NAESCO http://naesco.org/about/message.htm
Message from the Executive Director -- Terry E. Singer
November 2005
The impact of Hurricanes Katrina and Rita on the Gulf Coast reminds all of us that life can be capricious. The struggles endured by the residents of the Gulf Coast have certainly put everything else in perspective. We, as individuals and as an industry, will continue to support Gulf Coast residents as they struggle to rebuild their lives and their cities.
With passage of the federal energy bill several months ago, pundits expected that energy issues would not be reconsidered in the remaining months of the Congressional session. The storm damage to energy assets like refineries and drilling platforms, however, raised immediate concerns about the mid-term and longer-term impact on domestic production and distribution of oil and natural gas. Moreover, the stark implications of the concentration of significant energy assets in one region have renewed the conversation about the need for regional decentralization of energy production, distribution and transmission.
The storms also reinvigorated the debate on the sufficiency of existing U.S. energy policies to stimulate the development and delivery of diverse energy resources, to ensure the reliability of power production and delivery, and to meet the increasing energy demand without adopting heretofore politically unpopular policies like fuel efficiency requirements. What remains to be seen is whether the political will is sufficient to make the tough choices and adopt policies that are more substantive than “drive less and turn down your thermostat.”
Market Opportunities
The most significant event during recent months for those of our ESCO and vendor members serving the federal market is the reauthorization of the ESPC program for ten years. The uncertainty surrounding the program reauthorization certainly slowed down the project pipeline to a crawl and now that the authority is clear, let a thousand projects bloom.
The market opportunities for ESCO and vendor members have become especially robust in California. The California Public Utilities Commission recently approved $1.8 billion in energy efficiency programs proposed by the three investor owned utilities for the 2006-2008 program years. The Standard Performance Contracting program as well as other ESCO friendly programs will provide almost $750 million in incentives for ESCOs and their customers.
In addition, NAESCO and a group of member ESCOs have been actively working with the California Department of General Services (DGS) to re-start the state buildings performance contracting program. DGS is committed to restarting the program, and is working to make sure that the new program has the full support of other agencies in the California Green Action Team, so that it will be a permanent part of the state’s ongoing energy efficiency efforts.
New York has long been a strong market for industry providers. The New York Department of Public Service (DPS) staff has recently proposed the extension of the state’s System Benefits Charge (SBC) programs for the next five years (2006-2011) at the current level of about $150 million per year. NAESCO is active in the proceeding that is considering the DPS proposal, and also serves on the SBC Advisory Group that formally evaluates the NYSERDA-administered programs for the Public Service Commission, as well as on the Technical Advisory Panel for the NYSERDA Energy Analysis division that monitors New York’s energy supply situation and produces the state energy plan.
Also in New York, ConEdison, as part of a recent rate case settlement, will spend $225 million, over and above statewide SBC programs, to procure 300 MW of energy efficiency, demand response and distributed generation resources in the next three years to offset expected load growth in New York City and Westchester County. ConEdison will administer half of this funding in a bid program targeted to specific distribution areas. This bid program will be an improved version of the 2003 targeted program in which NAESCO members were successful bidders. The other half of the funding will be administered by NYSERDA, and will extend the market reach of current NYSERDA programs using additional funding and marketing efforts.
NAESCO has served on the Collaborative that is helping ConEdison and NYSERDA design their programs, and will actively monitor program implementation for the next three years.
The Western Governors' Association last year agreed unanimously to reduce energy use by 20 percent by the year 2020. An Energy Efficiency Task Force transformed the Gubernatorial mandate into a comprehensive policy document this past summer. NAESCO is a member of the Task Force and provided staffing in the development of policy initiatives. The Task Force recommends a “best practices” approach in which the participating states would spend about $2.3 billion annually for energy efficiency with performance contracting playing a key role.
Regional Meetings
NAESCO has hosted two regional meetings this fall. The “Spotlight on Pennsylvania” meeting attracted over 90 attendees including ten state facility managers. The workshop highlighted the emerging opportunities in Pennsylvania for ESCOs and other industry providers created by the Governor’s Executive Order to dramatically accelerate the use of demand reduction technologies and measures at public facilities.
NAESCO will continue to work with the state to facilitate additional face-to-face meetings between the state and industry providers to discuss the elements of the program design and implementation. The state is about to commence an ESCO qualification process that is expected to start in December. NAESCO will let you know additional details, as they are made known.
NAESCO also hosted a regional meeting in Chicago attracting over 50 attendees. The workshop focused on market opportunities in Illinois, Indiana, Kentucky and Iowa, including a potential $1.1 billion natural gas efficiency initiative to be undertaken by several Midwestern states. This initiative, if implemented, would create significant opportunities for our industry. Also on the agenda were presentations about looking beyond interest rates to maximize project savings, reinforcing a company’s marketing message using EPA-developed software, improving power quality, optimizing system efficiency using HVAC, and new innovations in lamps and ballasts.
Annual Conference
NAESCO looks forward to seeing many of you at our Annual Conference in Las Vegas. For those of you who need additional information about the Conference or still have not registered, visit our website at www.naesco.org. As many of you have already told us, our new website makes it much easier to navigate around the site and get information more quickly.
Our tracking information shows that since June, we have over a million hits with 54,000 serious visitors to the website viewing 2.4 pages on average. Most visited pages were “Finding a Provider” which features profiles of member companies, information on accredited companies and Conference information.
Bruce Springsteen wrote, “At the end of the day, people find a reason to believe.” In a period of great upheaval and tragedy, we welcome the optimism and faith in tomorrow that gives us a reason to believe.
