Despite a murky outlook for Ameresco’s federal contracts, in the wake of an executive order issued by President Donald Trump on his first day in office, the company is working to bolster its smart building solutions. The executive order, among other things, discourages regulatory efforts to curb choice in appliances like water heaters and gas stoves on the basis of energy efficiency.
The company relies on the federal government for about 20% of its revenue, but it’s not letting a pullback in that business keep it from investing in the smart building services it provides to its other clients. “There is a strong demand for our budget-neutral solutions that provide customers with significant cost savings, resiliency and much needed infrastructure improvements,” CEO George Sakellaris said last month on the firm’s Q4 earnings call.
To meet that demand, Ameresco acquired regional controls contractor ASA Controls, a specialist in the design, installation, start-up and service of HVAC direct digital control and building automation systems.
The acquisition will enhance Ameresco’s capabilities and presence in the building automation and temperature control market, the company announced Monday. ASA Controls’ staff are expected to enhance the ability of Ameresco’s smart building solutions team to increase its capacity to meet market demands, the company said.
One of Ameresco’s main businesses is helping organizations upgrade their facilities to be more energy and cost efficient. It uses what it says are budget neutral solutions to make it easier for clients to pay for the upgrades. These include an energy-as-a-service platform that lets organizations keep the energy services off their balance sheet, according to the company.
Federal woes
In its federal business, the company has experienced two paused contracts and one cancellation on a project contracted in January, Nicole Bulgarino, president of federal and utility infrastructure at Ameresco, said Feb. 27 on the earnings call.
“Federal policies play an important role in our business,” Bulgarino said. The work includes a wide variety of federal agencies, both civilian and federal, she said.
The company anticipates further delays but that most federal projects are continuing in “their normal cadence and on schedule, she said.
Ameresco did not specify which contract was canceled, but there were two contracts awarded to the company in January, according to USASpending.gov. The company was awarded a $217 million energy savings performance contract, or ESPC, by the General Services Administration on Jan. 16. The contract called for energy conservation measures at the Bean Federal Center in Indianapolis and 24 other buildings in Indiana, Illinois, Minnesota and Wisconsin, according to USASpending.gov.
The GSA’s Public Building Service also on Jan. 16 awarded Ameresco $40 million for an ESPC targeting energy conservation measures at the Veteran’s Affairs Building and Lafayette Building in Washington, D.C., and on Dec. 31 with a $140 million ESPC contract for the Denver Federal Center.
Ameresco’s ESPC business model enables federal agencies to procure energy savings and facility improvements with no upfront capital cost or special appropriations from Congress, with agencies using the contract vehicle for over 25 years, Bulgarino said.
As of Jan. 16, the GSA had obligated $416 million in total for ESPCs, an agency spokesperson told Facilities Dive.
“The majority of our federal projects are focused on cost savings, resiliency and upgrading critical infrastructure, which we believe will continue to be in great demand and is in line with the current administration’s priorities,” Bulgarino said. “In addition, these ESPC projects are often signed with long O&M contracts as proven by our current contracted O&M backlog that stands at over $1 billion.”
The move follows a strong year for Ameresco, which grew energy asset revenue 31% year over year due to an increase in operating assets, CFO Mark Chiplock said on the earnings call.
