Cinergy Corp., the Cincinnati, OH-based owner of Cincinnati Gas& Electric (CG&E), sold its nonregulated retail gasmarketing unit to an integrated energy services cooperative calledThe Energy Cooperative (TEC) for an undisclosed sum last week.Cinergy said it will not disclose the number of customers CinergyResources serves.

“The decision we made [last week] was to exit the retail gasmarket and focus on wholesale marketing operations,” said SteveBrash, a Cinergy spokesman. “Quite simply, we believe we canallocate our resources in more effective areas than retail markets.When power deregulation hits [CG&E’s service territory], wehave already made the decision to not enter the retail powermarkets as well.”

The actual date of the sale was Feb. 1, Brash said. Theannouncement was delayed, he added, because of a “transitionperiod” while the two companies worked out customer service issues.

“Our primary objective was finding an acquisition partner thatwould make customer service a top priority,” said Donald Ingle Jr.,president of Cinergy Investments. “We have found that in TEC. Theyhave met our standard of placing the customers at the forefront ofthis arrangement.”

The decision of Cinergy to pull out of the retail market arena isthe second such decision by a major U.S. energy company in the pasttwo weeks. In late February, DTE Energy announced it was closing upshop on its retail marketing efforts (see Daily GPI, Feb. 23)

All of the 23 employees of Cinergy Resources will be givendifferent jobs at Cinergy, Brash said. The name of the marketingcompany will change to The Energy Cooperative as a result of thetransaction.

For TEC, the purchase gives the company an entrance intoCG&E’s deregulating market place. Cinergy Resources hadparticipated in CG&E’s customer choice pilot program, so it hasname recognition in the market. Overall, CG&E has 360,000 gascustomers, all of whom are free to select a supplier of theirchoice.

TEC is a not-for-profit business owned by its members. Anyprofits generated by the business are allocated to its members,based on patronage. As a result of this purchase, CinergyResources’ customers are automatically entitled to the benefits ofownership and membership in the cooperative, TEC said.

Cinergy is no stranger to exploring the options for one of itssubsidiaries. After a summer in which the power unit defaulted on somecontracts due to excess demand and record heat, Cinergy’s top brassannounced it was going to look into selling that portion of thebusiness. Brash said that the management decided to stay in thebusiness after a meeting last November (see Daily GPI, Nov. 4).

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