Big growth in USA important
target for Energy Savings

Energy Savings Income Fund (ESIF) wants to add 475,000 customers this year (RT, 8/11)
        The US is an important part of that target.
        The Toronto based marketer has made a name for itself selling long term, fixed price contracts for gas and power to residential customers and small C&Is.
        This year it's expanding into Northern Indiana Public Service's gas territory in Indiana and National Fuel Gas' New York footprint.
        The marketer has a list of markets it wants to enter possibly Maryland, Virginia, Ohio and New Jersey, its CEO Brennan Mulcahy told us.
        Texas, too, is one of the top markets ESIF is keeping an eye on, he added.
        The Lone Star state, though, poses unique challenges for ESIF since utilities there don't offer billing services to marketers.
        ESIF doesn't have its own billing system and enters markets where utilities offer billing and other back office services.
        The only exception, Mulcahy explained, is Alberta where it has a deal with Epcor to handle billing.
        ESIF if entering Texas would look for a partner that has a platform for billing.
        That could possibly be a generator, Mulcahy added.
        ESIF ranks the markets where it hasn't goen in yet in to decide where to grow.
        The marketer aside from utility billing services weighs supply liquidity, whether utilities buy marketers' receivables and market penetration levels.
        ESIF has traditionally grown 75% organically with the remaining quarter coming through acquisitions and intends to keep that ratio as it expands in the US.
        The firm can afford to pursue strategic acquisitions since it's a well capitalized income trust, he explained.
        His top priority, though, is building ESIF's US sales force to support natural growth.
        Mulcahy expects to see a "shake out" when the price to beat ends in Texas.
        That mechanism has prompted retailers to market against a relatively high price but when it goes away Jan 1 those marketers will be forced to differentiate themselves, he explained.
        Fiercer competition will "make it difficult" for marketers who have just sold on price, he predicted.
        Originally published in Restructuring Today on September 18, 2006