With the state’s deregulated marketplace just one year old, retail electric provider (REP) Texas Commercial Energy (TCE) on Thursday filed for Chapter 11 protection. The company claimed that “significantly higher volatility and uncertainty in the Texas wholesale power supply market” since the beginning of 2003 made it “necessary” to protect its estimated 1,500 customers.

TCE, which filed for protection in the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi, said it had been working “diligently” with the Public Utility Commission of Texas (PUCT) as well as the grid operator, the Electric Reliability Council of Texas (ERCOT), since the end of February to “minimize customer impact created by this course of action.”

“The decision to file for bankruptcy protection was difficult, but we feel it represents the most viable approach for our business,” said Scott Hart, president. “Our objective is to move through the Chapter 11 reorganization process as quickly possible without disruption to our operations or inconvenience to our customers. We remain committed to providing a high level of service to our customers.” Hart said the company is in “active discussions with leading financial lending institutions and major energy companies” to move it out of bankruptcy.

“While uncertainty during the past few weeks has created challenges for TCE, we are taking the steps announced today to stabilize our business, maintain the confidence of our suppliers, and enhance our ability to compete in the ERCOT market,” said Hart. “We also continue to work with the PUCT and ERCOT to understand the events of the past several weeks.”

TCE, headquartered in Plano, TX, was launched in January 2002 as Texas deregulated its electricity market. According to its web site, TCE serves industrial and commercial customers through “multi-site contracts signed through February 2003.” Operating offices are all located in Texas in Houston, Laredo, Corpus Christi and Harlingen.

In February, TCE announced it had formed an alliance with the Texas Association of Homes and Services for the Aging (TAHSA) to offer reduced-cost electricity to TAHSA’s estimated 200 members through TCE’s “Power in Numbers,” a volume-aggregated purchasing program. In January, TCE announced similar agreements with the 60,000-member Texas Association of Realtors as well as the Texas Retailers Association.

From 1996 through 2001, on behalf of Texas Utilities and TXU, TCE’s Hart led a new energy services division that acquired multiple companies, acquired and managed performance contracts and “reinvented energy sales and marketing.” He left TXU as vice president-strategy for large commercial and industrial customers. Hart also worked for Lone Star Gas (later TXU Energy Services) from 1988 to 1996 as a strategy director.

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