| New
energy service companies (ESCOs) and other unregulated utility
subsidiaries are being formed each and every month by electric
utilities in North America and abroad. Established ESCOs
appear to change names on a monthly basis as they merge,
consolidate or establish new mission statements. Keeping track
of these new market entrants, and the revamped existing
companies, can be likened to tracking your favorite sports
player as he jumps from team to team through the free agency
market. Some ESCOs are so new, or appear and disappear so
quickly, that their holding company switchboard operators
don't even have phone contact listings for their employees.
In the past, ESCOs
formed by utility holding companies focused their business
efforts on demand-side management initiatives, such as load
control, lighting, window tinting, insulation, energy audits
and residential appliance sales. As deregulation of the
industry takes hold, ESCOs must find ways to distinguish
themselves from their competitors.
Establishing a line
of distribution automation-related products and services is
one way in which ESCOs can improve their industry presence,
fuel business growth and gain market share. Automation-related
products and services currently offered by ESCOs include:
- Smart lighting
systems including related design and engineering services
for industrial and commercial properties. Such systems
include sensors for available sunlight and automatic
turn-off when the area is not in use.
- Facility energy
management systems bring together the elements of metering,
billing, demand management and consumption by detailed
components. Electricity cost allocation methodologies
provide energy cost accounting by department, floor,
occupant, product line and so forth.
- Building
automation offerings encompass more than energy management -
bringing into focus building security, facilities heating,
ventilating and air conditioning, and some of or all
supervisory control and data acquisition-like applications
that provide status and alarming for equipment and
appliances.
- Telecommunications services range from simple
local-area-bypass offerings to Internet offerings to total
cable-based services.
In
states where industry regulations may force separation of
services from the regulated utility (distribution network
operations provider), ESCOs are offering metering and billing
services. Illinova Energy Partners is one company currently
developing electricity pricing and billing software for its
customers. Puget Sound's subsidiary, Connext, is providing
automated meter reading and customer information system
services. Still others, such as Wisconsin Public Services' WPS
Energy Services subsidiary, have begun to offer energy
consumption software. DTE Energy Co.'s (Detroit Edison)
Intelligent Link Project is a business unit established to
send data messages to residential customers for residence
temperature control based on a four-tier rate structure.
An array of
telecommunication services is available through Potomac
Electric Power Co.'s subsidiary, Starpower, with offerings
such as cable, telecommunications and Internet services.
Additional telecommunication service programs are offered by
Texas Utilities via its PrimeCo Personal Communications
Network. PrimeCo is a wireless digital communications company
with a strong Fiber-optic network and 896 MHz dispatch radio
services.
In the building
automation arena, Southern Co. is providing PowerCall Security
- a 24 hour security monitoring systems for homes. The system
includes alerts for intrusion, fire and medical emergencies.
District-wide heating and cooling schemes are now offered
through Houston Industries' HL&P Energy Services Co. and
Cinergy's Trigen-Cinergy Solutions.
Over the next five
years, computer-based and automation-centered offerings geared
to improve the usage and cost management of electricity will
serve as fuel for the most successful ESCOs.
ESCOs Take Hold Around the
World
- More than 85% of
large U.S. investor-owned utilities now have one or more
ESCOs staffed and operating.
- More than US$2
billion in 1998 U.S. electric utility holding company
revenue can be tracked back to ESCO-derived revenues. About
20% of that amount is based on automation-centered or
computer-based services.
- More
sophisticated, computer-based and automation-related
offerings can be expected from ESCOs in the future.
- International
utilities in many Western and several Asian-Pacific
countries have already formed, or are about to launch, ESCOs
or the local equivalent of unregulated businesses owned by
electric utility holding companies.
- The pace of
state-by-state electricity deregulation will have a direct
effect on the number and types of ESCOs formed (and
revamped) over the next five years.
Expect to see a new
generation of ESCOs move into new territories, such as
energy-related equipment manufacturing, utility and industrial
and commercial facilities automation consulting, utility
management, and facilities management for information services
departments, call centers and control center operations of
other utilities
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