Lloyd Kass, Senior Vice President, Utility Strategy, Lime Energy
Lime Energy is an energy efficiency services company serving two primary populations, utility clients such as Duke Energy, PSE&G, and National Grid, and the utilities’ customers. Lime generates revenue by producing energy efficiency savings and improving customer satisfaction for utilities, and by completing efficiency projects for customers.
Lime helps utilities and their customers to benefit from the energy and financial savings associated with efficiency retrofits. Their focused customer constituency is small and medium commercial buildings under 50,000 square feet. Small and medium buildings make up between 90% and 95% of all commercial buildings in the United States and represent about 50% of commercial building energy use. Over the past eight years, Lime has completed around 150,000 commercial projects serving 13 utilities across 10 different states.
Lime also partners with its utility clients to develop, market, and service energy efficiency programs. They serve as a project aggregator by completing efficiency projects, estimating the energy savings via modeling, and selling the energy savings back to the utility. Lime is unique in that they do not charge retainers, engagement fees, or startup fees, which increase the risks of these initiatives to a utility and its customers. They simply receive the estimated 10-year value of the savings of a project upon completion, which is adjusted throughout the following ten years based on actual performance.
Lime Energy and Willdan Group, Inc merged in November. Willdan’s primary focus has historically been on larger commercial properties; the merger will allow the combined company to service multiple market segments for their utility clients. Going forward, Lime Energy will be known as “Lime, a Willdan Company”.
What do you actually do all day?
I have three primary responsibilities: market development, business development, and relationship development.
Market Development: The energy efficiency market is highly policy driven, so an important part of my job is to be an active and engaged stakeholder within industry associations and to work with state regulators and utilities to create the market structure needed for us to stay in or join new markets. Even in states where energy efficiency is a priority, policy changes can have unintended consequences that make conditions unfavorable. It’s important that we keep regulators and lawmakers informed on the impacts that proposed legislation can have on the energy efficiency market.
Business Development: I’m always working on traditional development and management of relationships with new clients and customers.
Relationship Development: I also spend a lot of time trying to grow our revenue base with our existing customers. We’re always challenging ourselves to be more efficient with a client’s budget. For example, one way we do that is through our extremely efficient and effective sales team which is unique in this space. They’re constantly using data and firmographic segmentation to increase our chances of connecting with customers who are likely to work with us. By lowering the acquisition cost of each customer through efficient sales, we can help a utility spend less money on a per-project basis so we can increase the number of total projects we do which increases both the utility’s kWh savings and our revenues.
That expertise is important because sales in this space can be very difficult. The National Federation of Independent Businesses does a survey every two years on small businesses’ pain points and utility bills usually rank around #20 on the list, so projects like these aren’t usually top of mind. There are even some utility programs with 100% subsidies which means completing a project would be totally free to the customer, and there are still many customers that say no.
What are some of the key skills for success in this role?
One of the most important skills that I bring to Lime is the ability to truly understand how policy impacts our business. It’s very important that we’re actively participating in policy discussions to ensure that lawmakers understand the full implications of legislation under consideration. I also focus a lot on relationship building and have developed deep contacts in the industry. Operational experience is also very helpful.
What is your favorite part of your job?
I enjoy putting all the pieces together to implement our broad growth strategy. Our company’s leadership has great strategic vision and it’s fun to implement that vision. I love that it’s interdisciplinary and that I get to do a little bit of everything. It’s also really nice to see the fruits of all our labor, particularly in a mission driven business that has a double bottom line where our growth and profitability aspirations are supporting energy and cost savings for our customers.
What is the hardest part of your job?
My role involves working with both the government and the regulated parts of the utility industry, which are two very conservative and bureaucratic worlds. Things tend to move very slowly, which can be frustrating. Getting into a new market and working with people to get the policy right and helping people to understand the value of energy efficiency and to help a utility set up a plan for going to market takes a long time. It’s painstaking, risky, and sometimes ultimately doesn’t pan out.
What is your proudest professional achievement?
I was at the New York City Housing Authority (NYCHA) for ten years. In that time, we had built such a robust energy management program that we had lowered the agency’s $500-million-per-year utility bill by nearly $30M a year. I also worked for Willdan several years ago. I started out as a one-person office without much of a budget and was able to grow that into a 55-person team with over $50 million in revenue per year. When I was working for the New York Power Authority, I set up a target energy efficiency savings of 20% by 2020 for all of the state-controlled buildings such as the mental health buildings, prisons, and SUNY campuses and I’m excited to say they’ve already reached that target. I’m pretty proud of those accomplishments.
What are the game changers in your world?
