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Tue, Oct 18

Episode #100: 'Innovating the Model with Utility 2.0' with Jereme Kent, CEO of One Energy [an Energy Central Power Perspectives™ Podcast]

Since the advent of the power sector over a century ago, the business model has seen incremental evolution over time but for most of that time has remained pretty consistent. Centralized power plants, long distances of transmission, and embedded utility companies being the sole provider for a given region. But the past decade or two have seen some landscape-shifting progress: new digital technologies, priorities towards clean energy, the availability of distributed resources, and the shift of consumers to prosumers. Together, those changes collectively warrant a reevaluation of the utility model, what can be considered Utility 2.0.

 

 

Today's guest on the landmark 100th episode of the Energy Central Power Perspectives Podcast is Jereme Kent. Jereme is the CEO of One Energy and earlier this year he was recognized as an Innovation Leader by Energy Central for his efforts to shift towards this Utility 2.0 model. As a utility-scale distributed-generation wind energy developer and operator, Jereme and his team at One Energy aren't afraid to shake things up and push the envelope in utility evolution even further, so Jereme joins podcast host Jason Price and producer Matt Chester to share how the company has gotten to this point and what he sees as the future of the utility sector.

Thanks to all of our guests, listeners, and team members at Energy Central for supporting the Power Perspective Podcast over the course of the last 100 episodes. This milestone is only possible because of the hard work of many people behind the scenes, but also the enthusiasm and the intelligent discussions prompted by the Energy Central Community. Here's to the next 100 episodes and beyond!

Prefer to Read vs. Listening? Scroll Down to Read Transcript.

Thanks to the sponsor of this episode of the Energy Central Power Perspectives Podcast: West Monroe.  

Key Links
Jereme Kent's Energy Central Profile: https://energycentral.com/member/profile/jereme-kent

Energy Central Announces: The 2022 Innovation Champions: https://energycentral.com/o/energy-central/energy-central-announces-2022-innovation-champions

Did you know? The Energy Central Power Perspectives Podcast has been identified as one of the industry's 'Top 25 Energy Podcasts': https://blog.feedspot.com/energy_podcasts/

 

TRANSCRIPT

Jason Price: 

Hello and welcome to this week's episode of the Energy Central Power Perspectives Podcast, the show that brings leading minds to discuss the latest challenges and trends transforming and modernizing the energy systems and the utility of the future. And a quick thank you to West Monroe, our sponsor of today's show. Now, let's talk energy.

Jason Price: 
I am Jason Price, Energy Central Podcast host and a director with West Monroe, coming to you from New York City. And with me, as always, from Orlando, Florida, is Energy Central producer and community manager, Matt Chester. Matt, if we've learned anything about the utility sector in our several years of putting together this podcast, it's that the utility sector in the United States is certainly not a monolith. Would you agree with that assessment?

Matt Chester: 
Yeah, Jason, I'd say that's a fair assessment. Different power providers have unique corporate structures, differing relationships with their customers. They vary in size, and a lot of other differences come up. But at the same time, the shared goal is to provide affordable, reliable, and sustainable energy. And I know today's guest is going to bring another new perspective to the conversation when it comes to how energy delivery can occur in the current US energy ecosystem.

Jason Price: 
Yeah, that's right. We're going to be diving into what today's guest refers to as Utility 2.0, or the decarbonized and distributed power grid of tomorrow. This topic is one that needs expert explanation out of the gate, and so we're fortunate to have an esteemed guest with us today. Jereme Kent, CEO of One Energy out of Findlay, Ohio. Jereme was actually listed in the Energy Central's official collection of innovation leaders earlier this year, and we'll soon see why firsthand.

Jason Price: 
As the founder of One Energy, Jereme brings much experience running utility scale wind energy construction projects. He is also a peer reviewer for the Department of Energy's Wind Energy Technology Office and holds multiple patents. So innovator is a fair descriptor, and that adds much credibility to the futuristic-sounding Utility 2.0. So let's see what he can teach us about the future of energy and how it's already taking shape. Jereme Kent, welcome to today's episode of Energy Central's Power Perspectives podcast.

