What's Happening in B.C.?

Earlier this week the Vancouver Sun ran an article titled "This industry unbundling is a gas." While a fair representation of the market to date, there were some innacuracies about MXenergy. Following is the letter I wrote to the editor which ran on June 1, 2007.

To the Editor:

Your recent article on competitive natural gas marketing in British Columbia (“This industry unbundling is a gas,” May 26, 2007) was a wry but relatively accurate picture of this new market.

Two additional notes. First, MXenergy is hardly a “new marketer.” Indeed, we are one of the oldest in North America, serving customers since 1999. We are now the largest independent marketer of natural gas, active in 14 states and 2 provinces.

Second, we are proud to report that our voluntary “Earth Friendly Partnership” program is now providing 100% carbon offset to thousands of environmentally sensitive residential and commercial customers.

Jeffrey A. Mayer
President and Chief Executive Officer
MXenergy

The Natural Gas Market As We See It

Each week MXenergy provides its commercial customers with our view of the natural gas market through an email newsletter. I thought this week’s commentary, authored by Juliana Claussen Strutt, may be of interest to a wider audience:

Despite the quiet demand in this shoulder period, natural gas prices increased slightly this week on both the futures wholesale market and daily spot market. There were many factors that contributed to the up rise, including the spike in crude oil and other competing petro products. For those of you thinking it is too early to watch hurricane activity, the first named tropical storm appeared this week.

On the bearish side, liquefied natural gas (LNG) imports have increased significantly in the past few months and natural gas underground storage is approximately 21% above the 5 year average for this same time of year.

The increase in prices this week reflect an uncertainly in the market, as a possibility of active hurricane season and tight supply/demand balance. Residential electricity prices are expected to continue to grow at about 3% per year during 2007 and 2008 as higher fuel costs, particularly for natural gas, are passed through to retail customers.

I would be curious to hear other’s thoughts on the market. Please send an email or post a comment.

Yahoo to Announce more Green Initiatives

Grist has a post about Yahoo's plans to unveil its latest green initiatives today in New York's Times Square.

Murdoch Making News Corp. Carbon Neutral

You don't hear the words News Corp. and "neutral" in the same sentence too often, but TreeHugger has a post about Murdoch's plan to make the entire News Corp. enterprise carbon neutral with a clip from Your World with Neil Cavuto.

IBM's new green project

Business 2.0's Green Wombat blog has an interesting post about IBM's new plan to spend $1B a year to green its data centers.

Surgery Under the Lights

Over a month ago I received an invitation from Connecticut’s favorite news channel: News Channel 12, a production of Cablevision of Connecticut. The station has a popular weekly business news show called 12 On the Money, hosted by Rebecca Surran. Their motto: “As Local as Local News Gets.”

Ms. Surran wanted to talk about the energy crisis and in particular why electricity prices are so high in Connecticut. Whether we need more power plants in Southwestern Connecticut. Whether there are enough power lines. Whether Broadwater, the LNG plant proposed for the middle of Long Island Sound, should be built.

I explained to the producer that MXenergy does not have customers in Connecticut. But we do have our headquarters here and like all businesses we certainly have an interest in all of these issues. Last August, after a few days of scalding hot weather, the underground wires in front of our building caught fire and ignited an adjoining natural gas line which blew a hole in the sidewalk and singed the cherry blossoms in front of my window. The explosion shut down most of downtown Stamford for a couple days, forcing us to decamp to our New Jersey office. More importantly, it reminded us that energy is, well, like Cablevision says, “as local as local gets.”

So even though we didn’t have any customers in Connecticut, I agreed to appear on the show. Not being shy about my views (in case you haven’t noticed), I figured I might be able to make an impact on the local utility. Encourage a bit more conservation here. Some prudent alternative energy development there. You get the drift.

But that was a month ago. In the life cycle of MXenergy a month is like the Jurassic Age when the natural gas was actually formed. The interview was scheduled for last Thursday. And on Wednesday, we received our license from the State of Connecticut to sell electricity!

So as I sat down with Ms. Surran I was prepared to talk about power plants and power lines and LNG plants. The producer came over and clipped a microphone to my lapel. We chatted a bit while they checked the mikes and the voice levels. Ms. Surran pointed out which camera would be on me when we spoke. And then…

“Welcome to 12 On the Money, this is Rebecca Surran with me today…” The show had started and before I knew it Ms. Surran wanted to know about MXenergy and when we would start marketing in Connecticut and how we could protect customers from energy volatility by offering them fixed prices like a fixed rate mortgage and how it was easy to enroll with MXenergy by simply signing up for our service by going onto our web site or calling our “800” number and…

Six minutes later the interview was over and I walked over to Pamela Fink who was sitting in a director’s chair in the dark behind Camera 1. “What did I say,” I asked her. “I have no idea what I just said.”

