The Money-Saving Benefits of Energy Management for Manufacturers

The Money-Saving Benefits of Energy Management for Manufacturers

Constructing Brands Podcast

Episode #33

What You Will Learn:

  • Affordable ways to bring energy solutions to your business
  • Looking at your energy solutions strategically
  • How an energy broker gets paid
  • How to vet an energy specialist

In the latest episode of GWP’s Constructing Brands podcast, Jim Mumm, CEO of Sunlight Energy Group, discusses the money-saving benefits and process of bringing big company energy solutions to small to midsize companies.

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Introduction (00:03):
Building materials manufacturers run a complex business, but we are here to help you plan for the future. Whether you are launching a new product, rebuilding a brand, trying to get thoughtful communication strategies in place or everything in between, here on Constructing Brands, we will be talking with leading experts in construction, architecture, engineering, marketing, and manufacturing to help make your building materials company stronger and more profitable. With 15 plus years of experience, helping building materials, companies succeed and grow your host, Eric Lanel:

Eric Lanel (00:43):
Jim. Good morning. Welcome to Constructing Brands. Now this is the place where my audience, people who are responsible for building material companies, manufacturing these products that are changing the world…this is where they come to get insights and information. I am so happy to have you on today. Jim Mumm is the CEO at Sunlight Energy Group. Jim, you know what, I’ve spoken to Jim a little bit and I really love the way in which you look strategically at ways that different companies, manufacturing companies for sure, can look at their carbon footprint, their cost savings, their entire line of energy and how strategically to align it. So, Jim, why don’t you tell us a little bit about yourself? What brought you to this spot where you are right now, and how you work with companies that are like my people here who really could look at all the different–Hey, look, margins are always tighter. So how can we make a few more dollars and make a little bit more profit. So that’s kind of where you fit in, I think.

Jim Mumm (01:59):
Absolutely. So, first of all, thanks for having me on Eric. It’s a pleasure. I’m a self-proclaimed energy geek. So I really eat, sleep and breathe this stuff and enjoy it. So the way I got into the energy business was really accidentally. I was a professional sales and leadership trainer and started training an energy company and really got in embedded in their business and learned a lot. A few years later, they invited me on board. So I came on as one of the leadership team. And after a few years with them, I said, Hey, this is a terrific company. It’s an exciting business, but I felt like we were leaving out some opportunities in the energy equation to help customers.

Jim Mumm (02:45):
So I decided to go out and do it on my own. We launched about four and a half years ago. I did it with a bunch of smart people as business partners, a solar company, that’s really a financial investment banking group. They invest in sola arrays and basically generate greater than market returns. And that’s why people come back and give them more money, which is what financial investment bankers do. But this team is specialized in energy. So when I met one of my partners and she said, I’m an energy person and I said, Hey, I’m an energy person too–we had a conversation about it. After she told me what they did and how they did it, and I told her what I was doing, we were about ready to walk out the door.

Jim Mumm (03:31):
And I said, let me tell you what I think we should do as entrepreneurs often do, when they get together…they get a whiteboard and start brainstorming. So I drew out the energy equation and talked about whether you’re Northrop Grumman, Best Western, or any person that uses power or any company that uses power. At the end of the day, it comes down to how many kilowatt hours you use times what you paid for those kilowatt hours, and that’s going to determine your total costs. And so what our company does is all the variables. It breaks down the equation and says, Hey, how can we affect each of these parameters? And amazingly you can affect a lot of things: what you pay for energy, how you’re classified, things like that, how you use energy has a lot to do with what you pay for it.

Jim Mumm (04:25):
And quite frankly, there are a lot of easy ways to use less energy and so that’s how I got into it and why I started my own company. We’re blessed. I’ve done really very well. So customers are responding well to what we do, which is really just being in bed with them. We just say, Hey, Eric, tell me about your company. And you’ll start talking and tell us what’s going on. Every single president I’ve ever sat across the desk from, their company is always different than even their competitors that are theoretically the same thing they’re doing. They run their business differently, they have different issues. So I sit down, or our team of consultants sit down, and we basically just understand what you’re doing, what you’re not doing and what you’ve tried, what you haven’t tried, and really try to understand the whys behind it.

Jim Mumm (05:19):
Then we can overlap that with knowledge of the industry, the energy industry, and just say things like , Hey, have you tried this and you may say, yeah, I’ve tried that. I hated it. I’ll never do that again. That’s fine. I’m not here to push an agenda, but sometimes people go, yeah, we tried it and failed and we dig a little bit deeper and come to find out that either technology has changed and it can be done better these days, or sometimes the way people implement the technology or the solutions, wasn’t the optimal way. So we can help them figure out what went wrong and maybe they give it another try. So anyway, that’s probably a long-winded answer to your question, but thanks for having me, I’m happy to be here.

Eric Lanel (06:04):
That’s interesting, and I do know that there are so many people in this space or so many companies that I’m guessing are competing for the attention of–I know I get calls, I’ve got two buildings, but I get calls from people who say, we could save you money. It’s interesting. Do you have a target audience? Are you an expert in a certain area, vertical, size? How do you break it down? I would imagine because there are so many variables in you’re a variable guy, you’re an expert in understanding certain solutions to the variables. Right. If I’m getting it right. So now with that said, what are you expert on if I fit into this spot?

