intro to co-op power 2 sept 2007

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