For Cal State, energy efficiency = new revenue

The 23-campus California State University system has signed a multi-year contract with EnergyConnect under which the institution will participate in a program to help reduce its electricity consumption during times of peak load. The program is seen as a way the university can proactively generate new revenue instead of being caught off-guard.

This concept will be familiar to those in California -- and another other state for that matter -- who find themselves subjected to rolling brownouts and blackouts during periods when electricity demand is particularly high, such during prolonged heat waves during the summer months. Under the preferred demand response contract, Energy Connect will use intelligent energy management technology to help the university voluntarily participate in reduction activities, which could help CalState not only save money during those peak demand periods but earn some new revenue from doing so. As you might imagine, a university might have more flexibility to respond than some commercial enterprises. So, this is sort of a no-brainer decision for the school.

The university and EnergyConnect didn't place any metrics on the deal, saying only that the savings and any revenue generated by the contract will be diverted into other sustainability measures being funded across the campuses.

The CalState deal is EnergyConnect's first foray into higher education on the west coast of the United States, after inking contracts with east coast schools. In November, the company reported revenue of $30.9 million for the first nine months of 2010. That compares with $19.1 million for the same period a year ago. So, energy response is at least lucrative for the demand response providers. Time will tell on the other side of the contract.

This post was originally published on Smartplanet.com