IBM and Public Service Co. of Colorado Announce Broad Alliance in Energy Services

Strategic Insights -

IBM and Public Service Co. of Colorado have announced a comprehensive agreement to develop advanced customer service and energy management applications for utility and energy-using customers nationwide. The partnership positions Public Service Co. as a leader in the fast-growing, multi-billion dollar energy services arena. Under the agreement, IBM's managed operations and technology services subsidiary, ISSC, will manage most of Public Service Co.'s IT systems and network infrastructure, saving the company approximately $190 million over 10 years.

Key Takeaways:

  • IBM's ISSC will develop and deliver new IT-based applications to help utilities provide more responsive and efficient customer service, meeting the diverse energy and service expectations of residential, commercial, and industrial customers.
  • ISSC will operate Public Service Co.'s entire IT infrastructure, including data centers, workstations, and help desks, and will be responsible for application development and maintenance.
  • Public Service Co. will establish a new subsidiary, e prime, to provide value-added energy-related products and services to energy-using customers and select segments of the utility industry.
  • e prime will offer four business units: e prime solutions, e prime marketing, e prime technologies, and e prime systems, each focusing on different facets of energy services.
  • The alliance between Public Service Co. and IBM aims to help the utility industry improve customer service and become more efficient in the face of deregulation.
  • ISSC will hire approximately 400 Public Service Co. employees to implement the agreement and will work with other utilities to offer consulting and energy services.
  • Public Service Co. President and CEO Del Hock stated that the company plans to be at the forefront of change in the industry, cutting operational costs and leveraging advanced technology to build a new business.

Statistics:

  • Estimated value of the ISSC-Public Service Co. agreement to ISSC: $500 million over 10 years.
  • Estimated savings to Public Service Co.: approximately $190 million over 10 years.
  • Public Service Co. serves more than 2.7 million people in Colorado and the Cheyenne, Wyo., area.
  • ISSC has approximately 400 Public Service Co. employees hired to implement the agreement.
  • Public Service Co. operates eight steam-electric plants, eight hydroelectric facilities, and a downtown Denver thermal energy service, with an extensive natural gas system including over 13,300 miles of pipeline.

Sources:

  • Business Wire press release, January 31, 1995
  • Public Service Co. of Colorado and IBM Corp.