Needed to duck out of the USEA Supply Forum to get to the Natural Gas Roundtable luncheon taking place that same day, July 27. Diane Leopold of Dominion was the guest speaker. She's both CEO of Dominion's gigantic Gas Infrastructure Group and Chairman of the Interstate Natural Gas Association of America. One of the leading voices on the need to modernize the nation's natural gas network, she's passionate on the topic in these video clips.

We received this nomination for the Fortnightly Top Forty Innovators, for Sharon Allan, chief innovation officer for the Smart Electric Power Alliance.

"A familiar name in the public power sector, Sharon has long been recognized for her visionary leadership in development of the North American smart meter market as well as her tenacious advocacy of grid-modernization technology and policy. An industry reporter once likened Sharon to the unsinkable Molly Brown on six cups of coffee.

Under Sharon's leadership during this past year, the Smart Grid Interoperability Panel team was entrusted by the U.S. Department of Energy to support four of the Grid Modernization Lab Consortium projects. Now, the team is working with multiple national labs and industry representatives to execute on these initiatives. 

To help make solar deployments more affordable, Sharon's team has been spearheading industry participation in the DOE OrangeButton program, which reduces the transaction costs between companies in the solar value chain by standardizing data interfaces...

Today's systems remain separated by silos, with meter data going to AMI systems, SCADA data to SCADA systems, load control devices to load control systems and so on. This has resulted in much system-to-system integration, plus it requires monitoring and the occasional round-trip as data travels from the field to the enterprise and back to the field again. OpenFMB facilitates data exchanges closer to the edge of the grid and will thereby enable a more distributed approach to grid management.

Through this past year, Sharon also has supported industry collaboration by bringing utilities together to discuss and chart out their changing system requirements as they face increasingly high penetrations of DERs. She has been leading an effort aimed at helping utilities identify and unify their requirements so that an open dialogue can be had with the industry players who must design technology to meet utility needs." Nomination by Betsy Loeff.

Seems to us that Sharon is a likely Top Forty Innovator. In November's PUF, we've announced, we'll publish our new annual list, the Fortnightly Top Forty Innovators.

As we've said, everyone making the Top Forty will have distinguished themselves during the last year, serving the public interest. Invented costless clean electricity generation? That would do it.

Or you could have developed or advanced the adoption of a technology, application, method, regulatory approach, or public policy that has the potential to serve the public interest. Understanding that such projects are predominantly the product of groups of people, rather than lone wolves like Nikola Tesla, a nominee can be an organizational or project leader that urged and stirred action and achievement.

The Top Forty issue in November will be a big deal. Interviews. Photos. Audio. Video. It will highlight some of the most outstanding leaders in our field. Like — perhaps — Sharon Allan.

Forty-three of the hundred ninety-two state utility commissioners have served since the summer of 2010, or longer. So, twenty-two percent of the current commissioners have served at least seven years.

Two have served since January 1989. That's twenty-nine years. Wow. Twenty-nine years means a whole lot of regulatory hearings.

I only counted commissioners from full members of NARUC. Sorry to my friends on the commissions of Guam, New Orleans, Puerto Rico, Virgin Islands, etc. And I rounded up or down to the nearest number of years of service.

I left off the list Commissioner and NARUC President Rob Powelson. He was in his ninth year on the Pennsylvania Public Utility Commission, a string of years now interrupted by his U.S. Senate confirmation a couple of weeks ago to a term at FERC.

Here's the honor roll of longest-serving commissioners:

29 years: Bob Anthony, Oklahoma Corporation Commission; Frank E. Landis, Jr., Nebraska Public Service Commission.

27 years: David E. Ziegner, Indiana Utility Regulatory Commission.

25 years: Rod Johnson, Nebraska Public Service Commission.

22 years: Stan Wise, Georgia Public Service Commission.

20 years: John W. Betkoski III, Connecticut Public Utilities Regulatory Authority.

16 years: Joann T. Conaway, Delaware Public Service Commission.

15 years: Foster L. Campbell, Louisiana Public Service Commission; Gary W. Hanson, South Dakota Public Utilities Commission; Harold D. Williams, Maryland Public Service Commission; Doug Everett, Georgia Public Service Commission.

14 years: Mark C. Christie, Virginia State Corporation Commission.

13 years: Lambert C. Boissiere, III, Louisiana Public Service Commission; Elizabeth B. Fleming, G. O'Neal Hamilton, John E. Howard, South Carolina Public Service Commission.