At the federal policy level, legislation implementing a carbon tax or carbon trading scheme that is comprehensive to all emissions would completely change the base of our business. Right now, small business energy efficiency is probably around a billion-dollar business in the US. If we had legislation like that, then it would increase about five to ten times within less than a decade.
At the state level, we currently have the Regional Greenhouse Gas Initiative (RGGI) which is basically a carbon market for utility scale power plants but if there were a carbon market that went all the way to the end user that would be a big game changer.
Some of the new business models that are starting to be tested at scale could make a big impact as well. “Energy Efficiency-as-a-Service” is a model where a service provider performs retrofits and installs sensors in a customer’s facility – at no cost to the customer. The savings is then measured on an ongoing basis, and the customer is billed by the service provider from the utility bill savings generated. This model is already in use for large and municipal customers, but taking it down to the mass market customer would help make a lot more projects happen.
Utility rates and the value placed on energy efficiency varies greatly by jurisdiction. The amount of energy efficiency opportunity in states such as Texas is huge, but the utility rates are so low there that you don’t see many customers who are willing to do these types of projects in such markets. However, energy efficiency is generally undervalued in the marketplace when one accounts for all of the full grid services it provides, and its societal benefits; so regulatory structures that place an appropriate value on efficiency could create market transformation at a grand scale.
What was your path to this role?
I was in public service supporting efficiency for public buildings at the city and state level for fifteen years. I worked for the New York City Housing Authority (NYCHA) for the first ten years doing all kinds of budgeting and financial planning. I was looking for alternative forms of capital financing when I learned about energy performance contracting structures, that enabled us to finance major upgrades (e.g., heating and lighting systems) through a revenue stream created by the future energy savings.
Then I became more interested in the infrastructure side of things. I saw the relationship between energy and infrastructure and worked my way towards being an energy leader at NYCHA. All of my energy experience up to that point had been on the job learning. I started sitting in on the heating technician’s training sessions so I could understand the equipment and the energy management benefit associated with running it correctly.
In 2007 I took Certified Energy Manager (CEM) training and became certified. In 2009, a took a job with Willdan and helped them grow their energy efficiency business – in service to utilities and their commercial customers – where I used my policy and management experience to the beginnings of a great team which is now stronger than ever. From 2013 to 2015, I held a position in NY State government’s utility (the NY Power Authority, or NYPA) where I developed a program to engage state government agencies to elevate their building efficiency efforts. And I joined Lime in 2015, where I grew into the position I have today.
What’s your advice to someone interested in a role like this?
If you’re just starting out, try to find a job with an energy efficiency implementor. They’re always looking for people in sales or in program coordination and there are ways to get promoted from those positions. Many people I’ve hired for those roles are now in VP or more senior roles. You can move very quickly in this industry; we need talent and we advance that talent very rapidly.
Typically, we have two primary sets of skills people bring to us at Lime; people either come from an engineering point of view and are able to translate engineering acumen into business acumen or they come from a sales and entrepreneurial background and are able to help us with our growth strategy by working with a wide variety of stakeholders.
Because it’s such an interdisciplinary business, communication skills are important. You’re always making a sale to internal partners, an external utility, or to a customer. Moving the policy ball down the field is a team sport, so you also have to be able to find a way to work alongside your competitors to work together to get the tide to rise for everyone. Social skills are crucial.
What are your favorite resources?
Resources in this industry are very scattered. I work a lot with industry associations as they’re the best at capturing and interpreting information, which helps me prioritize what I read.
Advanced Energy Economy is an organization of businesses using policy advocacy, analysis, and education to bring about a prosperous economy based on secure, clean, affordable energy.
The Association of Energy Services Professionals is a great organization for people trying to get started in this business. It’s a very social group that does a lot of sharing of best practices. There are both national and local chapters.
I read Utility Dive daily and I like to subscribe to the blogs of people at NRDC such as Miles Farmer and people at EDF because they’re always putting out the most recent energy efficiency reports.
I also read NJ Spotlight to keep up with New Jersey news.
Politico NY has a great daily email with good energy resources.
Who (or what) is your sustainability hero?
I don’t know about a “hero” per se, but there are a lot of folks I admire. And so many have worked in obscurity on energy efficiency for so long. I don’t know of anyone has done more to stimulate trends in large-scale sustainability action than Michael Bloomberg. As mayor of NYC and as a philanthropist since, he has transformed the way metropolitan areas tackle these issues across the country and the world. There are a lot of lifelong energy efficiency warrior legends around – still doing good work — such as Stephen Cowell and Steven Winter. And my boss and President of Lime Energy Adam Procell is a brilliant and committed lifer in efficiency I have the pleasure of working closely with every day.