Episode #16: ‘How Public Power is Leading Utilities’ with Joy Ditto, CEO of American Public Power Association - [an Energy Central Power Perspectives™ Podcast]Posted to Energy Central in the Utility Management Group
- Jul 13, 2020 6:58 pm GMT
The year is only half over, but it’s safe to say that 2020 is already one for the record books within the utility sector. With the year already starting off to be hectic for utilities among an energy transition, fluctuating energy markets, grid modernizations, and more, the onset of the COVID-19 pandemic was just another screwball the industry was forced to adapt to on the fly. But adapt it has, and, as you’ll hear in this episode, it’s been the public power utilities who have been in many ways setting the standard for how utilities should prepare before a crisis, react to it, and adjust to it as time goes on.
In this riveting episode, Jason Price and Matt Chester are joined in the podcast booth by Joy Ditto, who recently became the CEO of the American Public Power Association. Joy takes us through what public power utilities across the country have had to do to react to an everchanging landscape, while simultaneously keeping an eye forward on potential for innovation, transition, and more. You won’t want to miss this episode to learn what the community-owned difference is in the utility sector and what lessons can be learned across the wider energy industry.
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Joy Ditto’s Energy Central Profile: https://energycentral.com/member/profile/238361/about
The Community-owned Difference: Lessons for Maintaining a Customer Focus: https://energycentral.com/c/cc/community-owned-difference-lessons-maintaining-customer-focus
I want to welcome our listeners to another episode of the Energy Central Power Perspectives Podcast. Located in New York City, I am your host, Jason Price, of West Monroe Partners and Community Ambassador for Energy Central. Joining me is my colleague Matt Chester, Community Manager for Energy Central, located in Orlando, Florida. Matt, how are you doing today?
Hi Jason. I’m doing great and I really think our listeners are in for a treat with our upcoming guest. And, well, they’re here to hear from her and not me so let’s move to it!
Matt, there not much to report going on in the energy field these days is there?
Pretty boring these days, isn’t it?
Right. Besides all the utility transformations going on from grid modifications, workforce transitions, digitalization of meters in gas, water, and electric distribution, renewable energy penetrations, and so much more just at the utilities plus of course, you’ve got climate risk and the pandemic and its implications. Is there anything else?
Well, as recent months have shown us, there’s always going to be the next big wrench thrown into things that none us saw coming!
That’s right, so let’s find out if our next guest is a having as much fun as the rest of us. But first, we want to quickly thank a few of our contributing partners of Energy Central. West Monroe, a national business and technology consulting firm advises the nation’s largest investor-owned utilities in telecommunications, grid modernization, digital and workforce transformation. From defending a rate case to preparing a business case, West Monroe utilizes a multidisciplinary team to address ever-increasing needs facing the utilities, whether it’s improving customer experience, conducting vendor assessments, driving value through analytics, deploying EV and battery storage programs, determining grid resilience and cyber security, our nation’s utilities turn to West Monroe. To Esri; Esri is an international supplier of geographic information, GIS software, web-GIS and geodata-based management applications. To Guidehouse; formerly Navigant Research; a premiere market research and advisory firm covering the global energy transformation. To CPower; at CPower we help our customers make the decisions today that guide them across the bridge to energy’s future. Where will your energy take you? For more information, visit the Seapowerway.com/future. And to Handcock Software, commercial and residential energy retrofits with Handcock Software, our customer are delivering more than double the retrofit projects with the same engineering staff.
Joining us today is Joy Ditto. Earlier this year she became the president and CEO of the American Public Power Association, which is the voice of not-for-profit, community-owned electric utilities that power 2,000 towns and cities nationwide. Before that, she was the president and CEO of the Utilities Technology Council, where she represented electric, gas, and water utilities on their mission-critical information and communications technologies.
Joy, it is a pleasure to have you on today’s episode of Power Perspectives. What a time to step into this leadership role! How is public power holding up these days during these challenging times?
