Genie Energy Profile
Genie Energy Ltd. is a global provider of energy services.
Segments
The company operates through two segments, Genie Retail Energy (GRE) and Genie Renewables.
Genie Retail Energy (GRE) supplies electricity and natural gas to residential and small business customers through retail energy providers (REPs) operating in certain portions of deregulated markets within the United States; and
Genie Renewables, includes the following four lines of businesses:
Genie Solar is an integrated solar energy company that develops, constructs and operates solar energy projects for commercial and industrial (C&I) customers as well as its own portfolio;
CityCom Solar (CityCom) is a marketer of community solar energy solutions;
Prism Solar Technologies (Prism) designs, manufactures and supplies specialized solar panels for wholesale distribution; and
Diversegy LLC (Diversegy) provides energy brokerage and advisory services to commercial customers.
The company owns 99.5% of its subsidiary, Genie Energy International Corporation (GEIC), which owns 100% of Genie Retail Energy, Inc. and 95.5% of Genie Energy Services, LLC (GES). GES holds the company’s interest in the entities comprising the Genie Renewables segment. In March 2021, the company renamed the GES segment to Genie Renewables. In the third quarter of 2022, the company ceased to operate a former segment, GRE International (GREI). Certain GREI's assets and liabilities and operations were classified as discontinued operations.
GRE owns and operates REPs, including IDT Energy, Inc. (IDT Energy), Residents Energy, LLC (Residents Energy), Town Square Energy, LLC and Town Square Energy East, LLC (collectively, TSE), Southern Federal Power (SFP) and Mirabito Natural Gas, (Mirabito). GRE's REP businesses resell electricity and natural gas to residential and small business and small commercial customers. The majority of GRE's REPs' customers are located in the Eastern and Midwestern United States and Texas. Mirabito supplies natural gas to commercial customers in Florida.
Genie Renewables consists of the company’s 100% interest in Genie Solar, an integrated solar energy company, its 92.8% interest in CityCom Solar, a marketer of community solar energy solutions, its 60.0% controlling interest in Prism, a solar solutions company that engages in manufacturing of solar panels, solar installation design and solar energy project management and 100% interest in Diversegy, an energy broker for customers.
Genie Retail Energy
GRE consists of REPs and related businesses. GRE’s REP businesses acquire residential and business electricity and natural gas customers in deregulated markets in the United States. Genie purchases electricity and natural gas on the wholesale markets and resells these commodities to GRE's REPs' customers.
GRE’s REP businesses operate in certain utility territories within the deregulated retail energy markets of eighteen states in the United States: Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island and Texas, as well as in Washington, D.C. As part of the company’s ongoing business development efforts, it routinely evaluates opportunities in other deregulated jurisdictions to accelerate the growth of its customer base and to reduce operational and regulatory risks associated with geographical concentration.
GRE’s REP businesses operate under several brand names, including IDT Energy, Residents Energy, Town Square Energy, Southern Federal Power and Mirabito. GRE's diverse offerings, in both the electricity and natural gas markets included variable rate or fixed rate offerings or both. Throughout many of their markets, GRE's REPs offer green electricity and green natural gas. Green electricity supply is matched with renewable energy certificates, or RECs that reflect the generation of electricity from renewable sources. Green natural gas supply is matched with carbon offsets certificates generated mostly from greenhouse emission reduction projects.
GRE evaluates its customer base both in terms of the numbers of commodity meters served and the number of Residential Customer Equivalents (RCEs) represented by these meters. An RCE is a unit of measure denoting the typical annual commodity consumption of a single-family residential customer. One RCE represents 1,000 therms of natural gas or 10,000 kWh of electricity.
GRE’s REP revenue is seasonal. Approximately 39.7% of the company’s natural gas revenues in 2022, were generated during the first quarter (year ended December 31, 2022), when the demand for heating in its service areas tends to be highest.
As of December 31, 2022, GRE serviced 275,000 meters (196,000 electric and 79,000 natural gas).
For its clients, Genie Solar identifies, develops, and in some cases operates solar generation sites to provide solar electricity to its customers. The project development scope typically includes sight identification – typically a rooftop or land already owned by the client, design and planning, obtaining relevant state and local permits, procuring panels and other materials, directing contractors during installation, and coordinating with the incumbent utility to interconnect with the existing power grid. Genie Solar offers a variety of solutions to finance project construction.
