Constellation shares lessons, trends and predictions

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Constellation has been on the cutting edge a lot this year – from their innovative partnership with big box retailer Best Buy to the energy-efficiency programs they offer their customers. In this interview with FierceEnergy Editor Barbara Vergetis Lundin, Constellation's Gary Fromer, senior vice president of load response and Michael Smith, vice president of solar and efficiency sales, discuss some of the lessons and trends of 2012 and share their predictions for 2013.

FierceEnergy:  What was the biggest lesson the energy industry learned in 2012?

Gary Fromer/Michael Smith:  In 2012, we saw competitive markets provide customers of all types and sizes with innovative and valuable solutions to manage their energy costs. One of the biggest lessons from this year is that great new concepts and business models ultimately must succeed on their own merits, based upon their direct value to end-use customers, and not because of their reliance on government subsidies or an artificially tilted playing field.

Gary Fromer

Mike Smith

FierceEnergy:  What were the trends in load response in 2012? Where do you expect this sector to go in 2013?

GF/MS: In 2012, we experienced more demand response events than in prior years, and programs continue to seek shorter response times and greater data transparency. 

These trends will continue into 2013 and require continued significant investment in sophisticated, yet easy-to-use, management systems (Constellation offers customers its VirtuWatt solution) in order for participants to comply with events in a manner that minimizes inconvenience to their business operations.

The load response market continues to become more sophisticated and technology-oriented.  As a result, customer education and enablement will also be of increasing importance.

FierceEnergy:  There was a lot of buzz around automated load response this year. Do you see this trend continuing?

GF/MS:  The increased frequency of demand response events, combined with shorter notification windows and need for more surgical dispatch of demand response portfolios, will continue to drive customers to demand response vendors capable of providing and supporting automation wherever feasible.

However, automation for the sake of automation, solely due to a subsidy, has already begun to diminish. We expect companies will continue to invest in automation toward more effective, less inconvenient load response deployment for end-use customers, as we are at Constellation. 

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Business models must succeed on their own merits, not because of their reliance on government subsidies or an artificially tilted playing field. ___________________________

For example, our customers are able to participate in demand response markets and automate their curtailment plans right from their existing automation systems, through communications with VirtuWatt via web services.

FierceEnergy:  How does energy efficiency fit in? Were there any innovative projects this year? What do you expect for 2013?

GF/MS:  Energy efficiency continues to be an important component of a company's energy management strategies. 

For many commercial and industrial customers, one of the biggest hurdles to implementing energy-efficiency projects is obtaining the necessary financing to pay for the measures. 

In 2012, Constellation rolled out an innovative solution, Efficiency Made Easy, which allows our customers to finance certain efficiency upgrades as part of their Constellation electricity bills, with little or no increase in electricity costs. 

Moving into 2013, we expect to see an expansion of new financing solutions that lower the barrier to implementing energy-efficiency measures.

FierceEnergy:  What does 2013 and beyond hold for Constellation in the load response and energy-efficiency sectors?

GF/MS:  At Constellation, our focus is on deploying all of our diverse capabilities to provide the greatest value to our end-use customers. 

In 2012, we piloted several power offerings that incorporated load response programs or energy-efficiency projects, with the goal of reducing overall energy costs for our customers over the long-term. These integrated products, which are available in a variety of markets across the U.S., further our commitment to help customers better manage energy use and, ultimately, reduce overall power cost.

Whether energy use is lowered temporarily for demand response events or high real-time power prices, or permanently via targeted energy-efficiency measures, we will continue to offer customers a variety of innovative programs to help them best manage their entire energy portfolio.