Interview with Judith Lipp, Leader in the Renewable Energy Sector

An in depth discussion with the Executive Director of the Toronto Renewable Energy Cooperative

By: Luis Fernando Arce, Chief Interviewer

http://www.flickr.com/photos/our-planet/5384222830/sizes/z/in/photostream/

The Toronto Renewable Energy Cooperative was created for the precise purpose of conquering the climate issues that currently plague our planet. It does so by providing interested community members with investment opportunities, allowing them to directly benefit from the profits of the organization’s work. Such an approach to correcting the issues of climate change educates community members and makes them feel more involved in the implementation of lasting solutions.Luis Fernando Arce, ARB’s Chief Interviewer, recently had the privilege of speaking with Judith Lipp, the Executive Director of the Toronto Renewable Energy Cooperative. Judith shed some light TREC’s structure, the specific projects they have on the go and the type of barriers and obstacles the organization typically faces.

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Let’s start with your name and position, please.

Judith Lipp. I’m the Executive Director of the Toronto Renewable Energy Cooperative (TREC).

Can you tell me how TREC was created and with what purpose?

It was created by a group of volunteers in 1998 for the purpose of creating a community-owned wind-energy project in Toronto.

Your webiste says that you have a group of “inspired citizens working together, pooling their resources, to realize a sustainable, democratic and accountable energy economy”…Who are the inspired citizens and what are the socio-economic status of most members? Is it mostly young activist filling the ranks or regular middle-class folks?

No. I’d say on the whole it is generally middle class people – environmentally-conscious individuals interested in findings ways to address climate change and other issues, but also looking for investment opportunities that align with their values.

What are the main difficulties or barriers as a cooperative in your sector?

The main difficulties are that we’re working in a sector dominated for the last hundred years by large centralized Entities. And what we’re transitioning to is a decentralized electricity system, but there’s lots of people who don’t understand what we’re doing; they turn the lights on but they don’t really want to engage with how it is that we keep those lights on and the impact that keeping those lights on has on the environment as well as the other social aspects of the matter. So the challenge is navigating the system that is geared towards large players and being able to make that system work for essentially small players who are doing smaller projects. So it’s everything from connecting to the grid, getting all approvals in place to do the projects…because obviously, they are technical installations and there are all kinds of standards and rules – so navigating that as a group of citizens is pretty tricky, but not insurmountable.

And how are you dealing with it?

Well, we are just taking the process one step at a time. And there’s a process in place in Ontario – a Green-Energy Act and a Feed-In Tariff (FIT) Program – that essentially provides the framework for us to be doing this; without that it would be almost impossible. It’s a framework that says you can apply and you can become a generator and you can feed into the grid as long as you’re given a contract…So it’s really just about making sure we’re diligent about our applications, about business planning, about our communications, about signing up members – meeting with the regulatory agencies and the institutions that allow us to get our work done. So it’s slow and steady, but we’re still doing it. It’s also about a group of committed and passionate individuals who bring various expertise to overcome the challenges at different stages. I don’t want to underestimate the challenge, but it certainly is not insurmountable if you have the right mix of people at the table.

You said the point is to decentralize the energy sector – how are you decentralizing it? I know that that’s one of the main points of cooperatives – to give employees/members more power. But explain a little further how exactly you do are doing that.

In our case, it’s not a worker-cooperative – there is no benefit to the employees: the co-op is owned by the individuals who are providing financing. So the co-op creates a mechanism by which individuals can own, operate and ultimately benefit from the profits that result from the project. That’s essentially the goal. In that process, by people getting involved in the generation of their power, they are thinking more consciously about how they use power – so there’s an educational component as well.

How is the management of the company structured?

Well, a cooperative is always led by a board of directors. And that board makes decisions – in many cases one like choosing to hire staff, etc. In our case, TREC is essentially the contract co-op that delivers the services on behalf of WindShare and SolarShare, which are Wind and Solar co-ops…So in those cases, the boards have decided not to hire staff within the co-op but to contract a separate service co-op that develops the project and oversees the management of the co-op. Different groups will do it differently. But that’s the model we’ve chosen: we think it’s more efficient to have one organization manage a number of co-ops as opposed to having every co-op hire staff and carry those overheads.