For its operating portfolio, Genie Solar targets projects with attractive return characteristics that are usually in the 3-15 MW range. Many of the company’s initial development projects are community solar. Community solar refers to local solar facilities shared by multiple community subscribers who receive credit on their electricity bills for their share of the power produced.
Genie’s community solar projects are usually 3-10 MW. The project development path begins with site identification and control and includes design, permitting, construction, and interconnection with the local utility grid. In addition to this scope of work, the company is also responsible for enrolling customers within the same utility territory to consume the project’s power production. Genie typically self-finances community solar projects or supplements its own capital with investments from third parties.
Genie Solar has site control and plans to construct – subject to permitting – its first utility-scale (non-community solar) solar project. The company is pursuing a buyer of the expected 30 MW of electric output through a long-term power purchase agreements (PPA).
Genie Solar markets projects directly to potential C&I customers, emphasizing its ability to help them achieve sustainability goals, lower their cost of energy and leverage tax and other solar generation incentives from federal, state, and local governments.
In the community solar market, Genie operates in states with robust community solar and utility scale solar regulatory frameworks and incentives –New York and Pennsylvania.
As of December 31, 2022, Genie Solar and its affiliates had over 65 MWs of solar projects in its development pipeline. Genie expects to expand its pipeline significantly in 2023.
CityCom operates primarily as a project level customer acquisition solution for the rapidly expanding community solar industry, and, through a joint venture partnership, also provides customer billing and management to community solar projects.
CityCom acquires community solar customers - residential, small business and commercial consumers - on behalf of the community solar project’s developers. CityCom employs a variety of sales channels to achieve its sales goals, including door-to-door, through third party brokers, and through digital advertising. By leveraging these sales channels and the customer acquisition expertise that Genie Retail developed while acquiring its customer base, CityCom is often able to acquire customers more efficiently than other providers.
CityCom is compensated for its services through a combination of upfront commissions and residual fees. CityCom is actively acquiring community solar customers on behalf of project owners in Illinois, New Jersey, New York, Maine, Maryland, Massachusetts, and Virginia. Additionally, CityCom expects to expand its geographic footprint in 2023 by pursuing customer acquisition contracts for projects in development in California, Colorado, Delaware, New Mexico, and Ohio. Some of this expansion is dependent on further community solar legislation pending at the state level.
In 2022, CityCom accounted for 1.3% and 35.9% of the company’s consolidated revenue and Genie Renewables segment's revenue.
The company acquired a 60.0% controlling interest in Prism in October 2018. On April 12, 2019, Prism restructured its ownership. The company holds 60.0% interest in Plus EnerG, which owns 100% of Prism.
Prism is a solar module manufacturing company with over a decade's experience in manufacturing and application of bifacial solar modules.
Prism bifacial modules are engineered and designed in the U.S. utilizing domestic and overseas manufacturing facilities using high efficiency P-type PERC bifacial cells.
Prism’s modules are sold directly to business customers – typically for applications requiring a high-quality custom solution. Prism is expanding its customer base by emphasizing the superior performance and aesthetics of its modules supported by unparalleled customer service.
Diversegy is a commercial energy broker and advisor to industrial, commercial and municipal customers across deregulated energy markets in the U.S. It also offers ancillary energy services in both deregulated and regulated state markets.
Diversegy works with clients to maximize the benefits afforded by energy deregulation through the solicitation and analysis of competing offers from its supplier-partners.
Diversegy’s ancillary energy services, including offerings provided by its network of supplier-partners, include LED retrofits, on- and off-site solar generation, and a full suite of utility bill auditing services.
Historically, Diversegy marketed its services through an in-house sales force supplemented by a network of independent third-party brokers and agents.
Customers and Marketing
The services of GRE’s REPs - IDT Energy, Residents Energy, TSE, SFP and Mirabito - are made available to customers under several offerings with distinct terms and conditions. As of December 31, 2022, customers on variable rate products constituted approximately 66.2% of the company’s revenue.
