Faced with the prospect of stagnating electric power use for years to come, Edison International has recently launched two ventures in an attempt to capture revenue in new markets.
The Rosemead parent of Southern California Edison late last year formed a water resources unit that will develop, construct, and operate water treatment facilities at major customers’ locations to make more water available. It also launched a consulting unit last month that aims to put together energy management strategies for major energy users around the nation.
Both of those units are the latest entrants into a rapidly expanding subsidiary at Edison International known as Edison Energy Group, whose stated goal is to find, develop, and exploit new revenue and growth opportunities outside the traditional utility business. The subsidiary also has a business that bids for transmission construction contracts around the nation and a solar panel installation business that it acquired.
“It’s all about growth,” Theodore Craver, Edison’s chief executive, said last week. “We’re not expecting significant growth on the energy usage front. The real growth is going to come from increasing the control and customization of energy use. That’s what these businesses are all about.”
Craver said that while the number of electric vehicles increases and other technologies emerge that will boost demand for electricity, the rise of solar power and greater ability of customers to generate their own electricity on site will offset that increased demand.
“Over time, these will likely cancel each other out, which is why we’re not forecasting much growth in electricity use from our customers,” he said. “So we have to go where the growth is.”
That, he said, is the driving force behind the creation and expansion of Edison Energy, which is run out of Irvine by former Southern California Edison President Ronald Litzinger.
New revenue streams
Of all the new unit launches to date, the SoCore solar rooftop installation unit has shown the most results. In Edison’s fourth-quarter earnings conference call in February, Craver said SoCore is operating about 250 individual projects in 16 states, with many of those coming on line last year. Craver did not disclose how much revenue is flowing from those installations.
To bolster the range of services it can offer, Edison Energy acquired a small independent energy consulting-engineering company as well as other firms specializing in energy procurement and offsite renewable energy sourcing.
While Edison Energy officially launched last month with former IBM executive Allan Schurr at the helm, Craver said the unit actually began advising customers last year and now counts about a dozen Fortune 50 companies as clients.
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