Ian Perterer, AESP 1:35

Hey everyone and welcome back to the Energy Beat Podcast. I'm Ian Perterer with AESP, and today's episode is a good one. Load growth, rising rates, customer pressure, utilities are feeling all of it right now. And today's guest has been deep in this work long before it became the headline topic at every industry event. I'm joined today by the fantastic Kate Heidinger, CEO of Allumia, a company who is really redefining energy efficiency as a service for small businesses, utilities, and program implementers. And listen, Kate's path into the energy world includes a West Wing binge, a leap into solar thermal with zero engineering background, and one really legendary moment involving water pouring out of a dorm ceiling. We'll talk about all that, plus the real challenges utilities face with low growth, why small and medium businesses still haven't tapped their energy efficiency potential, how as a service models help everyone win, why AI can actually improve things, and what things it really definitely probably shouldn't touch. Plus, a sneak peek at Allumia's digital twin work that made my marketer heart very, very, very happy. It's smart, practical, and honestly, it's just a really fun conversation with someone who gets it at the strategy and boots on the ground level. So with that, let's get started. Okay, Kate, welcome to the podcast. I'm so happy to have you on with us today. How are you doing?

Kate Heidinger, Allumia 3:00

I'm doing great, Ian. So glad to be here. Thank you for having me on.

Ian Perterer, AESP 3:05

So, Kate, you are CEO of Allumia, and I think it's interesting. You know, Allumia's been around for a while, but I feel I like to say that you guys have been doing the good hard work, but you've been doing it a little quietly. So I'm really happy to get you all in here today and you know, talk about some of the stuff that the industry is dealing with in the utility space in regards to efficiency and things like that, but also talk about, you know, your company, the story there and what you all are contributing to the industry. But before I do that, I like to ask our guests to tell us a little something about you, like that thing that we're not gonna pick up at a trade show or at a booth about yourself. Tell us something, a little trivia or nugget of knowledge.

Kate Heidinger, Allumia 3:54

Oh boy.

Kate’s Unlikely Path Into Energy

Kate Heidinger, Allumia 3:55

Well, I'll say just a little bit of background before we get into energy and and sort of broader what's been going on with Allumia. I'm from the Midwest originally, grew up in Illinois, went to school in Minnesota, watched too much West Wing while I was in college, and moved to DC immediately afterward. I had studied political science and economics. And so I was extremely idealistic about what that experience was going to be like coming to DC. I was working for a think tank, I was writing policy papers. It was very depressing because no one ever reads them or does anything with them unless you know the right person in the right place at the right time. And the the way that I got into the energy industry is a couple of friends from college were had decided they were going to start a solar financing company. I don't know anything about energy at this point in my life, like nothing, zero. They asked me to come to their first like meeting about starting a company. And they said, we want to finance rooftop solar for like multifamily buildings and small businesses and things like that. And my response was, do we need insurance? Like, do you have a bank account set up? Like what's going on? And they said, This is perfect. Kate, you can be our project manager. Those are all very practical questions. So I got voluntold that that would be my role. And so my first job in this space was as a project manager, building not just solar PV, but specifically commercial solar thermal, which is again not something I know anything about. It was a complete crash course in mechanical engineering. And and it gave me such an eye-opening experience for what it is like to build things and like be in buildings and work with contractors. And when I think about the work that I do now, one of the things that I really try to keep in mind is a lot of empathy for and affinity with the contractors and the trade allies who are actually doing stuff all the time. Because every time I think about a project or a project going wrong, I am taken immediately back to maybe the single worst thing that I've ever experienced in construction, which is a university multifamily, a university dorm, I should say. We were putting a solar thermal project on their building. And I walk in the front door of this building after the client has called me, and water of this 10-story building, water is dripping through the ceiling and into the light fixtures and flooding the entire lobby of this dorm. And I was just like, what on earth is happening? I'm gonna lose my job. This university is going to sue us. Like, oh no, something has gone terribly, terribly wrong. So every time I'm like interacting with a contractor or doing something, I'm thinking back to that moment of this is like me in like the pit of my stomach of like complete disaster. And I think that is that's something that's been very formative for me in my like life and my career, and just like at the end of the day, like we have to go and get things done. And like sometimes these like terrible things happen, but it's all about just like getting up and doing the next thing the next day, and like how do you fix the problem? And so that's that's about me specifically, and you know, getting thrown into the very deep end of the swimming pool with absolutely no knowledge about this industry whatsoever. And now I'm a CEO, so I guess something like worked out along the way.

