ESCOs look for signs of the future

Executives from various energy services companies (ESCOs), utilities and manufacturers of electrical and HVAC products for the energy conservation market compared their expectations for the future at the annual conference of the National Association of Energy Service Companies (NAESCO) in New Orleans.

The discussions revealed a broad consensus that the market is entering a period of confusion and turmoil, which will yield enormous opportunities for some players. There was less agreement on what types of companies will capture those opportunities and what products and services they will be expected to provide.

The 14th annual conference of Washington, D.C.-based NAESCO drew an unexpectedly large crowd. In all, more than 350 people attended the conference-a 40% increase over last year's meeting-and 52 companies set up booths to tout their products and services in the Vendor Showcase.

Executives from nine ESCOs, including independents, utility-owned and manufacturer-owned ESCOs, told a standing-room-only audience at the conference's opening round-table session about what products they would like to see developed and what the future of the industry holds.

The discussion reflected a widespread belief in the power of information. ESCOs are convinced that, if they are to thrive beyond utility deregulation, they will have to have better access to information-particularly customer power usage data-in standardized formats. Devices for capturing data were peppered throughout the ESCO executives' technology wish-lists, in among the dimmable ballasts, the integrated retrofit lighting control systems and the dual-fuel chillers.

In terms of overall trends, the attendees of the conference said customers will continue to demand an ever-broadening array of integrated services from ESCOs, including both supply-side and demand-side services. ESCO executives from throughout the country said they are considering expanded services, including not only performance contracting, but also electrical retail wheeling, gas purchasing, onsite generation, systems design and installation, even equipment maintenance and consulting on how customers can manage loads for maximum savings. The sentiment was that deregulation will cast consumers and building owners into widespread uncertainty and confusion, which ESCOs will be in a prime position to help them navigate.

Attendees of the conference also generally emphasized that 1998 will see a shift in focus away from lighting-only solutions (lighting has historically accounted for over 70 percent of this market) and toward solutions that involve heating, ventilation and air conditioning (HVAC) equipment that, while it has a higher up-front cost and longer payback, also results in more substantial long-term energy savings.

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