Amigo Energy and Tara now under one umbrella

Houston-based electricity management firm Fulcrum Power Services has merged with electric retailer Tara Energy in an equity swap deal. The value of the transaction wasn’t revealed.
Fulcrum already owns another Houston electric retailer, Amigo Energy, which focuses on the residential power market. Tara is mainly focused on small commercial customers. The two brands will remain separate for now but some operations may be combined in the future, said Kim Casey, Fulcrum’s chief marketing officer.
Fulcrum buys power on the wholesale market for retailers and helps power plant operators find buyers for their output, including about 18 percent of the wind-generated power in Texas. The company has purchased power for Tara since 2005.
Fulcrum also owns a minority stake in an 800 megawatt natural gas-fired power plant in Laguna Park, Texas, which made me wonder: is it a whole lot easier to run a retail electric operation when you own power plants in the same region?
Smaller electric retailers that weren’t part of a larger utility have struggled at times. Even Reliant Energy, which was the largest retailer in Texas at one time having spun out of the former Houston electric monopoly, HL&P was struggling due to the volatile power markets and its lack of an investment grade credit rating. The company had lots of power plants, but none in ERCOT.
Earlier this year the retail business known as Reliant was bought by NRG Energy – the owner of many Houston area power plants — which is a little like re-creating HL&P. All they need to do now is buyout CenterPoint Energy and it will be like the old days prior to electric deregulation!
Casey said owning power plants in the same region as your electric retail business certainly gives one greater knowledge of the spot and forward markets.
“But in order to get the best value for both business units you have to make good decisions for the retail business and the energy management side,” Casey said.

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