Ian Perterer, AESP 7:41

Oh, I caught it. Now I'm curious, and I do have to ask because you know, if you're looking back, if you could tell yourself starting out watching water flood out of light sockets, well, what what would adult you tell younger adult you now that you know everything you know?

Kate Heidinger, Allumia 7:56

Oh boy. In that particular instance, waterproof everything so important. In like a very general sense, you know, measure twice, cut once, like make sure you're just like double checking everything before you do something. And on the fun side, you know, there are other fun things. I don't just work all the time. Like I have a bunch of fat cats running around my house. I really love to cook, but that sort of getting into our conversation

Lessons From A Construction Disaster

Kate Heidinger, Allumia 8:24

today was just thinking about in the utility space and in the finance world in particular, not everyone gets to be in this position by having started out like boots on the ground, like wiring things in the basement of multifamily buildings for solar controllers. And so it's just it's an interesting journey to get here.

Ian Perterer, AESP 8:48

Absolutely. But also very helpful, I think personally. Totally, totally, yeah. To have that boots on the ground knowledge is really something that I think makes us makes a boss a better boss, quite frankly. It helps you kind of have that high-level perspective, but you also know how the stuff really gets done. So let's talk a little bit before we get into Allumia itself. Let's talk about utilities today. I want to start here because it really is an interesting time. And I like to say it's like there's so much potential, there's so much possibility out there, there's so many solutions and so many new technologies coming to the market. It's kind of really is a game of whack-a-mole. But when it comes to programs, quite frankly, and how programs get done, programs get funded, designed, not a lot has really changed. I mean, in terms of how it gets done. So, you know, when we get into talking about your company in Lumio, you know, programs and and and helping these programs run faster, better, more successfully, more profitably, really is your sweet spot. What are the challenges that utilities are really facing today in terms of these uh these programs and and how they get up and running and and stay running?

Kate Heidinger, Allumia 10:08

Such a good question. I think, you know, one challenge is inherently utilities are very risk-averse, slow-moving organizations for the most part. At least that's certainly the stereotype for people who are outside of the utility world. They see a utility, and for those of us who do work with a lot of utilities, you see that also of things, there's a bureaucracy there. And so when it comes to evolving and changing programs, that's a really slow process. But I think very high level, the challenge right now that everybody seems to be talking about is load growth and how do utilities approach the problem of load growth. And with that comes a challenge to the customers,

Utility Challenges And Load Growth

Kate Heidinger, Allumia 11:01

which is I'll start with talking about the customer challenge. Customers are seeing rates increase, like energy affordability is a real problem. Rates are going up. We do a lot of work specifically with commercial customers in that small to medium size SMB market. And there is a great chart I saw earlier this week from EIA showing that, you know, the short-term forecast for rates is residential rates are going to go up by about a percent over the next year. Industrials going up about about two percent, a little over that. And commercial rates are expected to go up by over two and a half percent. And so that mid-sized business customers it the challenge of the utilities of how do you keep everyone with electricity, basically, that load growth problem is a problem for the utilities, but it's also a problem for the customers because their rates are going up, right? And so, like that to me feels like the one of the it's the core issue that's going on right now. It's what everybody's talking about, it's what everybody's, you know, you go to utility conferences and another spaces, and that's that's the conversation that folks are having.

Ian Perterer, AESP 12:18

We just did a survey actually of utilities and and their implementers. That was one of the things we asked them was what is the what are the top three challenges you're seeing in relation to rising demand? And and sure enough, number one, tied for first and second was customer satisfaction and engagement, no shocker there. And then the other one was generation shortages in terms of not being able to build or buy fast enough. And so you're 100% right. That's exactly what we're seeing right now. And it seems every conference, you're right. It pops up for sure.

