Co-op Power
May 22, 2015
Co-op Power
CoCo--op Powerop PowerBuilding a multi-racial, multi-class movement
for a sustainable and just future
We’re now using more than one year’s worth of renewable natural resources each year, depleting our natural capital.
US Share of the World, 2004
Source: US EIA.gov
In August of 2001, New England Governors and Eastern Canadian Premiers (NEG/ECP) signed the Climate Change Action Plan which called for reducing greenhouse gas emissions 80% below 2000 levels by 2050.
Source: American Solar Energy Society, Jan 2007
Source: American Solar Energy Society, Jan 2007
Source: American Solar Energy Society, Jan 2007
WHAT COULD BE THE IMPACTS OF CLIMATE CHANGE ON MASSACHUSETTS?
WEATHER EVENTS – More frequent, more damage, downed power lines, over burdened septic systems, travel delays
COASTAL IMPACTS – Loss of beachfront with rising sea levels and stronger coastal storms
ECONOMIC IMPACTS – Negative impact on tourism and agricultureWATER RESOURCES – Higher temperatures accelerate evaporation and
cause drier conditions and draughts; water shortages would then alter rivers, lakes and streams
FISH AND OCEAN IMPACTS – Warmer, saltier ocean and changing currents will affect fish, shellfish, and lobsters and the fishing industry
HUMAN HEALTH AND COMFORT - More heat waves, more frequent periods of harmful outdoor air quality, spread of certain diseases
NATURAL RESOURCES – Warming could have a serious impact on our ecosystem; Non-native species may be encouraged; long term, warming could intensify droughts and damage forests.
Source: Mass. Climate Action Plan, 2004
Other Reasons Propelling Us Forward
In addition to Climate Protection…The End of Cheap Oil – Time to transition now when we have
time and money to do it!Air and Water Quality Concerns – To preserve the resources we
have.Energy Independence – So our way of life isn’t dependent on
oil from across the globe.The desire to create good new jobs to replace the jobs we’ve
lost. The desire to create a way of life that brings us together, treats people fairly, and preserves our natural resources for our children and their children.
There is no silver bullet.
We must be the change we want to see in the world!
How can we maximize the use of clean, healthy energy where we live?
• Here in our homes
• Here in our neighborhood,our schools,municipal buildings &while providing city services
• Here in the Pioneer Valley
• Here in Massachusetts
• Here in the Northeast?
Bad News:
Not home to Fossil Fuels
Largely Dependant on Coal, Gas & Nukes for Electricity
Oil and LNG for home heating
Context
Good News:
• MTC offers assorted educational & Grant programs
• Strong academic research ties & investment
• Has established Renewable Portfolio Standards
• High Motor Vehicle Emissions Standards
Potential Energy SavingsFROM INDUSTRY – 30%• Heat recovery• More efficient motors and
drives, • The use of cogeneration (also
called combined heat and power or CHP) systems that provide both heat and electricity
FROM TRANSPORTATION– 30%• Lighter-weight vehicles,• Public transit, • Improved aerodynamics, and • More efficient propulsion systems
FROM BUILDINGS – 40% • Better building envelope
design,• Daylighting, • More efficient artificial
lighting, and• Better efficiency standards
for building components and appliances
Source: American Solar Energy Society, Jan 2007
Energy Flow in the US in 2005
Source: US EIA.gov
Sunlight
Electricity
Biomass
Batteries
Hydrogen
Organic Fuels
Animals
Inorganic
Organic
Materials
Transportation
Heat
Motors/Lights
Energy
Food
Wind
Ocean/hydro
Geothermal
Nuclear
Minerals
Sole Source
Sustainable Primary Secondary Human Resources Intermediates Intermediates Needs
Imagining a Sustainable World
Lee Lynd, Engineering/Biology Prof. Dartmouth, ASPO Conference, Oct 2006
Solar Electricity
Electric Vehicles Powered by Solar Electricity
Carbon savings from Electric Vehicles for operating a vehicle on electricity versus gasoline by state. The national average savings is 42%.
