PAETEC Looks to Energy Biz

By Richard Martin

IT EXPO — Saying that the future of energy and communications are inextricably linked, PAETEC (PAET) CEO Arunas Chesonis laid out a vision for the future of his company as a major player in energy consulting and renewable energy funding during his keynote address at the IT EXPO in Los Angeles.

“We’ve got customers who are spending $40,000 a month on their network with us, and they’re spending $440,000 a month on their energy bills,” remarked Chesonis in his high-energy presentation style. “I said, ‘Holy s**t!’”

PAETEC’s investment in its energy division arose both from personal interest on Chesonis’ part and from the 2007 acquisition of a small energy brokerage in upstate New York. That firm formed the core of PAETEC Energy, which now offers consulting and evaluation services to companies looking to reduce their energy use and broaden their power sources to include renewable generation.

Meanwhile, the Chesonis Family Foundation, founded by Chesonis and his wife Pamela, donated $10 million last for solar energy research at MIT. The intellectual property that comes from the grant belongs to MIT, but Chesonis sees the relationship as a possible source of technology that PAETEC can help commercialize.

PAETEC’s interest in energy production and consumption goes beyond consulting and philanthropy. Chesonis envisions broadening the company’s successful “equipment for services” program – in which PAETEC finances gear purchases for customers who contract for network services – to similarly structured “energy for services” deals. “We’ve funded 10,000 equipment projects in the last 10 years,” Chesonis said, “so why not fund 10,000 projects to build out distributed renewable energy projects?”

PAETEC will also adapt its Pinnacle software platform, designed to help companies manage their telecom expenses, to enable companies to better monitor their energy bills.

Some of this vision sounded a bit far-fetched, and it’s not clear that everyone in the audience really bought what Chesonis was selling – helping a company finance the purchase of a softswitch, after all, is vastly different that helping it build a solar plant. But PAETEC has a national footprint, a strong balance sheet, an existing customer base looking to go green and cut energy costs, and a CEO with boundless enthusiasm for blending telecom and energy. If any company can profit from the merging of communications and energy, it might well be PAETEC.