Jeff Senger didn’t plan on getting into the green energy business. After graduating with a degree in geography, and then tacking on a two-year post-grad degree in commerce, Senger moved from Edmonton to Calgary to work as an accountant for an oil and gas firm. But he soon realized that he wasn’t willing to put in the kind of time that was required in order to climb the corporate ladder and get into management, and that despite the fact that he and his wife were pulling in more than $150,000 between the two of them they weren’t saving any money. Senger had an exit strategy, though. The real-estate boom had been kind to the couple, and they were sitting on substantial gains in the value of both the Edmonton home that they had bought and subsequently rented out and the Calgary house that they still owned and occupied. It was time, they decided, to cash out.
Despite the fact that they were both born and raised in the city, the Sengers decided to buy a sprawling farm property in Sangudo, a community that sits an hour northwest of Edmonton. Senger spent two and a half years working for a fledgling trucking company before moving on to work as the operational accountant for the Millar Western pulp mill in Whitecourt. He kept himself busy on the side, too, first by putting some of his real-estate earnings into another real-estate venture in Saskatchewan and later getting into the importing business. He had a friend in Japan who introduced him to Japanese mini-trucks, four-wheeled vehicles that look like a cross between the cab of an eighteen wheeler and a go-kart, but the only way he could convince his wife that they could afford to purchase one for themselves was if he could sell a bunch of other ones. “I said, ‘what if we buy seven, sell six? Then can I keep one?’” In the end, he brought 21 of them into the country.
Senger continued to work at the pulp mill, but the virtues of owning and operating his own business were fast becoming too obvious to ignore. “The laugh was that I was at work as an operational accountant at this pulp mill, stressing out and staying late every day, but we were making more money selling Japanese mini-trucks. With our own business, you can make more money with less stress.” Eventually, he decided to yield to what he felt was his fate. At the age of 30, he was retiring.
Fate changed its mind in 2008. After watching his father-in-law’s investment portfolio shrink by more than 30 per cent almost overnight, Senger decided that it was time to get back to work – while he still could. Ironically, the head-hunter that he contacted found him a job right next door to his previous one, at a power plant that used the woodchips produced by his former employer as its feedstock. At one point, Millar Western had owned both operations, but by the time Senger arrived at the power plant it was part of a portfolio of green assets in a fund operated by the Macquarie, an Australian investment bank.
His bosses tasked him with finding operational inefficiencies in the operation. The biggest one Senger could find was the fact that they weren’t charging a premium for the biomass energy – “the closest thing to 24-7 green,” he says – that they were producing. Restore the plants Ecologo certification, he suggested, and stop selling green energy at coal prices. The problem was that the Whitecourt plant was one piece in a larger portfolio of assets – the “red-headed stepchild of the fund,” Senger says – and the owners weren’t interested in pursuing Ecologo certification unless they did so across the board. Since most of the assets in the portfolio were located in regulated markets like Quebec – places where you couldn’t get a premium for green energy – they didn’t share Senger’s enthusiasm for the idea. It was, to say the least, a disappointing experience. “It was frustrating to me as a person,” he says. “Like, ‘my god, it’s right there in front of you.’”
The Big Payback
The co-operative model may prove to be the key to Spark’s success, but it’s also played an important role in one of Jeff Senger’s other ventures. One of the projects that Sangudo’s new investment cooperative decided to fund – the co-operative that he helped to establish along with Paul Cabaj – was the purchase of Ivan’s Meat Shop, which was renovated and re-branded as Sangudo Custom Meat Packers under the management of – you guessed it – Jeff Senger. Under the terms of their financing arrangement, the Sangudo Opportunity Development Cooperative holds title while Senger and his partner Kevin Meier lease it from them at a fixed monthly rate of $800 plus six per cent of gross revenues.
The decision to kick up a portion of the revenues came from Senger himself, but he didn’t do it for entirely altruistic reasons. “Our biggest fear was that we weren’t going to have enough business to keep the two of us busy,” he says. “But if we pay the 22 investors a percentage of our gross sales, they’ll have a vested interest to push sales our way.”
Senger had no idea just how accurate that assumption would prove to be. This past June, Senger and Meier paid their landlords the usual $800 in rent – and then cut a cheque for $2,400 more as a result of the terms of their agreement. “These investors – and I’m one of them – are getting 18 per cent return on their money, which makes me want to slit my own wrists,” Senger says. “The math went sideways along the way, but the community’s getting rich off of us working like dirty dogs.