Along with more competition and -- theoretically, at least -- lower prices, energy deregulation is bringing some uncertainty to the nation's power grid. After all, California experienced controlled interruptions of service this past summer because utilities had stopped building power plants in anticipation of deregulation. That instability is especially bad news for any company that does business on the Internet, since it takes uninterrupted power to keep Web servers humming.
That's where Sure Power Corp. comes in. Sure Power uses high-tech fuel cells to turn hydrogen and oxygen into electricity -- a backup power source that the company claims is both environmentally friendly and available 99.9999% of the time. That availability level translates into a 1% chance of power failure over the course of 20 years, says cofounder and executive vice president Art Mannion. Although fuel cells are similar to batteries in some ways, they never run down as long as enough fuel is present.
Sure Power, based in Danbury, Conn., is betting on a growing need for dependable backup power. Its target market includes data centers, Web hosting companies, medical facilities, research laboratories, high-tech manufacturers, and any other business that can't afford to have its computers or equipment go down for even an instant. Using cells manufactured by a partner, ONSI Corp., Sure Power will install several dozen fuel cells for each of its customers and offer maintenance services for those setups.
The installations aren't small or cheap: each fuel cell is about the size of a sport utility vehicle, and according to Mannion, a typical contract could run into the tens of millions of dollars -- hardly a price point that most small businesses or individual homeowners would fall into. But Mannion insists that for a 10-year span, Sure Power's system can cost two-thirds to one-half of what traditional power backup systems would run.
So far, with seven employees, Sure Power has just one customer -- First National Bank of Omaha, which hired Sure Power in 1998 to provide uninterrupted power for its credit card processing operations. Sure Power's revenues for both 1999 and 2000 hover around $2 million, says Mannion, adding that the company is currently negotiating contracts worth up to $50 million each.
In landing the First National contract, says Mannion, it helped that some of the bank's executives were familiar with fuel cells. Unfortunately for Sure Power, however, not every customer is going to be so knowledgeable. "Our biggest job is educating the public," he says.