A company spokeswoman Thursday confirmed reports that the multimillion dollar energy retailer Glacial Energy is being acquired by a private equity company. It was unclear how the sale could affect Virgin Islands employees who, at one point, numbered more than 100.
The move will require regulatory approvals so it is far from final.
In fact, Jennifer Nugent-Hill, acting head of the V.I. Economic Development Commission while the executive director is on leave, said that as an EDC beneficiary, the company must notify the commission, but that hasn’t happened yet.
As of Thursday, “We are not aware of any transfer or closure of Glacial Energy,” she said in an email responding to questions.
Incorporated in Massachusetts, Glacial Energy did business in Texas and several other states. In recent years it was plagued by lawsuits and accusations that a principal, Gary Mole, was involved in mining of conflict minerals in Africa. It also ran afoul of the Texas regulatory agency, the Public Utility Commission.
In 2009 it opened offices on St. Thomas to take advantage of tax benefits through the territory’s Economic Development Commission. Beneficiaries are required to contribute to local charities and to employ a minimum number of Virgin Islands residents.
The company acquiring Glacial Energy is Voltage Energy Holdings LLC, according to Marjorie Kass, who said she was recently hired by Voltage as its spokeswoman but she gave no details about that entity. It is not incorporated in the Virgin Islands, according to staff at the Corporations Division, and an internet search for Voltage Energy Holdings was fruitless.
“The acquisition has not been finalized,” Kass stressed. However, it has gotten far enough along that Voltage shareholders recently flew to St. Thomas to check things out, and Voltage has installed an “interim head” in the office, whom she declined to name.
Kass said she did not know whether Voltage or Glacial Energy had notified the EDC of the pending acquisition, but added, “I believe that that must be part of the due diligence for acquiring the company.”
She said she could not say whether Voltage will want to maintain the benefits, but added, “Of course, they’re aware of the EDC deal and they’re aware of the benefits.”
Nugent-Hill’s response made it clear there is a good bit of process ahead whatever road Glacial Energy takes.
“If there is to be a transfer of the company to another company, an application must be submitted and a public hearing held, then a decision (made) by the VIEDC Board,” she said. If there is a change of ownership, the EDC makes a formal review. If the business closes, the company has to comply with the V.I. plant closing law and must advise both the EDC and the Department of Labor.
Kass indicated that Glacial Energy was not advertised for sale but “everyone in the energy business knows each other” and that Voltage “plans to build it back up.”
She said details for the new company are still being worked out; even the name is uncertain. “We may call it something else.”
As for Mole, the former president and chief executive officer, Kass said, “He’s selling the company. He will no longer be involved.”
That would be in line with an August 2013 order resolving the conflict between the PUC and Glacial Energy Texas.
The agency had considered revoking Glacial’s license, in part because Mole had failed to reveal in Glacial’s initial application that he was a principal in another failed company in the state, Franklin Power Company. PUC initiated an investigation in 2012.
That prompted Glacial to sue the agency. The two reached an agreement that allows Glacial to continue operating in Texas but places a number of conditions on it. According to the order posted on PUC’s website those include:
– the company must pay a $100,000 administrative penalty;
– it must invest $250,000 to meet three requirements: a) procuring an annual regulatory internal audit; b)acquiring a $1.5 million letter of credit for a period of two years; and c) assigning and maintaining a person to act as a liaison with commission staff regarding customer complaints;
– it may not collect state sales tax on residential electric service and must refund any outstanding tax payments collected;
– it must issue new stock;
– and Gary Mole and his family must relinquish any and all positions with the company and any financial interest in it.
“They can continue to operate as long as they comply” with the conditions, PUC spokesman Terry Hadley said Thursday.
Rumors have been circulating in the territory for months that Glacial Energy’s operations on St. Thomas were on shaky ground. According to one version of the pending acquisition, the new owners will retain only about 20 employees.
Kass, however, said it is too early to say how personnel will be affected, if at all. She said she was unable even to say how many people currently are employed in the territory’s offices, which are located at Yacht Haven Grande.
According to a 2011 report, quoting another spokesperson, some 115 people were employed then on St. Thomas. The V.I. staff worked in customer care, billing, pricing, contract administration, sales, human resources, legal, financial, credit and collections, and in IT, with the average salary being $65,000.