By ANN DE ROUFFIGNAC
Oct. 3, 2000à‚–Green Mountain Energy, the niche renewable power retailer, received a cash infusion of $53.5 million for working capital from Dutch utility Nuon. Green Mountain is selling electricity in states that have adopted electricity deregulation.
Nuon’s equity stake in Green Mountain puts the Dutch utility on a par with BP in terms of ownership. BP previously invested $50 million in May. BP and Nuon each own a 23% stake. The rest is controlled by undisclosed private investors, according to a spokesperson. BP and Nuon will appoint cochairs and founder and Chairman Sam Wyly, who retains an undisclosed stake in the company, will step down.
Green Mountain says it will use its Dutch connection as a platform to sell renewable electric power in Europe when that entire market opens up to retail competition.
“We plan to extend our brand to retail electricity in Europe,” says Suzie Quinn, spokesperson for Green Mountain.
Nuon is one of the largest “green” energy providers in Europe and plans to expand that position. Its goal is to provide 10% renewable energy by the year 2010.
The cash from Nuon and BP puts Green Mountain on a new growth path after a slowdown from an aborted initial public offering last summer and lawsuits filed in the state of Pennsylvania over the wording of Green Mountain’s sales pitches The company allegedly did not add state taxes to the price of power when comparing its prices with competitors. As a result, Green Mountain’s price of power looked cheaper.
The company settled in the fall of 1999 with the Pennsylvania attorney general without admitting wrong doing and agreed to send letters to all customers explaining its pricing structure more clearly, according to a company press release.
The company has since changed its name to Green Mountain Energy from GreenMountain.com and moved its headquarters to Austin, Tex. from Vermont.
“We feel comfortable that we are on a healthy course,” says Quinn.
The idea of an initial public offering is still a possibility but there are no plans now, she says.
Green Mountain will focus on retail sales in the deregulating Texas market, in addition to Pennsylvania, New Jersey, and California. It is also interested in helping foster more development of renewable generation facilities in the US and in Europe.
Already, the company has partnerships with five renewable facilities in the US where Green Mountain is the exclusive purchaser of the power produced.