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Reliant Expands Midwest Retail Presence

March 8, 1999
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Reliant Expands Midwest Retail Presence

Reliant Energy, formerly Houston Industries, expanded its Midwest retail gas marketing business with the acquisition of certain assets of National Energy Management LLC and Koch Midstream Services Co.'s Chicago operation. Together, these retail marketing businesses serve more than 2,200 accounts in the Chicago and southern Wisconsin areas and have annual revenues exceeding $65 million.

"These acquisitions provide Reliant Energy with key sales and operating capabilities in one of the largest retail gas markets in the U.S.," said Rollie Bohall, senior vice president of Reliant Energy's commercial and industrial markets. "They fit with Reliant Energy's strategy of growing its mid-market retail business in the upper Midwest and strengthen our position as one of the leading retail marketers in the Illinois region."

Reliant has been selling unregulated natural gas in the region since 1994, primarily in Wisconsin and Minnesota with a few accounts in the Illinois area, said Gregg Hollenberg, Reliant director of market strategy. The acquisition announced yesterday expands the company's presence in heavily industrialized Chicago. Hollenberg declined to disclose the gas volumes marketed by the acquired businesses. Customers are retailers, apartment buildings and small industrials. "They're not the large industrials, and they're not the small, mom and pop strip center kind of stores. It really represents a large cross section of industries and customers, but it's one with significant volumes."

Reliant Energy last week announced the acquisition of certain assets owned by Com/Energy Marketing Inc. that added 2,000 accounts in Massachusetts, Rhode Island and Connecticut (see Daily GPI Feb. 25, 1999). "We've been active in this region for about two years now and this was an opportunity to expand with a company that had a complementary fit," Steve Husband, vice president for Reliant Energy Retail Marketing, said at the time. "In terms of market share, this increases [our commercial portfolio] about five times. If we're talking about total market share, it increases it by about 10%."

Geographic areas where Reliant is active in unregulated retail marketing include the upper Midwest, upper Atlantic region, and Georgia.

National Energy Management is a joint venture of PanCanadian Energy Services Inc., a wholly owned subsidiary of PanCanadian Petroleum Ltd., and two subsidiaries of Madison Gas and Electric. Koch Midstream Services, a wholly owned subsidiary of Koch Industries Inc., owns and operates gas pipelines and processing plants.

In another, unrelated retail market expansion last week, AmerenEnergy said it is entering the retail gas market in eastern Missouri and southern Illinois. The company, a unit of St. Louis, MO-based Ameren Corp., said it will provide gas-related services and products to commercial and industrial customers, including brokering services for gas transportation as well as risk management. Ameren Corp. has two utility subsidiaries, AmerenUE and AmerenCIPS, and serves 1.5 million electric customers and 300,000 gas customers in Missouri and Illinois.

Joe Fisher, Houston

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