Jim Mumm (06:55):
Yeah, that’s a great question. First of all, customer segment-wise, I purposely thought that the best place for us, the best positioning strategy is these egg heads from grad school. So it should be in the small to medium sized commercial space. First of all, the average US house, the average household, is probably using something like 6,000 kilowatt hours a year. Whereas, the average manufacturer is probably using a million, a million and a half kilowatt hours a year. So if you want to help somebody go for the 1.5 million users, not the 6 million. On the other hand, I took a long, hard look at it and I decided that the people like let’s say your target corporation or the Pentagon or some other multi-billion dollar company, where you’re going to be paying so much in energy costs over the years time, that you’re probably going to have a senior vice president of sustainability and energy management.

Jim Mumm (07:55):
You’re going to have a team of 27 experts. And it really makes sense to put a lot of time and effort behind energy management because you’re spending millions and millions of dollars. On the other hand, small to medium commercial entities or commercial and industrial entities, they’re typically spending a hundred thousand to a million dollars a year in energy. So it doesn’t make sense to go out and get somebody with a master’s degree in energy management and bring on a team, because even if you save 30% of what you’re using, it’s not worth a ton of time and a ton of resources. So our company targets the small to medium size companies. And I don’t mean really small, like I’m not targeting a bodega that’s a super small C-store or something. But maybe if somebody owned 20 of those, that’s getting big enough where writing the check for energy every month hurts and they want some help. On the other hand, they don’t have the guys knocking on their doors that call on the Targets and the Pentagons and all that. So they’re really getting inferior solutions. So what my business plan was as a company, when we started, was to bring big company solutions to small medium-sized segments that they couldn’t otherwise afford. And then of course bring it to them in a way that makes financial sense. So that kind of addresses the target marketing section. Did I answer your question?

Eric Lanel (09:27):
Yeah. Are there any verticals in specific that you look at?

Jim Mumm (09:34):
Yeah. So at the end of the day, everybody uses energy and so anybody using energy, we can help. However, we do specialize in manufacturing, we do specialize in the hospitality industry–think of not a motor in-type place, but a luxury hotel, using a boatload of energy and a boatload of natural gas and all that. And then the third is really distribution as we call it, but think of frozen and dairy products. Supermarkets could be too–retail distribution. So basically anybody using a lot of power, but those three segments are really our sweet spot, quite frankly. You asked me, Hey, what am I expert at? The funny thing is, I consider myself, and our consulting team, leaders.

Jim Mumm (10:28):
That’s what I consider myself. Even though I’m the CEO of the company, I actually call on customers and try to help them because energy, if you don’t stay in the game and stay up on all the rules and regulations, six months later, you’ll be that old guy up at the whiteboard talking about how things were back in the day. So you kind of have to stay in it and stay up on what’s going on. But I guess what our people are good at is they really have a lot of understanding of the entire energy market. So I’m never going to be the guy that walks in and says, Hey, Eric, let me put in new lights for ya. And I’ll put in the new lighting fixtures and all that. Not that guy, not the lighting company.

Jim Mumm (11:08):
I jokingly tell my prospects, Hey, I’m not trying to sell you light bulbs. You know? On the other hand, HVAC systems are a big use of power and a lot of retail locations. I’m not the guy who puts in HVAC systems, building management systems, equipment efficiencies and things like that. What we really do is we’re kind of like the general manager standing on the sideline of a football game and go and say, Hey, it’s time to run a pass. Let’s bring in our wide receiver. That’s the fastest guy in the league. We know when to bring in the right people. But we also know how all the pieces of the puzzle fit together so if you’re throwing a pass….what’s the best way to block for that pass. And what’s the way to get the most money from federal, state, utility, powerful, and sometimes even county levels. There are a lot of people out there paying businesses to use less energy.

Eric Lanel (12:07):
It’s funny, the older I get, and quite frankly, the longer I have the responsibility of running a company, the more I realize even today, I mean, I was driving in and I was thinking about what do I need to accomplish today? And someone called and threw a bunch of other things at me. And I thought, okay, that’s important, but they don’t know all the things that I have going on that I need to do. Right. So I need to keep on track. But when I look at what I need to do, half of those things involve people who I consider experts that I’m going to pull in and have conversations where ultimately I’m making the decision because that’s what my job is to ultimately make decisions. But at least for me, I know that like Aristotle, the thing I know most certainly is I’m not expert at everything.

Eric Lanel (13:03):
So I need to find, and speak to, and engage people who, and it’s what you’re saying really resonates so well with me right now, because of what I have going on. My one question is, is the person that I’m bouncing the ideas or asking for the kind of solutions from, is that person A) up to speed on all the things going on right now, which is kind of what you’re saying, B) are they involved, engaged and proactive or are they reactive? And that’s my little checklist of my advisors that I have no problem paying either way because if right, they’re going to make me more, they’re going to help me make decisions. That’ll make more money than whatever their cost would ever be. Absolutely. So it’s like a no brainer and it’s unfortunate because half my list right now I’m questioning…if they have the chops to help me go forward where I need to go. And the one thing that you just said and I wasn’t sure what I was vacillating over it, it was quite frankly, are they up to speed on everything? And are they proactively looking at my business? I think about that. That’s the conversation I have with our folks every day. Are you proactively looking at the competition of our clients and what they do and coming up with the best case solution, whether they want to implement it or not, are you providing them those things?

Eric Lanel (14:35):
Tell me about your process to do that because I know you’re doing it. How do you do it?

