Commerce Energy Consents to Foreclosure and Declares Dividend

  
    
  
  
    
      Commerce Energy Group, Inc. (AMEX:EGR) announced today that the company 
      accepted a foreclosure by its secured lenders under a procedure under 
      the Uniform Commercial Code on all shares of Commerce Energy, Inc. 
      (Commerce), our wholly-owned subsidiary, and certain other securities 
      held by the company, in satisfaction of the company’s liabilities and 
      obligations with respect to the company’s secured debt. In connection 
      therewith, the company declared a cash dividend of $0.084 per share on 
      shares of the company’s common stock to all stockholders of record on 
      December 11, 2008. The company also announced today that the company 
      redeemed all of the rights outstanding under the company’s shareholder 
      rights agreement at a price of $0.001 per right.
    
    
      AP Finance, LLC (“AP Finance”) and Commerce Gas and Electric Corp., a 
      wholly-owned subsidiary of Universal Energy Group Ltd. (“CG&E”), the 
      holders of the company’s secured debt, notified the company today that a 
      default existed under certain agreements relating to the company’s 
      secured debt. AP Finance and CG&E, also proposed today, under Section 
      9-620 of the Uniform Commercial Code, as in effect in the State of New 
      York, to accept all of the company’s stock in Commerce and certain other 
      securities held by the company in satisfaction of the company’s 
      liabilities and obligations with respect its secured debt pursuant to 
      the terms and conditions of an acceptance agreement among the company, 
      AP Finance and CG&E (the “Consensual Foreclosure”).
    
    
      The company had a right not to consent to, and thereby delay, the 
      Consensual Foreclosure. However, the company recognized that a delay 
      would likely not prevent a foreclosure and instead chose to accept 
      certain inducements offered by AP Finance and CG&E by consenting to the 
      Consensual Foreclosure and executing and delivering an acceptance 
      agreement today. Pursuant to the terms of the acceptance agreement, AP 
      Finance and CG&E agreed to allow Commerce to pay a dividend to the 
      company in the aggregate amount of $3.1 million. As a result of the 
      Consensual Foreclosure and the dividend to be paid by Commerce to the 
      company, the company’s board of directors determined that the company 
      would be able to make a distribution to its shareholders in the 
      aggregate amount of $2,614,780, comprised of a dividend in the amount of 
      $0.084 per share on shares of the company’s common stock and a 
      redemption of all of the rights outstanding under the company’s 
      shareholder rights agreement at a price of $0.001 per right. The 
      dividend will be payable to shareholders of record as of the close of 
      business on December 11, 2008 and will be paid as soon as practical.
    
    
      As a result of the Consensual Foreclosure, the company ceased all 
      operations but Commerce will continue to market gas and electricity in 
      its current markets as a subsidiary of CG&E, a wholly-owned subsidiary 
      of Toronto Stock Exchange listed Universal Energy Group Ltd. The company 
      will commence proceedings to wind-up and dissolve as soon as practicable.
    
    
      Effective on December 11, 2008, in connection with the Consensual 
      Foreclosure, the company determined to initiate the withdrawal of the 
      company’s shares from the NYSE Alternext US, previously known as the 
      American Stock Exchange (the “Exchange”). The company is in the process 
      of submitting a letter to the Exchange requesting the withdrawal of its 
      shares of common stock from the Exchange.
    
    
      About Commerce Energy Group
    
    
      Commerce Energy Group was a leading independent U.S. electricity and 
      natural gas marketing company. Its formerly-owned, 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.
    
    
      Forward-Looking Statements
    
    
      This press release contains forward-looking statements that are made 
      pursuant to the Safe Harbor Provisions of the Private Securities 
      Litigation Reform Act of 1995, particularly those statements regarding 
      the effects of the proposed transaction and those preceded by, followed 
      by or that otherwise include the words “believes,” “expects,” 
      “anticipates,” “intends,” “estimates,” or similar expressions. 
      Forward-looking statements relating to expectations about future results 
      or events are based upon information available to Commerce as of today’s 
      date, and Commerce does not assume any obligations to update any of 
      these statements. The forward-looking statements are not guarantees of 
      the future performance of Commerce and actual results may vary 
      materially from the results and expectations discussed.