Kate Heidinger, Allumia 12:49

Right. And it's it's compounded by a lot of the changes that are happening on the federal level around renewables and how quickly or how effectively are those going to be able to help offset this problem. So that that's the big problem as far as what I'm seeing when I look at the utility landscape is growing load, how do you cope with that? And you could build more power plants, you can build more solar, maybe if you can make it make cost-effective sense. But the real need, I think, and the answer in the very short term to solving this problem is the programs. How do you go back to your DSM programs? How do you put more into energy efficiency and demand flexibility and demand response programs and make those more effective?

Ian Perterer, AESP 13:45

And so And do you feel yeah, do you feel like right now that there really is still a lot left on the table when it comes to these DSM programs that people aren't tapping?

Kate Heidinger, Allumia 13:55

It's a really good question. I think that generally speaking, folks think that LED lighting, the lowest hanging fruit on the efficiency side, is mostly gone. And I think there are a lot of places where that's the case. I was at a conference this summer and someone was doing a presentation on the LED lighting retrofit, sort of what the market penetration has been in Chicago, in the Chicago area for ComEd. And it's something like 80, 80% of the commercial buildings are done there. So, like, yeah, you're reaching the limits of that. That's not necessarily the case everywhere in the country. We do a lot of work in the Midwest and the Southeast, and there are still a lot of businesses who have not actually done even the bare minimum of energy retrofits. And so there's still some of that out there. But but yeah, the the easiest stuff to do is increasingly not available as a resource. And so you have to move into what's that deeper retrofit? What's the next layer of efficiency that people

DSM Limits And Deeper Retrofits

Kate Heidinger, Allumia 15:04

are less familiar with or is a little a little harder to implement? Things like HVAC controls, advanced rooftop controls, VFDs is maybe the next layer of things. So I think there is still tons of efficiency work that is out there to do, but it's a lot harder to accomplish and it's often more expensive.

Ian Perterer, AESP 15:28

And are there possible savings in the overhead costs of these DSM programs? Are are there are are there any way to be more efficient or or squeeze more out of the overhead or bring those costs down as that relates to, you know, whether it's the financing, the implementation, or the program management. Is there stuff to be doing there or or is mainly where we're still looking going to be at those those higher investment, let's say, upgrades, whether that be HVAC, weatherization, et cetera?

Kate Heidinger, Allumia 15:59

I personally think that there is room to take the administration of these programs and make them more efficient and use some different tools. And in the same way that utilities are often slow to move forward with progress and try out new tools and new things, I think that filters down to a lot of the folks that are also in that space of serving utilities. And you know, you have momentum around using a certain set of tools and a certain set of processes. And when you're used to using those, it's really hard to, you know, as a company that does consulting work and as an implementer for some programs, it's really hard to sort of think about what's the investment that I need to make to make this process faster and easier. But it is definitely possible. You know, there's a lot of interesting work that's going on in the private sector around using AI and not necessarily like LLMs that, you know, you don't need to query the whole internet to be able to do things like machine learning and workflow automation. But I think that there's a lot of tools that are out there and people are increasingly latching onto and figuring out how do we incorporate this to make those processes more efficient and reduce those admin costs associated with program management.

Ian Perterer, AESP 17:32

Well, and this actually leads me into the what I something I find really interesting. You know, being a marketer by background, uh, you know, at every time anything in marketing this is is XYZ as a service, you know, and data as a service, marketing as a service, email as a service, everything. But you know, you I one thing that I love that a new Allumia does is your foundation, the way you're really looking at it is energy efficiency as a service. And so I would love to dig into I think that specifically, but also before we do, talk a little bit about your company. You're not new, you know, you've been doing the deep work in

Cutting Admin Costs With Better Tools

Ian Perterer, AESP 18:14

utilities for years. So tell me maybe a little bit of the nuggets of where it got started, where you're taking your company, and then also, you know, what is the value and the unique perspective that you're bringing to utilities to help them do their best work?

Kate Heidinger, Allumia 18:31

So Allumia was founded in 2014. I'm not the founder, our founder and former CEO, Aaron, we're headquartered in Seattle. He's from Seattle, he grew up there. He got the business started basically by, I think, riding his bicycle to local grocery stores and businesses and saying, Hey, what if I funded LED retrofits in your businesses?

