Briefly

Direct Energy Completes Acquisition of Retail Book

Direct Energy completed its acquisition of the energy marketing business of Hess Corporation, consisting of 23,000 commercial, industrial and small business electric and natural gas customers in the eastern half of the United States. Total consideration was $1.2 billion, which was higher than originally announced due to increased working capital at closing. Direct Energy said that the new organization, which also now combines Direct Energy's commercial and industrial retail business with the company's wholesale supply business, will be led by Maura Clark, who assumes the role of president of Direct Energy Business. Clark headed Direct Energy's commercial and industrial business prior to the acquisition.

FERC Orders Immediate Implementation of Expanded Performance Obligation on New England Capacity Suppliers

FERC has ordered an immediate expansion of the performance obligation imposed on New England capacity suppliers by expanding the definition of shortage event which triggers a performance obligation. FERC adopted the new definition of shortage event effective November 3, 2013. The new definition is expanded such that a shortage event will now be declared in any capacity zone when the thirty-minute operating reserve requirement has not been satisfied for thirty or more contiguous minutes. Capacity suppliers had sought to delay implementation of the new definition until June 1, 2017. FERC said that the benefits of the new definition, "are critical and should be provided for immediately rather than several years in the future." FERC added that, "Contrary to the tenor of Protestors' arguments, the earlier effective date would not violate the principles underlying the rule against retroactive ratemaking. The changes would apply only prospectively and after notice. To the extent that the revisions might upset the expectations of market participants (which is distinguishable from retroactive ratemaking), we are not persuaded that their reliance on the current definition outweighs the benefits expected to result from the change, i.e., helping to ensure that reserve requirements are met and system reliability is protected." Docket ER13-2313