Frontier Communications Corporation has lent its name to “FTR Energy Services,” as part of a marketing agreement with Crius Energy. That doesn’t mean Frontier Communications is “getting into the business of retailing energy services,” though. Instead, Frontier is “merely” lending its name to a third party affiliate that will sell “clean energy” including electricity and natural gas to customers.
Frontier Communications does not own the venture. In fact, FTR Energy Services is a wholly-owned subsidiary of Crius Energy. And some would say that is a good thing, for the simple reason that, at various times over the last couple of decades, telecom service providers have dabbled with the notion of adding energy services to the retail menu, as some also had dabbled at home security.
The financial results from energy sales experiments have been quite mixed, and the main reason is low profit margin. Traditionally, a service provider would obtain wholesale capacity from a utility, then offer a discount to consumers. The problem always has been the thin profit margins, as the difference between the wholesale price and retail price has been small enough to squeeze profit margins.
None of that is stopping cable companies and telcos from taking another look at home security, particularly as broadband access, smart phones, tablets and video now offer opportunities not available before.
The company will initially provide 100-percent “green electricity” to customers in New York and Ohio, and clean-burning natural gas to customers in Indiana.