[pullquote]The challenge is navigating the system that is geared towards large players and being able to make that system work for essentially small players who are doing smaller projects[/pullquote]

And who chooses the board members?

The membership of the co-op. Initially, when the co-op gets started, it’s a group of people that have come together and that have a shared vision and a common goal. Eventually, that group of people decides on the board members and, over time, as the project gets completed and there’s an active membership-drive, there’s an annual member meeting, and the membership votes on who represents them on the board. So it’s a fully democratic organizational structure. There are also key decisions on which the membership has to vote. Then there are other decisions on which the board is given the mandate to act on behalf of the membership – these would be top executive decisions also brought up at the annual general meeting.

Do a lot of co-ops work on a non-for-profit basis?

No, not necessarily. Within the community-power sector, there have been several groups pursuing the profit and the non-profit model. At the end of the day, the business case is quite similar – the only difference between the two is how the surplus gets used. In a non-profit, any surplus will get pooled into a fund and that fund is allocated toward either new projects or education. In a for-profit co-op, you can do the same things, it’s just that the members have to agree that that’s what you’re doing, or the co-op may decide to just disperse all of the surplus.

In a non-for-profit, the surplus can’t be dispersed among the members. That’s the principal difference in our sector. TREC is a non-profit co-op for differ reasons: one is that we’re a service co-op, so when we started 12 or 13 years ago, we could only survive off grants and could only get grants as a non-profit…So there are always different motivations, but TREC is different – we’re in the community-power sector, but we’re not in the business of generating power – we’re in the business of helping co-ops that are trying to generate projects to generate power. Just to be clear: TREC is a non-for-profit the same as SolarShare is non-for-profit. SolarShare is very much in the business of generating electricity; they’ve decided to use their surplus and put it into a fund for future uses other than distributing it to their members.

Would you say that your company is definitely competitive in the market?

Well, we’re unique in the market. There aren’t many people providing co-ops to the depths that we are doing around community power developments. There are certainly others, but we’re certainly recognized as a leader, yes.

Do you see the cooperative business model as a viable alternative to the traditional capitalist model?

Absolutely yes! Co-ops have been around for the last 200 years. What’s interesting is that they can be applied to any type of activity. What [the Cooperative Movement] really is, is an antidote to the capitalist model which is all about maximizing profits for the shareholders; this is about maximizing profits for the community, but at the same time recognizing the social values that people are interested in pursuing. So ultimately, the biggest difference between a co-op and a corporate model…is the members’ vote: regardless of your investment, it is one member one vote – a democratic enterprise. I’d say that’s the biggest distinguishing factor.

Beyond that, you can use a co-op for any number of activities. We could be using a co-op instead of a corporate structure for banking, retail, cultural factors, the energy sector, because it’s a model that’s proven to be more in line with peoples’ values. That’s why we’re even seeing more people interested in that – and even governments – in supporting that model and the community-powered co-op model. It’s a way for people to get involved in the green energy sector as opposed to what’s been happening with some of the contentious issues around project development, where foreign companies are coming in and, at the very local level, are setting projects and sometimes not respecting the people on the ground.

We’re seeing that with a lot of the pipeline projects that are coming into the country.

Exactly….You actually are seeing lots of great co-ops coming up with great infrastructure.

Let me ask you this…I guess this goes more to your opinion than anything else, but with the momentum and magnitude of the Occupy movements across the globe, do you think that – even if it won’t be the demise of capitalism – we could be seeing in the near future a more broad adaptation of the cooperative model? 

It’s hard to say. On the one hand, I feel optimistic: people are looking for community, for ways to align their values in various ways, whether it be by investing money or other ways to participate in society; at the same time, a large segment of the population is very focused on status and money, and have lost touch with what their values are and any kind of long term thinking. I think we’ve created a system where people just think they have to keep working harder and harder to make more and more money so that they can buy more things. I’m not sure we’re close to breaking that cycle. I’d like to say “yes,” but I don’t think so. I think more people are looking for alternatives.

