The fall and incredible rise of Encorp

FORT COLLINS – Three years ago, one of Northern Colorado’s biggest energy companies nearly disappeared, but Encorp Inc. has not only survived it is now thriving under a new business model.

The company was founded in 1994 with a focus on providing distributed energy technologies to large facility operators. The company’s hardware and software combination – developed on $65 million in venture capital – allows businesses to run what amounts to onsite power plants. It grew to employ 120 at its Windsor facility at its peak and was generating revenues in excess of $10 million.

However, Encorp was saddled with high overhead with its manufacturing and hardware-centric business model. Adding to its issues was a churn in the upper levels of management and pressure from venture capital firms to see some returns.

By the start of 2006, the company’s investors were looking at options, first suspending most of the hardware development to focus on the software product before shutting down almost all of the operations in February of that year.

Herndon, Va.-based Primary Integration stepped in a few months later to purchase what remained of the company – its intellectual property – and tapped Encorp Vice President Mike Clark to lead the firm forward.

Clark was ready to move on to a new company and new career. When Primary Integration approached him to lead the revived firm, he agreed for two reasons: the group of people ready to continue working for Encorp, and a small army of customers who had selected its technology platform.

Responsibility to clients

Encorp products are deployed at about 300 customer sites around the nation, and Clark and his colleagues felt a responsibility to those clients to continue. Encorp’s product carries with it a 30- to 50-year product life and a multimillion-dollar expenditure, so a continued relationship is important.

“Everybody had a personal stake, if not in Encorp then in the customers,” Clark said.

He set out with a small team of Encorp engineers in a new, smaller office in Fort Collins to rebuild the company’s bruised reputation and grow it along with the new energy economy.

In all, about 10 former Encorp employees – mostly engineers – joined him to rebuild Encorp. A major difference for the new company is that much of the manufacturing is not done in-house. The Fort Collins facility serves primarily for research and development, testing and sales.

“We’ve intentionally tried to keep a low profile,” Clark said.

The company flew under the radar for a few years while it focused on repairing existing customer relationships, which was a big task given Encorp’s rocky past. With existing customers taken care of, the company is now working on new customer acquisition. Now the company is landing bigger jobs, and its resurrection is no longer a secret.

Niche in complex projects

Encorp is not alone in the distributed energy market where giants like General Electric, Emerson and Eaton lurk, but the firm considers the complex project its niche. While some of the bigger players focus on quantity, Encorp thrives on bringing energy controls to projects that would have otherwise been written off.

Encorp’s focus is still on large operators by facilitating the efficient use of onsite power generation. The company has completed projects for the U.S. Navy, Verizon Communications Inc. and hospitals around the nation.

Additionally, Encorp has and does work with equipment from any manufacturer in the world, reducing the potential of capital cost for new equipment. Clark explained that Encorp can connect multiple technologies, get them grid-connected and -controlled and monitor it all from one central location.

“They’re really the only ones who do what they do,´ said Tim Tawoda, president and CEO of energy integrator Preon Power.

Preon was charged with creating a microturbine power plant at two $21 million police stations in Chicago. The company tapped Encorp – and the company’s Gold Box controllers – to make sure the electric power produced by the turbines is integrated and handled safely. The stations are the first of 12 environmentally friendly stations the city has planned.

“Encorp is in the right place at the right time,” Tawoda said.

Since the company has been working in energy generation controls for more than a decade, it has a jump on much of the competition entering this increasingly hot market.

The companies were working on getting the Chicago projects under way for about six years. Now, Preon plans to bid for a number of other city buildings. Tawoda indicated that outside of the Chicago projects, Preon has five to six projects in the pipeline that will include Encorp.

Ahead of its time

“We’re in a sector that’s very healthy,” Clark said. “Everyone’s talking about the ‘smart grid’ and that’s exactly what we do.”

Encorp’s technology is economically and environmentally sound. The company will continue to focus on the business case for its technology.

“We think this year we will exceed the revenue of the former company,” he said. “Encorp might have been a decade before its time. We were just here and the market came to us.”

Today, Encorp products are installed in more than 400 projects with 1,000 megawatts. The company now employs about 15 and is likely to be hiring engineering talent later this year. Clark said that when finding talent, Northern Colorado is a great place for Encorp. Woodward Governor Co., Advanced Energy Industries Inc. and General Electric are all hotbeds for experienced engineers.

Encorp just started discussing the FortZED project with its organizers. Clark said he has had the opportunity to see other such efforts across the nation during his business travels.

“This has more meat (than a lot of the others). We regret that we didn’t get involved sooner,” he said. “Colorado is really getting a reputation as a green power state. That benefits all of us.”

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