Electricity from Wind
Biomass for Electricity and Heat
Geothermal
Biodiesel
The biodiesel plant proposed for Greenfield will make 10 milliongallons a year from recycled oil; an equivalent of 380 megawatt hours.
Source: American Solar Energy Society, Jan 2007
Who Owns it Matters
What are the things communities could decide if they owned their own sustainable energy resources?
Privileges of Ownership
When you own it, you decide:– Equipment and raw materials to use– Sustainability of production process– Who gets what you make– How much profit to make– How workers are treated– What R&D to invest in– Where to spend your profits
Ingredients for Community-Owned Sustainable Energy
Resources
• Powerful community outreach and participatory planning
• Successful replicable models and technical support
• A good site • A great business plan• $ from community members, grants,
investors, and loans
Local and Regional Sustainable Energy Solutions
are Needed
Comparison of Legal Structure Options
Not unless the LLC is community controlled
NoYes; Costs $300,000 for public offering or $30,000 for private placement
ShareholdersFor-Profit (C-Corp or LLC)
No – owners can sell anytime
NoIndividuals or partners
Sole Proprietor or Partnership
Likely to protect local ownership over time
Can take investments from everyday folks and give benefits in return
Can take investments from people with > $1 million and give a return
Owners who get the Profits
Comparison of Legal Structure Options
YesCan take donations only
Can take donations only
Profits stay in the non-profit; can’t be distributed
Non-Profit
YesYes; Members get Member Benefits in return
NoProfits are given to members who use the co-op
Co-op
YesOnly through taxation
No, but can raise money with bonds
Profits support other govt. activities
Municipality or Govt. Entity
Likely to protect local ownership over time
Can take investments from everyday folks and give benefits in return
Can take investments from people with > $1 million and give a return
Owners who get the Profits
Results ofCommunity Ownership
CommunityOwnership of
ASSETS
Assets are retained -not easily sold for cash
Increased Job SecurityIncreased Food, Housing, &
Energy SecurityPublic Investment is Retained
for Ongoing Public Benefit
Results of Community Ownership
DemocraticControl
Community voice isgathered and raised
Increased Community LeadershipDevelopment
Attention to member, worker, andcommunity needs
Decision making focused on meetingneeds vs making profits
Increased Stewardship of NaturalResources
Results ofCommunity Ownership
PROFITSdecisions madeby Community
Members
Profits are distributedto community members
and/or used to build othercommunity resources
Stronger Local EconomyMore Community Needs MetMore Stable Local Economy
Increase in Community-Owned Assets
Increased Standard of Living
Requirements of Ownership
and responsibility
Options for Raising the Money
#1 – Municipal Utility Ownership – Have your town become a municipal utility; raise government grants, bonds, tax revenues, and co-op member equity to buy your lines and build your energy plant
Options for Raising the Money
#2 – Municipal Ownership – Get permission from the legislature to own generation (and change the laws so you don't need to get permission); Raise grants, bonds, tax revenues, and co-op member equity to build your energy plant
Options for Raising the Money
#3 – LLC or C Corporation Ownership –Incorporate a business with majority ownership held by a co-op, a non-profit and/or municipality committed to long-term stewardship of the generation resource; raise co-op member equity, grants, and investments to build your energy plant
Co-op Power’s Mission
To build
a multi-class, multi-racial movement
for a sustainble and just
energy future
Co-op Power
STRATEGY
• Build community-owned sustainable energy resources
• Make sustainable energy products and services more affordable and accessible through group purchasing
Why Join CoWhy Join Co--op Power?op Power?Save Money and Save the EnvironmentSave Money and Save the Environment
Biodiesel PlantBiodiesel Plant
CoCo--op op PowerPower
$750,000$750,000
Biodiesel and Biodiesel and dividendsdividends
-- $975 member equity$975 member equity-- Volunteer energyVolunteer energy
CoCo--op op Power Power
MemberMember Community Wind Community Wind & other & other
renewable renewable energy projectsenergy projects
--Discounts on productsDiscounts on products& services & services
--Profits returned as Profits returned as steep product discountssteep product discounts
-- Energy educationEnergy education-- Learning CommunityLearning Community-- Public policy advocacyPublic policy advocacy-- Regional/local controlRegional/local control
Electricity Electricity RECsRECsand dividendsand dividends
$1,000,000$1,000,000
CoCo--op Power membersop Power memberssave money now.save money now.
