News » Feature

Air for Sale

While Kansas struggles to cash in on the wind, one slick salesman’s wheels are turning.

by

comment
Troy Helming looks good for a guy who's been losing sleep.

Microphone in hand, he gazes out from a small stage at the Overland Park Convention Center. Beside him is a plug-in model of a futuristic white windmill.

"Kansas City is known for a few things," Helming begins in a strong, clear voice. "Great jazz, famous barbecue and, soon, as the home of Krystal Planet."

It's November 2004, and some of the people in the audience have flown in from as far away as Florida to hear Helming, their 37-year-old leader, update them on the state of their young company, Krystal Planet. Helming calls the people in the audience "ecos" -- short for energy consultants -- and this is the first annual Krystal Planet Renewable Energy and Hydrogen Expo.

Helming launches into his signature presentation about trends in America's energy consumption. It is a lecture he's given dozens of times, studded with facts on mercury pollution, the world's dwindling oil fields, inflation in the price of natural gas. His earnest message and his ability to call up meaningful statistics make him a go-to guy for the media. He's been a talking head for the Discovery Channel and National Public Radio. But tonight, in front of his ecos, he's a little breathless.

"I am so excited to be here tonight! Oh, man! I've been waiting years for this moment, I have to tell you. I mean, I've gotten, I don't know, maybe a cumulative of four to six hours of sleep this week, you know. I can't sleep at night. I've been getting up, Alysia knows, I've been getting up four, five o' clock in the morning ... "

He looks at Alysia Helming, his wife, whom he met on Match.com. She nods from behind the PowerPoint projector.

"Monday night I stayed up till four in the morning. Finished my book Monday night, by the way," Helming continues, to applause. He's referring to The Clean Power Revolution, available in paperback from his Web site. In that book, Helming details his "Freedom Plan" to get America powered 100 percent by renewable energy -- such as wind power and hydrogen power -- by 2025.

According to Helming, Krystal Planet is a revolutionary new concept in the world of "green" marketing. Launched in April 2004, the company's short-term goal is to spend $1.6 million to build two electricity-producing wind turbines, either in Kansas or somewhere in the Caribbean. Helming is proud to say that he's no tree hugger. His politics are conservative, and he makes no apologies for his ultimate goal: "to get filthy, stinking happy." His speech lingers on words like billionaire.

After all, one of Krystal Planet's mottos is "When the wind is blowin', the payments are flowin'."

Becoming an eco takes one thing: a monthly check for $20, payable to Krystal Planet.

"Stay loyal to the company. Stay the course," Helming tells his ecos. "Go over the little speed bumps, the little hiccups. I can tell you we're not going to be perfect. We're going to make a few mistakes here and there. We're still a little tiny company, not even in the ground floor. We're in the what?"

The crowd answers in unison, "In the basement!"

Helming beams. "We're looking up at the ground floor, so bear with us. But I sincerely hope that each and every one of you will achieve great wealth for yourselves and for your families and save the planet at the same time."

To harness the power of the wind, Helming hopes to use another form of energy: the average consumer. A generation of kids who learned to recycle in school, whose science classes included units on dwindling rainforests, melting ice caps and global warming, is now entering the workforce. That means a legion of buyers looking to spend their dollars on things that make them feel environmentally responsible, products with labels signaling their eco-friendliness.

Helming promotes himself as the golden-boy representative of renewable energy, a hip and savvy emissary from America's clean-powered future. He's training to be a pilot. He's a member of Mensa. He used to compete as a gymnast. His goal is to climb the mountain peaks known as the Seven Summits.

He calls himself a maverick. His close-knit business associates call him an innovator.

The scientists who are struggling to make wind power legitimate in Kansas, though, call him an outsider.

It doesn't get as much ink as gay marriage and evolution, but wind energy is an extremely touchy subject in Kansas.

Experts predict that investors will spend as much as $3 billion on wind energy in 2005; in fact, they predict that this will be wind power's biggest year. That's because late last year, Congress approved a tax break for developers hoping to finance wind-energy projects -- but the incentive is good only through 2005. Last year, developers built projects generating 389 megawatts of wind power (enough to power 120,000-160,000 homes); this year, the industry expects an additional 2,000 megawatts to come online.