GRE’s REPs offer renewable or green energy supply options in all their markets. Renewable electricity supply is 100% matched with renewable energy certificates, or RECs, that reflect the generation of electricity from sources, such as hydro-electric wind, solar and biomass.
The electricity and natural gas the company sells through all of its offerings are metered and delivered to customers by the local utilities. The utilities also provide billing and collection services for the majority of the company’s customers. For a small number of customers, the company performs its own billing and collection.
Procurement and Management of Gas and Electric Supply
Certain of GRE's REPs are party to an Amended and Restated Preferred Supplier Agreement with BP Energy Company, or BP, through November 30, 2023.
For their natural gas supply, GRE’s REPs contract with Dominion Transmission, Inc., National Fuel Supply, Williams Gas Pipeline and Texas Eastern Transmission and others for natural gas pipeline, storage and transportation services. For electricity supply, they, utilize the New York Independent System Operator, Inc., or NYISO, and PJM Interconnection, LLC, or PJM, for electric transmission and distribution. NYISO operates the high-voltage electric transmission network in New York State, and administers and monitors New York’s wholesale electricity markets. PJM is a regional transmission organization that coordinates the movement of wholesale electricity in all or parts of thirteen states (including New Jersey, Pennsylvania, Maryland and Illinois) and the District of Columbia. In Texas, SFP acquires power through the Electric Reliability Council of Texas (ERCOT).
For risk management purposes, GRE’s REPs utilize forward physical delivery contracts for a portion of their purchases of electricity and natural gas, which are defined as commodity derivative contracts. In addition, GRE’s REPs enter into put and call options as hedges against unfavorable fluctuations in market prices of electricity and natural gas.
Genie Renewables
Genie Renewables consists of businesses that market and provide renewable energy solutions. Genie Renewables consists of the company’s 95.5% in Genie Solar, its 92.8% in CityCom Solar, its controlling interest in Prism, and Diversegy.
Scope of Services and Business
For its clients, Genie Solar identifies, develops, and in some cases operates solar generation sites to provide solar electricity to its customers. The project development scope typically includes sight identification – typically a rooftop or land already owned by the client, design and planning, obtaining relevant state and local permits, procuring panels and other materials, directing contractors during installation, and coordinating with the incumbent utility to interconnect with the existing power grid. Genie Solar offers a variety of solutions to finance project construction.
Many of the company’s initial development projects are community solar. Community solar refers to local solar facilities shared by multiple community subscribers who receive credit on their electricity bills for their share of the power produced.
Genie’s community solar projects are usually 3-10 MW. The project development path begins with site identification and control and includes design, permitting, construction, and interconnection with the local utility grid. In addition to this scope of work, the company is also responsible for enrolling customers within the same utility territory to consume the project’s power production.
Genie Solar has site control and plans to construct – subject to permitting – its first utility-scale (non-community solar) solar project. The company is pursuing a buyer of the expected 30 MW of electric output through a long-term PPA. The company expects to have all permitting and approvals necessary for construction toward the end of 2023.
Growth Strategy
The key elements of the company’s strategy is to attract new clients directly, Diversegy utilizes customer marketing campaigns focused on propriety pricing software; recruit affinity groups, associations and organization in specific market verticals for cross-sell opportunities; and Diversegy is well-positions to increase in market share by leveraging its custom energy software, energy market expertise and strong agent customers support.
Customers and Marketing
The services of Genie Renewables are made available to customers via multiple channels and under several offerings. The majority of the company’s customer base consists of medium to large commercial customers who are looking to be more efficient with their energy consumption. The company’s sales channels and marketing activities include a direct sales force, commission-only referral agents, telemarketing, digital marketing and radio advertising.
Discontinued Operations in the United Kingdom, Finland and Sweden
As a result of volatility in the energy market in Europe, in the third quarter of 2022, the company decided to discontinue the operations of Lumo Energia Oyj (Lumo Finland) and Lumo Energi AB (Lumo Sweden). In July 2022, the company entered into a series of transactions to sell most of the electricity swap instruments held by Lumo Sweden. The company also entered into a series of transactions to transfer the customers of Lumo Finland and Lumo Sweden to other suppliers.
History
Genie Energy Ltd., a Delaware corporation, was incorporated in 2011.
