A 10-month old company just bought the erstwhile golden child of green technology as part of a plan to reinvent the 100-year-old utility business model.
On Friday, Twenty First Century Utilities, a company founded earlier this year by power industry veterans, acquired GridPoint, a data-driven energy management solutions provider based in Arlington, VA. The terms of the deal have not been disclosed publicly, but a press release stated that GridPoint would operate as a subsidiary of TFC Utilities going forward.
A few years ago, GridPoint was the hottest startup company in the cleantech stable.
GridPoint’s founder and Chairman, Peter Corsell, is also a founder and managing partner at TFC Utilities. Corsell served as the Chief Executive Officer of GridPoint from 2003 to 2010. The GridPoint acquisition is an opening salvo in TFC Utilities’ campaign to transform regulated utilities and facilitate wide-scale adoption of emerging energy technologies, including distributed energy and other behind the meter applications.
"We are just starting up, raising capital," said Larry Kellerman, a founder and managing partner at TFC Utilities while speaking in May at a natural gas conference hosted by Argus Media. "We want to buy one or two regulated utilities."
Kellerman, a former partner at Goldman Sachs, previously served as the chief executive officer of Quantum Utility Generation, a private equity-funded power generation company.
Over the past year, TFC Utilities has reportedly been raising funds to acquire small to moderate-sized utilities, preferably vertically integrated utilities in progressive markets. If the Federal Reserve raises interest rates later this year as expected, it could create opportunities for TFC Utilities to buy one or two electric utilities.
"We are looking to deploy capital to make utilities more customer-friendly (by) embracing new technology tools that allow us to be more impactful for customers on the other side of the meter," Kellerman said in May.
In the meantime, the acquisition could provide GridPoint a viable pathway for pursuing scale in mainstream markets. GridPoint has struggled to get traction in the regulated utility industry.
GridPoint’s customers include 5 of the top 10 retailers by total sales, 3 of the top 10 casual dining restaurants and 5 of the top 20 quick serve restaurants. Regulated utilities are not on the list and until they are, GridPoint will remain in the margins of the mainstream of energy economy.
“TFC Utilities’ business model provides a commercial accelerator that will enable millions of customers to adopt the energy technologies they want in an affordable manner,” said Corsell. “It eliminates longstanding barriers for GridPoint and other behind the meter technologies and, for the first time in the electric utility industry, creates a practical path for achieving a sustainable energy future.”