For Kansas, that could mean millions of dollars in investment, millions in construction activity and dozens of jobs. There are other perks, too. One large-scale wind farm already operates in the state, built by Florida Power and Light in Gray County's Montezuma. And though wind development companies in Kansas don't have to pay property taxes for their projects, they generally try to be good neighbors, offering yearly donations to municipalities where they build, comparable to the taxes they might pay otherwise. For example, Florida Power and Light gives Gray County schools $300,000 a year.

Kansas has the country's third-highest wind-energy potential. The winds whipping across the state's western plains are not only strong but also sustained, which is crucial for creating electricity. Yet Kansas doesn't even rank in the top ten states now producing wind energy.

Kansas could be cashing in on its natural asset. Ten companies are vying to get 14 wind projects up this year in Kansas (though experts expect only about six to really succeed). It's a neo-gold rush.

U.S. Department of Energy maps show the state as a swirl of yellow and pink, along with two purple patches -- the purple representing Class 5 winds: strong, steady wind ranging from 16.8 to 17.9 miles an hour, ideal for wind-farm developers.

The larger purple patch stretches over the western quarter of the state, which could be hot for developing wind power. It's sparsely populated, rarely zoned, and owned by struggling farmers and ranchers who have been quick to recognize the financial benefits of leasing their property to wind developers. Unfortunately, the state's already-overloaded energy transmission lines don't reach that far into rural Kansas. Building new or improved transmission lines would mean getting easements on thousands of acres of property and hooking up expensive equipment. It's not an undertaking for which your average venture-capital wind developer can write a check.

The other purple splotch is the Flint Hills.

Reasonably close to transmission lines and major population centers -- Wichita, Topeka, Lawrence, Kansas City -- the Flint Hills howl with Class 5 winds and are owned by more of those cash-strapped farmers and ranchers. A few years ago, several wind developers started sidling up to landowners there with pens and contracts.

But the Flint Hills also represent the last stand of the nation's tallgrass prairie, which once covered much of North America but has been paved, farmed and developed almost out of existence.

The prospect of cluttering the scenic prairie with giant windmills has turned some Flint Hills towns inside out, creating weird rifts where there are usually alliances, such as between the Sierra Club (pro-wind) and the Audubon Society (which fears that birds will be massacred by the blades of wind turbines). Those landowners who don't need extra income fear that turbines will mar the view and bring down their property values. Some people, soured by memories of fly-by-night turbine companies that sold low-grade versions of the machines to farmers in the '70s, insist that the windmills' motors would make the Flint Hills sound like high noon at Sturgis.

Last summer, Governor Kathleen Sebelius appointed Lee Allison, the director of the Kansas Geological Survey, to help create a renewable energy policy for the state. As the state's official geologist, Allison sat on a board called the Kansas Energy Council, which works closely with the oil and gas industry.

In January 2004, Allison convened a group he called the Wind and Prairie Task Force, charged with finding a balance between the conservation of the Flint Hills' ecosystems and the "full and aggressive" wind-energy development that Sebelius hoped for in the rest of the state. In its final recommendation, task-force members identified a 3-million-acre area that they called the Heart of the Flint Hills, and Sebelius asked that wind companies show voluntary restraint by not developing in that area.

But such gentle suggestions from the governor, along with her call for the electric industry to install a modest 1,000 megawatts of renewable energy in Kansas by 2015, have frustrated wind-power proponents, who believe there is no time to lose. And whereas 18 other states -- even George W. Bush's Texas -- have mandated that certain percentages of power companies' production include renewable energy, the Kansas Legislature has yet to pass such legislation.

Kansas Energy Council meetings are cliquish. Scientists and scholars hang out and harrumph. Oil- and gas-industry bigwigs whisper to one another and lunch together at the break. The rift between renewable-energy backers and the old-guard oil and gas guys exacerbates the frustrations of some members, who mutter doubts that the Kansas Energy Council's work on renewable energy will amount to anything at all.