Jereme Kent: 
Thanks, Jason. Thanks, Matt. It's great to be here.

Jason Price: 
Jereme, let's start with the idea teased into our intro that One Energy doesn't look quite like the typical US utility. Can you share where One Energy fits into the overall construct of generation and distribution?

Jereme Kent: 
I guess my first hope would be that we look nothing like the traditional utility, Jason. If we have any resemblance, then I've made a mistake somewhere. We operate at a different point in the grid, and we don't accept the premise that transmission and distribution are the key parts of the grid. In our view, the entire grid, as we know it, from transmission to distribution, exists solely for one purpose, and that's to serve customers. And so we exist on the customer side of the meter, and sometimes those customers are connected at transmission voltages, and sometimes are distribution voltages. But everything that we do and that we believe is the future of the utilities is tied to behind-the-meter operations for large industrial facilities.

Jason Price: 
All right. So given the unique positioning, that no doubt means you're able to achieve some things in a more, say, traditional utility may struggle with. Is that fair?

Jereme Kent: 
Yeah, I sure hope so.

Jason Price: 
So Jereme, you emphasize how One Energy strives to be customer-centric. I want to dig a bit deeper into that, and that this may be partly in contrast to the centralized utility model more often that we see these days. So I know you're a student of energy history. Can you walk our listeners through a quick lesson in how the power sector became, say, detached from customer control over the years?

Jereme Kent: 
Yeah, absolutely. And actually, I took a note as Matt was doing his intro, and I appreciate the intro talking about the shared goals of utilities that he said was affordable, reliable, and sustainable energy. And God, I wish that was true. That's where it started.

Jereme Kent: 
So the modern power grid that we know of didn't start that way. It didn't start as a grid at all. It started back in the 1900-type years when large industrial facilities were installing the first generators in the world and going through the initial stages of electrification. And so you had, whether that was a large sawmill or a large steel mill, electrifying themselves. And what they realized was that it's very expensive to have your own backup, but if you have two or three industrial facilities all next to each other, all who have electrified, if you took the time to sync them up and you all had one-third the backup, if there was a problem, all three of you could turn your backup on and you could work together.

Jereme Kent: 
And those were the first power grids. Those are what we today would call state-of-the art microgrids capable of islanding, but the reality was that was just how they made things work back then. And it was completely customer-centric because it was completely customer-owned. That, over time, got bigger and bigger and more connected and more connected, and eventually the idea of the centralized utility started showing up saying, well, what if we could do this better, and we could build bigger plants? And the reality is with the economies of scale at the time, it was better to build one big central plant. But in the process of doing that and in the process of utilities not having their mission actually be affordable, reliable service, but have it be maximizing shareholder value as they became public companies, all of a sudden you ended up with fundamental conflicts.

Jereme Kent: 
And over the next 100 or so years, those utilities have become these massive beasts that have monopolies that are entrenched 100 years, that have regulators that they systematically cut funding to that are unable of delivering that affordable, reliable service. And the end result is you now have a power grid designed to serve the customers that doesn't actually do that. And so we believe the revolution that will be Utility 2.0 is a power grid where all of a sudden the customers are centric, and it is about what is best for the customer. And we think that it's going to be very hard for a lot of traditional utilities to adapt to that model.

Jason Price: 
You're going to be winning a lot of popularity votes here, Jereme, because our audience is primarily from the utilities. So I have to ask this question, which they're all thinking, do you see yourself in a position as a partner, a competitor, or perhaps an outright threat to the existing utility structure that we have today?

Jereme Kent: 
I've never been one to go out and try to win friends. So if I make enemies, I make enemies. I think the reality is we all need to step back and reflect upon what we're all here to do, and that is to provide affordable, reliable service in the manner the customer wants. And I think a lot of people who work at utilities know that the machines that exist have become inefficient and they've lost a culture of innovation.