Jim Mumm (14:45):
Yeah. So, great question. Let me give you a quick analogy, because you hit on something that’s really important. So, you as a small business owner you want to get my marketing message out there, articulate our value proposition, just like every other company wants to do. And so you pick up the phone and you call somebody that maybe somebody recommends, or for some reason you think they’re going to be a terrific help to you. You call them up and you say, Hey, I want to get my message out there and they go, “Great. Absolutely, Jim, here’s what you should do”. You know? It depends if they’re search engine optimization people, you should figure out how to do that. And I’m like, Hey, that’s probably a great thing to do. And then if you make business cards, Hey, you need to change your logo and get new business cards and all that.

Jim Mumm (15:30):
And if you’re a commercial printer you’re trying to get my flyers, my sales materials and my marketing folders and all this kind of stuff. You’re trying to help me change them. And all those things are good things. One at a time that you probably should do. But what it’s really hard to find in marketing is find somebody who’s a marketing strategist and says, okay, hold on. Let’s look, let’s go back to old school, STPs: segmentation, targeting and positioning? Methodically walk you through what segment should you go after? Or are you going after, how do you target that segment? And then how do you position it and yourselves to get in front of those decision makers so they can hear your message and make a decision for themselves.

Jim Mumm (16:14):
That’s what a marketing person should do before they try to sell you anything. But what my experience has been– I’ll make 20 phone calls and talk to 20 different people. And if they’re a search engine optimization person, they’re selling me that, if they’re a website company, they’re trying to sell me that.

Jim Mumm (16:29):
What we do is we come in, we have a methodical step by step way of evaluating a business. How much energy are you using? How do you use it and what have you done? What haven’t you done and why? And then lay out an energy strategy plan step by step by step or an energy management plan, to say yes, you can go in and change and upgrade to LED lighting. That’s a great thing to do. But you told me that your economizers on your HVAC systems are broken and you’re bringing in fresh air in the middle of the summer. That’s 90 degrees and your compressors are working like crazy. So that’s probably eating up 10 times more power than upgrading to LED lights. Although LED lights are a great thing to do and everybody should do that type of thing.

Jim Mumm (17:17):
So that’s kind of how we approach it. I’ve had some presidents tell me….we have a trucking firm that has nationwide locations. We went through a bunch of stuff and he said, Hey, I just want to tell you, and this is at the beginning of the relationship, we were just getting to know each other, and he said, Hey, I just want to tell you that you may come up with something that’s just a no-brainer, we absolutely should do it. But we’ve got to repave the parking lot and location seven 82, and that’s going to cost us $190,000.

Jim Mumm (17:50):
And we’ve got to get that done because it’s a safety hazard. And I said, that totally makes sense to me as a business owner. So I think, the second thing I made a note, while you were talking, it was not only methodology, but the other danger you have is salespeople. It’s like you get your door beat off the hinges and your phone ringing off the hook from salespeople all the time. And if you get the LED salesperson, LED lighting salesperson or the HVAC salesperson, they’re pushing their agenda, Hey, I want you to do my stuff and Hey, God bless them. That’s what they do for a living. And it doesn’t mean you can’t be really good, even if you’re a pushy salesperson. But what we do is we embed ourselves with businesses and act as if we’re their energy department head.

Jim Mumm (18:34):
So imagine if you’ve got 17 buildings that you manage or own or whatever, our job is to say, Hey, Eric, what’s your goal? Or what are your goals for these buildings? What are you trying to achieve and start from there? And that sounds really dumb because everybody listening might say, well, of course we want to spend as little as we can for energy. That’s true, but you probably want to attract tenants and there’s probably a lot of other things. So as business owners, we’re more experienced, well-educated….so we get PNLs and things like that.

Jim Mumm (19:17):
We understand that our piece of paper isn’t necessarily the most important piece of paper. And you have to look at all your pieces of paper on your desk and figure out what’s the number one thing you should be doing. And what’s the number two. And if our recommendation waits six months, even though it’s a no-brainer to us, well, that’s the way it should be. If I worked for you and was your energy department head, I’d say, Hey boss, here’s all the things we can do, given all the understanding of how we operate and how much money we have and what we do and what we don’t do. Here are your options. Now you decide. And that’s kind of how we work. Customers like it because they feel like we’re part of their team. And we have a team of people behind us that makes it so I can spend time with you as a business owner, and spend time with a lot more people during a month and help a lot of businesses that way.

Eric Lanel (20:08):
It’s interesting. So I know the model really well. It’s the one that I’ve got here. And to your point, it’s a great analogy. We happen to be in marketing. I have an agency, an ad agency, and I will tell you that we’re not owned by any one vehicle or vendor. We have five divisions. And by the way, the divisions aren’t responsible for their own profitability, because I don’t want any one division pushing an agenda. So I totally get what you’re saying to the point where I’ve met with small companies who say we want to do this. And I say, well, actually, how much money do you have? And I ask them a lot of questions. So why don’t you just change the facade of your store? Because you’re going to get a lot more traffic if those lights get fixed, than anything that you don’t have a budget for. And I’m really not the guy for you, but this is what I think you should do versus…. Literally this week I was on the phone with someone who wanted a website built and was recommended to us, which was great. So they wanted to micromanage every piece of it and didn’t have a vision, mission, value statement. They didn’t have a go to market strategy. They wanted to talk to our team about a website build and were trying to negotiate a price really low. And I had to get on and say, maybe we’re not the right folks for you because we’re built as a partner, not a vendor.

Eric Lanel (21:38):
We really want to help you grow your business. And we’re going to look, whether you want to work with us or not, or you have other resources, but we need to understand what you’re saying. And we want to help you achieve your objectives. Your ROI (return on objective) is the thing we’re looking for. So I get it.

