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Exergy Development Still Peddling

But Exergy Tour bills should total $1.9 million

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James Carkulis, president and CEO of Exergy Development Group, sat at the marble table in the glass-enclosed penthouse suite of the nesting doll that is the Hoff Building. Thumbing through a short stack of printed media articles and e-mails, he settled on one article from The Idaho State Journal and read aloud:

"So far, even Exergy's hometown has been stiffed."

"We haven't stiffed anyone," Carkulis said.

The article and Carkulis refer to the then-recently paid $27,500 bill from the City of Boise for police and waste disposal, one of an undisclosed number of invoices it was left after the Exergy Development-funded Exergy Tour, the women's road cycling race Boise hosted in May. Since the tour, Exergy Development's cash shortage has become an open secret that continues to draw scrutiny----and Carkulis' ire----as he and his cycling teams look forward to next year's tour and beyond.

Invoices began piling up almost before the Exergy Tour was over. Though Carkulis declined to comment on how much is left to pay or to whom, he said that Exergy Development originally allocated $1 million to the tour. By the time he has signed the last check, cash outflow from Exergy Development to Exergy Tour will total $1.9 million.

The doubling of Exergy's sponsorship of the Exergy Tour dragged a business page quarrel between the energy development company and Idaho Power to page one.

Exergy Development's role in funding the tour ballooned after filling in a budget gap left when unnamed race organizers didn't provide sufficient funds. To pay for the overages, Exergy diverted the difference from its business cash flow.

"Unfortunately," Carkulis said, "our cash flow was constrained with the current Public Utility Commission filings in Idaho and placing on hold $250 million of our Idaho projects, which we had under construction."

In July, construction at six sites became mothballs. A conflict between Idaho Power and Exergy Development over transmission services and interconnection processes culminated in both parties entering mediation through the Public Utilities Commission. Idaho Power filed complaints with the PUC that Exergy's projects had not been completed by their scheduled July 2011 operation date, violating the terms of their energy sales agreement.

Idaho Power then testified that adding new sources of wind energy would unnecessarily drive up electricity costs to the tune of $594 million over the 20-year term of Exergy's agreement to provide wind energy in Idaho.

Idaho Power spokesman Brad Bowlin said that the company was unable to comment on the subject of its dealings with Exergy because of the terms of the PUC's mediation.

In mid-August, Exergy Development permanently suspended its open Idaho wind energy projects, giving up its rights to projects in Twin Falls, Lincoln and Bingham counties.

Exergy's prospects for wind energy generation in Idaho were at an apogee in 2010. Two years later, they were nil, but the profitability of Exergy's venture had been in slow decline for more than a year by the time the PUC ruled. In April 2011, the Idaho Legislature voted to allow a tax credit exempting alternative energy companies from usage and sales taxes to expire that June, cutting into Exergy's bottom line.

As the company's cash flow was pinched, so was the tour's, and the bills are still being paid. One group voiced its disappointment with Exergy Tour's late invoices in the media.

When the Wildcat cheerleading squad from Columbia High School in Nampa didn't receive a $2,000 donation to sponsor a cheerleading camp in return for working trash and recycling services at the tour, it posted a disgruntled letter on the KTVB Channel 7 website.

"After months of non-payment, yesterday Columbia Wildcat Cheerleaders were told that Exergy would not be paying," wrote KTVB-user "mebgreer."

"Does this teach these impressionable young girls not to participate, work or volunteer at other community events and with other groups in general?"

Carkulis said that Exergy has since paid the cheerleading squad, and that the team being told it would not be remunerated for its services was a misunderstanding that arose when a third-party race organizer contacted the squad.

The Wildcat Cheerleaders' coach Jennifer Dickinson and the unnamed race organizer could not be reached for comment.

Others have been more relaxed about Exergy Tour's late payments. On Aug. 30, Exergy paid its bill to the City of Boise for waste and police services. The bill was weeks overdue, but upon receipt of payment, Boise welcomed the return of the tour with open arms.

"The mayor and the Council were thrilled with the Exergy event," said Adam Park, spokesman for Boise Mayor Dave Bieter.

Park is confident the tour had a positive economic impact on cities and towns that held events, but said that the attendance and its tourism value remain a guess. More concrete is in how the tour fits in with the city's long-term branding and development agenda.

"It's more than just economic impact--it fits in with the livability goals the mayor and Council have set," he said.

One of those goals is for Boise to solidify its image as a recreation hub. Exergy Tour and the Twilight Criterium (and, from 1984 to 2002, the Women's Challenge) contribute to that image.

Despite the payment woes, Exergy's men's and women's racing teams are already looking to the future. Tad Hamilton, race director of Team Exergy, is tinkering with his roster. In the coming weeks, he will drop six riders from his squad of 16 and add three.

"You have to look at who has done a good job for you and the guys who you think can win," he said.

Building a winning team isn't just about having the fastest riders. The best squads spare aggressive riders for most of a race so they can surge to a winning finish at the end----"It's a bit of politics, a bit of performance," Hamilton said----and unlike professional sports like baseball or basketball, ticket sales, broadcast deals and merchandise don't pay the bills. Big sponsors like Exergy do.

The bills aren't chump change. Hamilton said the average men's team has a $1 million budget, about one-third of which goes to riders in the form of salaries. Most entry-level pro racers have a take-home income of just $5,000 per year, but that allowance is supplemented by about $30,000 in lodging, food, training and equipment. This coming season, the net loss of three Team Exergy riders will save his team $100,000.

Hamilton's objective is to maintain his squad's balance. On his roster are up-and-coming riders as well as seasoned veterans of the continental tour, and their skill levels allow Team Exergy to compete successfully with big American teams like Optum, LiveStrong and Bissell.

"We're at a level that is a bit of a developmental level," he said.

While Team Exergy is stirring up its roster, Team Twenty16 (formerly Team Twenty12) is stirring up the role women play in the sport.

This year at the London Summer Olympic Games, Exergy Twenty12 cyclists Kristin Armstrong and Lauren Tamayo represented the United States. Armstrong won her second gold medal in the individual time trial.

But the Exergy brand is looking to expand women's cycling beyond the visibility of its most aggressive riders.

In professional cycling, the gender line is a sponsorship cliff.

"We have a concern about adequate sponsorship on the female side of the sport," Carkulis said.

Carkulis envisioned the Exergy Tour growing the sponsorship opportunities and participation in women's cycling. To do that, the tour had to expand its visibility. Beyond local and cycling-specific media, the Exergy Tour used TourTracker, the online race viewer used at the Tour De France, marking the first time TourTracker had been used at a women's cycling event.

Nicola Cranmer, Team Twenty16's general manager, said Exergy Tour and TourTracker have enhanced women's visibility within the sport, but added that her riders have a different outlook on participating in professional sports from their male counterparts.

"We really encourage our women to think about life after cycling," she said.

Unlike the members of Team Exergy, many of Cranmer's riders are junior riders still finishing high school. Others are trying to raise a family or secure full-time employment. These competing interests are reflected in the rigorousness of the women's team's schedule.

"Some teams choose to race every weekend and we don't," Cranmer said.

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