Retail Electricity Seen as Natural Fit for Gulf Oil Brand

May 11, 2011
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Gulf Oil Limited Partnership has expanded to retail electricity marketing because competitive energy supply is a natural fit for an "energy brand" such as Gulf, Michael Lordi, Director of Retail Energy Business Development for Gulf, told Matters.

Gulf's entry into the retail electric space was exclusively reported by Matters last fall (10/13). It enrolled its first accounts in Connecticut, part of an extended pilot, last month.

Gulf Oil Limited Partnership is a wholly owned, indirect subsidiary of convenience store chain Cumberland Farms, which operates over 600 stores in 11 states mainly in the Northeast from New England south to Pennsylvania and New Jersey, many of which retail Gulf branded fuel.

Gulf distributes motor fuels through a national network of over 2,000 Gulf branded gas stations and service stations (with a large concentration in Northeast states with competitive electric or gas markets), and also sells heating oil, diesel fuel, and kerosene. Additionally, through its subsidiary Great Island Energy, Gulf also supplies petroleum products and offers various risk management and financial services to industrial, commercial, and independent retail firms.

Lordi said that electricity supply is yet another way to drive customers to the Gulf brand and enhance its value. Customers already see Gulf as a destination for energy (specifically motor fuels), and extending this relationship to electricity is a natural progression, Lordi added.

Lordi said that Gulf will go slowly with its pilot in Connecticut, initially serving only affiliated Cumberland Farms and Gulf Oil locations, and a Gulf employee. Any decision to move forward with a market-wide entry will be made after results of the pilot. Target customer classes would also be decided at that time.

During the pilot, Gulf will gain familiarity with various backoffice functions, including enrollment procedures and EDI communications.

At this time, Gulf Oil has not determined how it will market to customers should it decide to move forward after the pilot. The Gulf brand, and the Gulf and Cumberland Farms brick and mortar locations, obviously present a unique opportunity for any mass market supplier, including the potential for various cross-business bundling, affinity, and rewards programs.

Lordi said that Gulf has no definitive plans regarding such opportunities at this time, and said that customer acquisition and marketing methods, should service progress beyond a pilot, will be driven by what works for retail electricity.

At this time, Gulf is focusing on retail electricity, but Lordi said that natural gas would also be a natural fit for Gulf. In addition to Connecticut, Gulf has been considering the Massachusetts electric market for a pilot as well.

Lordi was previously a senior vice president at CNG Energy Services and managed its Pennsylvania retail electric market entry in the late 1990s. Lordi has also held senior positions in energy trading with EDF Trading, Duke/Louis Dreyfus, and Enron Power Marketing, and was most recently president of Merchant Energy Consultants.

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