The Energy Co-op 

Philadelphia, Pennsylvania

The Energy Co-op offers their members an alternative to extractive, unsustainable energy companies. It's 100% local renewable energy that not only has the best interest of their members but also the Earth. Their range includes clean electricity, heating oil, and renewable natural gas at affordable prices. 

November 7, 2020

Cooperative Journal

It isn’t common to have energy cooperatives in an urban area. What inspired the development of the Energy Co-op and why do you think it has sustained itself for forty years?

Divya Desai

The co-op was founded in 1979 by a group of Weavers Way Co-op members, which is a food co-op in the Philadelphia area created to address the high price of home heating oil that occurred during the oil embargo. While the heating oil program still stands today and is one of our services, bringing reliably affordable home heating oil to houses in the greater Philadelphia region and beyond, what actually allowed the Energy Co-op to sustain is our strive to seek opportunities and innovative solutions to address energy challenges. We entered the deregulated electricity market in the late 1990s offering a renewable electricity product, pioneering renewable electricity in the Philadelphia area. There was a time when we were not seeing any of that, it was mostly just cost competition. That program has since flourished, and we now offer only 100% renewably-sourced electricity products. One of these is a Pennsylvania local project, 100% renewable energy within the Pennsylvania commonwealth, which creates a cleaner Pennsylvania and supports the Pennsylvania economy.

Again, in mind with that innovation, in 2015 we became the first group offering renewable natural gas (RNG)  an alternative to traditionally sourced natural gas. The RNG program sources recovered methane gas from facilities like landfills or wastewater treatment plants and we source that to offset our members’ natural gas usage. This not only reduces the costs but also prevents the recovered gas from being flared into the atmosphere, helping to reduce carbon emissions.

Ultimately, as with many nonprofit organizations, our goal is to put ourselves out of business. We hope that one day renewable energy will be the new normal with utilities. We hope that utilities will be 100% renewable electricity and natural gas. We at the Energy Co-op continue to innovate and move forward, using our unique position as a non-profit energy cooperative to tackle new and evolving energy challenges.

Since you have started, have you seen that the local municipalities are trying to push for more renewable energy?

Since the founding of the Energy Co-op in 1979, we have seen a lot of new state laws and local requirements where there is much more awareness of issues like climate change. That has led to an increase in the development of alternative sources of energy to fossil fuel-use, which creates greenhouse gas emissions. Certain municipalities have clean energy standards; in Philly, for example, it basically follows the state mandate – the Alternative Electricity Portfolio Standard. Philidalpheans may choose to go beyond that. There are certain municipalities we serve that are developing their own energy plants that go above and beyond that state requirement and we are happy to be of assistance and support those goals as well. There has definitely been a lot of development and energy innovation.

Divya Desai

There are minimums, and long-term goals [in this sphere]. Some municipalities and cities are implementing Environmental Action Committees (EACs) and organizations like the Delaware Valley River Planning Committee (DVRPC), which take environmental action very seriously and have a lot of initiatives in place. People and cities are taking actions to move forward on a lot of environmental initiatives. But I think, ultimately, sometimes the challenge can be when the minimums are not as ambitious as we all hope.

Rooftop Solar Farm - Philadelphia City Council launches a Solar Rebate Program for Philadelphia commercial and residential properties

How are you able to maintain competitive pricing among energy monopolies?

Alexandra Kroger

We have a number of strategies that we use to try and minimize costs to our organization and members while also managing risks so that we can remain competitive in our renewable energy pricing. We are a small team internally – six full time staff, one part time staff-person – and yet we are able to serve thousands of people in the Philadelphia region because we use a robust network of vendors, and the services that they provide for us really allow our small team to maximize our ability and effectiveness in delivering services. We are constantly reevaluating the price positions of our competitors in renewable electricity as well as our own market risk in clean energy supply and products, because it is also one of our primary goals to be sure we are as cost-effective as possible in the purchases that we are making for our members. On the electricity and natural gas side, those are the primary tactics that we use to remain competitive in our pricing.

