Energy Elective Model

Business Model

The EnergyElective business model capitalizes on the strong congruence of public benefit and private return that accrues when the return is tied to delivery of exclusively clean energy within a transparent operation structured to continually pass the cost reduction benefits of both efficiency and ongoing technology improvements through to the utility’s customers.

EnergyElective’s primary role is to aggregate and broker clean watts and manage the intelligent local grid which connects the mini power plants created when buildings and properties are retrofit with renewables and/or efficiency. By aggregating and connecting local clean energy assets through an intelligent grid, EnergyElective maximizes the value of locally produced clean energy by balancing renewables with automated demand reduction (ADR) and automated generation control (AGC). The result is less waste, less demand, and lower transmission and distribution (T&D) cost, all resulting in lower energy prices to the CCA ratepayers than can be offered by fossil-fueled energy supplied through a centralized system architecture.

The EnergyElective business model is also designed as a platform in which the incentives of the corporation’s ownership are strongly tied to the ratepayers’ desire for steadily falling costs, and the public’s need for steadily falling GHG emissions. Through mechanisms such as profit sharing with both ratepayers and employees, stock options for employees, localized ownership of each CCA operation, and limits on executive compensation in the form of maximum ratios between the lowest and highest paid employees of the corporation, the EnergyElective public benefit corporation platform maintains strong congruence between public benefit, ratepayer satisfaction and profit to ownership. Part of the intent of the corporation’s design is to eliminate the conflicts of interest between public benefit and private profit which have historically driven the need for intense regulatory oversight of the investor owned utility model.

Fundamental, structural market forces underpin the business case for a utility built on distributed generation from renewables and efficiency. The combination of energy efficiency negawatts plus renewable megawatts produces clean energy at lower cost than fossil-fueled energy. In a CCA structure, the blended price to ratepayers can be lower than Investor Owned Utilities (IOU) are able to offer, because negawatts, which are far cheaper than fossil-fueled watts, cannot be purchased in bulk from remote sources; they must be produced inside the jurisdiction where the CCA structure can distribute the benefits in the form of lowered capacity requirements. The other fundamental market advantage is that distributed generation uses only a fraction of the high voltage transmission resources that centralized generation requires. Since transmission and distribution costs represent roughly half the utility bill, the price advantage of EE’s business model in CCAs compared to the centralized IOU model grows over time. The result is that the EnergyElective business model can offer cities and counties cheaper energy while simultaneously switching them off fossil power.