130 www. bus- ex. com DECEMBER 09 maintain stability. " Since our business is regulated, it was very important to retain people who could manage all the compliance initiatives relating to the rules and regulations of the utilities and public utility boards," he says. A few people were kept to manage the cash flow and treasury functions of the company. Others were kept to help the re- emerging company re- acquire customers and gradually build the company organically. These eight people worked through righting the ship with the knowledge that they too would be let go once the company regained its stability. Once this happened, only Marcille and Johnston remained, and they outsourced all the major business operations. " With just the two of us in the company, we had almost no internal overhead expenses, and we began to build up cash with our remaining customer base," Marcille reports. " We gradually used the excess cash flow to acquire more customers." Then the two began to bring in people they had worked with previously, and they gradually built a management team of seasoned professionals. " They all knew how to run a business, though not necessarily the energy business," Marcille says. " We just couldn't afford to make any hiring mistakes, so we had to hire talented people that we knew." In 2007 Marcille sold the majority of the company's stock to a NYSE- traded business development fund that brought in a large bank to fund the company's operation. " At that point we had reached a level of stability enabling us to bring back the outsourced functions. We brought in industry veterans to build and run internal departments that we previously outsourced," he explains. Marcille attributes USG& E's remarkable success to four key pillars. First is having in- house sales representatives who can give Marcille and his team a better pulse on the marketplace, unlike their competitors who use third-party or contracted call centers. " We talk directly to our own customers and potential customers. This allows us to be more responsive to their needs by providing products that meet those needs," Marcille says. The company's new 23,000- square- foot call center will be in operation in the first quarter of 2010, with a group of 200 working there ( up from the current group of 60). For the first year, USG& E will spend only $ 7 per square foot for the sublease, which includes all utilities, maintenance, security and parking. " This exceptional price will lower our customer acquisition costs to a level where none of our competitors can touch us, and we can pass along those savings to our customers." Second, the company's success rests in its ability to offer products to large markets. " We work with states and utilities to open new markets to deregulation to assure an ever- expanding potential customer base," Marcille explains. His chair on the executive committee of the National Energy Marketers Association offers him greater insight into this endeavor. USG& E currently sells natural gas to New York, Michigan, Ohio, Indiana and New Jersey and soon will have customers in Pennsylvania and Maryland. It sells electricity to consumers in New
means it would drill and own its own wells and would own its own pipelines. " We plan to be the largest marketer in the country in each of our markets by the end of 2011. We are definitely on the energy industry's radar now." York and soon will sell in the Connecticut, Illinois, Maryland and Pennsylvania electricity markets. The third pillar of success adheres to following the industry's rules and regulations. " I can't overstate the importance of following the rules to ensure the systems and processes in place are fully compliant." The final pillar relates to access to capital. " Managing our cash flow carefully has been critical to our rapid growth and success," Marcille says. " Now that we have the benefit of a controlling shareholder that is a business development fund, we don't have limits on capital anymore, which allows us to grow as fast as we wish." So the company that began its illustrious journey by turning itself topsy- turvy is now on a steady and planned trajectory upward. " Our goal is to simultaneously sell in every deregulated market in which we are licensed, and we believe we can increase our business by another 50 percent by next year," reports Marcille. USG& E's long-term goal is to be completely vertically integrated, which U. S. Gas & Electric, Inc. DECEMBER 09 www. bus- ex. com 131 The USG& E family of companies includes the following energy marketers: Indiana Gas & Electric, Michigan Gas & Electric, New Jersey Gas & Electric, New York Gas & Electric, and Ohio Gas & Electric. As the group continues expanding into new territories, Connecticut Gas & Electric, Illinois Gas & Electric, Maryland Gas & Electric, Massachusetts Gas & Electric, and Pennsylvania Gas & Electric will be added. To learn more about USG& E and its national and local brands, please visit www. USGandE. com.