Shell to Stop Selling Power in Ohio, Texas

HOUSTON —  Shell Energy Services, an affiliate of Royal Dutch/Shell Group, the second-largest publicly traded oil company, said Tuesday that it will stop selling retail power in Ohio and Texas because of a slowdown in U.S. deregulation.

Shell Energy will focus instead on selling natural gas in Georgia and Ohio, the company said.

“Volatile energy prices and an uncertain economic environment over the past few months have caused legislators, regulators, generators and marketers to reconsider their deregulation situations and strategies,” Alan Raymond, president and chief executive of Shell Energy, said in a statement.

The company said the slower pace of deregulation made it unlikely that it would make a profit “in a reasonable amount of time” by selling retail power nationwide.

Power prices in California, one of the first states to open its market, rose exponentially last summer, and the state experienced a series of outages. Politicians have accused the state’s power sellers of profiteering in the competitive market. The power sellers say there are flaws in the California market model and the state has a supply shortage.

Shell Energy said it will find another marketer for its 30,000 Ohio customers and will withdraw from Texas’ retail choice program, scheduled to start Jan. 1. Customers who selected Shell for the pilot program ahead of statewide deregulation will be returned automatically to their traditional utility.

Competitor NewPower Holdings Inc. said its New Power unit’s base of residential and small-business customers continues to grow, and it remains committed to retail energy competition. The company has customers in 10 states.

NewPower, a venture formed by Enron Corp. to compete with traditional gas and electric utilities, said in a statement that natural gas presents “an attractive marketing opportunity,” but it believes that “electricity deregulation is progressing strongly and provides a sustainable market that will only continue to grow.”

Shares of Shell fell 44 cents to $56.19 in the U.S. Shell is based in The Hague. Shell Energy is based in Houston.

Shares of Purchase, N.Y.-based New Power rose 15 cents to $14.15 on the New York Stock Exchange.