Ian Perterer, AESP 18:54

That's also a very Seattle thing to do.

Kate Heidinger, Allumia 18:56

It's so Seattle, it's so Seattle of him on his like bicycle, maybe like with a dog in toe or something, like going around to visit. It's very Seattle. But but that's really how the business got started. And you know, the as a service funding structure for energy efficiency, Lumia didn't come up with that. It's been around for a little while. There are a lot of other folks in the space. Redaptiv's probably the biggest and best known of those folks, but all of the folks who offer as a service, energy efficiency as a service funding for customers had sort of the same concept in mind, which is at that time, you know, 10, 15 years ago, there were lots of ESCOs doing performance contracts and financing for big universities, for hospitals, for that mush market. And so the concept of how do we take that idea of providing customers with a turnkey service that covers installation, that covers financing, that helps these customers who don't necessarily know what's going on or what's available to them in the energy efficiency world and make it more accessible to a broader range of customer types and project sizes. And so, you know, philosophically for Allumia, it's always been really important for us to be able to provide services for that little local grocery store that Aaron was riding his bike to on a regular basis and doing those $30,000, $40,000, $50,000 projects that need financing. It's a really hard type of project to finance and underwrite, right? And so everything that we've done sort of from the very beginning has been figuring out how do we make this set of tools, and in particular the funding side, available to as broad a spectrum of customers as we can on the commercial side. And so the way that we've evolved over time was from originally just going out and talking to the customers directly ourselves to working with utilities and utility programs to make this, I would call it a bolt on, a service that complements existing

Allumia’s Origins And Mission

Kate Heidinger, Allumia 21:11

incentives and rebate programs to help customers get over that final hurdle or set of hurdles that's really stopping them from being able to complete projects. Often that's budget, but not always. There's a lot of other things at play here. You know, transparency and data, like how do I know? That the thing that you're going to put into my building is going to save me the money that I think it's supposed to. And how do I know it's going to be well taken care of? And so the as a service model really does wrap in the funding component, managing the contractors, handling the ongoing service and maintenance of those. And then for us, it's always been really important to meter the equipment itself that we're funding. So we know exactly what it's doing and how much energy it's saving. So for us, customers pay out of actual energy savings that they see on a monthly basis and from an alignment with what the utilities really need. Not only are projects happening, they're getting done, they're being funded in a way that might not otherwise have been possible for those customers. But the savings themselves are locked in. They're being constantly monitored and ensured that the savings that you're expecting to get out of these projects, you're actually going to see in the long term. And so that's another really important component for us and how we do business and sort of how we've we've evolved over time.

Ian Perterer, AESP 22:39

That is a really interesting concept. So I think if I'm if I'm understanding correctly, let's say I own a, let's continue with the grocery store analogy. I own a grocery store in say Roanoke, Virginia, and I have to do my HVAC upgrades or something like that. It's just that time, rather than doing the capital outlays, or in addition to any incentives that may be available, I can basically take the savings and you will, if I'm understanding correctly, use these savings to pay for what I would have had to lay out of my own pocket initially, right?

Kate Heidinger, Allumia 23:18

Yeah, exactly. So let's say over a 10-year period, you're expecting to save, you know, $20,000 a year every year over that 10-year period by implementing and putting in this new HVAC unit. The way that we would be structuring our agreement with you as a customer is taking that $20,000 of savings on your utility bills, utility budget that you would have already had to be thinking about spending and maybe even more of that over time. And then deploying that instead of to pay utility bills, we're taking it and we're using it to upgrade your facility. So, you know, that utility savings gets put to good use in terms of helping the customer secure and upgrade their facility.

Ian Perterer, AESP 24:06

And it sounds like in addition to that, you also are all taking, taking the let's just say the burden of maintenance out of the mind of the customer as well. How do you all manage that? Is that a process where, you know, you deploy a contractor, let's say they get an email or text message notifications like, oh, by the way, we need to come to your facility next week. You know, the filter needs changing or there's a tune-up that needs to happen, or we want to check the meter. Is it that kind of thing? Very hands-off.