Allison says it's his job to ease that tension. Fossil fuels and nuclear plants produce 99 percent of the electricity generated in Kansas, he points out. "There is a tendency in the established energy side of the business to look on renewables like, 'Who are these new guys?' I don't want to say they're thought of as wackos, but you do get those guys who are like, 'We've got to be running everything on hydrogen, shut everything else down!' Well, you could quadruple the cost of doing business overnight doing that. Some of them are real visionaries, but some are not very practical about it."

Small wonder that Troy Helming would want to circumvent this process. After all, the only thing stopping anyone from putting up his own wind turbine in Kansas is money: Once a turbine is up and running, by law, the nearest utility has to pay its owner for the energy it supplies to the pool.

Helming's business model would disseminate the message of clean power from person to person, friend to friend, family member to ... well, that's the idea. Companies such as Amway and Pampered Chef say these maneuvers are the most effective means for introducing a new idea to the marketplace. Helming says he has 2,000 customers nationwide, 500 of them in Kansas.

Helming works out of an office in a small business incubator called the Enterprise Center of Johnson County, just off Interstate 35 in Lenexa. He dedicates his wall space to pictures of wind turbines and a honeymoon photo of him and Alysia on a beach, she in her wedding dress, he in a tuxedo. A lucky bamboo shoot juts its stalk between stacks of books.

Around Shawnee Mission North, Helming was known as the kid who lived in a solar-powered house and threw raging keg parties. His dad, Bill Helming, is a well-known expert on agricultural economics who operates a consulting business in Olathe.

Helming went to the University of Kansas, studying business, Internet marketing and Spanish. He was a yell leader on the sidelines with the cheerleading squad. After college, Helming took a job at AT&T, where he won sales awards for his skill at selling telephone equipment. He struck out on his own in 1992, going into business for himself with a phone company he dubbed TeleTeam Consulting, where his sales team sold Lucent and Nextel equipment. Later, he says, he spun it off to different buyers, piece by piece, in 1996, 1998 and 2000.

Helming's first taste of "multilevel marketing" (the seller's preferred terminology for what skeptics might call a pyramid scheme) was in 1998, when he says he started working for Topeka-based Renaissance, the Tax People Inc., run by Michael Cooper -- which federal authorities and the Kansas Attorney General's Office investigated as an illegal pyramid scheme in 2001. Wichita prosecutors ultimately ordered Cooper to pay $13.6 million in damages that the court awarded to consumers. In 2003, the Shawnee County Circuit Court allowed Cooper to go to Mexico to retrieve part of the money, but -- shockingly -- he didn't come back. He was eventually arrested again last October, crossing the border from Mexico near Laredo, Texas. The federal case against Cooper is still pending.

Helming says he joined the tax company as a marketing representative in 1998, after Cooper hired some of Helming's top TeleTeam sales managers. He says Cooper still owes him a quarter of a million dollars.

There's a right way and a wrong way to build a pyramid. You can't pay people to recruit people if there isn't an actual product or service for sale. Another no-no is allowing people to buy more merchandise upfront than they could reasonably be expected to sell. (In Cooper's Tax People pyramid, buyers could purchase multiple $300 packages of his tax-deduction program, as though they were buying multiple McDonald's franchises.) Legal pyramid marketers also adhere to other industry standards, such as a fair cancellation and refund policy, listed in a code of ethics published by the Direct Selling Association.

Helming took some of the pyramid techniques he learned at Renaissance and brought them to another company he was hired to run, AZtech Financial Services Inc, which he describes as a small business incubator offering tax advice. Helming says he brought in his own team of employees, tax lawyers, accountants and marketing professionals, but after 11 months, just when the company reached profitability, he was fired.

"They got greedy and stupid," Helming says of AZtech's founders. "When they fired me, it made the people I brought to the company so upset that the staff left.... So the company was decimated by that, and now they're bankrupt. They weren't able to survive firing me."

But by then, Helming had begun thinking about what he hoped would become his life's work.

