PLANO    A local start-up retail electricity provider is taking on new space and more than doubling its employee base. 
 
Cirro Corp., a Plano-based utility services company incorporated in May, has leased 10,025 square feet of additional office space at 1700 Preston Road in Dallas to house its sales and sales-support staff and its order-entry personnel. Cirro said it also intends to use the space for a call center -- a function it previously outsourced. 
 
The company said it will maintain its Legacy Business Park headquarters. 
 
Cirro's chief executive, Tim Rogers, said he also plans to grow a staff of 20 to about 50 people by year's end. 
 
Rogers said the company spent May through December finding office space, setting up back-office systems, billing operations and other functions. It began bidding for contracts and selling electricity Jan. 1. 
 
Tim Bell, Cirro's executive vice president, said the company has signed "hundreds of residential and hundreds of business customers" in the two months since the state's electric markets were opened to competition. The company is focusing on residential and small to medium-sized businesses. 
 
Under deregulation, the state prohibits the home-base utility -- such as TXU in the Metroplex -- from competing for smaller commercial accounts using fewer than 1,000 kilowatts in any month during the year. That gives smaller providers an edge in targeting small commercial accounts. 
 
Bell said Cirro, which currently services only TXU's territory in and around the Metroplex, plans to establish an office and offer services in Reliant Energy's territory -- Houston and its surrounding cities -- within the next 60 days. 
 
He said by year's end Cirro plans to do the same in Corpus Christi and South Texas, the home territory of Corpus Christi Central Power and Light. The company also plans to set up an office and sell electricity in West Texas, the home territory of Texas-New Mexico Power Co. 
 
Most of Cirro's management group -- Bell, Rogers, and Tim Terrell -- have roots in Caprock Communications. Rogers and Terrell helped found the telecommunications company in 1992. Bell served as Caprock's vice president of sales and marketing for three years. Along with partner Gary Shapiro, the trio was looking for a venture after Caprock's sale in December 2000 and decided to start Cirro in light of the deregulated electricity market in Texas. 
 
"The telephone industry kind of turned itself into a commodity over the last couple of years," Rogers said. "And we saw an opportunity with electricity as far as the parallels that deregulation created between electricity and telecommunications." 
 
The company is self-funded by its four founders, but Rogers said he is evaluating potential angel investment. What's more, a recently signed five-year agreement with the client-services division of Kansas City, Mo.-based energy wholesaler, Aquila Inc. provides a multimillion dollar revolving line of credit as well as a credit facility to purchase power from suppliers. 
 
One problem facing small utilities is a Texas Public Utility Commission requirement that they keep $100,000 on deposit for every $250,000 in customer billings. While that's not a big problem for mega-providers, which typically satisfy the requirement with large credit facilities, most smaller companies can't keep that kind of money sitting in a bank. 
 
In addition, smaller utilities have to pay the transmission and distribution service providers -- TXU in Dallas and Reliant in Houston -- for use of the wires and lines to deliver actual electricity to customers. That fee carries a tariff, fixed without regard to the utility's size. From a cash-flow standpoint alone, it would be difficult to compete for large contracts. 
 
Cirro said the credit facility provided by Aquila will help with its marketing, expansion and funding efforts, because the company will not have to tie up millions of dollars of cash in deposits. 
 
In return, Aquila received a 10% equity stake in Cirro. 
 
Contact DBJ writer Hala Habal at hhabal@bizjournals.com or (214) 706-7123. 
 
Copyright 2002 American City Business Journals Inc. Click for permission to reprint (PRC# 1.1647.563002) 
 
About Cirro Corp.
Cirro Corp., founded in May of 2001, brings a new, smarter approach to utility services. The customer-focused and service-oriented company provides bundled utility services – including electricity, telecommunications and Internet access – to business and residential customers. Cirro offers its customers multiple service package options as well as the tools to control, monitor and adjust service usage in real-time. The company is lead by a management team with successful experience in deregulated markets. For more information on Cirro, visit www.cirroenergy.com or call 800 MY CIRRO.

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