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Energy Services Outsourcing: Opportunities and Challenges

By Dr. Michael Schmidt and Dr. Daniel Duran

Order $119.00-- Spiral Bound, 149 pages.
ISBN#: 0-910325-90-1


Book Cover

In Energy Services Outsourcing: Opportunities and Challenges, two seasoned industry professionals take an in-depth look at this source of new products for utility and energy companies.

Although most ESO applications today focus on energy delivery and energy management, the potential for services ranges from a limited IT project to a complex internal communications network to a "virtual" company with all energy-related infrastructure outsourced.

This comprehensive book highlights the best markets to target for ESO, examines the expertise and resources most valued, and discusses the role for regulation. It also points out how to avoid the potential pitfalls of being an ESO provider.

AVAILABILITY: This title usually ships within 1 to 2 weeks.

View Table of Contents


Table of Contents

  • Dedications
  • About the Authors
  • Acknowledgments
  • Preface

CHAPTER 1 - INTRODUCTION

  • Energy Industry Restructuring/Unbundling
  • Energy Services Outsourcing
    • Benefits
    • The ESO lifecycle
  • Three Ways of Looking at ESO
  • The ESO business
    • Rationale and history of outsourcing
    • ESO products and services/providers
    • ESO models
    • ESO applications/options for utilities
    • ESO products/services for commercial and industrial end-users
    • Emergence of regional energy entities
    • Value added
    • Common myths and realities of ESO
  • The Role for Regulation
    • Regulatory/legislative incentives
    • Regulatory/legislative impediments

CHAPTER 2 - INFORMATION MANAGEMENT, METERING, BILLING SERVICES, AND E-COMMERCE SERVICES

  • Energy Information Systems and Their Management: A Key to Success
  • Utility-Based Information Management Systems
    • New services
    • Metering services
    • Metering technology
  • Bill Auditing and Rate Analysis
    • Rate tariff
    • Billing characteristics
    • Role of teh ESO provider
  • Utility Impediments
  • Regulatory Issues
    • Embedded versus marginal cost
    • Real-time metering
  • Recommendations

CHAPTER 3 - RATIONALE AND STRAEGIES FOR UTILITY OUTSOURCING

  • Why Utilities Outsource
    • Financial pressures
    • External market forces
    • Customer/end-user forces
  • Ientifying Core Utility Business and Competencies
  • What Utilities Hav Outsourced - or Could
    • Information technology
    • Customer call centers and service
    • Billing and metering
    • Transmission and distribution
    • li>Payroll and other HR functions
  • Criteria Used to Make Outsourcing Decisions
  • Lessons Learned from Utility Outsourcing
  • Case Study: Puget Power - T&D ESO
  • Antitrust Issues
    • Case Study: Trigen Antitrust Suit
      • The trial court verdict
      • The appeal
      • Implications of the appeals court decision
      • Appeal to the U.S. Supreme Court
      • Recommendations
  • The Role for Regulation
    • Premium services
    • Utility restructuring
    • Utility outsourcing from an affiliate
  • Performance based ratemaking
  • Ratebase/rate of return model

CHAPTER 4 - RATIONALE AND STRATEGIES FOR COMMERCIAL AND INDUSTRIAL CUSTOMER OUTSOURCING

  • Sample Segment Targets and Profiles
    • Private health care
    • Universities
    • Government
    • Technology sector
    • Commercial real estate
    • Food processors
  • Risk
    • The utility as an ESO provider
    • Case Study: Edison Carrier Solutions
      • Outorcing frame of reference for operations
      • Evolution of dison Carrier Solutions
      • Regulatory concerns and approval
      • Value proposition for Edison Carrier Solutions' customers
      • Lessons learned
  • Customer risk of ownership
  • Commodity risks
  • Supplier risks
  • Capital constraints for customers
  • Risks for ESO poviders
  • Long-term contracts
  • Marketing risks
  • Credit and settlement risks
  • Technological obsolescence
  • Regulatory risks

CHAPTER 5 - CONTRACTING FOR ESO

  • Evaluation
  • Scope of Services
    • Service Levels
    • Pricing
  • Control Provisions
    • Management
    • Exit rights
  • Summary
  • Recommendations

CHAPTER 6 - COMPETITION IN ENERGY COMMODITY SERVICES

  • electric Commodity
    • Competition from alternative suppliers
    • Emergence of ESCOS and energy advisors
    • Types and roles of aggregators
    • Municipalization
    • Financial vs. physical deals
    • Impact of direct access on customer classes and serving utilities
    • Services
      • In Power Block Pricing
      • Peak Reduction
      • Hedging
      • Forwards
      • Swaps
      • Options
    • Extraordinary reliability
    • Real-time pricing
    • Demand-side management
    • Price response load programs
  • Natural Gas Commodity
    • Natural gas industry structure
    • Changes in federal policy
    • Choice of business partners for suppliers and markets
    • Individual rules for pipelines and utilities
    • Selling natural gas
    • Buying natural gas
    • Transporting natural gas
    • Local distribution of natural gas
    • Accounting for natural gas
    • Pricing
  • Recommendations

CHAPTER 7 - THE REGULATORY ENVIRONMENT

  • Regulatory/Legislative Incentives
  • regulatory/Legislative Impediments
    • Stranded investment recovery
    • Licensing requirements/retail access rules
  • Affiliate rules
  • Retail price capping
  • Price capping in the wholesale market structure - The California situation
  • Default service
    • Utility retains default customers
    • Default customers transferred to another supplier
    • Default service awarded based on revenue bids
    • Default service awarded based on price bids
  • Exit fees and competition
  • Green power requirements
  • Compliance filing requirements
  • Consumer protection and billing
  • Transmission bottlenecks

CHAPTER 8 - DISTRIBUTED GENERATION

  • Definition
  • Identifying and Quantifying DG Applications
  • Technical Factors
    • Micro-turbines
    • Cogeneration
    • Reciprocating engines
    • Cmbustion turbines
  • Typical Product Offerings
  • Regulatory/Legislative/Incumbent Utility Incentives
  • Regulatory/Legislative/Incumbent Utility Impediments
    • Stand-by services
    • DG/utility technical interface
  • Recommendations
    • Need for standards
    • The stand-by tariff
    • Role of the distribution utility
    • Role of regulation

CHAPTER 9 - ASSET MONETIZATION/ASSET SERVICES

  • Purchase/Replacement
    • Common ESO assets
      • Case Study: The venetian Hotel and Casino
  • Advantages to Customer
    • Top ten reasons to outsource energy operations
  • Disadvantages to Customer
  • Advantages to ESO Provider
  • Disadvantages to ESO Provider
  • Sample Asset Monetization
    • Asset monetization
    • Cogeneration/related power marketing
    • Other energy conservation opportunities
  • Energy information/invoice management
  • Energy procurement management
    • Natural gas
    • Electric
  • Operations Maintenance

CHAPTER 10 - FACILITY SERVICES

  • Typical Services
    • Energy management
      • Carrier Corporation
      • Kwery Corporation
      • KW Aware
      • Powerweb Technologies
  • Advantages to Customer
  • Disadvantages to Customer

CHAPTER 11 - CONCLUSION

  • Customer Value Proposition
  • Distribution Utilities
  • C&I Applications
  • Regulatory Issues
  • The Future
    • The utility
    • The C&I customer
    • The Regulator






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