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July 01, 2011

Company Focus

Viridian Energy: Power with Purpose

by Karyn Reagan

Company Profile

  • Founded: 2009
  • Headquarters: Norwalk, Conn.
  • CEO: Michael Fallquist
  • Products: Energy Services

Michael Fallquist

Michael Fallquist

Michael Fallquist has always understood the responsibility of leaving the planet better than he found it. And his understanding has developed into the passion that birthed Viridian Energy in 2009. Though the new kid on the block, Viridian has already experienced stellar growth and is well poised to continue its climb.

The deregulation of the energy industry resulted in several companies rising to acquire a piece of the electricity pie. Competition emerged where there had been none as consumers were given options when purchasing their electricity. To some, understanding the energy industry has been daunting. Other consumers have jumped in with both feet to analyze the intricacies of deregulation and how it may benefit them. Questions have arisen as to the differences in companies and the products they offer, but most of the time the decision boils down to cost. After all, electricity is electricity. That is until Viridian came along.

Prior to starting Viridian Energy, Fallquist, the company’s Founder and CEO, worked in consulting, banking and commodities. He went to work at Macquarie Bank, an investment bank in Sydney, Australia, where he was part of a strategy group in the Energy Markets Division that was consulting a natural gas wholesaler the bank had acquired, Cook Inlet Energy Supply. Fallquist assisted them in expanding their business in the energy value chain. “Energy starts as oil or gas in the ground or a windmill on the ground, and ends up as many different products, including electricity,” Fallquist explains. “There are numerous stops along the way, and it was rewarding to help a company add to the parts it could contribute to the chain.”

Fallquist was later invited to become COO at Commerce Energy Inc., a large, publicly listed, deregulated, retail energy marketing company where he successfully assisted in the restructuring of the company. It was later sold and became Universal Energy Group in 2008. Fallquist was ready to start a new chapter in his life.

Green Energy

While exploring his options, Fallquist was naturally attracted to the industry with which he was most familiar. He felt the energy industry provided prime opportunity to offer consumers savings as well as having ample room for growth potential. The most compelling aspect of Fallquist’s decision was that the company he envisioned, Viridian, was able to slide into a market niche as a provider of affordable green energy—the opposite of what is termed brown energy.

The difference between brown and green energy is simply how it originates. “Brown energy requires fossil fuel generation, whereas green energy is generated from wind, solar, or other clean, renewable sources,” explains Fallquist. “Viridian primarily uses wind for our renewable sources, harnessing the power of the natural environment.”

When a customer plugs into an outlet, he has no way of knowing if that specific electricity is brown or green because both sources are merged by the energy providers prior to being distributed to consumers.

Viridian has developed products whereby environmentally conscious individuals can be confident that a part or all of their electricity consumption is supporting green energy sources.

A Perfect Fit

In the process of developing Viridian’s components, Fallquist was convinced that the sales model offered by the direct sales industry would mesh perfectly with the product he would make available. “Green energy holds a unique product positioning in the market, which I felt would prove beneficial to independent associates,” Fallquist says. “At the same time, Viridian stays consistent with my core belief, which is the promotion of green products.”

Viridian Executive Directors take center stage at the company’s annual Momentum convention, held this spring in Atlantic City, N.J.

Viridian Executive Directors take center stage at the company’s annual Momentum convention, held this spring in Atlantic City, N.J. 

In August 2009, Viridian was launched in the state of Connecticut. “On Sept. 19, 2009, we held our first opportunity meeting in Connecticut with 30 people in attendance, and all 30 signed up as independent associates,” Fallquist says. The good news is that 20 of them are still active associates, even through the growing pains. Fallquist attributes the loyalty of the original associates to the green value offered by Viridian.

“As most startup companies do, Viridian had a bit of a learning curve to challenge its survivability in the very early days,” Fallquist says. “Most of the issues we faced were related to the compensation plan design.”

While his first job out of college was as an actuary—one who assesses risk involved in an industry or specific company—Fallquist is naturally averse to risk, so creating a compensation plan was not without minefields. “We have learned that an effective plan is one that rewards associates for their time and successful result and ultimately drives their business success,” Fallquist explains. So the original plan morphed over time based on a better understanding of the behavior of the company’s associates and their feedback. “We work very closely with the field, and if there is something we need to fix, we fix it,” he says.

The Explosion of Power

By February 2010, Viridian was launched in Pennsylvania, and New Jersey was added shortly thereafter. “Those two markets exploded the company to the next level,” Fallquist says. At the end of 2009, Viridian serviced approximately 17,500 customers and today boasts 160,000 customers. “2010 was an exciting year for us,” Fallquist says. Since then, the total number of states offering Viridian’s products is six—Connecticut, Pennsylvania, New Jersey, Maryland, New York and the newest member, Illinois.

Before the arrival of Viridian, the energy industry competed on two levels: cost and being 100 percent green or renewable. While studying the focus group data offered by the industry, Fallquist discovered that 98 percent of the people questioned desired green energy but only 2 percent were willing to pay for it. The opportunity standing in front of him was to offer customers a chance to support green energy while saving money on their utility bills.