Kate Heidinger, Allumia 24:32

Yeah, it it totally depends on what type of measure we're talking about. You know, the maintenance for lights are very different than the mains for HBAC. But in again, your your grocery store that you own in Roanoke, what we'll be doing is getting a preventative maintenance plan in place with the HBAC contractor who installed that unit. We'd be making sure

Energy Efficiency As A Service Explained

Kate Heidinger, Allumia 24:54

that they're getting their quarterly or their biannual checks in. And if there's a problem that needs to get resolved, it gets fixed during those maintenance checks. And so we're making sure that if there's a problem, the customer calls us, we send someone out to take care of it. But we're also doing that proactive work of ensuring that once that piece of equipment's in there, it's actually operating and saving energy the way it's supposed to.

Ian Perterer, AESP 25:18

It sounds to me like if I if I'm that customer, it's to me kind of like a no-brainer because it's reduction in energy spends. If that's something you care about and being efficient is something you care about, you can feel good about that. But it's also a lower overhead in terms of, you know, no potentially low or no loans or investments having to be taken out. But also sounds like better customer outcomes because that money I was saving, I could have invested in a new cooling unit or something like that for something I've got in the store.

Kate Heidinger, Allumia 25:46

Yeah, it's it's really about thinking about for particularly small business owners, what if they have again, they have $100,000 to spend, and do they want to spend it on a new HVAC unit or do they want to spend it on something that improves their customer experience or drives like real revenues? And typically it's going to be choice number two. Let's spend the money on something that directly impacts customer sales and in the growth of my business. And in that case, let's let someone else put their money to work um helping me save energy.

Ian Perterer, AESP 26:20

Right. And then it sounds like the flip side from the utilities perspective, a lot of what you're doing is really it is sort of process automation for them, all these things that you know, before it's like they're not having to deploy the contractors, you're monitoring the equipment, you're making the decisions of when these things need to go out. And also, probably I would imagine that like another outcome of this is a longer longevity for your assets, right? Because they're getting totally they're getting the care they need when they need it, right?

Kate Heidinger, Allumia 26:49

Right, exactly. Yeah, and we take advantage of utility incentives and rebates when those are available, right? We use it to buy down the cost of the project and to make that funded option more affordable for that customer. From the utilities perspective, the sense of security around okay, we've put money out there, it's gone towards incentivizing this new equipment that's on this customer site. And there's a certain amount of energy savings and payback that they there's an impact that they expect that project to have on their overall consumption, right? And so having a partner who's going out, who's metering equipment at a circuit level, who's making sure it's well taken care of, the money that the utility is spending is going to result in really true savings on an ongoing basis for a longer period of time. And so that's very handy.

Ian Perterer, AESP 27:47

And so I have to ask, because I feel like it comes up in every podcast I do lately, you know, is AI playing a part in any of this that you all are doing? Are you using AI, you know, as one of these things? And as someone I just personally am also always very interested in AI and what people are or aren't doing with it. And if you are, like what role is that playing in your execution of these programs and the assets and the management and all that stuff?

Kate Heidinger, Allumia 28:16

Yeah, we do use AI um in in lots of different ways in terms of how we are operating the business and our but the key thing is the software platform that we've built for ourselves. So taking a couple of steps back to the sort of the history of as a service, and I was explaining a little bit before, the idea of ESCOs doing these enormous projects, and how do we make that more accessible for small people and smaller businesses and smaller projects? So

Maintenance, Metering, And Measured Savings

Kate Heidinger, Allumia 28:44

the amount of paperwork that you have to do to finance a project is pretty much the same, whether it's a $50,000 project or you know, a million dollar or a $5 million project, right? And so one of the ways it was really important for us to be able to effectively offer funding for those small projects was by automating as much overhead and admin out of the process as possible. So we built our own in-house platform that we use for workflow automations, document control, project management, our billing system for customers where we're capturing meter data and using that to create monthly bills that are reflective of those customers' actual energy savings. That's all automated using what I'll call traditional AI tools, things like machine learning, automated workflows, workflow automation. And so that is the core of what we're doing in terms of the platform and how we're able to essentially take what we're doing on the as-a-service funding side and make that a really plug-and-play option, essentially, to tack onto and support existing programs because the tools are all there. It's not a bunch of people behind the scenes with spreadsheets doing things. It's it's a platform that automates a lot of that work. And so that's how we're using AI. And I think that there's, you know, a lot of interest in AI in the energy space around how do we look at our data, how do we optimize things, practically speaking, but also from the load growth problem is in part because of data centers driven by AI. And so it's it's a really interesting cycle of what's going on. But I'm I'm sort of of the opinion of a like a walk, like a crawl, walk, run sort of process. And so we've really focused on some of those more core bits of AI that are really easy to incorporate into that utility program flow without necessarily moving fully into the I don't know what the chat GPT version of like program management might look like. But but like there's a lot of steps that we can take that are maybe a little bit less intense.

