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NRG Energy acquired Energy Curtailment Specialists on Thursday to make a play in the demand response market, particularly in the Northeast and mid-Atlantic regions.
ECS was one of the largest private demand response players out there, with more than 2,000 megawatts under its control. Although ECS works across the U.S., much of the load it manages is in the Northeast. ECS is headquartered in Buffalo, New York.
The move is part of NRG’s retail ambitions to provide more than just energy. “We look for sustainable, competitive products that go beyond per commodities,” said Jim Steffes, president of NRG Retail Northeast. “We want to give our product a more wholesome energy solution.”
Many energy retailers and big utilities are starting to understand that they cannot simply sit back and deliver electricity like they used to. One of ECS’ strengths was its customer-driven approach to demand response, which it used to quietly build a sizable portfolio of more than 5,000 customers.
NRG is looking to take the Buffalo-based team and leverage those relationships to add and retain large customers. “Our vision is to move into a trusted advisor role where individual customers can find the best solutions for them,” said Steffes. “The team we acquired in Buffalo gives us a competitive advantage and we’ll invest in that.”
In Texas, NRG’s retailer Reliant just inked a deal with ThinkEco to offer its modlet smart plug to commercial customers for energy management.
As the market becomes more customer-driven within demand response, it is not enough to simply set up a plan to shed megawatts on the hottest days of summer, either. Constellation, for instance, merged its billing for commercial and industrial customers with demand response offerings so that customers could get a reduced rate on their bill. EnerNOC and Comverge also say they view themselves as energy managers and not just demand response providers.
The active Northeast and PJM regions are also just one piece of the pie. FERC Order 745 will open up even more demand response in many other regions. Texas’ ERCOT, which does not have to comply with Order 745, is weighing market changes that could encourage demand response participation.
NRG's Steffes noted that the immediate focus was to expand in the Northeast deregulated retail markets, but added, “We will be seeking to take this other places.”
Terms of the deal were not disclosed.
Energy Curtailment Specialists explains demand response and the company's service: