Energy Central Power Perspectives™: Welcome Denise Kuehn, New Expert in the Generation Professionals Community
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- Feb 18, 2020 3:58 pm GMT
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The basis of the entire electric utility industry is in power generation, and the landscape of generation has been undoubtedly evolving more than ever before in recent years. From generation becoming smaller scale, more localized, and even cleaner, the conventional wisdom of generation professionals across the sector must evolve with it.
With that in mind, Energy Central seeks to constantly refresh and add to our terrific base of registered experts in our network that can provide insights based on experience and thought leadership. In particular, our Generation Professionals Group has a notable variety of experts across different positions, organizations, and role types. We recently added some firepower to that network with the addition of Denise Kuehn, Director at Austin Energy. As has become tradition, Denise granted us with an interview towards our Power Perspectives™ ‘Welcome New Expert Interview Series’ so the community could get to know her better.
Matt Chester: On behalf of the Energy Central community I want to thank you for being one of our experts and for dedicating your time to the community. So our members know exactly the value that you’re bringing to the table, can you give an overview of your background and history in the utility industry and talk a bit about what you do today in your current role?
Denise Kuehn: The utility industry is ever-changing. My interest in the ‘big picture’ and how we all contribute on a daily basis resulted in my technical and business degrees complimented with a broad-based utility industry experience. My education and experience includes electrical engineering and an MBA. I have managed sustainability and customer-focused areas and worked in various types of power plants, renewables, transmission and distribution, operations analysis and government affairs; led and managed numerous cross-departmental strategic and change management initiatives focused on optimizing business processes reducing costs, increasing safety and quality while enhancing the customer and staff experience. I've been involved in a broad range of strategic planning/strategic initiative implementations which included rate assessments, generation planning, IT road maps, product development, nuclear security, board communication and more. This broad-based background has helped me to further collaborate with other departments because having worked in their shoes I understand more of where they're coming from, what they need to be successful so, together we ‘break down the silos’ and design ‘win-win’ resolutions to a lot of different issues because of that experience.
My current role is the Director of Energy Efficiency Services at Austin Energy, which is basically the customer experience, support, products and services; fintech payment platforms, engineering. Together, we have merged various local and national databases to provide a centralized view of the customer identifying potential programs that would be beneficial to them. This system also processes the rebates. We have designed and implemented 30 programs which focus on various points of the customer purchase decision process. A significant focus is on education, outreach, benchmarking and the experience so the customers can be aware of their energy usage with respect to others that are similar in nature and ways in which they can reduce their consumption. School-based education provides curriculum and take-home kits for sixth graders to install with their parents. Our area provides in-store instant savings in over 70 local and national retailers focusing on Do-It-Your-Self projects. Other programs focus on income qualification, energy efficiency, demand respond, and thermal energy storage. We also process the solar and electric vehicle rebates. Austin Energy serves as a QSE on the ERCOT market. We work a lot with our energy marketers on how to position our demand response in the market to optimize the utilities benefits of those services. We work a lot with our transmission and distribution professionals to put in the special metering and to get that information back from users on how much they consume and ways in which we can streamline any of the associated processes. Then we work a lot with customer billing on how people can participate in some of their low-income discount programs, as well as to utilize our rebate programs to offset some of the various tiered payments that they do as they use more.
MC: With such an extensive career in the power industry, you’ve been fortunate enough to see the shift of utilities from being slow to move and resistant to change to the current environment where it seems like things are moving faster than ever before and technology is opening up new doors that had not previously been possible. Was this change one that you saw coming? How has it impacted the overall strategic view utilities need to take, in your view?
DK: When I was at Omaha Public Power, one of my assignments was to help establish the first sustainability department, and that included energy efficiency, demand response, and renewables. OPPD at the time was largely coal and nuclear, so it was a huge change in culture, but we found what made sense from a company and customer perspective. Sustainability is about using resources wisely; optimizing processes, reducing waste, improving quality. We pursue things that were of value and initially, at a no- to low- cost approach. We worked arm-in-arm to identify those areas that were low-hanging fruit, that made sense for both the customer and the business.
