CHOICE! Energy of Houston, Texas
Source: Houston Business Journal
Choice Energy is
taking advantage of the turmoil in the energy industry to capture quality
workers to help clients steer through the deregulation maze
By Allison Wollam
Javier Loya (Choice
Energy) had his sights set on law school while attending Columbia
University, but changed his plans after an internship with a fast-paced energy
“I was immediately attracted to the business,” says Loya, who is now
president of natural gas brokerage Choice
Energy in Houston. “It’s very energetic, fast-paced – and the money
isn’t bad either.”
During his internship at Connecticut-based United Crude Oil, the Gulf War
broke out. Loya’s responsibilities quickly grew from assisting brokers to
being thrown into the trenches and becoming a broker himself.
Loya went to work for United Crude Oil full-time after graduating from
Columbia University in 1991, but after the natural gas industry was deregulated
in 1993, Loya saw an opportunity to start his own business.
It’s not surprising that Loya got the entrepreneurial itch, considering
his six siblings are also involved in entrepreneurial stints of their own. Loya’s
brother, Mike, is president of Houston-based Vitol, one of the world’s
largest independently owned crude oil trading companies. His sister, Irma, is
CEO of an engineering and consulting firm in Alabama.
Loya and two partners founded Choice
Energy in 1994, crafting one of the first institutional natural gas
brokerage houses following industry-wide deregulation.
He made headlines earlier this year when he signed on as minority owner for
the Houston Texans and was awarded “Entrepreneur of the Year honors by the
Houston Hispanic Chamber of Commerce.
Loya helped grow Choice Energy
to 11 people in 200. Today, the company employs a staff of 65.
Even though the company has grown exponentially, Loya remains an active
trader and stays glued to his computer screen and phones until the market
closes each day.
Choice Energy brought in $8 million in revenue in 2001, and Loya expects the
company to double that to $16 million this year.
Eight-year-old Choice Energy
arranges commodities futures and other kinds of transactions for oil and gas
companies and major banks. The company’s client list includes BP, El Paso
Energy and Morgan Stanley Dean Witter.
Although the local energy industry is struggling right now, Loya says his
company had benefited since many of the large companies began laying off
experienced employees earlier this year.
“A lot of the bigger companies have displaced a lot of quality energy
traders and marketers,” he says. “We now have people on our staff from
Enron, El Paso, Reliant and traders from Wall Street banks,”
Loya points out that because many of the large players in the energy
industry are shifting their emphasis away from trading, his company’s role
has become more important than in the heyday of the industry.
“In one way, we’ve lost customers, but we’ve also picked up market
share and have doubled in size the last two years,” Loya says. “As you see
more and more companies downsize, the services will be outsourced to companies
like ourselves. This situation has made someone like us the expert in being the
But Choice Energy wouldn’t
necessarily have been able to thrive during the energy downturn unless it
continued to be instrumental in bringing new products to the marketplace, Loya
says. He points out that institutional players often come to Choice
Energy to help them move commodities in the most effective, up-to-date
Loya says it’s a constant challenge to keep his company on the cutting
edge in the industry, but he make sit a point to hire innovative employees in
an effort to keep the company at the top of its game.
“We foster an entrepreneurial atmosphere, and there’s not a high level
of bureaucracy in the company,” says Loya. “That way, if we see something
new and different, we can act on it quickly.”
In fact, until recently the company didn’t even use titles to identify
members of the staff. Because of Choice
Energy's growth, job titles were ultimately assigned to foster better
communication among the staff.
Loya points out the fact that companies now having the opportunity to choose
their energy providers has really had an impact on the business.
“We expect Texas to be the model for the rest of the country with
deregulation,” he says.
According to the U.S. Department of Energy, Texas is one of the 18 states
that have initiated electricity competition.
Loya says his company stands out from competitors because it’s still small
enough to give personal service to each customer and is able to shift its focus
on emerging energy trends more easily than most big companies. Robert Kennedy,
chief financial officer for Gillman Auto Group, says his company signed a
contract with Enron Corp. seconds after deregulation came about and went through
a difficult process trying to switch back to Reliant Energy after Enron began
“We began looking for a better deal, and Choice
Energy found one for us, they’ve saved us a lot of money.” Kennedy
Gillman Auto Group benefited from one of Choice
Energy's newer divisions, Choice
The two-year-old retail division negotiates on behalf of businesses with the
goal of lowering their energy bills. Choice Energy Services’ clients include
the Home Depot, Spec’s Liquor Stores and the city of Houston.
Loya admits it was a risk to get involved in the retail sector, but says he’s
learned that entrepreneurs can’t be afraid to take chances.
After conducting intricate research on the subject, Loya found that the cost
of actually becoming an energy provider would be about $2 million, so he
decided to switch his focus to using the company’s experts to arrange
transactions for retailers.
“We were still able to get in the market and provide services and offer
assistance without a vested interest,” he says.
In the future, Loya says he hopes to grow Choice
Energy to a full-service energy company. He envisions the company
eventually being able to handle all crude oil derivatives.
Today, Choice Energy
serves only as a broker for natural gas and ELECTRICITY. Loya expects the
company to enter the provider market in the future and to eventually purchase
commodities and sell them to commercial and industrial clients.
“I envision ourselves being able to handle the whole barrel,” he says.
Loya says there’s no timeline for Choice
Energy’s growth. In fact, the wants to take it slow, making sure the
company enters the right markets at the right time.
“Being a small company, we’re not going to do it right away,” Loya
says. “We like to find our niche and grow it when we see the opportunity.”