Eric Lanel (21:59):
So here’s where I’m going to go with this because I do understand exactly the partnership mentality versus the vendor and that instead of being an expert in one area, really understanding all areas, not having an agenda to push one, but really to me that’s a no brainer. That’s the only way I can really connect myself at the hip with you and act, and advocate for you.

Eric Lanel (22:26):
But when doing so, you’re competing against specialists who are driving a cost model and trying to say, no, no, no, no. My business business cards are great. I do business cards. You should work with me on business cards and I’m gonna get you the business cards that are perfect for you. And that’s all I do is business cards, right? That analogy: lights…where I’m like, guy, I do lights. Yeah. You can talk to Jim and his folks, but I know lights better than them because that’s all I do. Is that a case where you say, well, if you need lights, just go to him or is it a case where you say you should really work with us anyway? How do you handle that?

Jim Mumm (23:10):
That’s a great question. And so our model is like, we use partners that we’ve vetted and got to know, and they worked with many of our customers. So we actually would offer a lighting company if somebody wanted lights. Oftentimes somebody says, Hey, I already got a guy I’ve been working with him for 15 years. I’m like, I don’t care. I’m not here to sell you light bulbs. I’m just telling you, if you go to do light bulbs, my job is to make sure you asked the right questions and you understand what all you could do, what all the rebates are all about and what all the solutions are all about. And that should be the first thing. Because you’re going to buy these, you’re going to upgrade your plan and have all these beautiful new LED lights. You’re going to be stuck with them for 10 years because they last a long time, which is a good thing. So you want to do them right. And let me give you a quick story if I can. I know I’m long-winded but one of our companies came in, they have a lot of different locations but in their headquarters they have an old-fashioned drafting room where they have people that print out blueprints, put them on the drafting table and they make changes and then they go back to the computer and upgrade them. Right. So this guy said, Hey, I got a guy, he’s a friend of the family. He has been helping the business for 18 years. I’ll use that guy. And I said, Hey, that’s fine. And so he goes, but Hey, just out of fairness to you, I’ll let your electric guy bid on the project.

Jim Mumm (24:36):
And I’m like, that’s really not what I do and what our people do. But I’ll tell you what, let me have my guy take a look at your specs and everything. And maybe he can save you trouble down the road. Because the most important thing is that you get what you want. You know what I mean? At the end of the day, I can’t remember how much I paid for my computer. What I remember is does it do what I wanted it to do? And an extra $200…that stuff doesn’t really matter for business executives because what they want is it done right. And they don’t want employees complaining. So he has his facility manager send my guy the specs. And my guy looks at it. And he goes, Hey, I really want to come in and meet with them, meet with a team. So I set up a meeting and I said, Hey, Mike, trust me, meet with this guy, worst case you waste half hour. Right. So he goes, all right, Jim, you know, I’ve known you for a long time. I’ll bring you in right. Or bring your guy on. So he goes in and meets with them and he goes around and talks to all their employees. And let’s just go back to that drafting room. He takes his light meter and he measures all the lumens, you know, foot candles down to the surface area and all those kinds of stuff. He comes to find out that it’s something like 30 foot candles was the average of the room and, or no, it was I’m sorry, it was 50.

Jim Mumm (25:49):
And so he asked the guys logical questions, Hey, is it too bright in here? Their people start laughing and they pulled out a desk drawer and they go “see this flashlight, sometimes we need to use this”. So they kind of chuckled. It wasn’t too bright in there and we go, okay, you got any dark spots in the room or anything like that? And they’re like, Nope, Nope. Just overall, it’s not bright enough. So he looked at the guy’s specs and the ASHRAE Standards for that type room was 30 foot candles. So they were going to go from 50 down to 30 and get a whizzbang price. So my guy told me, Jim, I don’t know how to handle this because they’re really going about this the wrong way. And I said, well, let me call the president and talk to him. So I called him and I said, Hey, Mike, you know, here’s, what’s going to happen. You’re going to go in and your guys are going to have these beautiful brand new lights and you’re going to pay this wonderful, low price. And you’re going to hear complaining for eight years, you know? And I go I don’t know about you, but I deal with employee issues a lot. And I don’t want to hear complaining. That’s like the last thing on my list, you know? And so I go, why don’t you talk to my guy and hear what he had to say in person. He just didn’t want to step on anybody or anything like that.

Jim Mumm (27:01):
So, make a long story short. What he did was he said, Hey, I’ll go in and put some sample luminaire lighting, fixtures up in the room, I’ll check those out or let your people check them out and I’ll set them to start with say 70 foot candles and see what your people say. They might come in and go, Oh my gosh, that’s too bright. You know? So he got some feedback and then whatever it was, his employees were totally on board. And they said, yes. So that’s the level of lighting I want in this particular room. He said, look you can go back to the other guy and tell him, this is the level of lighting you want, but just imagine what would have happened if you would have gotten his specs and everything…not only would you have gotten a great price, but your lights would have been too dim, but you would have heard about it forever. He says, not only do I bring you a good solution, but I bring you a methodology to get your people on board and let them have ownership in the solution. So now it’s your solution as a company.

