Direct Energy

Nick Henn talks energy auditing

Direct Energy is one of North America’s largest energy and energy-related services providers whose mandate is to offer customers choice and support in managing their energy costs through a portfolio of innovative products and services.

A subsidiary of Centrica plc, one of the world’s leading integrated energy companies, Direct Energy operates in 46 U.S. states plus the District of Columbia and 10 provinces in Canada, which equals 6 million customer relations and $9.5 billion revenue last year.

Direct Energy has served the Canadian market since 2000, and has since grown in Canada and the U.S. through a number of acquisitions and organic growth. In April, Direct Energy announced it had acquired natural gas assets in the Wildcat Hills region of Alberta from Shell Canada Energy for $47 million in cash. The acquisition includes production of about 10 million cubic feet equivalent per day (97 per cent natural gas), 45 billion cubic feet equivalent of proven and probable reserves, increasing Direct Energy’s reserves by eight per cent, and complements the company’s investment in the area in the fall of 2010. The Wildcat Hills assets are 35 kilometres northwest of Calgary and have been operated by Direct Energy since October 1, 2010.

Nick Henn, Vice-President of Canadian Operations for Direct Energy, said, “In essence we run the energy chain from natural gas production in western Canada, we operate gas wells, power station generators in Texas which we run all the way through to providing residential and business natural gas, power and related energy services.”

Henn’s overarching message is one of reducing waste; reducing energy waste and unnecessary cost. “Energy is a very important part of the manufacturing process, a key input cost,” he says. “And so it is very important that manufacturers think hard about the input cost and how they can help manage their use of that and the price they pay for that.”

There are benefits for businesses and individuals to reach out to energy experts to help navigate managing energy needs. Direct Energy is one of those experts who can provide significant support in managing energy needs.

When we talk about business energy, what we mean is helping companies understand how they use energy and how they can better control that. Essentially, all organizations have an energy profile or a usage profile which describes how they use energy during a 24-hour period, at different times of the year. Understanding individual energy needs is the first step in discovering opportunities to reduce waste, reduce costs and use less energy.

It is critical that manufacturers understand the impact that energy management has on their bottom line. To manage procurement in a way that reduces use and maximizes market cycles, businesses must understand energy use—knowing the best times to ramp up or down—production can facilitate cost savings. Understand the energy markets—market cycles can present cost control savings opportunities.

“Direct Energy has had a number of customers where we have been extremely successful that have benefitted from both a financial and operative perspective. If you are an energy buyer you have two choices,” says Henn. “One is go with utilities, government closely regulated entity. Two, you can go with a retailer, the benefit of that is the retailer can create an energy selling process and product that specifically links to your requirements.”

Another method of managing energy is investigating what Henn calls demand response. “That is looking at ways to cut down on the amount of usage on a particular time of day or year through helping them to more efficiently heat their operations, or generally the way they use their energy. These methods can be ways to interrupt how they use energy, particularly at high peak demand. There is a way to participate in some provincial program which might provide cash incentives for customers to turn down their power or turn off an operation to allow them to take advantage of this.”