Maryland PSC Notes Direct Energy Acquisition of Gateway After Staff Agrees Firms Are Not Public Service Companies

The Maryland PSC noted the acquisition of Gateway Energy Services Corporation by Direct Energy, after Staff modified its recommendation and agreed that the suppliers are not public service companies, and that the transaction should not be evaluated under the public interest standard of Public Utilities Article Sec. 6-101(c)(3) (see 4/26).

During discussion at the administrative meeting, Direct said that Gateway had a "limited" number of gas customers at Baltimore Gas & Electric and Washington Gas Light, and an even smaller number of electric customers at BGE. Most Gateway customers are residential, with some smaller commercial.

Initially, Gateway customers will continue to be served under the Gateway name. Direct said that the issue of future branding has not been decided yet, in part, because until the deal closes, Direct and Gateway can only have limited interaction on strategic issues due to competitive concerns.

The Commission ordered Direct to provide notice to existing Gateway customers of the transaction, but held that the particulars, including the timing of the notice, shall be left to Staff, working in conjunction with the company. Direct said that it may be more appropriate to wait on sending the notice until the future of the Gateway name is known, to avoid unnecessary customer confusion.