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Our home to share our thoughts and host an (e)discussion about the opportunities sustainability presents and how our world will be changing as a result. From savvy strategies for clients to our fleet of Schwinn 10-speeds and everything in between; we invite you to the conversation and hope that we can explore true.green. together.


I’m really hoping this is not news for most of you, but I’m running to represent Subdistrict 5 on the Omaha Public Power District Board of Directors in the upcoming general election. Running for office was not something I was ever planning to do, but life threw a few things at me, and I decided it was time to step up.

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Why am I running, you might ask? Three reasons.

First, I think I’m actually well suited for the Board. Given that I work in the energy industry on a daily basis, I have a really good level of knowledge that will be immediately advantageous for the Board. I also have a background in finance with an MBA so I’m also able to fully understand all the financial implications of OPPD’s activities.

Next, I would really like to see the Board be more open and transparent. It’s a public utility; we own it. And OPPD can do a much better job of sharing and soliciting information from its customer-owners.

Finally, the energy industry is changing very quickly right now. New technologies are popping up all the time. Wind and solar energy are not only getting more efficient, but they’re decreasing in cost. That pace of change is only going to continue. My hope is to help OPPD take advantage of all these changes. They’re coming whether they want them to or not. How can we pursue them as opportunities? What must we do to ensure we have a long future of clean and affordable energy?

You can learn more at craigmoody.org. Or call me anytime if you’d like to discuss further. I’m always more than happy to chat!

And, of course, I would greatly appreciate your vote!

#GetintheMoody

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We have several new projects underway that we’re really excited about and wanted to let you in on a little of what we’re up to. Let’s get right to it!

Methodist Health System brought us on board to complete some preliminary Sustainability Master Plan work. Our main objectives are threefold: 1) identify and articulate their previous accomplishments, 2) establish benchmarks in key areas such as energy and water consumption, waste diversion, commute modal split, and our Sustainability Engagement Index, and 3) set their sustainability vision and goals.

Countryside Community Church is in the process of building a new church, and we were brought onto the design team to ensure all involved are really taking a thorough and meaningful approach to sustainability. Their aspirations are impressive, and we’re excited about having such a great, sustainability–focused house of worship in Omaha.

Omaha’s Henry Doorly Zoo & Aquarium, a long-time client of ours, has us hard at work this year with several different projects, including the development of a new master plan for the Wildlife Safari Park (as a partnership with ASD Stanley J. How Architects), re-evaluating the goals in their Energy & Sustainability Master Plan, many of which have been met, and technical assistance with a new solar installation. We’re also continuing our implementation work at the Zoo.

The University of South Dakota (my alma mater) hired us to conduct our Sustainability Engagement Survey and to provide a suite of recommendations on how they might re-engineer their waste and recycling collection processes so as to increase their diversion rate.

In partnership with WELLCOM, we created and rolled out the Active Commuting Toolkit to help employers develop comprehensive active commuting programs. These programs support employees’ transportation choices such as walking, biking, riding the bus, and carpooling. Active commuting saves employees and employers money, improves health, and keeps our air cleaner. Our efforts earned recognition from Omaha by Design with the 2016 Access & Mobility Award.

Omaha’s Metropolitan Utilities District brought us on board to write their first ever Sustainability Annual Report. It’s been very exciting to learn about their past efforts and future plans!

Duchesne Academy engaged our team to help carry out a school-wide sustainability initiative this year. By engaging students, faculty and staff, we are helping them to hone in on the best opportunities for sustainable improvements and to implement them in ways that are smart, efficient, and fun.

Morrissey Engineering hired us to conduct a waste audit, and Soil Dynamics engaged our expertise to help them navigate the changes being considered to Omaha’s waste collection system.

Creighton University , partnered with us earlier this year to design and implement a peak energy reduction campaign that primarily focused on operational and behavioral strategies. We also conducted our Sustainability Engagement Survey for all CU staff and students and developed a sustainability engagement plan for one of Creighton’s residence halls.