Sustainability is a piece of the overall change for utilities in the past 10 years; utilities shifting from a commodity to offerings that include sustainability and affordability programs; aged T&D being replaced with ‘smart’ metering and stranded power plant assets; expanded technology focus for staff; customer equipment more sensitive to outages; less regional grid reserve margins creating price spikes; more third-party power purchase agreements; utility mandates to provide programs which reduced their customers consumption while expanding services. Consumers used to focus on reliable cost-effective energy. They didn’t have much concern on how the energy was produced if it was available when they flipped a switch and the lights came on. Utilities usually had balanced generation portfolios that consisted of various fuels with mostly baseload dispatchable units and some non-dispatchable that were weather dependent. Now, there are some customers that would prefer all renewables and are willing to pay a premium for it while others are concerned about cost and reliability. There are a few utility-grade storage projects to capture the energy produced when the sun is shining and the wind blowing to be used when the customer flips the switch; however, not to the level needed to address current baseload usage. In ERCOT 2019, we had the first two rolling outages that we've had since 2011. One day this occurred was when the wind didn't blow, and another day was when the sun didn't shine, greatly reducing the renewable production on that day which impacted the market pricing. Some utilities paid considerably, in the tens of millions of dollars, because the market spiked so much, so we as an industry need to also be mindful of making sure that as we go forward with these great opportunities that we don't hurt ourselves in the long run by extending ourselves before we have the right engineering and technology to deliver the reliable energy to our customers in the end.
MC: You’ve also been fortunate to work across different forms of power generation, including fossil fuels, nuclear power, and renewable energy. Often these different energy sources are pitted against each other head to head for what they can or can’t provide. Do you think that’s a necessary way to frame the conversation, or will the future of energy be more integrated and all-encompassing when it comes to generation sources?
DK: I think it's going to have to be the latter where it is across generation types until we have some of those big breakthroughs in storage that are really cost-effective and feasible at a utility-scale for the long-term. You can have a baseload power plant now that's 800 megawatts taking up a certain amount of space. It's hard to imagine battery storage to be 800 megawatts, though especially in cities where land is a premium like New York, LA, etc. So, I think at least for a period of time each type of generation has their role. That way, it gives us that balance and reliability. I think if we get too far ahead of ourselves in saying we're only going to depend on this specific source, then we leave ourselves a bit of a challenge in creating that reliability based on the technology that's available to date.
MC: Shifting to the customer-focused side of utilities, can you comment on where you think the industry may be currently falling short in addressing and focusing on the end customers? When the customer focus falls down the priority list, what is generally taking its place?
DK: What I am finding interesting is that some of the people that speak out the most on what utilities should do at any costs are not even the utility’s customers. So, they are adding significant costs to the customers’ bills without the actual customers’ input. Sometimes those most outspoken are a third party that might be selling a product or lobbying for a specific group which can be a conflict of interest. At the same time, in many of the larger cities, the cost of affordable housing is stretching homeowner resources. We do our best through the various cost-effective energy efficiency programs to help them reduce their overall usage. Currently, the average home in Austin uses less than 850 kWh per year, which is significantly less than other areas.
What I always find interesting is some of those people that speak out the most on what should be offered with respect to various customer programs are not the customers participating. So, it's just an odd dynamic for them to tell other people what to do but not to do it themselves. That concerns me because then those people that are participating might, at some point, say "you keep saying this is what I want, but this isn't what I want. For the extra cost to my bill or the impact to reliability, I only want ___, not ____." To better understand what the customer values, we constantly do focus groups and surveys, we go out and talk to people to try to get that true voice of the customer. But doing that can be very challenging because people are busy. They have their own lives, and a lot of people, the silent majority, don't take the time to provide that information. So, I have a concern sometimes where people assume they know these customers want or what they’ll do without asking them or only obtaining input from a few.
For example, I was once in a meeting where a utility in California shared they had offered a particular program with a utility cost per participate of about $140. They went to the customers that had participated after the fact and asked the customers how much they thought the program cost per participant was. The participating customers valued it around $14 dollars. As utilities, we have to be very careful not to spend lots and lots of money on something others believe our customers need or want. It is about what each of the customers actually value for that investment.
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?
DK: I think that utilities for decades didn't have any major changes. There was a specific business model and you just plugged into that business model. You might have something a little bit different that might be a plus or minus in that business model, but that was it.
Today, though, the utility business model is totally changing at a very rapid pace. So, you have an industry that's not used to major changes; an industry that has 20- to 30-year capital investments that take 5 years to go through the regulatory and financial requirements, now having to make these dynamic changes in a market that sometimes assumes utilities are like Apple or Samsung where they can change their mind today on something tomorrow.
Because of that, I think that there is an opportunity for us to communicate more widely and share ideas so that when we make investments of both time and money for our customers that it is an alignment on what our customers really need or want, not a perception of others. And I think the best way to do that is to have those kinds of conversations where a utility shares a program they did and how it went. Or conversely, they can report that all of the surveys said it was going to be great, and then when they went back, we found out that their value was substantially less than our investment. So, I think Energy Central is that tie to help all of us have a forum in which to communicate because, in utilities, I see pockets of information shared, but I see there's a lot more potential to have these kinds of discussions so that we can make more informed decisions using that kind of platform.
Thanks once again to our new Generation Professionals expert, Denise Kuehn, for sharing her insights with the Energy Central Community and being a trusted expert in the network. Don’t hesitate to reach out to ask a question or just say hi the next time you see her in the community.