Columbia Energy took a hit last week as the Michigan AttorneyGeneral stepped in to halt a misleading marketing effort by thecompany. Due to an objection by the Attorney General over thewording in a mail solicitation sent to Michcon pilot programcustomers, Columbia has consented to end the solicitation and givecustomers the option to choose other suppliers. Currently, Columbiahas signed 12,200 customers away from Michcon.

The controversy stems from a promotion sent to residentialcustomers stating, “Save this winter, when your gas cost is usuallythe highest. Lock in your low price now, when your gas usage ispeaking.” But the fine print on the back of the solicitationrevealed that customer savings would not start until after theheating season in April.

“I will not tolerate advertisements that mislead Michigan’sconsumers. While this solicitation never should have been sent inthe first place, I commend Columbia Energy for its quick responseand its promise to pull the advertisement and allow customers whomay have been misled to opt out of the program,” said JenniferGranholm, Michigan’s Attorney General.

“I’m embarrassed” by the promotion, said Columbia President andCEO Oliver G. “Rick” Richard III. It was an “inadvertent” mistake,but “you can believe there have been some people chewed out in myoperation for it.” He conceded that certain mistakes are bound tohappen. “This is a whole new game of marketing, and people need tobe ever vigilant about things like that.”

Michcon’s three-stage pilot program began in January. Open on afirst-come-first served basis to all 1.2 million Michcon customers,the pilot program allows 75,000 people to shop for gas each yearfor the duration of the program.

This marks the second time Columbia has had trouble with aMichigan pilot program. Over the summer, a Semco spokesman said, atelemarketing agency Columbia employed used “definitemisrepresentations” to try and sign commercial and industrialcustomers. “It is unclear if the fault is Columbia’s,” thespokesman said. “It might have just been an overaggressive agency.But it was a significant enough problem that we contacted Columbiaabout it, and like this situation, they acted responsibly.”

John Norris

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