Union Energy sale may lower consumer costs

Mark McNeil
Hamilton Spectator
October 23, 2001

An Alberta-based utilities company is poised to move into Ontario’s natural gas and electricity market. Epcor Utilities Inc. yesterday announced an agreement with Westcoast Energy Inc. to purchase its subsidiaries, Union Energy and Westcoast Capital, for $176.7 million.

Union Energy is a spinoff company from natural gas retailer Union Gas. Union Energy rents water heaters and provides heating, ventilation and air conditioning. Westcoast Capital is a financing company that provides products that are rented out by Union Energy.

The move gives Epcor 900,000 new Union Energy customers in Ontario, including Hamilton. Epcor hopes to sell many of these customers other energy-related products and services including natural gas and electricity.

“This is a very important strategic move for Epcor,” said Brian Vaasjo, Epcor’s executive vice-president and president of the energy division. “Epcor is on a very aggressive growth trajectory and we aim to become one of the top three providers of energy and energy-related products in Canada.”

By starting with the Ontario customer base, Epcor hopes to land 20 per cent of the energy business in the province.

“We expect to move very quickly into the retailing of natural gas and power particularly when the market deregulates (in Ontario).” The province says it will open up electricity to competition in the spring.

Energy Probe’s Tom Adams says Epcor’s plans are good news for consumers because it could lead to savings and also simplify energy purchasing.

“Cross-selling could be very beneficial for customers. They could buy a package of natural gas and the furnace to go with it or maybe electricity with the air conditioner to go with it.”

Vaughn Goettler, President and CEO of Union Energy, said 1999 was a difficult year, but in 2000 “we made a turnaround and (the company) is solidly a profitable business today with a great future.”

Union Energy has 1,400 employees, none of whom is expected to face layoffs because of the sale. It will continue to operate as Union Energy.

Epcor has 2,100 employees, more than $3 billion in assets and a customer base of 600,000 in Alberta, British Columbia and Manitoba.

 

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