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NAESCO

Executive Director's 2007-2008 Management Report

As we approach our quarter -century anniversary, NAESCO continues to build market opportunities for the energy services industry, providing industry support and education, and re-doubling our efforts to establish energy efficiency as the foundation of a balanced, cost-effective, and sustainable national energy policy.

National Voice of the ESCO Industry

NAESCO, through its national and regional advocacy efforts, has firmly established itself as the national voice of the energy services industry. NAESCO has taken a leadership role in working with the US Department of Energy to accelerate the ESPC project award pipeline, encourage federal streamlining efforts, and expand federal organizational capabilities to support the expected expansion of ESPC investment at federal facilities.

NAESCO works to ensure that state initiatives focus on creating verifiable energy savings and stimulate industry market opportunities. In 2007, NAESCO provided written testimony in NY, CA, MA, TX, NC and NJ state proceedings and participated as a witness in Senate hearings on green job opportunities. NAESCO has strengthened organizational ties with the ESC, NASEO, BOMA, the FPCC, the Apollo Alliance, ACEEE, and the NEMA CBTD Coalition.

NAESCO also participated in the national coalition to enact a federal Efficiency Performance Standard, and in the Apollo Alliance Clean Energy Investment Task Force to develop policies for the investment of potential carbon cap-and-trade revenues into energy efficiency.

During 2008, NAESCO will emphasize promoting energy efficiency as a major energy resource in state regulatory proceedings across the country; striving to make ESCO services part of “demand response” programs; and, working to ensure that the new demand-side “bidding” programs are as ESCO-friendly as possible.

Ratepayer-funded energy efficiency programs currently spend nearly $2 billion per year nationwide and that total is growing rapidly. NAESCO participates in state proceedings where significant program decisions are being made.

State-Specific Business Issues

NAESCO participates in initiatives designed to address state- specific industry business issues. Typically these involve delays in the implementation of state buildings performance contracting programs and/or program rules hindering project implementation. In 2007, NAESCO worked on these issues:

California Business Issue: To successfully re-start the state building performance- contracting program that was suspended in 2001. ESCOs have estimated that this could be a $500 million per year market.

NAESCO’s role: NAESCO and a group of its member ESCOs, worked with the California Department of General Services for more than two years to re-start the state program. DGS issued its RFQ for ESCO services, selected 12 ESCOs to participate in the program, and anticipates launching its initial projects in early 2008.
Louisiana PC Program Issue: NAESCO member ESCOs have been struggling for several years with the issue of how to document O&M savings and capital cost avoidance in performance contracts. The issue escalated to the level of legislative hearings and litigation.

NAESCO’s Role: NAESCO delivered a workshop on M&V in May to staff from various state agencies, and agreed to support the effort to develop standard protocols in Louisiana. NAESCO has subsequently secured funding from the US DOE to develop in 2008 a model M&V protocol for O&M and capital cost avoidance savings.
Massachusetts PC Program Issue: In April 2007, the Massachusetts Division of Capital Asset Management significantly altered the rules for the state building performance contracting program.

NAESCO’s Role: NAESCO wrote a detailed protest letter to DCAM which negatively responded to NAESCO’s concerns. NAESCO is monitoring the progress of the first project RFP to determine if ESCOS are actually participating in the program and to assess the impact of the change in program rules.

Information Dissemination about Core Industry Products and Services

In 2007, NAESCO hosted three regional meetings (Washington DC, New York City and Seattle) and a national conference in Pasadena, California. In 2008, NAESCO is planning to host a federal market workshop in Washington DC, a workshop in the Chicago region on the role of green technologies in area energy efficiency and renewable energy programs, a joint meeting with the ESC, and a series of webinars highlighting various market opportunities and providing technical training. NAESCO will also host its 25th Annual Conference.

Development of a Pilot State Certification Process for State Energy Program Managers

NAESCO developed and ran a pilot training program, funded by US DOE, for South Carolina state energy office staff and public facility managers which also attracted participation from nine states. In 2008, NAESCO, with US Doe funding, will conduct additional state training programs, develop a web-based self guided program, and hold webinars all designed to promote best practices and burnish the technical capabilities of state performance contracting specialists.

Aggressively Promote NAESCO Accreditation as a Market Differentiator

NAESCO continues to work with end-users to communicate the value of the achievement of accreditation. NAESCO is also exploring how to translate project metrics provided during the Accreditation process into credible measures of equivalent emission reductions.

Expand the Value Chain in Marketing ESCO Services

Understanding and quantifying non-energy benefits can provide an additional rationale for pursuing both traditional energy retrofits and high performance upgrades. Using DOE grant funding, NAESCO is leading a team to identify which non-energy benefits act as key market drivers, and to determine appropriate monetary values. Expect the report to be issued in 2008.

Conclusion

NAESCO is proud of our many accomplishments on behalf of its members and in growing industry opportunities.

To read the entire report, click here.

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