Jorge Angarita
View from the Top

Information, Liquidity Needed as Market Evolves

Wed, 02/22/2017 - 17:44

Q: What has been the greatest challenge the company has encountered as a qualified supplier?

A: We have encountered several challenges but they are all part of the natural process of opening a new market. The rules are not entirely defined, which is natural. Particularly with off-takers, there seems to be a lack of knowledge regarding risks and options, which hampers operations. What we need is more information, to have the model completely explained so we can make decisions. Even though it does not affect us directly, there is also a problem regarding loan procurement. The Mexican market does not have the level of liquidity that it needs, which is also understandable because financial companies do not have the level of understanding required for the market. We are all participating with a lot of caution, trying to see how the market will evolve.

Q: What actions is B2E taking to remain competitive amid the changing regulations?

A: Sometimes not all the regulatory pieces are in place but that is part of the process. I think that one of the company’s strengths is that our team has experience in other markets such as Colombia, Chile, Argentina, the US and Spain. This experience puts us ahead of other players. It has also helped us in the development of our systems’ platforms. For example, we have a system that allows us to predict congestion prices. That is something we are very proud of since we know that few players have developed such a system. Our goal is not to be a massive company. We have focused our efforts on a few clients with large consumption, providing them with an added- value product offering.

Q: How do you convince off-takers to use your new product offering?

A: Our job is to explain to an off-taker everything that exists in the market. This means explaining tariffs, buying energy and so on. We deliver a portfolio of options so they can compare by themselves and decide what is best for them. It is important to clarify that I do not sell projects. I have a group of 17 partners that generate energy and a large group of off-takers. What I offer my clients is the best possible option from this portfolio. We do not work on point-to-point product placement. It is a solution tailored to each client.

Q: Why do you include services such as natural gas supply and energy-efficiency solutions instead of just electricity?

A: Integration of electricity and natural gas forms part of the well-known concept of an Energy Service Company or ESCO. The service of energy efficiency is the result of our experience in other markets so we wanted to include it in Mexico. Including energy efficiency is part of the business model of a modern energy company that offers integral solutions. Regarding the natural gas offering, many of our shareholders have experience in the natural gas market so we also wanted to be a participant in this.

Q: What constitutes good customer service for an energy company?

A: There are two important elements to consider when we talk about service quality. The first is related to the quality of the power and the second to the quality of the commercial service. Power quality does not depend on the supplier but on the distribution company, currently CFE. Any failure in this part is not the supplier’s fault but the fault of the distribution company. Commercial service is the supplier’s responsibility but the off-takers are not fully aware of this. This is the kind of information that needs to be understood.

Q: How do you expect the Mexican market to evolve in the next two years?

A: The future will depend on what we do today. If we do things right they will get better eventually. It will take a lot of work from the parties involved, including the regulator. So far, the regulator has done a good job but I believe that it needs to keep up that good work. It needs to send very clear signals regarding what participants can expect in the long run. You cannot change the rules of the game.