Direct Energy

From Wikipedia, the free encyclopedia
Jump to: navigation, search
Direct Energy
Type Energy retailer
Industry Energy
Founded 1985[1] or 1986[2]
Headquarters Houston, Texas
Key people Badar Khan, CEO
Parent Centrica
Website www.directenergy.com

Direct Energy is a North American retailer of energy and energy services. The company was founded in 1986.[3] With more than six million customer relationships in Canada and the United States, it is the largest energy and home services retailer in North America.[4] Direct Energy is a subsidiary of UK-based Centrica plc, an integrated energy company.[5]

History[edit]

Direct Energy Office in Markham.

Direct Energy was founded in Toronto in 1986, as a competitive energy retailer. In 2000, the company was acquired by Centrica, the UK-based parent of British energy retailer British Gas.

From 2000 onwards, Direct Energy grew rapidly through acquisition. These acquisitions included Energy America (2000),[6] Enbridge Home Services (2002),[7] AEP’s Texas retail operations (Central Power and Light and West Texas Utility), the regulated retail operations of ATCO Gas and ATCO Electric in Alberta, Entergy Solutions Ltd.’s Electric Reliability Council of Texas customer base and Strategic Energy (2008).

In the area of energy services, Direct Energy acquired Luced Heating Contractors, BASE Controls Ltd., MABE Canada Inc.’s in-home service repair division, and the Residential Services Group.

In 2010, Direct Energy acquired Clockwork Home Services making Direct Energy the largest energy and home services retailer in North America . Clockwork has three brands:, One Hour Air Conditioning & Heating, Benjamin Franklin Plumbing and Mister Sparky, which specialize in plumbing, electrical and air-conditioning and heating and services.[8]

Direct Energy acquired a number of upstream assets, including gas reserves and power generation facilities. These include: Quintana Minerals Resources, Bastrop Energy Center, Frontera Energy Center, Paris Energy Center, and Rockyview Energy Inc. Direct Energy has entered into long-term power purchase agreements for 813 MW of electricity from five wind farms in Texas.

Direct Energy owns and operates approximately 4,600 natural gas wells in Alberta, most recently acquiring natural gas assets from Suncor Energy and Shell Canada.[9]

The company ’s new strategy calls for increased investment in North America, specifically to grow its upstream asset cover to 35-40%; it also plans to grow its downstream businesses in its core markets of Texas, US North East and Canada.[2] Chris Weston became President & CEO of Direct Energy on July 1, 2009 following the retirement of Deryk King.

Direct Energy announced in January 2012 that it will move its corporate headquarters from Toronto to Houston within the next 12 to 18 months. The headquarters will be in the Greenway Plaza location where the company's residential energy and upstream business are now based.[2]

In 2012, Iberdrola USA sold its energy services companies, Energetix and NYSEG Solutions, to Direct Energy.[2]

In 2013, Direct Energy made one of its biggest acquisition to date by purchasing Hess Energy Marketing for $1.03 Billion.

Products and services[edit]

Direct Energy’s U.S. operations span 46 states and the District of Columbia including: Texas, Ohio, Michigan, Illinois, Pennsylvania, California, Connecticut, Maryland, Rhode Island, Maine, New York, New Jersey, Delaware, Massachusetts, Florida, North Carolina, Kentucky, Indiana, Alabama, Oklahoma and Virginia. While not providing services to residential customers and businesses in Oklahoma, Direct Energy has established an Operations Center in Tulsa. In Canada, Direct Energy has operations in Ontario, Alberta, British Columbia, Manitoba, Quebec, Saskatchewan, Nova Scotia, Prince Edward Island, New Brunswick, and Newfoundland and Labrador.

For residential customers and small business, Direct Energy offers fixed price electricity and gas plans, as an alternative to the local utility or in competition with the local competitive energy providers. In Texas, Direct energy offers a pre-paid electricity plan, Power-To-Go.[10] In Ontario, Direct Energy rents water heaters to around 600,000 residential homeowners.[11] Through its services division, Direct Energy installs and services heating, ventilating and air conditioning equipment. It also can perform energy retrofits and other energy management projects at larger facilities. Direct Energy’s Home and Business Services division employs over 1,400 technicians providing residential customers with heating, ventilation and air conditioner (HVAC), plumbing, home improvements, water heater and electrical appliance services.[12]

Direct Energy is a regulated gas and electricity provider in Alberta, operating under the Direct Energy Regulated Services brand. It also offers deregulated service in the Province, operating as Direct Energy.

In South Texas, Direct Energy operates as CPL Retail Energy and CPL Business.

In West Texas, Direct Energy operates as WTU Retail Energy and WTU Business.

Controversies[edit]

Sales Employee Oversight[edit]

May 2004 - Direct Energy was fined C$157,500 in 2003 after investigators discovered 25 of their sales agents were forging contracts to trap Ontario and US citizens into long-term energy contracts.[13] After the forgeries where discovered, committed by sales employees were discovered, Direct Energy president Paul Massara reported that "action [was taken to] deal with these issues and we've moved on a long way since that time."

