Energy Central Power Perspectives™: Welcome Dean Chuang, New Expert in the Load Management Community
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- May 27, 2020 11:30 am GMT
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The past few months have proven to be quite an interesting experiment when it comes to how our collective energy demands impact the grid and what a series of abrupt changes—like commercial business shutdowns, people staying at home around the clock, and more—does to that collective load. Watching demand curves in the electric power industry is a critical part of the load management field, and what watching these recent developments has shown is perhaps we know less about load trends than perhaps we had thought.
That uncertainty in the world of load management and our ability to continue to learn more in terms of operations and optimal strategies moving forward is why having smart people studying these issues is so critical. The Load Management community at Energy Central is a key place to find discussions on these topics, and at Energy Central we’re looking to continue to bolster the value and quality of that conversation by bringing in experts in the world of load management. With that in mind, I have the honor of welcoming Dean Chuang as the latest member of our network of experts, specifically as one of our Load Management experts.
As a part of our Power Perspectives™ ‘Welcome New Expert Interview Series,’ Dean agreed to answer some questions to help the Load Management community get to know him a bit better:
Matt Chester: Welcome to the community, Dean, and thanks so much for becoming a member of our expert network. Can you please share a bit about your background so our community has an understanding of from where your experience and expertise comes?
Dean Chuang: Thanks Matt! There’s an incredible body of knowledge on Energy Central, and I’m honored to be nominated as an expert.
I come to energy from the lens of sustainability and sustainability from economics. I studied Economics, Political Economy, and Environmental Studies at Princeton, and I began my career on the finance and policy side of the industry. I’ve spent the last seven years working in product development at NRG/Reliant and Entergy, and I would characterize my Load Management expertise as the “operationalization” of customer driven demand-side assets against Retail, Merchant, and Regulated utility business drivers. I’ve spent much of the last decade developing DR/DER products and programs, along with the IT/OT platforms necessary to “co-optimize” customer and utility value.
MC: You’ve spent a lot of time working with demand response programs and smart products. Obviously, successful load management strategies depend both on technologies and operational strategies/customer-facing programs. Which of those areas do you think is more advanced and where should more efforts be placed to enable continued progress in that regard?
DC: I definitely feel that the capabilities of existing consumer energy technology have outpaced the utility market. I’ve seen a number of demonstrations that offer clear technical value, but can’t yet be compensated in the regulatory utility marketplace.
Operationally, in order to translate “regulatory asset” value to operational value, I think that utilities need to think beyond regulatory “program year” requirements and develop a more holistic philosophy towards customer/product lifecycle management. To paraphrase a presentation I delivered at PLMA last May, the scale and availability of an operational demand side resource is driven by customer interest and customer satisfaction. Failure to engage customers with a compelling message will hinder program scale, while failure to maintain a positive customer experience will impact the performance and availability of the demand side resource.
MC: Load management is intuitive to people working inside of utilities for its importance and its implementation, but how do you think utilities should best go about creating awareness and implementing education to customers about the topics? How critical is it that customers understand the ‘why’ of it all, or are incentives and the ‘how’ sufficient?
DC: My apologies, but I’m going to redirect my response toward the customer. Historically, utility programs have been prescriptive – i.e. “Do ‘X’ in exchange for ‘Y.’” However, with the grassroots groundswell of IoT and DERs, I believe that it is increasingly important to “meet customers where they are, not where we as utilities want them to be.” The philosophy here is that all capacity has value; it’s up to the utility to determine which capacity can be engaged and managed in a cost-effective manner.
From this perspective, I think it’s actually more important for the utility to understand the customer than it is for the customer to understand the utility. Based upon my Retail experience, only a small percentage of customers care about the “why.” Customers care far more about the bill impact and the program impact on “comfort and convenience.” I do think that it’s critical to provide a narrative for customers who ARE interested, and to provide as much transparency (perhaps as FAQs) as possible, but it’s far more important to 1) clearly explain the value to the customer, and 2) provide assurance that the program terms will not be overly onerous.
The larger onus is upon utilities to consistently engage their customers. Who are they? What are their pain points? How does their unique identity impact their consumption of energy? The most successful program marketing is targeted towards specific customer values; surveys, focus groups, interviews, etc. all have a place in customer research.
MC: Are there equity aspects of demand response programs that need to be addressed in a successful program? For example, how should programs handle certain customers that might benefit from economic demand response incentives but who don’t have as much ease of access to shift their energy-intensive behaviors to different times?
DC: Yes…and no. The avoidance of cross-subsidization should always be a primary program design consideration.
More broadly however, how do you define success? A successful regulatory compliance program will hit pre-determined metrics for count, capacity, and/or program spend. “Equity” is a construct of the local political environment, and the successful utility will be responsive to regulatory requests.
However, success for an operational DR program should be measured based upon cost-effectiveness. Regarding Low Income populations specifically, the reality is that LI loads tend to be smaller and less cost-effective as an operational resource. Alternative rate design may provide a more “equitable” solution than subsidization for DSM participation.
In the long term, I believe that the only way to avoid cross subsidization is to compensate and develop programs based upon the locational value of the asset. In an economically perfect world, customer rates are based upon cost of service, and demand side assets fit within a locational “merit order of dispatch.” Unfortunately, locational marginal value (LMV) is sometimes perceived as Pandora’s Box, and some utilities fear that studying LMV is the first step towards disintermediation. So, we clearly have a long way to go.
MC: As you’ve started to get involved with Energy Central, what do you find to be the value that the platform brings to you and to the industry? Why do you participate and stay so engaged, and how do you hope to bring value based on your experience and knowledge to fellow Energy Central users?
DC: Using the language of my generation, I’m a long-time “lurker” on Energy Central, having joined in 2008 but only recently begun to post. I’ve enjoyed the articles and discussions and have long felt that Energy Central is one of the best public forums for thought leadership in the Energy Industry. On top of all that, I actually found my first utility role (with Reliant) on the Energy Central Jobs board!
I’ve clearly gained a ton from Energy Central and the Energy Central community and would love to begin giving back. I’m always happy to chat!
MC: Is there anything else you’d like the community to know about you?
DC: Enough about energy: as a totally unbiased native Western New Yorker, I think that the Buffalo Bills finally have another shot at the Super Bowl this year!
Please join me in thanking Dean Chuang for sharing his insights in this interview and bringing a new set of experiences as a Load Management expert. Now that you know he’s here, don’t hesitate to reach out and ask Dean questions in the comments sections or just say hi