Category Archives: Utilities

Utility CFO resigns after less than a year

Xia Liu, CFO of Centerpoint Energy, has resigned to become the CFO at WEC Energy, a publicly-traded utility company based in Milwaukee. Her resignation from Centerpoint is effective immediately, though she will assist in an advisory capacity until May 1, 2020. She starts her new role at WEC on June 1, 2020



Kristie Colvin, currently the Chief Accounting Officer, has been appointed interim CFO. She has been with Centerpoint and its predecessor companies over the last 30 years.

Ms Liu joined the company in April last year. She was previously the CFO of Georgia Power Company and had spent 20 years in various roles at its parent company, Southern Co. She had a base salary of $550,000. Her new role at WEC will pay her $710,000 in base salary. Ms Liu will also receive a one-time bonus of $100,000 and a one-time restricted stock award worth $400,000.

Centerpoint is currently going through a transitional period. In February, CEO Scott Prochazka left with a $7 million cash severance and $8 million in vested stock awards. John Somerhalder, a director since 2016, was appointed interim CFO. A permanent CFO will not be named until after the appointment of a permanent CEO to replace Mr Somerhalder.

SEC filing – Centerpoint CFO resigns

CEO out at Houston retail energy company

Spark Energy stock price

Nathan Kroeker is out as the CEO of Spark Energy. He is replaced, on an interim basis, by founder and chairman, Keith Maxwell, who still owns approximately 66.5% of the stock.

The company was founded in 1999 and is headquartered in west Houston. It supplies energy to residential and commercial customers operating in 19 states.



It’s not clear what prompted the change. EBITDA rose in 2019 to $71 million and the company has net debt of only $66 million. Its share price is currently $6.20, down from $10 earlier in the year.

Mr Kroeker had been the CEO since April 2014. Prior to that. he was the CFO of Spark between 2010-2012. He had a base salary of $450,000. The SEC filing doesn’t mention any details of his severance package. However, the annual proxy for 2018, filed in April last year, stated that Mr Kroeker was entitled to severance of one year’s salary, payable in twelve monthly installments.

He will also get his 2019 earned bonus (the 2018 figure was $250,000) and a pro-rated 2020 target bonus. Mr Kroeker’s unvested stock awards will also vest. As the annual proxy statement for 2019 has not been filed, I can’t quantify their specific worth, but it is likely to be over $2 million.

Mr Maxwell will receive a salary of $1 for his interim CEO role, though he is paid $250,000 in fees for his non-Executive chairman position.

Spark appointed Jim Jones as its new CFO in June 2019. He replaced Rob Lane, who stepped down to become the CFO at Sunnova Energy, which went public in July.

SEC filing – Spark Energy CEO

Centerpoint Energy CEO steps down

Scott Prochazka, CEO of Centerpoint Energy, has resigned from his position with immediate effect.  John Somerhalder, a director of the company, has been appointed interim CEO while the Board conducts a search for a new CEO. The Board determined that ‘now is the right time for a new leader with a fresh strategic perspective.’



Centerpoint Energy has a market capitalization of $13.7 billion.  It has nearly $35 billion in assets and serves 7 million customers in 8 states.

Mr Prochazka has been with the company since 2001 and had been CEO since January 2014. He had a base salary of $1.323 million. According to the 2018 proxy statement, technically there are no formal severance payments due to Mr Prochazka, unless it is a change of control.

[UPDATE 03-09-20 The company has filed a separation agreement and it’s a whopper. Mr Prochazka will get a lump sum cash payment of $7,348,584. His 2016-2018 stock awards will also vest. It’s hard to tell, but they are probably worth about the same again]

When CFO Bill Rogers retired in March 2019, the Compensation Committee gave him a special lump-sum cash payment of $360,000 (about 60% of his base salary). He also had joined the company in 2001.

Xia Liu was appointed as the new CFO in April 2019.

SEC filing – Centerpoint CEO resigns

SEC Filing – Separation Agreement

Houston woman charged with embezzlement

A Houston woman, Beverly Davis, has been charged with embezzlement and theft of assets from her employer, a local labor union.

