Two of the biggest names in Silicon Valley are playing venture capitalist for a new Alexandria firm that hopes to use high-technology equipment to control electricity demand and defer construction of costly new plants.
Both Mike Markkula, vice chairman and cofounder of Apple Computer Inc., and Robert Noyce, a cofounder and vice chairman of Intel Corp., came to Washington recently to voice support for Alexandria-based UHR Corp.
UHR, founded in 1979, is taking conventional heat-pump technology and adding a small computer and energy-storage equipment to allow homeowners to save money by using stored energy instead of electricity during "peak" times of the day, when electricity demand on utilities is greatest. Such times commonly occur on hot summer days or cold winter days when everyone runs air conditioners or electric heaters at the same time.
"It's something we need. Why isn't somebody doing it?" asked Markkula. "The bottom line is the average homeowner could have more power for his money . . . be more comfortable for less cost."
Recently, officials from industry groups and 25 utilities gathered to discuss the development of the new technology. Participants included Virginia Power, Potomac Electric Power Co., Southern California Edison Co., the Edison Electric Institute, the National Association of Regulatory Utility Commissioners (NARUC) and the Department of Energy.
UHR is backed by a group of more than 20 investors, including venture-capital firms such as Atlantic Venture Partners of Alexandria, Greater Washington Investors Inc. and Baltimore-based Alex. Brown & Sons, as well as Noyce, Markkula and other individuals.
One Department of Energy official said the device "would be of great use to utilities.
"The reason why is that everybody benefits if the utility can shift from peak to nonpeak times," he said. "The problem is they have never found a way to do it, and here is somebody who says, 'I have a system that can really shift big loads around.' "
UHR is not the only company developing this technology, the official said. Well-known companies such as Carrier Corp., a subsidiary of United Technologies Corp., also have expressed interest.
Because electric utilities must have enough generating capacity to meet peak demands from customers, the new technology is being watched closely by the industry. By moving energy usage from peak to slack periods of the day, utilities could delay the extraordinary costs of building new plants, experts say.
Said UHR Corp. President C. W. Uhr Jr., "Most electric companies . . . are currently working on marketing programs that will increase the sales of off-peak energy and will defer the need to build new generating plants."
That's where UHR Corp. fits in.
While conventional electrically powered heat pumps -- which eject heat from the house during summer and reverse the process during winter -- are relatively efficient, they still add to the total demand for electricity during the coldest or hottest times of the day, Uhr said.
UHR starts with the heat pump and then adds computer controls to shut off electricity to the system at times of heaviest use. The system still uses a trickle of electricity but relies mainly on stored energy gathered at other times of the day when electricity demand is lower. The system also heats hot water.
But its biggest advantage is that a homeowner notices no difference between stored energy and electrically powered energy and, thus, does not have to adjust his life style to save money, Uhr said. "The homeowner does not want to change his life style and does not have to," he emphasized.
Some proposals for shifting electricity usage away from peak periods rely on switching electrical equipment on and off, potentially causing objectionable variations in room and hot-water temperatures,, a NARUC official said. "The idea is a customer ought to be able to turn on an oven, dishwasher and set his thermostat where he wants it set. . . . The customer doesn't want to wash his clothes at 3 a.m. to save 2 cents per kilowatt-hour," he said.
Karen Kekst, a Virginia homeowner who has participated in a pilot program sponsored by Virginia Power, said the device has saved her money. "It's fun to go out and say, 'How much was your electric bill?' Ours is always lower than everybody else's."
UHR currently is capitalized at $2.8 million, and has identified 20 markets that could use the product, which will not go into commercial production for a few years. High on the list is the Washington metropolitan area.
Nearly 350,000 single-family houses have been built over the last 15 years in the Washington area, said Uhr. New homes also are expected to be built at an average rate of 17,500 a year over the next 10 years in the metropolitan area, he said.
The devices would cost between $2,500 and $5,000 more than conventional heating and cooling systems, he said. Homeowners could save $500, or 35 to 45 percent, on their energy bills in the first year, he estimated.
Virginia Power has been supportive of the development of the device since UHR was formed in 1979. The utility has monitored 12 pilot installations, Uhr said.
Edmond P. Wickham Jr., manager of economic development and energy services for Virginia Power, said traditional heat pumps already have helped electric utilities by encouraging customers to heat with electricity instead of other energy sources.
Nonetheless, he said, "We have to take a tough look at different technologies. This is one more option . . . and has more potential than some others."
Pepco, which has seen rapid growth in peak electricity demand, also is interested in the technology but concerned that it won't be available soon enough and for the right price.
UHR "is looking for financial support and is two years from production," said Jack Stevenson, manager of the sales department at Pepco. "That is not going to help us in the short run." However, Pepco still is interested enough to be willing to provide UHR with pilot installations and support services, he said.