Jim Mumm (27:56):
Guy happened to be an employee of Aesop company. So as employees they were owners and he loved it. He goes, you know what? I should have done that in the first place. I can’t believe I didn’t think of that. So the guy who he had been with for 18 years, he decided to use my guy. And quite frankly, probably paid more than he would have, but he got the right solution and he never looked back. And, you know, when he got done, he was like, Hey, that’s exactly what I should have done in the first place. So, I don’t get envelopes under the table or anything like that from people I bring in, but I’m bringing in people that I know are certified energy managers, LEED application, basically LEED certified. I bring in people that I take for test rides with my clients and I tell them, I go, Hey, this is a brand new lighting vendor is the first time I used him. Let’s go take a walk. I’ll be there with you and help you through this process. And if they do a great job, I keep inviting them back. So they get lots of business. So it’s worth their while to do a good job for my customers. I say, I’ve got two rules. Do what you say you’ll do. And basically don’t be a sales guy. I go, these guys get that all day long. They want somebody to come out and listen to them and find out what their problems are. And if they have a problem, tell them the options they have to solve it and then go from there. So, it’s fun. We’ve been really blessed to get partners that our customers just really love. And it’s fun because they give us all the credit for all the right things they do. And they give us more business by saying, Hey, you know, anything you want to know about energy, call Sunlight Energy Group because if they don’t know how to do it, they’ll find somebody that does.

Eric Lanel (29:47):
So, you have an expert in the manufacturing arena. You specialize in small to mid-sized businesses that don’t have a team of 20 professionals in the energy field on board. So you could actually get involved with strategic planning and work at a higher level to really look at the bigger picture and drill down. If I was listening to this, I’d say, Oh, that sounds great. How does he get paid? And how much does he charge and how does that work?

Jim Mumm (30:24):
Yeah, that’s a great question. So this was my challenge. How do I bring the big company solutions to small and medium companies that can’t write the big company checks. Let’s be honest and all due respect to them, or it wouldn’t make sense to write the big company checks, right. So I had to figure out how do I bring these solutions without coming in and saying, Hey, Eric, I’ll charge you X amount of dollars to come in and be your consultant. And trust me, we’re going to pay for ourselves. So I had to figure out how to get that done.

Jim Mumm (30:56):
Well you alluded to it before that in the energy brokerage business, which is what I was in before, where they were looking at, what’s your third party supplier costs–are you paying 7 cents or seven point or 6.90 cents? You get the guy who’s dialing for dollars all day long, and they call you up and say, Hey, Eric, what are you paying? Geez, I don’t know, look on your bill… And they tell you how to find it and you tell them and whatever number you’re paying, they can do better. Right. So that’s what the business is, and they get a commission off that sale, just like a realtor does–somebody who wants to buy a house, somebody that wants to sell a house, you put them together, the realtor gets a commission. You’re happy that the realtor gets paid. Cause they found you the right house. So that’s kind of how an energy broker gets paid commission off the kilowatt hours you use. So what we do is we bring that same solution. I say, Hey, what makes you a customer of ours?

Jim Mumm (31:49):
So we do all this other stuff and procurement contracts through us. However, it’s up to me to prove that we’re equal or better than whoever you’re currently using, even the utility. In some cases, if we can’t come up with an equal or better procurement strategy, then you shouldn’t use us and they go, okay, great. Theoretically, even if we brought in the exact same prices, broker A through Z, and we brought in the exact same price–you’re still getting the energy management, holistic approach strategy along with it. So why wouldn’t you work with us? You know, so bottom line is our customers don’t have to write us a check. They don’t have to sign a contract with us. So all they do is do procurement contracts through us, which is going to be with the constellations, direct energy, all these Fortune 100 energy companies. So they don’t have to pay us.

Eric Lanel (32:53):
So, you have relationships with the energy companies directly. And by them signing off and letting you handle it, you’re now getting commissioned by them is what I’m hearing. So the utility companies are actually paying you.

Jim Mumm (33:20):
No, it’s not the utility companies but the third party suppliers.

Eric Lanel (33:23):
Yeah. Okay. Which is not unlike an advertising model quite frankly, which is: I’m going to negotiate and get a better rate and I get a net rate that you would never see and you’re going to pay the gross rate. And that way in effect, all the work I did is covered by the vendor that I’m bringing in and it’s across the board. So it sounds pretty straight forward.

Eric Lanel (33:51):
What should I be looking for? What questions should I be asking as a person responsible for a manufacturing company right now, when someone calls me up and I’m thinking about my energy, or even somebody doesn’t call me, if I’m sitting here, I’ve got five facilities, we manufacture let’s say here, Canada, we’re in Mexico. We’re doing manufacturing overseas. What are the things I need to think about in terms of, are you the right fit? What would be the three questions I’d ask myself that would help me understand if I need to start thinking deeper about this?

Jim Mumm (34:42):
I think first of all back in the day when we could actually have in-person meetings, you sit down and have a conversation with a company and what always tells me how well I think somebody’s going to work for me is what questions they asked me. You know, if they’re coming in, they’re going, Hey, let me tell you about my features and benefits. We’re the best, this, and we’re the best of that. Well, then they’ve got a package and they’re going to sell it to you and you better hope that package fits your needs. But what we do is we come in and we ask questions. We say, Hey, what’s going on? What have you done? What haven’t you done? And why you might have some really good reasons for that.