12 years: Joseph L. Fiordaliso, New Jersey Board of Public Utilities; Judith W. Jagdmann, Virginia State Corporation Commission; Dallas Winslow, Delaware Public Service Commission.

11 years: Michael A. Albert, Public Service Commission of West Virginia; Chuck Eaton, Georgia Public Service Commission; Edward S. Finley, Jr., North Carolina Utilities Commission; Tim Schram, Nebraska Public Service Commission; Janice W. Wilson, Regulatory Commission of Alaska.

10 years: Betty Ann Kane, Public Service Commission of the District of Columbia; Brandon Presley, Mississippi Public Service Commission.

9 years: Kenneth W. Anderson, Jr., Public Utility Commission of Texas; Bryan E. Beatty, North Carolina Utilities Commission; Robin Sessions Cooley, Wyoming Public Service Commission; James C. Dimitri, Virginia State Corporation Commission; Lauren "Bubba" McDonald, Jr., Georgia Public Service Commission; Dana Murphy, Oklahoma Corporation Commission; Robert Pickett, Regulatory Commission of Alaska; Eric F. Skrmetta, Louisiana Public Service Commission; Swain E. Whitfield, South Carolina Public Service Commission.

8 years: ToNola D. Brown-Bland, North Carolina Utilities Commission; Kenneth C. Hill, Tennessee Public Service Commission.

7 years: Ronald A. Brise, Florida Public Service Commission; Twinkle Andress Cavanaugh, Alabama Public Service Commission; John F. Coleman, Jr., Pennsylvania Public Utility Commission; Art Graham, Florida Public Service Commission; Nikki M. Hall, South Carolina Public Service Commission.

Lead image: Bob Anthony, Oklahoma Corporation Commission

The New York Power Authority is the largest state power organization in the United States, with 16 generating facilities and more than 1,400 circuit-miles of transmission lines. NYPA management envisions 50% of the electricity supply coming from renewable energy by 2030, and they want to reduce greenhouse gases 40% by 2030, among other targets. These goals, originally set forth in 2014, are being updated in their 2020 Strategic Refresh.

Doug McMahon is VP, Strategy, at NYPA. “My job now moving forward is to make sure that [Refresh] becomes reality.”

McMahon describes the challenges. “Part of NYPA’s uniqueness is that it has lots of different types of folks from across the entire region. We have plants up in Niagara as well as a presence further down south in the state. You have lots of different viewpoints. You’ve got lots of different people with different experiences of the utility industry. Trying to bring that all together and get collective agreement can be challenging.”

McMahon sums up the vision of the future of NYPA. “This notion, this key thread that runs through the plan for me, is that NYPA needs to be, in the future, a digital utility at its heart... What would define success for me is if [our customers] think of NYPA as a services and technology organization as well as an engineering and infrastructure business.”

McMahon describes some of the biggest changes that would occur within NYPA in the next three or four years. “We’ll see a lot of changes in the skills and capabilities and competencies of our employees... We’re going to have to start to partner and collaborate with the other utilities in New York, with up-and-coming startup organizations, and with trusted technology vendors.”

See the full interview here.

The first transformational transmission line design in nearly fifty years? They developed it. The world's first battery/gas turbine hybrid system at existing peakers. They developed it too.

The world's first underground spent fuel storage facility at an operating nuclear plant. They developed it. One of the first distribution utility natural gas compressors. They developed it too.

Vertical climbing inspection robots. They developed them. Transmission line crawling inspection robots. They developed them too.

The world's first interstate trading program for water quality. They developed it. The largest offshore wind farm in U.S. waters. They're developing it.

A lab to protect widely dispersed substations and transmission. They developed it. The Swiss Army knife of high-voltage transformers as backup as we face grid security threats. They developed it too.

Grid integration, CEO-level grid security focus, utilities partnering with anyone, wind turbine steel substituting for fuel. They're the pioneers.

And innovation as a corporate strategy? They pioneered that too.

They are forty.

