EmPOWERing Communities: Renewable Energy Co-ops Drive Local Investment And Ownership
By: Dana Drugmand
Citizens are increasingly standing up and fighting back against dirty energy projects across the country, from the Gateway Pacific coal terminal in western Washington to the Northeast Energy Direct gas pipeline in New York, New Hampshire, and Massachusetts. But some are taking it a step further by engaging in clean energy development at the local, grassroots level. The idea is to have communities and individual consumers take ownership and control over their power provision.
“We’re finding a way to bring the assets of an energy economy into our own hands,” says Erik Hoffner, co-founder and now marketing and membership director of Co-op Power. Hoffner and others started this renewable energy cooperative in 2004 as a way to empower the local community to build a sustainable future. Since then it has grown into a 500-plus member-owned business supporting clean energy projects across New England.
Operating as a decentralized network of local energy co-ops, Co-op Power exists for and invests in the communities it serves. Contrary to the corporate business model of big utilities, the cooperative establishes a more democratic structure ensuring that money, jobs, and the green energy produced stay in the community.
The local co-ops, or organizing counsels, are at the heart of Co-op Power. There are currently six regionally aligned community co-ops rooted in southern Vermont, Massachusetts, and Rhode Island. Each local co-op decides which projects it wants to pursue and, through its share of control in the larger Co-op Power network, accesses the funding and other resources it needs.
Having local entities connected through a networked structure makes it easier to share resources and ideas in order to have a more powerful impact. Community energy co-ops decide what projects they want to pursue, recruit members, and receive technical, financial, legal, and project management support from the main office. “There’s tremendous learning between cooperatives about what’s working, what’s not working, where the opportunities are to move communities off of fossil fuels,” said Lynn Benander, president and CEO of Co-op Power. It also requires a decentralized governing structure. “We’ve spent a lot of time creating that local governing structure so each of the local co-ops can be as effective as they need be if they had incorporated separately,” she said.
While community energy co-ops do exist elsewhere, the decentralized structure of Co-op Power is unique. As Hoffner explained, the founders “hacked the traditional co-op model” and turned it into a grassroots investment vehicle. Local economy expert Michael Shuman, author of Local Dollars, Local Sense: How to Shift Your Money From Wall Street to Main Street and Achieve Real Prosperity, describes Co-op Power as “one of the most innovative co-ops in the country and a leader in the local investment movement.”
“Their structure, their democracy, the way in which they’re bringing benefits to members, all of that is pretty cutting edge,” he said
Co-op Power charges a relatively high membership rate, and uses close to 40 percent of that money—the limit imposed by investment law—to reinvest in local energy firms. “Co-op Power puts the petal to the metal as far as they can go legally in order to invest in other energy businesses,” said Shuman. “I think that’s exemplary behavior of how a co-op can contribute to the investment in their community.”
Co-op Power has already raised over $300,000 in member equity and over $800,000 each in member loans and local investment. The buy-in cost is either $975 or $500, depending on income, and members receive discounts on energy products and services. They also become part owners of a dozen different businesses developed by Co-op Power.
So far the cooperative has helped to start five solar installation firms, two green electrician businesses, one thermal window fabrication firm, and a dynamic energy efficiency business. They have also supported several community solar projects like a 30.6 kW solar PV array atop the Brattleboro Food Co-op, and they work with vendors to offer other energy efficiency and solar products and services.
Co-op Power’s latest development is a biodiesel plant, Northeast Biodiesel in Greenfield, MA, that uses recycled vegetable oil to produce clean fuel for use in home heating or diesel-powered vehicles. After ten years of planning and fundraising, the plant is finally set to begin operations this spring. With the launch of this plant and the installation of new community shared solar arrays totaling 5 megawatts, Co-op Power’s clean energy efforts will have kept 60,000 metric tons of carbon out of the atmosphere—equivalent to taking 12,500 cars off the road—by the end of this year. Between 2004 and 2014, their efforts already saved 7,600 metric tons of carbon (equivalent to retiring 1,600 cars).
Additionally, Co-op Power runs a green jobs training program and does extensive outreach and education, focusing in particular on traditionally disadvantaged communities.
“We actively organize in limited income communities of color because these are the most impacted by dirty energy sources, and we believe all people deserve access to cleaner air and renewable energy,” said Hoffner. Co-op Power envisions building a “multi-class, multi-racial movement,” and they do this by hiring and working with people of diverse backgrounds.
“Our Metro Boston office is staffed and directed primarily by people of color. Our three weatherization businesses train workers of highly diverse backgrounds in energy efficiency trades and employ them in a fast-growing green jobs sector. Our member-owners are a diverse group, and our current board chair is African American and an immigrant,” Hoffner explained. About 40 percent of Co-op Power employees are people of color, while 40 percent of Co-op Power members come from limited resource families.
Co-op Power’s unique structure, community impact and commitment to diversity put the principles of energy democracy into practice, and efforts are already underway to bring this model to the rest of the country.
“There are groups looking to replicate parts of what we do,” said Benander. It’s all part of a movement, she said, that is striving for social justice within the context of the clean energy revolution. “This movement is addressing the injustices of the past where people of color and low income communities have been left out of the equation.”