Former Microsoft executive puts cash behind Ice Energy

WINDSOR – Two West Coast venture capitalists, including a former executive with Microsoft Corp., have joined Ice Energy LLC’s board of directors as a result of their recent investments with the Windsor company.

Tom Cain of SAIL Venture Partners in Costa Mesa, Calif., and Pete Higgins, with 2nd Avenue Venture Partners in Seattle, joined Ice Energy’s board in late April. SAIL and 2nd Avenue Venture combined recently to provide the bulk of a $5 million round of financing for Ice Energy.

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Ice Energy makes air conditioning technology that draws cooling power from melting ice. The company introduced its product to the marketplace last year.

Cain and Higgins join what was already an all-star lineup on Ice Energy’s board. Existing members include Joseph T. Gorman, former chairman of TRW Inc., and former California Congressman Vic Fazio.

Higgins brings a resume that includes 16 years with Microsoft. Before he left the software colossus in1998, he was group vice president of Microsoft’s Interactive Media Group, which was responsible for the company’s on line and consumer software businesses, such as MSN, MSNBC, Expedia Slate and Encarta.

Cain, who has a background as a technology entrepreneur, was recently chairman Frontstep, an enterprise software firm. His venture capital firm specializes in investing in energy and “cleantech” investments.

The new financing, which closed in April is “already having immediate impacts,´ said Randy Zwetzig, vice president of marketing for Ice Energy. The company has used the funds to establish two sales offices in California – Ice Energy’s primary market for early sales – and to develop its smaller consumer air conditioning units.

Last year Ice Energy rolled out its larger Ice Bear unit, which serves commercial buildings and large homes. “We are prototyping (the smaller unit) this summer, both here and in California,” Zwetzig said. “We plan production in the first quarter of next year.”

The company’s technology freezes water overnight, when demand for electricity is low and prices are cheapest. As the ice melts during the day, the machine blows chilled air through a connected air conditioning system.

As a result, Ice Energy’s technology – a distributed energy system – shifts the burden of air conditioning demand to overnight hours.

The company claims its technology shaves 95 percent of the “on-peak energy demand and consumption used by refrigerant based commercial air conditioners.”

The company is targeting California in its early sales efforts because of the state’s warm climate, and its new building standards, which mandate more energy efficiency in newly constructed buildings and remodeled buildings. Ice Energy is marketing its product as a means to meet the mandated efficiencies.

Currently, Ice Energy has 16 of its cooling units installed, with 35 contracted for delivery.

“Our goal is to have 50 of them out in a matter of weeks, so they can be operating in the summertime period,” Zwetzig said.

The larger Ice Bear units, which generate 50-ton hours of cooling capacity, are priced in the range of $6,000 to $ 12,000 per unit. Pricing for the residential units would start at $4,000 and deliver between 12 and 35-ton hours of cooling capacity.

Ice Energy officials predict the company could reach sales totaling “several million dollars in 2005 with exponential growth in the residential market in 2006.”

Higgins, the former Microsoft executive, the Ice Energy technology is “a very large opportunity.”

“In a way it’s retro – using ice for cooling. It’s almost quaint. But I think it’s easy to miss the magnitude of what’s going on here, in terms of fundamentally shifting the energy consumption curve. That’s a big deal. That’s a very big deal.”

Meanwhile, Ice Energy has found a new headquarters. The company, which started in Fort Collins in 2003, has moved into leased space in the Encorp Inc. building, 9351 Eastman Park Drive in east Windsor, near the Kodak Colorado plant. Ice Energy has leased about 14,600 square feet for offices, research and testing space.

Previously, the company kept administrative offices in Fort Collins and research and testing in another location in Windsor.