"That was a sign to me that I needed to focus on wind energy," he says.

Troy Helming doesn't have a lot of allies at the Kansas Energy Council, though few of the scientists there can explain exactly why.

It may be that Helming's reputation in Butler County precedes him.

In the 1990s, the first wind developers in Butler County descended on two little Flint Hills towns, Leon and Beaumont. What resulted was, to use a finely crafted industry-insider term, a shitstorm.

Helming had formed a wind-development company called Kansas Wind Power in 1999, hoping to sign contracts with public utilities to finance wind farms. He convinced Jim and Sally Beach, a couple of acquaintances who owned land in Butler County, to help him evangelize the idea of leasing land for turbines around Leon, where Jim had been the state wrestling champ from Blue Stem High School and Sally was known for her church activities.

But when investigators from the Kansas Securities Commission came across Helming's Kansas Wind Power Web site and discovered that he was soliciting investors over the Internet, which is illegal, the agency's director of enforcement, Steve Hulsopple, issued a letter on June 10, 2002, telling Helming to knock it off.

"He signed off, acknowledging that he kind of messed up and promising not to do it again," Hulsopple tells the Pitch.

The Butler County Commissioners turned down Helming's request to change the zoning to permit his projects in Leon. At the same meeting, though, the commissioners approved another wind project just down the road in Beaumont.

One landowner, who asked not to be named in this story, says he can guess why commissioners turned Helming down.

"We were both working in the same arena at the same time, but he was doing it all wrong and muddying the waters," the landowner says. He says wind developers first approached him in 1994, so he'd had years to educate himself about the industry -- but the idea was new to county commissioners.

"The last place you want for an open discussion to take place is in front of commissioners," he says. "They're not reasonable. And the last person who ought to be in front of a bunch of mom-and-pop farmers is a man who looks like Rob Lowe and acts like Rob Lowe. He came in looking Hollywood, saying 'I'm smart, and you're not. I'm slick, and you're stupid.' And they hated his guts. ... Here's this tanned, soap-opera-looking guy who talks slick and insulted the crowd for not seeing the wisdom of his ways."

The landowner says the commissioners didn't just vote against Helming's plan. "They slayed and dismembered it on the floor right in front of us." It came as a shock, then, that in the next minute, commissioners passed the competing proposal in a 3-2 vote.

The landowners Helming was working with sued the Butler County Commission for what they felt was an unreasonable decision. Charles Benjamin, an environmental lawyer and lobbyist for the Sierra Club who represented Helming's landowners, says that, near as he can tell, the commissioners rejected Helming's proposal because his project would be too visible from a major highway. Helming's landowners later dropped the lawsuit. Meanwhile, another group of landowners who were against the wind farms sued the Butler County Commissioners to protest their decision to approve the Beaumont project. Deadlocked and exhausted, the leaders in Butler County begged the governor to intercede. That's when she turned to Lee Allison for help crafting the state's policy.

Helming sold out of Kansas Wind Power shortly after. Much of his original team remains there working for a new CEO, Rob Freeman, who now runs the company under the name Tradewind Energy and is seeking a contract from Kansas City Power & Light to build a wind farm.

"I left that company primarily because I didn't feel like I could soar with the eagles when I was working with turkeys," Helming says today. "Some of the employees who are still there are people who, if they paid me, I wouldn't let them work for me. It was a toxic environment."

And speaking of toxic environments: The controversy in the Flint Hills refuses to cool. Just this month, Rep. Frank Miller published a list of anti-wind arguments in his "Frank Talk" e-mail newsletter. In January, leaders of the Kansas Audubon Society formed the Flint Hills Tallgrass Prairie Heritage Foundation. Their first action was to file a 200-page class-action lawsuit against the Elk River Windfarm, a project on the outskirts of the Flint Hills under development by PPM Energy of Oregon (an arm of a large Scottish developer) whose generated power is to be sold to the Empire District Electric Company, a regional power company based in Joplin, Missouri. (Last week, a judge dismissed the lawsuit.) Elsewhere in the country, regular citizens are embracing renewable energy. The most common way for average consumers to encourage power companies to produce clean fuel is by purchasing "green tags."

