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New Entrant CEO: Retail Market "Screaming" for Consolidation; Company Will Be Active in M&A; Organic Focus Is On Value-Add, Partnerships
The fragmented U.S. retail energy market is "screaming out" for consolidation, Mark Lewis, CEO of retail energy holding company ONEnergy, Inc., told EnergyChoiceMatters.com.
ONEnergy is the parent of Sunwave Gas & Power, a Canadian retail supplier which as first reported by Matters is in the process of entering four U.S. states.
"One of the big things that we're very attracted by, is there are so many small retailers in the U.S.," Lewis said of Sunwave's decision to expand to the U.S.
"To me, the market is screaming out for some consolidation," Lewis told EnergyChoiceMatters.com.
"We're very interested in acquisitions, and are actively looking at a number right now. We hope to be an active participant in part of that U.S. consolidation that I think is inevitably going to happen, and we've seen some of it start to happen already," Lewis said.
Organically, Lewis sees Sunwave's opportunity in the U.S. as taking advantage of the lack of value-added services offered by retail commodity suppliers. Lewis sees a lot of room for growth for a supplier that can bring additional value to customers. Sunwave will focus on the residential market, with an active commercial business as well.
While some suppliers have made strides on value-added services, "I think the industry still has work to do in terms of bringing value to our customers, and not just simply supplying a commodity that's slightly cheaper than the utility," Lewis said.
"Being a pure commodity provider today is not a winning strategy," Lewis said. While Lewis could not at this time disclose what products or services Sunwave is developing to move beyond commodity, Lewis did emphasize products that help customers evaluate overall energy usage, manage their budgets better, "and ultimately live life a little bit better."
"People are looking for a lot more out of their energy providers today, so we're really driving towards bringing a lot of additional partnerships into our fold," Lewis said, such as affinity discounts at retail establishments where customers shop. Sunwave has a number of existing partnerships in Canada.
"One of the things that always strikes me about our industry is, people spend all this money and all this time and effort to acquire customers, and then they don't really do anything for them once they've signed up," Lewis said.
Lewis, who splits his time between Canada and Connecticut, says he has switched to four energy suppliers for his home, and only one of those communicated with him after enrollment.
Lewis reported that Sunwave continues to grow in the challenging Ontario market, where the lack of headroom required Sunwave to emphasize a different value proposition. Lewis sees Sunwave as being able to leverage this different mentality in U.S. markets with headroom, where offers are still dominated by savings comparisons measured in mills.
With its Connecticut retail electric supplier license granted earlier this month, Sunwave expects to begin actively marketing in Connecticut in February. Sunwave's initial U.S. markets will also include New York, Massachusetts and Pennsylvania for electricity. Natural gas expansion will be undertaken once Sunwave gets the initial electric markets up and running.
Additional states which Sunwave expects to enter at a later point include Illinois, Ohio, and Georgia.
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January 14, 2014
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Copyright 2010-13 EnergyChoiceMatters.com
Reporting by Karen Abbott • kabbott@energychoicematters.com
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