May 2009 - Some Direct Energy sales people failed to make it clear to customers that they were signing up for unregulated energy rates. In order to prevent this issue from continuing, Direct Energy worked with the Service Alberta to train staff and implement practices that would prevent sales people from purposefully or accidentally misleading citizens about energy plans. The company was fined over $500,000 in penalties for the damages caused by the negligence. The Ontario government has since passed a bill that would require energy retailers to follow up on each contract sold to ensure the customer had willingly made the purchase which should allow energy companies to ensure that customers were not swayed by unethical sales pitches.[14]

Water Heater Rental Contracts[edit]

March 2012 - Direct Energy attempted to impose harsh new contract terms on 500,000 rental water heater customers with new exit fees and high buyout charges for those who wanted to buy or rent water heaters from other suppliers. It withdrew the plan after receiving numerous complaints from consumers. Direct Energy continues to make it difficult for its customers to switch to other suppliers by charging a $75 fee to pick up water heaters from people’s homes and restricting the number of return centres.[15]

The Competition Bureau took action against Direct Energy for engaging in action that "intentionally suppress competition and restrict consumer choice" with its water heater rental contracts. Specifically, The Competition Bureau took issue with Direct Energy's process of returning water heaters that involved a requirement to call to obtain authorization to return a rented water heater, aggressive retention tactics during these calls, restrictions on when and where water heaters can be returned, and unwarranted fees and charges.[16]

Late Penalties[edit]

March 2014 - An Alberta judge has certified a class action lawsuit against Direct Energy alleging the company violated the Criminal Code and Canada's Interest Act. The lawsuit alleges Direct Energy's late payment penalties were effectively charging customers a 91 percent interest rate on late payments.[17] The class action is still in process.

Community investment[edit]

Direct Energy encourages volunteerism within their organization through internal company policies, award programs, and grants. Direct Energy encourages their employees to take their first step into community involvement by offering one paid volunteer day a year. Interested employees can choose a charity or organization to lend their expertise. [18]

Deregulation position[edit]

CEO Chris Weston has given several speeches stating the need for deregulation of the energy market and the need for consumers to pay the actual price for energy rather than what he considers its current artificially low position. Weston spoke at KEMA’s 21st Executive Forum on the benefits of a competitive energy market and the value it has to consumers.[19] He has also authored opinion pieces on the subject.

See also[edit]

References[edit]

  1. ^ http://www.taleo.com/customers/media/pdf/CS_US-DirectEnergy.pdf
  2. ^ a b c d Direct Energy Business LLC sources
  3. ^ "Direct Energy Business LLC sources". 
  4. ^ "British company buys Clockwork". Gulf Coast Business Review. June 10, 2010. Retrieved April 12, 2011. 
  5. ^ Stockhouse, “Great Plains Energy, Inc. Q1 2008 Earnings Call Transcript.” 5/9/2008
  6. ^ Byfield, Mike. “Wes Moringstar: Direct Energy Thrives on 40 Mcf Wells.” DOB Magazine. April 2008
  7. ^ Ottawa Citizen. “Centrica Buys Enbridge retail unit for $1 billion.” The Canadian Press. 29 January 2002
  8. ^ "British company busy Clockwork". Gulf Coast Business Review. June 10, 2010. Retrieved April 12, 2011. 
  9. ^ "Direct Energy gains assets from Shell Canada". The Globe and Mail. April 2, 2011. Retrieved April 12, 2011. 
  10. ^ "Direct Energy and NRG Collaborate on EV Charging Solution". SmartMeters.com. November 20, 2010. Retrieved April 12, 2011. 
  11. ^ "Direct Energy gives extra month to change water-tank policy". toronto.ctv.ca. March 14, 2012. Retrieved March 14, 2012. 
  12. ^ Jaremko, Gordon. “Direct targets service firms: Gas marketer accelerates acquisition plans.” The Edmonton Journal. 27 Aug. 2004, Edmonton ed.: F1
  13. ^ Robertson, Grant (May 16, 2004). "Hit by the sales pitch". Calgary Herald. Retrieved February 7, 2012. 
  14. ^ [1]
  15. ^ "Returning rented water heater can be tricky". The Toronto Star. November 2012. 
  16. ^ "Competition Bureau Takes Action to Support Competition in Ontario’s Residential Water Heater Market". December 20, 2012. 
  17. ^ "Class action lawsuit filed over Direct Energy late fees". CBC News. March 2014. 
  18. ^ Bain, Jennifter (January 14, 2011). "Creative solutions to handle food waste". The Toronto Star. Retrieved April 12, 2011. 
  19. ^ Weston, Chris. "The Future of Retail Energy Markets in North America". KEMA 21st Executive Forum. Retrieved April 12, 2011. 

External links[edit]