Edmonton's power utility is forming a new marketing branch with a Calgary firm to help sell power to customers outside the city once the industry is deregulated.

Epcor, owner of Edmonton Power, and the Calgary-based natural gas company Engage Energy Canada have announced the formation of Encore Energy Solutions.Encore, which will cost Epcor about 500,000 Canadian dollars (US$345,000) to set up, will offer services and products to help the companies stay competitive.

''This is to create a company that customers, primarily outside of Edmonton, begin to recognize as a provider of electricity services,'' said Chris Heffring, Epcor's chief financial officer.

Because competition within the industry is expected to be fierce, Mr. Heffring said commercial and industrial companies could expect lower rates as a result of Encore's presence.

Mr. Heffring added the partnership doesn't mean there are plans for privatizing Epcor.

''This has to do with preserving the ability of the company to sell electricity in the future. If you don't have this kind of a venture you're not going to be in the game,'' he said.

Encore's products will be sold through the Epcor subsidiary Edmonton Power, and Encore will include Edmonton Power's product line.

''We understand very much the way the power business works from an electricity point of view. What they (Encore) understand is trading and hedging and the flow of money and the risks associated with that,'' said Cairine MacDonald, Edmonton Power's vice president of distribution and transmission.

Epcor is the parent company of Edmonton Power, the water utility Aqualta, and Eltec, which provides services such as street lighting.

Engage Energy is a joint venture between Coastal Corp., a Houston-based holding company, and Westcoast Energy of Vancouver, British Columbia.

Mr. Heffring said the limited partnership announced Tuesday.