SOURCE: Industrial Info Resources

January 17, 2008 07:01 ET

North American Energy Services Diversifies, Experiences Growth

SUGAR LAND, TX--(Marketwire - January 17, 2008) - Researched by Industrial Info Resources (Sugar Land, Texas) -- Staying on top of the technical and commercial trends in the Power Industry is a continual process. With a corporate culture of continuous improvement, North American Energy Services (NAES) (Issaquah, Washington), a subsidiary of Itochu International Incorporated, has diversified its portfolio to meet the markets' increasing demand for safe, compliant, productive and cost-effective generation-services outsourcing.

In the U.S. the Power Industry is facing challenges. New coal plants are very difficult to develop given the uncertain regulatory environment and increasing construction cost pressures; the nuclear option is gaining momentum but will also face regulatory and cost challenges moving forward; and renewables will continue their steep growth curve, gaining a larger share of the power market. With this backdrop and the increasing need for base load generation in the U.S., existing coal and natural gas power plants will be driven to achieve better efficiencies and greater capacity utilization in the future.

All of this points toward greater service and outsourcing opportunities for NAES, which experienced significant growth in 2007. For the year, NAES added 30 new plants to its operations and maintenance (O&M) services portfolio, which now totals nearly 90 plants of 25,000 megawatts. In looking to the future, NAES has put together aggressive growth initiatives, which include venturing into new technologies and geographies.

About 75% of NAES' O&M business comes from Independent Power Producers and financial players, but the company is also finding growth from private and public utilities, which are looking to outsource generation services. Glen Canavera, Vice President for Marketing of NAES, said: "A significant portion of our growth arose due to turmoil in the industry when assets changed hands. Fundamentally, we focused on customers who could benefit from the NAES value proposition. Firms have selected us to operate their plant because technically and commercially we perform well. At the end of day, we provide customized O&M solutions based on our customers' project requirements while aligning our objectives to achieve optimal plant performance."

Originating in 1980, NAES has built a full-service, generation-services company. In addition to its plant operations business, the company provides turbine repair and overhaul with a 35,000-square-foot MRO shop in Houston, Texas, temporary and full-time staffing services through the NAES Staffing Services Group, and power plant maintenance and construction services through its NAES Power Contractors (NPC) subsidiary. In 2007, NPC initiated major contracts in Missouri and Pennsylvania for the construction of precipitator and SCR systems at two coal-fired power stations. The company also constructed six electrical substations, renewed a number of annual maintenance contracts, and provided a wide array of boiler, chimney and balance of plant component repair and maintenance services.

"Looking ahead, we're seeing significant interest from the renewable sector," Mr. Canavera said. "The advent of renewables, including biomass, solar, geothermal and wind, and the mandated portfolio standards for renewables in half of our states will result in ongoing and significant new construction. NAES has operated renewable plants since 1987, and we're strongly positioned to support that segment of the industry."

Municipalities and public utility districts are taking a more aggressive stance in plant ownership and are evaluating building more of their own power plants. Mr. Canavera also sees private utilities taking a greater role in constructing new plants. "Significant new generation is being purchased or developed by the utilities themselves," he said. "For the first time in a number of years, utilities are really grabbing the mantle of building new generation. Some have not built a new plant in 10 years or more. With a long history of serving utilities, we see this opening up new opportunities across the company."

Another key challenge facing the industry is an aging workforce. The need for new talent to operate, construct and maintain generation assets is keen. NAES is addressing this challenge in a number of ways. Through its Technical Services Group, NAES is providing unique programs and services to assist customers in capturing, documenting and retaining the institutional knowledge of its work force as it faces the natural attrition of retirement. From an outsourcing standpoint, the company provides temporary staffing solutions through NAES Staffing Services and for a more programmatic approach it provides long-term onsite manpower and maintenance services year-round for a number of major customers through NAES Power Contractors. Of course, NAES also provides full-scope O&M outsourcing services for full plant operations solutions.

2008 is shaping up to be an exciting year in the Power Industry. NAES has a full range of generation services that will meet the needs of the industry today and in the future. Please visit the company's website at or call (425) 961-4700 for further information.

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