Jereme Kent: 
And so, in many ways, we are an outright threat. I think that there are times when we're helping large industrials use more power and use it more efficiently and optimizing things on a distribution or transmission system where we can be an ally, but we're an ally to the overall grid. I don't think we're ever necessarily an ally to the idea of a monopoly or the fact that somebody is entitled to anything. That's a position that we struggle with fundamentally and don't think exists in the Utility 2.0 world.

Jason Price: 
Understood. So if a company is interested in clean energy or cleaner energy, then what tends to be the top barriers to making the investments? Because otherwise it seems like a no-brainer. And especially coming back from New York at the AEC conference this past week, the Advanced Energy Conference, it was all about the need to accelerate cleaner energy. So electrons is a commodity, and you offer a competitively priced and environmentally-friendly version, yet you still remain in the minority. So why are there not more of you?

Jereme Kent: 
So I think all of us struggle to understand the scale of the problem. The sheer amount of energy we use in this country is astronomical. And when you put that down to even just large industrial facilities, it's hard to remember how big they are. And it's hard to remember that we all have the scale and concept of, hey let me throw some solar panels on my roof at my house. But when you understand how big a million-square-foot industrial processing facility is and what a 30- or 40- or 50-megawatt load look like, and the fact that you may need three or four or five times that in renewable energy to be able to power that facility with clean energy, the scale of the problem is very big.

Jereme Kent: 
And so we're all used to this idea that's been put in our minds for the last 80 years of big central power plants. The problems that come along from local permitting, to land availability, to understanding responsible sighting, to understand how power systems work with a large amount of distributed generation and how they interconnect to utilities, and frankly have having utilities understand how those can operate in and even support their own distribution and transmission systems are all very complicated things, and the books are just being written on them now. We're just figuring out how to standardize it and do it reliably and have the data and demonstrate the data and demonstrate reliability.

Jereme Kent: 
And all of those are a huge problem. And that's before you get to things like who is actually qualified to build wind turbines in the middle of an MSHA regulated mine site? Or who is qualified to build wind turbines or power systems where if they go down, they take down a billion dollar factory. And so there are substantial barriers to entry, and frankly, these are problems that I wish traditional utilities had been solving for the last 50 years, but they haven't. And so companies like One Energy are out trying to solve them right now because the market's pulling us that way. The customers are demanding that they get control back, and they're looking for partners willing to break through boundaries and barriers to do that.

Jason Price: 
I'm glad you dug into the industrial side of things because I have a question related to that. So I believe that approximately 20% of total GHG comes from industry, and some of the biggest users in the manufacturing space are steel and glass and concrete manufacturers. So what percentage of your existing customers fall into this category, and what do you feel is needed to move the needle forward in this segment?

Jereme Kent: 
So I think there's a stat that's just slightly tweaked from that that I like even better, and that's that 0.6% of the energy users in this country use 26% of the electricity. And so you realize that such a massive portion of our electrical load, and therefore all of our emissions and all of our good and bad that goes with the grid, is all so tightly concentrated. And with our model, 100% of our customers fit into that 0.6%. We work with the large industrial facilities, whether they're staffed or not staffed, that are using power that's on the scale of hundreds to thousands to tens of thousands of homes.

Jereme Kent: 
And so we're directly going after and helping those industries that are the largest emitters, that are the largest energy users, but that we still need here today. Because I can't picture a world tomorrow where we aren't using steel, and there's no magic process to make steel with no carbon. So figuring out how to make steel as clean and responsibly and affordably as possible is the real goal. But you can't just say we're going to attack the industry. You have to help the industry lead and change, and those 0.6% of users can start the change that forever changes the grid.

Jason Price: 
So now that we understand where One Energy is positioned, let's talk about where you're looking to go. What are the driving goals that are at the top of the list when you get to the office every morning? What pillars and priorities are you emphasizing to your team as CEO?

Jereme Kent: 
I think one thing that maybe we skipped over is actually putting a hard definition to Utility 2.0. And to me and to our company, a Utility 2.0 company checks five boxes. The first is that it enables and operates on a decentralized grid. The second is that it has to provide a physical solution. The third is that it has to embrace sustainability in all of its forms. The fourth is that it has to innovate to ensure the cost of delivered energy goes down with time. And finally, it has to be able to function with no monopolistic protections of any kind. And if we put that framework out there and say, what does the company need to do to be able to succeed in that? What do we need to look like as a company to make sure that we check those five boxes?