Usually, consumers agree to pay for a green tag (also called a tradable renewable certificate) that represents a certain amount of kilowatts produced by an existing wind farm. (Industrial-sized wind farms are collections of a hundred or so turbines spread over many acres.) Buying a green tag lets a consumer pay extra for the privilege of injecting an amount of renewable energy into the power grid -- when a renewable-energy plant is actually generating electricity.

But the turbine producing Krystal Planet's energy doesn't exist.

Krystal Planet dubs its specialized version of a green tag "Future Wind." One unit of Future Wind costs $30 a month. A fraction of Future Wind money goes into an escrow account to finance the construction of a Future Wind turbine, which might be built in Kansas or maybe in the Caribbean. (Future Wind purchases can be tax-deductible as long as the buyer then donates them to a church, a charity or Save the Planet USA, a nonprofit founded by Alysia Helming and run by a staff of six Krystal Planet ecos in Newport, Rhode Island.) The $15-$20 from the green tag that doesn't go into the escrow account gets funneled into Krystal Planet's compensation plan, paying ecos $30 for every three new people they attract to the company. (Ecos are also eligible for one-time commissions for sales of energy-efficient products from the Krystal Planet Web site.)

Being a Krystal Planet eco costs at least $20 a month, which pays for a Web site, from which ecos work to invite friends, family members and complete strangers to become ecos, too. Most ecos opt to buy Future Wind, too, bringing their total payout to $50 a month.

Helming doesn't mind admitting that Krystal Planet is a pyramid.

Much of Krystal Planet's Web site is devoted to defending the company's structure: The United States government is arranged in a pyramid, as is the Catholic Church -- because, the site points out, it's architecturally the most solid structure you can build.

But Krystal Planet makes Kansas' official wind-power proponents nervous.

Bruce Snead, an engineering instructor at Kansas State University who is a member of the Kansas Energy Council, says Helming's approach presents a risk for wind power's reputation. If something goes wrong with Krystal Planet -- if the ecos don't see enough revenue, or if their project fails, or if they discover that money they thought they had invested wasn't actually invested -- the resulting bad publicity could be a problem, Snead says. "The message instead of the messenger sometimes gets blamed if something goes south."

David Springe is the consumer attorney for the Citizens Utility Ratepayer Board (which argues on behalf of customers when public utilities ask state regulators for the right to increase their rates). A few things trouble him about Krystal Planet. "A majority of the money you give is simply going back into the pyramid for payment, which is for the people at the top, because generally in these pyramids the money flows uphill," he says. "If the expectation is that you are paying a lot of money to support wind power, the reality is that the majority of the money is supporting the payment structure.

"Which is perfectly legal," Springe adds, "just like Amway is perfectly legal. These guys are smart. They know what they're doing." But, he says, "If the intent is truly to foster and develop and promote wind power, this is not the most efficient way to do that. This is about making money in a pyramid."

Helming's not worried.

"They probably don't understand or don't like the fact that I'm trying to turn the industry on its ear and use grassroots marketing to try to get wind energy mainstream," he says. "I don't care. And if people are calling me crazy, then I know I'm on the right path." On a giant PowerPoint screen, the ice is melting.

At the Krystal Planet expo at the Overland Park Convention Center, Helming has cut from his speech to a clip from The Day After Tomorrow. It's a tension-driven sequence in which scientists studying an ice shelf suddenly face death -- massive cracks in the ice snaking under their feet.

If the point is to manipulate emotions in the audience, it's working. Women seated at one round table are clearly worried for the lives of the characters on the screen.

Helming abruptly ends the clip and strides back onstage with the microphone.

"All right. Some keys to our collective success. In a $5 trillion clean-power industry by 2050, if there's thousands of companies controlled by 10 or 20 key firms, somebody who wants to be a leader -- and I think you know who that somebody company is going to be -- somebody needs to establish a lead early to be one of those 10 or 20 $200 billion firms."

