Call it a match made in Glendale.
Ice Energy has moved into a new 25,000-square-foot facility in Glendale, a city whose utility has become one of the Colorado-based company’s largest clients for systems that store energy for air conditioners overnight, when electricity is in less demand and cheaper.
The facility, located in Glendale’s industrial San Fernando Road corridor, is also centrally located to the firm’s other top clients.
“Glendale is kind of like the center of the map for us here in California,” said Mike Hopkins, executive vice president of Ice Energy.
Glendale Water & Power has spent $3.2 million on about 180 Ice Bear units, said Craig Kuennen, the utility’s business transformation and marketing administrator.
The units are placed on commercial and city-owned buildings, with about half the cost covered by a federal grant, Kuennen said.
The utility would like to purchase about 1,000 more units if the expenditure is approved by the City Council. And now that Ice Energy is in Glendale, the utility will likely get a better deal due to reduced transport and delivery costs, said Glendale Water & Power General Manager Glenn Steiger.
Glendale Water & Power expects to spend less than $10 million on the extra units, Steiger said — about 50% less per unit than what the utility spent for the first batch of 180 units.
“That’s what you get when you’re one of the first out of the chute,” Steiger said. “We’re one of the very first to use Ice Bear in a significant way. We’ve been with them pretty much from the beginning.”
Buying in bulk and being closer to the distribution center also has a lot to do with the discount, Steiger said, although he added that negotiations were still ongoing.
Ice Energy has about 60 employees and contractors — half of them based in Glendale — and is planning to hire more, Hopkins said.
According to city officials, Ice Bear units reduce air conditioning energy demand by as much as 95%, a significant cost savings since up to 50% of a building’s electricity use comes from air conditioning.
Some of the extra units could be distributed to local businesses, Steiger said. Several have been given to businesses for free, but if the new deal comes through — probably within a year — they would likely be distributed for a fee, he added.
Ice Energy was founded in 2003, but it wasn’t until recently that utilities companies started flocking to the product.
“The growth we’ve experienced in the last several years dwarfs what we were doing in the past six years,” Hopkins said.
Over time, utilities noticed how costly it was to handle energy loads on the hottest days of the year. Ice Bear units store energy overnight to be used during peak hours — saving utilities money while helping to prevent temporary power outages, or “brown-outs,” Hopkins said.
Most other strong Ice Energy customers are in Southern California, including Burbank and Riverside, he said. Three years ago, Ice Energy signed contracts worth $100 million with about a dozen utilities across the Southland, and is pursuing utilities in Arizona, Hopkins said.
Ice Energy’s expansion into Glendale also came without the move-in perks that other businesses got through the city’s now defunct redevelopment program, Steiger said.
Another facility is being considered in Northern California.
The start-up has also been reportedly courted by several investors, including Goldman Sachs Group.
“We are becoming more popular as utilities look for more cost effective, more environmentally gentle ways of dealing with their peak demand issues,” Hopkins said.