Edison Moves Toward Energy as a Service

Edison International, parent company of Southern California Edison (SCE), announced on March 29 that it’s launching a new business unit called Edison Energy that will provide energy consulting services to large energy consumers across the country to help them in identifying and exploiting opportunities to lower energy costs, reduce complexity of energy management, and meet their sustainability objectives.

Energy as a Service: More than Power

Speaking at an event at the University of California, Irvine, Ted Craver, chairman and CEO of Edison International, started by noting that the energy business has changed enormously for large energy consumers such as manufacturers and major service firms. Gone are the days of simply taking power and paying the going rate. Distributed generation and distributed storage have taken on central roles in corporate energy management—especially as a means of reducing energy costs—but that means a new array of challenges that non-energy firms aren’t well positioned to meet.

“Large energy users increasingly need a strategic partner to help them navigate through the diverse energy marketplace,” Craver said. Edison Energy aims to fill that role.

Edison Energy, which will be a separate and distinct business from SCE, is mostly comprised of three energy consulting firms Edison recently acquired: ENERActive Solutions of Asbury Park, N.J.; Delta Energy Services of Dublin, Ohio; and Altenex of Boston. These join SoCore Energy, a Chicago-based solar energy development firm that Edison acquired in 2013.

Rather than providing energy to its clients, Edison Energy will help them identify solutions and design customized systems to meet their needs and goals in the most cost-effective and sustainable fashion, while managing their exposure to energy risks.

Clean Energy Can Be Complicated

Michael Bates, global energy director for Intel, who spoke at the event, noted that many high-tech firms are looking to reduce their carbon footprints and move toward a cleaner, more efficient grid. But they’re finding that the traditional stewards of the system often aren’t moving things as quickly as they could.

“Utilities are not moving things forward. Public utilities commissions aren’t moving things forward. As I sit here today, the real answer is the consumer,” he said. Intel is partnering with Edison Energy because “they’re moving the market forward by helping customers solve these problems.”

Ron Litzinger, president of Edison Energy Group, echoed those concerns (Figure 1). “The fundamental challenge is the development and advancement of distributed energy resources,” he said. “It’s been a socialized model with standard tariffs. People want customized solutions.”

1. Energy as a Service. Ron Litzinger, president of Edison Energy Group (far right) explains how Edison is planning to provide energy consulting services for large corporate customers looking to simplify their energy management and meet sustainability goals. Source: POWER/Tom Overton

As part of the announcement, Edison Energy released the results of a study of the challenges with large corporate energy management. Of the 500-plus large-to-medium firms surveyed, 24% did not have a clear idea how much energy the company consumes and why.

“It’s hard for corporate energy managers to even know how well they’re doing,” Allan Schurr, president of Edison Energy, said.

One point that stood out from the study was the rapidly growing number of corporations committing to source 100% renewables to meet their energy needs, only to discover afterward how large the challenge is in doing so. Initiatives of this nature often mean moving well outside a company’s core competency, likely one reason that 41% of the of the companies surveyed cited the lack of a reliable partner as a major barrier in energy investments.

Big Companies New Big Solutions

Schurr, who spoke to POWER after the event, said he views the new company’s role as a systems integrator. “We can do the engineering. We can do the design. It’s a different model” than what’s been available in the past. Rather than providing the electricity, “we can show them what the best capabilities are.”

While utilities have usually tried to work directly with their large customers in the past, Schurr said, that approach only helps within their service area. It’s not a solution for large national and international firms with operations spread across a wide range of markets and regulatory regimes. “If a large company has operations in New York or San Francisco or wherever, a local utility in Georgia just can’t do anything for those facilities,” he said. “It’s a way to be a national provider.”

Schurr said Edison Energy is already working with a number of large firms and is finishing construction on its headquarters in Irvine, where it will also conduct research and design on new technologies for distributed energy management.

—Thomas W. Overton, JD is a POWER associate editor (@thomas_overton, @POWERmagazine).