Energy Cooperative Association of Pennsylvania

1. Energy Cooperative Association of Pennsylvania Exploring Cooperatives: Economic Democracy and Community Development in Pennsylvania and Wisconsin June 13, 2012

2. The Energy Co-op Mission • To provide energy cost savings, education and advocacy on behalf of its members • To promote the efficient use of energy and the use of renewable energy • To support cooperative concepts and participate in the cooperative movement

3. History Est. 1979 as a heating oil cooperative Founded by Weavers Way Food Cooperative members Located in Center City Philadelphia Serves members in a five county region of Southeast PA Programs Heating Oil Electricity Biodiesel Distribution ECAP History & Programs Service Area – Delaware Valley Region

4. Heating Oil Program • Group buying program for heating oil consumers • Owner-members in five counties • Partners with 10 suppliers • Most locally owned • 5 provide Bioheat/combinations of bioheat and conventional heating oil • Floating daily rate – varies by supplier • Set by ECAP • Based on the daily wholesale market price and marked up for each supplier based on contracted fixed margins • Average cost savings of up to $.20/gallon

5. Energy Program • Electricity Generation Customer Choice and Competition Act of 1996 • ECAP licensed Electric Generation Supplier • 2012 Electricity Composition • EcoChoice100 = 99% wind; 1% solar • EcoChoice20 = 20% wind

6. Biodiesel Distribution Program • ECAP is a a full-service, licensed Class I Distributor in Pennsylvania supplying biodiesel at any blend level • Sustainably sourced, produced and distributed • Grant application and administration support • Quality ASTM-grade fuel

7. Categorizing ECAP • Type – determined by ownership structure and function • Consumption OR production • ECAP incorporates elements of both • Sector – industry in which the cooperative operates • Utility sector • Distribution OR generation and transmission (G&T) • Federated co-ops form purchasing co-ops to generate or purchase the power they distribute ECAP = Hybrid Consumer-Producer Federated Energy Distribution-G&T Cooperative

8. ECAP Organizational Structure

9. Board of Directors • Elected by and (largely) from within ECAP’s membership • Administrative and managing agent of the cooperative • Composition (according to bylaws) • 5 – 11 directors solicited from all classes of membership • ≥ 50% of directors need to be active members • ≤ 6 at-large, non-member directors • 2 year staggered terms with a 4 term limit

10. Staff • Oversees the Electricity and Biodiesel Distribution programs (and ultimately the Heating Oil Distribution Program) • Direct research and development of existing and new energy programs • Manage the implementation of strategic goals • Manage and report on the financial conditions of the organization • . • Oversee the Membership, Marketing, and Outreach departments • Manage the implementation of strategic goals and strategic management process • Oversee HR, IT and infrastructure • Report on organization’s operational conditions Co-Director of Operations Co-Director of Programs • Maintaining inventories of biodiesel • Ensuring quality control • Arranges and processes deliveries • Reports on grant deliverables • Engages members through the co-op’s social media sites • Serves as the face of the co-op at local events Outreach Associate Biodiesel Distribution Program Manager Marketing Coordinator • Coordinating all marketing efforts • Oversee Heating Oil membership services Electricity Program Manager Manager of Membership & Administration • Focuses on meeting the needs of the co-op’s growing membership base • Manages website and IT needs • Managing and growing the Electricity Program • Identifying and obtaining for local energy sources

11. Members • Membership Classes • Class A – any cooperative organization, credit union, unincorporated association, community association or nonprofit organization • Class B – any residential household or residential energy consumer • Class C – any businesses or for-profit enterprise • Membership Status • Active – members using ECAP services/products who are current with dues or have applied for/received a dues waiver; only active members can vote at the AMM • Inactive – members using ECAP services who are not current with dues and have not requested a dues waiver • Supporting – organizations, households and businesses unable to use ECAP services/products due to unavailability who are eligible for limited member benefits 7,606 members as of February, 2012

19. ECAP & Strategic Management • 2012 Strategic Planning Initiative • Lack of best practices • Unique organizational structure • Mixed urban, suburban and rural membership/service area • Cooperative and ECAP-specific values • Innovative, young and expert leadership

20. Big Hairy Audacious Goal (BHAG) • By 2020, The Energy Coop • Has 20% market share, • Sources 100% of its renewable energy from within the region, and • Reduces overall greenhouse gas emissions by more than 20% compared to conventional energy usage.

21. Strategic Issues Expansion Diversification ECAP’s weak position in the renewable energy market ECAP’s competitive edge dependent on innovation and diversification Investment in R&D will yield uneven/irregular program diversification Uneven diversification will result in disproportionate patronage rebates • Patronage rebates distributed in proportion to use • How to distribute patronage rebates to new members? • New users may receive benefits that are disproportional to their share of the equity investment • Existing members may be reluctant for the cooperative to use the equity created through their patronage to fund operations benefiting new users

22. Conclusions • Importance of mission and values • Identification of strategic issues and best practicesconsistent with cooperative principles • ECAP’s innovative products and unconventional business structure pose specific challenges • Profit distribution system • Equity structure • Realization of the BHAG requires balancing ECAP’s • Progressive business structure • Organizational values • Universal cooperative principles