• Steven Ewens, Ameren
• Alex Rojas, Ameren
• Jeff Fleeman, American Electric Power
• Alex Hofmann, American Public Power Association
• Lauren Weinrich, American Water
• David Hood, Austin Energy
• Sarah Edmonds, Berkshire Hathaway Energy
• Andrew Bordine, CMS Energy
• Holly Bowers, CMS Energy
• Vibhu Kaushik, Edison International
• Erik Takayesu, Edison International
• Randy Hickman, Entergy
• Shannon Watts, Entergy
• Ron Domitrovic, Electric Power Research Institute
• Jessica Fox, Electric Power Research Institute
• Maria Guimaraes, Electric Power Research Institute
• Mike Howard, Electric Power Research Institute
• Andrew Phillips, Electric Power Research Institute
• John Simmins, Electric Power Research Institute
• Lee Olivier, Eversource
• Sonya Harbaugh, Exelon
• Brian Hoff, Exelon
• David Ranallo, Great River Energy
• Earlynne Maile/Lani Shinsato, Hawaiian Electric
• Lisa Wood, Institute for Electric Innovation
• Bud Ajdukovic, Kissimmee Utility Authority
• Darron Scott, Kodiak Electric Association
• Carlos Nouel, National Grid
• Emilie Bolduc, New York Power Authority
• Ricardo DaSilva, New York Power Authority
• Dave Monte, NiSource
• John Carmody/Rick Edwards, Northwestern Energy
• Josh Byrnes, Osage Municipal Utilities
• Mark Cayce, Ouachita Electric Cooperative
• Brian Arellano, PNM Resources
• Lizette Miranda, Sacramento Municipal Utility District
• Julia Hamm, Smart Electric Power Alliance
• Tom Fanning, Southern Company
• Chris Marshal/Doug Venjohn, Westar Energy
• Ben Fowke, Xcel Energy

They hail from twenty-nine organizations. Seventeen are investor-owned utilities. Eight more are from utilities - five public powers and three cooperatives. The remaining four are utility associations.

We received many nominations for distinguished innovators at other kinds of organizations in the electric, natural gas and water utilities industry. We wish we could honor them all. But we decided to focus here on individuals who are innovating at utilities. This hard decision made easier by NARUC's initiative that will do an admirable job honoring those innovating in utility regulation.

Back to the forty. Twenty-two of them are individuals in the employ of investor-owned utilities. Six of them are in the employ of public power utilities. Three are at electric cooperatives.

Six are at that one association of utilities that is almost synonymous for innovation, the Electric Power Research Institute. When we saw the nominations, it was impossible for us to select a fewer number.

Three are at other utility associations - the American Public Power Association, the Institute for Electric Innovation (a good name!), and the Smart Electric Power Alliance.

Six utilities also scored multiple innovators. Ameren, CMS Energy, Edison International, Entergy, Exelon and the New York Power Authority had two of their people make the list.

There are five names on the list that everyone knows - Tom Fanning, Ben Fowke, Julia Hamm, Mike Howard, Lisa Wood. But there are thirty-five others that few of us have heard of, until now. Like that slick shortstop on a small-market team, that can hit with the big boys, these thirty-five are about to step from relative anonymity to the world stage, as members of the 2017 Fortnightly Top Forty Innovators.

There's a good demographic mix. Among the forty is Darron Scott, who works for the Kodiak Electric Association, in the forty-ninth state. Also among the forty are Earlynne Maile and Lani Shinsato, who work for Hawaiian Electric, in the fiftieth.

Yes, I know. We cheated. We counted Earlynne and Lani as one; they work so closely together at Hawaiian Electric. We cheated as well with John Carmody and Rick Edwards of Northwestern Energy; they're also a tight team. Plus, Chris Marshall and Doug Venjohn of Westar Energy; another tight team. Earlynne and Lani. John and Rick. Chris and Doug. Three pairs of innovators. Each we were compelled to count as one.

We got Californians - Vibhu Kaushik and Erik Takayesu of Edison International, and Lizette Miranda of Sacramento Municipal Utility District. We got New Englanders - Lee Olivier of Eversource, and Carlos Nouel of National Grid. From the northwest are Sarah Edmonds of PacifiCorp (Berkshire Hathaway Energy), and the aforementioned John Carmody and Rick Edwards of Northwestern Energy.

From the Great Lakes states, the top innovators are very well represented. We got Jeff Fleeman of American Electric Power (much more on him below), Andrew Bordine and Holly Bowers of CMS Energy, Sonya Harbaugh and Brian Hoff of Exelon, David Ranallo of Great River Energy, and Dave Monte of NiSource.

Top innovators from the Midwest are very well represented too. We got Steve Ewens and Alex Rojas of Ameren, Josh Byrnes of Osage Municipal Utilities, Mark Cayce of Ouachita Electric Cooperative, and the aforementioned Chris Marshall and Doug Venjohn of Westar Energy.

