Liberty Power was featured on the front of the business section of its hometown paper, the South Florida Sun-Sentinel.
Liberty Power grows far from home
But Fort Lauderdale-based Liberty Power Corp. has grown into the largest minority-owned electricity retailer in the U.S., with sales now topping $700 million per year, and it still can’t sell in Florida.
Liberty Power operates in 15 states and the District of Columbia, where governments allow competition in selling energy to consumers. It buys electricity in bulk from producers and sells it retail to businesses and homes — often at prices cheaper than what the producers offer.
Yet in the Sunshine State, only regulated utilities like Florida Power & Light can sell energy to consumers.
So, why does Liberty Power employ so many people on Cypress Creek Road, including many energy-buying specialists that had to be transplanted here from Texas and other deregulated markets?
The story begins with its chief executive, David Hernandez, whose family left their native Cuba for South Florida in 1975. He studied accounting here, joined Nortel, earned a master’s degree in New York, worked on Wall Street and then took a job with Enron in Houston that included some work in retail energy.
When Enron imploded and laid him off in 2001, Hernandez saw potential in retail electricity and called his brother and a close friend in South Florida to suggest they enter the business together. They told him yes – and asked him to head back home.
With his brother Eliezer living in West Palm Beach and his friend Alberto Daire in Miami, “Fort Lauderdale was a nice middle spot for us,” Hernandez said.
The three partners started by hiring teams of salespeople to go door-to-door in New York City, mainly to small- and mid-size businesses. Their company offered consumers a chance for rates lower than utilities.
The business focuses on offering longer-term contracts at fixed rates, so that consumers can lock in prices and budget better. That’s key, because electricity rates can fluctuate wildly with fuel costs and weather, making it tough for consumers to plan for their power bill, Hernandez said.
Today, Liberty Power serves some 180,000 customers, including many large businesses like Ryder and Costco that use minority-owned suppliers.
The future looks bright too.
Nationwide, the retail energy market tops $45 billion in revenues per year and continues to grow, said Young Kim, a principal in Energy Research Consulting Group specializing in the industry. Retailers generally offer electricity 5 percent to 10 percent cheaper than regulated utilities do, based on smaller profit margins and leaner operations, he said.
Liberty Power ranks among the 20 largest U.S. energy retailers and the biggest based in Florida, Kim said. It stands out from rivals for two main reasons: Its minority ownership attracts big business and minority consumers. Plus, it relies more for sales on independent brokers who represent consumers instead employing its own sales force. Brokers embrace that model, since they need not fear that the retailer later will send its own sales staff to steal away the broker’s customers, Kim said.
Hernandez expects Liberty Power to grow to $1 billion in sales within the next few years, partly based on custom offerings like electricity only from “green” producers. Still, the privately held company will remain lean, likely not adding much to its current staff of about 275 people.
Revenues could grow faster, however, if more states open their energy market to competition as California, New York, Texas and others have. Hernandez would like to see Florida deregulate, so he could sell where he lives – and likely help cut down on his travel to see key accounts.
In the meantime, the Cuban-American executive enjoys being near friends and family in South Florida. His seven brothers and sisters all live near one another in the West Palm Beach area.
“It’s pretty amazing,” said Hernandez. “After being in this country for almost 40 years, we are still all within a three-mile radius of our mother.”
Liberty Power Corp.
Founded: December 2001 and based in Fort Lauderdale.
Business: Retail electricity. Buys electricity from producers and sells it to homes and business – often cheaper than producers do and often in contracts at fixed rates to help consumers budget.
Revenue: About $711 million in 2013; projected at $795 million this year.
Employees: About 275, mainly in South Florida.
Source: Company executives, http://www.libertypowercorp.com