Direct Energy Business To Acquire Retail Supplier

Direct Energy Business, a subsidiary of Centrica plc, announced today an agreement to purchase the retail electricity business of Source Power & Gas LLC, a wholly owned indirect U.S. subsidiary of Australian power company ERM Power Limited

ERM Power Limited announced that the sale price for its sale of its U.S. business Source Power & Gas to Direct Energy Business LLC was US$27m (A$38m). ERM said that net after-tax cash proceeds will be around US$23m (A$32m) from the sale after termination and transaction costs.

Source Power & Gas serves commercial and industrial customers in the ERCOT and PJM markets. With an approximate annual load of 6.5 TWh, Source Power & Gas currently serves 4,000 customers across 16,000 service locations in Texas, Illinois, Ohio, New Jersey, Delaware, Maryland, Pennsylvania and the District of Columbia.

"The purchase of Source Power & Gas, LLC's retail business is in line with our continued growth strategy in North America," said John Schultz, President Centrica North America and Direct Energy Business. "This transaction will mark a significant step in continuing to expand our operations and customer footprint in existing markets."

As previously reported, ERM had announced a decision to sell the U.S. business, saying that shareholder value was better served by focusing on the Australian market

The sale is subject to usual completion conditions and adjustments and is expected to close on November 30, 2018, followed by a period of customer transition.