To recap, I’m building up a boutique energy retailer (Strathcona Power), to be your local, human options for power and natural gas.
This is a follow-up to March’s status update. I delayed it a little to get May’s pricing out, but life has a way of making things take even longer.
Pricing Update
This section is general notes on electricity and natural gas pricing in Alberta, looking back at April and forward to May.
The floating prices continue to be very low for both power and gas, and so I remain a fan of both. Fixed pricing continues to drop, and so if you want to sign up for a fixed gas price for next winter, this might be a good time to do so.
Our pricing for May:
| Term | Electricity | Trend | Natural Gas | Trend |
|---|---|---|---|---|
| Floating1 | ~3.6 ¢/kWh | ~$2.55/GJ | ||
| 1 year Fixed | 7.09 ¢/kWh | $3.49/GJ | ||
| 2 year Fixed | 7.79 ¢/kWh | $3.69/GJ | ||
| 3 year Fixed | 8.39 ¢/kWh | $3.79/GJ | ||
| 5 year Fixed | 8.69 ¢/kWh | $3.89/GJ |
Retailing Progress
The retailing business is growing slightly more quickly, up 18 sites to a total of 110. Part of this is we pushed a fundraiser with one of our fundraising partners, and part of this is personal sales.
I’ve also finally got the website update live. A big part of that was I gave up on a complete rebuild, as the existing framework does everything I need it to do today.
The biggest setback this month has been a proposed change to the Backend’s service agreement. Without going into too many details, I thought the issue in question was covered by the February agreement, they claim it’s a new issue. Unfortunantly, it’s taken up a lot of bandwidth over the last three weeks, and remains and open concern yet; I’d hoped when I’d signed the agreement two months ago I wouldn’t have to think about it for another five years!
Next up is to resolve the issue with the Backend, and get serious about marketing campaigns. With the website in place, it is time to figure out how to get people signing up without me needing to sit down with them (the current process bottleneck).
Longer term, I was looking at the Strathcona Power website, and currently the only search terms people are finding it with are “strathcona power” and the only links back to it are from these blog posts. I would like to improve both.
Generation Progress
A secondary line of the business I’ve been focused on is building my own generation capacity, to compliment the retail sales.
For my first 10 kW of generation, I has originally hoping to have it installed over a month ago (i.e. when the ground un-froze). Instead, the loan has come back with a request for additional paperwork, and I still don’t have a confirmed installation cost I like (although I have managed to bring it significantly down, ~30%).
For the second tranche (of ~70 kW of generation), the paperwork is in a holding pattern.
The third tranche of larger sites (hosting 50 to 150 kW of generation per site) has also seen little progress. I did have a site vist of one possible purchase location, but follow ups are moving slowly. As for possible leased sites, I’ve talked to a couple of possible locations, but without better defined install costs, it’s proved hard to build an actual economic model from my side.
That said, I have had a couple of visits with both suppliers and contractors that could prove very useful in the near future! As is becoming a theme through, getting pricing out of them has proved involved.
Looking forward, my first focus is getting the first trache loan paperwork issue resolved. Following that, I can probably build an economic model based on the numbers I currently have a use that as a “to-be-improved-on case” but a useful case to base a proposal on.
Current KPI’s
| KPI | Status | Trend | Target Date |
|---|---|---|---|
| Site Count | 110 / 420 | 18 / 35 | end of January 2027 |
| Generation Online | 0 / 50 kW | ||
| ARR2 | ~$4.7k / $100k |
Site count growth is definately up, so now the effort is to solidify it and make it repeatable. I’m close enough to my first site count target (of 120 sites by the end of July) so my focus here is on the next target (of 420 sites by the end of next January).
ARR is remains low (but is growing) because on the generation side I’m paying interest on upfront installation costs, but it isn’t generated any income yet.
Review of Last Month’s Plans
- complete the relaunch of the website. — done!
- complete the funding and connection agreements for the second tranche, or at least have everything done on my side. — done
- make a go/no go for the third tranche generation site I’m currently looking at. — in progress. I’ve made a site visit, and received a “verbal” offer.
Plans for the Coming Month
- resolve first tranch generation loan paperwork issue
- resolve the Backend’s proposed change to the service agreement
- launch a marketting campaign
How You Can Help
I’m grateful for your help in growing the Strathcona Power. If you live in Alberta, please sign up for electricity and natural gas, or send me your bill (to William@StrathconaPower.ca) and I can run a bill comparison. If you’ve already signed up, tell a friend!
Till next month,
— William, El Presidente of Strathcona Power
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This is approximate April retail pricing. Floating prices can and do change month to month, and vary slightly between wire areas. ↩
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Annualized Recurring Revenue. Basically an assumption of annual revenue, based on last month’s topline income. This combines both the retailing and the generation arms of the Company. ↩
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