Embattled CMS Energy is welcoming in the New Year with more bad news for its employees — it plans to shut down its natural gas and electricity trading operations in Houston in early 2003.

CMS Marketing, Services and Trading already has notified the Texas Workforce Commission in Austin that it intends to close its trading office and lay off as many as 100 employees, mostly traders and some support staff.

The exact date of the office closing and lay-offs is uncertain because it depends on when CMS sells its electricity trading book, said spokesman John Barnett, but he noted the company hopes to accomplish it by mid-February. CMS sold its gas trading book to San Diego, CA-based Sempra Energy earlier this month for $17 million (See Daily GPI, Dec. 23).

Barnett declined to say whether any competitors have expressed an interest in buying the power trading book of CMS.

A few of the staff in the Houston office, which currently totals 107 workers, will be offered jobs at CMS’s headquarters in Dearborn, MI, he said. There, they will continue to trade on a “much smaller scale” to supply energy for company-owned power generation facilities.

CMS announced in November it would likely exit the wholesale gas and electricity trading business, joining the ranks of other energy companies that have taken similar action after suffering huge financial losses.

Some of the companies that have pulled out of trading or significantly scaled back their operations include American Electric Power, Dynegy Inc., Aquila, Williams, Reliant Resources, El Paso Corp., Calpine Corp., Duke Energy, UBS Warburg and Mirant.

CMS admitted last May that it engaged in questionable trades that boosted its revenue and expense by more than $4 billion from May 2000 through January 2002. The disclosure prompted a string of investigations by federal agencies into the company, and resulted in the forced resignation of long-time Chairman and CEO William T. McCormick (See Daily GPI, May 16).

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