Government contracts energize company’s growth

BERTHOUD – A couple of new, long-term contracts has EnergyLogic Inc. preparing to more than double its employment base.

EnergyLogic was founded in 2006 to work with homebuilders and homeowners on energy efficiency. Despite the housing downturn, the company has continued to expand, growing to 17 employees.

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In early January, EnergyLogic started settling into its new home, just a few miles west of its original Berthoud location. The move from a 1,700-square-foot former residence to an updated 3,700-square-foot office removes a number of physical barriers, and Principal Steve Byers said that goes hand-in-hand with the dissolution of barriers to the company reaching its full potential.

“The economy is tough, but we managed to grow our business,” Byers said.

New residential homes still account for almost 70 percent of EnergyLogic’s business, but growth is coming from all angles. Byers credits the company’s recent success to its ability to diversify while still leveraging its traditional talents.

Most recently, EnergyLogic was selected for several innovative, multi-year projects. The company is partnering with Denver-based nonprofit Veterans Green Jobs on a legacy weatherization program in Denver and Jefferson counties. Administered by the Governor’s Energy Office, the program received an $80 million boost from the American Recovery and Reinvestment Act. VGJ became the leading bidder in early December and finalized the $9 million contract in February.

VGJ and EnergyLogic will hire several dozen new employees to provide weatherization services to income-qualified households, including those receiving financial help through Temporary Assistance for Needy Families, the Low-Income Energy Assistance Program, Supplemental Security Income and Medicaid. Coupling energy audits with upgrades such as insulation, sealing air leaks and installing high-efficiency appliances, should help lower utility bills. Through June 30, 2011, when the initial contract ends, the team expects to weatherize about 1,800 homes.

“It’s helping the people most impacted by the economy,” Byers said. In addition to lowering energy bills, it will create local jobs using U.S.-made products.

EnergyLogic has been involved with VGJ since its establishment a couple of years ago, with Byers serving on the organization’s advisory council. While VGJ will provide the administration and Denver-area office space, EnergyLogic will perform about 80 percent of the field operations.

“This partnership is very innovative,” Chuck Watkins, director of enterprise development for VGJ, said of the nonprofit, for-profit and public sector mash-up. “We definitely hope to expand (our opportunities with EnergyLogic) in the future.”

Basic energy audits

EnergyLogic has also been selected by the city of Fort Collins to conduct basic energy audits for its new Home Efficiency Program. The program subsidizes low-cost home energy audits, helps residents identify rebates for recommended energy improvements and recommends approved contractors for the installations. The basic audits will cost residents $60, with the remainder covered by the city. There is also an expanded home energy audit available for $150, performed by JKG Consulting.

The audit portion of the program launched in mid-January and by early February, 100 audits were already scheduled. A goal of 300 audits and a 50 percent conversion to completed projects was set during the planning phase last summer, with a goal of 600 annually for subsequent years, although there isn’t necessarily a limit on the number of audits performed.

“We think we’re likely to exceed our goal since we hit one-third of it in the first few weeks,´ said John Phelan, energy services manager for Fort Collins Utilities. “We weren’t sure what the response would be. We looked at similar programs around the country, but it’s hard to predict.”

Phelan is familiar with EnergyLogic’s work but hadn’t formally done business with the firm. He added that the company stood out among the dozen proposals submitted for the program for its pricing, experience and ability to scale up to meet demand.

“I feel fortunate that there’s a company here locally that can help us leverage the efficiency resources we have,” he said.

EnergyLogic’s contract can be renewed annually for up to five years, when the program is set to be completed.

Including the personnel hired for the Denver project, Byers indicated that this and other contracts will have EnergyLogic hiring up to 40 new employees. While most of them will be employed in the Denver area, there have already been new hires for the Berthoud headquarters. The company just brought on a chief operating officer, Will Lorey, and a controller, Janet Howard, into newly created positions.

Education and training

Not all of EnergyLogic’s work is focused in deployment. The company is seeing most of its growth in its Rater Services division, headed by Scott Doyle. The division provides training, certification and continuing quality control to home energy raters – subcontractors who perform standardized evaluations of the energy efficiency of homes.

EnergyLogic recently developed and sold a basic energy rater course to Maui Community College in Hawaii. Byers said that company learned a lot through the process and now sees this as an additional business line.

The company is also in the beta testing phase of its Optimiser energy audit software, now several years in development. The program is meant for use by residential auditors to perform detailed modeling and predictions, analyze utility bills, and other functions. EnergyLogic has already developed an award-winning administrative and back-office software suite – iRate – that it now markets to other energy rating companies.

It’s not been all growth, all the time, for EnergyLogic. The company recently decided it couldn’t continue to operate its retrofit division, which installed one-time porjects such as residential ceiling insulation.

“It’s not that it isn’t a good business. It’s just not a good business for us,” Byers said, adding that the company let two employees go when it dropped that division.

Those decisions are tough but important for a small business becoming a medium-sized business.

“We’re the poster child for ‘no-man’s land’,” Byers said, referring to Doug Tatum’s book about surviving small-business growth pains.

Byers said that bringing in new roles, such as a COO and controller, is necessary for a company that has been growing rapidly but has been limited due to lack of resources. Byers’ main goal is to leverage the new contracts to add workers now, then secure additional projects to keep those, and more, people employed. He anticipates being at 100 employees in three years.

For Byers, the current level of activity and excitement, which has taken years to produce, is palpable.

“We’re making soup and it’s about ready,” he said.