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Energy Savings Income Fund: `We are not finished growing`

That's what ESIF Chairman Rebecca McDonald proclaimed as she announced record growth so far in FY 2006.
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[read more]         The firm exceeded by 21% its target to add 350,000 new customers over the year ending in March.
        Its long-term customer base rose to 1.5 million, up from 1.1 million a year ago.
It signed 424,000, including 100,000 new US customers for a net gain of 281,000 after subtracting non-renewing customers.
                McDonald credited enormous volatility in commodity prices for the firm's enormous success.
        It's "no surprise," she said, that hundreds of thousands of customers chose price stability in signing contracts.
        The firm began selling gas and power in New York this year. It has been selling gas in Illinois.
        The New York market "has been very receptive," the company noted.
        It doubled its US customer base and expects to double it again in the new fiscal year, CEO Brennan Mulcahy told analysts.
        The firm beat expectations by the greatest margin -- 86% -- in Canadian power markets including Ontario's power market that reopened in April of last year.
        Customer growth exceeded ESIF's target in Canada but fell short in Ontario's gas market where it added only 55,000 customers -- 69% of its 80,000 target.
        McDonald was adamant the firm would not give up market share in Ontario gas.
        It has diverted sales efforts to the much bigger power market there but signed 83,000 gas customers elsewhere in Canada.
        ESIF sells gas to residential, small to mid-sized commercial and small industrial customers Ontario, Manitoba, Alberta, Quebec, British Columbia, Illinois and New York and power in Ontario, Alberta and New York.
        Those markets have more than 25 million customers eligible to shop.
        Ontario is most heavily penetrated, ESIF noted, with 45% of gas customers shopping.
        But New York is fresh territory where only 8% of gas and 6% of electricity customers now shop, ESIF figures.
        The marketer's future is more exciting than its past, Mulcahy told investors.
        ESIF has identified 10 new markets in North America, he noted, with 45 million customers and light or zero shopping so far.
        Each market, the firm said, is ripe for selling long-term, fixed-price contracts to "residential and small business customers challenged by volatile commodity prices."

The firm expects to be the dominant marketer in every market it enters, Mulcahy added.
        ESIF identified only two of the 10 markets -- Indiana gas and another New York utility.
        The marketer is "actively monitoring" developments in Virginia, Maryland, New Jersey, Michigan, Texas and the British Columbia residential gas market, ESIF revealed.
        Sales grew by a third to C$1.2 billion with gross margin up 15% to C$187 million.
        US sales were C$106 million, up from C$27 million in FY 2005, ESIF reported.
        The firm is setting its sights high for next year intending to sign 475,000 new customers -- 50,000 in Ontario, 60,000 elsewhere in Canada and 100,000 US gas customers along with 175,000 Canadian and 90,000 US electric customers.
        If it succeeds, it will have 1.8 million customers in April.
        Originally published in Restructuring Today on May 19, 2006

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