New Mexico State University, our newest client, recently hired us to conduct our Sustainability Engagement Survey, which, for all you institutions of higher learning out there, will help them fulfill AASHE STARS credit EN-06: Assessing Sustainability Culture.

Last but certainly not least, our implementation work continues with the Omaha Public Schools, Kearney Public Schools, and UNMC/Nebraska Medicine.

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Everyone who cares about the natural environment recycles, right? Paper, plastic, glass…but what about money? It can be almost just as easy to recycle energy investments to address the serious global issue of climate change if you set up a Green Revolving Fund (GRF).

What is a revolving loan fund?
A revolving loan fund is a dedicated funding mechanism used to support specific projects that payback project costs to such fund. Often using cost savings from funded projects, loans given are repaid into the revolving loan fund. Then the money repaid to the revolving fund is lent again to finance additional projects.

What is a green revolving fund?
A green revolving fund (GRF) is a revolving loan fund used to finance projects that have specific ties to energy conservation or efficiency, renewable energy, or other natural resource-saving projects. Specifically tracked savings from projects funded are returned to the green revolving fund to be used for future projects.

How do GRFs perform?
Colleges and universities with GRFs have reported a median return on investment of 28 percent over the life of a typical project (see Sustainable Endowments Institute’s (SEI) Greening the Bottom Line 2012). GRFs are often focused on projects with a payback window of no more than five or ten years. The investments make economic sense. Often the biggest hurdle is working out the mechanisms to allocate savings appropriately within the constructs of a university’s current budgeting and finance structures.

To start brainstorming for high payback projects, review McKinsey & Company’s Global GHG abatement cost curve beyond business-as-usual, in its report Pathways to a Low-Carbon Economy. This chart and report provide insight into the investments that reduce greenhouse gas emissions with the highest financial payback. Of course, most everyone knows that changing an incandescent light bulb to a LED often pays back its investment in less than a year, but this report will get you thinking beyond lighting. If the McKinsey & Company report is too academic for you, just start talking to your facilities and maintenance leaders. They know what needs to be replaced and upgraded. Starting from there, look at your options for more efficient technologies. More energy efficient options often cost more upfront, but that additional cost will often be more than recovered in energy savings over the life of the equipment, saving money and reducing emissions.

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Image included with permission from Sustainable Endowments Institute

 

Who is using GRFs?
The most common users of GRFs are colleges and universities. AASHE has a database of information about many of the institutions that have started GRFs. The Sustainable Endowments Institute (SEI) has coordinated The Billion Dollar Green Challenge to encourage colleges, universities and other nonprofits to investment a cumulative total of one billion dollars into green revolving funds. As of July 2016, SEI has $131 million committed from 62 participating institutions. See if your alma mater is on the list, or your child’s dream school. As of July 2016, the University of Vermont boasts the largest GRF, with a $13 million fund started in 2012. They look for projects that pay back within seven years and cost no more than $3 million per project. Harvard University’s well know $12 million fund, established in 2001, has supported nearly 200 projects which now cumulatively save the school over $4 million each year (yes, each year!) on energy bills.

Schools have found that a GRF is a reliable mechanism to support cost-saving capital improvements even in the midst of budget cuts and rising energy costs. GRFs regularly outperform the investment returns for schools’ endowments and thus some endowments have become involved with initial funding support to GRFs.

Are you at a small institution or one that doesn’t have access to millions of dollars? No problem. The range of sizes (both regarding enrolled students and school endowment size) among colleges and universities with successful GRFs suggests that any school could implement a GRF. SEI reported that initial capital investments in GRFs are evenly distributed in the ranges: below $100,000, between $100,000 and $1 million, and above $1 million. The fund I helped start began with only $50,000 and is added to annually from various sources. As a result of projects funded by this GRF and through a number of other small cost behavior-based changes on the campus, the energy bills are down, and the institution is saving more than $400,000 annually on energy costs compared to a business as usual scenario.

