A new way to cut your %!@# power bill
Think of it as a kind of TiVo for electricity: A device lets you buy energy when it's cheapest and store it for later use.
NEW YORK (FORTUNE Small Business) - In an age of flextime, when workers increasingly commute outside peak traffic flows, the delivery of electricity seems a bit, well, static. When you need it most, so does everyone else, imposing big costs and occasional brownouts on utilities and their customers. But a Washington, D.C., startup called GridPoint has a better idea. Starting this spring, GridPoint is selling a "smart box," priced from $15,000 to $20,000, that will allow business owners to manage their electricity more intelligently - and cut down on power bills.
The system works thanks to "dynamic pricing" - a payment arrangement in which utilities charge customers more during periods of peak usage, such as dinnertime, and less when demand is low - say, 3 A.M. Though this option has been around for decades in some areas, it's still available to only about 10% of U.S. customers - but that's about to change. An energy law enacted last year requires that all utilities offer customers some form of dynamic pricing by February 2007.
Most utilities have been dragging their feet, because it's expensive to fit homes and businesses with smart meters capable of registering the time electricity is used. But once those new meters are in place, prepare for a shock as utilities raise prices whenever demand rises. That is where GridPoint comes in.
"Our product will allow customers to trim their bills painlessly," says CEO Peter Corsell. "Think of it as a kind of TiVo for electricity."
The device, called GridPoint Protect, is the size of a small file cabinet and connects to the circuitbreaker panel. (The company also offers a lower-capacity version designed for homes, which costs $10,000.) A built-in computer powered by a Pentium chip will make intelligent purchase decisions, buying when prices are low, then storing the electricity for later use. That will make it possible to run your company during the workday with cheaper electricity that you purchased at 3 A.M.
Corsell, 28, estimates that his device will shave a business's electric bill by about 15%. Assuming monthly charges of $2,500, the system would pay for itself in less than four years.
GridPoint Protect offers a second function: Because it stores electricity, it can double as a backup generator that is safer and faster than many models currently available. Standard generators run on gas or diesel, and their carbon-monoxide exhaust fumes can be dangerous. By contrast, GridPoint Protect uses safer gel-style batteries, similar to those that back up cellphone towers. Standard generators also take a few seconds to power up, but GridPoint Protect kicks in within about 30 milliseconds, fast enough to prevent a company's computers or other sensitive devices from crashing.
Founded in 2003, GridPoint has raised $18 million from venture capital firms and private investors and now employs a staff of 50, with no revenues until it sold its first units this spring. The company features an all-star board of advisors, including tech guru Esther Dyson and Bill Bradley, the former presidential candidate and longtime member of the Senate Energy Committee.
"It's a smart company, focused on a couple of regions where there's a real need in the marketplace," says Daniel Violette, a Boulder energy consultant.
Picture it - one day soon you might be at a cocktail party and encounter someone bragging not about his hot stock picks but about how much he saved on his electric bill.
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