It turns out that building a soup-to-nuts, customer-focused, renewable-enabled, future-ready distributed energy services company is hard -- for utilities, as well as for the world’s biggest energy manufacturing giants.
Edison Energy, the energy services, renewables and “new energy future” business launched last year by utility holding company Edison International, has undergone a major restructuring of its leadership team, including the departure of its president, Allan Schurr, according to a report from Smart Energy Decisions.
According to the report, Schurr, a former head of IBM’s utilities business, will be replaced on an interim basis by Ron Litzinger, president of Edison Energy Group, the holding company for both Edison Energy and SoCore Energy, the commercial solar developer bought by Edison in 2013. Edison International also owns the big investor-owned utility Southern California Edison.
Chief Regulatory Affairs Officer Ward Camp and Chief Marketing Officer Tom Comstock will depart Edison Energy, too, and Steven Eisenberg, previously senior vice president of commercial operations, will become chief operating officer. Other additions include Paula Campbell, vice president of business operations, who will become vice president of marketing and sales support, and General Counsel Lloyd MacNeil, who will accept additional responsibility for government and regulatory affairs.
An Edison International spokesperson confirmed these personnel changes in a Wednesday phone call, but declined to comment further beyond this emailed statement: “Edison International remains committed to Edison Energy; we have heard from our commercial and industrial customers that they value the independent insight we bring regarding their energy needs. We will continue to seek out good strategic business opportunities that complement the regulated business at SCE.”
Still, the shakeup comes just two months after Edison International revealed in its first-quarter earnings report (PDF) that it was “performing a strategic review of the competitive businesses pursued by subsidiaries of Edison Energy Group,” including Edison Energy and SoCore Energy.
“The outcome of the strategic review may affect Edison International's ability to fully recover its investments in these businesses,” which stood at $195 million in SoCore Energy and $103 million in Edison Energy as of March 31, 2017. In its forward-looking statements, it noted that the outcome of this strategic review could “include changes to existing competitive business models and/or exit of certain business activities,” although this should be taken as a description of all possible outcomes, not a comment on their likelihood.
While Edison International doesn’t break out the performance of its Edison Energy Group subsidiaries as a reportable segment, it did note that the group had a $6 million net loss from continuing operations in the first quarter of 2017. The company lost the same amount in the same quarter last year. That included “income of less than $1 million and $2 million for the three months ended March 31, 2017 and 2016, respectively.”
Edison Energy was formed through the acquisition and integration of several companies in different sectors of the energy services field, including project design and development firm Eneractive Solutions, energy procurement and data analysis provider Delta Energy Services, and commercial and industrial (C&I) renewables procurement platform Altenex.
But it’s just one of a host of utility-backed and acquisition-built companies seeking to combine traditional customer services like HVAC and lighting with on-site solar and other forms of distributed energy resources, or to expand traditional or C&I energy procurement to utility-scale renewables. GTM Research's report on the C&I energy management landscape found more than 20 utility affiliates offering energy efficiency or distributed energy services, with parent companies including nearly all of the country's biggest power providers, all vying to get a piece of the $16 billion energy management market.
In the U.S., Edison Energy’s efforts are being mirrored by Duke Energy Renewables. The utility giant’s new business was founded in 2007 and expanded through the acquisition of California solar installer REC Solar and energy management company Phoenix Energy Technologies. Also similar is Southern Company, with its $431 million purchase of PowerSecure and its more recent investment and partnership with Advanced Microgrid Solutions.
Meanwhile, France’s EDF formed its distributed electricity and storage business unit earlier this year, building on its 2016 acquisition of groSolar and Groom Energy. French utility Engie bought U.S. energy services provider Ecova and OpTerra Energy Services, as well as behind-the-meter battery startup Green Charge Networks. And Italian utility Enel’s U.S. subsidiary has joined the fray with its purchase of behind-the-meter energy storage project developer Demand Energy, and most recently, demand response market leader EnerNOC.
Clearly, this acquisition spree represents a rosy view of the opportunity that lies in serving the needs of the more energy-advanced C&I customers out there. But, as several speakers noted at our Grid Edge World Forum 2017 conference last month, it’s also a reaction to the threat that distributed energy resources pose to utility business models, particularly rooftop solar PV.
Edison Energy isn’t the only company struggling with its initial approach to this new kind of energy business. Back in 2015, General Electric launched its $1 billion Current energy services company, combining its commercial and industrial LED lighting, solar, energy storage and electric-vehicle businesses with its Predix industrial internet analytics platform. But in December, Greentech Media reported that Current is undergoing “strategic organizational changes” that could include hundreds of layoffs and breaking off parts of the business.