How is a GRF formed?
GRFs are formed in many ways. The most common sources of start-up funding are one-time administrative budget allocations, prior efficiency or utility savings, private donations or foundation grants, and endowment funds. Although administrative involvement and support for a GRF is key, students are frequently involved in creating the GRF at colleges and universities.

Verdis Group helped Omaha’s Henry Doorly Zoo & Aquarium (“Omaha’s Zoo”) set up a GRF, starting with seed capital from a grant and growing through utility lighting rebates, recycling-focused grants, direct contributions, and of course energy savings. One of the hurdles the Zoo’s Green Team faced was having money to fund even small sustainability projects, and this fund has almost entirely resolved this issue. Each year projects are selected that are both high payback projects, such as lighting updates, and low or no payback projects, such as adding recycling infrastructure to make recycling easier, faster and more complete. These GRF bundles use the high payback projects to support the projects that don’t financially payback on their own, and everyone is happy—the accountants who are saving money on energy bills, the Green Team who now has funds to make the changes they view as most important, and the environment which benefits from resource conservation and reduced pollution.

How is a GRF administered?
It is important to get your administration and tracking set up before jumping into a GRF. There are many administrative models among GRFs. On college campuses, the governance of the fund often depends upon how it was formed. Typically, a small group oversees the finances of the fund, while a larger, more diverse group reviews project loan applications on an ongoing basis. Funds typically require projects to have a maximum payback period to ensure timely replenishment of principal to the fund. Some funds charge interest while others simply require repayment of the principal. Interest allows the fund to grow organically over time; however growth can also come from additional external contributions or allocations from operating funds. Other funds require a percentage of real energy savings to be paid to the fund even after the principal amount of the loan is returned, allowing the fund to grow from the additional savings.

At Omaha’s Zoo, Verdis Group currently administers the GRF in partnership with the Zoo’s accounting group. The Zoo wanted its GRF to financially benefit its general operating budget and serve as a continuing funding source for green projects. Thus, savings in the Zoo’s GRF projects are allocated with a percentage to the Omaha Zoo’s general operating budget and the remainder to replenish the GRF. Since the creation of the Zoo’s fund, SEI has developed a GRF tracking system (GRITS 1.5) that helps institutions manage and analyze project-level energy, financial and carbon data without developing a new process or tool just for the GRF tracking. SEI’s experience with GRFs is exceptional and the GRITS tracking tool has made setting up and tracking a GRF even simpler.

What are common GRF goals?
A GRF can focus on energy efficiency goals, such as reducing energy expenses and cost savings (a.k.a., fighting climate change with the bonus of saving money). In other cases, the GRF may support innovation and engagement projects that do not have direct significant financial payback. In the latter example, a GRF is replenished by grants or other funding, rather than repayment of project savings. GRFs are often operated as hybrid funds that fund both high payback projects along side engagement projects with low or hard-to-measure payback.

At Omaha’s Zoo, a hybrid fund was formed because engaging the staff and providing funds to implement staff-generated green projects was important. Yet, ensuring the revolving nature of the fund endured was critical because an ongoing source of contributions beyond savings was not guaranteed. Verdis Group works with the Omaha Zoo annually to analyze potential projects, determine project paybacks, and guide the Omaha Zoo’s GRF selection committee toward a group of annual projects that meet financial payback, employee engagement, and environmental goals.

So get out there and start recycling something even more interesting than those old aluminum cans – recycle your energy investments!

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We are beyond excited to announce that Kim Morrow will be joining our team on May 31, 2016! Originally from California, Kim has worked in the sustainability and climate fields in Nebraska for the past six years. She has experience in sustainability consulting, clean energy advocacy, faith-based climate advocacy, higher education, policy work and fundraising.

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Prior to joining us, she served as Executive Director of Nebraska Interfaith Power & Light, a non-profit leading the faith community’s response to climate change. She also served as Climate Change Resource Specialist at the School of Natural Resources at the University of Nebraska-Lincoln, partnering with Dr. Don Wilhite to deliver a series of sector-based roundtable discussions on the implications of climate change to Nebraska. In July 2015, she was honored at the White House as a “Champion of Change” for her efforts on climate change with the faith community.

