Houston electricity retailer launches $63 million IPO

HOUSTON – With an eye on making inroads in the growing numbers of states with competitive retail gas and electric  markets, Houston-based electricity retailer Spark Energy launched its initial public offering Monday seeking $57 million to $63 million.

It said it aimed to sell 3 million shares for $19 to $21 per share during its Wall Street debut on the Nasdaq Global Select Market, under the symbol “SPKE.”  It said underwriters may purchase up to 450,000 additional shares. Spark initially filed for a $92 million IPO.

The 15-year-old Houston company said 20 states and the District of Columbia have some form of competitive retail markets for electricity and natural gas — commodities that for decades were provided almost exclusively by municipally owned or regulated utilities. Twenty-one states and DC now have competitive natural gas markets, it said.

But in states where Spark operates and competitive retail energy markets exists, only 11 percent of gas customers and 33 percent of electricity customers get their energy from competitive retailers, the company said in regulatory filings that cited statistics from the Energy Information Administration and energy consultant DNV GL.

“Management believes these underserved residential markets provide an opportunity for further penetration over the foreseeable future as more customers become aware of their option to choose an energy retailer other than the local regulated utility,” the company said in regulatory filings.

Spark is an electricity retailer in Texas and Pennsylvania and sells natural gas in California, Florida, Illinois, Nevada and Arizona. It serves both energy markets in parts of the northeastern United States.

In most of Texas, including the Houston area,  power generators and electric retailers compete for customers, although regulated monopoly utilities still operates lines, poles and other infrastructure to distribute power. Residential natural gas gas is still distributed and sold by regulated utilities in Texas.