Ian Perterer, AESP 31:14

So for someone, you know, utility program manager sitting out there at Acme Utility, like tell me a more I'd like to know maybe more about what that crawl walk run really looks like. Like, what are things that you know fall in each of those categories? And I think that also is a great question I have because I think it can seem rather daunting. AI, generally speaking, it and you know, we even see this internally in our own organization where it's like AI can do so many things, it's kind of hard to even know where to start and know what you're ready to start with. So, what does your crawl walk-run model look like?

Kate Heidinger, Allumia 31:54

Yeah, so I would say the crawl part, a great example of this is for us when we're creating proposals or contracts, just automatically pulling data that we already have around those customers and inputting them into documents. That sounds super simple. And a lot of folks are already doing that for like proposal generation and things like that. But that's kind of like the crawl phase. Like, how do you take the data that you have and you use it to make it a lot faster? What used to be an hour to make a proposal is now five minutes, right? And that's because you're you're sort of pre-setting a set of calculations, you're pre-setting algorithms, you're using data that you're collecting for everybody, and you're putting that to good use

Utility Value: Longevity And Accountability

Kate Heidinger, Allumia 32:48

in a way that's an that's an easy, easily replicable format, right? So that's sort of the the crawl phase. For us, I would say the walk phase right now. We have a couple of programs where we're doing not financing, but actual program implementation and management for some utilities. And what we've done there is build out a set of workflow automations. So when a contractor or a trade ally submits a document that's required as part of that program, that automatically kicks off a series of events and milestones that are getting automatically completed within the platform that then lead to the customer being able to see their final quote and sign off on that automatically. And then that kicks off a series of other steps. And so that, in my opinion, is more of the walk is how do you take what used to be a bunch of email exchanges and attaching PDFs to things and sending them around and make it so a contractor does one thing one time and sets into motion things, the the next few steps of that process. And so that process automation and workflow automation, I think is is where we are. That's where we are personally on the sort of Allumia side in terms of our progression there. Now, when it comes to running, that I think is there's some very interesting things that we're getting ready to start trying out with some of the finance programs. And this to the marketing side of what I know you're very interested in is something that we're looking at is that that running, in my opinion, looks like we're gonna be launching a new program in collaboration with a small, a smaller

Practical AI And Platform Automation

Kate Heidinger, Allumia 34:34

utility to do funding for their commercial projects. And one of the things that we're gonna be doing as part of the outreach for customers is essentially building out a digital twin of all of the buildings in that utility's jurisdiction, finding out what's been going on there, who owns them, all publicly available data that's out there already, that we're just compiling into one place, things like permitting documentation. What do we know has been done in those buildings? And using that as our starting point for outreach to those customers to say, you know, hey, you at such and such management company, we know that you're managing these 20 buildings in this particular city. And of the 20, like, here's an initial assessment of what the opportunity is to implement different kinds of energy efficiency measures and reduce those utility costs at your site. And so that's getting into the run world of how do you take the data that's out there, really structure, you know, a large language model to analyze that and help us be better at our jobs for communicating with customers and helping them understand what their opportunities are.

Ian Perterer, AESP 35:45

And so I'm real, I'm really excited about that. I I can't wait to see how that that specifically turns out, because relevance is such a huge, I would not a thorn, but it's a challenge, definitely, I think for markers and marketers in that utility space is because I as I always say, it's like if the if you can make the decision a duh moment, then it's so much easier to progress. But you know, it those those days of just sending out a flyer, like, hey, we have our brochure in the mail, hey, we have this program or so over. Like, you know, that's that's cooked.

