PG&E Energy Services all but completed its exit from theunregulated energy commodity and related services businesses withthe announcement last week it has sold its remaining servicecontracts and related assets to a unit of Chevron Corp. Thecontracts cover commercial, industrial and institutional customersspread around the country. The two San Francisco-based companieswould not disclose terms of the deal, but said it is expected toclose in mid-July.

Earlier this spring PG&E sold the commodity contracts it hadfor supplying electricity and natural gas to various large,multi-site customers to Enron’s retail energy services unit for $85million. That sale is supposed to close by the end of this month.In total, PG&E Energy Services over the past three years hadlocked up deals for the commodity and related services thatexceeded several billion dollars in long-term value.

Prior to a decision late last year to get out of the energyservices business to concentrate on power plant development,trading and interstate natural gas pipeline operations in thePacific Northwest — PG&E Energy Services signed deals withMarriott, Motel 6, the Los Angeles Unified School District and thenation’s largest commercial property manager. The dealscollectively exceeded $300 million in value.

Thursday’s sale marks Chevron’s entry into the energy servicesbusiness, and while a spokesperson said the company won’t speculateabout future acquisitions, the head of the company’s productsbusiness talked bullishly about the new line of business, callingit “vibrant and growing.”

“This purchase will help position Chevron to provide totalenergy solutions for its commercial and industrial customers,” saidPatricia Woertz, president of Chevron Products Co. “Thisacquisition will accelerate our entry into the value-added servicessegment of the energy market.”

With this deal PG&E Energy Services has only a “handful ofcontracts” and mostly small hardware/software infrastructure leftto sell, said a PG&E Corp. spokesperson, noting that Enron andChevron got the vast bulk of the energy services assets.

Richard Nemec, Los Angeles

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