Industry Spotlight: Interview with Newly Appointed NAESCO Chair, Michael Perna

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The National Association of Energy Service Companies (NAESCO), a leading advocacy and accreditation organization for Energy Service Companies (ESCOs), recently completed the election of board members for the next term running November 2020 – November 2022. 

The newly elected officers, alongside Executive Director Dr. Timothy Unruh, have begun outlining the organization’s strategic objectives capitalizing on the success it has seen over the past several years. 

Leading the group for next term as NAESCO’s Chair is Michael Perna, Vice President of Strategic Initiatives for Con Edison Clean Energy Businesses, which includes NAESCO member company Con Edison Solutions. As chairman, Perna will be responsible for NAESCO’s strategic planning and board-level operations. He brings a wealth of knowledge from the industry and first-hand experience working on the board. Shortly after joining Con Edison in 2006, Perna took advantage of the company’s membership with NAESCO and became actively engaged with the organization. He saw the value it brought to the company and assumed the company’s board seat in 2014. In 2018 Perna was elected as vice-chair and held that position until his recent appointment to chair. 

Energy Services Media recently connected with Perna for an interview.

ESM: How has NAESCO impacted Con Edison Clean Energy Businesses, and how has it benefited you professionally?

Perna: We (Con Edison Clean Energy Businesses) have benefitted from the halo effect created by the strength and presence NAESCO has had in the industry. The work they have put into the growth of the performance contracting industry through awareness and a focus on advocacy has directly impacted the company as a whole. Their specific attention to the Federal Energy Management Program (FEMP) and communication to Congress on the importance of the 179D Tax Deduction has been vital to our business. 

For me personally, with any organization like this, if you invest your time and effort into it, you build up a network of other like-minded folks in the industry. Through NAESCO I have met and created long-lasting relationships with affiliate members, companies that work with ESCOs. We have had a number of affiliate members work with us on projects and new opportunities.  

ESM: During the last term, the NAESCO Board named and onboarded a new executive director, expanded the organization’s outreach efforts, grew membership, and provided guidance, support, and resources while the industry navigated a global pandemic. Now that the dust has settled, the executive director is up to speed, and the industry is seeing some stability during the pandemic. What are the steps for taking NAESCO to the next level?

Perna: The prior two chairs, Natasha Shah and Chuck McGinnis, did a great job making sure the transition of the new executive director went very smoothly, which it did. We did not miss a beat. It’s been a successful transition, and Dr. Unruh is doing an impressive job moving the organization forward. 

As we look at the next steps, we will consider the accomplishments and proven approaches we have seen thus far. It is important to continue to grow our membership. An association is only as good as the strength of its members. NAESCO has done a valiant job maintaining, growing, and broadening memberships to increase the organization’s visibility and importance as the voice of the industry. 

With this comes another key step to the organization’s growth, which is promoting the advantages of membership for the affiliates. To us and to the industry, they are an essential part of that voice advocating for performance contracting and the multiple benefits it provides. 

A core piece of NAESCO is the accreditation. We at Con Edison Clean Energy Businesses are proud that Con Edison Solutions is a NAESCO-accredited ESCO. The NAESCO team has done a good job getting the message out about what it really means to have this kind of accreditation. Communication will amplify over the upcoming years about its significance.

We will leverage the development of collaboration and the combined strength of similarly oriented associations. Dr. Unruh has started this initiative over the past year, and we will continue to build upon his work. Associations like the National Association of State Energy Officers (NASEO), Federal Performance Contracting Coalition (FPCC), and the Energy Services Coalition (ESC) may approach things from a slightly different angle but share a lot of the same interest and views on the importance of energy efficiency for the society. 

Lastly, there will be a focus to carry on the progress of NAESCO’s regional approach to address state and local issues. States have their own unique rules for performance contracting set by local laws and regulations, and issues pop up from time to time, as do opportunities. I think NAESCO has been trying to be more diligent in managing at the regional level and staying aware of opportunities or issues for the industry. 

ESM: Where do you see the market going over the next two years?

The market has continued to be strong. With the change in administration, it will be important to stay close to what’s going on in DC. We will need to watch various agencies, such as the Federal Energy Management Program (FEMP) and the Department of Energy (DOE), to see where the new administration’s priorities lie. I expect to see that energy efficiency will be an integral part of those priorities. We must stay aware, at the highest level, of how energy efficiency initiatives are rolled out or implemented. It may be in conjunction with other priorities, whether that be infrastructure or renewable energy, or it could be all of the above. 

I am bullish on the market. It’s going to be important to see how we align the capabilities we know the industry has with the priorities of the incoming administration. 

ESM: Taking a step back and reflecting on your previous role as Vice President of Marketing and Business Development at Con Edison Clean Energy Businesses, what are the challenges ESCO’s face when marketing energy efficiency projects like energy savings performance contracting (ESPC)? 

Perna: It’s always interesting to me. Energy performance contracting is not a brand-new concept. It’s been around quite a long time. Yet, it’s always surprising to me that in many places, it’s still not as familiar as I would expect it to be. 

I remember being at a general business leadership event some years back, after the Clinton administration. Former President Bill Clinton was one of the speakers and was presenting on the Clinton Climate Initiative. In response to a question, he spoke about performance contracting, stating that energy improvements can be made, capital equipment can be replaced and it can be paid for through energy savings. 

The way he spoke about it seemed like he was talking to a group of individuals that were apprehensive. It was as though he was saying, “you guys should be aware of this, and even though it may sound too good to be true, it is a solid and proven concept.”  

Maybe that is part of the problem. It sounds too good to be true. I think there is still a lot of work to be done getting the message of what performance contracting is and the power it has to leverage private dollars to help the public sector. That’s going to be critical because there will be lots of work to be done, whether it’s infrastructure rebuilding, Build Back Better, or meeting renewable and energy efficiency portfolio standards. There’s certainly never going to be enough appropriated money to go around, but a tool like performance contracting, where you can leverage private sector financing to help rebuild public infrastructure, can be an incredible game-changer. 

The messaging has to be that it is a real tool and not too good to be true. It needs to be tailored to each constituency because, at the facility and client level, there is a policy constituency, operations constituency, finance and accounting constituency, and the legal procurement constituency. We’ve got to be able to get the message out and get it out in a way that resonates with each of those groups. 

ESM: What do you look forward to most about the new role within NAESCO? 

Perna: I am looking forward to getting a chance to work closely with Dr. Unruh; not to use a pun, but he brings a lot of energy to the job. He’s got a lot of good ideas, and he will be the one to lead the organization forward. The role of the board and my particular role as chair for the next couple of years is to help him along in that mission and provide guidance, support, and oversight. 

I am also looking forward to working with the other board members, hearing their ideas for taking NAESCO into the next decade and continuing the evolution. 

This position also provides a chance for me to give back to the industry. We’ve all been very fortunate to work in the energy industry at a time where energy is so essential and transitions are going on in so many parts of the energy businesses. Working with an organization like NAESCO that is trying to benefit the industry and society overall through promoting the growth and awareness of something as significant as energy efficiency, I see it as a chance to give back in a small way.

The National Association of Energy Service Companies (NAESCO) is the leading advocacy and accreditation organization for Energy Service Companies (ESCOs) and is dedicated to modernizing America’s building infrastructure through performance contracting. Uniting the energy service industry, NAESCO promotes favorable government policies; sponsors a rigorous accreditation program; provides training and education; and champions the interests of ESCOs across the nation.