LPB Wins Multiyear State Electricity Deal

 

LPB wins multiyear state electricity deal

Dallas Business Journal - by Chad Eric Watt Staff Writer

A small Dallas company has embarked on a multiyear deal to help the state of Texas save money on electricity. The project could generate up to $36 million for the company in the next 4 1/2 years.

The state isn't paying any money up front to Dallas-based LPB Electric Services, but plans to share any savings the company finds. That's common practice in the utility consulting business.

What's different is the size of the customer. The deal makes LPB one of the largest companies of its type in the state, landing it 5% of the energy supply market.

In its proposal, LPB projects that it can save the state $43.5 million on its power bills over the term of the deal. The contract it signed with the state in March says LPB can make $36 million if it achieves that.

"It's important also to look at savings we will generate for the state that we're not going to get credit for," said Matthew Berke, president and chief executive of LPB Energy. "We are not going to get paid for any usage savings."

Key part of pitch

Keeping an eye on how much power an office or agency uses was a key part of LPB's pitch, Berke believes. It's something not many utility brokers emphasize. It's easier and more profitable to sell devices promising more efficiency than to teach humans to conserve.

"No one is really selling behavior-modification plans because no one really makes money on that," Berke said.

But in pursuing the state contract, Berke said the company leaders decided to make conservation part of its pitch.

Before pursuing the contract, LPB focused more on negotiating power supply deals.

LPB has about 50 employees and is staffing up for the state work.

In addition to reviewing electricity, LPB will look at government offices' water and natural gas usage. But because of retail electric choice in Texas, there's more room for savings on that side of the deal.

A first step will involve deploying software to monitor power and water usage. That will help LPB figure out where agencies can be more efficient and what sort of electric supply contract makes the most sense for them, Berke said.

The company has begun discussions with the Texas Health and Human Services System, he said.

LPB staffers will head for Austin next week.


 

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