Traditionally, KMC contracting partners are dedicated commercial controls contractors. Many are mechanical contractors with controls divisions or services. Some are so-called "system integrators." And then, there is Urban Energy Solutions (UES; www.urbanenergyinc.com
This Arizona-based contractor has its roots in electrical contracting. But its business model today is best described as "Client Driven." UES offers contracting services in electrical construction, energy management, and solar. (Photovoltaic installation and service accounted for nearly 50% of UES revenue in 2011.) It's evolution to this model occurred just three short years ago when the company was known as Urban Electric. Two driving factors led to the new business model:
- Urban customers, pleased with their electrical services, were interested in expanded service offerings from Urban including energy management work.
- Urban clients were demanding a self-performing contractor.
In 2009, Joe LaRovere joined the company to help formulate the new strategy and now serves as Director of Energy Management for UES. "Many of our competitors sub-contract out their field work," Joe says. "This often means that projects aren't properly manned and have loose control of schedules. In addition, the client often gets different people at various stages of construction or service. All this leads to great inconsistency in the deliverable."
In contrast, by self-performing all of its services, Urban Energy can control both schedules and quality. "At the end of the day," Joe says, "it's a better product."
UES employees in company headquarters pause from their daily activities to pose for this shot. Joe LaRovere, interviewed for this article, is fourth from the left in the front row with white shirt and tie.
One of the major elements of consistent quality of service for UES is their commitment to training.
According to Field Install Manager, Chris Flores, such training includes both mandatory and voluntary sessions. Mandatory training can include new employee orientation and classes performed by the UES Safety Director such as CPR, First Aid, Lockout/Tagout training and the like.
"But we learn a great deal more," Chris says, "in less formal sessions. "For instance, on every other Wednesday we hold an open forum discussion where technicians and others can bring up any topic or question and get the official company line or process from the management team."
"In addition," Chris continues, "on the first Saturday of each month, management picks the topic and provides specific training such as proper wiring of KMC controllers. While they are not mandatory, most of the sessions are heavily attended."
To facilitate their formal and informal training, Urban Energy completed construction of its own new training center in September of 2011. With its dual screens, flexible arrangements of tables and chairs, and the latest in connectivity, the center is also being utilized for training by outside organizations.
"Of course," says Joe LaRovere, "we bring in KMC and many of our electrical equipment suppliers to conduct factory training. But we also make the facility available to others including associations like BOMA (Building Owners and Managers Association) and the ASCA (American Subcontractors Association of Arizona). And, many times when training at their facility is not feasible, we'll bring in our customers for end user training."
Dan Wiley, of the KMC training team, instructs UES employees on BACnet-related matters in Urban's new training facility.
Much of the electrical, energy management, and solar work being done today by Urban Energy occurs through performance contracting. For a given facility, these self-funded construction projects reinvest energy savings into retrofit work on the facility. Sometimes, such work can also include monitoring and maintenance responsibilities for the contractor. Arizona law requires a 15-year payback, or less, for such projects.
"As energy consumption projects have moved along and money has tightened," explains Joe, "a re-emergence of performance contracting has become necessary."
A related factor, he notes, is that, for any major corporation today, including school corporations, having an Energy Manager on staff is an imperative.
"Public corporations in particular," he notes, "have had their operating and maintenance budgets slashed. Staffs are buried and can't even monitor equipment properly. So, they look to cutting utility costs either through conventional means or through performance contracting. If they take a conventional approach to utility cost savings, they have to consider photovoltaic or EMS strategies and we're there. And, if they look to performance contracting, we're there."
UES take specific steps to prepare for a performance contracting project. General steps include a prequalification, energy audit, and proposal. The prequalification looks at basic energy usage data of the facility to see if it qualifies. Just as important to UES however, they gauge whether the customer "has an appetite for it." From an audit perspective, the entire facility is examined from glazing to mechanical and lighting systems.
Here again, however, the client-driven approach of Urban Energy sets them apart from others in the performance contracting arena.
"Performance contracting has had a bad name for many years," says UES Technical Services Manager, Dave Fortuna, who has over 30 years of experience in the field. "This reputation problem was due to two factors: contractors cutting corners or taking many shortcuts and all the misinformation that contractors fed to owners."
Such misinformation, according to Dave, includes practices such as artificially inflating a facility's electrical costs to justify the opportunity for work and to demonstrate the resultant, though fraudulent, savings.
"But that's the old-school way to do performance contracting," Joe says.
"The key to our success," he continues, "is collaborating with the customer. Believe it or not, this is not the standard practice. Our competitors tend to tell the customer what they need. They lose site of the fact that the customer must operate that site for years to come. Our approach, on the other hand, is to involve the customer and help them to achieve their goals. In this way, we get not only customer satisfaction but repeat business."
The UES solar installation highlights this aerial view of Pinnacle High School (Phoenix). Other less obvious EMS strategies by Urban Energy have helped the school achieve significant energy savings.
The notion of repeat business is central to the goals of Urban Energy.
One of the "mantras" that Joe is known for within the organization is, "We want customers to do business with us because they want to, not because they have to."
"This is how we are growing the business," Joe says, "not by seeking a new customer here or a new customer there but by servicing well our existing customers and growing what we do for each. And I tell my people all the time that we compete for the customer's business on every project. We never take customers for granted."
This organic approach to growing the business has a parallel in UES human resources as well. The company invests considerably in grooming employees for growth or greater responsibilities. And that's quite an undertaking when they are approaching nearly 200 technicians in the field.
"Growing a business requires this type of investment," Joe says. "We'd rather train employees than steal them from the competition."
Chris Flores has personally benefitted from this company culture. He began his career at Urban Electric as an apprentice electrician. Company cross training in energy management, as well as his own ambition, led to his promotion to Field Install Manager.
"Careers are made here," Chris added.
Urban Energy field personnel make a final inspection of a new control panel installation.
Prepared for the Future
In addition to its client-driven philosophy, Urban Energy keeps its fingers on the pulse of marketplace changes to maintain relevance and ensure continued growth.
For instance, Joe LaRovere talks about the new realities of negotiated selling. "Owners today are much more educated," he says. "They know they want open systems versus a proprietary approach. They know they want web access to their systems. Thus, they can be more demanding on issues they did not even know about in previous years."
"By the same token," he continues, "we have to help them understand regulatory mandates. In our market anyway, they can't meet code today without an energy management solution. And, as California Title 24 moves east, we are demonstrating to them even more compelling reasons to pursue solar projects, demand control ventilation, and related energy management strategies."
"We've already demonstrated," adds Dave Fortuna, "a 49% utilities savings at one school through demand control ventilation. This has created EMS opportunities for us in 55 sites in this school district alone."
"And speaking of schools . . .," adds Chris Flores, ". . . Thirteen years ago the School Facility Board led an initiative to install packaged roof-top units throughout all of the local school districts. Those units are now approaching end of life. And we know that new RTU installations will include greater control opportunities than those of the previous generation."
"Opportunities are certainly plentiful," Joe LaRovere concludes. "From a general perspective, our buildings here in Arizona are just beginning to get old enough to warrant retrofit projects. We see this retrofit work driving much of our business for the next 10 years or so as opposed to new construction projects that have been the mainstay of Arizona construction for some time."
Interactions with the Urban Energy Solutions team make it clear that good, old-fashioned hard work is a cornerstone of the company culture. Combine that with their client-driven motivations, employee development investments, and market awareness and you create a formula for both short-term growth and long-term success.