Members receive:Members receive:2% off solar installations 2% off solar installations –– either solar hot water or solar electriceither solar hot water or solar electric15% off15% off Econoheat’sEconoheat’s Omni flexible fuel burners, furnaces, space Omni flexible fuel burners, furnaces, space
heaters, and air conditionersheaters, and air conditioners10% off solar hot water equipment from Stiebel Eltron10% off solar hot water equipment from Stiebel Eltron10% off hundreds of conservation and efficiency purchases online10% off hundreds of conservation and efficiency purchases online
atat efiefi.org (Energy Federation Inc).org (Energy Federation Inc)22--5 cents off a gallon on heating oil (either a 3% or 20% blend of5 cents off a gallon on heating oil (either a 3% or 20% blend of
biodiesel) bringing your cost for B3 heating oil below the goingbiodiesel) bringing your cost for B3 heating oil below the goingmarket price for home heating oil in more than 100 townsmarket price for home heating oil in more than 100 towns
Discounts onsolar electric & solar hot water packages
Arrange Site Assessment
Help with Federal, State & Co-op Power Rebates
Co-op Power member, Jonathan Woodbridge, on his roof with his solar hot water system installers from Kosmo Solar. Jonathan’s Co-op Power rebate: $95 on his $4,760 system.
Co-op Power members, the O’Neils, with their solar electric system installer from (PV)2.
The O’Neils’ Co-op Power rebate: $481 on their $24,058 system.They were also able to secure a $9,990 from the MTC and $1,000 in state income tax credits
for a final cost to them of $12,587 for their 2 kW system. (2004 programs and pricing)
Co-op Power Member Rebate: 5%
off selected items
Omni’s Econoheat Burners, Furnaces, Air Conditioners and Space Heaters take recycled vegetable oil, biodiesel, and heating oil for the ultimate in fuel flexibility. For those who like to work for their fuel, you can stay warm burning free fryolator oil from a local restaurant.
Co-op Power Discount: 15% off Retail Prices – For example, Co-op Power members receive a discount of $600 off a $4,000 furnace
Savings at Energy Federation IncorporatedWeb Site
Hundreds of Energy Conserving Items Discounted 10%
www.efi.org
Joyce Palmer-Fortune and her sons show the energy efficient attic cap they purchased online through the Energy Federation, Inc. (EFI.org)
Joyce’s Co-op Power Discount: 5% off their $119.50 purchase
Heat your home with3% or 20% Biodiesel Blends
No need to buy new equipment!
Get 2-5¢ a gallon rebate
Co-op Power members, the Rottenbergs, receive a delivery of bioheat from Rice Oil. The Rottenberg’s Co-op Power discount:
$100 off 1,000 gallons of their bioheat purchases.
Energy Education: Co-op Power Manager, Lynn Benander, meets with a group of local high school students to make their own jars of biodiesel and tour her
co-housing community’s solar homes.
Uniting Environmental Justice with Community Ownership of Clean
Energy Resources
Why Join CoWhy Join Co--op Power?op Power?Save Money and Save the EnvironmentSave Money and Save the Environment
Biodiesel PlantBiodiesel Plant
CoCo--op op PowerPower
$750,000$750,000
Biodiesel and Biodiesel and dividendsdividends
-- $975 member equity$975 member equity-- Volunteer energyVolunteer energy
CoCo--op op Power Power
MemberMember Community Wind Community Wind & other & other
renewable renewable energy projectsenergy projects
--Discounts on productsDiscounts on products& services & services
--Profits returned as Profits returned as steep product discountssteep product discounts
-- Energy educationEnergy education-- Learning CommunityLearning Community-- Public policy advocacyPublic policy advocacy-- Regional/local controlRegional/local control
Electricity Electricity RECsRECsand dividendsand dividends
$1,000,000$1,000,000
Co-op Power members, board and staff worked together with Congressman Olver and the National Renewable Energy Laboratory
to research which renewable energy resource to develop. Biodiesel production emerged as the business that would have the greatest
likelihood of success and the largest environmental impact.