Kate Heidinger, Allumia 36:21

So you know it's totally cooked. And like emails don't work very well. I mean, no one answers the phone anymore. So like being able to give some someone something that's truly customized to them says, Hey, using this publicly available data, like this is the opportunity, this is how much money is on the table, or here's what you could be doing to improve your building in these particular ways. And here's why it's cost effective and why it makes sense financially for you. Because at the end of the day, as you say, like you have to make it a duh, this makes perfect sense kind of offering for them and really like serve it up on a platter. I think like people in general, that's the thing that really works well for them. And when we're thinking about AI, you know, I'm always a firm believer, you know, I've I've worked in operations, I've worked in project management, I've worked in sales, but like people like doing business with people that they like. And so, you know, so much of program administration outreach is that outreach and how do you communicate with customers? And I think to your earlier question about how do we make that admin more efficient, that part's still really important. Like the contractors and the trade allies that you work with, they want to have they want to know that there's a person with a face and a phone number that they can call. And the customer likes that too. It's really a question of what are the things outside of those face-to-face conversations that you can automate? So you're not spending time doing a bunch of busy work and instead you're spending your time communicating with that customer. And so, you know, our plan using the digital twin, you know, database and putting together these portfolios on different building owners is how can we go out to meet these people live and in person and already have 10 steps of the process completed? Like, here are the things that we could be doing. Here's what that might look like for you financially. Like, let's talk about what your needs are and how do we keep moving this forward without having to spend a ton of you know, data analysis time and and and research and in particular asking the customer to give you a lot of information about themselves that we can already find because it's already out there.

Ian Perterer, AESP 38:36

Yeah, and I think that's that's such an important point. And that yeah, kind of you wrapped it up in a little a little bit of a bow for me, but it's like AI can do a lot of things, and there's a lot of things it should do, and there's a lot of things it shouldn't do. One thing it shouldn't do is replace authentic, like people-to-people relationships. That I think I mean, I you just you don't even have to really look at AI, just think of the the call center. When you call and you have to go through a decision tree menu, you're hitting a button. Or worse, or or worse, it's how can I help you? And you just want to cancel your contract or something. It's the most frustrating experience. So a hundred percent right. But I like that it you also touched on, I think as part of this, it's like a lot of the things you're doing, you're doing with utilities, you know. So it's uh which I like, I love the co-creation model. I think it's such a smart way to go. What can you tell me about your

Crawl‑Walk‑Run For Utility AI

Ian Perterer, AESP 39:29

experience working with utilities in this co-creation process? And sort of, I think a couple of top like level questions I have is like, what what's worked really, really, really well, what are the challenges that you've you've and what are the lessons that you've learned from that process?

Kate Heidinger, Allumia 39:48

Well, the answer to kind of both of those questions of what's worked really well and what has not worked, when thinking about adding our as-a-service funding option into existing landscapes where there are incentives and rebates, there's a utility, there's almost always also a utility program implementer that is a third party. Where we have had the most success is where all three of those groups, I'm gonna say four, all four state major stakeholder groups. You've got the utility, you've got the contractor or trade ally base, you have that implementer, and then you have Allumia, where all four of those groups are really in alignment and communicating well, and where there's buy-in from everyone, that's where we've seen the most success. And the key part there is if the people who are actually out talking to customers about what that utility does for them on the incentives and the program side are really aligned and on board, that makes a key difference, right? And so we've had utilities where they spent a lot of time and money working on marketing, help working with us to educate folks within that utility and those program teams to make sure they felt like they understood the as a service funding option, that they understood how it could benefit customers and and working with us not just. To educate the program teams, but also their trade ally networks. And that's been really successful for us in terms of making sure that people who are communicating with the customers know what's going on. Where we've had less success are with utilities where maybe someone within a department, the utility was like, Oh, this sounds like a great idea. We should definitely do this. And then they just went and told their implementer, you have to do this now. Talk to Allumia, get it figured out. And that's that puts everybody in a hard position because those implementers, like, they have targets to meet. They're being asked to do something that's new that wasn't part of their existing program structure and how they were thinking about reaching out to the customer. This is this is putting more burden on them. And so I want to be super sympathetic to folks who are in that position and sort of saying, like, oh, this is like you just decided to change my program completely or add this whole new thing that I don't know anything about. And I don't have any extra resources to help manage that or learn about it or understand. And so that's a really broad thing. But I think the key is like really making sure that the stakeholder who's involved, who's out communicating with customers, understands the offering and that all of those stakeholders are really bought in that it's something that works well. And having gone through that process a couple of times with a couple of utilities, like we've now really learned that often our most successful partnerships are actually those implementers themselves. So like going to them and talking to them about how this is something that can complement the work that they're doing, can help drive more participation in their programs from customers who might otherwise not be able to afford it. And so that's been something that I've really learned a lot is like the utility relationship is really important. But so is the ecosystem of other people who are involved and in making sure that they feel supported and are on board.

