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Episode #163: 'Zero Carbon by 2030 - Leaving No Customer Behind' with Erik Krause, Director of Customer Experience Delivery at SMUD [an Energy Central Power Perspectives™ Podcast]

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Much of the impassioned and focused dialog in the utility space centers around new and expanding technologies, but diving into the human side of the power industry is just as, if not more, critical. To help us do so, the Energy Central Power Perspectives Podcast was joined by Erik Krause, Director of Customer Experience Delivery at SMUD, to focus on the Sacramento utility's groundbreaking Community Impact Plan.

In this lively conversation, Erik discusses the work SMUD has done in reaching disadvantaged communities, addressing inequities, and building trust within the utility space. Listen in as he shares with podcast host Jason Price and producer Matt Chester how the community-owned electric utility is spearheading initiatives to achieve zero carbon emissions by 2030 while ensuring no customer is left behind. From developing collaborative Community Impact Plans to addressing gaps in service offerings, Erik provides valuable insights into navigating the complex intersection of utility goals, customer needs, and community engagement. Don't miss this enlightening conversation on empowering communities, bridging gaps, and charting a sustainable path forward in the energy transition.

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

 

Key Links:

Erik Krause's Energy Central Profile: energycentral.com/member/profile/erik-krause 

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

Ask a Question to Our Future Guests: Do you have a burning question for the utility executives and energy industry thought leaders that we feature each week on the Energy Central Power Perspectives Podcast? Do you want to hear your voice on a future episode? Well starting in 2024, we’re offering you that opportunity! Head to this link where you can leave us a recorded message, including a question you’re eager to have answered on a future episode of the podcast. We’ll listen through them, pick out the right guests in our upcoming lineup to address them, and you’ll hear yourself as a part of the conversation! Energy Central on SpeakPipe: www.speakpipe.com/EnergyCentralPodcast 

 

TRANSCRIPT

Jason Price:

Welcome to the Energy Central Power Perspectives Podcast. This is the show that brings leading minds from the energy industry to discuss the challenges and trends that are transforming and modernizing our energy system. And a quick thank you to West Monroe, our sponsor of today's show. Now, let's talk energy.

I am Jason Price, Energy Central Podcast host and director with West Monroe, coming to you from New York City. And I'm joined once again by the producer of this show, Matt Chester, dialing in from Orlando, Florida. Matt, we often think of the utility sector as a physical infrastructure. That includes power generators, grid infrastructure, meters and sensors all along the way, and IT equipment monitoring and guiding it all. But the reality is that the human side is the fundamental base of the power industry, especially when it comes to the customers themselves. On the energycentral.com community platform, where would you recommend the listeners go to learn more about the dedicated people behind the scenes powering our utilities?

 

Matt Chester:

It's a great question, Jason and I would say that if anyone listening in today hasn't looked specifically at the customer care group on Energy Central, they should definitely do so after they finish this episode. This community group it's not just for people in say, call centers or those who are responding directly to individual customer concerns, but rather it's the central hub in the Energy Central community for all the conversations related to delivering what customers need. And that could be in terms of technologies, programs, advice, support, and more.

 

Jason Price:

Thanks, Matt. We'll definitely look forward to continuing conversations there. And we know that today's episode will drive a lot of inspiration to our listeners on how and why to better engage with the broader utility customers. That's because today's focus is on the development and implementation of SMUDs community impact plan, identifying different pockets of utility customers with varying needs, recognizing where there may be inequities and building the utility as a trusted actor to address these challenges and shortcomings. Specifically, we're thrilled to get an expert view into this important topic from Erik Krause, the director of Customer Experience Delivery at SMUD in Sacramento. Erik's passion is in reaching disadvantaged communities in SMUD service area, identifying how certain communities are under-resourced and underserved, and that SMUD and its community partners can take to meet their needs.

Erik, this is such an important conversation, so we're thrilled to have you join us to chat about it today and share some lessons learned with the Energy Central community. So with that, welcome to the Energy Central Power Perspectives Podcast.

 

Erik Krause:

Thank you, Jason and Matthew. I really appreciate the time and appreciate, and I'm honored by the fact that I'm able to represent SMUD and the dozens, if not hundreds of people that have had such an impact here in the community. Look forward to sharing more so utilities can follow our lead as well.

 

Jason Price:

Yeah. Absolutely. We're thrilled to have you here. So tell us about yourself, about SMUD. What makes SMUD unique?