“That is the void we have filled with Viridian,” Fallquist says. Their most popular product is the Everyday Green rate, which is electricity just like that of other energy companies, but the origin of the electricity is approximately 20 percent green. While it is not 100 percent renewable, which is cost-prohibitive to most consumers, the 20 percent keeps the price on par with the competition while allowing customers to support a cause that is important to them. The second product offered by Viridian is the Green-e certified Pure Green rate. It offers 100 percent pure renewable energy content at a competitive rate.

The Life of a REC

Renewable Energy Certificates, known as RECs, are how suppliers like Viridian meet renewable energy standards. Each REC represents proof that one megawatt hour of energy was generated from a renewable source. “We purchase our RECs according to strict standards outlined by an organization called Green-e that we are proud to be associated with,” Fallquist said.  “Once we sell the associated power to our customers, the RECs are retired or taken out of circulation.”

Green-e is the nation’s leading independent consumer protection program for the sale of renewable energy and greenhouse gas reductions in the retail market. Green-e also offers certification and verification of products in other areas. Viridian’s 100 percent renewable Pure Green plans are certified by Green-e Energy. Each megawatt of sustainable power is accounted for through an annual audit that is submitted to the organization for review and verification.

CEO Michael Fallquist addresses associates at Viridian’s first ever national convention, PowerUP, held last October 2010 in Atlantic City, N.J.

CEO Michael Fallquist addresses associates at Viridian’s first ever national convention, PowerUP, held last October 2010 in Atlantic City, N.J.   

“Most people who purchase green power prefer it to be from a local source,” Fallquist explains. “While we cannot know exactly which windmill produced which megawatt, we can know that it came from the customer’s local region.” Viridian is sensitive to the fact that a customer who is conscientious enough to purchase renewable energy will most likely want to know the details of their power source. “Most of the time, someone from New York is not interested in purchasing energy from a source in Texas,” Fallquist says.

Green-e makes extra efforts to offer assurance to consumers in three specific areas. First, the renewable sources are offered from an up-to-date source. Second, there has been no double selling. The customer is the only one who can claim the environmental benefits of the renewable energy that was purchased. And third, the purchase of the renewable energy goes beyond what is required by law or claimed against a mandate, and is helping expand the production of green energy in the United States and Canada.

Being born and raised in the Seattle area, Fallquist has green in his DNA. “It’s who I am,” he says. So when his business experience was met with a prime opportunity to offer others a chance to give back in a way that was tangible, it was a no-brainer. “The independent associates with Viridian feel good about what they are doing, and that loyalty to the cause has been critical to the success of the company,” Fallquist says.

Reward with a Twist

While working for a cause might offer something unique to its associates, those who have earned high sales ranking have found another key difference. Staying true to their cause, Viridian’s management team has implemented—among other more traditional incentive trips—a sustainability incentive program tagged 7 Continents in 7 Years.

In March, the 30 recipients of the first-ever sustainability incentive trip were given prime opportunity to demonstrate the depth of their passion for the cause of renewable energy and sustaining the planet. The country upon which they left their mark was Brazil. After a flight into the country, the group of Viridian independent associates traveled deep into the Amazon to a deforested area where they planted trees. “A lot of sweat and tears went into the reforesting project we worked on, and the overnight accommodations were interesting,” Fallquist says. “Finding a 4-inch-in-diameter spider in the shower one day and a frog the next certainly qualifies as interesting!” The Viridian group also spent one night camping in the Amazon jungle. “We didn’t really get much sleep that night,” Fallquist says. But he reports that the adventure was unforgettable.

With the feeling of satisfaction from a job well done, the associates were treated to the more traditional kind of reward when they were taken to the coast of Brazil and wined and dined for the second half of the trip. The next continent the group will visit on its mission is Africa, where the participants will join a different sustainability project aimed at helping the people of Africa. One of the options Viridian is considering is installing solar panels for families living in areas where electricity is unavailable. “We want to be able to help in practical ways such as providing for children to have light in order to work on their homework in the evenings,” Fallquist says.

Also in keeping with the mission, the month of April receives special recognition at Viridian. That is when Earth Day is celebrated and many sustainability projects are spearheaded by the leadership of Viridian’s corporate headquarters. This year those projects included a beach cleaning in Connecticut, a tree planting in New Jersey, a neighborhood cleaning in Pennsylvania, and another tree planting in Brooklyn, N.Y. Also, corporate employees were offered rebates for using public transportation for the month. For customers, Viridian offered the Pure Green option at the Everyday Green rate. “The month of April will always be celebrated at Viridian,” Fallquist says.

Another aspect of giving back offered by Viridian is through the Viridian Foundation. Its aim is to encourage research and innovation in the arena of sustainable living and development. “The key to our foundation is the promotion of mainstream green—creating an awareness of how to incorporate renewable value into the contemporary things that we do every day,” Fallquist says. As a practical implementation of its core beliefs, the foundation has purchased 500 deforested acres in Brazil with a plan to reforest that land over the next 10 years.

The Formula for the Future

As a newcomer to the direct sales industry, Fallquist quickly learned the formula for success within its walls.

Through Viridian, he is proud to offer a unique product that provides customers a better energy option and associates a viable direct sales business opportunity. He understands the value of residual income as he offers an opportunity to Viridian associates, which requires that they only sell the product to a consumer once, and then they get paid monthly. In addition, the product offered is not affected by a failing economy.

Uniqueness + Residual Income + Economy Proof = Success.