Calico Energy Emerges in Energy Management World, Partners with EPA

8/13/10

Calico Energy Services has been flying under the cleantech radar for some time. The Woodinville, WA-based company, founded just over a year ago, is in the business of energy management which is quite a bit different from most cleantech companies that get a lot of press. Unlike many companies out there that provide services to help the homeowner, or to help small businesses monitor their energy consumption and find ways to curb costs, Calico specializes in the management of energy output.

“What we like to consider ourselves is a smart grid data management system with the ability to integrate different data points and services at the smart grid level,” says CEO Brian Dawson.

What this means, he says, is that Calico plugs into other energy management systems, to allow for the most comprehensive entry point for its clients—major utility companies and energy providers across the U.S. and Canada looking for ways to better manage the energy they sent out to customers, and cut costs.

“There are a lot of great solutions out there that are kind of a la carte things—a piece of this, a piece of that. And the industry is so new that utilities and power providers, they’re challenged with ‘what do I do with all of this?’” Dawson says. “Our system sits in the middle and allows us to combine all these services and data into kind of a portfolio management system for demand-side management. So when there’s a utility, for example, that wants to roll out new rate programs, or new programs for the community, they may have a customer relationship management system, a billing system, a meter system, an advanced metering infrastructure system—and they need them to combine together, and that’s what our platform does.”

The 28-employee operation is spread between Seattle and Chicago. It’s the result of a merger with an established seven-year-old Midwest energy company, Invaluable Technologies, in February. The deal combined Calico’s energy storage and management side, with Invaluable’s demand and response management technology. Dawson says the deal has proven to be a good match for both companies—Calico has been profitable for the last two quarters.

For those of you who don’t know what demand and response is in energy terms, it goes like this: energy demand peaks during certain in-demand hours. During this time, energy companies need to find ways to shift energy around so that they don’t have to purchase more at peak usage times, which can get pricey.

“During a peak period of energy usage—let’s say between 3 and 5 pm on a weekday—the amount of energy being used is three or four times that of a standard base load,” says Calico chief marketing officer Thomas Doggett. “What utilities are trying to do is figure out how do I shift that usage so I don’t have to have all this extra generation capacity online all the time to need it, and or buy extra energy off the grid, which is very expensive on short notice.”

In order to keep themselves from having to shell out extra dough to pay for cost over runs during peak hours, utility companies instead turn to their customers—homeowners and commercial businesses—to take part in a “demand response event.” Basically, it means the customer gets offered a lower rate for agreeing to reduce their energy usage by a certain amount below their regular usage during a peak period. Both energy users and providers are supposed to save money.

“During a heat wave, everybody pops up their air conditioner to cool down the house, and that cooling was a high load on the energy grid. In general when that happens, there isn’t enough generation to supply—when the grid gets over-burdened with that much usage, things break. So what they want to do is reduce that load,” Dawson says.

Even if cases of demand response only happen five or six times a year, they are exceedingly costly for both the consumer and the provider, he says.

Calico’s software allows energy providers to handle the whole transaction—launching a demand response event, enrolling participants, assessing their energy usage reduction, and paying customers accordingly.

The company has intentionally kept a low public profile, so that it could first focus on building a strong customer base, Dawson says. But now that their business is growing, Calico feels it’s time to come out in the national energy scene.

Calico will soon be announcing a Service and Product Partnership with the U.S. Environmental Protection Agency Energy Star program. An Energy Star certification program helps buildings quantify their energy usage, and make changes to cut costs and curb energy consumption. The partnership acknowledges Calico’s ability to help clients manage their energy and meet goals. It is a big deal that provides independent validation to the startup, Doggett says.

“There have been studies that show that there’s as much as a 16 percent increase in the value of the property if it’s Energy Star certified,” he says. “The EPA awards very few companies. It’s basically a partnership certification that says this is a solution that helps companies to meet Energy Star certification goals.”

So how does Calico stack up to other smart grid energy management companies like Tendril, OPower, and GridPoint? It really all comes back to the breadth of energy management capable through each. While there has been an “explosion of companies that are doing all sorts of hardware, and software, and services in this space, Doggett says, Calico is the only company that is able to integrate with all of them. That, according to Dawson and Doggett, is what makes them truly different.

“What you’re seeing within the space is a lot of fragmentation. A big challenge for our customers is how do I create a solution to my problem out of all these different point solutions? We were brought in to integrate all those different solutions and make them provide one point of access for the data, and the analytics, and understanding what does this information mean, and how do I, as a utility, leverage it to reduce usage? We arguably compete over five or six different industry segments because of the fact that we have a platform,” Doggett says.

The flexibility, he adds, is what makes them able to reach a variety of customers. “While we can provide an end-to-end solution, we’re not hard-over on that because utilities already have existing systems and requirements,” he says. “In order to be able to succeed, you have to integrate with those, because a utility is not going to go back and re-install a million meters just because your solution doesn’t play with them.”

So what’s next for this relatively new company in the up-and-coming energy market? Calico isn’t saying whether it plans to raise more venture capital, or hire more staff, but Dawson did say his company is profitable and looking to grow. Calico has, a “very well thought-out growth plan,” he says.

Thea Chard is a correspondent for Xconomy Seattle. You can e-mail her at theachard@gmail.com or follow her on Twitter at http://twitter.com/theachard. Follow @

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