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08/01/06

MXenergy acquires area customers today

Cleveland Plain Dealer
By John Funk

Houston-based Shell Energy Services is leaving the natural gas business, including its customers in Ohio—effective today.

MXenergy of Stamford, Conn., will acquire about 100,000 residential and commercial customers across the state.

MXenergy confirmed that the deal was struck in May after competitive bidding and the closing date was set for Aug. 1. Shell Energy Services did not have an immediate comment.

The Public Utilities Commission of Ohio said MXenergy will honor the terms of the old Shell contracts until they expire, as required by PUCO regulation. No disruption of service is anticipated.

The acquisition includes customers in Georgia as well as Ohio and doubles MXenergy’s customer base from 300,000 to 600,000 in 12 states and Ontario, Canada.

Shell’s employees are expected to stay on. Terms of the deal were not disclosed. MXenergy, founded in 1999, is a privately held corporation.

Although the sale does not include Shell’s gas suppliers, it does include the Texas company’s pipeline transportation and storage contracts.

MXenergy will have sufficient gas to handle the growth, said Chief Executive Officer Jeffrey Mayer.

"Of course we are covered for the winter," he said. "We have ample supplies in storage and firm transportation [pipeline] contracts to the market."

The company’s major suppliers are in the Gulf of Mexico, Mayer said, but include Appalachian gas stocks as well. The two marketers have been offering similarly priced contracts.

Shell is currently offering consumers in Dominion East Ohio territory a one-year fixed-rate contract of $11.90 per 1,000 cubic feet and a monthly variable of $8.90 per Mcf. MXenergy’s rates are $11.89 per Mcf for one year or $10.13 on a monthly variable.

In the territory of Columbia Gas of Ohio, Shell’s one-year fixed-rate contract is $1.19 per 100 cubic feet and 93 cents per ccf on a month-to-month contract. MXenergy’s contract rates are $1.18 per ccf on the one-year fixed price, and $1.00 per ccf for a monthly variable contract.

MXenergy also offers three-year contracts - the only gas marketer in Ohio currently doing so - with rates of $11.99 per Mcf in Dominion territories and $1.26 per ccf in Columbia territories.

"Residential customers prefer three years," said Mayer. "We are offering price protection in a volatile energy world."