EXHIBIT10.4**INDEMNIFICATION AGREEMENT**     This Indemnification Agreement (this “Agreement”) is made and entered into as of March 26,2007, by and between Commerce Energy Group, Inc., a Delaware corporation (the “Corporation”), andErik A. Lopez, Sr., an individual (“Indemnitee”).**Recitals**     A. Indemnitee performs a valuable service to the Corporation in his capacity as an officer ofthe Corporation.     B. The Amended and Restated Certificate of Incorporation (the “Certificate”) and the Bylaws(the “Bylaws”) of the Corporation provide for the indemnification of the officers and directors ofthe Corporation as authorized by the Delaware General Corporation Law, as amended (the “DGCL”).     C. The Certificate, the Bylaws and the DGCL, by their non-exclusive nature, permit contractsbetween the Corporation and its directors, officers, employees and other agents with respect toindemnification of such persons.     D. In accordance with the authorization provided by the Certificate, the Bylaws and the DGCL,the Corporation is entitled to purchase a policy or policies of directors’ and officers’ liabilityinsurance covering certain liabilities which may be incurred by its directors and officers in theperformance of their duties to the Corporation.     E. As a result of developments affecting the terms, scope and availability of such insurance,there exists general uncertainty as to the extent of protection afforded such persons by suchInsurance and by statutory and bylaw indemnification provisions.     F. In order to induce Indemnitee to continue to serve as an officer of the Corporation, theCorporation has determined and agreed to enter into this Agreement with Indemnitee.**Agreement**     1. Indemnity of Indemnitee. The Corporation shall hold harmless, indemnify andadvance expenses to Indemnitee as provided in this Agreement and to the fullest extent authorized,permitted or required by the provisions of the Certificate, the Bylaws and the DGCL, as the samemay be amended from time to time (but, only to the extent that such amendment permits theCorporation to provide broader indemnification rights than were permitted by the Certificate, theBylaws or the DGCL prior to adoption of such amendment); provided, however, that the Corporationshall not indemnify Indemnitee in connection with any proceeding, (or part thereof) initiated byIndemnitee, or any proceeding by Indemnitee against the Corporation or its directors, officers,employees or other agents, unless (i) such indemnification is expressly required to be made by law,(ii) the proceeding, was authorized by the Board of Directors of the Corporation, (iii) suchindemnification is provided by the Corporation, in its sole discretion, pursuant to the powersvested in the Corporation under the DGCL, or (iv) the proceeding is initiated with respect to aproceeding to enforce rights to indemnification pursuant to Section 8
 

 
hereof. The rights of Indemnitee provided under the preceding sentence shall include, butshall not be limited to, the rights set forth in the other sections of this Agreement.     2. Additional Indemnity. In addition to and not in limitation of the indemnificationotherwise provided for herein, and subject only to the exclusions set forth in Section 3 hereof,the Corporation hereby further agrees to hold harmless and indemnify Indemnitee:          (a) Against all liabilities, losses, expenses (including attorney’s fees), judgments, fines,ERISA excise taxes or penalties and amounts paid in settlement actually and reasonably incurred orsuffered by Indemnitee in connection with any threatened, pending or completed action, suit orproceeding, whether civil, criminal, administrative or investigative, to which he is a party or awitness, by reason of the fact that Indemnitee is or was a director or officer of the Corporationor is or was serving at the request of the Corporation as a director or officer of anothercorporation or of a partnership, joint venture, trust, enterprise or non-profit entity, includingservice with respect to employee benefit plans, whether the basis of such proceeding is allegedaction in an official capacity as a director, officer, employee or agent or in any other capacitywhile serving as a director, officer, employee or agent.          (b) Otherwise to the fullest extent as may be provided to Indemnitee by the Corporation underthe non-exclusivity provisions of the DGCL.     3. Limitations on Additional Indemnity. No indemnity pursuant to Section 2 hereofshall be paid by the Corporation:          (a) On account of any claim against Indemnitee for an accounting of profits made from thepurchase or sale by Indemnitee of securities of the Corporation pursuant to the provisions ofSection 16(b) of the Securities Exchange Act of 1934 and amendments thereto or similar provisionsof any federal, state or local statutory law;          (b) On account of Indemnitee’s conduct that was knowingly fraudulent or deliberatelydishonest, or that constituted willful misconduct;          (c) On account of, or attributable to, Indemnitee’s conduct that constituted a breach ofIndemnitee’s duty of loyalty to the Corporation, a breach of Indemnitee’s duties of professionalresponsibility to the Corporation by accepting any subsequent employment as an attorney for anyperson, firm or entity that is adverse to the Corporation, as this term is used in the rules ofprofessional conduct governing attorneys licensed to practice in California, unless the Corporationhas consented to such employment in advance, or resulted in any personal profit or advantage towhich Indemnitee was not legally entitled;          (d) For which payment has actually been made to Indemnitee under a valid and collectibleinsurance policy or under a valid and enforceable indemnity clause, bylaw or agreement, except inrespect of any excess beyond payment under such insurance, clause, bylaw or agreement;          (e) The payment of which by the Corporation under this Agreement is not permitted byapplicable law;
-2-