Of the forty, eleven were women (or a pair of women). And twenty-nine were men (or a pair of men). We would not be surprised if the 2018 Top Forty and 2019 Top Forty have a greater percentage of women than twenty-eight percent.

Well, let's get to it. Check out the important new products, services and methods that the Top Forty has invented and advanced. See how they're impacting our industry and society.

They Developed Firsts

Jeff Fleeman championed the game-changing transmission technology that his company AEP calls Breakthrough Overhead Line Design or BOLD®. We were so impressed by its advantages in performance, cost and siting that we're including Lisa Barton's nomination letter directly following this article.

Steve Ewens and his team at Ameren developed the world's first underground spent fuel storage facility at an operating nuclear power plant.

Holly Bowers championed the development of a natural gas compressor that solved a low-pressure issue during peak fall usage, avoiding a nine-million-dollar pipeline project. Through her leadership, Consumers Energy is one of the first utilities to own and operate a natural gas compressor on a distribution system (versus a transmission system).

Vibhu Kaushik led a team to develop the world's first battery and gas turbine hybrid system at two existing Southern California Edison peaker sites. The system responds immediately to grid needs through the use of utility-scale battery storage while an enhanced gas turbine ramps up.

Jessica Fox, at EPRI, created and manages the world's first interstate trading program for water quality. And this program isn't small potatoes. It's gigantic, the Ohio River Basin Water Quality Trading Program. Talk about proof of concept. It's supporting the adoption of agricultural conservation practices to reduce nutrient loads of nitrogen and phosphorous in Ohio River Basin waters.

Chris Marshall and Doug Venjohn of Westar Energy, are paired because their work is paired. Shall we say their awesome work. Chris and Doug and their team developed a Swiss Army knife of high-voltage transformers - a flexible, multi-tap, high-voltage transformer that could be optimally located, easily transported and rapidly deployed to any of the key substations. Wow.

Remember that most challenging of grid security problems that faces the industry? In which transformers are so different from each other and so difficult to replace? Well, Chris and Doug applied their ingenuity to the problem and engineered a compelling solution.

Very High Tech

Andrew Bodine championed the use of drones for inspections of electric lines, wind turbines, etc. at his company, Consumers Energy, one of the first utilities to receive its FAA 333 exemption for drone use.

Maria Guimaraes and her team at EPRI are pioneering vertical climbing robots to inspect large concrete structures such as at nuclear and hydroelectric plants.

Andrew Phillips and his team at EPRI gave birth to Ti. The robot's name is It spelled backwards; don't know if Andrew thought of that. On transmission lines, Ti literally crawls over conductor shield wires, harvests power from ambient energy sources, and does high-fidelity condition assessments of the lines. Really, science fiction meets reality. There's even a safety impact. We frail humans don't need to go up the poles to do these assessments nor buzz the lines with helicopters to check them out. 

Augmented reality is great for games. But John Simmins and his team at EPRI are putting AR and other wearable tech to work in the real world to keep the lights on, such as in storm damage assessment.

Changing the World

Lauren Weinrich of American Water has served as the project manager for a joint research project with Drexel University to investigate ways to predict and reduce a major challenge in desalination.

EPRI's Ron Domitrovic and his team are leading the research that could improve the heating and cooling efficiency in as much as ninety percent of homes in the U.S. Particularly the next-gen heat pump with a variable-speed compressor.

Mike Howard works at EPRI too. Well, actually, he directs it as the CEO. But the Top Forty isn't a lifetime achievement award or an honorary for famous names. Mike has pushed EPRI to unprecedented performance, as might be measured in the sheer quantity of research, or more importantly in the impact of EPRI research on our industry and society.

Though actually that's not why we're putting him on the list. Mike - more than any one individual - drove the industry to think in terms of integration. For decades, we all considered the industry in three somewhat separate buckets. Generation. Transmission. Distribution. They were connected, sure, but still separate in their character and challenges. And there wasn't really a fourth bucket. Customers? Oh, that was where we dropped off the product - electricity - as if we were a FedEx deliveryman leaving a package on the porch.

Mike, with a whole lot of help from thought leaders within and outside EPRI, committed us to the integrated grid. He picked up the three buckets, metaphorically, and found the fourth, and poured them out into a common pool. In everyone's minds, the industry is now a single integration of supply and demand and connections betwixt them.

Lee Olivier has a cool title at Eversource Energy. He's an executive vice president, for strategy and business development. But what he's doing now to impact our future is cooler.

