Schneider Electric Building Solutions And Energy Efficiency

Posted on May 27th, 2010 by
   

Christopher B. Curtis has over 15 years experience guiding the successful growth and strategy within global energy management specialist Schneider Electric. He has held various sales and marketing leadership positions, was president of Schneider Electric Canada for a “too short but effective” year and a half and was named president, Schneider Electric US in June 2006. Curtis was named president and CEO of Schneider Electric in North America in 2008, assuming responsibility for all N.A. operations in the U.S., Canada and Mexico. In 2009, Curtis assumed additional responsibilities to lead Schneider Electric’s global Buildings business as well as its Renewables Business. He speaks to us about the importance of energy management, performance contracting, and a deal with the city of Houston.

Full Transcript:

Ben Lack: So I’m here with Chris Curtis, CEO of North America for Schneider Electric. Thanks so much for giving us some of your time.

Chris Curtis: Thank you.

Ben Lack: Can you tell us a little bit about what Schneider Electric does?

Chris Curtis: Okay. Sure. We’re active globally in a hundred and thirty countries. I would say the common theme of our business is we consider ourselves an energy management specialist. And we do it for many markets, data centers and the IT industry, building market which I’m responsible for, the energy market or the utility company, the industry market, manufacturer, and the retail equipment manufacturers. Very, very spread geographically in terms of both our products as well as our people.

Ben Lack: Building markets are big issue in the United States. Forty percent of all the energy consumed in the United States comes from buildings.

Chris Curtis: That’s correct.

Ben Lack: What do you guys do to tackle that and what types of solutions do you offer your customers to help lower their energy consumption?

Chris Curtis: Well, the solutions can range from something rather simple to something perhaps more complex or more long-term. We have products that we can talk about that they by themselves can reduce energy, a variable speed drive for a pump or for a fan or something of that nature. What we face a lot is a lot of our customers don’t know where to start. So what they would like to do is perhaps is maybe measure to begin with, and then ultimately, we may even have a lifetime relationship with a customer where they were not only want us to set up some type of energy management program with them but be responsible for the maintaining over the course of the life cycle of the building which could be up to twenty years or beyond.

Ben Lack: What type of education do your potential customers have? Are the folks that you go to typically well-informed about building automation, energy management or is part of the sales process is actually educating them that this technology is actually out there?

Chris Curtis: That’s a great question. I mean, we get all ranges. If you’re with an industrial customer, typically you’ve got a pretty informed customer because somehow energy’s going to relate to the manufacturing process that their touching. I think that if you’re in large properties that are occupied by the owner, you’re probably going to get somebody that knows a lot about the topic. But they may perhaps not have as many internal experts as they use to and they come to us to perhaps fill that vacuum that they use to have with an external company. And then I think when you get to the owner-not-occupied buildings, multi-tenant use, you don’t have the internal infrastructure that knows exactly what you’re talking about. So it’s not uncommon that the first job that you have is the education about what’s the current state, what’s the opportunity, how do you ultimately decide which solution to go after first versus another one. And that really takes a lot of understanding what your customers are trying to do.

Ben Lack: Talk to us about your relationship with the government sector. That’s a big piece of Schneider Electric’s business. What’s your value prop with the government sector? Is most of your initiatives geared towards the federal government or do you really try to cater more towards municipalities, state governments?

Chris Curtis: We certain do both. But the federal government is the most visible in the sense it’s a large, rather complex opportunity. And we range from providing products to the GSA services to being a full energy procurement services contractor for Department of Navy, for GSA themselves, and for all arms of government in that regard. It’s been, I would say, a very good relationship that takes a long time to understand how to do government business, but we’ve made that investment before. Locally and municipal and state governments, there’s, I would say, different types of relationships. We have relationships where we manage directly. We do a lot of work in the state of Texas. We do a lot of work in the state of Pennsylvania, but we also have a lot of partners that will also do work with the government on a local basis municipally. Basis that we probably don’t necessarily see day-to-day but certainly there’s a lot of activity. And we have a rather large presence there with our partners.

Ben Lack: I know that recently you guys were awarded a deal from the city of Houston to help them with some of their building automation. Can you shed some light on what that relationship is going to be like?

Chris Curtis: Well, first of all, we hope it’s a longstanding one. And, again, it’s the same concept we were talking about before which says how do you really put together a long-range program of not only how to save energy but really to upgrade the infrastructure so they can kind of modernize where they want to go and the capability that they’ve got as a city to provide services to their citizens. It starts with a very detailed audit process of what’s there from the inventory of the facilities, what state are those facilities in, where are the energy-saving opportunities as well as where are they in the requirements, I would say the upgrade some given buildings. And we’re just now kind of getting into it. I mean, we’re certainly active in a number of buildings in the city of Houston. We have more work to do, and we look forward to a rather long standing relationship based upon the fact that they got a lot of value out of it.

Ben Lack: When I was reading the press release, you were talking about doing some performance contracting.

Chris Curtis: Correct.

Ben Lack: Talk to us about the offer of the performance contract and how you use that to close a potential deal with a customer whether it’s government or…

Chris Curtis: Yeah. You know, performance contracting is not new, and we’ve been in it for quite a while. It does take a rather, I would say, unique skill set to do it on a sustained basis and do it well. Essentially, what you’re doing is you’re taking advantage of the existing operating expense in the energy bill. And you’re looking and saying, “Okay. How much can I save for this client?” as a result of deploying certain strategies that you think will get a reasonably good payback. Now some clients just purely want the energy savings, and they want to have as quick a return as possible. Other clients want the energy savings to fund capital improvements. So they might not have the budget to get themselves a new central plan to get themselves or new types of equipment that they’re looking for. And they basically use the asset called what they’re paying their utility to take a performance contract and say, “Okay. Give me that energy savings, and I’m going to use that on the expense side.” And then it becomes a win-win because they are rolling their energy, but at the same time they’re upgrading their facilities for the future.

Ben Lack: Is that something you try to push when you go to market or is the straight sale the relationship that you prefer?

Chris Curtis: Well, no. We’re very committed to the business model. In fact, we actually have a separate division for it. Some states don’t allow it yet. Other states are passing legislation where, in fact, I believe we’re doing the first performance contract that I’m aware of in the state of North Carolina.

Ben Lack: Wow.

Chris Curtis: North Carolina State University. You don’t mix up universities in North Carolina. That was only recently allowed from a legislative basis. Okay? We’ve been active in the state of Texas for a long time with the college system as well as the city of Houston as you mentioned. Active in the state of Pennsylvania. But not all states are actually allowed a procurement vehicle. The federal government only recently allowed it as a procurement vehicle. We think it’s a business model that makes sense. It has some history that was not positive. We’ve been fortunate enough in our twenty years of doing, we’ve never written off any guarantee from a risk standpoint to ourselves. We have been able to deliver on the promises that we make.

Ben Lack: Final question. And this is really more of a personal question.

Chris Curtis: Yeah.

Ben Lack: I’m curious to know why you do what you do.

Chris Curtis: That’s a very good question. I’m curious about different types of cultures and different types of opportunities where Schneider certainly gives me a great opportunity to be able to do that. I’m absolutely passionate about this particular field of saving energy. It’s a huge dilemma, a huge problem. I’d like to be able to make a contribution to solving the problem. It’s a heck of a lot bigger than myself, but ultimately if I can be part of the impact and be part of the solution, I will say my time was well spent.

Ben Lack: Well, Chris, thanks so much the time today and much continued success with Schneider Electric. And we look forward to talking with you soon.

Chris Curtis: Thank you, Ben.

Ben Lack: Thanks.

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