Ice Age II: New business takes air conditioning back to its roots

FORT COLLINS — Two years ago the Platte River Power Authority spent $90 million on three natural gas generators to supplement the utility?s power plant capacity.
Like most utilities across the country, increased use of air conditioning has driven up peak electricity demand in the summer months at PRPA, which supplies power to Fort Collins, Loveland, Longmont and Estes Park. Short of building a new power plant, PRPA needed the generators to make sure demand does not exceed PRPA?s capacity, a condition in California that led to that state?s infamous summer of blackouts in 2000.
The memory of the blackout fiasco, and the expenses of utilities like PRPA, are now selling points for a Fort Collins company, which believes it?s come up with a technology to lighten summer electricity loads.
Ice Energy LLC has introduced an air conditioning device that functions like a storage battery for cool air. As the company?s name suggests, the essential ingredient is frozen water.
The Ice Bear 50, so-named because it possesses 50 ?ton-hours? of cooling capacity, freezes 500 gallons of water overnight. Users can then draw on the cool air emitted from the melting ice ? dispersed through an existing air conditioning system ? in the heat of the day.
During the peak cooling periods, usually between 2 and 6 p.m., an Ice Bear system would consume only 200 watts of electricity, while a standard air conditioner could gobble up to 70,000 watts, company officials contend.
Fundamentally, an Ice Bear user shifts air conditioning demand to the nighttime ? when the Ice Bear is drawing electricity to freeze the water ? a time when overall demand on power capacity is the least and power is cheapest.
Given the lingering concern for blackouts, the process of shifting air conditioning demand from daytime to nighttime has an historical analogy, according to one Ice Energy executive.
During the Arab Oil Embargo of the 1970s, carmakers and motorists quickly embraced fuel-efficient cars. ?That had the effect of extending the life of oil reserves,? said Greg Tropsa, president of Ice Energy. ?It?s the same with electricity capacity issues.?
By shifting or balancing demand, Tropsa said the life of existing power plants would be extended.
Customers can also save money if their own peak use is moderated. Utilities typically set electricity rates for customers based on their peak use in a given billing period. The lower the peak, the lower the bill.
The Ice Energy product, although barely out of the testing phase, has already won heady compliments.
Earlier this year the Ice Bear received a Gold Award at the World?s Best Technology 2004 contest, in which judges picked from 60 competing technologies. Ice Energy was also called ?Most Promising Company? at the Energy Venture Fair IV in October 2003.
The company recently struck a demonstration deal with the city of Anaheim, Calif., calling for Anaheim to use the Ice Bear at a fire station and monitor results.
California is a primary target market for Ice Energy, due the state?s size, warm climate, and new building standards ? set to go into effect in 2005 ? which mandate more energy efficiency.
?Our product is definitely the ? lowest-cost method for achieving compliance? with the California law, said Randy Zwetzig, vice president of business development for Ice Energy.
Other target markets for Ice Energy include Hawaii and its home base in Colorado.
Hawaii makes sense ?because it?s summer all year there,? Zwetzig said. The U.S. military is also expected to invest heavily in new buildings in Hawaii, which could be a source of customers for the Ice Bear, he said.
Initially, the company is focusing its marketing on small- and mid-sized businesses. A residential version of the Ice Bear 50 is under development.
The commercial product costs $10,000 with installation, but Ice Energy has a major marketing ace in the hole. Many power utilities offer rebates to electric customers who show they have shifted peak power usage.
Locally, PRPA rebates users $350 for every kilowatt shifted away from the peak demand period. With other savings inherent in the Ice Bear, Zwetzig figures an Ice Bear could provide payback within two years to a business customer in Northern Colorado.
The company?s now trying to convert its national awards and energy-saving arguments into capital.
To date Ice Energy has been funded from a circle of 35 private investors, including some high-profile names like retired military hero Norman Schwarzkopf, former U.S. Congressman Vic Fazio, and Joseph Gorman, one-time chairman and CEO of TRW Inc. Gorman is also chairman of Ice Energy.
Ice Energy now hopes to attract a round of venture financing of $10 million so it can take flight as a commercial venture. Pending that financing, the company ? which has eight full-time employees ? expects to ramp up soon with the addition of sales teams in its target markets.
If investors agree, a new ice age could be in the making.

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