Pamela probably thought I was pulling her leg and ignored the question, saying simply, “The phone lines will be lighting up in the call center. You did great.”

“Seriously,” I persisted, “Did I say anything?”

As I explained to Pamela, I felt like I had just come out of surgery. Being interviewed on TV is an out-of-body experience. I wonder if others have had the same experience. I guess that I am so nervous about saying something silly – this is live television, after all – that I concentrate intensely on the questions and the answers. Then, when it’s over, I have no recollection of what I said. It’s just like when you’ve had general anesthesia: You have a faint recollection of the last thing the doctor said to you before you went under and then you slowly wake up after the sedatives wear off.

Of course, the worst thing about television is that you never know if anybody will watch. This particular interview was going to be broadcast all weekend, at odd times: 8:03, 12:33, 4:03 etc. I forgot all about it until I came to the office on Monday morning and found the following email from a friend:

HEY JEFF,

I WAS CHANNEL SURFING ON SUNDAY MORNING, AROUND 4:30 AM
AND THERE YOU WERE! SO I'M CONVERTING. I GUESS IT'S A GOOD THING, MY OTHER OPTIONS WERE BOGUS REAL ESTATE PROGRAMS, TUMMY FLATTENING MACHINES, MIRACLE SKIN CREAMS, OR 300 KNIVES I DON'T NEED.

WELL, YOU WERE VERY DISTINGUISHED AND I WAS SO PLEASED TO LEARN MORE ABOUT MX.

I'M GOING ON THE WEBSITE NOW.....

At least somebody was watching!

The Last Shall Be First

I suspect Pamela Fink, our indefatigable director of PR at MXenergy, must have thought she was dreaming when she saw the headline come across her desk Tuesday.

Direct Energy, one of our worthy competitors in British Columbia, had just put out a press release announcing they were the first to introduce a carbon offset product in the gas market. Within minutes Pamela was on the phone to me:

“Jeff,” she begins, “you know we’ve been marketing this product for six months in the States and that I’ve been talking to reporters in Vancouver about it for several weeks….” Her voice sounded a bit stressed. Was it from lack of sleep editing my blog entries? Concern that we were opening up in three new states soon? Or panic that I was about to erupt like Krakatoa, which I suppose would be appropriate since it is said that when that volcano erupted in 1885 it blotted out the sun for weeks and made today’s global warming look like a sunny day at the beach.

I think she was worried about Krakatoa.

“Pamela,” I said, “I know we were the first to introduce carbon offset to the BC market. And to the US market for that matter. No worries. In my view, if our competitors will follow our lead I don’t care if they all claim to be first second and third… We’ll have made a difference!”

Krakatoa has gone dormant. The fact is that over 30% of US carbon dioxide emissions come from utilities and another 25% or so from industrial boilers for factory production and home furnaces burning natural gas for heating. In other words, if all the utilities and natural gas distributors in the country followed our lead we could reduce the US carbon dioxide emissions by 55% -- a significant percentage of world contributions to global warming.

We had worked for months to research this market and make sure we were offering legitimate reforestation projects to absorb our customers’ carbon dioxide emissions. When we started talking to one of the pioneers in carbon offsets projects -- Sustainable Forestry Management in London – most people thought carbon offset would never be accepted. Among other things, they were nervous that a new product like this would not be understood. Nearly everybody studied about photosynthesis in junior high school. But applying that knowledge as an adult was something else entirely. Sure, the biology textbooks showed that trees and plants convert carbon dioxide into carbon and oxygen, store the carbon in the plant and emit the oxygen. But how do reforestation projects accomplish this? And how can we trust that these projects really will work?

For years people have talked about conservation. But as long as energy consumption keeps increasing, conservation efforts will have a negligible impact on carbon dioxide emissions. By contrast, carbon sink projects – i.e., projects that help to absorb carbon dioxide by supporting new forestation programs and other methods for absorbing CO2 – can have a significant impact. Remember, the average homeowner accounts for over 5 tons of CO2 emissions every year!

Now that companies like Delta Airlines have jumped on board, carbon offset projects are a well-respected tool for dealing with the dangerous impact of CO2 emissions. And it’s only a matter of time before large utilities as well as competitive marketers like MXenergy and Direct Energy, also join the effort. SFM and MXenergy have launched a reforestation project in Montana on the Kootenai Indian reservation, planting hardwood trees. Pictures can be found in one of my first blog entries.

“Pamela,” I added, “MXenergy may have been first to the market with a carbon offset product, but if our competitors want to share the credit, let them! Imitation, after all, is the sincerest form of flattery!”