Continuing its pile-up of large energy management deals, Enron Energy Services (EES) announced a 10-year, $1 billion energy outsourcing agreement with Owens Corning last week. Enron’s services will cover 20 of the glass and composite material manufacturer’s major facilities located throughout the United States. Management services began when the contract was announced.

Through the agreement with Owens Corning, which is EES’ largest contract, Enron said it will supply or manage all energy commodity requirements including electricity and natural gas. It will also mitigate risks of price volatility and design, build and finance certain energy infrastructure projects.

Glen Hiner, CEO of Owens Corning said, “We have selected Enron because they can address the volatility we are facing nationwide, and also provide the capital necessary to further drive down our energy consumption and costs.”

This is the Toledo, OH-based manufacturer’s first energy management deal. There was no bidding process for these services, and Tricia Ingraham, a company spokesperson, said Owens Corning approached Enron about a possible deal. “We heard about what Enron was doing with other companies and decided that they would fit our needs.” Although the 20 plants are located throughout the country, many of them are located in the Carolinas, Ingraham added.

For the Enron Corp. subsidiary, the agreement demonstrates its effective presence as a national full-service energy services company. “Enron’s ability to provide nationwide energy price risk management, construction management for energy related assets, as well as furnish capital, uniquely positions us to reduce Owens Corning’s energy costs in a deregulating market,” said Lou Pai, CEO of EES.

The Enron subsidiary has been one of the most successful players in the energy management contract arena, contacting over $1.7 billion worth of deals in 2Q99. For the year, the company’s goal is to double its 1998 performance of $3.8 billion worth of management contracts. Peggy Mahoney, a spokesperson for EES, said the company is “right on track” to meet that goal. Over the summer, EES inked two other large outsourcing contracts: one with Suiza Food Corp. (which was EES’ largest contract before the Owens Corning deal came along) and the other with Packaged Ice Inc. (see NGI, July 19).

John Norris

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