EDMONTON - - Direct Energy is chomping at the bit to become the third company to sell natural gas and electricity contracts to Alberta homeowners.

Last December, Direct paid $128.5 million for the one million gas and power customers of Atco Ltd., contingent on the province completing revisions to existing energy acts. With those changes pending, Direct will file the necessary regulatory papers by the end of this month, said Rob Hemstock, Direct's vice-president for regulatory affairs. "It will be a smooth transition from Atco to Direct Energy," he said Friday. Within a few weeks of obtaining Energy and Utilities Board approval, Direct will begin selling gas and electricity contracts to homeowners. While there are numerous brokers selling wholesale energy to large industries and businesses, only Epcor Energy Services and Enmax Energy offer residential fixed-rate contracts. Direct would be No. 3, and Hemstock -- who previously was an executive with Enron Canada in Calgary -- said the Direct rates will be competitive. "Let's wait and see what we come out with. I'm very confident that (Direct's rates) will be competitive with what you see in the market." Epcor offers three- and five-year contracts for 6.7 cents and 6.5 cents per kilowatt-hour, respectively, about half-a-cent higher than its regulated default rate. Direct has been placing ads in newspapers counselling consumers to wait. It purchased wholesale power in a mid-March auction conducted by the provincial Balancing Pool. Wholesale spot prices have averaged more than eight cents per kilowatt-hour this year, but Hemstock said it's the futures prices that really matter: "And they aren't at eight cents." Direct will also provide regulated default rates in both gas and electricity, picking up the customer base now served by Atco. Atco Gas has 800,000 gas customers provincewide; Atco Electric serves 170,000 customers, mostly north and east of Edmonton. Direct has 150 people at its Calgary office, but, under a long-term contract, will also use the 700 call-centre and billing employees of Atco I-Tek in Edmonton. Meanwhile, a Baltimore energy company, Constellation Energy Group, will not enter the residential market as had been speculated. Constellation, via New Energy Canada, purchased 550 mega-watts of wholesale power in March but will sell it to large industrial and commercial clients, or on the spot market. The residential market offers puny profit margins unless individual homes are gathered into large blocks, vice-president Martin Proctor said. "Unless you are aggregating or bundling that volume of customers, it's very difficult to match up the wholesale market with the residential retail market." And, Proctor added, "until those things happen, you're not going to see a substantial (number of) entries into the residential market."

"It will be a smooth transition from Atco to Direct Energy," he said Friday.

Within a few weeks of obtaining Energy and Utilities Board approval, Direct will begin selling gas and electricity contracts to homeowners.

While there are numerous brokers selling wholesale energy to large industries and businesses, only Epcor Energy Services and Enmax Energy offer residential fixed-rate contracts.

Direct would be No. 3, and Hemstock -- who previously was an executive with Enron Canada in Calgary -- said the Direct rates will be competitive. "Let's wait and see what we come out with. I'm very confident that (Direct's rates) will be competitive with what you see in the market."

Epcor offers three- and five-year contracts for 6.7 cents and 6.5 cents per kilowatt-hour, respectively, about half-a-cent higher than its regulated default rate.

Direct has been placing ads in newspapers counselling consumers to wait.

It purchased wholesale power in a mid-March auction conducted by the provincial Balancing Pool.

Wholesale spot prices have averaged more than eight cents per kilowatt-hour this year, but Hemstock said it's the futures prices that really matter: "And they aren't at eight cents."

Direct will also provide regulated default rates in both gas and electricity, picking up the customer base now served by Atco.

Atco Gas has 800,000 gas customers provincewide; Atco Electric serves 170,000 customers, mostly north and east of Edmonton.

Direct has 150 people at its Calgary office, but, under a long-term contract, will also use the 700 call-centre and billing employees of Atco I-Tek in Edmonton.

Meanwhile, a Baltimore energy company, Constellation Energy Group, will not enter the residential market as had been speculated.

Constellation, via New Energy Canada, purchased 550 mega-watts of wholesale power in March but will sell it to large industrial and commercial clients, or on the spot market.

The residential market offers puny profit margins unless individual homes are gathered into large blocks, vice-president Martin Proctor said. "Unless you are aggregating or bundling that volume of customers, it's very difficult to match up the wholesale market with the residential retail market."

And, Proctor added, "until those things happen, you're not going to see a substantial (number of) entries into the residential market."