To recap, I’m building up a boutique energy retailer (Strathcona Power), to be your local, human option for power and natural gas.
This is a follow-up to August’s status update.
Pricing Update
This section is general notes on electricity and natural gas pricing in Alberta, looking back at August and forward to September.
The floating price for electricity is bouncing off of the lowest price in a decade two months ago. So it’s up again from last month, but still incredibly affordable at ~5.4 ¢/kWh. Floating natural gas is low as well, and slightly lower than last month (again), but tighter (to fixed prices) at ~$1/GJ below fixed prices. In short, I remain a fan of both and hope you are signed up on floating rates.
Fixed prices are relatively low, and have fallen across the board this month. Natural gas is getting very cheap for shorter terms, and so if you want to look in the 1 year rate for the winter, now would be a good time.
Our pricing for September:
| Term | Electricity | Trend | Natural Gas | Trend |
|---|---|---|---|---|
| Floating1 | ~5.4 ¢/kWh | ~$2.39/GJ | ||
| 1 year Fixed | 6.99 ¢/kWh | $3.29/GJ | ||
| 2 year Fixed | 7.19 ¢/kWh | $3.59/GJ | ||
| 3 year Fixed | 7.79 ¢/kWh | $3.79/GJ | ||
| 5 year Fixed | 9.29 ¢/kWh | $3.89/GJ |
Retailing Progress
The retailing business continues to grow, up 14 sites to a total of 152. My new online advertising campaign has been working fairly well, with very good conversion rates. However, it requires me to spend 2 to 4 hours/day on the phone, and so is hard to scale, and not something I can simply automate or hand off to a hired assistant. Looking forward, I need to turn it back on as I had it off for a trip for a week, and I’ve spend the last week trying to catch up. But it is promising and exciting to have something that legitamately works!
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’ve started the physical install. Permits (with the City) have been a bit of a gong show, with them being cancelled and then un-cancelled three times, and still needing manual interversion to be issued; I’m still waiting on one of the four original permits.
The physical install is taking longer than I would have liked, and I’m stuck with a yard that is completely turned upside down for now. But the problems are slowly being solved. If everything goes off as planned, I could have the unit physically placed by the end of next week! I cross my fingers that it will be generating by the end of next month.
For the second tranche (of ~70 kW of generation), I’m (frustratingly) waiting on the interconnect agreements for these. Normally the wire company is expected to either issue the agreement or issue a formal objection within 14 days; it’s now been months without them doing either.
The third tranche of larger sites (hosting 35 to 150 kW of generation per site) is at a standstill. For the first site for a 35kW generator, the (property) loan is proving unfindable. I even had a bank issue a Term Sheet and then rescind it a couple of days later! The connection agreement here hasn’t come through either. We’ve taken the initial steps to looking for alternative sites.
Current KPI’s
| KPI | Status | Trend | Target Date |
|---|---|---|---|
| Site Count | 152 / 420 | 14 / 54 | end of January 2027 |
| Generation Online | 0 / 50 kW | ||
| ARR2 | negative / $100k |
Site count growth is holding steady and ticking slighly up, although the next 5 or so months are going to be demanding. Current enrollment levels are still only ~1/4 what I need them to be to hit my target.
ARR has gone negative (though the gross is growing) due to the combination of advertising expenses and interest paid on the generation setup costs.
Review of Last Month’s Plans
- get my first tranche generator (physically) installed — started, but still in progress
- get some traction from my marketing campaign — success! (but I need to restart this)
- continue with securing financing for my first third tranche site — fail here
Plans for the Coming Month
- restart my marketing campaign. It probably needs to be written here to happen; the alternative is just too comfortable.
- finish the first generator install; this might turn into a multi-month project.
- corporate year end. Not glamorous, but I have a hard deadline of the end of the month to have this done and filed (bookkeeping, income taxes, GST).
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. But to spoil the surprise, you want to be on our floating rates! 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 August 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 less last month’s regular costs (i.e. ignoring one-off costs). This combines both the retailing and the generation arms of the Company. ↩
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