Lee is driving the development of the - by far - largest offshore wind farm in U.S. waters. Bay State Wind, in partnership with Danish Oil and Natural Gas Energy, is planned to have two thousand megawatts of badly-needed New England-based generating capacity. If you're in the transmission biz, you already knew Lee has many successful transmission projects on his resume. And you'd agree that if there's one guy who can make this all happen, it's him.

Carlos Nouel is vice president of National Grid's team to pioneer utility 2.0, 3.0 and beyond, dubbed New Energy Solutions. He is leading the charge (ha!) on the Fruit Belt Neighborhood Solar Partnership, Clifton Park Smart Meters and several other projects and demonstrations in upstate New York and New England.

One can praise the work and impact of Julia Hamm, of the Smart Electric Power Alliance, at length, and still fall far short of sufficiently appraising her leadership and how she's moved our industry. Where to start?

Perhaps by saying that she is a remarkable entrepreneur in crafting coalitions and associations. Doing this, she has developed a broad consensus on what the industry's future might look like. Julia came up with a name for that vision - the fifty-first state. As if there was a new state, a fifty-first state, and we could design an optimal electricity industry from scratch. It's been a highly-effective thought experiment, to get everyone to think creatively about our options and future.

Ben Fowke, Xcel Energy's CEO, is Mr. Wind in our minds and so a worthy member of the list. Ben has transformed and is further transforming Xcel Energy into a powerhouse of zero-carbon generation, mainly wind farms, paired with low-carbon generation, mainly highly-efficient gas plants. Indeed, some of his wind farms in the very windy middle of the country have reached down and passed below the cost of fossil fuel-based generation. Hence Xcel's strategy and motto of trading "steel for fuel."

Innovation is Cool

Alex Hofmann created eReliability Tracker or eRT for the American Public Power Association where Alex works. The patented eRT is used by more than four hundred utilities to collect, categorize and analyze outage data.

Sarah Edmonds has pioneered PacifiCorp's participation and refinement of the Western Energy Imbalance Market. This was a challenging project involving large changes in operations, technologies and regulation.

Here's another neat title. Brian Hoff is director of corporate innovation at Exelon. He apparently earned the title by launching and being the driving force for innovation at the nation's largest utility.

But we really wanted to put him on the list because his humongous Exelon Innovation Expo - featured in August's Public Utilities Fortnightly - was the inspiration for Fortnightly Top Forty Innovators. Brian and his team taught us how important it is to recognize and celebrate individual innovators in our industry.

Sonya Harbaugh is a principal in the distributed energy development group at Constellation Energy, an unregulated sub of Exelon. Sonya founded a new business accelerator there. Among its first achievements was development of a digital electric vehicle adoption platform - very creatively called EZ-EV - that is now live and selling cars.

It wouldn't make any sense to not list Lisa Wood, executive director of the Institute for Electric Innovation, in any honor roll of top innovators. We can think of a number of reasons why Lisa easily makes the Top Forty. But one stands out to us.

Lisa has been a tireless promotor of the need for partnering. That is, the need for utilities to team up with tech companies and other groups pushing the envelope. Her campaigning for partnering has had a huge effect. Indeed, one utility chief exec told us that the best ideas are the best whether they come from within his company or from outside.

Darron Scott is a CEO, but of a cooperative that is located thousands of miles from most of us, up at the Kodiak Electric Association. The cooperative is actually on Kodiak Island, off Alaska's coast, with a population of fifteen thousand. Most of its grid's twenty-five megawatts of generation comes from hydro and wind.

Recently, the City of Kodiak and Horizon Lines decided to replace a diesel-fueled port crane with an electric crane. No way could this microgrid handle the fluctuations in demand from the relatively large load. Darron got together with ABB to install two one-megawatt fast-acting grid stabilization generators, saving a lot of diesel fuel and a lot of money.

Now let's talk about the inseparable pair of John Carmody and Rick Edwards at Northwestern Energy. John is director of asset management at the utility. Rick is director of community connections (a cool title). John, Rick and their team went practically overboard in involving all stakeholders in co-designing the Northwestern Energy of the future. The resulting distribution system infrastructure plan - to attack aging infrastructure and modernize it - was jointly crafted by the group. Collaboration, as is often the case, led to cooperation, and the plan is progressing to implementation.

Brian Arellano and his team at PNM Resources developed the PNM New Mexico Operations Substation Test Lab. It addresses a big challenge that PNM has faced. There is a lack of proven technologies that allow remote access to geographically-dispersed substations and equipment. This is an acute problem in PNM's footprint in sparsely populated New Mexico and west Texas.

