Project narrative how smartky


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Project narrative how smartky

  1. 1. Startup Appalachia Accelerating the Entrepreneurial Economies in Appalachia Project NarrativeStartup Appalachia aims to (1) identify promising efforts that could produce larger results for theeconomic transition of Central Appalachia, (2) encourage direct organizing by foundations to fundaround the most promising work in the region, (3) leverage additional resources to scale projects,and (4) offer funders insight on how to capitalize on the investments they have made to date.Section I: Project IdentificationProject Title:How$martKYIdentify the name, contact number and email address of the following Startup Actors:  Supportive Coach: Mary Hunt-Lieving  Nominator: Sandra Mikush  Project Leader: Justin MaxsonSection II: To be completed by the Nominator1. Please provide a short summary of your motivations for funding this project and what you hope togain out of participating in Startup Appalachia.How$mart is an innovative solution to helping low-to-moderate-income people, including renters, toget access to energy efficiency upgrades to save on utility bills. The Appalachia Funders Network andthe Babcock Foundation see the potential of energy efficiency/alternative energy as a growth sectorfor the region. Taken to scale, How$mart will provide job opportunities for skilled workers providingenergy efficiency services. By working with rural electric coops, MACED is creating a sustainablebusiness model for reducing energy use to save consumers money and provide a healthierenvironment. If successful, this model could be replicated throughout the region. This supports theBabcock Foundation’s goals of facilitating an economic transition in Appalachian Kentucky thathelps the region move to a sustainable economy that offers economic opportunity and a healthyenvironment for all its citizens.Section III: To be completed by the Project Leader1. Clarify the short-term and long-term results of the project.In the next two-to-three years, the results of the How$martKY pilot will mostly revolve around theenergy and financial savings that residential customers of the co-ops will experience. These resultsinclude the following: 49 jobs created or retained. 300-400 retrofits completed. 7,200 MMBtUs of energy saved by How$mart residential clients. $308,400 saved by How$mart clients as a result of retrofits to their homes. $4,039,800 invested in retrofits to residencies in eastern Kentucky.The long term results of the pilot are focused more on the utilities, both the East Kentucky PowerCooperative members and the investor-owned utilities. Energy efficiency represents the most directand achievable way of reducing emissions from coal-fired power plants, addressing the coming
  2. 2. Startup Appalachia Accelerating the Entrepreneurial Economies in Appalachia Project Narrativechallenges associated with taking old coal-fired plants offline, and protecting customers (especiallylow-income customers) from steadily increasing utility rates. A recent study by American Council foran Energy Efficient Economy found that implementing existing energy efficiency measures acrossthe board would reduce consumption by 20 percent – a huge amount. Thus, the long term results ofthe How$martKY pilot would be: Shifting the utilities’ revenue models to including and encourage energy saved . Having EKPC or investor owned utilities adopt the How$mart program or model as part of their energy or customer services provisions. Proving the viability of an energy efficiency retrofit market for contractors. This would be one component of a robust clean energy economic sector, a sector that would create meaningful employment opportunities in eastern Kentucky. A growing number of low-income families whose resiliency in the face of rising utility rates is greatly increased.2. Please provide a detailed description of howthis project couldbe expanded.The current iteration of How$mart involves MACED and four EKPC member co-ops. This phaseof the pilot ends in December 2012. As the first phase of the project winds down, we are in theprocess of evaluating, tweaking the program design with our co-op partners, recruiting new co-oppartners to the second phase of the pilot, and preparing to file a new rider with the Kentucky PublicService Commission. To expand the project, we hope to increase the number of co-op participantsfrom the current four to a minimum of eight. Ultimately for this portion of the project, we wouldlike to have 10 co-ops participating.If we have eight co-op partners, we anticipate increasing the number of completed annual retrofitsfrom 100 to 320. If we had 10 partners, this could go from 100 to 400.This expansion would allow the program to operate at a scale that would entice adoption by otherutilities, specifically the investor-owned utilities. If How$mart is to have a real chance to go to ameaningful scale, it (or a model very similar to it) will have to expand to the investor-owned utilities.Because financing the retrofits is essential to this pilot, MACED will have to raise additional capitalto fund the expanded retrofits. An expanded pilot will also require additional funding for operations.3. What resources are needed to assist in this expansion?We currently estimate needing an additional$200,000 a year in new operating funds to support theexpansion. This additional funding would help pay for expanded staffing, communications, andmarketing of the program.In order to fund the increased number of retrofits, we anticipate needing an estimated $750,000 innew capital.These numbers are still tenuous as we are still planning and recruiting for the second phase of thepilot. These numbers will become firmer by the end of October. One issue we are exploring with theco-ops is the financial contributions they are willing to make to the expansion and to this model ofenergy efficiency financing and provision. In the long run, we know that the co-ops will have tobecome more financially invested for this program to achieve true success and scale.There is acurrent possibility that the co-ops can access a new USDA rural utility service capital source as early
  3. 3. Startup Appalachia Accelerating the Entrepreneurial Economies in Appalachia Project Narrativeas spring 2013. The capital source has challenges to it that may make it less likely the co-ops will bewilling to bring it to the table.4. Please list the specific activities that will lead to this expansion. (Provide a timeline for theseactivities.)The following are the specific activities we will pursue to expand the program. (September)Complete the design of the expanded service delivery model with the co-ops’ assistance—We are currently refining the delivery model in partnerships with the co-ops to address risk concerns and define partner roles. (October)Finalize financial pro-formas—Completing the design is allowing us to project revenue and costs during the next two years. (November)Recruit new co-ops—Currently working to recruit four-to-six new partners in addition to the four currently in the pilot. (December)Develop and submit a new rider to the PSC—The next phase will require approval from the Kentucky public service commission based on a written application prepared by MACED and filed by the co-ops. (February)Implement staffing plan—We will finalize our staffing and deployment plan and seek to hire needed new staff. (May)Start expanded roll-out—We aim to launch the expanded How$mart in the late spring of 2013.Section IV: To be completed by the Nominator and Project Leader1. How does this project contribute to the economic transition of Central Appalachia?The primary contributions of the How$martKY project to an economic transition in CentralAppalachia are two –fold. In the short-term, this project has the real potential to increase thefinancial security of people in the region, and especially low-income families. These families often livein subpar housing structures that were not designed to be energy efficient. As such, they dedicate alarge portion of their already limited incomes to their utility bills. How$mart provides them a way toaccess the energy efficiency retrofits that will save them money and make their homes more resilientto future rate increases by the utilities that serve them.In the long-term, How$martKY, if adopted at scale, would provide utilities with a way to managepeak load demand and the coming stress of continuing to provide energy to customers while alsoretiring old, coal-fired plants that are far beyond their intended life-span. If adopted at scale, thecontractor market for providing energy efficiency retrofits also represents a crucial part of a cleanenergy economy, one with the potential for a great deal of meaningful, local jobs.2. Provide a 1-paragraph summary of your project to share on the Appalachia Funders Networkwebsite.How$martKY is a pilot program designed to address the primary barrier to investment in energyefficiency retrofits by low-to-moderate-income homeowners: the necessity for upfront funding to payfor improvements. Also known as a tariff on-bill program, the idea is simple and powerful — theutility makes energy improvements in a property as part of its utility service. The customer pays backthe cost of the improvement through the savings on their bills.Section V: Conditions for Participation
  4. 4. Startup Appalachia Accelerating the Entrepreneurial Economies in Appalachia Project NarrativeDue to the educational nature of this initiative, your participation in Startup Appalachia confirmsyour willingness topublically share and encourage the use of the ideas and strategies behind yourorganization’s project.