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ConsumerPowerline Buys New England Demand Response CapacityDow Jones Clean Technology Investor
By Jonathan Shieber
September 4, 2008
Revealing a healthy appetite for acquiring new capacity and market share, energy management and demand response provider ConsumerPowerline Inc. said it has bought a small New England provider of demand response services.
ConsumerPowerline has worked with the Oxford, Conn.-based firm, DemandDirect LLC, since 2006. The company provides demand response services to more than 100 customers mostly in Connecticut and Massachusetts, said ConsumerPowerline Chief Executive Gary Fromer in an interview with Clean Technology Insight.
Financial terms of the acquisition were not disclosed.
New York-based ConsumerPowerline has approximately 600 megawatts of obviated power that it is able to bid into the power market at any time, Fromer said. In all the company has approximately 2,000 megawatts of power under management.
It wasn't just the customer base that DemandDirect had amassed that attracted ConsumerPowerline to the business, said Fromer. His company also appreciated the business, which DemandDirect had just launched to take advantage of changes in the way the New England Independent System Operator was rewarding different types of energy management plans.
Fromer said that demand response programs often misalign incentives by rewarding companies for temporary reductions in power usage, while ignoring the continued energy savings in permanently reducing demand.
In New England, however, the ISO has established a program that rewards permanent efficiency steps, Fromer said. Called "Other Demand Response" the program from the New England ISO is the first of its kind in the nation, and DemandDirect was one of the first companies to develop a program tailored to the new rules, according to Fromer.
ConsumerPowerline is also active in other regional power markets. In August, the company signed a three-year contract with paper products company Marcal LLC to provide 18 megawatts of demand response services.
The contract, whose financial terms weren't disclosed, was one of the company's largest signed to date in the PJM Interconnection, which manages power flows in the Mid-Atlantic region.
According to Fromer, ConsumerPowerline intends to keep up its acquisition pace of one deal per quarter.
It raised its first institutional financing last September, with a $17 million round. Investors in the company include Bessemer Venture Partners, Consensus Business Group, Expansion Capital Partners and Schneider Electric Ventures.