More than 70 organizations have worked together to help each other navigate the market’s notorious complexities.
Just over a year ago, 36 churches and nonprofits banded together in Connecticut to test their collective negotiating power in the state’s electric supply market.
“It was really a leap of faith on everybody’s part,” said Dom Gautrau, a former vestryman and active member of St. Francis Episcopal Church, in Stamford, one of the participants. “But we loved the concept.”
They weren’t disappointed. Working closely with the Community Purchasing Alliance, an experienced purchasing cooperative based in Washington, D.C., the organizations eventually signed a contract collectively saving them around $50,000 over the standard offer rate from the utilities.
Last week, the group completed its second energy purchase — only this time, more than 70 organizations signed the contract. And if all goes as planned, those numbers will continue to grow.
With organizing help from CONECT, a state network of congregations that works together on community and social justice issues, the group is aligning with Community Purchasing to adapt the D.C. co-op model for Connecticut.
After several rounds of group energy purchases, they hope to formally incorporate as a cooperative — a form of corporation that places ownership and control in the hands of its members. The co-op will be able to negotiate lower prices on an array of services, possibly fuel oil, solar panels, or copier leases. At the same time, it will maintain a focus on strengthening communities, perhaps by awarding contracts to local businesses.
“Saving money is job number one, especially in this crazy environment,” Gautrau said. “But it’s also the fact that we have Catholic, Episcopal, Lutheran and Baptist churches, temples, mosques, as well as some private schools, an Islamic community center, a food bank — it is a powerful collaboration of organizations enthusiastically involved.”
Community Purchasing has filed an application with the state Public Utilities Regulatory Authority for approval as what’s called an electric aggregator — someone who negotiates with suppliers on behalf of a group of consumers.
The license would help it to continue supporting the Connecticut group by enabling the alliance to build a broker fee into purchase contracts, said Boris Sigal, the alliance’s chief financial officer. That revenue can then be used to help build out the infrastructure for the cooperative.
“What’s happening in Connecticut is similar to what we started a decade ago in D.C.,” Sigal said. “It started with a group energy purchase by about a dozen congregations. The organization grew quickly to around 120 organizations all going in together on a single bid. That created a program around purchasing together and the template for what would become the co-op.”
The model has proved successful — according to the alliance, their member churches, community centers, and private schools have saved nearly $8 million since its incorporation in 2014. Now, they are trying to branch out, seeding co-ops in Connecticut, Massachusetts and Illinois.
“Expanding has been a goal of ours,” said Ellen E. Agler, a member of the alliance’s board of directors and executive director of Temple Sinai, a large Reform Jewish synagogue in D.C. “We’ve been incubating and testing this model, and we’ve achieved financial sustainability. We want to share what we’ve learned in other geographic areas.”
Temple Sinai, with about 1,200 member families, was among the original group of D.C. nonprofits that began working together on electricity bids, through the Washington Interfaith Network. While the first couple rounds of purchases saved the temple a modest amount of money, “we were in it because we saw some of the smallest organizations saving so, so much money,” Agler said. “We were leveraging our larger size to drive our commitment to social justice.”
After the group incorporated, they began negotiating purchases on everything from copier leases to security services to waste hauling. They focused on supporting women- and minority-owned vendors, as opposed to national vendors, when possible, and making “environmentally respectful decisions,” she said.
Last year, of the $17.3 million in purchases and contracts by the alliance, $10 million went to local small businesses. Nearly $8 million of those contracts went to businesses owned by women, immigrants, and/or Black or Hispanic people, Agler said.
The partnership has also yielded some unexpected benefits. An alliance purchase of solar leasing services inspired a group at Temple Sinai to form their own “green team” and launch a separate residential solar program. They recruited more than 200 households who chose to go solar.
“The carbon savings from that effort was huge,” Agler said.
The co-op maintains a budget to compensate a small staff and the expertise they need for negotiating, contracting and maintaining oversight. It is largely funded through a rebate amount that is built into each vendor contract and comes back to the co-op, Agler said. The amount is either paid directly by the vendor or built into the rates.
The alliance’s expertise was key to the electricity bill savings in Connecticut, according to Gatrau. They “made sure the contracts didn’t have onerous pass-throughs that were going to bite us in places we didn’t want to be bitten,” he said. “They did a wonderful job of making sure that the contracts were as clean as possible.”
The Mount Aery Baptist Church, in Bridgeport, one of Connecticut’s poorest cities, saved about $4,500 on its electric bill, said Ramona A. Berry, the church administrator. She is looking forward to being able to save money on other services, especially at a time when the economic landscape looks particularly uncertain.
“Our people are still giving, but we don’t know what their income is going to be in two months,” Berry said. “I pray every week — I say, ‘God, this is how much we need.’ We just have to have faith it’s going to work out.”
Temple Israel, in Westport, saved about $4,000, but just as important were the connections made with houses of worship across all denominations, said Lisa Goldberg, the temple’s executive director.
“As these turbulent times have shown us, it’s so important that we are functioning as an interfaith community for the benefit of everyone,” she said.
State regulatory authorities were still reviewing Community Purchasing’s aggregator application and had asked for additional information to be submitted this week.