The competition is becoming intense.

• Author: Barton, Charles
• Position: Oklahoma Electric Cooperative and Oklahoma Gas & Electric - Company Profile

Oklahoma Electric Cooperative's competition with Oklahoma Gas and Electric has intensified in recent years. As a result of this pressure and emerging open competition, OEC has redesigned their marketing strategy. Our author discusses the redesign and the positive outlook cooperatives may project.

David vs. Goliath

At Oklahoma Electric Cooperative (OEC) we battle the giant every day. It's the same old song, just a different verse. OEC was selected to provide electrical service to Lowe's Building Center, a 1000 kW load in South Oklahoma City. We were selected because of lower rates and better service. Once again the giant, OG&E, loses and once again, they are mad. They built a spite line in front of the Lowe's property and on both roads leading up to the property. It took quick action but OEC was able to go down a different street and avoid OG&E's new line. Although it took longer and cost more, OEC was not deterred from serving our new member.

In this competitive environment, co-ops must be more aggressive in our marketing activities. We must be innovative and creative in our rate design and incentives to secure new load. We must win the battle for new load in our area. This may mean doing things differently than we have done in the past. It may mean taking the IOU head on in battle. We have to develop market niches and exploit IOU weaknesses. Just as David slew Goliath, it is time that we look for a few smooth stones to carry for our sling-shot.

Over the last several years, the competition between Oklahoma Electric Cooperative (OEC) and Oklahoma Gas and Electric (OG&E), an IOU, has become intense. During the '70s and '80s there was always rivalry for serving new loads. The developers or commercial accounts would select their power supplier based on service, rates or political connections. In OEC's most populated service area, central and north Cleveland County that includes Norman and South Oklahoma City, there was duplication of over 1,500 miles of line along section line roads. Most new customers are located in this area and can, to some degree, choose their electrical supplier.

OG&E is Oklahoma's largest IOU, providing electrical service to 670,000 consumers in Oklahoma and Arkansas. Their annual revenue is over $1.3 billion with kWh sales of over 20 billion. Approximately 35% of their revenues come from sales to residential accounts. They also own a gas supply subsidiary. Like many large utilities, OG&E has closed many of its branch offices...