The company that brought to life Pennsylvania’s wind energy sector in the past decade is well-positioned for today’s rapid ramp-up of alternative energy development not merely because it beat everyone else to the punch. Delaware County-based Community Energy is among the nation’s most important outfits working in the sector because it has known precisely how to play the game.
Industry veteran and company co-founder Brent Alderfer thinks that mindset can also help Pennsylvania stay out in front of innovation and implementation of the renewable energy sector.
“There is an open market relative to what regions are going to establish themselves as leaders of the renewable energy market,” says Alderfer, “which is why it’s exciting for folks like us who like to be leading the market.”
That strategy–being ahead of the changing energy curve–has driven Community Energy’s development from a startup wind developer, to a holding of Spanish wind power giant Iberdrola Renewables, to the larger, spun-out independent firm it is today, nimble and creative enough to lead developing alternative energy markets. Once a forerunner in wind and one of the reasons why Pennsylvania ranked second in wind power growth by the end of 2008, Community Energy is now focused on being a leader in developing solar power projects throughout the state and region.
The company is a supplier or marketer to 19 electric utility or competitive electric supplier programs from Massachusetts to Illinois, serving more than 112,500 green power customers. Those programs include three of the most highly rated–like the PECO Wind program in PA–of more than 850 nationwide in a recent ranking by the U.S. Department of Energy’s National Renewable Energy Laboratory.
“We have a passionate team that wants to build a company that makes a difference and has a bottom line that works as well,” says Alderfer. “We’ve got to make a profit and do it in a sustainable way.”
Alderfer grew up in Montgomery County and graduated from Souderton High School. He remembers winning a trip to San Francisco at a science fair held at Drexel University and how his experience in the city’s Haight-Ahsbury neighborhood was an eye-opener for a suburban PA boy.
He would go west again after earning his law degree at Georgetown University and the electrical engineer/lawyer rose to the top post at the Colorado Public Utility Commission from 1996-99 and as a result was also leading the national discussion about viable renewable energy markets. When his term ended, he was interested in returning to PA, where state-mandated deregulation was opening up the electricity market. Alderfer and Eric Blank, who had been working for an advocacy group pushing a wind energy program his future partner was approving, founded Community Energy in the basement of a condo in late 1999 and almost immediately got to work on a small-scale wind project in Luzerne County, which quickly drew enough interest that a waiting list was necessary for potential power purchasers. Given a choice, plenty of people wanted clean wind for electricity.
“We got some traction and then regulatory change followed,” says Alderfer, referring to PA’s alternative energy portfolio standard, set in 2004, and subsequent mandates. “The market led it.”
Community Energy would go on to develop some of the first utility scale wind farms in the Northeast and into the Midwest. This came at a time when they were practically non-existent (less than 10 megawatts of operating wind farms 10 years ago) east of the Mississippi. By 2006, the company was marketing 200 MW worth.
“The industry transitioned from niche play to third-party capital markets getting involved, through bond offerings and a variety of streams of economic benefits like tax credits,” says David Giordano, who joined Community Energy as its CFO in April. Giordano comes from the third-party financing side of the industry and was a part of its earliest wind transactions, including his future employer’s first deal in PA.
With a pipeline of projects bursting at its seams by early 2006, it became apparent to Alderfer that this emerging wind energy market required a scale his company didn’t have at that point. Projects, it had. Capital, it needed.
Enter Iberdrola. The Spanish company was looking for a sweet spot to enter the U.S. market, and Community Energy had the technological capabilities and was clearly among the nation’s market leaders in navigating local permitting and building community support and interest. Community Energy wanted Iberdrola’s global expertise in commercial wind operations, large renewable energy staff and ability to source equipment internationally. Alderfer referred to it as a perfect marriage at the time, and that’s precisely how it played out.
Together, Iberdrola and Community Energy developed 700 MW of wind power, including the Locust Ridge project in Schuylkill County that included turbines made by another mammoth Spanish firm, Gamesa, which set up shop in PA in 2005. Also in 2007, Iberdrola and Community Energy worked with PECO to partner with Montgomery County on its groundbreaking wind energy purchase, which made it the first 100-percent wind-powered county in the country and ranked among the nation’s top-10 green power commitments in the country.
As capital markets dried up and the recession took shape, the mad dash for wind slowed. Alderfer and company, though, had already learned plenty of lessons from its happy marriage with Iberdrola, like the importance of picking your partners and knowing what you can and can’t do. Quick, nimble and focused on the emerging solar market are what Alderfer believed the new Community Energy should be, and by last August, Community Energy was again an independently owned, private and small company (Iberdrola still maintains an office and friendly working relationship in the same Radnor office building as its former affiliate).
The company will continue to look for customers looking to be early adopters, to sign long-term electricity contracts at fixed rates, and to install new equipment on their roofs, and to mitigate their risk by connecting them to tax incentives and financing. Giordano’s role will be increasingly important. He’s largely responsible for mapping the best locations and partners for the company’s pipeline of projects.
“The risk isn’t in the technology, it’s in putting up the capital and recouping the benefits,” says Alderfer.
Today’s Community Energy is best illustrated by solar projects like the one in St. Davids at Eastern University, a modest undertaking that took only four months to complete and included rooftop installation by Dynamic Solar of nearby Berwyn. Larger projects will take longer, but most will be operational within a year. The company, which plans on adding to its staff of 35, has big goals, like $100 million in new projects under construction in PA and New Jersey in the next six months. And once again, legislation appears to be following, as House Bill 2405, which would increase renewable energy purchase requirements for PA utilities and electric generation suppliers to match the supply for solar projects, moves through Harrisburg this month.
“What can we do in the next two years? We can build solar projects at utility scale, feeding power to the utility grid in PA and throughout the region and doing it in a way that’s profitable for investors, works for communities and delivers electricity at prices people will pay, says Alderfer. “When you’re driven by a vision of sustainable energy, ultimately success is affordable fuel-free energy available for everyone in PA.”
Joe Petrucci is managing editor of Keystone Edge. Send feedback here.
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Photos:
Community Energy co-founder/CEO Brent Alderfer and newly hired CFO David Giordano outside the company’s Headquarters in Radnor.
Alderfer talks inside company headquarters about the circumstances that led to his return to Pennsylvania.
Giordano has brought a wealth of experience in third-party financing and was involved in Community Energy’s first wind project in Luzerne County.
Alderfer and Giordano chat with Community Energy employees Meg Denny and Laila Reilly.
All Photographs by Jeff Fusco