Company Offers E-lectricity In Pennsylvania

Online consumer resource OnlineChoice.com's ElectricityChoice.com subsidiary launched a new e-commerce service in Pennsylvania yesterday that will attempt to use the power of numbers to lower the cost of electrical power to a pool of more than 4,000 registered residential customers.

Utility.com, an Internet electric service vendor distributed by OnlineChoice.com claims that Pennsylvania residents can save 15 to 25 percent on utilities bills in their first year by buying electricity from them, instead of their local electric provider.

The company is offering an additional 700 families in Philadelphia a choice between service from Utility.com or competitor PowerDirect.com.

Capitalizing On Deregulation

The new electricity service on the Internet stems from the state of Pennsylvania's recent decision to deregulate the electric and gas industries. The company plans to offer Internet service, telephone service, home security contracts and insurance policies on a similar basis, buying in bulk for multiple customers at once. The company allows visitors to vote for future buying group concepts on its Web site.

Current options up for debate include travel services, vehicles and real estate.

OnlineChoice.com also plans to add ShoppingChoice in the future, offering lower prices for standard consumer goods based on the number of consumers wanting to buy those goods. Although OnlineChoice.com has not yet posted details of its new shopping service, the plan appears to be similar to Microsoft Corp. (Nasdaq: MSFT) co-founder Paul Allen's Mercata.com buying club.

Unlike the planned shopping service, however, ElectricityChoice.com is the first electricity buying group in the nation, OnlineChoice.com says. The company compared prices of various electricity providers licensed by the Pennsylvania Public Utilities Commission before choosing Utility.com and PowerDirect.com as its preferred services.

Participation Rules

The electricity buying groups have finite times during which customers can sign up, because the group is then switched all at once to the new electricity service provider. The first buying pool, for example, closes December 22nd, with the switch to the new service provider slated for the first quarter of next year.

Once a customer joins the buying pool, by filling out a form on the company's Web site, OnlineChoice.com contacts each member of the pool to offer the ElectricityChoice.com service. As of Monday, more than two-thirds of the initial 4,000 group members had accepted the new plan, the company said.

OnlineChoice.com makes its money through customer acquisition fees from the utility providers it markets for the buying pools. The company plans to expand to New Jersey, California and Massachusetts next, again trying to take advantage of recent deregulation in those states.

The expansion plan also calls for the launch of a similar buying group program for gas service in mid-December. That program will also start in Pennsylvania and expand to other states.

OnlineChoice.com was founded last year in Pittsburgh by Marshall Cohen, chairman, Sanjay Chopra, president, and Bill Kirkendale, chief technology officer. The company is a subsidiary of Duquesne Enterprises parent DQE, Inc. (NYSE: DQE).

Duquesne Enterprises acquires, develops and invests in companies involved in electronic commerce, energy services and communications.