Debbie Denny, an eco from Eldon, Missouri, is in the audience. She heard about Krystal Planet from her brother, who saw an ad for the company in USA Today. He told her to take a look at the Web site and listen in on a couple of the company's weekly conference calls. She liked the idea of extra income and the idea of getting rid of pollution.

She has a day job but hopes that eventually she can quit and work on her Krystal Planet business full time. Everywhere she goes, she says, she hands out little cards that say something about global warming and the choice between clean and dirty energy.

"I try to listen to people, and if people are complaining about gas prices or something to do with a lake or something being polluted, that'll start up my conversation about how there's a way to stop polluting," she says. From the Web site, Denny can sell other products, too, including fuel catalysts for a car's gas tank, energy-saving appliances, solar panels and energy-efficient light bulbs. But Future Wind tags have so far been her best-selling product.

Of all the multilevel marketing companies Denny has been involved in -- and she says there have been many -- she likes Krystal Planet the best. The Web site provides her with materials, such as fliers she can print out. If she has trouble explaining some of the more technical aspects of renewable energy, she can give a prospective customer the phone number for the conference call to ask questions of company spokespeople.

"I've been involved in so many other things -- Amway, Excel and stuff -- so when my friends see me coming, they go, 'Oh, gosh, what's she doing now?'" Denny says. But with Krystal Planet, the idea of cutting pollution sells itself. "I just didn't seem to hit the right ones willing to buy expensive soap and vitamins."

During a recent Tuesday-night conference call, Timothy Beckford from Krystal Planet found himself answering questions from a caller in Kansas City. The caller wanted to know why Krystal Planet's green tags weren't certified by Green-e, a well-known environmental organization that reviews claims by green marketing companies and places its seal on the products as a stamp of approval.

"Well, they [Krystal Planet] did seek that [Green-e's endorsement] a long, long time ago," Beckford answered. "There were two things that Green-e didn't offer that Krystal Planet was looking for. One was the ability to certify future green-tag models. They are just not to that level yet. The second thing is, Green-e is this very tiny nonprofit. And right now there are only about a million customers in the green-tag market, so they can handle that. But they look at every little thing you do, and they cannot keep up with Krystal Planet's growth."

Beckford explained that Krystal Planet had hired the auditing firm Grant Thornton LLP to audit each green tag and examine the escrow account yearly. He also mentioned Krystal Planet's sister company, Pristine Power, which markets wind projects to corporate buyers -- minus the referral-based marketing. (Pristine Power is run by two of Helming's Sigma Phi Epsilon fraternity brothers, Tom and Bill Gray; Krystal Planet and Pristine Power operate as subsidiaries under the larger company name Krystal Energy Corp.) Pristine Power, Beckford said, was taking a more "traditional" approach to selling green tags and therefore might seek Green-e certification. But with Krystal Planet's conference calls and extensive marketing, and with thousands of ecos each running their own expanding branches of the company, trying to work with Green-e, Beckford said, "would really slow us down."

And Helming isn't about slowing down.

A lack of available turbines -- there's currently a waiting list for parts, and Helming says Krystal Planet is on it -- and the ticking clock on the 2005 tax break are worrisome, but no matter. If Helming can't get his Kansas projects in the ground and spinning by the end of the year, he hopes to have his Caribbean projects up and running. Erecting wind turbines in the Caribbean is easier, cheaper and more lucrative because electricity is more expensive on islands that must ship coal and natural gas to their ports. And by law, the closest utility to any new wind project is obliged to pay the prevailing wholesale energy prices to the wind company for the electricity it adds to the grid.

Helming is hesitant to say which of the island projects will be finalized first. But he says he hopes to generate 15-20 megawatts of electricity in the Dominican Republic, Haiti or the Cayman Islands.

"Eventually, I plan to really take this fight to the utilities in this region," Helming says. "Neither KCP&L nor Westar are really very serious at all about embracing wind energy, and quite frankly, the executives of those companies that continue to want to do coal and build coal plants are doing it because that's what they've always done. I think they're pansies."

Add a comment