KANSAS CITY, Mo.--(BUSINESS WIRE)--March 8, 2000--Continuing to
leverage its investments in growing international energy networks,
UtiliCorp United (NYSE:UCU) today said that Melbourne-based United
Energy Limited, 34 percent owned by UtiliCorp, was joining with Shell
Australia Limited and two other Australian energy companies to
capitalize on deregulation of the national Australian electricity and
Referring to the action as described in the news release
reprinted below, Robert K. Green, UtiliCorp president and chief
operating officer, said, "This is a move to increase services to the
customer and further strengthen and lock in the value of our
Note to editors: The following news release was issued in
Melbourne, Australia Wednesday, March 8. All financials are expressed
in Australian dollars.
NEW NATIONAL ENERGY RETAILER ANNOUNCED
MELBOURNE -- Four of Australia's leading energy companies intend
to form an energy retail company to capitalise on deregulation of the
national Australian electricity and gas market.
United Energy Ltd, Energy Partnership (Ikon Energy Pty Ltd),
Shell Australia Ltd, and Woodside Energy Ltd, will form Pulse Energy
which will initially service more than one million Victorian customers
with the aim of rapidly becoming a national energy player.
The transaction is subject to final documentation, financial
close, and banking and regulatory approvals.
With retail energy markets becoming contestable next year, Pulse
Energy will provide Australia's first large-scale combination of
electricity and gas services and have access to potentially 10 million
energy customers in Eastern Australia commencing January 2001.
Customers for Pulse Energy will come from the existing Victorian
electricity retail business owned by United Energy and the gas retail
business (Ikon Energy), owned by Energy Partnership (AMP and
UtiliCorp). Through deregulation of the Victorian electricity and gas
businesses, it is expected that every Victorian electricity and gas
customer, regardless of size, will be able to buy energy from a
retailer of choice during 2001.
Effective ownership of Pulse Energy will comprise Shell (40%),
United Energy (25%), Energy Partnership (25%), and Woodside (10%).
Chief executive officer of the new company will be Nigel Kuzemko,
who brings 17 years of experience with a range of international energy
Pulse Energy will grow from the substantial customer base of
United Energy's 560,000 electricity customers and Energy Partnership's
(Ikon Energy) 520,000 gas customers. This customer base, which Pulse
Energy will service, includes a substantial overlap of customers who
already purchase electricity and gas from United Energy and Ikon; a
unique mix in Australia's energy retail market.
Shell will provide strong brand equity, retail channels, and cash
to Pulse Energy, as well as an established customer loyalty program.
Woodside will provide potential access to a long-term, competitive gas
supply and $27 million in cash. The balance of Pulse Energy's cash
needs will be met by non-recourse debt.
Pulse Energy will secure access to all future revenue streams of
the combined business from January 2001 as the energy market becomes
fully contestable. This revenue is currently more than $1 billion a
Chief Executive Officer of United Energy, Mr. Don Bacon, said
United Energy would receive net proceeds of approximately $232 million
from the contribution of its retail electricity business which would
be used initially to retire debt and to position the company to take
advantage of future growth opportunities.
"Pulse Energy is set to be Australia's most significant and
innovative energy retailer that combines the strengths of Australia's
leading energy companies. With United Energy's existing customer base
and extensive operating and marketing expertise, Shell's considerable
retail strengths, together with Woodside's ability to provide an
alternative gas supply choice, we see Pulse Energy becoming the
leading energy retailer in Australia by meeting the needs of customers
with smart, simple energy solutions," Mr Bacon said.
United Energy's contribution to Pulse Energy also includes
e-commerce focused back office facilities, including customer call
centre services and meter reading, which will be provided on contract.
The Director, Commercial, of Shell Development Australia, Mr Wim
Hein Grasso, said; "The Pulse Energy brand will build on the strengths
of the Shell brand and network. Pulse Energy will secure access to
Australia's largest loyalty program, Fly Buys(TM), with two million
additional customer accounts, and to Shell's extensive commercial and
industrial relationship network.
"Pulse Energy is consistent with Shell's desire to develop an
east coast gas and power business," Mr Grasso said.
"It will be a driving force behind market reform in Australia as
customers become aware of the ease, simplicity and convenience that
come from the choice of buying gas, electricity and other services
from the one provider."
Woodside's Australian Gas Director, Mr Jeff Schneider, said
Woodside's interest in Pulse Energy was part of the company's strategy
to build relationships and capture markets for its south-eastern,
northern and north-western Australian gas resources.
"Woodside sees eastern Australia as an important and major
long-term market in which we intend to provide an alternative gas
supply choice, initially through our interest in the Bass Strait
Kipper field and, in the medium term, through our northern Australia
gas resources off Darwin," Mr Schneider said.
"Pulse Energy builds on the Woodside-Shell Alliance, combining
the upstream and downstream strength of both companies, and provides
the opportunity to work with United Energy to access eastern
Australian energy markets."
Pulse Energy will continue to service its Victorian customers and
expand its presence in interstate electricity and gas markets as they
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