In addition, to distinguish ourselves in the market and help with our competitive pricing edge, we are very transparent about our offered products and pricing plans. The staff are always available to answer questions from existing members as well as prospective members. Anyone from the public may call with questions. We also provide education and support  to our members about their energy usage and how we can help them to find the solutions that they are looking for.

Another trait that has really distinguished the Energy Co-op is that we have been really evolving to find solutions to the specific energy needs that our members faced. The heating oil program mentioned earlier, for example, developed as an affordable solution when oil prices were high in the 1970s. Right now, we are offering sustainable energy options with our renewable energy and natural gas programs. It is a combination of our diverse products, our engaged staff, our members, and internal strategies we use that minimize our costs that help us remain competitive against energy monopolies in our market.

Local heating oil supplier - members save an average of $0.15-$0.30 per gallon

What do you tell your members and potential members you can offer that other energy companies lack?

Alexandra Kroger

We are a member-run nonprofit, the only one in the Philadelphia region that is offering 100% renewable electricity. We are 100% transparent about what we do. We are one of the few companies offering electricity that supports local clean energy jobs. We invest in our own state, as one of the few companies to offer Pennsylvania-based wind and solar energy – and only wind and solar energy, which is unique among renewable energy providers. There may be other renewable energy companies who source from other, less high-quality and less technologically-advanced sources (including hydropower or even coal waste, depending on what your state considers a renewable energy source).

Much of the significantly less-expensive renewable energy available in the Philadelphia region is offered by those large, vertically integrated companies who make the majority of their profits from sales of nonrenewable energy. They take on less risk and thus have more flexibility in their pricing, but by becoming a customer of one of those companies you are implicitly supporting fossil fuel-backed generation. In contrast, with the Energy Co-op you are only supporting renewable energy-based innovation.

In addition, virtually every energy company right now offers fixed-pricing for a set term rate. These companies have cancellation fees. At the Energy Co-op, while we have always set our guarantee for a year term, we charge no penalties if our members choose to cancel their contract early for any reason. When members sometimes call and say “I want to cancel. What is the penalty?” we say “Nothing! We are sorry to lose you as a member, but you are free to go and will not have any charge for that.”

Finally, I want to mention the renewable natural gas program again. That program is offered for people looking for a sustainable energy alternative to natural gas sourcing, as opposed to the environmental damage that is caused in the recovery of conventional natural gas through drilling and fracking.

Renewable Natural Gas process - alternative to drilling and fracking

What are your decision-making processes and how are your members involved in that?

One of the benefits of running a cooperative is that we really value participation from all of our stakeholders, and we always look for input to continue to evolve and innovate. While the staff and the board are the ones that envision the future of the Energy Co-op, we as a group bring new ideas and services to our members. Each member possesses one vote, to elect members to the board of directors and to vote on our bylaws. They do so much, too, to move us forward as an organization. Our Executive Director, Ronald Fisher, and our Member Recruitment and Business Development Lead, Meryl Sands, actually work with a group of our members who generously offer their time and passion to share feedback and develop ideas for growth. They really push for opportunities to educate their own communities and the broader community on renewable energy. We really would not exist without our members!

Divya Desai

How are you engaging with the community through education and outreach?

Alexandra Kroger

There are many opportunities for members to volunteer with the cooperative, whether that means out in public or in our planning process. We are actually developing the current model that we have for member volunteers into a member ambassador program. This will entail staff working with and teaching our members how they can best engage with their own friends, families, and neighbors in terms of describing their experience with the Energy Co-op and and telling their stories about being members. This program will not be mandatory, but because we do have so many enthusiastic members many will be interested. The program will provide them with the resources that they need to be more effective advocates for an organization that they are proud to be members of. While the development of the program has been slowed due to the pandemic, we are still on the track to launch this.