Jereme Kent: 
One, we need to never lose sight of the customer and what the customer wants and what the customer needs and different customers value things differently. There is no one solution. So encouraging our team to constantly say, what does this customer want, and not how do we fit this customer into a box that the other 300 customers fit into is key. We also need to never accept industry standard. The phrase "on my last job" or "that's how we've always done it" or "that's how utilities typically do it" is about the quickest way to get most of my team to go, "Oh, okay, we better check into this then. There's definitely a problem." So never accept industry standard as key to what we do.

Jereme Kent: 
And finally, it really is constantly step back and ask ourselves, are we really innovating to make sure that we're making our product cheaper in the long run and we aren't beholden to a rate of return or to saying that we're here to maximize shareholder value for the sole purpose of driving costs up and getting as much of a rate of return as possible? We're here to serve our customers. And if we can build a business model that serves our customers profitably, it's good for them, it's good for us, and ultimately it's a very different construct where when they succeed we succeed.

Jason Price: 
I want to talk to you a little bit more about innovation. So as I mentioned earlier, you were recognized by Energy Central's special issue on Leaders in Innovation for 2022. So first of all, congratulations. But I'd like to know, and I think our audience would like to hear more about, how are you fostering an environment of culture of innovation to your teams and even to your partners who you work with at One Energy?

Jereme Kent: 
Thank you for the award. That's a great honor, and I appreciate it. I think what we have learned, and the way I learned was if you don't learn from the ground up, you're not really capable of innovation. You're capable of following a rule book that somebody else wrote. I love when we get on phone calls with utilities. Because we get on a phone call and I'll have two or three people from my team on, and the utility will have 15 people from their team on. And you'll ask a basic question like, "What do you guys want the CT ratio for that to be?" And you'll get five different people all bouncing around, all trying to figure out who's actually the one who can answer, none of whom understand the full system, all of whom have specialized and well, I'm relaying. No, I'm metering. No, I'm PNC. No, I'm just physical assets. No, I'm all the 17 different parts. And you lose the focus and the ability to deliver innovative results when everybody is so compartmentalized, which is how most big utilities are set up.

Jereme Kent: 
Most of the people I hire, most of my engineers, go through rotations where they serve in all the different groups. They get to where they can help design a power system or a wind project or a substation from a blank piece of paper. We make them go out in the field and actually pour foundations and understand what it's like to pour a pier versus a spread footer versus an inverted T. You make them understand what it's like to install different parts, what it's like to have five different sized bolts on the same structure when you could have just standardized all of them. And if you take those same people that you've made get all of that firsthand experience, and then you tell them, "Now design the substation you want to build," you get a very different answer, and you get a whole lot more common sense than we see a lot of our utility counterparts are traditionally doing. And that common sense drives safety, it drives quality, and ultimately it drives affordability for our customers.

Jason Price: 
Certainly compelling, no doubt. Jereme, so we're talking about serious issues and serious topics, which this podcast is about, but we also want to take a moment to learn more about you, Jereme Kent. So we're going to pivot now. Before I give you the last word of the day, we want to pivot to getting to know a little bit more about yourself. So we have what's called the lightning round. It's a series of questions we'll ask you, and you respond with either one word or phrase. The first thing I'm going to say is, are you ready?

Jereme Kent: 
Let's go for it.

Jason Price: 
Are you a morning person or a night owl?

Jereme Kent: 
Absolutely a morning person.

Jason Price: 
Do you have anything at your work desk that you couldn't do without during a long day?

Jereme Kent: 
Calculator.

Jason Price: 
What gets you most excited at the start of a new day?

Jereme Kent: 
The quietness before the chaos starts.

Jason Price: 
Who were your role models growing up?

Jereme Kent: 
I think a wrestling coach that I had, who taught me about toughness. I think learning about people like Admiral Hyman Rickover and what they did, building the nuclear navy, and probably a whole bunch of others I'm forgetting.

