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Direct Energy Buys Entergy Solutions' Texas Competitive Customer Base

Direct Energy has acquired the competitive electric customer base of Entergy Solutions Ltd. located in the Electric Reliability Council of Texas (ERCOT) grid. The more than 100,000 residential and commercial customers are located throughout Houston, Dallas/Fort Worth and South Texas. The $30 million acquisition increases Direct Energy's Texas customer base to over one million customers.

Direct Energy said the addition of customers in Houston and Dallas/Fort Worth will grow Direct Energy's market presence to about 10% in those areas, solidly positioning the company as the largest non-incumbent provider in Houston and one of the largest competitors in Dallas/Fort Worth. Direct Energy's overall ERCOT market presence will be boosted by two percentage points to approximately 18%. Entergy Solutions is an Entergy retail affiliate.

Direct Energy, which is part of the Centrica group of companies, said it will honor the existing terms of agreement that Entergy Solutions has in place for its customers with equivalent or lower rates.

Centrica said that the transaction underlines "Direct Energy's on-going confidence in the Texas market, where the company has reinforced its position as the clear number three energy provider."

"It is with mixed emotions that we are informing you that as of April 20, 2006, Entergy Solutions has sold its Texas retail electricity business to Direct Energy," Entergy Solutions said in a notice aimed at its customers posted to its website ( "Direct Energy was carefully selected to take over your account because it shares Entergy Solutions' philosophy of delivering competitive prices and excellent customer service."

Direct Energy's latest acquisition follows the recently announced purchase of the Paris Energy Center, which represents the third power station that Direct Energy has bought in Texas since 2004, following the acquisitions of Bastrop Energy Center near Austin, Texas, and the Frontera Energy Center, in Mission, Texas.

The company also entered into an exclusive 15-year power purchase agreement for all output from the Buffalo Gap Wind Farm located near Abilene.

As a result of its acquisitions, Direct Energy can meet approximately 31% of its current peak demand in Texas from its own assets. In addition, Direct Energy now provides energy-related cooling and heating maintenance and installation to Texas customers thanks to its acquisition of Residential Services Group in 2004.

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