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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