Well, first of all, thanks for having me on, Jason and Matt. It’s a pleasure to be here even during these challenging times. As you mentioned, I just came back to APPA; I was at UTC for about four years but prior to that, I was at APPA for fifteen years so I really kind of came home to APPA back in January and certainly, I couldn’t envision back then that a couple of months into my tenure, we would be facing a pandemic, as well as all the other issues you kind of alluded to, in addition to the terms of the transition of the industry. But I will say that electric utilities actually did plan for and have plans in place for pandemic response. We actually---as a total industry, not just public power, but specifically public power---we plan for what are called high impact, low frequency events such as pandemics. Another example of high impact, meaning, it could have a really negative impact if it happens but it’s very aware---that’s kind of the definition of high impact, low frequency. Another example of that would be, for example, a solar flare that might cause damage to our systems or electromagnetic pulls. While we try to mitigate against those eventualities in advance, there still could be potentials that we aren’t able to deal with, so there’s plans in place for those types of situations. There has been work around pandemics in our industry, so those people had pandemic plans in place. Obviously, this particular type of pandemic and how our local jurisdictions and our states and our federal government would respond was unknown. We practiced maybe our pandemic plan but living through one had never happened, at least in our lifetime, so this has been a new world. While we had plans, we’re actually activating the plan. And I think that public power’s done a very good job, actually an excellent job--- in responding to the situation. I was just talking to some of my members kind of across the country yesterday who were in various---one was in very much a hotspot in New York; others were not as in a hotspot, but they all had similar actions that they took to respond, meaning, they quarantined in some cases their control room operators, which are very highly essential personnel; they rotated in their line workers in terms of their shifts so that they weren’t all congregating together and if there was an outbreak, they could easily quarantine and manage that. They typically allow their office staff to work from home and telework where possible, and most of them closed their customers service centers at least initially; some of them are reopening. So, I think overall, we’ve seen a great response because the lights have stayed on, even a couple of places where they’ve seen really massive kind of Spring storms or tornadoes. We had one in Jonesboro, Arkansas. We had a massive storm in Nashville, Tennessee; in Chattanooga, Tennessee as well, and they actually had to get aid from others, whether contractors or fellow public power utilities, to respond to restore power from those storms. And during that restoration, they had to implement social distancing and other pandemic response plans while they were restoring power in those areas. So, I think we’re doing a really good job so far in responding to pandemic overall. APPA, as the industry trade association, we have been providing best practices, supporting our members by interfacing with the federal government and with state governments in some cases. So, we have also stepped up to provide that support; webinars, other actions in knowledge sharing throughout the public power industry. So, so far, so good; we’ll keep plugging away.
Joy, you recently published an article on Energy Central entitled, “The Community-owned Difference: Lessons for Maintaining a Customer Focus” where you highlighted some of the special things about public power and its business model. In your opinion, what’s special about public power, and what drew you back to APPA?
So, to me, the main thing about public power is we’re very much mission-focused and public service oriented. We’re not-for-profit; we’re owned by the communities that we serve so we’re typically affiliated with a municipal government. In some cases, a state government, we’re a sub-division of the state. But, because of that, our mindset is to provide optimal service to our communities where we also live and where our members also live and work. So, that is what is special to me. Look, there are other utility-types serving other communities in the U.S., and they do a really good job, too, but we just feel like we kind of do it the best of the best really because of that mindset. We’re very responsive to our community in terms of our waits, in terms of innovation and we really kind of mirror what our communities want. So, some communities are going to be more progressive in terms of certain activities related to climate change, for example. Others may be more focused on keeping rates affordable for their communities, and those decisions are very much local decisions which I also think is an amazing business model. And I think the other thing I would say is that’s just fascinating about the industry right now is, and you alluded to it earlier, which is, it’s a very changing industry right now. We have done an amazing job over the last hundred years plus keeping the lights on for our customers, even as the industry has changed because of becoming more centrally focused with large power plants. And now, we’re kind of shifting back in some ways to where we started which is more localized generation-like distributed energy resources; a focus on electric vehicles; a lot of things which really look to the customer, the residential customer, and really the local distribution level. We’re sort of shifting back to that. We’ve been away from that for efficiency reasons. We moved to this sort of central station power plant model, which served us very well. But now, with technology developments and increased interest from our customers and really having more control over their energy needs, we’re moving gain back to that more localized view, which is where public power is really amazing because we’re right there with the communities helping them manage that, providing our expertise and working with them on what their needs are going to be, so that conversation that we can have with our members is incredible and it really does lend itself to all of these future-facing activities that I mentioned. Not that there aren’t challenges with that, but we’re there, I think, really uniquely situated to meet their challenges.
