COGnitive Dissonance:

Power, profit, and the future of Hampshire County

Cash on Hand

$256,043

$822,779

$323,899

$60,726

General Fund CheckingGeneral Fund InvestmentElectricityTrust Funds

Total: $1,463,447

Annual Fixed Expenses

Expenses $-

$50,000

$100,000

$150,000

$200,000

$250,000

Retirement Assessment

Health Insurance--Hampshire Care

Health Insurance--Hampshire COG

Workers' Comp--Hampshire Care

Property & Casualty Insurance

Councilors

Total: $464,454

Current Annual Expenses*

2016 Expenses $-

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000 Regional Management

Purchasing

Building and Grounds

Regional Services

Board of Councilors

Finance

Public Safety

Hampshire Care

Sustainability

Accounting Services

HCOG Retirees

Electricity

Total: $1,445,977*Excludes electricity costs of goods sold. See next page.

Net Revenue per Program*

Series1

$(500,000)

$(400,000)

$(300,000)

$(200,000)

$(100,000)

$-

$100,000

$200,000 Regional Management

Purchasing

Building and Grounds

Regional Services

Board of Councilors

Finance

Public Safety

Hampshire Care

Sustainability

Accounting Services

HCOG Retiriees

Total: -$638,125*Excludes electricity

Net Revenue per Program

Series1

$(600,000)

$(400,000)

$(200,000)

$-

$200,000

$400,000

$600,000

$800,000

$1,000,000

Regional Management

PurchasingBuilding and Grounds

Regional ServicesBoard of Councilors

FinancePublic Safety

Hampshire CareSustainability

Accounting ServicesHCOG Retiriees

Electricity

Total: $301,903

Hampshire Power Financials

Revenue Surplus $-

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

$8,000,000

$9,000,000

$10,000,000

AggregationsRetail Book

Total Surplus: $915,544

HCOG Deficit, Surplus 2014-16

2014 2015 2016

$(2,000,000)

$-

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$(627,134.00) $(474,110.00) $301,904.00

Revenue

Expenses

HCOG Surplus

Staff Vision, Mission StatementsVision Statement: To drive economic development and improve quality of life in Hampshire County and beyond.

Mission Statement: To offer a robust suite of programs and services that combine the best practices of government and the private sector in support of municipalities, residents, non-profits, and local businesses.

Our Guiding Principles:· Abide by the highest standards of ethics, honesty, and transparency.· Be accountable to member towns, clients, and other stakeholders.· Commit to financial and environmental sustainability.· Innovate and educate.

Current Plan• Continue to diversify income generators

– SREC– Hampshire Solar– Hampshire I.T.– Hampshire Web

• Create services that have limited/zero risk and upfront costs• Adapt Hampshire Power to changing market

– Continue low-risk growth– Gain access to robust line of credit– Expand retail book– Increase market differentiators

• Hampshire Solar bundle• MeterGenius• Managed portfolio product• United Way partnership• Explore real-time and other new products

• Recruit Opportunities Committee of staff, Councilors and outside experts to explore revenue streams and market differentiators

SREC Program Surplus

FY15 FY16 FY17 $-

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

Surplus

Surplus

Hampshire Solar Referral Fees per Month

Apr-15

May-15

Jun-15

Jul-15

Aug-15

Sep-15

Oct-15

Nov-15

Dec-15

Jan-16

Feb-16

Mar-16

Apr-16

May-16

Jun-16

$-

$500

$1,000

$1,500

$2,000

$2,500

$3,000

Chart Title

Profit Tail of Aggregation and Retail Book Assuming No New Contracts

Jul-16Oct-

16Jan

-17Apr-1

7Jul-1

7Oct-

17Jan

-18Apr-1

8Jul-1

8Oct-

18Jan

-19Apr-1

9Jul-1

9Oct-

19 $-

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

AggregationsRetail Book

Does HCOG Want to Exist in 10 Years?

• If so, how do we plan on remaining financially sustainable?

• How do we bridge the gap between liabilities and assets?

• What combination of programs and services can bring in a bare minimum of $464k of surplus (or preferably $638k) to cover existing expenses?

Possible Future Scenarios

1. Hampshire Power Wind-Down2. HCOG Wind-Down3. Current Plan

a) Diversify Income Generatorsb) Pursue limited/zero risk and upfront cost

opportunitiesc) Adapt Hampshire Power to changing marketd) Explore selling Hampshire Power

Sell Hampshire Power?!

1. Contracts have value: Retail book has much more value/kwh.

2. Market could pay between $3-5M for current book

3. Possible long term revenue stream froma) Options/ownershipb) Contract for Services Rendered

Urgency

1. 2 weeks until no Director of Energy Ops2. Aggregation margin has decreased3. Entering Favorable Pricing Environment for new

customers4. Majority of Retail Book is up for renewal by

November5. Absent renewals and new business, expenses

will exceed income as of February 2017.6. Staff Morale