As utilities prepare for summer cooling loads, California utilities are turning to glorified ice cubes to help solve peak energy use problems.

Windsor-based Ice Energy’s Ice Bear systems are essentially insulated water storage tanks that attach onto rooftop air conditioning units. The systems contain heat exchangers submerged in about 500 gallons of tap water and a 5-ton condensing unit that powers on during off-peak hours to freeze the water in the tank. During peak daytime hours little to no electricity is used to circulate refrigerant through coils in the ice and send icy water through the building’s air conditioning system.

The company is set to release a second generation line of products in May that are less costly to install and maintain and suitable to a wider variety of deployments, and will be rolling out utility-scale deployments by mid-2009 through partnerships with utility companies throughout the country, according to CEO Frank Ramirez.

Currently, corporate customers share the cost of the Ice Bear unit with the local utility and, according to Ramirez, have a payback period of zero to four years, depending on the structure of the service area. A number of utility companies, including Pacific Gas & Electric and Southern California Edison, are currently conducting pilot deployments of the company’s products, and Ramirez says Ice Energy is working toward a model in which utilities bear the entire cost of the unit, leaving corporate customers to reap energy cost savings for just the price of maintenance.

 “The technology is revolutionary, in that it enables businesses to increase energy efficiency without requiring any curtailment,” Ramirez says.

Ice Energy is currently raising capital, but according to Ramirez the company is looking for more than just cash. “We are really looking for strategic partnerships with people who are committed to energy efficiency and can help us accelerate the commercialization of our product, either through project financing or through introductions to channel and distribution partners.”