Ms Davis was an employee of the Communications Workers of America Local 6222. The local represents AT&T workers and is based in the Greenspoint area of Houston. The charges allege that from 2010 to 2017 she used union funds to pay for personal expenses and other authorized charges.



According to the Information sheet filed in the Southern District of Texas, the amount involved is $85,537. The charge sheet doesn’t give any more details than what is listed in the press release. There are no details of the personal expenses or how she was able to carry out the alleged embezzlement.

If convicted, Davis faces up to five years in federal prison and a possible $10,000 maximum fine.

[Update 12-13-19 Ms Davis has pleaded guilty. Also pleading guilty is Evelyn Smith. Ms Smith was the secretary/treasurer between 2005 and 2018. She took $50,968 in union funds between 2011-2018]

https://www.justice.gov/usao-sdtx/pr/local-woman-charged-embezzling-thousands-her-job

Contrasting fortunes for two Houston IPO’s pricing this week

There were contrasting fortunes for the two Houston-based companies that were pricing their Initial Public Offerings this week.

Sunnova Energy International, a residential solar energy provider, priced its IPO at $12 per share.  That’s below the expected range of between $16 and $18 per share. However the company is selling the same number of shares (17.6 million). At that price, the company will raise $221 million and have a market value of $1.1 billion.  The shares will begin trading on the NYSE on July 25 under the symbol NOVA.



Castle Biosciences, based in Friendswood, priced its IPO at $16 per share. That’s at the top end of the expected range of $14 to $16 per share. Also the company also increased the number of shares on offer from 3.3 million to 4.0 million. The gross proceeds are expected to be $64 million. The shares will also begin trading on July 25, but on the Nasdaq under the symbol CSTL.

The company is a commercial-stage dermatological company that uses genomes to provide physicians and their patients with more accurate treatment decisions. The main product is a multi-gene expression profile test that predicts the risk of metastasis or recurrence for patients diagnosed with invasive cutaneous melanoma, a deadly skin cancer.

I’ve added the two companies to the list of Houston-area public companies which you can see here. However I have deleted American Midstream from the list, whose deal to go private was completed yesterday.

Sunnova IPO pricing press release

Castle Biosciences IPO pricing press release

Houston solar energy company sets terms for IPO

Sunnova Energy International, a residential solar energy provider, has set terms for its Initial Public Offering (IPO). The company has its head office in the Greenway Plaza area of Houston.

The company filed confidentially for an IPO back in April. Its first public filing was on 27 June.



The company is offering 20% of its shares (17.6 million) with an expected price of between $16 and $18 per share. At the midpoint, that would raise $300 million, or $277 million after expenses.

$57 million of the proceeds will be used to repay convertible loan notes due March 2021 that have an interest rate of 9.5%. The rest of the money will be for general corporate purposes, primarily funding the growth of the company.

At $17 a share, the company would have a market capitalization of $1.5 billion. About a third of the 186 Houston-area public companies have a market cap higher than this. You can see the complete list on my website here.

The company is expected to price during the week of July 22, 2019

Sunnova S-1/A filing

 

Houston solar company files for IPO

Sunnova Energy International, a residential solar energy provider, has filed for an Initial Public Offering (IPO). The company has its head office in the Greenway Plaza area of Houston.

The company leases rooftop solar energy systems to residential customers usually in the form of a 25-year lease. Customers get the benefit of cheaper electricity costs while the company retains ownership of the system, allowing it to claim federal tax credits.



$1 billion market cap?

Two weeks ago, Reuters reported that the company was planning an IPO that would value the company at $1 billion. In the current SEC filing there is no indication of the number or price of the shares being sold.

History

The company CEO is John Berger. He worked for Enron and founded residential solar energy company SunCap Financial in 2010. He sold that business to NRG Energy before starting Sunnova in 2012. The company is primarily backed by Energy Capital Partner, a PE firm that has raised over $13 billion in funds since 2006. They also led a consortium to take Calpine private in a $5.6 billion transaction in 2018.

