Energy deregulation how to make money

As more and more states open up their gas and/or electricity markets to greater competition, once-regulated utilities are encountering increased pressure to compete. They’re competing not only on the basis of efficiency and price, but also with the innovative, tailored, and (at times) disruptive services being offered by ESCO’s, brokers, and other leaders engaged in reshaping the energy ecosystem of the future.

While each state is different in its timing and approach to energy deregulation, few in the industry can deny the impact of investment from new players seeking to affect change and make money. They’re modernizing infrastructure, improving transmission, establishing options for local distribution, rethinking approaches to generation, and enabling the adoption of technologies that drastically reduce demand. And their influence is having marked impacts. More choice and greater competition generally results in reduced prices for consumers. In addition, they’re spurring more incentives to innovate, explore alternatives, and drive market growth.

As new players are turning to buying and selling electric and gas commodities, they need partners to help them take advantage of opportunities at a scale that facilitates business growth. A key component to their success is the ability to establish strong, flexible, and transparent partnerships with financial lenders who can help optimize these opportunities and minimize risk.

There are 5 steps you can take to help find the right financial partner (and successfully work with them) to take advantage of the opportunities afforded by energy deregulation:

1. Find lenders who understand niche industries -- with energy deregulation, the industry is ripe for innovation and growth and there are financial partners who are eager to lend at this time. However, you should look for a lender that understands how to provide capital for niche industries as they have the expertise and processes in place to tailor financial solutions to your business needs.

1. Identify and articulate your opportunity -- articulate the opportunity that requires capital by using a written page or less. Without memorializing the opportunity, ideas can get lost in conversation and difficult to socialize among potential partners. Alternatively, if you rely too much on slide decks prospective partners can lose interest or get bogged down in details.

1. Assess your own value -- before you engage a potential partner, take a look at your current book of business and your projected earnings and obligations. Sometimes the upside isn’t what we think it is. But other times we miss opportunities if we don’t write them down.

1. Establish your needs and tolerance for risk (and ask the lender to do the same) -- different individuals and/or businesses have unique tolerances for risk. While the Oak Street Funding’s cash-flow lending model is designed to mitigate the risk, there are always inherent risks of borrowing. It’s important to clearly understand the tradeoffs of doing a deal (or not doing one).

1. Execute an agreement that works for you and your lending partner -- it’s important you spend time reviewing the documents to ensure you have clarity and confidence in the approach forward.

As energy deregulation continues to unfold, the opportunities to capitalize on growth opportunities has never been greater. If you are an ESCO, Energy Broker or Independent Energy Consultant with a cash-flow revenue model and have  identified a promising opportunity to grow your business, you may realize additional financial resources are necessary to help you achieve success. Please feel free to contact us about a working capital loan or an acquisition loan. At Oak Street Funding, we have experts in lending who have helped thousands of potential clients determine if a loan from a specialty lender is right for them.

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