When the lab was completed, processes that used to take an entire day in some instances because of travel time now take only minutes. Already the lab is playing a critical role in placing cyber assets on the PNM bulk electric system behind firewalls, at more than fifty transmission facilities.

You cannot have a serious list of the industry's top innovators without Tom Fanning's name on it. One of the most influential thinkers and doers we've had the privilege of seeing in our careers. Should we cite his insistence and persistence to revive the nation's nuclear industry? Or how about his courageous work to combat climate change with carbon sequestration? Or his dedication to research and development at, uniquely, Southern's own extensive labs (as well as at EPRI)?

Let's not go that way. Let's instead base his inclusion in the Top Forty on his truly tireless leadership (and we do mean truly tireless) in early and ongoing development of the Electricity Subsector Coordinating Council.

The vital group literally protects the nation's electricity systems from the traditional threats of natural disasters and the emerging threats of cyber and physical attacks, coordinating with the government, the International Brotherhood of Electrical Workers, and first responders. The thing is, Tom's not just involved in the ESCC. He is totally all over it. We're grateful for his service and patriotism and all those on the ESCC team.

Industry Transformation? On It

Alex Rojas and his team at Ameren developed one of the only utility-scale microgrids that also has the ability to serve live customer loads.

Erik Takayesu led the team at Southern California Edison (of Edison International) that developed the plan to modernize the grid and operations to accommodate customers adopting rooftop solar, battery storage and electric vehicles.

Randy Hickman of Entergy worked with Louisiana State University to develop a smart network protector to automatically (without manual intervention) allow renewable generation to connect to downtown networks without tripping the network protector when there is more power generated than load drawn.

David Ranallo is manager of marketing and member services at Great River Energy, a Minnesota cooperative. David is totally passionate about electrifying the nation's transportation sector. He's all over electric vehicles. He "drove" the Revolt program so consumers could fill up their electric cars with wind power, the Electric Room at the Twin Cities Auto Show, and a large-scale electric school bus pilot. Then there's Plug Into MN, an EV charging corridor from the Twin Cities to Minnesota's north shore, and David's push for adoption of on-road and off-road commercial and industrial equipment like forklifts.

They're a pair, Earlynne Maile and Lani Shinsato of Hawaiian Electric. It was impossible to separate the innovation and achievements of Earlynne, manager of distributed energy resources operations on the islands, and Lani in her department (actually it's Kaiulani, but Lani for short).

Let's start with the challenge. Thirty percent of single-family homes there have private rooftop solar. Thirty percent! To address this unique situation, Earlynne and Lani developed and launched this fall an online and first-of-its-kind Customer Interconnection Tool. Next up for this dynamic duo, a new Smart Export Program to provide incentives to rooftop solar customers who export energy only during the evening peak and support grid stability.

Emilie Bolduc's team at the New York Power Authority is undertaking the unprecedented digitization of customer data (dubbed the New York Energy Manager).

Ricardo DaSilva's team at the New York Power Authority is developing a broad digital hub for utility operations in one common space (dubbed the Integrated Smart Operations Center).

Mark Cayce is the general manager of Ouachita Electric Cooperative. It's far from the largest electric utility at around seven thousand customers in rural central Arkansas. But it's a leader in utility-scale solar.

Mark worked with the largest industrial customer Aerojet Rocketdyne, project developer Silicon Ranch and Arkansas Electric Cooperative Corp. (Ouachita's power supply cooperative) to build a twelve-megawatt solar system. The industrial customer got a purchase power agreement with a low fixed-cost. Ouachita customers got around half the capacity and energy, and most importantly, lower cost as well. 

Helping People

David Hood leads Austin Energy's Multifamily Low-Income Weatherization Assistance Program, targeting hard-to-reach apartment renters in affordable housing developments. The program is uniquely market-driven with incentives for contractors and property managers.

Shannon Watts of Entergy developed a vertical switch safety restraint to prevent high-voltage and extra-high-voltage switches from coming loose and dropping when opened for maintenance, to protect people working in a substation where switches are routinely opened to isolate live circuits.

Bud Ajdukovic doesn't work for the largest utility. But perhaps Kissimmee Utility Authority - with seventy-four thousand customers - is one of the happiest, as it serves the Walt Disney World area. Bud implemented a virtual call center to promote work from home and a program (called Mentor, as in Matching Employee Numbers to Operational Requirements) to throttle staffing in accordance with customer call volumes. Employees are happier, as befits its proximity to Disney World. And customers are happier too, because their calls are better taken, and because utility costs are well-controlled.

