The Energy Shift: Deregulation and energy conservation lead the way – Who can provide “Everything Energy” to today’s smarter consumers?
With an ever-growing population, advances in technology, and an increased demand for reliable energy, the debate for how our energy companies will compete for customers is heating up. Large, monopolistic energy companies have controlled the landscape until now. The Enron debacle delayed full blown deregulation in The United States. Regardless, many of the most populous states in the U.S. are now deregulated.
In a deregulated energy market, energy suppliers are urged to provide the latest energy efficient solutions to their customers if they want to differentiate themselves from the competition. Of course, large energy consuming commercial clients are the prize. There will be a few new players on the energy scene that are positioned to take advantage of “The Energy Shift”; so read on and find out who appears to be ready for the challenge.
What is Energy Deregulation?
In 1992, Congress passed the National Energy Policy Act allowing consumers the power to choose their energy supplier. Transmission and distribution is still regulated and is the responsibility of the local utility company, but customers in deregulated states can shop prices for the cost of its power which typically represents about 70% of its energy bill. Although only 12 states now have deregulation of both electricity and gas including largely populous states such as New York, Illinois, Texas, New Jersey, and Pennsylvania; more states will be opening up as the federal government would like each state to have a plan for deregulation by 2020.
Energy deregulation is the reason one can shop for an electricity or natural gas provider. It gives the power to choose an energy provider to the consumer, and ultimately, how much one pays for energy. These open markets benefit consumers by driving competition. When energy suppliers compete for business, the customer wins. The more one knows about what is being offered and why, the more the customer can save in the long run.
Critics of energy deregulation see it as a threat because it is difficult to monitor and gives private industry a lot of power. Supporters believe that this will be the impetus that breaks up the so-called monopoly of big energy companies that are regulated by big government.
Premier Holding Corporation: Award Winning Energy Reseller, Efficiency Expert, and now – Energy Supplier!
Upon formal closing of its acquisition of Lexington Power and Light, LLC. Premier Holding Corporation (OTCQB: PRHL) has three operating subsidiaries that are positioned to provide “Everything Energy”. Internal pro formas suggest that Premier can grow revenues at a breathtaking clip beginning in 2015 (more on this later), and is why Maxim Group LLC agreed on October 15, 2014 to officially accept becoming its financial advisor and investment banker. Maxim will focus on assisting Premier in its strategies for maximizing shareholder value through its full scope of investment banking services.
The three subsidiaries of Premier to provide “Everything Energy” are:
The Power Company (“TPC”) at www.ThePowerCompany.com based in Chicago, Illinois assists residential and commercial customers to procure the best electricity rates from wholesale energy suppliers in deregulated states. TPC is a marketing and award winning leader in the industry with a proprietary portal known as National Energy Services Transactor (NEST). Unlike any other reseller, NEST allows TPC to be expedient, competitive and compliant while offering secured pricing. The company has spent years cultivating relationships with the most reputable energy suppliers in the industry. Through TPC’s buying power and reputation, they are able to save their customers up to 20 percent on their very next energy bill. In Illinois, TPC has added over 4,000 new accounts per month for most of 2014.
Energy Efficiency Experts, (“E3”), provides customers with the next step to save money – lowering consumption. Commercial customers are particularly excited about how much money can be saved through consulting and products from Energy Efficiency Experts. Through a custom audit process, E3 provides leading-edge products and further energy reduction solutions including lighting, refrigeration, heating, and cooling. Ultimately, this can help customers save an additional 10 to 15 percent, for a total energy savings of 30 to 45 percent.
Lexington Power & Light (“LP&L”), the newest subsidiary (acquisition scheduled to close October 21st, 2014) is a supplier of electrical power and natural gas. As a supplier, Premier can book the customers entire electric bill as revenue, estimated to be 10 to 12 times higher than the revenue recognized by TPC on the very same sale. LP&L is expected to add numerous resellers to ignite growth quickly. As a valuation tool, residential contracts themselves have sold for over $1,000 per contract. The company expects to have well over 100,000 contracts in 2015.
In Their Words:
Quoted from PR issued October 15, 2014: “Last month, Premier signed a Definitive Agreement to acquire Lexington Power and Light, LLC of New York, a Company engaged in the sale of retail electricity and natural gas to residential and commercial end-users. About two weeks ago, the Federal Energy Regulatory Commission authorized the transactions clearing the way for acquisition to be completed. The purchase of Lexington Power and Light LLC is a major part of Premier’s larger plan to provide “everything energy” to its thousands of clients and the massive potential energy market. The new subsidiary will also allow Premier to leverage the marketing success of energy brokers such as its current subsidiary, The Power Company (TPC), and eventually create new energy efficiency prospects for E3, allowing Premier to further its plan of integration in this sector.”
Quoted from PR issued September 15, 2014: “Although Lexington has been a private company, it has disclosed that revenue from its current client base of over 1,200 commercial accounts and roughly 6,000 residential accounts is expected to produce in excess of $11 million in 2014; an increase in revenue from $9.5 million in 2013. Lexington is generating positive earnings and is positioned for stronger future growth.”
“Once the acquisition is complete, Premier Holding Corporation will assume all accounts and report all revenue from LP&L on its financials going forward. In July of this year, Premier issued a press release that it had compiled pro forma estimates based on Premier becoming a supplier through a merger with an established entity. It stated that, “Premier will provide these pro formas upon request, which demonstrate that revenue could climb from $50+ million in 2015 to over $500 million in 2018.”
PRHL is a hot company to watch as they are truly positioned to now provide “Everything Energy”. To us, it seems like a no-brainer. Energy deregulation is already here in many states. Both residential and corporate customers want lower bills, and PRHL is increasingly better positioned and capable to provide it.