Jim Mumm (35:21):
So I guess what you would do to vet people is just listen to the quality of their questions. If they’re coming in and saying, Hey, Eric, how much are you paying for your third-party supply costs? They’re an energy broker. And that’s okay, those aren’t bad. An energy broker can do a lot of good because he can have access to multiple suppliers that even if you picked up the phone and called them directly, it’d take you a lot of time. So like the real estate analysis, you’d have to call a lot of homeowners and set up appointments and stuff. So they’d save you a lot of time doing that. So that’s okay. But what I tell people is, we’re going to bring you that same price. Because we all get the same prices from the third-party suppliers. So we’re going to bring you that price. But what is their plan to help you better manage your energy? And if you have to say, Hey, Eric, you called me about energy. What’s your plan? Well, then they don’t have a plan because if you talk to me, I’ll tell you, I’ll say, Hey, Eric, the first thing we’re going to do is we’re going to learn about your business. And we’re going to put together a plan based on what your issues are and what you want to solve and what you see. And maybe some things that we bring to the table that you haven’t thought about not pushing an agenda, but making sure you’re well-informed, and then we’ll put a plan together for over the next year or two years.

Jim Mumm (36:41):
However fast you want to go, that your building is optimized and you’re using as little energy as you possibly can, you’re paying as little as you can, you’re generating your own power if it makes financial sense and your greenhouse gas emissions…you have a plan for that. And all of a sudden your customers aren’t calling you up and saying, Hey, guess what? We’ve got to go with somebody else because you don’t meet our sustainability requirements? So we’ll come in and put a plan together. I guess that’s the biggest thing. Sorry for the long-winded answer. But bottom line is, what questions are they asking you? If they’re not asking you really high quality questions then they’re probably just sitting at the desk, dialing, dialing numbers all day long.

Eric Lanel (37:22):
So let me ask it in a different way. As a person sitting at the desk, responsible for the success of my manufacturing company, what questions should I ask myself before even contacting or thinking about or reacting to this? What are the things I need to think about to see if it makes sense to talk to someone?

Jim Mumm (37:48):
Most manufacturers in this day and age, they’re all using energy brokers already because they understand that they can bring a lot of suppliers to the table and, you know, supplier aid doesn’t always have the best price, you know, even if they had the best price last time. Right. So most manufacturers probably 80% or higher are already using energy brokers. So here’s a question for you if you’re using an energy broker, um, when’s the last time you had a business review meeting, um, when’s the last time you sat down with them and they walked you through what you’re doing your plan where you started, where you’re at now, and what’s next, when’s the last time they called you and told you that, Hey, Marilyn is changing their renewable standard requirements from 25% to 50%.

Jim Mumm (38:40):
And there’s an opportunity for you to be grandfathered in at the old price, but you have to act, and here’s what you do. I mean, if they’re making those kinds of calls to you and having regular business meetings, you know, they’re probably pretty good. And if they’re not, if they’re just, Hey, I signed a contract with them 36 months ago, I walked into one of my biggest clients. And I, I wish I could tell you the name, but it’s a huge aerospace engineering company. If I said the name, everybody would know it. Right. I walked into there and said, Hey, let me just tell you how we manage energy. And your company might be doing a better job than I am for all I know. And if they are, God bless you, you’re in good hands.

Jim Mumm (39:20):
Right. And so I, I basically told them what we did. And I said, Hey, let me ask you a question. When’s the last time you heard from your energy broker and, I’m sure they’re doing quarterly updates with you, or at least, at least having a zoom meeting or something like that. And they go, I haven’t heard from my broker since I guess about 24 months, we signed a 36 month contract. And I know the market’s been up and down between that time, but I’ve never heard from him. And I was just like, Oh my gosh. So that’s a big question. If your energy broker is behaving, like he’s your partner and really trying to help you understand what’s going on in the energy business without taking a ton of your time. I understand that.But if he’s really behaving as a partner, then you’ve probably got a good energy broker and there are some good folks out there.

Eric Lanel (40:15):
Now, what if it’s in that 10%? I don’t have an energy broker right now. And I don’t just because quite frankly, I get calls all the time and I just didn’t want to deal with it.

Jim Mumm (40:30):
Yeah. A lot of people had a bad experience 10 years ago or something like that. Like somebody walked in and gave him some teaser rate and then they got burned as they say, and they never want to do another energy contract, the rest of our lives and now they’re using half a million dollars in energy and they really are leaving money on the table. So what I tell them is, you should really check credentials. I’m blessed to be a certified energy manager, certified procurement professional. I got a guy at one of our team leaders got 30 plus years on the trading desk, so vet people and say, Hey, there’s a reason that you’re not using energy contracts.

Jim Mumm (41:10):
It’s not that you haven’t heard of them. Right. So what you want to do is find what we would do is ask the question why, if they say, Hey, I got burned. I go, do you remember the company? Do you have a comp copy of the contract? Bottom line is, a good energy broker steers his clients or make sure his clients know everything that’s in the contract–Good and bad–because some negatives in a contract might not be a big deal to you like Harry, Eric, did you realize that if you move from this location that you’re going to have this clause evoked and blah, blah, blah. Well, Hey Jim, we got a 10 year lease. That doesn’t bother me at all. Okay. But I told you about it and I made you aware of that.

Jim Mumm (41:51):
Gotcha. In that contract. Hey, there’s volumetric swing provisions. There’s one supplier…so volumetric swing is like, if you do a million kilowatt hours last year, and you have a 10% swing, you can go 10% over 10% under, and you’re still locked in at the same price. Well, if you go higher than 10%, you’ve got to pay the market price, you know, plus an administrative fee to the supplier sometimes. And it can get really costly. The point is a good broker will make you aware of everything that’s in that price to give you a good idea of if you’re paying 6 cents at the end of the year, it’s really going to be 6 cents or, Hey, there’s a high likelihood of the way you do business and it’s really going to be 7 cents.

