After my recent post about subscribing to Greenpower, my partner Susan received a thoughtful response from Mat Northway this week regarding the questions we had about how the $0.01 premium on each kWh of electricity we use would be managed. Mat is the Energy Management Services Department Manager with the Eugene Water & Electric Board (EWEB) and he provided a few more details than EWEB’s Greenpower FAQ.

Regarding the question of how the extra funds would be managed, Mat reports that the EWEB board has established a reserve account for the Greenpower program. Mat states, “This reserve account keeps Greenpower revenues separate from the remainder of the utility revenues and under the direction of the Board.” This is a sound decision in my opinion and will certainly allow EWEB to better measure the popularity and costs of the program.

Susan also asked about the cost of the administration and marketing costs. The initial marketing expense was at least $40,000. This amount is based on the 80,000 flyers that were mailed to EWEB customers. This was the flyer that caught my eye. Mat indicated that he felt that keeping administration and marketing cost to 10% - 15% of revenue would be “responsible and appropriate.” He says that EWEB doesn’t have advertising or promotional costs for “regular” power. This could be problematic, without a comparison with other departments at EWEB how will the public know if they are being responsible with their spending?

Mat noted that after one month the Greenpower program sign ups and sales earned $2,000. At this rate the program will have revenue of $24,000 after 12 months and will have started with expenses of at least $40,000. Those figures do not take into account the administration and marketing costs that Mat indicates EWEB will incur. I do not believe that this assumes that the Greenpower program is going to fail due to these very basic financial figures. Mat appears realistic about the revenue possibilities and encouraged by what a strong response by the community could bring to them:

What we actually spend the money on will depend greatly on how much we actually collect. The types of investments we are considering range from additional investments in more renewable energy such as additional windmills installed at an existing wind farm, to funds for research in to new forms of renewable energy such as the work currently being conducted by OSU on wave energy off the Oregon coast, to support of local education to improve understanding of sustainability and the impacts of energy generation on our environment. If we only collect a few thousand dollars by years end we might only be able to proved some financial support for a local sustainability conference and workshops; at $50,000 to $100,000 we could also add investments in research into new technologies and additional investment in photovoltaic generation in Eugene, with over $100,000 we could also consider expanding further the ongoing investments that EWEB already makes in new windpower in Oregon.

Susan and I appreciated Mat’s quick, thoughtful and full response to our questions. He invited us to review the program’s progress in order to have EWEB prove their ability to build and expand this new program. Though he suggested that we hold off until they had proven themselves, I feel that we need to provide early support for this program in order for a critical mass of participants to be established.