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Sempra Inks Energy Deal with Lockheed Martin

February 22, 1999
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Sempra Inks Energy Deal with Lockheed Martin

Sempra Energy has signed a comprehensive multi-million-dollar, five-year deal with Lockheed Martin Corp. to be its exclusive energy provider in 26 eastern states. Lockheed Martin expects to finalize a similar deal for its western facilities with Enron some time in March, according to Lockheed Martin energy manager Sam Johnson.

Through a combination of energy efficiency and water conservation measures, Sempra estimates it will help cut Lockheed Martin's energy bills a minimum of 17% for its eastern U.S. operations.

Declining to give specific dollar values, Johnson would only say that Lockheed Martin's eastern facilities in total represent multi-million-dollar annual natural gas and electricity loads, both of which will be provided by parts of Sempra Energy's nonutility operations. Estimates indicate there may be as much as $200 million in retrofit energy systems work at Lockheed's eastern facilities based on initial audits of 10 locations that have identified $50 million in energy system retrofit needs, carrying potential annual savings of $9 million in energy costs at these facilities alone, according to information released by the two companies.

"We want to split up the work across the country (where Lockheed operates in every state except North Dakota)," Johnson said. "We think this keeps a little competition going."

"Lockheed Martin's leadership has paved the way for large companies with multiple sites and facilities to benefit from the dramatic changes taking place in the energy industry," said Richard Farman, chairman and CEO of Sempra, the San Diego-based holding company for San Diego Gas and Electric Co. and Southern California Gas Co.

Several Sempra officials reiterated that the Lockheed deal is a major coup for the newly merged company because it is the first one in which all of its combined energy services are being applied to a major national customer. In addition to buying gas and electricity for Lockheed, Sempra will provide energy billing and information management services, energy education and training to Lockheed employees, energy use and billing analysis, and energy efficiency retrofitting. The billing and energy management services alone are estimated to cut Lockheed's energy costs from two to five percent. This is Sempra's largest energy services deal so far, according to the $5 billion holding company that includes trading, energy services and international subsidiaries, in addition to its two large utilities.

Richard Nemec, Los Angeles

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