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First Person: Commentary from Barry Russell, CEO of Encore Ceramics

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Archives - June 2006
Thursday, June 01, 2006

{safe_alt_text} Waste not

A small business aims for a big impact on the environment.

By Barry Russell

In 2000, my wife, Debbie, and I started Encore Ceramics. Having just left our successful previous company in a dispute with the financial partners, we were starting our professional lives over in our late 40s. We weren’t finished doing what we loved, so we took the leap and began again. We stayed with our particular expertise: designing and manufacturing handcrafted ceramic tiles. Little did we know what a learning curve lay ahead.

Encore’s first factory just fit in our two-car garage. Undercapitalized, we raced against time and money to develop a process and product for a larger facility. Our business plan said we had one chance: get to $30,000 a month in shipments, fast, with five people.

Energy issues loomed large. We were in Northern California, where the Enron-induced energy crisis was happening. Which day would the brownout happen in our sector? Would we lose a firing? What was all this talk about global climate change, and what was our role in that? If we survived, how would we grow our energy-intensive process? The future of energy seemed tenuous and fraught with challenges to the planet’s health.

Our experience had been to fire with natural gas — once considered “clean-burning.” In the new context, I saw that if we used gas we would be depleting a fossil fuel, while at the same time emitting greenhouse gases (GHGs) directly into the atmosphere. On the other hand, electricity seemed in short supply but held the promise of one day originating from a clean, renewable source such as wind or solar. The same could not be said of gas.

In 2001, we moved to Oregon, where energy was plentiful (think hydro) and less expensive. Taking our five-person, $30,000-per-month operation to Grants Pass, we set about growing our business nationwide. Our sales climbed, our staff grew; we were on our way. It felt good. Until early 2004, that is, when I opened our power bill.

I still remember the shock. Inside the envelope was a small report. What it said threw me: 78% of the power we used came from burning coal in Utah. I don’t know about you, but when I think about burning coal, what comes to mind is sulfur dioxide and acid rain. A climate-change cocktail. Our little company by then was using 60,000 kilowatt-hours per month, and the growth curve still looked steep. Visions of a brown, overheated earth played in my head as I imagined a conversation with a future grandchild. “Grandpa, why didn’t you do something? Didn’t you care about me?” It was time to do something.

Scrambling, I launched a nearly full-time effort to obtain the largest solar photovoltaic setup I could get. If we needed so much power, we’d just generate it ourselves. I soon realized that even a $1 million system would provide only 30% of our usage. Undaunted, I searched for $1 million. The Department of Energy financed these systems, I was told. Their representative took our application and not-so-politely rejected it, saying our ratios were upside-down. After two rounds of project downsizing, we asked: “Is there any size project you will finance for us?” “No” was the reply.

This couldn’t be the end. Months of effort could not come to this. That day, our contractor spoke to the president of Bonneville Environmental Foundation, Angus Duncan. He explained our project to Duncan, who seemed to admire our determination. Duncan called me and said, “We have never made a loan like this before, but I have a question for you: How would you like to ‘green’ all the energy your company uses?” When I responded with interest, a unique partnership was born. BEF would lend us money for our project if we would buy their Green Tags to offset the GHGs from the rest of Encore’s energy use: electricity, gas, auto miles and airline seat-miles. And when our system was producing electricity, Bonneville would buy the green attributes of that power from us, adding it to their inventory for customers who similarly “green” their energy.

I couldn’t be happier with the relationship. Surprisingly, our customers love the idea of tile made from clean energy. We received $80,000 in tax credits and an Energy Trust grant of $35,000 for installing our system. Our company’s operations are “climate neutral.” Two years from now our photovoltaic system will be fully paid for, and it is guaranteed for 25 years.

Consider this: For March and April 2006, our manufacturing was up 30% over 2005 but our imported electricity was down 6%. This gives me hope for the future. Our monthly purchase of Green Tags is developing an infrastructure of wind and solar energy projects. I no longer worry about our growing business. And our customers love it.

If we’ve learned one thing from our years in business, it’s this: Wherever you put your attention, you will soon see improvement. Where is your attention? Isn’t it time you do something about your energy use?

 

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