You also see what’s being taught at schools and universities – and it’s the dominant capitalist and individualistic model. So how do you break that? You chip away at it, but it is a very big tide to shift. So I think the best co-ops can do is get the word out there. I’m sure the International Year of Co-ops helps with that, but even with it there, there exists so many competing messages. I don’t see a big shift in my life-time. We just have to keep chipping away. I think if there is a crisis, you can see it chipped away at faster…

Well, that’s precisely why I asked: because there is such a global economic crisis, I think, that it is pushing people more and more to actively and seriously look for tangible alternatives, not just theories.

Yeah….To tell you the truth, I’m not seeing the crisis. Unfortunately, the Occupy Movement hasn’t…I’m not seeing it, not hearing about it…Certainly the Middle East is a different type of crisis – it’s a democratic one not an economic one. And whether those two are related, I’m not sure, that would probably be a bit of a stretch. And are they coordinated? I don’t know…

That could be a whole different conversation that we could have. [Laughs].

[Laughs]. Yeah, exactly. But I’m not seeing the sort of scale for a paradigm shift. I think it’s a paradigm transition, perhaps. But it’s not a transformation at this point. People may be thinking a little bit about how they cooperate, but not on a mass-scale…

Do you think it would be better or worse if the cooperative movement were politicized more?

Hmm…that’s a good question. When you say politicized, what do you mean, exactly?

Well, in Argentina, for instance, and in a lot of Latin American countries, the cooperative movement is kind of being associated one way or another with the Political Left and Socialist parties.  Whereas, here…I was talking to someone from the CWCF, and she was telling me how the Conservative Government is putting all these barriers to the movement, such as the cuts we discussed before.

Yeah, it’s an interesting question. I mean, I don’t know…Political parties will pick up causes if they see that there’s an advantage to them as far as getting elected, but I’m not sure that the co-op as an entity has that clout. Obviously the NDP could align itself with co-ops, but I don’t know; co-ops are still under-understood, if you will [laughs]. There’s a huge lack of understanding of what co-ops do.

We did some focus groups when we were preparing our marketing, and I think in rural communities they certainly understand them, but most Canadians live in cities and I think a lot of Canadians don’t have a clue about cooperatives. So I can’t see them being politicized at this point in time, where we are. It wouldn’t be a strong draw, let’s say, as far as political decisions go…

….Last thing to say is that we are forming a Federation of community power cooperatives in Ontario to help provide that unified voice to get the word out, share resources and all sorts of things. I think that a common trait among co-ops  is precisely that solidarity and cooperation. We’ve just formed that in anticipation of the new rules coming out for the FIT program.

How will that work? What is the purpose of it?

We have an opportunity under the FIT program – they basically give us priority points as well as access to connect projects to the grid, assuming they meet the requirements. So we’re working the odds with that opportunity and recognizing that lots of commercial interests will be trying to partner up with us. So we’re also making sure that we can protect ourselves and maximize the potential we have under the new rules. The idea is that the 20 or so renewable energy co-ops that already exist in the province will come together to strategize around how to partner with commercial developers, how we want to develop projects, how to share resources, how to become more efficient at getting projects off the ground. And also to have a single voice to go to government with to say, “look, our members are experiencing these problems, can we talk about what is needed to fix it?”

It sounds like an excellent program. You mentioned the importance of solidarity and cooperation before. What has your interaction been like with cooperative movements around the world?

I’ve just come back from a trip to Germany and Belgium where I was visiting with renewable energy co-ops there, and I took a trip to England last year with similar purposes. So we certainly stay in touch to compare notes, understand how people are overcoming issues, that sort of thing. And there’s definitely a growing movement around community power co-ops – it’s a growing phenomenon. It’s a sizeable sector now and it’s only emerged in a significant way in the last five to 10 years. So we definitely stay in touch. But it’s always hard; we’re so focused on the local scene too – the nuance of our individual policies and environment in which we’re working.

[We continued chatting about other topics from here on in].

ARB Team
Arbitrage Magazine
Business News with BITE.

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