Energy Plus Holdings LLC, the University City-based electricity and natural-gas retailer founded four years ago by former First USA Bank boss Richard W. Vague, of Center City, has been purchased by NRG Energy Inc., the Princeton electric utility, for $190 million in cash, to owners including Vague, his managers, and other private shareholders.
Energy Plus employs more than 150, including Penn and Drexel student telemarketers, at its headquarters on the top floor of the University City Science Center's new 3711 Market St. office building. The business will expand "with NRG's investment," and will be able to sell more by adding NRG "products" for electric cars and home solar power, says chief operating officer Kevin Kleinschmidt, who runs Energy Plus day-to-day.
NRG chief executive David Crane said Vague and Kleinschmidt are the rare energy executives who can turn the "boring" business of power sales into "a hotbed of entrepreneurial activity." Kleinschmidt will run Energy Plus as a unit of NRG, Vague will stay on as a consultant, and the company will keep hiring in Philadelphia: "This is a growth story, not a contraction story," Crane told me.
While NRG owns electric plants across the South and West, Energy Plus produces no gas or electricity on its own. Like competitors who have sprouted amid energy rate de-regulation, Energy Plus doesn't guarantee cheap rates. Instead it sells itself as an alternative to locally-dominant utilities like Exelon Corp.'s Peco, to consumers and small businesses, by offering airline frequent-flyer models and other discounts with business partners.
Energy Plus claims about 160,000 customers. Crane told me he first met Vague and Kleinschmidt through Howard Cosgrove, who counted their bank as clients when he was boss of the former Delmarva Power & Light Co. in the 1990s. After Cosgrove engineered and profited from the utilty's deregulation and sale, he became chairman of the board at NRG.
NRG owns about 2.6 MW of electric production, including some former Delmarva plants. That's roughly 2.6% of US electrical output, and about half what the nation's largest utility, Exelon, produces, Crane said.
Energy Plus does business as Independence Energy and Energy Plus Natural Gas LP, with customers in Pennsylvania, New Jersey, New York, Illinois, Maryland, and Texas, among other states. Crane said NRG had previously acquired two other energy retailers, Reliant and Green Mountain, but had mostly stayed out of the Northeast, until the recent fall in natural gas prices made it easier to make profits from consumers here.