Dave Monte is a senior vice president of NiSource. His portfolio includes safety, environment and training. Ok. But Dave is absolutely obsessive about safety, like many of his counterparts throughout our industry. Recently he and his team really went after the plague of distracted driving, with greatly stepped-up driver training and integrated GPS/diagnostics. Now, they've constructed an outdoor Emergency Response Safety Town, for training. It's a mock neighborhood with mini-homes and businesses and underground utilities and meters.

Readers will recall Josh Byrnes, the general manager of Osage Municipal Utilities, who we wrote about in the Nikola Tesla Corner feature of September's PUF 2.0. He really cares about the kids in his area of all academic and socioeconomic backgrounds. Josh provides utility facilities to Iowa Big North, enabling students to work on engaging projects alongside adults from local businesses. 

Readers will also recall Lizette Miranda of Sacramento Municipal Utility District, who we also wrote about in that Nikola Tesla Corner feature. Lizette runs the SMUD Career Ambassador program to reach the nearly four hundred schools in the utility's footprint. She increased the number of Career Ambassadors to almost three hundred and expanded the hands-on activities for the kids to make a bigger impact on them.

Shout-Outs

The nominations for a number of the Top Forty included shout-outs to key team members:

Ameren: Richard Lutz, Corey Jutting, Elizabeth Ptasznik, Michael Corbin, Christopher Graham II, Jon Schaffner, Jay Skitt, Edward Stewart, Ricky Brummet, Dan Muhleman, Darin Quayle, Eric Birkner, Nicholas Torpea, Rodney Hilburn, Rodger Koester, Robert Riegler, Tamer Rousan, Chad Raley.

APPA: Mike Hyland.

Austin Energy: Jaime Gomez, Jack Pittala.

Berkshire Hathaway Energy: Natalie Hocken, Christine Kirsten, Joseph Hoerner.

CMS Energy: Nate Washburn, Matt Henry, Amanda Monette, Dean Baker, Paul Wolven.

Edison International: Matthew Zents, Terry Maddox, Jose Salazar, Janet Combs, Samantha Nelson, Ranbir Sekhon, Al Laven, Casey Scott, Amber Wyatt, Kishore Billapati, Allen Kelinsky, Jason Collette, Anita Shu, Erjiang Sun, Jason Edwards, Brent Buffington, David Balandran, Kelly Henderson, Brandon Tolentino, Nathan Todaro, Tyson Laggenbauer, Eric Nunnally, Roger Salas, Dhaval Dagli, David Castle, Shinjini Menon.

Entergy: Michael Gray, David Chemin, Dennis Dawsey, Jim Schott, Jason Brown, Mark Bruckner, Willie Wilson.

EPRI: Baskar Vairamohan, Tom Reddoch, Becca Madsen, Sal Villalobos, Randy Manley, Paul Weeks.

Kissimmee Utility Authority: Terrance Farley

National Grid: Fouad Dagher, Brian Cronin, Brian Schuster, William Jones, Robert Sheridan, Arunkumar Vedhathiri.

NiSource: Mark Chepke, Dave Varwig, Marie Walker, Martin Zain, Jaquelyn Lange.

Northwestern Energy: Curt Pohl, Mike Cashell.

PNM Resources: Daniel Espinoza, Robert Landavazo, Aaron Redd, William Watkins.

PUF's Steve Mitnick: What's the goal of the NARUC innovation awards initiative?

Brien Sheahan: The Task Force on Innovation is proud to provide an opportunity to highlight and recognize the innovative work of various leaders in the public utility sector. The awards are a result of FERC Commissioner Rob Powelson's vision and leadership and complement his focus on encouraging innovation.

We believe that the utility industry will change more in the next ten years than it has in the last one hundred years, and it is important that we distinguish pioneers and trailblazers who are leading the way. This is a unique opportunity for NARUC members to nominate their colleagues and peers, and to celebrate innovative thinking. NARUC is the perfect forum for regulators to share best practices, and for utility and regulatory innovators to receive national recognition for the work that they are doing.

PUF's Steve Mitnick: Are commissions becoming significantly more innovative? If so, what's driving the trend?

Brien Sheahan: Many state commissions are driving innovation in a variety of ways and Commissioner Powelson's leadership has certainly been critical in encouraging state regulators to challenge their staffs, stakeholders, and utilities to leverage technology to increase value for society.

