Direct Energy Planning Rapid Residential Expansion

Direct Energy said yesterday that it is looking to expand its residential business "rapidly" in 2011, as it consolidated its U.S. Northeast residential operations in Pittsburgh.

The announcement comes on the heels of Direct's entry into the PSE&G electric and gas mass markets on Tuesday (2/2). Direct declined to cite specific target areas for residential growth.

However, in 2010, Direct Energy expanded its Illinois alternative retail electric supplier license to include residential marketing authority (7/21), and the Commonwealth Edison territory is seeing nearly half a dozen confirmed new entrants with the start of Purchase of Receivables.

Other potential markets are in Direct's backyard in Pennsylvania, where its residential marketing has thus far has been limited to PPL, PECO, Duquesne Light, Pike County, and Columbia Gas. Aside from newly uncapped electric markets such as Penelec and Met-Ed, it should be noted Direct is not currently active in the most competitive (in terms of migration) Pennsylvania residential gas market -- Peoples Natural Gas.

However, as only reported by Matters last month (12/31), Direct Energy, "has made a firm commitment to file an application for a [natural gas supplier] license in the Peoples service territory," and, "intends to service residential and small commercial customers in the Peoples service territory." In making that statement, Direct did not place a timeline on its Peoples Natural Gas entry.

Additionally, the January 2012 start for Purchase of Receivables at PECO Gas is quickly approaching. When first reported by Matters in late 2009 (11/25/09), the 2012 start date seemed a long way off, but suddenly, suppliers have less than 12 months to prepare to start serving PECO residential gas customers upon the start of POR.

Obviously, the remaining New Jersey territories, which are being contested by other residential suppliers, are prime candidates for Direct's residential expansion as well.

"We've got big plans to grow our residential business this year and a lot of work to do to make it happen," said Direct Energy Residential Vice President Cory Byzewski.

Direct Energy Residential's new Pittsburgh headquarters for U.S. Northeast operations represents 30 additional jobs for the region. The operations will share space with Direct Energy Business, which had previously relocated to Pittsburgh. Direct Energy Business is also adding about 40 jobs, and Direct is adding over 9,100 square feet to its offices in Liberty Center to accommodate the Northeast residential relocation and growth.

Previously, Direct Energy Residential's Northeast operations were conducted from offices in Houston and Ohio, depending on market and commodity. Residential ERCOT operations will remain based in Texas.