Energizer money - Dallas Business Journal


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DEREGULATION DUDE: After working in the telecom industry when it was in the throes of deregulation, Matthew Berke formed LPB Energy Management and turned his attention to the energy markets. This year, his firm expects to rake in between $10 million and $25 million in revenue.

Energizer money

Helping businesses cut utility costs is
LPB Energy Management’s goal
Dallas Business Journal -
by Shashana Pearson-Hormillosa Staff writer

Biggest Problem
When Matthew Berke started LPB Energy Management in 1999, he had to compete against some of the largest players in the market. He leveraged his past experience working through deregulation in the telecom industry — and his company’s use of in-house services — to win a big contract with the State of Texas over rival Accenture. This gave him credibility and helped pave the way for future sales.
Matthew Berke likes to stay one step ahead of industry trends. In 1999, with states in other parts of the country deregulating their energy markets, Berke launched LPB Energy Management LP   in anticipation of deregulation hitting Texas. The company specializes in collecting and presenting energy-spending trends for public and private entities, and helps clients identify ways to cut energy consumption.
 
At its inception, Berke was the sole employee of LPB and worked out of a 100-square-foot room. He started the company with his own capital. Today the company employs 130 people, occupies 75,000 square feet of office space and projects annual revenue for 2008 of $10 million to $25 million.
 
Berke didn’t start his career in the energy realm. After earning a law degree, he jumped into the telecommunications industry, which was deep in the throes of deregulation. He started at IDT Corp. as a director in 1995, working his way up to executive vice president of telecom. In 1998, he left IDT to join Excel Communications’ CEO Kenny Troutt in Dallas as vice president.
 
“Telecom had gotten so competitive. Things were moving so fast,” Berke says. “Those that won were companies that thought ahead and built the company to handle it.”
 
By the late ’90s, deregulation in the telecom industry had almost run its course.
 
“I sensed that (deregulation of the telecom industry) was over and that all the savings had been extracted from that market,” Berke said. “I realized that energy was the next market to be optimized.”
 
In 1999, he began to evangelize the benefits of data collection. “You can’t bill-audit without looking at your bills. You can’t purchase competitive supply without it,” Berke says. “You can’t talk about reduction, nor claim successful reduction, without knowing how much you use.”
 
He built LPB through contracts with Dallas-based companies with affiliates outside of Texas that were already experiencing deregulation in their markets. In 2001, when energy deregulation arrived in Texas, LPB was ready to offer its services to local companies.
 
In 2005, the state of Texas issued a request for proposal for energy-management services, including procurement, data collection and historical audit. LPB saw an opportunity to help the state conserve energy and submitted a proposal. After competing against larger companies, such as Bermuda-based Accenture, which had been awarded the original contract in 2001, LPB won the energy contract for the state. LPB receives the bills, captures data, audits the bills and assigns the accounting codes before the state sees the bills. Of the 33,000 utility bills Texas receives each month, LPB processes half of them.
 
“They will be able to say how much energy they use in every highway light, every park and every jail,” Berke said. The entrepreneur attributes LPB’s win to the company’s dedication and providing all services in-house.
 
“We found that outsourcing compromises things,” Berke says. “Many people, especially in an emerging industry, will respond to an RFP and will rely on outsourcing. Our offer was night-and-day because we knew what we were doing and had experience.”
 
In 2007, the energy management company acquired Jenkins and Roland, a utility analysis company, to audit customers’ data. By the time LPB’s contract with the state comes up for renewal in 2010, LPB will have saved Texas $50 million. The company also performs bill verification for Texas Stadium, and since September has helped recover $51,000 worth of utility overcharges for the Dallas Cowboys.
 
Another company benefiting from LPB’s services is Arlington-based Trinity River Authority, a wastewater and water management agency for the Trinity River Basin. According to Warren Brewer, manager of the northern region for TRA, the group operates six wastewater management systems, which requires a tremendous amount of energy. With annual energy costs of about $10 million, the TRA has commissioned LPB to watch the utility market and procure competitive pricing for its energy consumption.
 
“They’ve found a few cases where billings were in error that were in our favor,” Brewer said. “When discovered, we were able to make adjustments. There’s no question that they’ve helped us price our energy needs competitively.”
 
He said that even if the difference in price is one penny per kilowatt-hour, the savings would be substantial. Brewer believes that demand for energy management will only increase in coming years.
 
“These types of firms are going to be a lot more common and show a lot of growth,” he says.
 
To come out on top, LPB must stay one step ahead of the competition, Berke says.
 
“We know what we are and what we’re not,” he says. “I want to be widely considered the best for what we are. We just make sure we deliver it and we do it better.”
 
Reprinted for web use with permission from the Dallas Business Journal. ©2008, all rights reserved.
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