Jason Price: 
What would you do if you didn't end up in an energy-focused career?

Jereme Kent: 
Man, I'd probably be an underwater commercial welder or something, or maybe an offshore sailor. I do miss the ocean. I grew up around it.

Jason Price: 
Very nice. Well, nice job. Like I said, we're going to give you the last word. So we want you to think about what our audience is thinking about as well and what they should take away from this conversation. So what's the key takeaway lesson you hope will resonate with our listeners on Energy Central?

Jereme Kent: 
I think I want to flip the scales and say I look forward to the day that I'm on a call or in a meeting with a traditional utility, and they say something so innovative that it makes me uncomfortable. I think that if we're actually going to innovate, we're going to innovate like any other industry in the world, we need to start pushing the boundaries and figure out how to make ourselves uncomfortable as opposed to constantly doing it the way we used to do it. So I know I constantly make utilities uncomfortable. I look forward to the time when I'm on a call that one of their engineers makes me uncomfortable with innovation, and I have to step back and figure out if that would really work. That's when we know we're actually changing.

Jason Price: 
Nicely stated. Jereme Kent, thank you for your time today. We really hope you stay engaged on these topics with the Energy Central community, whether it's through another podcast episode, so let's say a follow-up a year from now to see how things are developing, or even staying engaged on the platform itself with the community. But for now, thank you very much for your insight and appreciate your precious time that you shared with us today on energycentral.com.

Jereme Kent: 
Thank you very much for your time, Jason and Matt.

Jason Price: 
You can always reach Jereme through the Energy Central Platform where he welcomes your questions and comments, and we also want to give a shout out of thanks to the podcast sponsors that made today's episode possible. Thanks to West Monroe. West Monroe works with the nation's largest electric gas and water utilities in their telecommunication grid modernization and digital and workforce transformations. West Monroe brings a multidisciplinary team that blends utility, operations and technology expertise to address modernizing aging infrastructure, advisory on transportation electrification, ADMS deployments, data and analytics, and cybersecurity.

Jason Price: 
Once again, I'm your host, Jason Price. So stay plugged in and fully charged in the discussion by hopping into the community at energycentral.com, and we'll see you next time at the Energy Central Power Perspectives Podcast.

 

About Energy Central Podcasts

The ‘Energy Central Power Perspectives™ Podcast’ features conversations with thought leaders in the utility sector. At least twice monthly, we connect with an Energy Central Power Industry Network community member to discuss compelling topics that impact professionals who work in the power industry. Some podcasts may be a continuation of thought-provoking posts or discussions started in the community or with an industry leader that is interested in sharing their expertise and doing a deeper dive into hot topics or issues relevant to the industry.

The ‘Energy Central Power Perspectives™ Podcast’ is the premiere podcast series from Energy Central, a Power Industry Network of Communities built specifically for professionals in the electric power industry and a place where professionals can share, learn, and connect in a collaborative environment. Supported by leading industry organizations, our mission is to help global power industry professionals work better. Since 1995, we’ve been a trusted news and information source for professionals working in the power industry, and today our managed communities are a place for lively discussions, debates, and analysis to take place. If you’re not yet a member, visit www.EnergyCentral.com to register for free and join over 200,000 of your peers working in the power industry.

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.  

If you want to be a guest on a future episode of the Energy Central Power Perspectives™ Podcast, let us know! We’ll be pulling guests from our community members who submit engaging content that gets our community talking, and perhaps that next guest will be you! Likewise, if you see an article submitted by a fellow Energy Central community member that you’d like to see broken down in more detail in a conversation, feel free to send us a note to nominate them.  For more information, contact us at [email protected]. Podcast interviews are free for Expert Members and professionals who work for a utility.  We have package offers available for solution providers and vendors. 

Happy listening, and stay tuned for our next episode! Like what you hear, have a suggestion for future episodes, or a question for our guest? Leave a note in the comments below.

All new episodes of the Energy Central Power Perspectives™ Podcast will be posted to the relevant Energy Central community group, but you can also subscribe to the podcast at all the major podcast outlets, including:

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