November 2007

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Leighton WolffeEMAIL INTERVIEW Leighton Wolffe & Ken Sinclair

Leighton Wolffe, Principal, Wolffe Technology Consultants

Leighton Wolffe is active advancing initiatives and deployment of new technologies in the Energy, IT, and Building Integration industries with expertise in facilities and energy management systems, commodity strategies and enterprise level applications. Mr. Wolffe’s recent activities include working with private equity firms evaluating and assessing investments opportunities in companies involved in leading edge grid integration and distributed energy technologies, and working with manufacturers and developers of intelligent building systems to create and implement national sales and marketing strategies. Currently, Mr. Wolffe is serving as Principal Consultant to Constellation NewEnergy Inc., a subsidiary of Constellation Energy (NYSE:CEG) and serves as Executive Director of the NewEnergy Alliance..

The NewEnergy Alliance

The NewEnergy Alliance is a group committed to driving innovation in the building automation industry that will create smarter, more energy responsive buildings. The NewEnergy Alliance has been formed in response to a growing commitment to sustainability and to reducing the carbon footprint of the established building environment.

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Sinclair:  Tell us about the NewEnergy Alliance.

Wolffe:  After the BuilConn event in May of 2007, we were approached by a number of industry leaders and Building Automation System (BAS) companies wanting to understand how they could become involved in demand response (DR) programs. These companies all shared two common attributes: 1) an awareness of the increasing emphasis and market need for sustainable energy solutions and 2) they wanted to bring these products and services to their customers. The Alliance was formed so that we could share information and help drive innovation across the BAS industry with best practices, new technologies, and advanced energy strategies to bring demand response to every building that has a building automation system.

Given that the building automation systems are already connected to most of the energy consuming devices in buildings, we quickly realized that the best, most efficient, and readily available means to create energy responsive buildings was to work together to leverage and enhance the existing infrastructure of installed systems with energy market information and advanced load response capabilities.

The NewEnergy Alliance supports open system technologies, so that BAS companies can easily develop new energy applications and strategies to enroll customers in demand response programs offered by competitive suppliers such as Constellation NewEnergy. Currently, we serve a customer base with over 17,000 Megawatts of electricity and we recognized that many BAS company customers are already commodity customers, so it made sense to align our strategic goals and work together to bring advanced supply options and load response to our mutual customers. We thought an alliance approach with key stakeholders, who are each committed to the vision of sustainable energy solutions, could bring the energy and BAS industries closer together.

Sinclair:  This sounds like a great initiative. Who are the Alliance members?

Wolffe:   We have a core group of founding members that are committed to a new load response model along with the development of products and services for energy responsive buildings. The NewEnergy Alliance is made up of leading equipment manufacturers, building automation companies, system integrators and software application businesses. Our members to date include: Cimetrics, Cisco, Clasma, Constellation NewEnergy, Delta Controls, Echelon, EnergyConnect, Energy Control, Gridlogix, LonMark International, Novar, Richards-Zeta, and Tridium.

Through pilot projects and deployment of ISO demand response to our mutual customers, we have been able to quickly prove the benefits of partnering and we are now delivering our integrated demand response and load management capabilities to a broad array of new customers and market segments. We have seen considerable interest from other BAS stakeholders since the DR-Expo, and welcome inquiries on how we can work together to help integrate energy supply, demand response and building automation systems.

Sinclair:  How exactly does this partnership work? How do you work together to implement Demand Response?

Wolffe:  Ken, it’s really quite simple. We have established a program for participation in demand response in all five Independent Systems Operators (ISO) zones. We work with our Alliance partners to identify our mutual customers and then we coordinate to provide our respective products and services. We handle the enrollment process, baseline calculations, settlement, customer payments and through our operations center and web based metering platform, collect and analyze the electrical consumption data used to measure and verify the curtailment events.

Our Alliance partners handle everything in the building, including upgrade and enhancements to the building automation system with new hardware, sensors, controllers, and services such as surveys, design and engineering, generation of new controls strategies, testing and commissioning. In effect, we compliment each other’s services perfectly resulting in easy to implement demand response. The payments we make to a customer for their participation in our programs then become the financial and economic vehicle for the customer to pay for BAS upgrades.

[an error occurred while processing this directive] Sinclair:  This sounds great. What else does the NewEnergy Alliance do?

Wolffe:  We are already addressing issues that affect us all throughout the industry such as standardization of protocols and interoperability between BAS systems and IT level enterprise platforms, as well as utilizing metering data from BAS systems to be applicable in the ISO programs. This is crucial for base lining, measurement and verification, and other initiatives that pertain to best practices, training, education and advancements to BAS system programming environments to provide portfolio wide energy strategies.

From a larger perspective, the BAS industry has a tremendous infrastructure already available to execute demand response. The building systems are in place to embed options to reduce demand during critical peak periods that will alleviate pressure on the grid, reduce carbon emissions, and greatly improve the overall energy utilization of buildings.

While we see that there are a number of newly formed companies that provide basic DR services, principally through turning equipment off, or flipping on generators, these are limited applications that usually operate independently of BAS systems and do not address the more sophisticated approach required of modern integrated energy supply and demand solutions. Additionally, from a sustainability perspective, some of these companies have little regard for the environmental impact of firing up more heavily polluting generators to replace the curtailed load.

We see a more elegant and longer-term business model emerging in which the BAS companies elevate their product and service offerings to take a dominant role in providing demand side energy solutions. All that needs to occur to make this a reality for the BAS industry is a dedicated effort to develop and apply new control strategies that effectively curtail load at peak periods while maintaining comfort, and perhaps most importantly, maintaining air quality, code compliance, and regulatory standards for building operations.

We believe the NewEnergy Alliance will help build the foundation for the advancements and development of new technologies and business models to help achieve our sustainable energy future.


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