Jim Mumm (42:36):
I think I’ve gotten some of my biggest clients for walking in and they say, Hey, I’m paying X. And I’m like, there’s no way. And they’re like, no, no, seriously, I got a contract and they pull out a contract and it’s a fixed energy only contract that let all the other components that they still have to pay, left them on the open market. And the market went through the roof. I literally had a client that was paying 7 cents a kilowatt hour and their contract. And then when they got off the contract, they were paying 14 cents. In this organization, people lost their jobs over this. And I walked in there, new plant manager came in, I looked at a spreadsheet that he had printed out and I said, Hey, Dan, what’s going on with us?

Jim Mumm (43:21):
You know what happened here? And he goes, honestly, I don’t know if you wouldn’t have been coming I probably wouldn’t even have known that. I just got that printed out from accounting 30 minutes before you walked in the door. I said, Hey, Kevin, energy file? Yup. And he handed me a file about that thick. I said, give me 10 minutes. And he went on, did some stuff. I started reading through his file and I found it was what we call in the industry, a rollover rate. So at the end of the contract, you can cancel the contract. You can renew with that supplier, or you can go back to the utility. But if you don’t, you go into a rollover rate, which is whatever the market price is. Plus a 3 cent per kilowatt hour administration fee. I mean, it was like forty five thousand, forty seven thousand, forty three thousand…Ninety thousand!

Jim Mumm (44:08):
I said, man, the bad news is, look at your meter, read dates on your bills. And he goes, okay, it’s the 13th. And I go, well, today’s the night. There’s no way if I had a contract in my back pocket, which I don’t, we could get you enrolled that fast. You got another month of 45,000 plus overcharge coming. So make a long story short, we helped them negotiate it with a supplier, renew the contract with that supplier, get rid of that crazy clause and cut their costs down probably about a quarter or get rid of almost all that penalty stuff. When people just go for the cheapest price, there are so many gotchas and energy contracts that people can put. I tell people, I go, God help you. If you tell somebody that the only thing that matters to you is the price because I said, you do that, somebody’s going to give you a great price and you’re going to be really wishing you hadn’t had that great price by the time the year’s over and you look at your energy costs.

Eric Lanel (45:09):
We covered so many different areas. I think a really important to think about if you have, what I’m hearing is, if you currently are working with an energy broker, really, when was the last time they checked in on you, what are they thinking? How are they, how are they helping you? Are they looking at your totality, your business? Are they just selling you a product? Are they acting as a partner? And I guess the biggest first question is, do you feel like you need a partner? Do you feel like you are you spending enough money on energy that you need a partner? If you do by golly, you should definitely look for one that is going to ask you all the questions and sit by your side and really work with you and help you untangle all the details that go into this energy business, because it feels like there’s a lot of gotchas. And if you don’t have someone kind of supporting and looking and acting on your behalf, you might get caught with one of them.

Jim Mumm (46:07):
Yeah. The way I like to say it to their clients, I go, look, I’m not a lawyer and all that, but I slept at a Holiday Inn Express last night. I just want to make it clear…I’m not an energy attorney. Right. But I go, what you need is you need somebody on your side to be your advocate pushing what’s right for you, not what’s right for them. And the great thing about our model is, I mean, I’m a human being like everybody, or a company has to make money and I have to pay employees and all this. So we have to make money, but we get paid once you decide to do procurement through us, we get paid through the supply contracts.

Jim Mumm (46:46):
So if I can help you lower your usage, if I can help you get rebates and things like that, you’re going to give me all the credit. I walked in and you’re paying 10 cents and I got you 8 cents. You’re going to give us all the credit. So why wouldn’t I want to do that for you? Because you’re going to stay with me forever. I got one of our clients. I walked in the door and a guy down in Maryland. Really. I love the guy. He’s a terrific, terrific president of the company. And he, and I hit it off right away. And he goes, look, Jim, I get all these calls all the time and all this. And he goes, I’d like to work with you, but I just don’t know what you guys do. And he goes, I’ll tell you what, I got a problem. If you can help me with this problem, you’re going to have my business. And I’m like, great, what is it?

Jim Mumm (47:25):
I love when people say that, right. It’s like, Hey, just give me something to fix. So he goes, one of our people at the front desk, somebody called them and said, Hey, how would you like to pay 3 cents a kilowatt hour, less than you’re paying now? And they said, yes, I’d love to. And they go, well, hang on, let me put you over. And they put it on a recorded line and they said, Hey, we’re going to do this, that and the other…make a long story short, they put him in a contract with a teaser rate for a few months. And then they went into like 3 cents per kilowatt hour over the market rate that we ended up getting him when I got the business.

Jim Mumm (47:58):
So what I did, was I said, Hey, I don’t know if I can fix this or not, but let me get into it. And he goes, well, how much is this going to cost me? I go, I’ll do this for free. I hate the fact that I’m a professional, and there’s a lot of, as I jokingly call them, 19 year olds that are ambulance chasers. And they just tell you anything just to get their business. And you paint me with the same brush, right. That really aggravates me. I’ve got two master’s degrees. I spent a lot of time in grad school. I don’t want to be treated like a 19 year old salesman. Right. And yet that happens a lot because of those type people. I said, Hey, I’ll fix this for you. And don’t worry about it.

Jim Mumm (48:33):
So I call up the Maryland public service commission. I said, Hey, what are your rules on telemarketing? They told me, basically two things: They have to record the call and they have to ask the person, if they’re an authorized signatory. He goes, even if they were wrong and they said they were…the contract is binding, okay. So I stayed on him and on him and on him and finally got them to the point where they were going to send me a copy of the recorded call and all of a sudden got a, this is a third-party supplier. And by the way, it’s not one we work with. I felt like these guys are not very reputable. And, so make a long story short they said Hey, we didn’t do what we were supposed to.

