Power TakeOff, or PTO for short, is a name you need to know. Its mission is to revolutionize the way utilities and businesses participate in energy efficiency through data and software. Lofty goal.
But expect great success. It was founded by two engineers with a vision of creating software allowing business customers to see their data, thereby empowering users to make energy efficient changes in their facilities.
Now, Lime Rock New Energy, which uses growth equity to accelerate the energy transition, has partnered with PTO as it trusts in the energy efficiency paradigm. Public Utilities Fortnightly sat down with the two founders of PTO, Kevin Martin and Peter Widmer, as well as Lime Rock New Energy’s Mark Lewis, to dig into where PTO is going as it partners with energy and utilities companies.
PUF’s Steve Mitnick: What is it that you do differently with your partners or utilities than anyone else?
Peter Widmer: The market success that we have with small, medium businesses and public institutions is a direct result of our data-first strategy. It’s unique in the marketplace, by first focusing on identifying the participants best suited for DSM offerings and knowing with a high degree of confidence they’ll likely benefit.
A data-first approach not only delivers a high value proposition to facility managers and building owners, but in providing a customer experience that’s unique to each participant, we build confidence and trust in our utility partners’ brands, that they’re here to help, which is an important part of this energy transition.
Second, our data-first strategy enables us to deliver our DSM services virtually, and we were one of the first to do so in the industry. We were delivering virtual services before COVID, and that expands our market reach beyond the traditional on-the-ground approach to meet the businesses where they are.
There’re so many small, medium businesses in contrast to large corporations, which utilities already have as a part of the portfolio. You need a fast, virtual offering that can rapidly meet people without having to drive from location to location.
Underlying our DSM services, our third unique differentiator is our industry leading automated Measurement and Verification (M&V) capabilities, which brings resource investment confidence to a project from the perspective of the participant.
To accelerate participation investment in energy efficiency, a more accurate M&V approach that’s available daily, rather than getting results next month or at the end of the year, is critical to driving investment moving forward. It is those three points that make Power TakeOff stand out in the industry.
PUF: Kevin, it’s been difficult to do DSM services with small and medium businesses. They’re different and don’t have a full-time energy expert. Discuss that.
Kevin Martin: Peter talked about the data-first approach. We are using both this large access to data and software automation to bring down what’s typically been offered to the largest customers, so it’s cost-effective for small and medium businesses.
We automate and do this at scale. It would normally take a lot of labor and time to reach these customers, but through continuous software development, R&D, and virtual engagement, that allows us to come to these customers with cost-effective solutions that a lot of the industry haven’t been able to do yet.
Our artificial intelligence-led approach allows us to be targeted and reach out with specific actions to these customers. Small and medium businesses don’t need to commit to a large engagement.
We’re reaching out with specific days, times, and actions to take. We’re doing it virtually. This virtual engagement makes it cost-effective; it makes it easy for them.
We have homed-in on the art of what is meaningful to them in a short period of time to get results quickly for small and medium business staff who wear different hats and have other responsibilities.
This is how we find success with them. The key is measurable results. It’s fully pay-for-performance. We get the job done and then get paid based on achieved results.
The customers and utilities see it, and it’s motivating to see the after-effects of the work they’ve put in that are often quick changes. There’s great feedback.
PUF: Give some examples.
Peter Widmer: There’s a wide range from simple examples with the lights being on, to more complex. I’ll give a couple here. A simple example is a bank.
Banks close on Sundays, but with interval data, we can diagnose in combination with weather data, what systems may be running and can call and advise them about this usage during unoccupied hours.
In more complicated examples with schools, which have variability in scheduling, from summer, the courses, and building review, to if space is rented out, to during the school year with sports activities, and helping facility managers.
First, our job is to educate. We teach facility managers and building owners about energy usage relative to their buildings. This is often the first time they’ve seen this data or had this level of insight and had a trusted partner without a direct financial gain from their perspective.
Our participants don’t pay us anything. We are simply there to help them, represent the utility, and consult on how to optimize their facility relative to energy usage and the goals for that space.
After we’ve completed our work with the organization, we refer them to a peer program through our industry partnerships. To be successful in this energy transition, we want them to continue their DSM journey. We need them to take that free cashflow we’re generating for them and do that large capital project they may not have otherwise budgeted for.
That benefits everybody. We want to be stewards of this process, get people into the funnel, and involved in energy efficiency. So many small and medium businesses have been overlooked for the last couple of decades that we need to engage and invite them into this process. There are many partners in this industry to help take them on the next steps of larger capital investments.
PUF: How does the process work and where does the utility fit in?
Kevin Martin: We deliver a turnkey program for utilities. We are reaching out as agents of the utility. We say, “this is Kevin Martin with ComEd, I’m calling about this.”
That’s where we’re building goodwill for utilities because here’s a customer that has been unengaged, that has someone calling out to them with their best interests in mind. This isn’t a gimmicky sales pitch.
They get their money back, because they have been simultaneously heating and cooling this building at the same time. A lot of Frankenstein buildings have additions, and these building facility managers don’t know which circuits go to where, what controls what.
