On March 28, 2023, Logical Buildings, a leading provider of decarbonization technology and ESG solutions for the built world, announced it has closed a $110 million virtual power plant (VPP) project facility with Keyframe Capital. Wilson Sonsini Goodrich & Rosati advised Keyframe Capital on the VPP project facility and financing for this agreement with Logical Buildings.

The project facility will be used to pursue VPP projects within New York City- and New Jersey-based multifamily residential buildings, providing thousands of operators with reputational and financial incentives to invest in initiatives that will drive energy savings, lower greenhouse gas emissions, and establish new channels for grid services revenue. This unique, first-of-its-kind funding, which will be repaid through energy savings and grid revenue, establishes a channel for deploying energy transition projects in the large, previously untapped multifamily housing market at a time when many operators seek solutions to comply with upcoming emissions reduction and energy efficiency regulations. New York City and New Jersey multifamily buildings can use this project facility to deploy connected smart thermostat upgrades which integrate with Logical Buildings' proprietary demand response platforms; recently installed smart meters in these buildings will then link to each apartment's thermostat and record temperature changes and related impacts in 15-minute increments, generating grid services revenue in utility and wholesale grid level programs.

The partnership between Logical Buildings and Keyframe Capital demonstrate a paradigm shift in how energy use is viewed, particularly for multifamily buildings. Through this project facility, rewards are available to both residents and operators. This alignment addresses the "split incentive" problem commonly found in multifamily energy efficiency efforts in which operators invest in upgrades, but residents accrue most of the benefits through comfort and cost reductions.

The Wilson Sonsini team that advised Keyframe Capital on these transactions was led by Scott Zimmermann, Claire Christensen, and Matt Bogdan and included support from corporate assistant Adam Pacheco.

For more information, please see the Logical Buildings press release. Further coverage can be found at Canary Media and Axios (subscription may be required).