Michael T. Burr

Managing Editor

The company that called itself the "deregulation parts department" was searching for a home in early October, as its parent companies pursued a different business plan.

KN Energy Inc., which merged in early October with Kinder Morgan Inc., categorized Orcom Solutions and en•able among the $750 million to $1 billion worth of "non-core assets" that it sought to liquidate as part of the merged company`s "back-to-basics" strategy.

"There are still efforts being made to sell certain parts of en•able, including Orcom, and those efforts continue," said Larry Pierce, investor relations manager with the former KN Energy. "en•able happens to be one of a number of assets that didn`t fit into our future plans."

The same thing happened with en•able`s other parent company, PacifiCorp. Last October, the company announced a corporate restructuring to divest PacifiCorp of all businesses other than its western U.S. electric business and Powercor, its Australian distribution company. Now PacifiCorp is merging with U.K. utility ScottishPower, which supports PacifiCorp`s "strategy of concentrating on our core electricity business," said Keith McKennon, ScottishPower deputy chairman and former PacifiCorp CEO.

Orcom alive

Sources close to en•able said the company was "shutting down operations" in effort to reduce costs-at least in regards to the Simple Choice brand of products and services bundles. The other major part of en•able, Orcom Solutions, operates as a separate organization, and remains viable and active.

"We`ve been totally focused on the utility industry for about 23 years. Currently we have more than 600 people," said Heather Huston, Orcom marketing coordinator.

Orcom sells billing and customer care systems and outsourcing services. Orcom completed major system installations this summer for Montana Power and the cities of Redding, Calif., and Austin, Texas (see "Customer focus," page 26).

For Simple Choice, however, prospects for the present and future seem clouded at best. Simple Choice bundles are no longer being sold by its licensees-which included KN Energy, two subsidiaries of PacifiCorp and Sierra Pacific Energy Co. Between July 1998 and the end of June 1999, Sierra Pacific lost more than $2 million on Simple Choice startup costs, according to a Sierra Pacific 10Q report.

More than just a branding play, Simple Choice established a line of retail stores in Colorado, Wyoming, Nebraska and Kansas. Through the stores and licensing partnerships with utilities, Simple Choice offered a number of products-including natural gas, electricity, telecommunications and satellite television service, as well as certain appliances-that appeared together on customers` bills.

A phone call to a Simple Choice retail store revealed that while at least some of the stores continue operating, the "Simple Choice" shingles have been taken down and replaced with "KN Energy" signs.

"We`ve dropped the Simple Choice name," said the store manager. "We`re still selling the dish network and the appliances, but we`re not selling long-distance or cellular phones any more."

Déjà vu again

The Simple Choice saga will sound familiar to those who have followed the industry`s history with branding and bundling attempts.

"It was a creative concept. When it was started, frankly we thought deregulation would move a little quicker than it did," said Pierce of KN Energy. "That did not happen. Although it was well-received in the marketplace, we were not able to grow the critical mass to make a profitable business."

The end of the story is not written for en•able, but the lead characters are certain to change. KN Energy officially became Kinder Morgan Inc. on Oct. 7. Before the merger, Kinder Morgan revealed its strategy for the combined company. The "merger will create a premier midstream energy company," explained Rich Kinder, chairman and CEO.

The new Kinder Morgan is focusing on a core business of interstate natural gas and refined products pipelines, retail natural gas distribution, and natural gas marketing and trading, as well as power development.

PacifiCorp`s merger with ScottishPower also progresses, with the state agencies of Oregon and Wyoming giving the green light in early October.