Let’s talk about that a bit more. We’re seeing increased customer demand for new energy and product services; distributed generation, electric vehicles, more control over energy use and transactional energy, and so much more. How is public power stepping up to meet those demands?
So, I think that’s kind of what I alluded to, a lot of it’s really about listening to your customers at the local level. Understanding from them what their expectations are from their electric utility, what their needs are; and then working with local decision makers/policy makers about what are the goals for that community longer-term. And, how can the utility sort of partner to meet those goals, and I see that happening across the country with public power. And, those investments; I’ve seen a lot more investments in electric vehicles like rebates, planning for the infrastructure. And while you kind of think that might be most focused in places like California where there are mandates; yes, certainly there is a focus there from our members in California, but there also is these types of activities happening in the middle of the country where there isn’t as much penetration with electric vehicles where the utility really wants to set themselves up to meet that demand when it actually starts happening more robustly. So, we’ve seen that as an example. We’ve seen a lot more focus on community solar projects and other, more localized renewable generation projects and that’s been an evolution over ten-fifteen years. In addition to deploying more advanced metering and really trying to analyze the data we’re getting back from our advanced metering technology to enable greater efficiency and then potentially, enable greater conversations between the electric utility and our customers, both at the commercial and industrial levels, but also at the residential levels. So, a lot of things happening. And again, our members are meeting them in slightly different ways but they’re all looking at it and they’re all very focused on how to use technology to enhance this service that they’re providing, both at just keeping the lights on in traditional reliability, but also, to increase the conversation between the utility and the customer.
Joy, I actually have a question about that last part. For a customer who you see technologies or programs that they might want to take advantage of, what’s the actionable way that they can start that conversation with their public power provider and try to influence that change? Is it through public meetings? Are their customer feedback tools? Are there surveys you run or something else?
That is a great question. So, obviously, this is going to vary quite widely. We have 2,000 public power members nationwide and they’re going to have different mechanisms and tools, but I would say generally---first of all, at the APPA level, at the trade association level, we frequently run surveys our member utilities and also provide them tools to survey their own customers about some of these very issues, so that surveying and data collection is something that the utility can do proactively to get a sense in advance of how many people in their communities might be interested in certain programs and in certain future-facing programs, and I know a numbers of our members have done that. We also have these entities called joint action agencies that are peruse consortium of public power utilities that help provide energy services and power supply. Those entities, as well, do it on behalf of their smaller distribution members, so there’s ways to gather the data in advance. We also offer and have for probably twenty plus years, numerous energy efficiency programs that are largely opt-in for our customers, so we have a history of providing some of these services in an opt-in manner. So, and they may be a little bit more expensive. They may be something if you really want to be more mindful or sustainability-minded, for example, we’ll offer you an opt-in for again, for a greater energy efficiency piece or purchasing part of community solar. So, those options are in place, and many utilities as well, but I would just as well suggest if there’s a question for a particular customer that yes, they reach out to the utility. And again, the nice part with public power, the headquarters is going to be in your own town, so you could actually walk-in, too. Well, after COVID, you could walk into a customer service center and just start a dialogue there, or you could e-mail, etc., but you’re going to get a response because we’re smaller and we’re right there. So, that’s what I would suggest now and if that’s already not clear on the utility website where the offerings aren’t, maybe they haven’t gone as far as the particular customer wants them to, there’s a dialogue they can have with the utility. You also mentioned public meetings, that’s another place that members’ customers can get engaged with them.
I’d like to hear a little bit more about the innovation side of APPA. As I understand, APPA runs a pretty robust R&D program? Can you talk a little bit about that?