 

Erik Krause:

Well, SMUD is unique in that we're a not-for-profit community owned organization. We're the sixth-largest municipal utility in the country, and we have a seven member elected board. Because we're located in primarily Sacramento County, it allows us to really focus on the needs of that community. And also we are part of the community. Most of the employees, including myself, who live about a mile and a half from the office are part of the community. So we want to create that impact. We want to make a difference. And we're more than just poles and wires. Of course, we want reliable and clean power, but we need to do much more for our community if we're going to create that value.

 

Jason Price:

Erik, we brought you in to talk about your community impact plan. What exactly is this and is this a common deliverable at all utilities?

 

Erik Krause:

Well, I'd love to say it's a common deliverable at all utilities. But there are some out there. Austin Energy is one that we've talked to before and we've modeled some of the work we've done there. There are several across the country. However, ours is specific to our community. We realized as we started moving forward quickly to zero carbon by 2030, we started getting some comments from community members, whether it's chambers of commerce, advocacy groups, et cetera, that were saying they just didn't see how this fit for them. What could they do to participate? How could they benefit from this program? So we decided to take a few steps back and look at how we might do that. As a utility, often we try to figure things out on our own. We decide we're going to figure out the best widget and the coolest thing for our customers. But we realized that we had to reach out to our community in this case.

So we set up a series of meetings. So it was back in 2021, and we needed to make sure that we accessed people. Most of the time it was remote. So we set up meetings with community groups, with business groups, with customers themselves. We have an online system that we can ask customers questions to find out what SMUD means to them. What's missing for them. What are they struggling with in the community? It doesn't have to just be related to electricity, it could be anything, food, resources, jobs, et cetera. And how could SMUD help? So it's really exciting. There's a big collaborative group with SMUD, entire nonprofit community that we work with, and we asked what can we do differently? So it's really exciting to have that change and be able to implement it based on what our customers see and need in the community.

 

Jason Price:

All right. So let's dig a little further. What were some of those gaps you identified? Can you give us some concrete examples that you walked away with after engaging with the community groups?

 

Erik Krause:

Sure. Yeah. The thing was, was that everybody supported what we were doing. But a lot of it was gaps in knowledge, gaps of understanding. Our customers in most cases didn't understand what zero carbon by 2030 meant. Did that mean that we're shutting down all of our power plants? Did that mean that we were only going to provide electrification for customers? And when you don't have information sometimes the first thing is fear. So some of these folks in the community couldn't see how they could participate, especially those in the under-resourced communities that don't have enough money to do anything, that can't afford to buy a new heat pump, that can't afford to replace their water heater ahead of time. They wanted to understand what it meant. They also told us that in order to understand what it meant, they had to hear from people that look like them, that spoke like them, that were in the communities ideally to help understand what's going on and how they can participate.

One of the things that they hit on quite a bit was jobs. We talk a lot about the transition to zero carbon and all the potential jobs that creates the infrastructure, the systems, the tools that customers can use. A lot of these customers in these under-resourced neighborhoods are just living paycheck to paycheck, if they even have a paycheck. Sometimes it's social security only, sometimes it's unemployment only. They need to figure out, how do I participate? How can I find a job? How can I get training, et cetera. So what we've done is we've tried to fill all those gaps by offering products and services that work for customers. Sometimes that means it's free. We've created job training for people in those neighborhoods, and ideally we've got one neighborhood, Meadowview that we're working on training the people in the neighborhood to prepare for the rollout of our efforts and our electrification so they can actually be working in the homes, in their neighborhood to make them better. So those are some of the things we're doing to make it.

 

Jason Price:

That's very interesting. When we speak to utilities, they're often pulled in many different directions with all sorts of expectations and goals that perhaps are outside the traditional role of a utility. So let's talk about some of these competing priorities that may sometimes be in conflict with one another. So as SMUD also works toward its zero carbon goals, in what ways does that make the community impact plan more difficult to achieve and as a follow-up, other ways in which those goals are well aligned and can be accomplished simultaneously?

 

Erik Krause:

Yeah. Actually, I don't think they're misaligned at all. The truth is that what we're doing is we're doubling down our efforts to get to zero carbon by 2030 by refocusing on those customers that might not be able to participate. We've increased our investment. We've been applying for grants and we've won several grants for it. It's a pretty compelling argument when you're applying for grants when you say, "Not only are we going to electrify neighborhoods, but we're going to electrify neighborhoods that have been underserved, neighborhoods that have been ignored, neighborhoods that feel that they've been left out." So that's one of the reasons we talk about no community left behind when we're talking about this. We want to make sure those folks come first. We don't necessarily want to be helping just the folks that can afford a new electric vehicle, just the folks that can afford to upgrade their HVAC, et cetera. Those people don't need as much help as our other customers.

