“We at Energy Plus believe customers should have direct control over the environmental and financial costs of their energy use.” – Energy Plus Company CMO Paul Frantz

I recently caught up with Energy Plus Company CMO Paul Frantz in order to ask him a few questions about his company’s ability to break into utility markets dominated by monopolies. He was nice enough to answer my questions and explain to me how empowerment goes a long way when establishing consumer confidence.

INTERVIEWER: Good afternoon Mr. Frantz, how are you?

PAUL FRANTZ: Not too bad, just happy to have the opportunity to speak.

I: Give us a 20 second elevator pitch of Energy Plus.

PF: Energy Plus is one of the fastest-growing energy suppliers in the country– and one of a few suppliers to offer customers ongoing rewards, just for paying their monthly bill. Essentially, in states that allow energy competition, we turn usage into valuable rewards. The great part about our service is that customers are already using – and paying their utility – for electricity. When residents switch to Energy Plus, we seamlessly take over the supply portion of the bill from the utility and give customers their choice of rewards, as well as the option to go green by enrolling in the Energy Plus Green Option.

I: What states do you currently service?

PF: With more than 160,000 customers, we operate in seven states for electricity – Connecticut, Illinois, Maryland, New Jersey, New York, Pennsylvania, and Texas. We’ve also recently launched a natural gas service in two states – New Jersey and New York. Our natural gas service also allows customers to earn rewards.

I: Can you explain to us what energy competition is?

PF: The easiest way to think about it is like this: For states that don’t allow competition, customers have only one option for both their energy delivery and supply – their local utility. For markets that allow competition, customers remain with their local utility for delivery services, but they can choose an alternative company for their energy supply. I think it’s important to remember that even though customers are choosing a different supplier, there is no risk to delivery. I should also mention that even for states that allow energy competition, there is still plenty of oversight. Every state has a utility commission that approves licenses, develops rules for competition, protects consumers and monitors competitive behavior.

I: You mention electricity supply – what is that exactly?

PF: If you look at your electricity bill, you’ll notice that there are essentially two components. One is called ‘delivery’ or ‘transmission’ and the other is called ‘supply’ or ‘generation.’ Delivery refers to the infrastructure that transfers electricity to your home or business – it consists of the wires, meters, and everything else required to physically get the electricity to your home or business. Supply refers to the procurement and purchase of electricity from a generation source and assigning the energy to individual customers. In states that are open to competition, customers can choose to have an alternative energy supplier or retailer such as Energy Plus perform this function.

I: What makes Energy Plus Company unique amongst other energy suppliers?

PF: It’s really the Energy Plus Rewards Program. We offer the largest variety of rewards of any supplier and we offer all customers the ability to earn rewards for their ongoing energy usage. In addition, all customers have the opportunity to enroll in the Energy Plus Green Option which supports 100 percent wind power.

I: What kinds of rewards are available?

PF: We have partnered with the some of the best loyalty programs available to offer a variety of rewards to our customers. An Energy Plus customer can choose to earn airline miles from the top seven domestic airlines, hotel points from six of the largest hotel brands, retail rewards from Best Buy, college savings rewards from Upromise or even cash back on their monthly bill. So, we really offer something for everyone, whether our customers are looking to earn a flight or a hotel stay for their next vacation, or even save for college.

I: Why should consumers switch from their existing service to Energy Plus?

PF: In addition to our customized rewards program, I can offer a few other reasons. Energy competition offers a great opportunity for customers to exercise their right to choose. In most of the markets where we operate, competition has only been in existence for a very short period of time. That means for most consumers, this is their first chance to explore the options that are available and select a supplier that may be better and more innovative than what they currently have. In addition, there is no risk related to a customer’s electricity service – the local utility will continue to deliver electricity, so the lights will always stay on. Also, there are absolutely no additional fees to pay when you switch – this includes start up and cancelation fees.
What’s more, our pricing is market driven which means that we don’t have any contracts with big penalties for cancellation. Customers aren’t locked into a long-term deal and can choose to leave our service any time if they are dissatisfied. Finally, our customers will receive one consolidated bill for their supply and delivery, so it’s a very convenient service as well.

