Northeast Utilities (NU) said Tuesday it has followed through on plans announced last fall to exit the unregulated retail energy marketing business to focus on regulated utility operations. NU subsidiary Select Energy Inc. is selling its retail gas and power marketing business, including its wholly-owned subsidiary Select Energy New York Inc., to Amerada Hess. The sale is expected to close by June 1.
Select Energy has about 30,000 customer accounts in the Northeast and Mid Atlantic regions and posted annual revenues in 2005 of more than $1 billion. However, NU's four competitive businesses, including Select Energy, lost a total of $398.2 million, or $3.03 per share, last year primarily as a result of marking to market and terminating wholesale electricity contracts, as well as various impairments and restructuring charges. The businesses also lost $15.1 million, or $0.12 per share, in 2004. Most of the loss last year -- $278.9 million of the $398.2 million for 2005 -- was due to marking to market and divesting the wholesale energy contracts, the company reported in February.
"The sale of the retail energy marketing business is a significant milestone that benefits shareholders and moves NU toward the completion of divesting our competitive energy businesses," said NU Chairman Charles W. Shivery. "It is a positive outcome for Select Energy's customers, who will be well served by a market leader known for reliable service and operational excellence. This also provides Select Energy employees with the potential to join a Fortune 100 integrated energy company."
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