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Entrust Energy Sets Growth Targets, Talks Customer Acquisition Strategy
September 15, 2011
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Entrust Energy plans to have 10,000 customers in the ERCOT market by the end of the year, and has set a five-year goal of enrolling 400,000 customers, Entrust Energy President and CEO Tom Gilpin told Matters yesterday.
As only reported by Matters (9/13), Entrust Energy is a new start-up in the ERCOT market led by several veterans of the Australian retail electric market, including Gilpin, who was previously General Manager for Commercial Operations at Australian Power & Gas, a residential-focused supplier that at the time Entrust Energy was formed had about 150,000 customers and was Australia's fastest-growing publicly listed company.
Entrust has been serving ERCOT load since late spring, but Gilpin reported that until recently, service had been limited to "friends and family" as the retailer tested its systems and backoffice processes in preparation for a wider market launch.
Entrust recently launched offers for residential customers at Oncor and CenterPoint, and will be launching in the rest of ERCOT later this month.
Entrust is exclusively focused on the residential market, similar to Australian Power & Gas.
Thus far, Gilpin reported that Entrust is serving 2,500 customers, and expects enrollments to increase to 10,000 by the end of the year. Entrust has set a five-year target of 400,000 customers, to be accomplished through "staged but aggressive" growth.
Entrust is completely focused on the ERCOT market at this time, and Gilpin said that growth in other markets will come as it reaches its ERCOT targets.
Gilpin, and several directors on Entrust's board, have already proven they can quickly build a pure retail start-up with their experience at Australian Power & Gas, which, similar to Entrust, was a new entrant with no affiliation to a distribution utility or generation owner.
Much of Australian Power & Gas' growth, with its book now in excess of 250,000 customers, has been credited to its strategic relationship with direct marketing channel The Cobra Group, which is also a shareholder in Australian Power & Gas.
Entrust is not relying on The Cobra Group for its Texas marketing, but is using a similar customer acquisition strategy with other vendors, including telesales and door-to-door marketing.
Gilpin said that the ERCOT market is very similar to Australia, with each deregulating at about the same time, both in terms of wholesale design and in several retail mechanisms (such as the reliance on supplier billing).
Gilpin added, however, that there is far more liquidity in the ERCOT wholesale market than in Australia.
Entrust takes an "absolutely" risk averse strategy in its supply procurement, Gilpin said. Entrust enters financially settled arrangements with wholesale marketers in ERCOT, while Australian Power & Gas, during Gilpin's tenure, would more frequently contract directly with generators.
Gilpin further said that ERCOT customers are "very well informed" regarding electric choice in comparison to Australia, which allows Entrust to have a meaningful conversation with prospective customers when contacted. Gilpin attributed Texans' greater familiarity with the electric industry to the fact that the average Texas residential bill is double the average Australian bill.
Entrust Energy chose to start in the ERCOT market, versus other markets in the U.S., due to the market's stability and the pro-business regulatory climate in Texas, Gilpin said. In particular, unlike several states in the Northeast with open proceedings regarding default service, Gilpin said that Entrust does not have to worry about major market structure rules changing in ERCOT.
Entrust emphasizes transparency and integrity in its offers, hence why it chose the name "Entrust." As previously reported, Entrust enacts these principles by designing products without a REP-imposed monthly customer charge, offering free online payments, and using Texas-based customer service.
Gilpin said that the goal is to build "long-term" relationships with customers.
There is no corporate affiliation between Entrust and Australian Power & Gas, but, in addition to Gilpin, Entrust's board includes directors of Australian Power & Gas as previously reported: Richard Poole and James Myatt. Additionally, boutique investment house Arthur Phillip Pty Ltd., as well as Nippon Gas, are investors in both Entrust Energy and Australian Power & Gas.
As previously reported, Entrust's board also includes Kevin Howell, previously Regional President of NRG Texas.
Entrust has since added several ERCOT market veterans to its executive team. These include:
- Amy Gasca, Vice President - Commercial Operations, who has held a variety of executive positions in the Texas and other retail markets, including COO of Glacial Energy Holdings; Vice President at Constellation NewEnergy, and Founder and President of AmPro Energy LP.
- Layne Loessin, Vice President - Supply & Wholesale, who was most recently Senior Director, North America Market Risk Management for Direct Energy, and previously was a risk analyst at Sequent Energy Management.
- Kevin West, Vice President - Sales & Marketing, who was most recently Chief Marketing Officer and Vice President of Marketing at Direct Energy, with prior sales and marketing positions at Shell Energy Services and Williams.
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