 
          (f) If indemnification is not lawful (and, in this respect, both the Corporation andIndemnitee have been advised that the Securities and Exchange Commission believes thatindemnification for liabilities arising under the federal securities laws is against public policyand is, therefore, unenforceable and that claims for indemnification should be submitted toappropriate courts for adjudication) or is prohibited by any applicable state securities laws withrespect to any violation of applicable federal or state securities laws; or          (g) In connection with any proceeding, (or part thereof) initiated by Indemnitee, or anyproceeding by Indemnitee against the Corporation or its directors, officers, employees or otheragents, unless (i) such indemnification is expressly required to be made by law, (ii) theproceeding, was authorized by the Board of Directors of the Corporation, (iii) such indemnificationis provided by the Corporation, in its sole discretion, pursuant to the powers vested in theCorporation under the DGCL, or (iv) the proceeding is initiated pursuant to Section 8 hereof.     4. Continuation of Indemnity. All agreements and obligations of the Corporationcontained herein shall continue during the period Indemnitee is a director, officer, employee orother agent of the Corporation (or is or was serving at the request of the Corporation as adirector, officer, employee or other agent of another corporation, partnership, joint venture,trust, employee benefit plan or other enterprise) and shall continue thereafter so long asIndemnitee shall be subject to any possible claim or threatened, pending or completed action, suitor proceeding, whether civil, criminal, arbitrative, administrative or investigative, by reason ofthe fact that Indemnitee was (i) a director of the Corporation or (ii) serving in any othercapacity referred to herein, and shall inure to the benefit of Indemnitee’s heirs, executors andadministrators.     5. Partial Indemnification. Indemnitee shall be entitled under this Agreement toindemnification by the Corporation for a portion of the expenses (including attorneys’ fees),witness fees, damages, judgments, fines and amounts paid in settlement and any other amounts thatIndemnitee becomes legally obligated to pay in connection with any action, suit or proceedingreferred to in Section 2 hereof even if not entitled hereunder to indemnification for the totalamount thereof, and the Corporation shall indemnify Indemnitee for the portion thereof to whichIndemnitee is entitled.     6. Notification and Defense of Claim. Not later than thirty (30) days after receiptby Indemnitee of notice of the commencement of any action, suit or proceeding, Indemnitee will, ifa claim in respect thereto is to be made against the Corporation under this Agreement, notify theCorporation of the commencement thereof; but the omission so to notify the Corporation will notrelieve it from any liability which it may have to Indemnitee otherwise than under this Agreement.With respect to any such action, suit or proceeding as to which Indemnitee notifies the Corporationof the commencement thereof          (a) The Corporation will be entitled to participate therein at its own expense;          (b) Except as otherwise provided below, the Corporation may, at its option and jointly withany other indemnifying party similarly notified and electing to assume such defense, assume thedefense thereof, with counsel reasonably satisfactory to Indemnitee. After
-3-