Kim is passionate about finding smart, compassionate, and community-based solutions to the environmental challenges of our time. She is thrilled to join the team and looks forward to making great things happen in Nebraska and beyond.

Kim currently lives in Lincoln, and we’re excited to report that she’ll eventually be spending roughly half of her time there – consider this a Verdis expansion into the Lincoln market!

Kim lives with her two kids. When she’s not trying to save the world, she enjoys roller skating, ice skating, biking, walking and jogging. She has recently started playing guitar, and has an unusual delight with her backyard composter.

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Omaha’s waste and recycling programs have been in the spotlight lately as new proposals from Waste Management to reform the current collection methods draw public attention. These changes could not come sooner, with the current state of Omaha’s recycling program lagging behind all neighboring states. A recent World-Herald analysis found that Nebraskans rank fifth in the country in the amount of garbage they send to landfills. Omaha has hovered around a diversion rate (% of total materials recycled) of 11% for many years, which is discouragingly low (the national average is 34%) and well below the EPA’s estimate that 75% of residential trash is recyclable.

We can do better, and it is time for change at all levels of the system.

Waste Management recently submitted proposals to overhaul waste collection in Omaha. Mayor Jean Stothert requested these proposals to address “frequent complaints about the current level of service and plan for the future.” However, overhauling Omaha’s waste and recycling programs is a complicated matter, and the decision our leadership makes must carefully consider many alternatives and criteria.

In our work we see first hand the challenges and opportunities our clients have related to waste and recycling. The reality is that it is far more complicated than most people realize. Residences and businesses alike obtain, use, and need to discard many different types of materials, and most people want a reliable, simple process.

In order to improve Omaha’s recycling rate, there are a few key things that should be considered. First, start at the source. Omahans need to do a better job of considering what they are obtaining at the point of purchase. The best way to limit the volume of outgoing waste is to not obtain those materials in the first place. A major missing piece of both Waste Management proposals is any programming to decrease the amount of waste/recycling/yard waste that is produced. Less waste means less cost to taxpayers to manage the waste. MAPA’s Integrated Solid Waste Management Plan (ISWMP) recommends the City hire or contract out a Source Reduction Specialist to do just this—reduce waste generation.

Yard waste in particular is a material that retains a great amount of value, and Omahans should be encouraged to consider ways to keep yard waste on their property. This can be done in the form of mulching grass clippings, composting leaves and grass clippings at home, and using some landscaping materials for other purposes (art, fencing, walking sticks, nature nooks, etc.). The City’s own policy directs City staff to mulch leaves and grass clippings on City property. Shouldn’t we all do the same?

Next, the addition of larger, lidded recycling containers is good and important. Several studies have shown that such a system will result in higher recycling rates, which is something Omaha desperately needs.

Third, one of the more contentious issues in Waste Management’s proposals relates to the plan to mix all landscaping materials with regular trash and send it all to the landfill, effectively shuttering the City’s Oma-Gro composting operation. Claims have been made that sending landscaping materials to the landfill, which is where some electricity is generated by burning methane gas, is better environmentally than composting. These claims have not been peer-reviewed and the Nebraska Department of Environmental Quality, MAPA’s ISWMP, and the Environmental Protection Agency share a common waste hierarchy (see below) wherein composting is a better use of organic waste than energy capture. The City does not have enough information to determine which approach is environmentally superior. Further analysis is warranted.

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Finally, both Waste Management proposals effectively limit the amount of waste that a household can have picked up on a weekly basis. Such a limit is worthwhile, especially for regular landfill-bound trash, but there will have to be a strong communication and education campaign to help change how much waste Omahans generate. In one proposal option, residents are limited to five bags or cans (32-gallon maximum each) of trash and 4 bags or cans of yard waste for a total of nine containers (288 gallons) each week. This is the same as the current limit on trash containers, and it is too high. Frankly, residents should be pushed a bit to lower the amount of waste they send to the landfill.

