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BlueRock Energy forecasts 30 percent growth

By Journal Staff

Date:

SYRACUSE — “Our corporate strategy is to sustain a 30-percent, annual revenue growth,” says Philip R. Van Horne, president and CEO of BlueRock Energy, Inc. 

“This has been the historical record of the company since its inception.” Personally, Van Horne is convinced that BlueRock can reach triple-digit revenue growth in 2012.

BlueRock Energy is a privately held, energy-services company (ESCO), licensed by the New York State Public Service Commission, that delivers electricity, natural gas, and green-energy products to all of New York State, except Long Island. The customer base is 10-percent residential and 90-percent commercial,” according to Van Horne, “ [and] sales are north of $50 million.” 

BlueRock employs 35, with 21 located at corporate headquarters at 432 North Franklin St. in downtown Syracuse, where the company leases 6,700 feet of office space. The remaining staff is spread across the state in multiple offices.

Van Horne started BlueRock Energy in 2006 as a new corporate direction in the deregulated energy market. In 2003, he had launched New York Energy, Inc. with his personal funds, financial help from family and friends, and investments from two partners. New York Energy targeted large commercial and industrial companies. BlueRock shifted the focus to selling energy to small- and mid-sized business operations, including restaurants, small office buildings, nursing homes, multi-tenant apartments, manufacturers, car dealerships, and retail operations.

Van Horne’s strategy for growth is multifaceted. First, BlueRock has its sights set on expanding its geographical footprint. “The company has already applied to the state of Pennsylvania for an operating license and anticipates that the license will be granted either in late summer or in the fall,” notes Van Horne. When asked about further expansion, BlueRock’s CEO says “… we also have our eyes on Massachusetts, Maryland, and New Jersey.”

Second, in addition to expanding geographically, BlueRock is moving toward a vertical-integration model, both upstream and downstream. Upstream, the company is in negotiations to buy a natural-gas well in New York State. Ownership of the well would obviate the need to incur credit charges, currently a major cost to the company. Van Horne adds, “BlueRock can also save on transportation cost.”

Downstream, BlueRock is pursuing the acquisition of consulting companies or partnering with others in order to offer its customers and prospects additional services such as engineering, project-management, and cost-analysis. When asked about his timetable for expanding downstream, Van Horne answered, “We’re looking this year.

Third, BlueRock says it is counting on the growth of natural-gas consumption in America. Just in the last decade, technology has enabled natural-gas companies to recover gas deposits that were previously unreachable or too costly for drilling. The available supply now makes America a world leader in energy output, a position it can maintain for decades. Natural gas is also the cleanest of the fossil fuels to burn and therefore more acceptable environmentally.

Van Horne’s growth strategy is also dependent on obtaining adequate financing. In 2006, BlueRock made a deal with the Shell Oil Co. to issue credit to the New York Independent System Operator, a nonprofit company that operates New York’s bulk electric grid and administers the state’s wholesale electric markets. In return, BlueRock bought its energy from Shell. In September 2007, the company closed a $1.1-million deal with Westminster Securities Corp., a private-equity company headquartered at 100 Wall St. in New York City. In February 2011, BlueRock established credit for more than $11 million through the Syracuse office of M&T Bank, allowing it to end its commitment to Shell and to find new suppliers and expand the company’s product line.

Van Horne stresses that his strategy is to “… brand BlueRock as an independent marketer, which reduces its customers’ energy costs through aggregate buying, guarantees a savings in writing, issues an annual “report card” to each customer highlighting the savings, buys its energy locally, and follows strict ethical business practices.”

The final piece to Van Horne’s strategy is to assemble a first-rate leadership team to direct the company. To this end, he announced in June 2011 a reorganization of BlueRock’s management team. Van Horne continues as the president and CEO. He brings 25 years of energy experience in trading, marketing, contract negotiations, wholesale back-office operations, power-systems planning, and systems development. In the early days of energy deregulation in New York State, Van Horne was the president and COO of Niagara-Mohawk Energy Marketing, Inc. He holds a B.S. and master’s degree in engineering from Clarkson University.

Jon M. Gipson serves as the BlueRock COO. Gipson has 25 years in the energy business and formerly was a founder and president of Shamrock Energy. He also was the vice president of business development and gas marketing for GeoMet, Inc., a public exploration and production company. Charles F. Hurley is the vice president of marketing and business development. Hurley spent 30 years in sales and marketing in the consumer-package industry, including stints with The Gillette Company and Procter & Gamble. Michael Young is a vice president and corporate controller. He has more than 15 years of experience in financial operations and management. Young, who holds an MBA degree from LeMoyne College, handles employee benefits and insurance in addition to his duties as controller.

The BlueRock leadership team also includes Jerry Schavone as the director of sales, Jim Nichols as the power-operations manager, Jon Collins as the gas-operations manager, and Tammy Maule as the executive administrator.

BlueRock is structured with BlueRock Holdings as the stock company. Under BlueRock Holdings, the table of organization includes four corporations: New York Energy, BlueRock Energy, BlueRock Energy Services, and Benchmark Energy. All are organized as “C-Corporations.” Twenty private investors own the stock company, with Van Horne as the largest stockholder.

Van Horne says, “BlueRock competes regularly with other energy marketers such as NYSEG Solutions, Hess, Hudson Energy, and Ambit.”

Van Horne is optimistic that, “New York State is out in front on [the subject of] energy deregulation.” He believes “... the utilities should be out of the commodity business in five years, and the layers of cross-subsidies should end.” He adds, “Let competition work.”   

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