|This article needs additional citations for verification. (June 2012)|
|Industry||Retail electricity provision|
|Rob Snyder Chairman
Mark Schiro President, CEO
Number of employees
|245 (October 2012)|
Stream Energy is an American retail electricity and natural gas firm active in states which have deregulated energy markets. The company is headquartered within the Infomart building in Dallas. Stream Energy uses multi-level marketing to recruit independent distributors through its marketing division, Ignite. The company provides services to both residential and commercial customers.
Stream Gas & Electric Ltd. (d/b/a Stream Energy) was founded in August 2004 after the deregulation of the Texas electricity market. Stream Energy was licensed as a retail electrical provider by the Public Utilities Commission of Texas on 21 January 2005 and formally began operations through the initial enrollment of Texas electricity customers on 7 March 2005. The company has since expanded to other states. The company has expanded, and also operates in Georgia (2008), Pennsylvania (2010), Maryland (2011), New Jersey (2011) and New York (2012).
Stream Energy operates a separately-branded marketing arm, Ignite, to implement multi-level marketing in the company. Substantively employing the same model as Excel Communications, Ignite associates earn commission through the gathering of energy customers. They also earn income when the sales agents they recruit into the business gather a required number of energy customers. All money paid through the Ignite sales organization is solely attributed to customer gathering activities.
Local meetings known as "Business Presentations" are held to promote the concept. Sales associates also maintain Ignite internet-based "homesites" that serve as informational web forums for recruits.
In 2009, class-action lawsuits were filed against the company in Texas and Georgia on behalf of sale associates. The suits allege that the company is acting as a pyramid scheme which is substantially more active in recruiting sales associates than in recruiting new customers. In Georgia the suit was dismissed on procedural grounds. As of November 2014, the suit in Texas remains ongoing. Scott Clearman, the attorney who filed both suits, has also alleged that sales associates are specifically trained to avoid discussing rates, since Stream Energy's customers in Texas pay substantially higher rates than the state's monopoly customers.
In 2010, the sign-up cost in Georgia was $300, with a $25 monthly fee to maintain a website. Associates typically received between $0.50 and $3 a month for each customer they recruited. According to Robert L. FitzPatrick of the consumer watchdog group Pyramid Scheme Alert, 90 percent of the company’s sales force lost nearly all their investments; 8.5 percent made no profit; 1 percent made minimum wage-level income, and fewer than 0.1 percent earned substantial income.
According to Stream Energy's income disclosure statement, among sales associates who maintained their position qualifications throughout calendar year 2013 and earned at least one commission or bonus payment (representing 84.5% of all sales associates), the average annual income was $686.90; for the majority (81.9%) of those associates, the average annual income was $117.12.
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