Golf links lead to energy startup: Former pro is launching a retail electricity brokerage for residential customers

TEXAS - Like most golfers, Scott Fawcett would rather be on the PGA tour than working for a living. But he's different: He was good enough to make the tour.

Mr. Fawcett also made friends on the links. And he's better at that than a lot of golfers, too.

This former tour pro used his golf connections to start an online energy business, and now he's launching a new retail electricity brokerage for residential customers.

His small startup, Smart Energy Texas, is a rare entry in a retail market dominated by larger players, but Mr. Fawcett hopes the combination of recent rate hikes and hefty summer power bills will drive consumers his way.

"Bills are going to be eye-popping starting this month," says Mr. Fawcett. "You're finally going to see the residential consumer look for some relief."

His firm has a marketing agreement with Richardson-based Cirro Energy under which he will resell the firm's power to residential customers with special pricing and promotions. Under the unique arrangement, Mr. Fawcett effectively acts as part of Cirro's sales force.

Mr. Fawcett says his plan is to slightly undercut Cirro's price while remaining free to strike deals with other power companies.

"We've taken a reduced commission in order to make it a better deal for the end user," he said.

It was both golf and his departure from the sport that brought Mr. Fawcett to energy. Mr. Fawcett, 32, played as a teenager growing up in Plano, made the golf team at Texas A&M University and turned pro just after graduation.

He went on to tournament wins, including the 1998 NGA/Hooters Lady Luck Classic in Mississippi.

On a wall of his home office, there's a framed newspaper story that shows him hitting his approach shot on the 18th green before finishing four strokes ahead and six under par.

Mr. Fawcett competed in the 1999 U.S. Open, but his professional hopes dimmed in 2001, when he suffered a shoulder injury severe enough to keep him off the circuit.

Unsure what to do next, Mr. Fawcett talked to some of his golf buddies at Gleneagles Country Club.

One of those buddies was Cirro president Tim Terrell, who suggested that with his degrees in finance and economics from A&M and extensive contacts among country club movers and shakers, Mr. Fawcett could work as an independent sales rep.

Mr. Fawcett was successful enough at turning his golf contacts, which included dozens of business and building owners, into new clients that he opened his own consulting firm.

"He was very well connected," says Cirro executive vice president Tim Bell, who golfs with Mr. Fawcett. "It's a good thing for him that he got injured."

Mr. Fawcett still plays golf several times a week and has a 5 handicap at Bent Tree Country Club in North Dallas. He's given up his professional status and now competes regularly on the national amateur circuit.

Mr. Fawcett saw his opening in the residential market, which is less developed than the commercial market, when TXU requested regulatory approval in October for a 24 percent rate hike. That followed the spike in natural gas prices after Hurricane Katrina.

More than 100 firms have entered the power resale market since deregulation began in 2002, but few focus on residential, says Terry Hadley, a spokesman for the Public Utility Commission.

Phil Tonge, president of Texas retail operations at TXU rival Direct Energy, said most consultants who broker energy contracts work on the commercial side, and Mr. Fawcett is "one of the only ones that have expressed interest in the residential side."

More than half of commercial power consumers have switched, compared to about a third of residential consumers, Mr. Tonge said.

Energy lawyer Tom Oney of Hunton & Williams LLP says retailers must act soon to catch new customers because more residential clients are switching.

"This time period until the end of the year is going to be key," he said.

Mr. Fawcett needed Internet expertise to launch Smart Energy, so he turned to another golfing friend from Bent Tree Country Club.

Shane Keller left his job as a Yahoo ad executive to help Mr. Fawcett co-found Smart Energy Texas. Mr. Keller, 38, formulated a strategy for the Web site, www.smart energytx.com, which he expects will be the main way the firm reaches new customers.

"We're attacking the market in a way no one else is doing," he said.