Beyond that, in terms of direct member engagement we also provide a lot of resources about public policy that you do not have to be a member to access. We have an educational blog called the Current, which provides information across a diverse range of energy topics. That can range from everything from consumer education to smarter energy uses to how to deal with deceptive marketing practices by other energy suppliers so you can be a smarter energy consumer and user in your own home. We also cover and do analysis of issues on energy markets and policy more broadly, more high level policy and political issues that do affect all energy consumers (whether that is developments in renewable energy markets or policies that might affect prices for all energy consumers, renewable and otherwise). The blog is for anyone to access, not only members.

The Energy Co-op information booth

We offer free educational webinars, too, developed and delivered by rotating staff members at the Energy Co-op. They are available to anyone who is interested. Rather than confuse the conversation by going too in depth about what renewable energy is not, we really focus on what renewable energy is and the options that Philidalpheans have for purchasing it. They provide information on our renewable natural gas program as well as other programs that some of our community partners might offer. We have a lot of community partnerships with other organizations local to Philadelphia, including the Clean Air Council and the Philadelphia Energy Authority, and we highlight some of their programs in the webinars that we do. This has included programming about clean energy finance programs available in Philadelphia. Ultimately, we see our mission as not merely providing our own product, but to assure sustainable energy usage in Philadelphia as a whole – whether or not they are members of the Energy Co-op directly.

What is the greatest challenge of having an energy cooperative?

Alexandra Kroger

We are pursuing a complex mission while at the same time operating in a market with very high levels of competition, where we have limited resources compared to our competitors. In addition, the market is characterized by relatively low levels of consumer awareness. It is not only that a lot of people do not know about renewable energy, why it is an important alternative to fossil fuel energy, and how that intersects with climate change; it is also that they are not familiar with our model. They are not familiar with why it might be in their best interest to support an organization that is fostering Pennsylvania-based renewable energy as opposed to becoming a customer of a large renewable energy company that is really just a for-profit delivering its dividends to stakeholders and at the same time delivering fossil fuel-backed energy. We don't have the same level of marketing resources to make ourselves known as these competitors, and being a smaller team and organization, we are more vulnerable to major fluctuations in the energy market. Significant price spikes or unexpected weather events may pose much more of an existential risk to us than to competitors that tend to have far greater financial resources and investor backing. Meanwhile, our investor backing is our members! It is the member equity that we build through every individual that holds a stake in the organization, just by being a member of the coop.

Ultimately we are not just aiming to provide sustainable energy to our members, but also education to our members as well as the larger public and work to directly engage with our members and community. We want to set ourselves apart as an economically, environmentally, and socially sustainable organization. Pursuing that mission while at the same time dealing with market realities is probably our biggest challenge.

What is the greatest benefit of having an energy cooperative?

The greatest benefit is our ability to offer our members practical alternatives to fit their energy needs through our programs, as well as addressing the energy challenges that we face through education. Our heating members purchase their whole heating oil at reliably affordable rates from quality suppliers that we are vetting for them, while our renewable natural gas and electricity members can leverage their dollars to support a clean energy future in a convenient way.

Divya Desai

As Alexandra discussed, however, the energy sector is really complicated. We utilize our expertise and experience to help people find, use, and understand energy through constant conversations. We are at this moment in a unique position to be innovative in our approach, with our focus not on any single bottomline; the Energy Co-op leverages its time, money, efforts in pursuit of initiatives that drive the mission forward first before profit.

What are additional barriers to implementing an energy cooperative? Do you see energy moving towards more community ownership?

Alexandra Kroger

There is a great deal of financial risk difficult to penetrate from the beginning. Being a supplier under those conditions requires knowledge, experience, expertise, and resources to maximize impact – and that is not an easy feat. The key to address those industry challenges is putting the energy first, and as a cooperative we continue to succeed because we are not focused on the bottom line. It sounds counterintuitive, but we strive for financial excellence not only in profit but to remain economically viable to continue to serve our members’ energy needs.

We remain the only energy cooperative in this area with the portfolio of services that we have. The nonprofit cooperative business model really offers a community-driven approach to energy provisions, which is appealing to our consumers. The newer generations are looking for models that are not just looking at profit, which means cooperative models and models like community solidarity and buy-in are great examples of alternative energy models that address evolving energy challenges and consumer behavior.

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