Chevron Energy Solutions, a performance contracting subsidiary of ChevronTexaco, announced Wednesday it has added the non-federal business portion of CMS Viron Energy Services to its growing energy engineering business, a move designed to bolster its presence in the education and state and local government markets, where CMS Viron has secured hundreds of contracts.

“We look forward to offering Viron’s expertise to schools, colleges, universities, cities, counties, states and many other customers, while continuing to deliver effective energy solutions to federal agencies and commercial and industrial customers,” said Jim Davis, president of Chevron Energy Solutions. “The fact that Viron has continued to win new projects speaks to its reputation, and we plan to build on this through the financial strength, technology resources and energy experience of ChevronTexaco.”

In addition to the transaction, Chevron Energy Solutions confirmed that it has completed the transfer of contracts related to its purchase of the federal business of Planergy International, formerly known as Energy Masters International. As a result of that acquisition, which was announced in April 2002, Chevron said it has been designing and implementing energy efficiency projects and integrated information systems for the federal government, helping many federal installations to manage infrastructure requirements and comply with energy reduction mandates.

“With these two developments, Chevron Energy Solutions is well positioned to provide energy services to all institutional markets, in addition to commercial and industrial companies,” Davis said.

Through the two acquisitions, Chevron Energy Solutions said it has added about 180 energy professionals, expanding the company to approximately 300 employees. In addition, more than a dozen offices have been added, covering all major regions of the country.

For CMS Energy the transaction was part of its ongoing asset sales program. While terms of the transaction weren’t disclosed, CMS said it will use the proceeds from the sale to reduce debt. The sale of its non-federal business came five months after it sold its federal government business to Pepco Energy Services.

With the latest deal, CMS Energy has now sold or announced the sale of more than $3.8 billion in assets, including assumed debt, over the past 18 months. That includes the $1.8 billion sale of the CMS Panhandle Companies to Southern Union, which closed June 11. The company said it is currently in the process of selling additional non-core assets as part of its plan to increase financial flexibility by reducing debt, strengthening its balance sheet, and preserving liquidity.

CMS Viron is one of the oldest energy engineering firms specializing in performance contracting in the U.S. Founded in 1974, the company has grown its energy services business over three decades and pioneered performance contracting, which involves guaranteeing future energy and operational savings — typically 15 to 30% of a customer’s annual energy costs — through energy-efficient equipment upgrades, energy management solutions and other projects.

John Mahoney, formerly president of CMS Viron Energy Services, will now serve as COO for Chevron Energy Solutions’ expanded organization. “To become part of Chevron Energy Solutions’ organization and ChevronTexaco’s 100-plus-year history as a leader in energy, opens up a world of opportunities for our customers and our employees,” said Mahoney. “It’s a great fit with Viron’s capabilities.”

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