PG&E Sells Energy Services Contracts to Chevron Unit
PG&E Energy Services all but completed its exit from the
unregulated energy commodity and related services businesses with
the announcement last week it has sold its remaining service
contracts and related assets to a unit of Chevron Corp. The
contracts cover commercial, industrial and institutional customers
spread around the country. The two San Francisco-based companies
would not disclose terms of the deal, but said it is expected to
close in mid-July.
Earlier this spring PG&E sold the commodity contracts it had
for supplying electricity and natural gas to various large,
multi-site customers to Enron's retail energy services unit for $85
million. That sale is supposed to close by the end of this month.
In total, PG&E Energy Services over the past three years had
locked up deals for the commodity and related services that
exceeded several billion dollars in long-term value.
Prior to a decision late last year to get out of the energy
services business to concentrate on power plant development,
trading and interstate natural gas pipeline operations in the
Pacific Northwest --- PG&E Energy Services signed deals with
Marriott, Motel 6, the Los Angeles Unified School District and the
nation's largest commercial property manager. The deals
collectively exceeded $300 million in value.
Thursday's sale marks Chevron's entry into the energy services
business, and while a spokesperson said the company won't speculate
about future acquisitions, the head of the company's products
business talked bullishly about the new line of business, calling
it "vibrant and growing."
"This purchase will help position Chevron to provide total
energy solutions for its commercial and industrial customers," said
Patricia Woertz, president of Chevron Products Co. "This
acquisition will accelerate our entry into the value-added services
segment of the energy market."
With this deal PG&E Energy Services has only a "handful of
contracts" and mostly small hardware/software infrastructure left
to sell, said a PG&E Corp. spokesperson, noting that Enron and
Chevron got the vast bulk of the energy services assets.
Richard Nemec, Los Angeles
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