Widespread energy privatization

Louisiana is moving toward entering a complex deal with a company controlled partly by Johnson Controls that could lead to the widespread privatization of energy systems at state buildings. The agreement, if approved, would let the company lease the chiller systems at a building from the state for $3 million over 20 years. The state would also pay $54.3 million to the company to install a host of energy efficiency projects at 31 state-owned buildings. If other state agencies wanted to opt in to the deal and privatize their energy systems under a similar arrangement, they could simply contract with the company under similar terms as the state deal.

Johnson Controls, a top patent holder in the Energy Financial Settlement sector, has a patent application published last week for optimally allocating energy storage assets (batteries, thermal energy storage) while accounting for multiple demand charges in buildings. This and the rest of the company’s patent portfolio lend support to Johnson Controls’ technical capacity to take on this deal, which is expected to have a net public benefit of $18.8 million to the state.