For the 12 months ended 31 March 2019, the business had revenues of $111 million and adjusted EBITDA of $44.6 million. The company has 63,000 customers in 20+ states and territories. However, most of its revenue comes from customers in New Jersey (29%), California (26%) and Puerto Rico (14%).

Revenue grew by 35% in 2018 and the company expects the number of residential solar energy systems in the overall US market to increase from 2.2 million in 2018 to 5.4 million in 2024, a 16% compounded annual growth rate.

Problems in Puerto Rico

The business in Puerto Rico is causing some operational heartache. In September 2017, hurricanes Irma and Maria made landfall, resulting in;

  • damage to many of the company’s solar energy systems.
  • damage to Puerto Rico’s electrical grid. This meant that those solar energy systems that didn’t have a battery back up operated at a reduced capacity, even though the system itself was not damaged.
  • residents leaving the island, and suspending lease payments to the company.

In addition regulators in Puerto Rico have started administrative proceedings against the company after finding that it had enrolled 436 customers illegally by attaching signatures to contracts they hadn’t signed.  Sunnova disputes the findings but is unable to state what impact this might have on the business.

New CFO

The CFO of Sunnova is Rob Lane. He joined the company a month ago, from Spark Energy. The previous CFO, Jordan Kozar, left in November 2018.

The company plans to list on the NYSE under the symbol ‘NOVA’. BofA Merrill Lynch, J.P. Morgan, Goldman Sachs and Credit Suisse are the joint bookrunners on the deal.

The filing comes a day after another Houston company, Castle Biosciences, filed for an IPO.

SEC filing

 

 

Houston retail energy provider hires new CFO

Spark Energy has hired Jim Jones as its new CFO, replacing Rob Lane, who stepped down in May to become the CFO at PE-backed Sunnova Energy. According to a report in Reuters yesterday, Sunnova is planning an IPO.

Spark Energy (market cap $390 million) has its head office in west Houston. The company engages in the retail distribution of electricity and natural gas across 19 states.



The company didn’t have to look far for Mr Jones, as he has been a non-executive director since the company went public in 2014. His involvement with Spark goes back further than that as he was the Audit partner for Spark at Ernst & Young. More recently Mr Jones was a partner at Weaver Tidwell, a regional CPA firm, until November 2018. Since that time, he has been providing consulting services on an independent basis.

Mr Jones will receive a base salary of $300,000. He also received a grant of 30,000 restricted stock units, worth about $310,000 that will vest over 4 years.

Mr Jones has stepped down from the board of Spark.

SEC filing

 

Houston utility appoints new CFO

Centerpoint Energy has appointed Xia Liu as its new CFO. She replaces Bill Rogers who announced his intention to retire on November 27, 2018.

Centerpoint has a market cap of $15 billion.  In February it completed its $6 billion takeover of Vectren, a utility company with 1 million retail customers in Indiana and Ohio. In total it now serves 7 million customers in 8 states (Arkansas, Louisiana, Minnesota, Mississippi, Oklahoma and Texas being the others).

Ms Liu joins from Georgia Power Company where she was the CFO and Treasurer. Georgia Power is a subsidiary of Southern Co that serves 2.5 million retail customers. Ms Liu had spent 20 years in various roles at Southern Co. She has a master’s degree in finance from Renmin University in Beijing, China. She also has a master’s degree in business administration from Emory University in Atlanta, Georgia.



Ms Liu has also served on numerous boards of directors of non-profit organizations, including the Atlanta Symphony Orchestra, the Pensacola Symphony Orchestra, Florida TaxWatch and Gulf Coast Health Systems.

Ms Liu will receive a base salary of $550,000 and a sign-on bonus of $100,000. She also receives 25,000 restricted stock units (current stock price $30) that vest over 2 years.

Mr Rogers had a base salary of $595,000 and received a lump-sum payment of $360,000 in connection with his retirement. He had been the CFO for 4 years and had been with the company since 2001.

http://www.prnewswire.com/news-releases/centerpoint-energy-appoints-xia-liu-executive-vice-president-and-chief-financial-officer-300834934.html