Direct Energy Texas Results Not Materially Impacted by August Weather

Total profitability for Direct Energy in Texas, "was not materially impacted," by price spikes during August, parent Centrica said in a recent interim management statement.

"The exceptionally hot summer in Texas, which resulted in extreme power price volatility at peak times, provided a challenge for all residential energy suppliers. However Direct Energy performed well and, after taking account of the higher prices we achieved in our power generation business, total profitability in Texas was not materially impacted," Centrica said.

Along with higher volumes from gas production at Wildcat Hills, the positive impact from the spikes in summer power prices in Texas on Direct Energy's generating assets in ERCOT are expected to produce a small operating profit for Direct Energy's upstream unit in 2011, despite an overall challenging environment of lower gas prices and spark spreads.

On a consolidated basis at Direct Energy, Centrica expects, "substantial year on year profit growth."

Centrica reported that Direct Energy has increased its customer count in the Northeast U.S. and in Texas, offsetting customer losses in Ontario as a result of the Energy Consumer Protection Act.

Through October, prior to the closing of the First Choice Power acquisition, total Direct Energy customer accounts had increased by 63,000, benefiting from the Gateway Energy Services acquisition.

The First Choice Power acquisition, which closed November 1, brought Direct Energy's number of electricity customer accounts in Texas to more than 830,000.

Electricity volumes in Direct Energy's business energy segment were 18% higher in the first ten months of 2011 than for the same period of 2010, and Centrica, "continue[s] to expect good profit growth from this division. "

The Direct Energy home services business, "is also expected to deliver substantial year on year profit growth, reflecting a full year's contribution from Clockwork following its acquisition in 2010. "