Working Capital Loans for Utility Companies

There was a time when giant utility companies monopolized the industry and charged fees as they saw fit. But not anymore. Because of laws passed in reaction to the Arab oil embargo in the 1970s, privatization of energy production is now possible. Companies can start producing energy for the mass market, and even small businesses can get in the action.

Huge Firms Leading the Way

Since major utility companies still control the vast majority of energy in the country, it stands to reason that large firms that offer cleaner and more affordable energy lead the way towards improved energy production.

  • In Georgia, a company called Georgia Solar Utilities (GaSU) is building an 80-megawatt solar farm. Its long range plan is to develop 2 gigawatts of solar power for consumers. The law mandates that the existing utility company Georgia Power buys the energy it produces, but its buying price was deemed too low by GaSU. Because of this, GaSU plans on selling their energy to the consumers directly.
  • In Colorado, a company called PanTerra Energy is registered as a geothermal utility. Its plan is to sell geothermal heating and cooling directly to owners of public and commercial buildings.

Geothermal pumps take advantage of the stable ground temperatures for heating and cooling, and they use 70% less electricity than do conventional air conditioners and boilers.

  • In California, the Gen110 Company is also trying to convince more homeowners to generate their own electricity through the installation and use of solar panels. Homeowners can save thousands of dollars each year, because they don’t have to pay the transmission and distribution fees that traditional utility companies charge to deliver the power from their power plants.

A Small Business Case Study

Even a small player can participate in this energy revolution, as long as it has sufficient working capital. One good example of this is PeakEnergy LLC, which was founded back in 2000. Its purpose was to help energy providers such as utility companies to make use of standing generators at private companies during periods of peak demand for energy.

Because of the service this small business provides, utility companies didn’t have to build more power generation and transmission capacity to meet the energy demands for these peak times. Nor do they have to charge higher prices for additional power for these peak periods. Even the owners of the backup generators benefit because they get a credit when their standby generators are used.

The founder of PeakEnergy was able to start his business with a grant from the American Public Power Association, along with a working capital loan guaranteed by the SBA. The working capital loan was used to develop the custom Internet-based software, and also to buy the required hardware used to connect with the generators. With this system in place, energy service providers can control multiple standby generators from their respective dispatch centers.

As you start and grow your own small business utility company, working capital will always be an issue. Get a working capital loan so you can make sure you have enough purchasing power for your own small business.

 

Published by

Chris Lanchech

Hi everyone, my name is Chris and I am a junior analyst at Neebo Capital and an inspiring blogger. We enjoy speaking with business owners and entrepreneurs who come to Neebo Capital looking for cash flow solutions. Give us a call toll free at 1-888-382-3766 or Visit us online at www.neebocapital.com

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