In summary, there are some good aspects of the proposals, but there remain some significant questions that must be considered before moving forward. For example, how much sooner will our landfill close with the additional volume of yard waste? What will it cost taxpayers to build a new landfill further from the city? What is the environmental cost with longer driving distances? And what are the clear, calculated environmental impacts of all scenarios?

We hope that the City invests time and money into gathering all the right information before making a decision on a such an important and complex issue.

 

 

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OPPD is considering a rate restructuring, which the Board of Directors will discuss November 12th. The proposed change would increase the basic service charge for residential and small business customers from $123/year to $420/year in fixed charges while slightly decreasing consumption costs.

To give this ‘basic service charge’ some context, the Wall Street Journal reported a typical rate of “$5 or so” per month ($60/year), and the ACEEE reported fixed fees of $5-10 per month ($60 – $120/year) as of late 2014 for average residential customers.

The proposed rate structure is bad policy for the following reasons:

  • Low use customers will pay more ($60 – $180 annually) including many low-income residents and fixed income seniors, while high use customers (higher income) will pay less by roughly the same amount;
  • Apartment & small home dwellers who conserve will pay more for the same energy;
  • Reduced incentive to for all customers to be more energy efficient and conserve;
  • Increased wasteful use of energy, adding to air pollution and climate change;
  • Makes investing in renewable energy harder to justify economically.

I urge OPPD to strive to live their new slogan – “Leading the way, we power the future.” Lead our community in its battle against poverty and its goals to care for the natural environment. With the Pope’s recent encyclical in mind, OPPD’s rate restructuring is a real life decision where care for the poor and care for the environment go hand in hand.

The proposal to lower the cost of a kWh, the rate you pay for the electricity that you actually use, is counter to the future power-generation plan OPPD recently approved. Lowering the rate a customer pays for the electricity consumption reduces the incentive to conserve energy. Often, customers and small businesses look at how long a technology investment will take to recover its upfront cost in energy savings – financial payback. Lower rates result in poorer paybacks, which will slow investments in energy efficiency and renewable technologies that are important for our planet’s long-term health.

UNO’s report, “Nebraska Energy Burden Study: 2013 Update” provides the following statistics for Nebraskan’s energy expenses:

  • For households making less than $30,000, the average cost of energy was $1984 per year.
  • For households making more than $40,000, the average cost of energy was $2451 annually.
  • Households making more than $100,000 had an average cost of energy of $2738 per year, more than $750 above households making below $30,000.

This data demonstrates that low-income households pay less for energy than high- income households, as they should. They use less, they should pay less. The new rate structure begins to shift the current, rather equitable distribution of costs so that the poor, elderly, and environmentally conscience pay for large homes or other homes that consume larger portions of the energy load.

I’d like to see a map from OPPD that shows which customers’ bills are going down and which are going up. Real data, real addresses, mapped over the OPPD territory. Board members and OPPD leadership should be asking for this to ensure they fully understand the impacts of this change. Such an exercise will quickly tell who is paying for whom in the community under the new rate restructuring.  I can’t help but think that the map would look something like this one.

As an accountant who cares about both the poor and the environment, here are my thoughts:

  • It doesn’t matter whether a business has fixed costs or variable costs. The customers are not responsible for the costs. Customers pay for the products they purchase. A business’s executive leaders, accountants and finance folks are in charge of managing both fixed and variable costs, and that’s one of the many reasons accounting and finance is sometimes complex. It’s also why it’s great that Nebraska has public power, which shouldn’t feel the same pressures as shareholder-owned utility companies to meet quarterly earnings projections.
  • Customers are not buying a part of a power plant, part of a power line, nor are we asking to take on a week’s salary of an OPPD employee. Customers are buying electricity delivered into their homes. That’s it, nothing more, just kWh.
  • If OPPD has missed budget targets or future purchase forecasts have changed, they should adjust the price of the product being delivered, kWh. If I built a house that’s too big for my budget, I don’t go to my boss and say, well gosh, I’ve got a big fixed mortgage now, I need a raise.

