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MP2 Energy Enjoys Strong Growth in 2014, Discusses What's On The Drawing Board

January 6, 2015

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Copyright 2010-15
Reporting by Karen Abbott •

MP2 Energy saw significant growth in its retail power business during 2014, both in ERCOT and in PJM, the latter of which it entered in earnest last year.

Speaking with, MP2 Energy Vice President Trey Price reported that MP2's retail power book now has a peak load of over 850 MW. That represents growth of about 50% over the last year.

Of its 850 MW retail peak load, 700 MW is in ERCOT, and over 150 MW is in PJM.

In PJM, MP2 is mirroring its approach in Texas, which includes a focus on C&I customers, and a reliance on brokers for sales.

Additionally, MP2 Energy is replicating its suite of product offerings in PJM, offering, in addition to retail power, demand response, distributed generation (including solar), and asset management.

"It's tough if you show up and just are another fixed price in the market," Price said, explaining the need for MP2 to differentiate itself in its new PJM markets via its additional suite of services. "We have to do something a little bit different," to stand out, Price said.

Price said that MP2 manages 10-15% of demand response in ERCOT, including through the various programs administered by ERCOT.

Retail C&I sales remain an "extremely competitive market," Price said, even in PJM where certain large players have recently pulled back (such as FirstEnergy Solutions) or have merged. Even with such exits, other suppliers have rushed in to maintain the competitive intensity.

That being said, Matthew Adams, President of MP2 Energy, told in late December that the company has seen a "stabilization" of margins.

In ERCOT, Price reported that while retail providers have had to reflect the forthcoming $9,000 price cap in their risk premium models, the lack of significant pricing near the existing cap over the last three years has made the change, "kind of a non-issue," until ERCOT sees such scarcity pricing.

The higher ERCOT price cap is driving greater interest among C&I customers in distributed generation as a strategy for addressing volatility, Price said, with MP2 being "busy" developing small, extremely fast-start power generation assets, some of which are built behind the customer's fence.

As previously reported, MP2 Energy received its first retail natural gas supplier license last year, but the company confirmed it is not yet active in the retail gas market.

Retail natural gas is something that's, "on the drawing board," when the company has the right team, systems, and model in place, Price said.

MP2 is also "looking at" extending its retail power sales to the residential market. MP2 has been engaged in limited residential sales to friends and families of its C&I customer base, but it is not a broad player in the residential market.

Similar to C&I sales, Price said MP2's goal if it were to enter the residential market would be to not just be another fixed price option in a sea of similar offerings, but to bring something different to market.

MP2 Energy was recently recognized by The Energy Professionals Association (TEPA) for outstanding broker and customer satisfaction, being named TEPA's inaugural Supplier of the Year. TEPA surveyed approximately 150 energy aggregators, brokers and consultants (ABCs) to determine the supplier who they are the most satisfied with, and MP2 ranked 1st out of 24 retailers, MP2 said.

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