Energy Velocity gearing for growth as interest increases in its databases

BOULDER — The Denver-Boulder area is not usually thought of as a hotbed of energy wheeling and dealing, but some Boulder companies may soon make their marks.

Recent startup Energy Velocity Inc. of Boulder, an energy markets information company, is set to hire some 45 employees, mostly personnel with an energy background. The company is a subsidiary of Global Energy Decisions LLC, also of Boulder, which in turn is supported by New York’s Quadrangle, a $1.08 billion private equity fund.

And ironically, that same kind of private cash infusion into energy markets may be creating the need for exactly the kind of database products that Energy Velocity is trying to create.

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Energy Velocity President Jon Ecker said the energy market has continued to change through deregulation, the role of public utilities, and most of all, the new interest of private equity funds in investing in what used to be a blue chip, “widow and orphan investment,” Ecker said.

“While the analytical content (for the energy market) has remained kind of the same, the market has changed dramatically,” Ecker said. “We’re developing products that cater both to the person who needs to use it every day, as well as for the person who just needs to pop into it on a limited basis.”

The energy market itself is extremely complex, as perhaps deregulators in California found, consisting of myriad supplies of coal, petroleum products, alternate electrical power production and natural gas. Tying these supplies and production together are electrical grids and natural gas pipelines, as well as conventional transportation ranging from rail to river barges.

“There are tens of thousands of analysts, fuel managers and load forecasters all trying to tie this information together and figure out where their (fuel supply) exposure is — anywhere from a three-week to a 20-year period,” Ecker said. “The closest thing to it is really military intelligence, where you try to take all this disparate information and tie it together in a meaningful environment, which is primarily geography.”

The database products that Energy Velocity is building are based on a global information systems (GIS) format, specifically MapInfo. The information is available from government sources, but tying it together in a way that can be easily focused on business strategy is more to the point, said Kyle Taylor, vice president of sales.

“I was talking to one of my major clients, a power utility in the Northeast, and she was asking that one specific application be built that it uses all the time,” he said. “With deregulation, utilities have to act differently. And today we’re dealing with new players in the energy market, & companies that may be looking at picking up strategic assets.”

So the database applications that Energy Velocity is building will provide the analytical firepower that current industry analysts expect, together with the kind of shortcuts and built-in charting that would be useful for business analysts who might not have a strong background in the energy field, Ecker said.

Ecker has a long association with Ron McMahan, the chief executive of Global Energy. McMahan gave Ecker his start in the field. In fact, all four founders of the startup worked at Resource Data International in Boulder, which became Financial Times Energy until it was sold to McGraw-Hill in 2001.

That long association, and the known quantity of the managerial expertise, made them an easy bet for Global Energy, said Executive Vice President Jennifer Greene.

“The management team there has been in this business for quite a few years. They know the market, and they what it takes to pull together a lot public domain information in a very useful way,” Greene said.

Global Energy is indicative of a small, but growing, energy industry in the area, Since it was founded last year, Global Energy has purchased Henwood Energy Service Inc. of Sacramento, Calif., and AcuPower of Broomfield, which are also in the energy markets information fields.

“You might be surprised at the number of energy consultants in this area who will be using this data,” Greene said. “The other companies that we have now also are very complementary of what Energy Velocity is doing.”

While not disclosing a funding amount for Energy Velocity, Greene said her company is definitely in it for the long term. “We are very committed to the development of this company,” she said.

Ecker is a self-taught database expert, but one with some fairly lofty long-term goals. While energy traders might not use his products within the next two or three years, Ecker sees a day when his products may provide analysis that even spot traders could employ.

“Most traders are really reacting to the market, and not the supplies,” he said. “I have a lifelong goal of revolutionizing the way that energy is traded.

Energy Velocity’s founding members Ecker, Sherri Taylor, Lee Lierz, Jon and Kyle Taylor have a combined 41 years experience designing, developing and marketing energy industry information products with Resource Data International, Financial Times Energy and Platts.