Greenfield MA Industrial Park
Innovative Technology using
recycled oil
Right TimeRight Placefor Biodiesel
Strong business plan with
skilled leadership
Biodiesel is a clean fuel for transportation and heating - the only clean fuel for diesel school
buses, tractors, and trucks.
Co-op Power is building a biodiesel refinery in Greenfield
Mass. called Northeast Biodiesel. It will produce ten million gallons a year of biodiesel from yellow grease and recycled vegetable
oil beginning in 2008 and provide 22 quality jobs. High Market
Demand
Recycled Vegetable
Oil(from
restaurants and cafeterias)
How is Biodiesel different from recycled oil and biodiesel blends?
Special recycled oil
furnaces and boilers with
special handling
Biodiesel (B100)
Biodiesel Blends
(Blended withpetro-diesel to make: B2 (2%)B3, B10, B20)
chemical process to remove glycerin
Any furnace or boiler in
warm weather
Any diesel
vehicle Any furnace or
boiler
blending with petro-diesel or #2 heating oil
Converted diesel
vehicles with special
handling
Any diesel vehicle in
warm weather
An Engine for Building An Engine for Building Renewable Energy ResourcesRenewable Energy Resources
From 2008From 2008--2016 Northeast Biodiesel Company will 2016 Northeast Biodiesel Company will give Cogive Co--op Power a $300,000 annual dividendop Power a $300,000 annual dividend
After 2016, once the outside investors have been After 2016, once the outside investors have been bought out, the bottom line of Northeast bought out, the bottom line of Northeast Biodiesel will all flow to CoBiodiesel will all flow to Co--op Power, now op Power, now estimated at $4.5 million a yearestimated at $4.5 million a year
These funds will be used to reinvest in Northeast These funds will be used to reinvest in Northeast Biodiesel, build new renewable energy resources, Biodiesel, build new renewable energy resources, and bring deeply discounted energy products and and bring deeply discounted energy products and services to our members.services to our members.
How Co-op Power is building Northeast Biodiesel Company, LLC
Capitalization Plan for Northeast Biodiesel
$125,000 $625,000
$1,866,000$4,000,000
Co-op Power Member Equity
Federal Grants
Equity Investors
Loans
How Co-op Power is building Northeast Biodiesel Company, LLC
Co-op Power 70%
Staff 30%
Investors 28%
Co-op Power 59%
Staff + 13%
At the end of ten years, Co-op Power and the biodiesel plant staff will own 100% of the biodiesel plant.
Ownership at Business Launch Ownership after Ten Years
Investors are looking to get their money back, not to keep it tied up in a business for a long time, so they were pleased with a ten year exit strategy.
Northeast Biodiesel Cash Disbursement Projections
Co-op Power members will decide how much of the Co-op Power disbursement (approximately $1.5 million/year) will be invested in building new renewable energy resources and how much will be distributed back to members in the form of discounts and rebates on energy products and services.
Partnering with Co-op PowerThere are several ways you might consider
partnering with Co-op Power . . . .#1) Join this regional effort to build community-
owned sustainable energy resources – raise Co-op Power member equity for your projects –leverage Co-op Power’s resources
#2) Create a consumer-owned cooperative like Co-op Power for your community
#3) Partner with Co-op Power to support your efforts
Efficiencies of Partnering with Co-op Power
• You’ll save time building the residential retail products and services that encourage people to invest their equity; just start signing on members and raising your equity.
• You’ll have support for your business development efforts from a large group of people with energy and business development expertise.
• You’ll have access to Co-op Power’s pool of investors, grantors, and lenders to help you raise capital to launch your sustainable energy business.
• You’ll save money and time, get more done, and be part of a large group of like-minded people and organizations in the region that will help you sustain your efforts.
CoCo--op Powerop PowerBuilding a multi-racial, multi-class movement
for a sustainable and just future