Subsidized Energy-Saving Programs Pay Off Big for Nonprofit Provider

Funding from federal stimulus to Exxon leads to banner income in 2009 despite recession

The Minneapolis-based nonprofit Center for Energy and Environment (CEE) has marketed residential energy conservation programs under the slogan, “Save Energy, Save Money!” However, according to tax records on file with the Minnesota Attorney General, helping utility customers save energy and money on their monthly bills also pays off for CEE, one of Minnesota’s biggest energy efficiency nonprofit organizations.

“We’ve been remarkably successful beyond our wildest dreams,” Sheldon Strom, CEE president  told the Freedom Foundation of Minnesota (FFM). “We were struggling for quite awhile and all of a sudden every program we were working on turned to gold. We’re trying to enjoy it while we can.”

Total compensation for the five highest paid CEE employees ranged from a high of $275,323 for the president to $175,003 for the director of indoor air quality. By comparison, the governor of the State of Minnesota gets paid $120,303 and the state’s Commerce Commissioner, who oversees some CEE projects, earns $108,400.

CEE officials said compensation amounts are competitive with going rates and not at odds with the nonprofit’s stated mission to make the most efficient use of both natural and economic resources.

“Our highly compensated staff are exceptional,” Strom said. “We didn’t just make up these numbers. We had a big accounting firm do a salary survey. They’re the ones that said these salaries are in the ballpark.”

Founded in 1979, the Center for Energy and Environment has a staff of about 100 and receives millions of dollars in funding from local, state and federal government agencies and utility ratepayers. Programs range from energy-saving audits to airport noise mitigation for the Metropolitan Airports Commission to revolving low-interest home improvement loans for the Minnesota Housing Finance Agency and energy saver rebates for the U.S. Department of Energy.  Among other endeavors, the Minneapolis nonprofit is currently managing a $705,000 federal stimulus residential energy project for the City of Minneapolis, a $2 million grant from the Minnesota Lottery’s Environment and Natural Resources Environment Fund and a $1.6 million energy loan program funded by Exxon Corporation from proceeds from petroleum pricing litigation.

“We have a very large array of programs,” Strom said. “Our primary purpose of these programs is to save people money by saving energy.”

CEE is also on track to receive more than $40 million from Xcel Energy and $588,000 from Centerpoint Energy in 2010-2012 under a utility-run energy efficiency project mandated by state law. Xcel Energy’s funding for CEE has doubled from $7.4 million in 2009 to $14.8 million for 2012. Ratepayer-funded energy programs are currently under review at the state legislature as part of a systematic evaluation of state energy incentive programs.

“We don’t have anything to hide. I think we’re doing a fabulous job,” said Carl Nelson, CEE program and policy manager. “We have people who work hard. We’re trying to save people money on their energy bills and at a good cost to ratepayers.  We’re responsible stewards whether that be government spending or ratepayer money. We’re very committed to maximizing the impact of those dollars and reducing energy bills at the least cost. That’s what we’re all about.”

Sound-proofing and energy-proofing thousands of structures also appears to be recession-proof.  The non-profit has accumulated more than $20 million in assets, including more than $15 million in cash and investments, according to 2009 tax filings.

“We have a lot of money we’ve saved up over the years.  These are retained earnings that we’re going to reinvest in other things we’re doing,” Strom said. “We’ve been working with our board on how we can use this money as effectively as possible.”

CEE maintains a “sizable fund balance” as a reserve against the “adverse effects of political and economic cycles” and plans to use part of the reserve to establish the Energy Technology Center that has been 20 years in the planning, according to Robert Henderson, director of operations.

In the meantime, some of CEE’s financial surplus was used recently to hire an improv comedian to train staff. CEE brought in popular Twin Cities standup comic Stevie Ray—at no taxpayer or ratepayer expense CEE stressed—to help staff learn how to be more effective in their own standup sales routines when pitching consumers at workshops.

“We try not just to have solid technical information but we also try to make it entertaining and that was the reason why we brought in a comedian,” Nelson said. “He doesn’t do the workshops or anything, but helps polish up their presentations off what any marketing company would do to try and make it relevant to the audience.”

CEE also spent $57,600 on public policy lobbying efforts in 2009, according to IRS records. “As a non-profit, CEE believes that an integral part of its mission is to advocate for public policies that are in the best interest of all of society.  With this in mind, CEE has shaped public policy for the most efficient use of natural and economic resources,” according to the group’s website.

***Source:  Office of the Minnesota Attorney General, 2009 IRS filing by the Center for Energy and Environment

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