Retail Supplier Will No Longer Pursue Municipal Aggregations, "Evaluating Options" For Current Book Of 300,000 Muni Aggregation Customers
August 10, 2018 Email This Story Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • firstname.lastname@example.org
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Consistent with its previously reported strategy to focus on higher-margin customer growth, Crius Energy Trust disclosed in a second quarter MD&A that it has, "decided not to pursue future municipal aggregations and we will be evaluating our options related to our portfolio of approximately 300,000 customers acquired through this channel."
Crius said that its decision to cease pursuing municipal aggregation load was driven by reduced margins for such customers, similar to compression seen in the large C&I space, and the fact that Crius is unable to cross-sell other products to municipal aggregation customers
Crius also said that municipal aggregation customers are associated with higher direct and indirect costs versus customers acquired through Crius's other sales channels.
"We expect our decision will reduce customer adds by 50,000 to 100,000 in the second half of the year, however, we don’t expect this to impact forward profitability given the low margins in this segment," Crius said in the MD&A
Crius also said that management is conducting a comprehensive review of the customer portfolio in 2018, which is intended to increase margins and reduce attrition over the long-term as customers will receive differentiated products and service levels based on customer lifetime value.
"Portfolio optimization is expected to increase near-term attrition as customers with customer lifetime value that is negative or below our internal thresholds will be returned to the utility upon product expiration if we are unsuccessful at enrolling them on products that meet or exceed our internal return thresholds," Crius said in the MD&A