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Edison International Bids to Spread Energy Wings Again

After divesting a merchant power unit and shutting down a major nuclear power plant in recent years, Rosemead, CA-based Edison International (EI) on Tuesday launched a growth initiative, introducing a broad-based non-utility energy business that carries implications for the natural gas industry.

The move marks a departure for the EI holding company, which has focused in recent years on its multi-billion-dollar electric utility, Southern California Edison Co. (SCE), and comes at a time when major electric utility holding companies have been buying up natural gas companies (see Daily GPI, Feb. 1).

Named Edison Energy and headquartered in Irvine, CA, EI's new unit will operate nationwide, offering energy programs that cover natural gas and electricity for large industrial and commercial businesses. It will include a number of non-utility energy service providers quietly acquired by EI over the past two years in the Northeast and Upper Midwest.

"[We're] advising customers on fuel substitution strategies, including the economics of combined heat-power [CHP] and self-generation," an EI spokesperson told NGI. "The energy engineering services group has done a number of projects with CHP and the energy management group has provided advisory services in support of natural gas procurement, including CHP and other forms of onsite generation."

Edison Energy plans to address all energy issues for its customers -- either with in-house resources or expertise through partnerships, the spokesperson said.

Noting that EI has deep experience in both the utility and competitive markets, EI CEO Ted Craver said "large energy users increasingly need a strategic partner to help them navigate through the diverse energy marketplace." Edison Energy is focused on providing "the expertise that will enable large commercial/industrial energy users to explore the many options available to them."

In introducing its new non-utility business, EI also released the results of research it completed on the future needs of large businesses, which it has published in a white paper, "The New Energy Future -- Challenges and Opportunities in Corporate Energy Management." In that document, the power holding company makes the case for "a new model for energy management" and  a "new kind of service provider."

"We believe that better insight and integration across data, technologies and strategic goals will unlock the next wave of innovation in energy," EI's white paper noted.

EI officials emphasized that the company’s research has underscored the challenges facing large energy users, including "increasing complexity and cost, greater volatility, multiple regulatory jurisdictions, rapidly evolving technology choices, and increased environmental concerns." EI is convinced the energy market is at a "tipping point." Energy is increasingly "an unavoidable concern" for senior management.

EI said a sign of improving technologies is found in the fact that the price of commercial solar systems dropped 40% between 2010 and 2014; among the large companies it surveyed, only 6% feel they have exhausted all their opportunities for energy savings, and they expect by 2023 they will get 29% of their energy from sources other than utility and retail energy providers.

Of the companies with revenues above $1 billion, 78% indicated in the EI survey that they have centralized their energy management function during the past 10 years, and among all companies 41% indicated they that lack a "credible partner" with which to invest in energy.

Edison Energy President Allan Schurr said his company will focus on working with the nation's largest energy users in a variety of sectors, including commercial buildings, data centers, retail, industrial, healthcare, and educational institutions.

The three recently acquired companies that are part of the new EI unit are: Asbury Park, NJ-based ENERActive Solutions, a full-service energy consulting, engineering and project development firm; Dublin, OH-based Delta Energy Services, an energy consultant to large users; and Boston, MA-based Altenex, provider of renewable energy, advisory and procurement services.

A fourth company, Chicago-based SoCore Energy, a commercial-industrial solar portfolio company, was acquired by EI in 2013 and is now part of Edison Energy.

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