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Cook Inlet Energy Supply

Business: Energy

Location: Century City

Revenue Growth: 321%

Few L.A. companies are headed by Native Americans, but Cook Inlet Energy Supply is and it’s booming.

Chief Executive Gregory Craig, an Inupiat born and raised in Alaska who later graduated from the Anderson School at UCLA, established the company in 1989.

It buys natural gas and electric power from producers and resells that energy to a variety of users utilities, wholesale marketers, major oil and gas companies and commercial end users. It does not own any pipelines or transmission lines, but rents space in lines owned by others.

Driving Cook Inlet’s growth? Deregulation. In the past, producers commonly sold gas directly to customers, under long-term contracts with one fixed price. Nowadays, with industry deregulation and the growth of electronic trading of energy futures, the market has become too complex for many producers to obtain optimal prices for their energy.

Cook Inlet acts as a facilitator for producers to sell their energy, without having to handle thousands of calls from buyers, and for buyers to purchase gas and energy at optimal prices, rather than be locked into long-term contracts.

Craig likens his company to Southwest Airlines.

“We took an inefficient system and found innovative ways of making it better,” said Craig. He cites a low cost structure, a high level of service, strong customer relationships, and a diverse workforce of 40 people (who among them speak 20 languages).

There’s also Cook Inlet’s ownership structure. The company, which takes its name from the Alaskan bay where several major gas and oil pipelines terminate, started out as a Los Angeles-based affiliate of Cook Inlet Region Inc., one of 12 regional corporations established under the 1971 Alaska Native Claim Settlement Act. (Rather than grant Inupiats, Eskimos, Aleuts, Haidas and other Native Alaskans land for establishing reservations to live on, the federal government set up regional companies for them to own.)

Cook Inlet Region was bought out in July by a three-way partnership of Inupiat Energy Corp. (which is owned by Craig and Cook Inlet COO Hans Saeby), Enron Minority Development Corp. (a subsidiary of Houston-based Enron Corp.), and Houston Natural Gas Co.

The involvement of two large utilities Enron and Houston Natural Gas provides Cook Inlet with the necessary financial depth.

“You need to be large to compete,” said Craig. “And we are big enough to play effectively, but not so big that the bureaucracy and complexity of being a large corporation pollutes our corporate culture.”

Some of the growth has been attained by broadening out from natural gas to marketing newly deregulated electrical power. Craig sees much of the future growth coming from expansion into other parts of North America, aside from its traditional stronghold on the West Coast.

He projects 1998 revenues will hit $1.2 billion, which would be a 60 percent increase over last year.

Edvard Pettersson