Windsor company ices deal in California worth $1.3M

Windsor-based Ice Energy LLC has landed a $1.3 million contract to supply 54 of its Ice Bear 50 cooling units to the city of Victorville, Calif., for use in municipal buildings.

While the deal represents income for Ice Energy and the largest single order for the three-year-old startup, the true importance of the Victorville contract could be in the momentum it creates for Ice Energy in the potentially lucrative southern California market.

“We’ve targeted 31 southern California cities … and we’re also targeting about a half dozen community colleges” in southern California as possible customers, said Randy Zwetzig, Ice Energy’s vice president of business development.

Some of the other municipalities looking at the Ice Energy technology include Anaheim, Burbank, Glendale, Pasadena, Riverside and Redding.

California has emerged as a key market because the state government has agreed to fund public entities if they install energy cost-saving appliances, and if the payback on that investment is 9.8 years or less.

Victorville’s contract with Ice Energy, for instance, will be financed by the state at low interest rates – no more than 5 percent – over a 15-year period.

The Victorville contract also shows that Ice Energy’s technology has the stamp of approval of California’s Energy Commission, the agency that authorizes funding.

California has been particularly keen on energy savings technology since it experienced its notorious summer of blackouts in 2000. Air conditioning demand caused the state’s power network to exceed capacity, and forced utilities to conduct rolling blackouts. The state estimates that 70 percent of peak demand during the summer comes from air conditioners.

The state has opted to embrace energy-saving tools as an alternative to spending on expensive new power plants.

California’s new building standards also require more energy-efficient construction, which also opens the door for Ice Energy to sell products directly to builders.

“The utilities and the state of California understand they need to solve their peak demand problems with technology that’s different than building new power plants and transmission lines and new substations,” Zwetzig said. “They’ve taken the attitude of ‘Let’s use what we have better.'”

 The Ice Bear 50, so called because it provides the cooling capacity of 50 ton-hours of ice, allows users to shift their electricity demand from peak cooling periods, such as summer afternoons.

The Ice Bear draws on electricity overnight, when demand for power is low, to freeze 500 gallons of water. The machine, which is connected to the existing air conditioning system, serves as a thermal battery that discharges cooling during the heat of the day.

Victorville officials were wowed last summer when they installed an Ice Bear at city hall as a demonstration project. The city determined the Ice Bear cut daytime electricity demand by 95 percent compared to a conventional air conditioner.

Air conditioning is precious in Victorville, located in the so-called “High Desert” of southern California, about 85 miles northeast of Los Angeles. Summertime temperatures in Victorville are known to reach 110 degrees.

Ice Energy calculated that Victorville, which will install the Ice Bears in 16 different city buildings, will save about $100,000 per year in cooling costs for those buildings. The city will achieve the 9.8-year payback by including some additional building improvements as they install the Ice Bears.

The first Ice Bears will be shipped to Victorville before the end of the year, and all installations should be complete by June 2006, Zwetzig said. The company will service the contract from a small office in Orange County, where it employs five

people.

Ice Energy’s contract with Victorville highlighted a series of significant announcements for the company, which employs about 30 in Windsor.

Earlier this month Ice Energy was named as one of five “most promising companies” in the energy sector at the annual Energy Venture Fair. Ice Energy, which won the award for the third straight year, was among 80 companies evaluated by venture capitalists at the program.

“That creates notoriety and it’s a real vote of confidence from the investment community,” Zwetzig said.

In another development, the Ice Bear was picked as one of the top 10 “green building” products of the year by BuildingGreen Inc., publisher of Environmental Building News.

The combination of milestones has begun to make an impact on the company’s growth in Windsor. Ice Energy recently expanded its office, laboratory and testing space another 4,400 square feet, or 25 percent.

“This is to accommodate future growth of staff as well as additional space for more project development,” Zwetzig said. Currently the company is hiring “selectively,” he said, but expects to add more people after the middle of 2006.

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