City of Boston Joins EnerNOC’s Demand Response Network

1/21/09Follow @wroush

EnerNOC (NASDAQ: ENOC), the Boston-based company that pays factory operators, store owners, and local governments for the right to dial back their electricity usage during times of peak demand, announced today that the City of Boston is finally diving into the local “demand response” pool. Under a new agreement negotiated with the office of Mayor Thomas Menino, Boston City Hall, the Boston Public Library, and Boston Police Headquarters will be equipped with remote-controlled meters that allow EnerNOC to reduce non-essential electricity usage whenever local utilities need a buffer. In return, the city will get periodic payments—whether or not it’s ever called upon to cut usage—plus additional money for every actual demand response event.

EnerNOC had previously landed clients seemingly everywhere on the Eastern Seaboard except its home city. As we’ve reported, the State of Rhode Island, the State of Vermont, the State of Connecticut, and even the Pentagon have joined EnerNOC’s pools, whose willingness to contribute “negawatts” by cutting electricity consumption during heat waves or other emergencies means utilities don’t have to build additional fossil-fuel plants. But Boston wasn’t a participant, until now.

“The City of Boston is a hub of clean tech innovation, and EnerNOC is a shining example of Boston-based companies that are making an impact on the way the world uses energy,” Mayor Menino said in a statement released today. “Demand response allows the City to implement smart energy saving measures and make an immediate contribution to the overall reliability of our region’s electric power grid. This is a win-win strategy that puts dollars back into our budget.”

Tim HealyEnerNOC chairman and CEO Tim Healy says the Boston contract has both practical and symbolic importance for the company. “There’s a lot of great discussion and dialogue about what the Commonwealth of Massachusetts and the City of Boston can do to create green jobs and green initiatives, but the fact that the city has decided to step forth and participate and find innovators right here in its backyard, while putting more revenue back into the city’s pockets, is important to us,” Healy told me last night.

“Also, we have so many people who work for us who live in the South End or the North End, and they like the fact that the very city they live in has chosen us—it’s another testament to them being at the right company at the right time.”

Like all EnerNOC clients, the city will get free access to a proprietary EnerNOC software package called PowerTrak. Using data collected by the monitoring and metering equipment installed at each EnerNOC client site, PowerTrak helps business and institutions identify ways to cut energy use.

How much money the city will get back through the demand-response payments and the efficiency monitoring depends on how many buildings are added to EnerNOC’s network, Healy says. “If we stick just with the Police Department, the Public Library, and City Hall and we don’t get much further than that, it is going to be a smaller amount than if we go to more police stations and museums and other city buildings,” he says. “Our aim is to deliver on our commitment to the city with these first three buildings and then use that as a catalyst to go in and unlock more value, facility by facility.”

Healy says he also hopes the city will also engage EnerNOC for other service such as energy procurement. (A whole section of the company is devoted to consulting with clients on their energy needs, finding the cheapest energy sources, and in some cases negotiating actual contracts.) He says the company could also help Boston show the world how it’s tackling efficiency challenges and pushing forward with a green agenda.

“We’ve already started discussions with them about putting more data visualization into the city’s buildings and facilties, so that the city can start to show off some of the very initatives it’s taking,” Healy says. “If the city is engaging in demand response, people shouldn’t know about that just because of a press release—we should make it visible.” There should be “energy-management kiosks” around the city, Healy says, where people could see exactly how much energy and money the city is saving. “By working with hometown cleantech leaders, we think the City of Boston can be more aggressive and more successful with its green initiatives than any other city in the nation.”

Next up: the Commonwealth of Massachusetts. Healy says EnerNOC is a party to several requests for proposals from the state government, and that consequently, he can’t say much about whether the services the company is providing to the City of Boston might eventually be extended across the state. “But I am encouraged there as well,” he says.

“There has been an awful lot of great dialogue and rhetoric, but lately I’ve been encouraged to see some task-force type activity around the implementation of the Green Jobs Act, with a particular emphasis on recognizing the value of building these clean and green businesses here,” Healy says. “I bet, a year from now, you’ll see a number of initiatives where Massachusetts put their money where their mouth is, in terms of picking local companies and creating green jobs here at home, and I think EnerNOC is as well-positioned as anyone.”

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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