Delivering energy efficiency through energy services diversification

The considerations of a utility looking at diversification opportunities into energy services are reviewed in light of the conditions which have dominated the market over the past year. With the utilities which have established energy service subsidiaries, five factors have been cited as paramount in consideration. First was the business option. Second, providing additional services to their customers while responding to competition offered by private businesses was a strong incentive. Third, several utilities felt they had the necessary expertise to effectively deliver energy services and that this type of activity would provide an opportunity for new challenges to employees. Fourth, an energy service subsidiary could help a utility acquire additional resources or help shape load curves. Finally, in one instance, a state regulatory body had ordered a utility to develop an energy management program as a service to their customers. The slow pace by which many utilities are entering the market is a reflection of their inability to be decisive and to move quickly in a difficult and competitive market. While not dominating the energy services industry, utilities will play an important role and develop an increasing market share over the next several years. 4 references, 1 table.