So that's why we've created these programs at no cost or at very low cost for our customers. Whether it be weatherization that's simple enough that can make the home more comfortable or electrification. We found the heat pump conversion from a gas furnace is one of the most efficient. It makes the home much more comfortable. It makes their bills much more lower. And their bill burden decreases dramatically so they can then spend those funds on finding a job, medications they might need or getting their kids to school. So it's totally aligned in my mind. It actually increased the passion and excitement around SMUD I believe, and with the board and execs because not only were we continuing toward our goal, but we're having a tremendous impact in the community while we do that.

 

Jason Price:

Sure. So share with us, how do you measure the results of the community impact plan?

 

Erik Krause:

I wish I had my dashboard up right now, but we have a dashboard with a variety of items. One of the biggest things that we're focused on is electric bill burden. It's a measurement that we came up with back in 2015 when we started focusing on the under-resourced communities area. Simply, it wasn't simple to figure it out and calculate it, but it's basically the average monthly bill divided by the average monthly income. And we identified a level above which is 8.7% that bills become unaffordable for folks. So that's our primary focus. We focus on bill burden and how we can reduce that.

But as you can imagine, as bills go up, utility costs tend to increase. That bill burden follows along. So adding to that, we wanted to track carbon reduction. We wanted to track the number of homes impacted. We wanted to track the region, the areas, the neighborhoods, because we have something called the sustainable communities map. And it's a map that has multiple layers of information and data, everything from where we have food deserts, where the pollution's higher, where the traffic is higher, where people may not have jobs, where unemployment is high, and that map creates a heat map. So we're able to target areas that are in the red or orange, which is the most significant issues, and focus on those areas. And it's really cool because when we first started that map, there was a lot more red and orange than there is now. So we can see the impact that we're having.

We can see bill burden going down, we can see carbon decreasing, we can see jobs increasing, et cetera. Now, SMUD couldn't do that without all our community partners, but it's really an impact. Just lots of data because we want to make sure that whatever we do is having an impact and we're prioritizing the most important customers and those most in need and those that we can help the most.

 

Jason Price:

Sure. So I want to ask you about, as a municipality, you are a quasi government organization. Tell us what is the relationship that you have with your communities and your customers through that lens of the correlation between the customer and government? There's always this fear. There's always this trust issue, particularly those who may have difficulties paying their bills and what that would mean by being involved with the government. So just walk us through, say some strategies of how you've prioritized to find opportunities that would be accepted by a skeptical community, like perhaps what you have in your own backyard.

 

Erik Krause:

Yeah. It's funny you say that. We're the government, we're here to help. It doesn't always work. I am actually looking back or thinking back to when we had a significant outage in downtown. It was a middle of a storm. We had some challenges downtown, and my team and I scrambled because it was a time when we knew that there were customers that would likely have extended outages. There are areas where those customers may or may not speak English and may not have access to services. So we pretty quickly scrambled myself and a few, probably eight people as well as the fire department because there was a building that was for low income seniors, primarily Chinese, primarily Chinese speaking, one of the dialects that was there. And very quickly we were deciding that we should evacuate the building. The generator that they had was no longer working, even with fuel that we had helped provide.

The lighting was very little because it was just emergency lighting. So I remember going up the stairs with a flashlight with my team starting to knock on doors, letting them know that we had buses there to take them to alternate housing. And maybe one out of 10 doors would open. And then eventually, this woman probably about, I'm 6'3", and this woman's probably about 5'0" if that. Came up to me and said, "Stop. Stop" She said, "You need to stop knocking." And I said, "Why? We need to help these people. They're not going to have power. We need to get them out of the building." She said, "You're too big. You're scaring them." And it was a shock to me. I know I'm tall, but I never thought that somebody would be scared of me. I'm a friendly guy. So she asked to start knocking on the doors herself with me standing off to the side where I couldn't be seen. Every single door open, and we were able to help all those people.

So that was a real epiphany for me that it's one thing to have your customers say that you need people that look like us, sound like us, speak like us. It's totally different to have that experience and see the impact it had. So going forward, we're working on translating our website into 14 languages. All the materials that we put together are in up to 14 languages depending on what solution it is. We actually just launched our first materials with braille and every single community we go into, we make sure that we have somebody that is known in the community. It might be a pastor, it might be a teacher, it might just be an older woman in the neighborhood that knows everybody. I'm thinking in Meadowview, we're going out on a walk in April. And the unofficial mayor of Meadowview is joining us because we know that they'll accept us more. So it's all about community partners, it's all about nonprofits. It's leveraging people that are trusted in the communities to be there with us and sometimes be there instead of us. And that's huge.

