Advancing its strategy to become a distributor of power as well as a telecommunications service provider, PAETEC (PAET) said it has acquired competitive electric supplier U.S. Energy Partners LLC, of Amherst, N.Y., for approximately $3 million in cash. The acquisition of U.S. Energy Partners, a privately held company that sells electricity to more than 3,500 customers in western New York State, will allow PAETEC to provide complementary services to its communications customers. The CLEC will also kick off an energy agency program at the Channel Partners Conference & Expo in Las Vegas this week.
Saying that the future of energy and communications are inextricably linked, PAETEC CEO Arunas Chesonis laid out a vision for the future of his company as a major player in energy consulting and renewable energy supplies in an industry address last fall.
“We’ve got customers who are spending $40,000 a month on their network with us, and they’re spending $440,000 a month on their energy bills,” remarked Chesonis.
This is the second acquisition the CLEC has made in the energy sector. In 2008 PAETEC acquired VARO Technologies, an electric and gas brokerage. That firm formed the core of PAETEC Energy, which now offers consulting and evaluation services to companies looking to reduce their energy use and broaden their power sources to include renewable generation. U.S. Energy Partners is an ESCO, or Energy Service Company, which in New York State means it buys directly from the energy supplier and resells power to end users.
The company plans to expand its ESCO operations into all 14 deregulated markets, starting with New York City by May 2010, said PAETEC COO EJ Butler Jr.
"We have over 44,000 medium and large business customers nationwide, and we've found that our average customer spends four times as much on energy as they do on telecommunications," said Butler. "We've seen a trend towards energy decisions being made by the office of the CIO, and this acquisition further supports that strategy."
PAETEC’s share price was up 2 percent at the close of trading on the Nasdaq on Monday.
