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Peoples Energy Buys mc2 Retail Portfolio

August 31, 1998
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Peoples Energy Buys mc2 Retail Portfolio

Peoples Energy Services has purchased the Midwest portfolio of KN Energy subsidiary mc2 for an undisclosed sum. The transaction includes 8,000 gas contracts, storage inventories and related receivables, increasing PE Services' customer base to more than 20,000 Chicago area businesses, the largest of any supplier in the Chicago market, the company said.

"We chose Peoples Energy Services because we believe it will provide superior service to mc2 customers, it offered a fair price for the business, and we have a strong, long-standing relationship between the two companies," said Mort Aaronson, president and COO of KN Services and en*able. KN selected PE Services as the buyer following a process that began in late May.

KN made a decision earlier this year to discontinue its mc2 retail energy marketing unit, which was acquired when KN purchased MidCon Corp. KN said mc2's business strategy clashed with that of KN Services and en-able, KN's retail energy marketing and services joint venture with PacifiCorp.

"The approach of mc2 was to build market share through direct branded sales to commercial customers, and to sell energy in the most attractive commercial markets regardless of geographic location. This conflicts with KN's highly successful marketing philosophy, which is to approach this business through partnerships [with utilities] and to concentrate marketing efforts within KN's asset base region," the company said in a statement at the time.

To ensure a seamless integration, PE Services mailed information letters to each of its new customers and set up an information hotline at 888-896-0842 to handle customer questions. "Since we already service 12,000 customers in this market, our systems and procedures already in place should provide a smooth transition," said PE Services President Michael Rumman. Peoples Energy Services is the nonregulated retail marketing unit of Chicago-based Peoples Energy Corp.

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