I: How does the switching process work?

PF: Believe it or not, it’s actually very easy to switch– and we do all the work. Potential customers can sign-up online, a process that takes just 3-5 minutes to complete, or they can speak to one of our dedicated customer service professionals. Customers need to provide just a few pieces of information, including their name, address and utility account number. Energy Plus will then work with the customer’s local utility to make the transition, a straightforward process that involves sending the customer’s information to the utility and then receiving confirmation. Upon confirmation, the customer will start service with Energy Plus at the beginning of the next available billing cycle. We work with over 20 utilities all the time and there’s no service interruption to the customer.

I: What was the drive and intention behind the creation of Energy Plus?

PF: Our goal was to bring innovation to this industry. When we started the company in 2007, we noticed that most suppliers viewed their product as purely a commodity: they offered the same product and solely competed on price. We believed that providing additional value would be unique and would resonate with consumers. So, we created the Energy Plus Rewards Program in order to differentiate ourselves and build loyalty among our customers. This strategy has proven successful – today we serve over 160,000 customers in seven states, and in 2010, we distributed more than 400 million in airline, hotel, and retail loyalty program miles and points and more than $2 million dollars in cash back through our program.

I: Does Energy Plus have any green products?

PF: Yes. As mentioned above, we give all of our customers the ability to enroll in the Energy Plus Green Option. Energy Plus’ Green Option is certified by Green-E and supports the creation of 100 percent pure wind power – one of the cleanest forms of electricity available that is produced without greenhouse emissions. For about a penny more per kilowatt hour, a customer’s monthly electricity usage will be offset by an equivalent amount of wind power fed into the nation’s power grid. This exchange is tracked by RECs – Renewable Energy Certificates. Every kilowatt hour of electricity our Green Option customers use counts toward the purchase of a Renewable Energy Certificate (REC) – the “currency” of renewable power in the United States. One REC is equal to one megawatt hour of electricity. Each year, the number of RECs Energy Plus purchases offsets over 200,000 megawatt hours of electricity.

I: What is a REC?

PF: Once green power such as wind power is fed into the electric grid, it’s not possible to separate it from other sources of electricity. So, a credit (REC) is created as a way to account for – and encourage – green energy’s contribution to the grid. RECs are sold separately and only one certificate may be issued for each unit of renewable electricity. The RECs purchased by Energy Plus support 100 percent wind-generated power and are certified by the leading organization that authenticates these energy credits.

I: Is a variable rate offer better than a fixed rate offer?

PF: It really depends on the individual customer and what their needs are. Variable rates can shift over time and are determined by a multitude of factors (for example, where you live or how much electricity you use). The benefit of a variable rate is that the customer is not locked into a long-term contract with potentially large cancellation fees. With a fixed rate product, a customer can lock into a rate for a period of time. Typically contracts are for 1-2 years, but they may be shorter or longer depending on the specific contract. The rate may be a little bit higher than other offers on the market in order to pay for locking in. Also, sometimes these offers have cancelation fees if the customer tries to break the contract early. It all depends on how much flexibility the customer desires and what the current rates and fees are.

I: Has the company won any awards or honors?

PF: We’ve been very fortunate to win a few awards over the past couple of years. In 2011, we were voted the Top Workplace in Philadelphia for small companies. This award is sponsored by the Philadelphia Inquirer, the Philadelphia Daily News and Philly.com and is determined by the votes of the employees at each participating company. We’re very proud of the fact that our employees voted us into the top spot. In addition, we were a finalist for the 2011 Red Herring Top 100 North America award.

Company Profile:
Founded in 2007, Energy Plus Holdings, LLC operates as an independent energy company that supplies electricity power to residential and business customers in Pennsylvania and Illinois. The company was incorporated in 2007 and is based in Philadelphia, Pennsylvania.

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