Yes, we have a program that’s actually quite amazing. It’s about 40 years old and APPA itself is 80 years old so for half of the time we’ve existed, we’ve had this R&D program, and it’s called Demonstration Energy and Efficiency development or DEED, and it was put in place because while there are other R&D-focused entities within our sector, a lot of times those entities have been focused on some of the larger utilities and we really needed a place where we could have really small utilities engage in our R&D. So, DEED is---it’s a member-drive program so of all of our members, they can opt-in to this program. So, they could be a member of APPA and not be a part of DEED. Or, they could decide that yes, I want to be part of DEED and I’m going to opt-in pay sort of dues to DEED and those dues get pooled in. And then, people apply for innovative programs that their utility is doing and they can get up to $125,000 annually to do that program or that R&D program at their utility. So, it’s really more about R&D DEED really because you’re actually taking an idea and applying it in a utility environment. We also have scholarship opportunities as well through DEED so it’s an amazing program and it’s very focused on kind of the smaller utilities and it’s pushed some very interesting things. Landfills produce methane emissions, which are 21 times greater than carbon dioxide emissions. And years ago, DEED funded programs and also worked with the EPA to have some funding for landfill-gas-to-energy project where you would take that methane emission and you create an energy source from that. That’s just one example of the types of programs that DEED has funded. It’s funded energy efficiency programs. Its funded programs related to EVs in sort of more recent years. It’s also funded programs that improve processes around just the advertisement for our energy efficiency programs you were asking earlier. How do people even know how to engage with the utility if there is a future-facing program that they’re either interested in or that they want to have the utility consider in the future. DEED has also funded activities to help the utility community; what’s it’s doing in the space. So, it’s just an incredible program. I can’t say enough about it.
Joy, what about the developments that say happen within the individual public utilities outside of the DEED program---does APPA help foster the sharing of new ideas or creation from one utility to another in sort of a communal sense of that ‘we’re all in this together’ as public utilities?
Absolutely. I mean that’s really the beautiful part of public power but I’ll even---I’m just going to go so far as to say even the entire electric sector with our colleagues in the investor and utility and the world electric clock, there’s a lot of information-sharing and especially with regard to response like a pandemic like we’re dealing with right now; but on mutual aid on a big hurricane response and the major issues, we share a lot of information with each other. Public power specifically, yes, APPA is really the platform for that type of sharing to happen and frankly, we have been doing that for years. It’s that platform for knowledge-sharing that can take many forms. We have sort of e-mail listers where people can ask questions of each other on certain topics. We have conferences, and right now, obviously we’re doing our conferences virtually. We’ve pivoted to a virtual conference for our national conference actually that’s called Public Power Connect. But we’re doing some of our conferences virtually so there’s one going on of our conferences around particular topics. We have webinars, I mean, there are a variety of ways that members can engage with us and frankly, they learn the most from each other, from anecdotal information. I’ve seen just a huge amount of engagement in the response to COVID that I think I mentioned earlier. We’ve had webinars. We’ve had groups of CEOs getting together and talking through things with each other over webinar formats or conference call formats and over e-mail as well. So yes, we provide that platform continuously whether or not we’re in an emergency situation and it really helps our industry be so successful. We have such strong reliability numbers and day in and day out, we keep the lights on. And, I think it’s a function of our being able to learn from each other; share best practices; share where we might have stumbled; and what not to do as well as what we do well, so I can’t say enough about that.
Joy, the APPA is located in Washington, D.C., where I understand you have a lot of federal advocacy behind APPA. Share with us, tell us a little bit about your advocacy priorities and what are some of the things APPA is looking for on behalf of its members?
