I recently spent some time with two entrepreneurs in the energy industry, Gary Boese and Patrick Kelly. Gary and Patrick have built an online marketplace for the utility and energy industries to buy/sell goods and services and even help each other out in a storm situation. The marketplace is known as Ecapiter. I trust you enjoy reading this interview.

 

Jon:  Please give us a background of yourselves and tell us what Ecapiter is about.

 

Patrick:  Gary and I first met back in 1980 and our careers have tracked fairly closely since.  We’ve devoted almost all of our careers to delivering solutions of one type or another, in the form of software and/or services, to the utility industry.  We’ve cut our teeth on CIS applications and services which has given us a good insight into all aspects of a utility’s operation and the challenges it faces on a daily basis.

Gary:  In addition to the above, Pat and I spent quite a few years leading software sales and support organizations in the international community.  Both of us have lived and worked abroad and been involved in managing direct sales organizations and managing local agents.

 

Jon:  Sounds like deep experience in the utility industry.  Tell us a little bit about what your venture is right now and why it is important.

 

Patrick:  Ecapiter was formed to provide utilities around the world a convenient forum in which they could buy and sell assets that are excess to one utility and required by another.  This allows them to sell and buy at the best possible price.  According to utility executives with whom we have visited, today’s business environment requires more cost awareness than ever.  Therefore, we feel Ecapiter will quickly become a valuable service to the industry.

 

Jon:  What is the business model around assets in the utility industry?  Obviously, we’re a very capital intensive, asset intensive industry.  What is the basic model of Ecapiter?

 

Patrick:  Based on our relationships and experience in the industry we became aware of the concern about the billions of dollars tied up in stranded assets (material and equipment no longer required). This was a result of regulatory reform, mergers and acquisitions and advances in technology.  We didn’t see any avenue being provided to facilitate the sale of these stranded assets on an industry-wide, world-wide basis.  Of course , in other parts of the world, there is a shortage of certain types of assets that are needed to build infrastructure and our concept really is based upon the idea that we can help these countries buy the assets they need at the best possible price.

 

Jon:  So, Ecapiter has an international or global reach or is it going to start in a specific geographic area?

 

Patrick:  We certainly plan on establishing a significant presence in North America to create a viable service and then extend into other countries as the demand dictates.

 

Gary:  We think we may be drawn into the international market by companies that have contracts in other countries and see what we are providing and work through us to obtain the assets they need at a reduced cost.  It was also interesting to discover that NRECA has projects underway in some of the emerging countries where they are assisting utilities expand their infrastructure. 

 

Jon:  That’s interesting you bring up NRECA.  Can you talk more about your target customer at the utility?  Are you looking investor-owned, rural electric, municipal and also commodities (electric, water, gas)?  What’s the scope of your client base?

 

Gary:  We see all types of utilities using this service.  Due to the environment described earlier and the aging infrastructure in the water and natural gas industries, it is estimated that trillions of dollars will be spent over the next thirty years to expand and refurbish this infrastructure.  Our scope includes all three types of utilities whether IOUs, munis or co-ops.

 

Walk me through what a utility does to sign up.  Let’s say that they have extra assets or they are looking for something.  What’s the process?  How do they go about using your service? 

 

Patrick:  In order to list or buy assets you must be a member.  Membership is free and is required in order to limit users to utility personnel and to appropriate contractors.  The first step is to submit an application for membership which is available on the Ecapiter website.  Upon notification, you are ready to participate in the process of listing or buying assets.  Ecapiter personnel are available to assist in the process as required.

 

Jon:  Who is responsible for the delivery?  Let’s say that someone lists and someone buys.  Who is responsible for the delivery of the assets?

 

Patrick:  The sellers are obviously responsible for having the assets available for transporting but the buyers are responsible for the transportation and receipt of the assets.  Most utilities have a relationship with resources to accomplish this but we are in a position to help them by referring them to appropriate people when necessary.  For large, complex projects (i.e. substations, generating plants) we can provide referrals to people who specialize in disassembling or deconstruction and shipping this type of equipment. 

 

Jon:  So, if I’m a utility, who is the actual user?  Is it a procurement department or could it be into a construction department or field service type job role?

 

Gary:  It could be any or all of the above, Jon.  It is more a function of how the utility is organized to accomplish and control these tasks today. 

 

Jon:  And I’ve also noticed that on your website you have an area for disaster recovery listings.  Can you talk a little about disasters and disaster recoveries?

 

Patrick:  Unfortunately, disasters come in all shapes and sizes and are something that each utility experiences.  What we want to do is provide each participating utility the opportunity to list assets that they would make available for sale to a utility that has gone through a disaster.  For example, a utility can go into the Disaster Recovery section of the Ecapiter website and list assets they may have planned for an upcoming construction project but would sell only if a fellow utility has experienced a disaster and needs help.  This provides participating utilities an opportunity to quick access to critical material and equipment.

 

Jon:  Certainly sounds like a novel concept.  I’m not sure I’ve seen something like this in the marketplace.  Have you got any competition or is there anyone like this doing an exchange in the market?

 

Gary:  The only service that we have found that is similar is not dedicated to the utility industry.  The service they offer is diluted as a result of trying to be all things to all people.  Our purpose in life is to serve the utility companies.

Jon:  So this is not overstock.com then.

 

Patrick:  Exactly

 

Jon:  Very good.  This has been very beneficial and I trust our readers will enjoy reading this.   Your website can be found at www.ecapiter.com.  I want to thank Gary and Patrick for joining us.

 

Patrick:  We certainly appreciate the opportunity to visit with you, Jon.  The only thing I would like to add is we certainly would welcome inquiries.  Anybody that has questions can certainly call us.  Our toll free number is listed on the site.