With incentives to ink a national contract later in the year,Sempra Energy Solutions has announced a “multi-million-dollar,one-year” energy services contract for the California operations ofPETCO Animal Supplies Inc., one of the leading national pet foodand supplies retailers with about $750 million in annual revenues(1997). Both Sempra and PETCO are headquartered in San Diego. Nationally, PETCO’s annual electricity bill alone exceeds $10million, according to Ken Moss, energy manager for the pet supplychain, which is rapidly expanding with new, larger(15,000-square-foot) retail outlets that now cover 36 states, withenergy coming from more than 100 different gas and electricdistribution utilities. Natural gas nationally accounts for about10% of the chain’s annual energy load. Water is a much smallerportion, Moss said.

Sempra Energy’s energy services subsidiary will provide energyinformation and supply energy to 115 PETCO outlets in California in1999, and by the summer, the retail chain will decide if it wantsto negotiate a similar, longer term deal for all of its 480locations.

PETCO currently has no systematic way to process and analyze itsenergy bills, Moss said, so the Sempra deal will apply its energyinformation technology, “Encharge”, to monitor energy usage andcosts and provide findings to PETCO’s California operations.

“Our agreement with Sempra allows us to test the waters ofderegulation with our California store locations and examine futureopportunities in other states as they undergo deregulation,” saidMoss, adding that he thinks 1999 will see “slow going” for statesmoving toward deregulation of electricity and natural gas. Sempra’s group president for unregulated affiliates, DonaldFelsinger, said his firm “will identify unique methods tosignificantly reduce PETCO’s energy costs within the first year bycombining competitively priced electricity with energy informationservices.”

Felsinger contends that Sempra’s energy services customers in1998 on average saved “two dollars for every dollar they investedin energy information services alone.”

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