The reality is that OPPD has a pretty significant budget shortfall. So rather than solely poking holes in their proposed plan, I’ll offer three ways for them to narrow that budget gap:

  • Increase kWh rates for all users, which lets everyone share the load equally.
  • Do what you do with your large business customers, charge a demand charge to residential customers and small business customers too. Demand charges continue to incentivize energy efficiency, because consumers can affect the amount charged by reducing consumption.
  • Move to a time-of-use pricing structure, where electricity costs more when it is most expensive to produce, usually during the late afternoon hours of the summer.

OPPD has made great progress in the past few years, with wind power purchases and decisions to retire three coal units in North Omaha. I am truly amazed that our power company will likely be 1/3 wind and 1/3 nuclear by 2018, both very low carbon and affordable power sources.

This is a public power state. We, the people, own our utilities, and we are represented by elected officials that are supposed to represent the consumers by definition.

The OPPD Board will hear from staff and the community at their November board meeting on Thursday, Nov 12th at 10:00 a.m. The public will have an opportunity to make 3 minute statements to the Board or you can email the Board at their website.

Speak up residents and small business customers – speak up and help OPPD lead us in the right direction!

 

For more information:

Meeting tonight with OPPD, Nov 9th

Rocky Mountain Institute – Fixed Charges don’t “Fix” the Problem

News on fixed charge changes – approved in Wisconsin, rejected in Minnesota

Similar rooftop solar fixed fee news

Featured Image courtesy of Watie White.

 

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When you hire exceptional people, you should expect that they’ll be regularly presented with offers for other jobs. It’s something we expect to happen. The alternative – hiring a bunch of monkeys that nobody wants – may mean we don’t need to worry about employee poachers, but it also means we’re not going to perform at a high level.

So when Chris Stratman broke the news that he’ll be leaving the firm, I found myself immensely disappointed but also not surprised. On November 16, Chris will start as the new Executive Director of Keep Omaha Beautiful, a nonprofit organization dedicated to litter reduction, beautification, and education on recycling and solid waste issues. You know that disappointment I mentioned earlier? That quickly faded when I learned about Chris’ new job.

Keep Omaha Beautiful has been around since 1959, and one of its focus areas – waste reduction and recycling – is really important in Omaha, which has a historically poor recycling rate. We have several ideas for how to increase recycling in Omaha, but we’re not particularly well set up to independently move the needle. Chris’ expertise, strengths, focus, and results-focused approach will undoubtedly have a positive impact not only on the city’s recycling rate, but on the city’s overall success as well. He’s really well-suited to the job, and he’s going to knock it out of the park.

Chris has been with us since early 2010 and has played a major role in nearly every one of our projects. Most notably, he has been our project lead with UNMC and Nebraska Medicine for the last few years consistently providing great leadership to our project team and impeccable service to our friends at the Med Center.

We will miss Chris. I will miss Chris. I’ve spent the last five years sitting about four feet from him. He’s an exceptional human being and our success as a firm is due in large part to his dedication to our purpose.

As they say, change is the only constant. Mr. Stratman’s (he asked that I start calling him that now) last day is slated for October 23. We wish Chris nothing but the best, and I look forward to working with him in a new capacity to make Omaha a thriving, green city.

Onward and upward.

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We are thrilled to announce a new partnership with Methodist Health System and its three hospitals!

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The project includes

  • Identifying sustainability strengths, successes, and achievements
  • Developing a sustainability vision to inspire and motivate change
  • Benchmarking and analyzing sustainability performance as it relates to emissions, energy, water, waste, mobility/transportation, and engagement
  • Developing measurable and strategic sustainability goals
  • Recommending a short-term course of action

Within the next few weeks, we will begin analyzing data, surveying students/employees, and meeting with key personnel and stakeholder groups.

We can’t wait to help Methodist Health System develop and formalize its sustainability plans!

If you have questions or thoughts about this project, please contact brent@verdisgroup.com.

 

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