Ian Perterer, AESP 43:32

Well, it creates better outcomes, but I also think knowing Lumia was founded in Seattle, I think is very much in the spirit spirit of the Seattle committee method. And I fully endorse that. Fully endorse that as a way of going about your work. Well, before we wrap up, I want to ask you. You talked about it a little bit briefly because you got a digital twin project coming out with the utility. What else is on the horizon for you and the company?

Kate Heidinger, Allumia 44:00

Yeah. Well, you know, a lot of interesting things going on. I think the Digital Twin project is going to be really interesting as we move into 2026 and that program really starts launch and taking off. Super excited to see how that goes. We're doing work partnering with some larger program implementers to offer the as a service, as I'll call it a bolt-on to their existing program structures and working with those teams to get up to speed and educated about, you know, how this can fit nicely into the toolkit that they have. We're doing

Digital Twins For Targeted Outreach

Kate Heidinger, Allumia 44:39

a lot of work on the technical and software side, continuing to always evolve. What are the tools that we're using to communicate with contractors and trade allies who are, I feel like everybody in the industry acknowledges that, particularly in the CNI space, like program success is driven so much by the contractor network and who's bringing projects. And so internally, we're doing a lot of exciting work on how do we keep growing and evolving and making those tools easier to use so the contractors aren't frustrated by trying to submit paperwork, or instead, like, oh, hey, actually, this is easy to work with and it's helping drive my business in a better way. And so doing a lot of work there. And then I'll just say adjacent to utilities, but kind of its own little world are a lot of states in the US and cities in the US have building performance standards that passed a few years ago and are starting to really kick into high gear in terms of fines are starting to be levied against folks who aren't in compliance and things like that. We're doing a lot of work, for example, with the New York City Accelerator. It's part of the mayor's office that's supporting multifamily in New York City who are trying to come into compliance so they don't have to pay fines. And there's a lot of interesting things that we're doing there to fund those types of projects. But we're also seeing a lot of there's a lot of work happening in Seattle and Washington state and the utilities in the state to try and figure out how do you better support customers who are trying to figure out the path forward here. And so for us, I think a lot of the work that we're going to be doing in 2026 is going to be trying to stack and layer in the available incentives and resources in those communities where we're pulling in state resources, we're pulling in local city resources, we're pulling in utility incentives to make compliance possible for those types of buildings, which I think is really cool, but is also a really complex process. And again, putting that platform and some of our AI tools to use of how do you make it as easy as possible for those differing programs to get layered in together and have a pretty seamless process for the customer that whose project we're funding.

Ian Perterer, AESP 47:09

So it's it's cool, it's really interesting work. That all sounds like really exciting. It sounds like there's a lot, a lot happening on the horizon for Illumin. I can't wait to see what you all do. Well, Kate, I want to thank you for hopping on the podcast with me today. And also side note, can't wait to meet you IRL at the AESP annual conference coming up here in February. So you'll be in person with us in San Diego of February 23rd to 26th. And we're gonna drop a link to your LinkedIn bio in the show notes, as well as some of the other resources that were mentioned in today's discussion for anyone who would like to connect with you in advance or learn about some of the tools or projects that were mentioned on this podcast. So, Kate, thank you so much. It was a pleasure talking with you.

Kate Heidinger, Allumia 47:57

Yeah, it was a pleasure to meet you and chat a little bit. Excited to see you in beautiful San Diego in February. Perfect place to go that time of year. So we'll be talking again soon, hopefully.