So, earlier, we were talking about public power’s response to COVID-19 and sort of on the operational side. One of the challenges that we have now and that we will have going forward is the fact that many customers may not be able to pay their bills. We have suspended shutoffs of power right now during COVID. In most cases, public power utilities have done that on their own and some of them under a state mandate, but there’s a variety of kind of suspensions of power shutoffs which can lead to bad debt, meaning, we might not be able to collect those arrearages of power payments, which is problematic for us to be able to operate optimally. So, there’s that kind of financial piece as well as what we characterize as load loss so just as demand loss. That varies quite a bit quite frankly because our members; it depends on where they are as to what their load profiles are, what their demand profiles are. In some cases, some of our members are largely residential and they don’t have nearly as much commercial or industrial load and their load hasn’t really diminished and in fact, may have slightly increased in that scenario. But most of our members have a combination of residential, industrial, and commercial load and they’ve seen significant drops in some cases. And, while some of the data is still coming in, I’ve seen as high as 10% overall load loss, but it’s looking like between 5-10% so far, that may again shift. That’s very significant for us and in order to maintain that operational integrity and reliability going forward, we’re going to have to be able to manage that financial hit so we are asking Congress; we typically don’t ask Congress for a lot of direct money but we’ve been asking Congress for actually additional money for the Low Income Home Energy Assistance Program---LIHEAP---which is actually a direct payment to low income customers to help them pay their electricity bills. And we’ve been successful in getting some additional funding for LIHEAP and that’s kind of part of the answer but in addition, we’re seeking some potential direct funding for the utility as kind of a bridge to get us through this emergency. That has not happened yet but it’s something that we’re pushing for in Congress. We’re also asking for---we use as our primary financing tool for structure investments. We use tax-exempt bonds, municipal bonds, so we’re asking for some additional flexibility with regard to municipal bonds and we would have asked for that anyway so kind of beyond the COVID-19 response, we would have asked for this flexibility, kind of restoring some flexibility to our ability to deploy municipal bonds. And I think this is extremely important when we’re talking about stimulating the economy. Much of that stimulation comes from investment and infrastructure and if we get some additional flexibility and that tool for us, we will, as we start to come out of this economic downturn, may be able to help spur some of that economic development if we have more flexibility in that tool. Longer term, and kind of what we were focused on before COVID-19 hit, we were obviously responding to the climate change legislation. Congress, making sure that it would be workable for some of our smaller utilities and communities as we move forward. We also care about the infrastructure---the energy infrastructure, some of the innovations we’ve talked about supporting things like electric vehicles and rebates and spring some of that innovation we’ve been long-supporting and we were supporting in various vehicles moving through Congress, including the kind of the bigger energy package that Senator Murkowski was pushing through Congress. So, those are a couple we continue to support reasonable efforts to enhance grid security and we have been fortunate to receive some grant funding as APPA itself; not as our members but as APPA. We’ve receiving funding from the Department of Energy around helping us educate our members around what their grid security posture is, particularly cybersecurity posture, and that’s been very, very helpful the last four years. so, we’re talking to them about additional funding in that regard. But certainly, our interest is to ensure that we have enhanced grid security without unwieldy mandates.
Absolutely. I had the opportunity to sit in a number of commissioner’s testimonies as well as meetings with IOUs and cybersecurity as top of mind, especially with COVID. It’s only made it a singular issue, so I’m sure everyone in this industry understands and can relate to this discussion here regarding cybersecurity for sure.
Joy, it’s been a pleasure having you on the Power Perspectives. We hope you’ll be back real soon. Thank you again.
Thank you so much.
I also want to thank our contributing partners of Energy Central.
ESRI: The Environmental Systems Research Institute. ESRI is an international supplier of geographic information: (GIS) software, web GIS and geodatabase management applications.
Guidehouse, (formerly Navigant Research), a premier market research and advisory firm covering the global energy transformation.
Oracle Utilities: Providing best-in-class utilities management solutions to improve reliability, service, and safety for electric, water, and natural gas companies.
Atonix Digital, A Black and Veatch Company, Atonix Digital software helps companies simplify asset performance management by putting data to work – to detect emerging risks, enhance efficiency, improve accuracy of planning, and provide an easily justifiable return on investment.
And lastly, Bentley Systems, a software development company that supports the professional needs of those responsible for creating and managing the world’s infrastructure projects.
Once again, I am your host Jason Price. Plug in and stay fully charged in the discussion by hopping into the community at EnergyCentral.com, and see you next time at the Energy Central Power Perspectives Podcast.
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As a reminder, the Energy Central Power Perspectives™ Podcast be looking for the authors of the most insightful articles and the members with most impactful voices within the Energy Central community and we'll invite them to discuss further so we can dive even deeper into these compelling topics. Posting twice per month (on the second and fourth Tuesdays), we'll seek to connect with professionals in the utility industry who are engaging in creative or innovative work that will be of interest to their colleagues and peers across the Energy Central community.
The Energy Central Power Perspectives™ Podcast is hosted by Jason Price, Community Ambassador of Energy Central. Jason is a Business Development Executive at West Monroe, working in the East Coast Energy and Utilities Group. Jason is joined in the podcast booth by the producer of the podcast, Matt Chester, who is also the Community Manager of Energy Central and energy analyst/independent consultant in energy policy, markets, and technology.
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