 

Jason Price:

Yeah. No doubt. Those are great examples and certainly being here in New York City, diversity is, I mean, that's exactly what the city's all about. So the importance of being able to communicate and relate to your customer race is so important, and it's great to hear that you're helping lead a lot of that and it's been successful. So I want to now ask you about your relationship with your utilities, the bigger investor owned utility in your backyard in particular. So from a collaboration and appreciation standpoint. So can you share maybe some initiatives and what are the types of synergies that you are working on with your investor owned utility?

 

Erik Krause:

Yeah. Sure. We're basically surrounded by PG&E from an electrical service perspective. And any of our customers that have gas, including myself, have PG&E for gas. So we work very closely together on a variety of things. Whether it's neighborhoods where they're interested in pruning their gas lines because it's too expensive or too disruptive to fix. We can work with them on finding ways to electrify. Whether it's looking for opportunities to work together on projects. One project that we've worked on in the past and I'm hoping to spin it up again now that we have gotten through the COVID timeframe, is working on low income and/or senior mobile home parks. Because as you can imagine, mobile homes are not the greatest and most energy efficient nor weatherized properties. I want to say we did more than 100 with them back pre COVID. And it was great because PG&E was looking to reduce the gas in that area. They were doing certain upgrades and they couldn't take credit for the reduction of carbon if it had an electric AC and a gas heat. So they reached out to us, actually, and we had a great partnership.

We also, through that identified that some relatively simple and low cost fixes in mobile homes. Putting a new blower motor in, a brushless blower motor, had huge impacts insulating at the same time. While we were out there, we made some other partnerships with a company called GRID Alternatives. They do solar, but they also do battery storage. They do EV systems. We were able to leverage that partnership to install EVs or EV chargers at homes of people that actually had EVs already. Not a lot of the low income folks or people that live in those neighborhoods have EVs. But we're trying to make that change and the first thing is making it convenient for them to charge. So it's actually really interesting. We've got a great relationship with PG&E in the area, even though you might think they wouldn't love us too much because we're replacing gas appliances with electric. But love to do more. If they're listening now, please call me. Let's do more in the low income communities.

 

Jason Price:

That's great to hear. Erik, we really appreciate this insight, particularly the boots on the ground perspectives of what's going on at a municipality. So your passion, your insight, your thoughtful responses are really appreciated here. And I know our listening audience will feel the same. We have on the show something called the lightning round, which gives us an opportunity to learn more about you the person, rather than you the professional. We have five questions that we'd like to ask you.

 

Erik Krause:

Oh, boy.

 

Jason Price:

We ask you to keep your response to one word or phrase. So are you ready?

 

Erik Krause:

Sure.

 

Jason Price:

All right. Let's take it away. So what's your go-to road trip snack?

 

Erik Krause:

Go-to road trip snack? Gosh, I'd have to say gummy bears. Jerky is good too, but gummy bears and my family would agree with that.

 

Jason Price:

What's the most underrated aspect of the Sacramento area?

 

Erik Krause:

I think the food scene. Food is incredible. Now, especially that kids are older and not as picky, it's hard to decide where to eat. Every time you turn around, there's a new place. Same thing with microbreweries. You can't get to them all.

 

Jason Price:

As you shared, you didn't start in the utility industry. So what would you be doing if not working in the utility industry?

 

Erik Krause:

Wow. If I had stayed on my path originally, I would continue to be driving software sales and product development in the agriculture industry. That's where my dad started. But if I could really choose, I'd probably love to be an author. Always wanted to write. I feel like I'm a good author, but I don't know for sure.

 

Jason Price:

Well, everyone has a book in them, so I encourage you to pursue that aspiration. All right. So what's your proudest accomplishment in your career to date?

 

Erik Krause:

Wow. I've had a lot of them. SMUD has given me a tremendous opportunity to do a lot of great things. But I'd have to say the whole effort around the community impact plan. We've been doing this work before in 2016, but the community impact plan has just bumped it up so much. And the best part about it is there's so many people at SMUD that are involved. Everybody from the grid in helping upgrade facilities so that we can electrify faster. The communications team, the outreach team, IT, customer, it's just so cool to work with so many people at SMUD and to see the impacts. I look at the dashboard last week and we've helped more than 30,000 under-resourced households with some type of education, electrification, weatherization, et cetera. And to me, knowing that I'm probably driving around town and at any time driving by a house that my team and the rest of SMUD has helped with bill burden, you just can't beat it.

