A big payout for a quiet pioneer in behind-the-meter energy systems—and a big move into distributed energy for SoCo
February 26, 2016
About the acquisition…
Over the past 15 years, PowerSecure has quietly built what may be the country’s biggest fleet of microgrids. The Wake Forest, N.C.-based company controls some 1,500 megawatts — mostly backup generators, along with some cutting-edge solar-battery integrations — that help hospitals, data centers, grocery stores, food-processing plants and other big commercial-industrial customers ride through blackouts and shave peak power costs.
Now it’s getting bought by one of the country’s biggest utilities, in one of the largest publicly disclosed deals in the still-nebulous microgrid field. On Wednesday, Southern Company announced plans to acquire PowerSecure for $431 million, or $18.75 a share — a hefty premium over the publicly traded company’s recent share price.
Southern Co., which serves about 4.5 million customers through subsidiaries Georgia Power, Alabama Power, Mississippi Power and Florida’s Gulf Power, hasn’t been a big player in distributed or customer-sited energy to date. As it noted in its press release, “these technologies typically receive highest demand largely in markets outside of the Southeast,” where coal and nuclear still provide most of the region’s power.
Even so, the utility recognizes that the “electric utility business model is increasingly expanding beyond the meter,” Southern Co. CEO Thomas Fanning said in Wednesday’s release. “Today there is demand for distributed infrastructure solutions that best meet each customer’s unique energy needs.”
About the business model
Most of the company’s business is based on its Interactive Distributed Generation, or IDG, systems, he said. These are custom-engineered, proprietary combinations of backup generators and on-site energy controls, built to provide a majority of a site’s power needs and keep it running during times of grid disruption, he said.
At the same time, most of the economic value of its systems come from peak shaving, demand-charge management, and other revenue streams dependent on syncing up the operation of its systems with utility needs, he said. “Most of our customers couldn’t afford backup power — and they used the peak shaving to justify the investment.”
How it relates to Tangent
Other companies in the space are forming partnership with energy companies — … Tangent Energy, a Pennsylvania-based company with about 525* megawatts of flexible behind-the-meter energy under management with industrial customers, municipal utilities and retail energy providers, is another company that bears some resemblance to PowerSecure’s approach to the market.
*Note: Tangent now has 1,842 MWs under manamgent