Who we are today
Over the past twenty years, CES has grown so much. Today, we are proud to work on behalf of over 750 customers across 16 states and provinces. We manage the strategic procurement of $2 billion of energy a year on behalf of many of the most prominent institutions in the US. Over this same period, the range of services CES has offered has expanded to meet the energy – and increasingly the sustainability - needs of our customers. We have worked with our customers and energy suppliers to develop innovative retail supply products to hedge market risk, enhance flexibility, and manage costs. We have expanded the range of energy fuels and products offered to our customers to include electricity, natural gas, propane, heating oil, residual oil, biofuel, biomass, carbon offsets and renewable energy credits. We have assisted our customers to evaluate and develop onsite electricity generation opportunities, including cogeneration and solar photovoltaic systems. We have helped our customers pursue energy efficiency and conservation measures and participate in government programs to encourage such actions. We are supporting our customers in their efforts to identify their environmental footprints and to reduce their greenhouse gas emissions. We have advised on hundreds of MWs of successful solar, wind, biomass, hydroelectric and cogeneration facilities – and just as importantly helped our clients avoid investment in projects that were fundamentally flawed. We have provided consulting and management services for customers developing long-term energy master plans for their facilities and campuses to meet sustainability, reliability and resiliency goals.
But, it all started in 1999…
CES grew to become the full-service energy advisory company it is today out of electric market restructuring in Maine. Maine restructured its electric utilities in 1998. However, by August of 1999, with retail choice set to begin on March 1, 2000, not a single national electricity supply company had set foot in Maine to offer competitive electricity supply opportunities to a Maine company or institution. Despite being home to some of the largest electricity consumers in New England, Maine was simply too small a retail market to attract the interests of large national energy companies, especially in light of much larger markets and retail opportunities emerging at the same time in Massachusetts, New York, Pennsylvania, Texas and California.
To raise Maine’s profile, Richard Silkman and Mark Isaacson established the Maine Electricity Consumer Cooperative (“MECC”), whose approximately 100 members included many of Maine’s largest companies and electricity consumers, but also a number of smaller manufacturers. By aggregating the loads of these member companies, Silkman and Isaacson were able to attract the attention of some of the largest energy supply companies in the country, a number of whom submitted bids to serve this aggregated load. By March 1, 2000, about 30% of all commercial and industrial electric load in Maine was represented by MECC and was being supplied by a non-utility on a competitive basis for the first time in Maine since the first dams built in the early 1900s started generating electricity.
MECC’s success was far from guaranteed. It took an enormous amount of work to organize, staff and manage the cooperative. But more importantly, it took an enormous amount of trust by Silkman and Isaacson in the voluntary structure of the cooperative and the non-binding commitments of such a diverse industry base, on the one hand, and by the members of the cooperative in the capabilities of Silkman and Isaacson to deliver on the promise of competitive retail markets and customer choice, on the other. What the MECC offered suppliers was an aggregated load of the size and diversity that created market advantages, plus the ability to obtain that load without the sizeable customer acquisition costs that suppliers were experiencing in other markets. These benefits, however, were contingent on all members executing retail supply contracts with the winning bidder within 48 hours of the receipt of final bids, since the bids submitted were themselves contingent on securing in excess of 80% of the total number of customers and their electricity loads.
Something like this had never before been achieved, and not surprisingly, many suppliers were skeptical of the ability of the MECC to meet this target. When the “dust” settled, of the 101 retail contracts sent by Federal Express to the MECC members, 100 were executed and faxed back. (The sole exception was a small manufacturing company that anticipated the need to file for bankruptcy in early 2000, and therefore felt it could not in good conscience execute the retail supply contract.) The experience of mutual trust was the key to the success of the MECC. Earning and maintaining the trust of our clients by always putting their best interests first, became the fundamental guiding principle of MECC.
CES as we know it
The pricing MECC was able to secure through its competitive bid process was very attractive relative to market conditions at the time. It did not take long for hundreds of other Maine companies to want to join the MECC. Rather than expand the cooperative to a size that would make it unwieldy, Silkman and Isaacson established Competitive Energy Services (“CES”) and hired Andrew Price to accommodate the growing interest in retail electricity choice and related energy advisory services. CES operated in exactly the same manner as the MECC, and after a few years when the cooperative structure of the MECC had outlived its usefulness, MECC was folded into CES.
CES’ usefulness to its customers begins with its knowledge of and expertise in energy markets, technologies, policies and trends. Unlike virtually all of our competitors, our knowledge and expertise come in large part from “doing” energy through the development of complex projects and initiatives. Through its partnership with Interfaith Power & Light, CES was the first company to offer Maine customers a “green” electricity alternative (Maine Renewable Energy). The CES principals developed the second utility scale wind project in Maine (Beaver Ridge Wind in Freedom) in 2008. When CES’ mid-Maine customers described the competitive disadvantages they were facing due to the lack of natural gas service, CES principals developed Kennebec Valley Natural Gas Company to develop a natural gas pipeline and distribution facilities to service communities from Gardiner to Madison along the Kennebec River. (This is now Summit Energy.) When it became clear that transmission costs were increasing at unsustainable rates and causing financial harm to our customers in Maine and throughout New England, CES principals established GridSolar to force utilities to consider non-transmission alternatives in lieu of multi-million expansion of the transmission grid to meet reliability requirements. (This effort has been subsequently institutionalized in the Office of the Public Advocate in Maine through actions of the Maine Legislature and is becoming standard practice across the region.) Most recently, Silkman has published “A New Policy Direction for Maine: A Pathway to a Zero-Carbon Economy by 2050” that takes a comprehensive approach to examining how Maine can meet the Governor’s stated policy objectives through beneficial electrification of the transportation and heating sectors of our economy and the decarbonization of the electric generating sector, and what these objectives and actions mean for our customers through their impacts on energy sources, electricity pricing, policy initiatives and the design of the electric grid.
A “we” not an “it”
The second critical ingredient for our ability to provide value to our customers is our people. Here, the guiding principle at CES has always been to hire smart capable people who have the technical expertise to understand energy markets, the ability to manage, process and use data to serve our clients, and a belief that they will succeed when our customers succeed. We have been very fortunate to be in Portland and have access to a pool of some of the most talented people anywhere in the country.
The first twenty years have been “quite a ride”. Many of the energy companies involved at the start of restructuring are no longer around. Companies like Enron, Select Energy, Strategic Energy, Hess, World Energy, TCE, Mirant, and U.S. Generating have gone bankrupt, been acquired, or have otherwise ceased to exist. Energy markets have experienced the disruptive price run-ups caused by Hurricane Katrina, the “theory” of peak oil and increased prices based on this concept, a natural gas shortage followed by the fracking revolution and the general collapse of natural gas and energy prices more broadly in the U.S., and the polar vortex of 2013-14 that illustrated how vulnerable New England is to pipeline natural gas, as well as policy changes through the implementation of Renewable Portfolio Standards, new capacity market structures, and state energy procurement initiatives. Throughout all of this and so much more, CES employees have translated energy market events and helped our customers manage energy market uncertainties through its role as the trusted energy advisor. The past twenty years have confirmed the wisdom of our fundamental guiding principle; always do what is right for our customers. We fully expect the next twenty years to do likewise.
RICHARD SILKMAN, MARK ISAACSON, ANDREW PRICE