Canadians angry as Direct Energy’s back-door exit from Canada means fewer jobs for Canadians, despite continued regulated rate subsidy.
Alberta’s resource sector has been in the spotlight recently, and for good reason. With the headlines showing potential for additional fiscal challenge, including a pipeline we own but can’t, to this point, operate; we are seeing grave shortcomings at the level of government. But that’s not all. International entities like Direct Energy are making business decisions that will have immediate and reverberating implications for Alberta’s economy, and more generally, Canada.
Direct Energy was purchased by UK company Centrica PLC in 2000. In 2004, Direct Energy/Centrica bought the right to Atco’s customer list, extending their customer base by approximately 1M. European ownership meant the consolidation of profits outside Canada’s borders and trading on the London exchange. While this was a concern for residents and economists alike, there were positive moves being made to support gas production, offering hope that this would counterbalance the ‘loss’.
Investing in Canada (2004-2017)
Among these strategic investments was the acquisition of CQ Energy, a Canadian exploration and production organization with significant operations in western Canada. Purchased in a joint venture with Qatar Petroleum International (40% ownership) from Suncor for 1 Billion dollars, CQ Energy Canada had ownership of 11 major Canadian facilities. At Dec 2016, CQ was producing 56 070 barrels of oil daily (of which 90% was natural gas).
Investment Loss (2017-Current)
2017 brought significant changes in Direct Energy’s operations as we saw the organization systematically divorce itself from Canadian investment. The divestment strategy, the company said, was part of a strategic move toward focusing on European assets. In line with this strategy, May 2017 saw the company sell-off its assets in Trinidad and Tobago.
On September 29, 2017, Direct Energy/Centrica sold its interest in CQ Energy for 722M to a joint partnership comprised of: Mercuria Energy Group (Switzerland), the Can-China Global Resource Fund (CCGRF), and MIE Holdings Corporation (China).
Direct Energy/Centrica has established call centers in Guatemala and Manila and has moved its billing departments to Texas where a third party (HCL India) handles billing services. Currently, all Canadian customer information is stored on servers outside of Canada, with its front office for billing coming (however misleadingly) from Calgary’s Post Office Station M.
Direct Energy, Atco, Enmax and Epcor are Alberta’s regulated rate providers (RROs), meaning that Direct Energy continues to receive subsidy by the millions of dollars every month despite having no meaningful Canadian presence.
With a socialist policy of subsidizing rates above 6.8 cents (Sept 2018 real cost 8.472 cents/kWh) combined with the loss of hundreds of jobs, Albertans have cause for significant concern. This year alone, Albertans will spend over 70 million of our carbon tax dollars in subsidy, and over 700 million over the life of the current RRO capping legislation.
Vote with your Business
We believe that the government of Alberta does a serious disservice to its constituents by continuing to funnel hard-earned tax dollars outside of the country without speaking openly about the available alternatives in electricity and natural gas. Burst Energy your local competitive retailer is available across Alberta and is offering fair and competitive energy rates.
So, to our Burst family we say thank you! We are proud to offer our services in a way that we can all feel good about – by Albertans, for Albertans.
For your free utility consultation
Your Burst Energy Leadership Team