New Century Energies, Inc. (NCE), Denver, Colo., signed a letter of intent on a new long-term exclusive sourcing contract with WESCO Distribution Inc., Pittsburgh, Pa., and Red Man Pipe & Supply Co., Tulsa, Okla. The deal, once completed, would give WESCO and Red Man a lock on more than $25 million in annual product sales.

The open-ended agreement is part of a new supply initiative at NCE, which was created in a 1997 merger of Public Service Co. of Colorado with Southwestern Public Service Co. WESCO and Red Man will supply all of NCE's requirements, system-wide, for transmission and distribution equipment along with a broad assortment of electrical and gas products and services.

Under the agreement, NCE will shut down its warehouse operations and turn over all of its inventory needs to WESCO, which plans to move into a new 100,000-sq-ft facility in Denver and dramatically increase the staff employed there because of the capacity needed to serve NCE, says Don Thimjon, vice president, utility operations.

Red Man, a distributor of consumable industrial supplies, oilfield products and tubular goods including natural gas distribution and metering equipment, will lease space within the WESCO warehouse to serve NCE. NCE serves approximately 1.6 million electric customers and more than a million natural gas customers in Colorado, Texas, New Mexico, Wyoming, Kansas and Oklahoma.