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EES Expects First Profit by 4Q

EES Expects First Profit by 4Q

Enron's retail energy provider, Enron Energy Services (EES), has not turned a profit to date but is expected to do so by the fourth quarter of this year and "from then on," said Marty Sunde, EES' senior vice president of sales and marketing.

Formed by Enron several years ago, EES now employs 4,500 and is active in 42 of the 50 U.S. states. It signed $8 billion in contract obligations for the full-year 1998, which was up from $3.8 billion signed for all of 1997.

"I feel good about exceeding the $8 billion figure," this year, said Sunde. The total annual market EES has to work with is about $280-billion, "so you can see we are only scratching the surface."

EES guarantees electricity and gas savings to any company signing a contract, meaning the $8-billion posted in 1997 translates to client savings of between $200 million and $600 million, he said. The current target market for EES is the Fortune 500. "That is where we can deliver the most value and can take over the 'business within a business,' energy management," he noted.

This year EES will take its business global by expanding outside the U.S. into client facilities in Canada, Mexico and Europe. "Our domestic clients are asking us to go global with them," Sunde said.

In its two most recent deals, EES separately signed energy management contracts totaling $362 million, including a $116-million deal with Ocean Spray Cranberries and a $246 million pact with the Catholic Archdiocese of Chicago. Both contracts cover most of the electricity and natural gas needs of the parties plus a number of other services.

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