 
notice from the Corporation to Indemnitee of its election to assume the defense thereof, theCorporation will not be liable to Indemnitee under this Agreement for any legal or other expensessubsequently incurred by Indemnitee in connection with the defense thereof except for reasonablecosts of investigation or otherwise as provided below. Indemnitee shall have the right to employseparate counsel in such action, suit or proceeding but the fees and expenses of such counselincurred after notice from the Corporation of its assumption of the defense thereof shall be at theexpense of Indemnitee unless (i) the employment of counsel by Indemnitee has been authorized by theCorporation, (ii) Indemnitee shall have reasonably concluded that there may be a conflict ofinterest between the Corporation and Indemnitee in the conduct of the defense of such action, or(iii) the Corporation shall not in fact have employed counsel to assume the defense of such action,in each of which cases the fees and expenses of Indemnitee’s separate counsel shall be at theexpense of the Corporation. The Corporation shall not be entitled to assume the defense of anyaction, suit or proceeding brought by or on behalf of the Corporation or as to which Indemniteeshall have made the conclusion provided for in (ii) above; and          (c) The Corporation shall not be liable to indemnify Indemnitee under this Agreement for anyamounts paid in settlement of any action or claim effected without its written consent, which shallnot be unreasonably withheld. The Corporation shall be permitted to settle any action except thatit shall not settle any action or claim in any manner which would impose any penalty or limitationon Indemnitee without Indemnitee’s written consent which may be given or withheld in Indemnitee’ssole discretion.     7. Expenses. The Corporation shall pay the expenses incurred by Indemnitee indefending any proceeding in advance of its final disposition, providedthat, to theextent required by the DGCL, the payment of expenses in advance of the final disposition of theproceeding shall be made only upon receipt of an undertaking by Indemnitee to repay all amountsadvanced if it should be ultimately determined by final judicial decision from which there is nofurther right to appeal that Indemnitee is not entitled to be indemnified under this Agreement orotherwise.     8. Enforcement. Any right to indemnification or advances granted by this Agreement toIndemnitee shall be enforceable by or on behalf of Indemnitee only in the Chancery Court of theState of Delaware if (i) the claim for indemnification or advances is denied, in whole or in part,or (ii) no disposition of such claim is made within sixty (60) days of request therefor.Indemnitee, in such enforcement action, if successful in whole or in part, shall be entitled to bepaid also the expense of prosecuting his claim. It shall be a defense to any action for which aclaim for indemnification is made under Section 2 hereof (other than an action brought to enforce aclaim for advancement of expenses pursuant to Section 7 hereof, provided that the requiredundertaking has been tendered to the Corporation) that Indemnitee is not entitled toindemnification because of the limitations set forth in Section 3 hereof, but the burden of provingsuch defense shall be on the Corporation. Neither the failure of the Corporation (including itsBoard of Directors or its shareholders) to have made a determination prior to the commencement ofsuch enforcement action that indemnification of Indemnitee is proper in the circumstances, nor anactual determination by the Corporation (including its Board of Directors or its shareholders) thatsuch indemnification is improper, shall be a defense to the action or create a presumption thatIndemnitee is not entitled to indemnification under this Agreement or otherwise.
-4-

 
     9. Subrogation. In the event of payment under this Agreement, the Corporation shallbe subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, whoshall execute all documents required and shall do all acts that may be necessary to secure suchrights and to enable the Corporation effectively to bring suit to enforce such rights.     10. Non Exclusivity of Rights. The rights conferred on Indemnitee by this Agreementshall not be exclusive of any other right which Indemnitee may have or hereafter acquire under anystatute, provision of the Certificate, the Bylaws, agreement, vote of shareholders or directors orotherwise, both as to action in his official capacity and as to action in another capacity whileholding office.     11. Survival of Rights.          (a) The rights conferred on Indemnitee by this Agreement shall continue after Indemnitee hasceased to be a director, officer, employee or other agent of the Corporation or to serve at therequest of the Corporation as a director, officer, employee or other agent of another corporation,partnership, joint venture, trust, employee benefit plan or other enterprise and shall inure to thebenefit of Indemnitee’s heirs, executors and administrators.          (b) The Corporation shall require any successor (whether direct or indirect, by purchase,merger, consolidation or otherwise) to all or substantially all of the business or assets of theCorporation, expressly to assume and agree to perform this Agreement in the same manner and to thesame extent that the Corporation would be required to perform if no such succession had takenplace.     12. Severability. Each of the provisions of this Agreement is a separate and distinctagreement and independent of the others, so that if any provision hereof shall be held to beinvalid for any reason, such invalidity or unenforceability shall not affect the validity orenforceability of the other provisions hereof. Furthermore, if this Agreement shall be invalidatedin its entirety on any ground, then the Corporation shall nevertheless indemnify Indemnitee to thefullest extent provided by the Certificate, the Bylaws, the DGCL or any other applicable law.     13. Consent to Jurisdiction. The Corporation and Indemnitee each hereby irrevocablyconsent to the jurisdiction of the Court of the State of Delaware for all purposes in connectionwith any action or proceeding, which arises out of or relates to this Agreement, and agree that anyaction instituted under this Agreement shall be brought only in the Chancery Courts of the State ofDelaware.     14. Governing Law. This Agreement shall be interpreted and enforced in accordance withthe laws of the State of Delaware.     15. Amendment and Termination. No amendment, modification, termination orcancellation of this Agreement shall be effective unless in writing signed by both parties hereto.     16. Identical Counterparts. This Agreement may be executed in one or morecounterparts, each of which shall for all purposes be deemed to be an original but all of whichtogether shall constitute but one and the same Agreement. Only one such counterpart need beproduced to evidence the existence of this Agreement.
-5-

 
     17. Headings. The headings of the sections of this Agreement are inserted forconvenience only and shall not be deemed to constitute part of this Agreement or to affect theconstruction hereof.     18. Notices. All notices, requests, demands and other communications hereunder shallbe in writing and shall be deemed to have been duly given (i) upon delivery if delivered by hand tothe party to whom such notice or other communication shall have been directed, or (ii) if mailed bycertified or registered mail with postage prepaid, on the third business day after the date onwhich it is so mailed: (a) If to Indemnitee, to:Erik A. Lopez, Sr.