Energy management firms – a new breed

Key players in the Better Buildings Partnership are the energy management firms. Sometimes calling themselves “energy services” companies, they have often evolved from traditional consulting engineering firms.

As their names suggest, these firms have chosen to specialize in one field. They also pride themselves on providing clients with full service, “one-stop shopping,” or turnkey projects. Is a client short of cash? They can arrange and even provide the financing. They not only design the systems and equipment that will go into the building, but also they sometimes choose the equipment manufacturer and act as the contractor supervising the installation.

Once the new equipment is in place, the energy management firm makes sure things are humming along as efficiently as predicted and that the promised energy savings ensue. In the Better Buildings Partnership they guarantee a payback on the equipment of anything from three to 10 years. If the savings don’t materialize, then the energy management firm is bound by a legal agreement to absorb the cost. The energy firm trains the owner’s staff to operate the building systems, and afterwards continues to monitor and audit performance.

It seems to be a fine arrangement on all sides except that Richard Morris, head of the Partnership, would like the program to have more control over projects. At Toronto City Hall, for example, a long row of spotlights less than a metre apart has been added as an aesthetic highlight on an interior wall, using power that the energy management firm had not planned for.

The Partnership acts as a clearing house of energy firms and competition is stiff to be on its list. After an original request for proposals only three out of 70 applicants were selected — Tescor, now owned by the large U.S. company DukeSolutions, Rose Technology and BESTo. This year the Partnership has added 33 more firms in order to cover the wider area that the megacity controls after amalgamating with the suburbs.

Obviously an energy management firm needs to have substantial resources in order to do this kind of turnkey project. Morris says that the smaller firms they have just enlisted “will grow with them” over the next two or three years.

The Partnership matches energy firms with owners, offering the owner a choice out of two firms. The energy firm negotiates its own fee and contract with the owner, but also has a contract with the city to guarantee the integrity of their work.