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Direct Energy
Company typeEnergy retailer
IndustryEnergy
Founded1985[1] or 1986[2]
Key people
Chris Weston, President and CEO
Websitehttp://www.directenergy.com

Direct Energy is a retailer of energy and energy services. The company was founded in 1985[1] or 1986[2]. With over six million customers in Canada and the United States, it is the largest energy and home services retailer in North America. The current President and Chief Executive Officer of the company is Chris Weston. Direct Energy is a subsidiary of UK-based Centrica plc, an integrated energy company.[3]

Direct Energy and various subsidiaries have been charged with and fined several hundred thousand dollars for unethical business practices for using fraudulent contracts to sign up unwilling consumers.

History

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)[4], Enbridge Home Services (2002)[5], AEP’s Texas retail operatings (Central Power and Light and West Texas Utility), the regulated retail operations of ATCO Gas and ATCO Electric in Alberta, Entergy Solutions Ltd.’s ERCOT 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.

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 four wind farms in Texas.

Direct Energy owns and operates approximately 4,550 natural gas wells in Alberta, most recently acquiring Alberta- based Rockyview Energy and the Canadian-based oil and gas assets from TransGlobe Energy Corporation.[6]

Chris Weston became President & CEO of Direct Energy on July 1, 2009 following the retirement of Deryk King.

Products and services

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 and Virginia. In Canada, Direct Energy has operations in Ontario, Alberta, British Columbia, Manitoba and Quebec.

For residential customers and small business, Direct Energy offers fixed price electricity and gas plans, as an alternative to the local utility. 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.[7]

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. Competitors include TXU, Bounce Energy, First Texas Energy Corporation, Texas Power, and Reliant Energy.

Controversies

Direct Energy was fined C$157,500 in 2003 after investigators discovered 21 forged contracts trapping customers into long-term energy deals.[8] According to Paul Massara, then the president of the company, the forgeries took place between June 2001 and April 2002. Both Direct Energy and a company it acquired, Energy America were charged with employing unethical business practices, with Energy America being fined over $500,000 in penalties for enrolling customers without permission and using deceptive sales pitches. The companies were found to have used unethical business practices in Michigan, Georgia, Texas, Ontario and Manitoba. [9][10] 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.[11]

During the investigations, the company frustrated investigators by withholding and concealing evidence, failing to respond to complaints, failing to respond to subpoenas for court appearances and generally ignoring demands to comply with the investigation. The U.S. branch of the company was taken to court by a customer in 2002. The judge in the case removed himself after being solicited for a contract by Energy America, citing a concern that he was now a potential witness in the case. Before the hearing could be re-scheduled, the complaintant settled out of court with the company on the condition that he no longer discuss the case publicly.[12]

Deregulation position

The previous CEO of Direct Energy Deryk King 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. King states that he believes consumers will not reduce consumption or use energy-efficient technology until they have to pay the true cost of electricity.[13]

See also

References

  1. ^ a b http://www.taleo.com/customers/media/pdf/CS_US-DirectEnergy.pdf
  2. ^ a b http://investing.businessweek.com/research/stocks/private/snapshot.asp?privcapId=998510
  3. ^ Stockhouse, “Great Plains Energy, Inc. Q1 2008 Earnings Call Transcript.” 5/9/2008
  4. ^ Byfield, Mike. “Wes Moringstar: Direct Energy Thrives on 40 Mcf Wells.” DOB Magazine. April 2008
  5. ^ Ottawa Citizen. “Centrica Buys Enbridge retail unit for $1 billion.” The Canadian Press. 29 January 2002
  6. ^ Megawatt Daily. “Direct Energy to Buy TransGlobe gas assets.” 17 April 2008. Version 13, Issue 74. 9
  7. ^ Jaremko, Gordon. “Direct targets service firms: Gas marketer accelerates acquisition plans.” The Edmonton Journal. 27 Aug. 2004, Edmonton ed.: F1
  8. ^ http://www.ontariotenants.ca/electricity/articles/2004/ch104e16.phtml
  9. ^ [1]
  10. ^ [2]
  11. ^ [3]
  12. ^ Robertson, Grant (2004-05-16). "Alberta's newest utility vows 'zero tolerance for improper conduct': The Direct Energy Story, Introduction". Calgary Herald. Retrieved 2007-11-26.
  13. ^ Toronto Star, "Go Green Or Pay: Direct Energy CEO", March 13, 2007
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