Tom Matzzie is not your typical utility executive. Then again, his company, Ethical Electric, is not your typical utility.
Blending grassroots political activism with clean energy procurement, Ethical Electric is an entirely new breed of power company. And for Matzzie, the company's founder and CEO, spending money on lobbying politicians in Washington isn't the way he wants to gain influence.
Instead, buying and selling electricity itself is his political statement.
In 2008, after leaving his position as the Washington director of the progressive activism organization MoveOn.org, Matzzie was looking for meaningful work beyond simple political consulting. It wasn't until a couple years later, when he and his wife installedsolaron their home in D.C., that he started thinking about energy.
Installing solar was easy. But dealing with Pepco, the local utility, was a painful process.
"It took eleven months just to get a net meter and another year before they actually read it," said Matzzie. "I thought, how are we going to get millions more people to do this? That's when my instincts from my prior life in activism kicked in."
At MoveOn.org, Matzzie had been focused on making it incredibly easy for people to take action on issues meaningful to them. (Throughout his career at MoveOn, he raised more than $150 million for various causes in increments of $5 and $10.)
Matzzie's difficult solar experience got him thinking about how to apply the principles of online political organizing to clean energy.
"We need this to be a service for consumers, not a construction project," he said.
So Matzzie started researching how to build a clean energy supply company. But rather than follow the traditional clean energy supplier model, Matzzie wanted his company to follow the political activism model and turn energy procurement into an organizing tool for progressive causes -- transforming the relationship between customers and their power provider.
"I knew I wouldn't be able to keep my opinions to myself. It wouldn't be as fun if I weren't also an advocate for the causes I believe in. That includes the obvious ones like climate change, but also celebrating things like the recent Supreme Court ruling on gay marriage."
The idea for Ethical Electric was born.
Three years and 90 percent of Matzzie's retirement funds later, Ethical Electric officially launched in April. It now has 4,000 customers (also called "members" in a nod to the company's explicit political goals) throughout the District of Columbia, Delaware, Maryland, New Jersey, New York and Pennsylvania. The company also closed a Series A funding round last year for $2.4 million led by Northwest Energy Angels that allowed it to grow to eleven employees and consultants, while expanding marketing to new states.
Matzzie said Ethical Electric is currently scaling back growth in order to finalize another round of working capital, which could close in the next couple of weeks.
When it comes to procuring clean power -- all wind for now -- Ethical Electric operates much like any other clean energy supplier in deregulated states. The company enters into power purchase agreements with local developers and pays for the right to access transmission and distribution infrastructure. It then sells that 100-percent-renewable power to customers, who get billed by Ethical Electric in the same way they would through their traditional utility. Matzzie said that the company is able to offer the wind electricity at virtually the same price as fossil electricity -- sometimes slightly higher, sometimes slightly lower.
But there are two big differences that make Ethical Electric more like a political organization than an energy supplier.
The first is that political activism is explicitly a part of the business. Ethical Electric spends 1 percent of every dollar earned on progressive political causes. It also uses its relationships with "members" to rally action on environmental and non-environmental causes. The company has partnered with organizations like the League of Conservation Voters, Daily Kos, the Sierra Club and Rebuild the Dream to mobilize their members.
"We think there's a massive group of people interested in clean energy that goes beyond the ones who are shopping for it. This is a way to engage people on the issues where they are," said Matzzie.
The second difference is the use of traditional political organizing tools to gain new customers. The company harnesses the same modeling and data analysis that organizers for the Obama campaign used to target voters. Matzzie hired Daniel Murray, the former data finance manager for the Obama campaign, to lead Ethical Electric's customer prospecting efforts.
"It's all about microtargeting. We have a giant database we call Megavolt that gives us a picture of the consumer, energy market information, marketing data and uses all of that to create a list for prospecting," said Matzzie.
Microtargeting has become a staple of information-age politics. By tapping the reams of information about voter behavior -- everything from buying habits to online interests -- campaigns have become extraordinarily sophisticated at figuring out how to reach individual voters. The technique is also used by online companies like Amazon, Apple and Netflix to predict what products consumers will want to buy.
Those information-gathering methods are also the basis for an energy efficiency startup called Faraday Energy.
Faraday uses a process called "machine learning" to predict which homeowners are most likely to invest in energy efficiency upgrades. The company works with utilities and energy efficiency providers to help them target those potential customers based on energy use, personal buying habits, education levels, geography and other factors.
"We were inspired by the data-driven work of the Obama campaign," said Faraday co-founder and CEO Andy Rossmeissl. "Everything we do is information driven."
After searching for patterns in the data, Faraday works with service providers to send out informational postcards or canvass from door to door to educate potential customers about efficiency. The strategy is not unlike that of Opower, which analyzes utility data and sends out mailers (and now mobile alerts or messages through a smart thermostat) to inform customers about efficiency options.
Rossmeissl insisted that Faraday's "secret sauce" of data analytics and messaging is much different than Opower's, however.
Faraday has been in "beta mode" for the last year, building relationships and pilot programs without any announcements. Rossmeissl and another co-founder, Robbie Adler, recently unstealthed to Greentech Media after establishing a ten-city project with a large efficiency provider in the Northeast.
Faraday has also been working on pilot programs in Madison, Wisconsin and Denver, Colorado, where its machine-learning system has shown 90-percent precision in predicting who is going to invest in efficiency retrofits. That accuracy figure is statistically derived, however, so it will take much more volume in the field to prove its accuracy.
Like Ethical Electric, the Faraday team is taking a page from the playbook of modern politics to advance clean energy. Rossmeissl worked on Howard Dean's presidential campaign in 2004, which was the first to use the internet to harness small donors. Rossmeissl went on to co-found Brighter Planet in 2005, a company that uses data analysis to track corporate carbon emissions and internal sustainability programs.
"The Dean team started something big [with information gathering], then the Obama team crystallized it," said Rossmeissl. "And at Brighter Planet, we focused on very large data sets to create an environmental impact. Now we want to take our ability to analyze these data sets and leverage them in a new way to directly target the right customers."
This is the energy company of the future.
In the past, the connection between energy and politics was simple: large energy firms spent money to influence politics. But now a new generation of politics is influencing a new generation of energy companies -- putting in place the conditions for targeted, grassroots efforts in an industry historically controlled from the top.
Tom Matzzie of Ethical Electric said he believes the crossover between political organizing and energy will continue to get stronger.
"These emerging information gathering and marketing techniques are making it possible to scale clean energy and organize people -- and we're just starting to scratch the potential," he said.