Message from the Executive Director -- Terry E. Singer
November 2005
The impact of Hurricanes Katrina and Rita on the Gulf Coast reminds all of us that life can be capricious. The struggles endured by the residents of the Gulf Coast have certainly put everything else in perspective. We, as individuals and as an industry, will continue to support Gulf Coast residents as they struggle to rebuild their lives and their cities.
With passage of the federal energy bill several months ago, pundits expected that energy issues would not be reconsidered in the remaining months of the Congressional session. The storm damage to energy assets like refineries and drilling platforms, however, raised immediate concerns about the mid-term and longer-term impact on domestic production and distribution of oil and natural gas. Moreover, the stark implications of the concentration of significant energy assets in one region have renewed the conversation about the need for regional decentralization of energy production, distribution and transmission.
The storms also reinvigorated the debate on the sufficiency of existing U.S. energy policies to stimulate the development and delivery of diverse energy resources, to ensure the reliability of power production and delivery, and to meet the increasing energy demand without adopting heretofore politically unpopular policies like fuel efficiency requirements. What remains to be seen is whether the political will is sufficient to make the tough choices and adopt policies that are more substantive than “drive less and turn down your thermostat.”
Market Opportunities
The most significant event during recent months for those of our ESCO and vendor members serving the federal market is the reauthorization of the ESPC program for ten years. The uncertainty surrounding the program reauthorization certainly slowed down the project pipeline to a crawl and now that the authority is clear, let a thousand projects bloom.
The market opportunities for ESCO and vendor members have become especially robust in California. The California Public Utilities Commission recently approved $1.8 billion in energy efficiency programs proposed by the three investor owned utilities for the 2006-2008 program years. The Standard Performance Contracting program as well as other ESCO friendly programs will provide almost $750 million in incentives for ESCOs and their customers.
In addition, NAESCO and a group of member ESCOs have been actively working with the California Department of General Services (DGS) to re-start the state buildings performance contracting program. DGS is committed to restarting the program, and is working to make sure that the new program has the full support of other agencies in the California Green Action Team, so that it will be a permanent part of the state’s ongoing energy efficiency efforts.
New York has long been a strong market for industry providers. The New York Department of Public Service (DPS) staff has recently proposed the extension of the state’s System Benefits Charge (SBC) programs for the next five years (2006-2011) at the current level of about $150 million per year. NAESCO is active in the proceeding that is considering the DPS proposal, and also serves on the SBC Advisory Group that formally evaluates the NYSERDA-administered programs for the Public Service Commission, as well as on the Technical Advisory Panel for the NYSERDA Energy Analysis division that monitors New York’s energy supply situation and produces the state energy plan.
Also in New York, ConEdison, as part of a recent rate case settlement, will spend $225 million, over and above statewide SBC programs, to procure 300 MW of energy efficiency, demand response and distributed generation resources in the next three years to offset expected load growth in New York City and Westchester County. ConEdison will administer half of this funding in a bid program targeted to specific distribution areas. This bid program will be an improved version of the 2003 targeted program in which NAESCO members were successful bidders. The other half of the funding will be administered by NYSERDA, and will extend the market reach of current NYSERDA programs using additional funding and marketing efforts.
NAESCO has served on the Collaborative that is helping ConEdison and NYSERDA design their programs, and will actively monitor program implementation for the next three years.
The Western Governors' Association last year agreed unanimously to reduce energy use by 20 percent by the year 2020. An Energy Efficiency Task Force transformed the Gubernatorial mandate into a comprehensive policy document this past summer. NAESCO is a member of the Task Force and provided staffing in the development of policy initiatives. The Task Force recommends a “best practices” approach in which the participating states would spend about $2.3 billion annually for energy efficiency with performance contracting playing a key role.
Regional Meetings
NAESCO has hosted two regional meetings this fall. The “Spotlight on Pennsylvania” meeting attracted over 90 attendees including ten state facility managers. The workshop highlighted the emerging opportunities in Pennsylvania for ESCOs and other industry providers created by the Governor’s Executive Order to dramatically accelerate the use of demand reduction technologies and measures at public facilities.
NAESCO will continue to work with the state to facilitate additional face-to-face meetings between the state and industry providers to discuss the elements of the program design and implementation. The state is about to commence an ESCO qualification process that is expected to start in December. NAESCO will let you know additional details, as they are made known.
NAESCO also hosted a regional meeting in Chicago attracting over 50 attendees. The workshop focused on market opportunities in Illinois, Indiana, Kentucky and Iowa, including a potential $1.1 billion natural gas efficiency initiative to be undertaken by several Midwestern states. This initiative, if implemented, would create significant opportunities for our industry. Also on the agenda were presentations about looking beyond interest rates to maximize project savings, reinforcing a company’s marketing message using EPA-developed software, improving power quality, optimizing system efficiency using HVAC, and new innovations in lamps and ballasts.
Annual Conference
NAESCO looks forward to seeing many of you at our Annual Conference in Las Vegas. For those of you who need additional information about the Conference or still have not registered, visit our website at www.naesco.org. As many of you have already told us, our new website makes it much easier to navigate around the site and get information more quickly.
Our tracking information shows that since June, we have over a million hits with 54,000 serious visitors to the website viewing 2.4 pages on average. Most visited pages were “Finding a Provider” which features profiles of member companies, information on accredited companies and Conference information.
Bruce Springsteen wrote, “At the end of the day, people find a reason to believe.” In a period of great upheaval and tragedy, we welcome the optimism and faith in tomorrow that gives us a reason to believe.
