Energy Savings Income Fund
TSX : SIF.UN

Energy Savings Income Fund

November 07, 2005 07:30 ET

Energy Savings Enters New York Natural Gas and Electricity Markets

TORONTO, ONTARIO--(CCNMatthews - Nov. 7, 2005) - Energy Savings Income Fund (TSX:SIF.UN), the Toronto-based marketer of deregulated energy contracts, announced today that it has commenced marketing deregulated gas and electricity in the State of New York. The New York market has 4.5 million natural gas customers with current 6% penetration by deregulated suppliers and 6.3 million electricity customers with current 6% penetration by deregulated suppliers. This makes New York the largest market yet entered by Energy Savings. The Company's first permanent sales office has opened and a ramp-up of agents has begun.

CEO Brennan Mulcahy added: "The results of our August test marketing in New York showed very high rates of take-up for a dual fuel gas and electricity product. While this testing was completed by a limited number of agents, the results are sufficiently positive to begin a full roll-out beginning this quarter. As with all past market entries, we will begin slowly and carefully but we anticipate that material numbers of new customer additions should be seen starting in Q4 of this year."

In a related announcement, Energy Savings announced that both U.S. and Canadian operations will be consolidated under President Paul DeVries. U.S. based management will report to head office in Mississauga through Mr. DeVries commencing on September 1, 2005. U.S. President Debbie Wernet has agreed to remain and assist the transition through to January 2, 2006 at which time it is expected that the consolidation will be complete.

Mr. Mulcahy stated, "In analyzing our business, it was clear that there are many more similarities than differences between our Canadian and U.S. operations. We have constantly pressed to deliver our services to the customer at the lowest cost possible. By elimination of operational duplication between Canada and the U.S., we believe that we will minimize those costs."

Rebecca MacDonald, Executive Chair added, "I want to particularly thank Debbie Wernet for her service to Energy Savings as we built our U.S. operations. While we have concluded that we are best served by one Operations Department for both Canada and the U.S., we could not have built our U.S. business to this point without Debbie and her team."

The Fund

Energy Savings' business, which is conducted in Ontario, Manitoba, Alberta, Quebec, British Columbia, Illinois and New York, involves the sale of natural gas to residential, small to mid-size commercial and small industrial customers under long term, irrevocable fixed price contracts. Energy Savings also supplies electricity to Ontario, Alberta and New York customers. By fixing the price of natural gas or electricity under its fixed price contracts for a period of up to five years, Energy Savings' customers offset their exposure to changes in the price of these essential commodities. Energy Savings, which commenced business in July of 1997, derives its margin or gross profit from the difference between the fixed price at which it is able to sell the commodities to its customers and the fixed price at which it purchases the matching volumes from its suppliers.

Non GAAP Measures

Management believes the best basis for analyzing both the Fund's operating results and the amount available for distribution is to focus on amounts actually received ("seasonally adjusted"). Seasonally adjusted analysis applies solely to the Canadian gas market (excluding Alberta). In Canada (excluding Alberta), Energy Savings receives payment from the LDCs upon delivery of the commodity not when the customer actually consumes the gas. Seasonally adjusted analysis eliminates seasonal commodity consumption variances and recognizes amount available for distribution based on cash received from the LDCs.

Forward-Looking Statements

The Fund's press releases may contain forward-looking statements including statements pertaining to customer revenues and margins, customer additions and renewals, customer consumption levels, distributable cash and treatment under governmental regulatory regimes. These statements are based on current expectations that involve a number of risks and uncertainties which could cause actual results to differ from those anticipated. These risks include, but are not limited to, levels of customer natural gas and electricity consumption, rates of customer additions and renewals, fluctuations in natural gas and electricity prices, changes in regulatory regimes and decisions by regulatory authorities, competition and dependence on certain suppliers. Additional information on these and other factors that could affect the Fund's operations, financial results or distribution levels are included in the Fund's annual information form and other reports on file with Canadian securities regulatory authorities which can be accessed through the SEDAR website at www.sedar.com or through the Fund's website at www.esif.ca.

The Toronto Stock Exchange has neither approved nor disapproved of the contents of this release.

Contact Information

  • Energy Savings Income Fund
    Ms. Rebecca MacDonald
    Executive Chair
    (416) 367-2872
    or
    Energy Savings Income Fund
    Mr. Brennan Mulcahy
    Chief Executive Officer
    (905) 795-4200
    or
    Energy Savings Income Fund
    Mr. Ken Hartwick, C.A.
    Chief Financial Officer
    (905) 795-3557
    www.esif.ca