LANSING, MI: Three Michigan PR agencies are involved in a
controversy over a state commission's decision to award them no-bid
contracts to handle consumer education programs dealing with utility
The Michigan Public Service Commission plans to spend $26 million
on PR, advertising, and grassroots efforts to educate consumers about
electric utility deregulation. Of that, $480,000 is budgeted for
PR, with an additional $250,000 for grassroots efforts, and
$175,000 for creation of a website.
The commission decided two years ago to award contracts for the work to
JankowskiCo. (Detroit), Ken Peterson & Associates (Southfield, MI), and
McCann-Erickson's Detroit office. All three had worked for either
Detroit Edison or Consumers Energy, both major Michigan utilities.
However, while Peterson had done internal communications work, the other
two are essentially ad agencies, which left open the question as to
whether they would subcontract PR work to other firms.
The no-bid nature of the contract and the possibility of a conflict of
interest - because of prior agency work for the utilities - only
recently became a public issue because of a story in the The Detroit
"There wasn't even consideration of opening this up to companies that
weren't associated with utilities. In my mind, that raises questions,"
said Rick Gamber, executive director for the Michigan Consumers
Peterson head Ken Peterson said, "The whole conflict-of-interest issue
was addressed two years ago in hearings. There really is no conflict of
interest here. All the parties involved, the utilities and the PCS, are
working for the same goal now."
But Peter Lark, a Michigan assistant attorney general, said that while
there was "no suggestion that it's unlawful, we think what they're doing
is unwise. We think it should have been competitively bid."
A commission official has said the no-bid process was used because of a
lack of time to get the consumer education program underway. But the
program has yet to begin two years after it was authorized because
Michigan still has no non-Michigan utility companies willing to sell
power in the state.
"There is no time element; nothing has really happened," says David
Waymire, an EVP with Marketing Resource Group, a Lansing, MI firm that
has worked in the deregulation area. "There's still plenty of time to
put this out to bid; there are a lot of firms in Lansing, the state
capital, that were far more engaged in electric restructuring than these
Currently, the commission has no plans to hold another hearing.