They often don’t realize there’s a parent/teacher event every other week. These systems got put on hold, or this control is calling for heat, this one’s calling for cooling.
They’re just running and making sure people are comfortable, rather than having time to log in and figure out what makes sense. What we are finding is customer specific. It’s a data-led way to say, this is a flagged opportunity.
It’s then human research to find and improve that engagement. We get one first impression and do a good job of reaching out to those customers on behalf of the utility with specific and actionable items that catch their interest and lead to a change that’s good for the utility and planet.
Peter Widmer: These aren’t our opinions or our ideas. This is data we’re bringing; this is what we see in the data, and we’re leading with that message.
It is not a sales pitch when somebody knocks on a door with a promise of savings to gain a customer’s participation in a program, but we’re leading with data, which changes the conversation and gets the facility manager and building owners to open up.
PUF: You’ve been at it for some years. How big can this impact be three years, five years out?
Peter Widmer: For context, we first launched this pilot, this idea with ComEd in 2017. Virtual Commissioning® is the name of our product.
The Virtual Commissioning product has been our focus of execution for the last five, six years. In 2019, we were a company that had twenty-eight people, and by the end of this year are approaching a hundred.
We see tremendous growth ahead. There’re a couple of points we look at for future opportunities, and the first centers around AMI meter deployment. That is the primary mechanism we need in place to run our program. Ten years ago, there was a big rush in capital to increase deployment, and that continues.
Then, general state regulation around energy efficiency policies and support of DSM. From the market perspective, which has those two conditions, we think there’s significant opportunity ahead. We continue to see an abundance of energy efficiency opportunity in the data.
Kevin Martin: AMI deployment and data is the lifeblood of our services and company. We’re seeing pressure socially from utilities with electrification.
As we decarbonize our environment, there’s a larger push for people to switch fuel sources to electric and electric heating is the largest opportunity for savings opportunities. Those are some of the largest savings we’re able to achieve from the Virtual Commissioning program. The more people electrify, the more opportunity to have a larger impact with this program.
PUF: Why is that?
Kevin Martin: A lot of it is the existing infrastructure. There’s little AMI minute-by-minute metering of natural gas data. It’s not granular, whereas we can get that for electricity. There’s the shift.
There are pilots, but it is a blunter instrument versus the level of granularity with electric data. The more heating with electricity — it varies across the U.S. — but for colder climates the bulk of energy usage is from heating and less for cooling. That’s a large opportunity on the horizon.
PUF: There’s also Lime Rock New Energy. What’s that about?
Mark Lewis: We’re excited to be partnering with Power TakeOff because we’re growth equity investors in the energy transition. Our focus is around businesses that help drive the energy transition.
One of our key verticals is around energy efficiency. We’re always looking for investment opportunities with businesses that are driving energy efficiency. But frankly, it’s been difficult to find ones to get excited about.
I previously was an ESCO CEO and know the space. But it is difficult finding businesses that aren’t reliant on growth coming from more boots on the ground, which is the model of ESCOs, or that are reliant on customers making capital purchasing decisions, which is always a difficult sale. That’s the traditional model.
Let’s upgrade your rooftop unit or the building envelope, insulation, lighting, all those things. But even with rebates, it requires a customer to make a decision around capital expenditures.
When we had the opportunity to meet Kevin and Peter and learn what PTO was doing, I saw a business making a quantifiable difference in energy consumption. That is what PTO has mastered, they’re measuring energy savings relative to a quantified, measured historical baseline based on AMI data.
It’s real data. It’s not an engineering model, it’s not an estimate. It’s based on consumption. They’re delivering verifiable results, and that’s how they get paid for performance.
Power TakeOff was the perfect fit because it fits our mandate. The business is growing rapidly. They’re delivering value to their utility customers and to small and medium businesses to help them save energy and money, reduce their carbon impact, and make the grid more resilient by reducing consumption.
There are only a few options around the continual electrification of our economy. You can build more transmission and distribution, and we know the challenges and capital costs around that. But the cheapest electron is one that’s never consumed and that’s what PTO is about.
We’re only at about roughly sixty five percent AMI penetration in the U.S. and that will be effectively full penetration by 2030. We’ve got a lot of runway to grow in the U.S., but Kevin and Peter have never been outside of the U.S. with this offering.
There’s an international opportunity here. With the energy challenges Europe has been dealing with, this is ideal for that marketplace.
PUF: What is this company going to look like in five years?
Kevin Martin: Five years out, we will have more than doubled the number of programs we have out there. The Virtual Commissioning will be inside and outside the U.S.
This is a global problem. These are translatable approaches, as are the core competencies that we built, and the trust and relationships with utilities. Utilities are reaching out to us requesting support for data analytics work, greenhouse gas measurement, verification, reduction goals, and engaging their customers more effectively to drive other programming.
We are going deeper on longer engagements. That’s what our new program we launched this year, Virtual Strategic Energy Management™, Virtual SEMs, is about. Those are longer engagements where we are coaching, teaching, and improving.