Source Energy Starts Another Electricity Company — Why?

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Have you ever heard of Source Energy? If you said “No” I don’t think anyone would be surprised. I certainly wouldn’t be surprised. I only know who they are because I work in the Texas electricity space. Source Power & Gas is a certified retail electricity provider (REP), formally licensed in 2011. I think that I vaguely remember starting to see their plans pop up on Power To Choose around in 2012. But new REPs pop up on Power To Choose all the time. So what makes Source noteworthy today?  Well, they’re starting another electricity brand/company. From Energy Choice Matters:

A start-up retail electric provider named OriGen Energy LLC has applied for an Option 1 Texas REP certificate. OriGen Energy is an affiliate of Texas REP Source Power & Gas and shares several principals and management with its affiliate.   Specifically, Javier Loya serves as CEO and President of OriGen Energy. Loya is a member of Source Power & Gas’ parent, SPG Energy Group, LLC.   John Werner is listed as COO of OriGen Energy. Werner is President of Source Power & Gas.   Kelli Mitchell, Vice President of Operations for Source Operations Group LLC, is listed as the complaint contact for OriGen Energy as well as Source Power & Gas.

Sadly, seeing existing REP’s starting up new REP’s is not a new turn of events. Some of these efforts are more innocent than others. Southwest Power & Light, YEP, and Texpo have all been the same company, operating under the same REP certificate, for years now. Additionally, we’ve recently seen bigger companies like TXU and Direct Energy start separate new brands to market to specific demographics, specifically philanthropic interests and green energy respectively. TXU started 4 Change Energy with an eye towards charitable contributions to the community, and Direct Energy started New Leaf to market directly to environmentally conscious shoppers. Both of these ventures are specific goals, and I can understand why they exist and are separate from their parent companies, even if I don’t agree with the necessity. But that doesn’t seem to be what Source Power & Gas is doing here with OriGen Energy. Let’s rewind and take a look at why this is confusing.

Source Energy is a relatively new electricity provider in Texas. And since they’ve been licensed, they haven’t been very active in advertising, trying to create a brand, or presenting themselves to customers. At least not that I’ve seen. In fact, outside of being listed on Power To Choose, I couldn’t find them listed on any other shopping sites. And they’re not even listed on the PUC’s complaint scorecard, indicating that they have less than 2,500 residential customers. So why is a company that has raised  capital, which has less than 2,500 residential customers, that isn’t actively trying to grow their customer base through shopping websites, starting an additional company/brand? To anyone paying attention, it would seem like Source Power & Gas has a lot of work they could be doing on growing their existing brand into a relevant player in the Texas electricity market. Instead, with their current brand still relatively unknown, they’re focusing their money, time, and resources on starting a new brand in OriGen Energy. Why? How does that make any sense?

Here’s the thing: If it isn’t clear to someone like me what is going on, it certainly isn’t going to be clear to the average shopper. I’ve written before about the frustration of customers who might have bad experiences unknowingly ending back up with the same company operating with a different name. But this might be even worse than someone who fled a huge company like Reliant only to end up at another NRG offshoot like Pennywise Power. In this instance it’s a smaller company, with less resources, which by all accounts still seems to be trying to get their feet under them, starting a whole new brand to try and lure customers? If anyone had a bad experience with Source, what are the odds they’d have a better experience with OriGen Energy? It’s unclear to me if this is some kind of Monopoly play where they think it’s better to have as many squares on the board as possibly to try and land customers. One thing is certain, and that is that this is becoming a common practice.

NRG operates Reliant, Green Mountain Energy, and created Pennywise Power and Compassion Energy. TXU operates 4 Change Energy. Just Energy also operates the Tara and Amigo Energy brands on top of their own brand. Direct Energy also owns the brand First Choice Power, and they have started their new green brand New Leaf. The list goes on and on. And now Source Power & Gas is applying for a new license before they’ve even started using their capital to grow their existing brand. It’s one thing to apply for a new license to appeal to a specific market, or to keep running an existing brand that you’ve purchased. However, in my opinion, something like this is a different matter entirely.

Allowing new, small market REPs to apply for multiple licenses without developing their existing brand, does nothing other than create confusion in the marketplace. It continues to create the illusion of a robust market with dozens of options, when in reality the Texas electricity market is increasingly controlled by a shrinking group of larger companies. And why is the PUC encouraging this confusion, or at the very least, allowing it to happen with such prevalence?  It can’t be in the best interest for customers. But sadly, protecting the consumer seems like it is becoming less and less of a priority of the PUC.

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