Jim Mumm (49:14):
So in other words, they didn’t ask them if they were the signatory, when they listened to their own call. So they just let us out of the contract and didn’t even send us the recorded phone call. And I said, Hey, that’s great. I’ll need that in writing. Second thing I’ll need is, I’ll need a check for whatever the number was…it was in the thousands, like $20,000. Right. And they go, how do you figure? And I said, well, that contract’s been flowing for six months now, I have the usage because I have all the bills. And you guys overcharge, basically about 3 cents a kilowatt hour. So that comes out to $19,872. I’ll expect the check on the president office within a week. So finally, another week later, the check showed up on the president’s desk and he goes, okay, you got my business.

Jim Mumm (49:59):
To me, that’s just not a reputable way to do business. If you can bring value to somebody and tell them what you do, tell them how you get paid and they’re okay with it, then great…we got a fit. If you think I’m making too much money for what I bring to the table, it’s okay. If you say no. We just want to be straight up, you know? So anyway, I told you I’m an energy geek. I get all excited about these stories. I can talk to you all day long about these things.

Eric Lanel (50:28):
I love it, Jim. I love it. And on your website, I love the first thing it says, which is we help companies design a custom energy strategy, taking a portfolio approach of traditional, renewable, and emerging technologies. Each solution is tailored to the individual client’s needs to balance reliability, cost, optimal usage and sustainability. So, as a marketing geek, I like the fact that your positioning statement is on your website and speaking with you for a little bit, absolutely reinforce each other. Absolutely intersect. And so I love that. So with that said, if there’s someone listening to this who wants to get in touch with you, what would be the best way Jim, for them to get in touch with you?

Jim Mumm (51:20):
The easiest thing is go right to our website. It’s, and there’s an 800 number on there. That’ll put you right to somebody. And the other thing I just wanted to say on a parting message to people, I think the whole sustainability movement is going to catch a lot of people off guard. Because just real quick: Level One is your own energy usage and are you energy efficient? Level Two is the energy you’re using like electricity from your electricity company. And are they sustainable? And Level Three is upstream and downstream. What are your suppliers doing with their sustainability programs and stuff like that? I believe there’s going to be a day, very, very soon when a manufacturer that’s not prepared, gets a phone call and says, Hey, I’m sorry, but I have to order from somebody else because you guys don’t meet our sustainability requirements.

Jim Mumm (52:17):
And so what I’m trying to do is get the word out there to manufacturing that, Hey, this upstream and downstream is really, really important. I mean, there’s a movement in this country that says, Hey, I don’t care if the administration is paying attention or not. We’re going to save this planet, you know? And we’re going to get behind this. And New York state has got an initiative to go to be 50% sustainable by 2030. I mean, that’s not far off. And Hawaii is already a hundred percent sustainable energy. Maryland’s gone to 50%. I mean, there is a huge trend to go more and more and more. And, you know, if companies, aren’t thinking about electrifying their fleets, if they’re not thinking about how to be a good upstream partner for their customers, it’s going to bite them. So I think having a partner that’s aware of what’s going on and helping you make the chess moves to stay ahead of your competitors. That’s really important.

Eric Lanel (53:19):
Wow. That sounds like fodder for another podcast, my friend. I think you opened a door that, I don’t know how to shut just yet. If you promise you’ll come on and actually share with our crowd, what they need to look for in terms of sustainability, then I’d appreciate that greatly.

Jim Mumm (53:44):
Absolutely. It’s something I’m passionate about. I’m 59 years old and don’t have kids, but I work with a lot of young people. We have a lot of young people in our company I want the planet to be around past my lifetime. Right. You know, andI think some big changes are are possible to happen with this new administration. You never know what you’re going to get. Everybody promises everything, but I’m more excited about the groundswell movement because it is strong. It’s like the racial injustice movement, this is not driven from the top down. This is driven from the ground up and people are fed up with stuff they’re fed up with, Hey, what are you doing to my planet?

Jim Mumm (54:30):
I’m going to be here. And I want a planet to stand on and it’s happening. And people are demanding that your products are sustainable or else I’m not buying your products, you know? And by the way I think that’s a great way to move. If the only thing that moves some people is money, then let’s talk money, let’s make it financially the right thing to do to treat the planet the way it should be planted. Sorry, I get on my soap box here. I’m not a tree hugger. I promise you I’m a capitalist, I believe in making money, but I also think that you gotta be chess moves ahead of your competitors too. There’s a good opportunity.

Eric Lanel (55:09):
I think that’s wonderful. We are going to get you on another podcast and we’re going to talk about specifically sustainability, but for now, I just want to say, Jim Mumm, thank you so much for being a part of this podcast. Sunlight Energy Group, check it out online. I think the website gives information if you’re even considering. I think the questions you’re asking and where we’re going with conversation are conversations that need to be happening in every boardroom across the country, around the world. So, if you’re not thinking about this right now, it should be on your radar and sustainability stay tuned for the sustainability podcast, which I’m sure will be right around the corner with Jim, where he’s going to share with us what you need to be thinking about to be chess moves ahead of your competitors and to be on target for what you need to think about in the upcoming world in which is right around the corner. Right? So with that said, Jim, thank you for your time this morning. Appreciate it.

Jim Mumm (56:16):
Absolutely. Thanks, Eric. Thanks for having me. And I’m happy to come back anytime.

Outro (56:19):
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