As we noted in these pages a year ago, North American Power’s residential business, founded in 2009, has been a runaway success and continues to grow, having already served more than a million electricity and natural gas customers across twelve states. Since Deryl Brown’s arrival as CEO in 2014, however, the company has stated its intention to also enter the Commercial and Industrial (C&I) market in order to further grow and diversify its business. This year, the company realized this intention by entering the Texas C&I market under its new C&I brand, ‘North American Power Business’, and is already making a big first impression.
In many respects, North American Power has taken the ingredients for success from its residential business and applied them to North American Power Business. While the management team for their residential business is stacked with individuals possessing decades upon decades of combined industry experience, the same can also be said of North American Power Business’ leadership.
North American Power Business is led by chief executive officer Deryl Brown, chief information officer Jim Crysdale, chief sales officer Kris Hertel, chief operations officer Jason Bear and senior business development manager Taylor Brown. Together, this team boasts over 150 years committed to leading and innovating in the retail energy space. Moreover, this team was largely responsible for starting two other enormously successful C&I companies.
North American Power Business, headquartered in Bedford, Texas, for the most part operates independently of its North American Power retail business based in Norwalk, Connecticut. Although NAPB has a different leadership structure and home base, the new C&I affiliate intends to mirror the rapid growth that the residential side of the company has enjoyed. The company’s confidence to do so resides in NAPB’s leadership, which has been there and done it all before.
While North American Power’s residential business is entirely focused on the end user, North American Power Business has a slightly different strategy. With gas and electricity making up a major proportion of overheads across the board from manufacturing to IT and data heavy businesses, and the need to comply with complex regulations across different states and jurisdictions, big business invariably turns to consultants, aggregators and energy brokers to obtain the best advice and the best deals available.
In fact, more than 60 percent of energy transactions in the United States are done through a broker or consultant. This is because brokers and consultants can not only find a great price for a business’ energy supply, but many also advise on energy efficiency tactics such as energy management systems, equipment and lighting retrofitting as well as renewable energy sourcing. Several brokers and consultants also specialize in selling ancillary products and services that assist customers in achieving LEED compliance for their facilities.
North American Power Business’ leadership therefore understands the importance of focusing on these key players in the market, supplying them with the power their clients need, in the way they need it and with outstanding transparency and flexibility when it comes to pricing, billing and commissions. NAPB approaches the market almost exclusively through these third-party brokers. “The brokers we work with, we call them sales partners, are vital to our company’s success,” chief sales officer Kris Hertel said. “As a result, our value proposition to potential sales partners needs to be just as strong as our value proposition to the end user.”
Powered by best-in-Class technology
So, what is that powerful value proposition that is already attracting top brokers in the industry? According to Hertel, in addition to its highly experienced management team that knows what brokers want and need, it’s North American Power Business’ technology that is the competitive advantage in the marketplace.
Specifically, brokers have come to expect supply partners to make sales, commission and account management as easy and transparent as possible—that’s why Hertel said that developing the technology to meet and exceed that expectation was #1 on the to-do list when NAPB was founded. “We’ve developed top-of-the-line broker sales and commission portals, powered by our new end-to-end system we’ve named ‘Joules’,” Hertel said. “Jim Crysdale led the development of the industry’s first sales portal and has more than 26 years of experience in this space, so having him on our team as a primary architect of all three of these proprietary pieces of technology has put NAPB in a league of its own when it comes to its technological performance and capabilities.”
Elaborating on the company’s broker portals, Hertel said, “The portal is our conduit to get the data from the broker to price the customer. It will generate pricing, proposals and executable documents – we are very proud of it, and our brokers love it!” It is a completely integrated platform that takes the broker right through customer pricing, to enrollment, to billing and to commissions, says Hertel. “It gives us the ability to move from market to market very quickly, and it is entirely scalable.”
The portal ultimately gives the broker control in whatever way they choose to use it. Being able to upload customer data and generate pricing and documentation means that deals can be automated, with no manual intervention on the part of NAPB. A commissions platform is integrated with the sales platform, giving a broker the ability to see its past commission statements alongside its projected income from NAPB. “It allows our brokers to self-serve. Having this accounting-like function through the commissions portal is rare in the industry, and it underlines our commitment to the broker channel,” Hertel said. “It is a really neat system: they can opt for full automation of customer accounts or any level of intervention they choose.”
The strength of the technology platform gives NAPB scalability and consistency as it moves from market to market. That’s a long-term advantage that the broker will appreciate more and more as the end customer becomes accustomed to dependable pricing and transparency – it’s a frequent occurrence, he says, to have issues with billing timeliness and accuracy, or the common practice of outsourcing billing to a third party.
As it develops, NAPB wants to expand the technology it has introduced to the market to become increasingly integrated with its large brokers. “The more integrated we can become with their systems, the more advantageous that partnership becomes,” Hertel says. “That may mean integrating with their CRM packages to make that customer experience better. We plan to provide more reporting and integration with their finance packages like Quicken and MS Dynamics. We see our partnership going well beyond the usual scope of that overused word, to a point where we become indispensable to them and they in turn help us grow quicker as we enter new markets.”
Hertel was quick to point out that beyond its own leadership, the company’s development partners have been integral to its technological success. Specifically, Znalytics has been a key partner in the building of the company’s end-to-end system, Joules. “Jim Crysdale and Znalytics made for an ideal pairing when it came to creating Joules,” Hertel said. “Because of their combined efforts, we believe that Joules truly stands alone in the industry.”
For the size of the company, such a level of investment and the sophistication of the technology is almost unprecedented in the industry, he adds. Technology never reaches a finished state, by definition, but the platform has been refined to a level that allows NAPB to run its current business effectively, and it can easily be given added functionality as the company expands.
Just getting started
From a soft launch with ten or so brokers in February 2016, North American Power Business is already well into its full launch in the Texas market. NAPB is now approaching the number of brokers and aggregators it needs to call itself an established player in Texas, and is now looking to expand into other states. In the US, many brokers are licensed in multiple states, and indeed a number of the customers it works with in Texas are not headquartered there. The relations NAPB has with these brokers is an excellent springboard for it to move into New Jersey, Pennsylvania and Ohio in the very near future.
These states are all within what is called the PJM Interconnection that co-ordinates the movement of electricity within Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia. “50 percent of the brokers we work with in Texas also do business in PJM,” explains Hertel. “Additionally the relationships we already have with brokers headquartered in the northeast also operate in multiple states. So, if a broker is licensed to do business in Ohio it is most likely licensed in Pennsylvania and New Jersey: even in New York and across New England.”
For now, a consolidation of Texas and a phased expansion into PJM will take a lot of hard work. Kris Hertel is keen to expand into as many states as possible as quickly as possible. Much of this will be achieved by following the existing broker network, though, and many of these brokers have an international footprint. Suffice it to say that it was CEO Deryl Brown who established Hudson Energy as a leading independent provider of electricity and gas to businesses across the UK. It would be in no way surprising to see NAPB quickly achieving its expansion goals in the USA, then perhaps even looking further afield.