 

Jason Price:

Well, that's an impressive impact for sure. So as you know, this industry still is challenged by talent development, and there's not a good understanding that this is not you say your daddy's utility anymore. This is a much more modern machine that's transforming right in front of us. So since you're near Silicon Valley, what would you tell a techie who is looking for a new career and considering the utilities?

 

Erik Krause:

Now is super exciting time here. I think back to 2009, 2010, when there's a big wave of ARA funding, that was incredibly fun. A lot of development and new technology, et cetera. 10, 15 years later, I think it's going to be even bigger. The technology that's available now, how we can leverage AI, how we can be more sophisticated about running our grid. SMUDs got a lot of projects coming forward in the next few years, funded by grants and funded by ourselves to just dramatically change the utility space and it's an exciting place to be. There's a reason I've been here, came from software and I'm here for 24 years and still here. It's always changing, always exciting. It's not a boring type career. It's amazing. It's constantly changing and constantly improving. I'd suggest municipal utilities are a lot of fun too, because they have that community focus and that real interest in making an impact there in the community.

 

Jason Price:

We've started asking podcast guests to pitch a lightning round question for future guests. So this one is from Professor Greg Keoleian of the University of Michigan. What do you do personally to reduce your energy and carbon footprint?

 

Erik Krause:

Well, funny you should ask that. It's been really interesting because I've been remodeling a little pool house behind our property and I just bought my first induction range. I haven't used it yet, but I'm planning on making some cookies tonight. I'm also going to be looking into whether I can replace a heat pump water heater in the back there instead of the gas, and haven't bought an EV yet, but looking at an electric bike.

 

Jason Price:

Okay. And then over to you, Erik. Now it's the opportunity for you to ask a question that you'd like to hear answered by a future podcast guest.

 

Erik Krause:

Sure. Yeah. The one thing I can think of is I'm a competitive guy, so I guess the question is something around, what are you all doing to create a positive impact in the community for those who may not otherwise be able to participate? I'd love to hear about it. I'd love to see other utilities imitate us. That'd be amazing.

 

Jason Price:

All right. Well done Erik. And as a reward for successfully navigating the lightning round, we want to give you the final word of the episode. So what's the last thing piece of advice you hope listeners take away from today's conversation?

 

Erik Krause:

I'd like to think that listeners take away from this conversation that sometimes at utilities we get so wrapped up in terminology, acronyms, et cetera. We forget that our customers aren't there with us. They need to understand. We need to use simple language. We need to explain what we're trying to accomplish. And I think even more importantly, we need to take the time to listen to our customers and build things that mean something to them and have an impact to them. Definitely we will need some benefit to the utility as well or doesn't make sense. However, what's in it for me? What's in it for our customers and how do we get that message out? That's critical.

 

Jason Price:

Well said. And thanks for your time today for joining us. No doubt, Erik, our utility audience will have a lot of questions and comments on the conversation, so we want to encourage them to head over the podcast, post on energycentral.com and share their insight. And until then though, we just want to thank you for sharing your input and insight and perspective with today's episode of the podcast.

 

Erik Krause:

You're welcome. It was a lot of fun and I appreciate the platform so we can help others do the same.

 

Jason Price:

Absolutely. That is our mission. So once again, you can always reach Erik through the Energy Central community platform where he welcomes your questions and comments. And if our listeners have a question they want to have answered in a future episode of the podcast and even hear their own voice on an upcoming episode, we've started this year offering the opportunity. Listeners can head to the SpeakPipe link. We'll leave in the show notes where you can leave us a recorded message including a question you're eager to have answered for a future episode of the podcast. We'll listen through them, pick up the right guests in our upcoming lineup to address them, and you may even hear yourself as part of the conversation.

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 is a leading partner for the nation's largest electric gas and water utilities working together to drive grid modernization, clean energy, and workforce transformation. West Monroe's comprehensive services are designed to support utilities in advancing their digital transformation, building resilient operations, securing federal funding, and providing regulatory advisory support. With a multidisciplinary team of experts, West Monroe offers a holistic approach that addresses the challenges of the grid today and provides innovative solutions for a sustainable future. Once again, I'm your host Jason Price. Plug in and stay 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.

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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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