Commerce Energy Sells Texas Retail Electric Business for $14.8 Million

Commerce Energy Group, Inc. said that its principal operating subsidiary, Commerce Energy, Inc., sold all of its retail electric service contracts in Texas to Ambit Energy, LP (Ambit), for an estimated $14.8 million. The purchase price includes $8.5 million in cash received on closing, a second payment of $2.7 million, reduced by customer deposits and adjusted for final customer count, to be received on or before November 24, 2008 and deferred payments over a 24-month period estimated to be $3.6 million.

“This is a significant, positive step in both paying down debt as well as strengthening the core platform of the company,” said Commerce chief operating officer, Michael Fallquist. “We found a buyer in Ambit that shares our commitment to great technology, products and customer service. Ambit has agreed to preserve the terms and conditions of the customer contracts and this transaction will be seamless to all our customers.”

Commerce chief executive officer, Gregory L. Craig, remarked, “We have achieved another critical milestone in the now eight month old turnaround process. We are pleased to have completed a successful asset sale against the backdrop of a global credit and financial crisis and believe that this sale will better position Commerce operationally, financially, and strategically to achieve our future objectives.”

Commerce will retain its business providing retail electric power and natural gas in other markets in which it currently operates. In connection with the sale, Commerce also entered into amendments to its debt agreements, which, among other things, allow additional support of up to $6.0 million from AP Finance, LLC, remove the requirement to have a refinancing term sheet by October 30, 2008 and decrease the revolving loan limit and letter of credit limit under the credit facility.

Commerce was represented by Affiliated Energy Group (AEG) in connection with the transaction.

About Ambit Energy

Ambit Energy, L.P. is a retail energy provider based in Dallas, Texas. Ambit currently provides electricity and natural gas service to retail customers in Texas, New York and Illinois. Additional information on Ambit Energy can be found at ambitenergy.com.

About Commerce Energy Group

Commerce Energy Group is a leading independent U.S. electricity and natural gas marketing company. Its principal operating subsidiary, Commerce Energy, Inc., is licensed by the Federal Energy Regulatory Commission and by state regulatory agencies as an unregulated retail marketer of natural gas and electricity and serves homeowners, commercial and industrial consumers and institutional customers. For more information, visit www.CommerceEnergy.com.