Renewable-energy provider Clean Currents, based in Silver Spring, is closing its doors after January’s polar vortex sent temperatures plummeting across the Washington region and, subsequently, the price of alternative energy soaring.
The vast majority of Clean Currents’ contracts lock customers into an energy rate, regardless of whether prices fluctuate on the wholesale market. Thus, Clean Currents absorbs the hit when prices rise dramatically.
The prolonged cold snap brought an abrupt end to one of the area’s promising eco-friendly companies, a source of alternative energy to thousands of homes and businesses since the company was formed in 2005.
“We worked extremely hard to the very last second to save the company if we could,” President Gary Skulnik said. “We were unable to give any kind of advanced notice because up until the last minute [we were] talking with people to save the company.”
Those talks included unnamed investors and other companies, but a deal never came together. Clean Currents, which has 19 employees, stopped providing energy this past weekend and plans to close in the coming weeks.
“We are writing to inform you, with deep regret, that the recent extreme weather, which sent the wholesale electricity market into unchartered territories, has fatally compromised our ability to continue to serve customers,” Clean Currents wrote in a message to customers.
Environment & Energy Publishing, an industry trade publication, reported in January that the cost of producing electricity “soared above $1,000 per megawatt-hour for the first time as arctic temperatures squeezed the East Coast.”
Since its creation in 2005, Clean Currents has allowed about 15,000 homes and 3,000 businesses in the District, Maryland and Pennsylvania to effectively buy wind power, according to its Web site. Those customers will now have to find other energy suppliers, or get their service from mainstream utilities, such as Pepco or BGE.
“There will be absolutely no interruption in service and they will go back to the utility,” Skulnik said. “There is no contract with the utility so they will be free to do whatever they want. They can stay with the utility or go to a new supplier.”
District-based nonprofit Groundswell helps households and local businesses negotiate for affordable, renewable energy by banding them together on a group contract. Clean Currents has won several of those contracts in the past, including contracts with about 60 businesses and 600 households at the time it closed.
Those customers were automatically switched back to their mainstream energy provider, though Groundswell executives hope to sign them onto a new contract this spring.
“Certainly that impacts us because at Groundswell we’re in this for the long-term growth of the consumer movement around clean energy purchasing,” said Eric Rubin, director of commercial programs. But “as things get back to normal as spring approaches. . .we’ll be in a good position to work with a lot of these folks.”
Groundswell now plans to more thoroughly scrutinize a company’s financial stability before awarding its contracts, as the Clean Currents closure might cause some new customers to question the risks associated with switching to renewable energy.
Skulnik said Clean Currents tried to hedge against price swings but was not prepared for the sharp jump that occurred recently. He said variable-rate contracts, in which customers share in the cost burden, could not have saved the company because Clean Currents was still faced with untenable prices on the small portion of power it does not buy wholesale.
“I can only say that this one [extreme cold period] was persistent,” he said. “It wasn’t just a day or two of cold. It was two weeks.”
Even if his company didn’t have the financial resources to survive the rapid shift in prices, Skulnik hopes Clean Currents’s tenure proves that the local demand for renewable energy is robust enough to sustain a business.
“It’s more alive than ever before,” he said.
Capital Business is The Post’s weekly focusing on the region’s business community.