At the Illinois Commerce Commission, we believe that innovation is central to executing our mission to balance the interests of consumers and utilities to ensure adequate, efficient, reliable, safe and least-cost public utility service.  But innovation is not always outside the regulatory sphere. Earlier this year we launched the first strategic planning initiative in a decade and a half to ensure that the ICC remains a thought leader and is aligned with the challenges presented by a rapidly changing utility landscape. We plan to review ways to streamline our procedures, statutes and rules, and identify and prepare for emerging trends in policy, including reliability, resiliency, cyber and physical security.

We recently approved an initiative to allow electronic tariff filings, for example, and we're systematically looking at eliminating all paper filings with the goal of improving efficiency and ensuring transparency for stakeholders and the general public.

Additionally, we have convened a Rules Review Task Force, comprised of utility representatives and consumer advocates, which is collaboratively reviewing the ICC's Administrative Code to determine what rules are outdated or obsolete, and what rules are cumbersome or impede innovation. The Task Force will produce a priority list of rule changes that the agency will initiate in the near term, and it has become a model for similar reviews elsewhere in state government.

The Future Energy Jobs Act passed last fall has been described as the most significant energy legislation in a generation. It demonstrates the state's leadership in integrating renewables and DERs into the grid, and its commitment to energy efficiency and the environment. 

An important component of the law is zero emission credits, which fairly value the environmental attributes of zero-emission power generation and allow Illinois to continue to leverage its nuclear fleet, the largest in the nation, to provide carbon-free generation. 

There is also dramatically more funding available for new energy efficiency, wind and solar development. In an important shift, energy efficiency spending becomes a regulatory asset. It is pegged to cumulative persistent savings, rather than year-to-year spending, which will incentivize long term investment in our communities. The impact on rates is capped to protect customers by ensuring that the total electricity bill impacts attributed to the law are relatively modest.

Another major initiative, launched in September, is NextGrid, Illinois' utility of the future study. This exciting project will build on the state's already impressive leadership in energy policy and investment in smart grid technologies. By next year, Illinois will have nearly six million deployed smart meters and a more intelligent network, which will become the foundation for the next generation of advances in distributed generation and storage, demand response, energy efficiency, interconnected smart devices and appliances, microgrids, electric vehicles, and big data and analytics. A collaborative consumer-focused study, NextGrid will culminate in a final report that we hope will serve as a benchmark for the industry.

Illinois has a rich history of innovation in this industry, beginning with Samuel Insull's invention of the modern public utility in Chicago in the late 1800s, to the Future Energy Jobs Act adopted last fall. We are beginning to see a shift in perspective from other states and commissions around the nation as well.

PUF's Steve Mitnick:Is there a natural connection between innovative organizations and diverse organizations?

Brien Sheahan: There is an enormous body of research that establishes a connection between diverse organizations and increases in creativity, innovation, and productivity. As the most diverse state public service commission in the nation, representing one of the most diverse states in the United States, we also have an obligation to be both diverse and inclusive; those concepts are not the same. We are being very intentional about it.

Creating a culture of diversity, inclusion, and innovation is essential to recognizing and seeking out opportunities to improve our organization and position it for the challenges ahead.

Innovators must have the courage to try new approaches, experiment with new technologies, and drive change. If we want to keep up with the relentless tide of technological change and serve customers in new and better ways, we need to attract diverse talent who can bring new perspectives and energy to the table.

PUF's Steve Mitnick:How is the public interest served by commissions and utilities becoming significantly more innovative?

Brien Sheahan: Innovations and breakthroughs in energy production, distribution, and consumption are coming not from regulated utilities and the regulatory paradigm that has overseen them for a century, but rather from entrepreneurs, start-ups, and industry disruptors who care little about the status quo. 

Innovation does not exist by itself. We have a responsibility, in the public interest, to ensure that utilities make the best use of new and innovative technologies and processes to maintain reliability and resiliency, reduce costs, positively impact the environment, and create efficiencies.

We also have a responsibility to the people of Illinois to ensure that we maintain the economic balance we are entrusted to safeguard. We must make sure that utilities live up to their obligations, remain healthy, and attract long term investments to the state for the benefit of our citizens and utility customers.

PUF's Steve Mitnick: Tell us about your philosophy of innovation, and what EPRI's role is in this industry's innovation.

Mike Howard:A very important part of what EPRI does is look over the horizon at what are the drivers of change. Clearly, one of those drivers of change is the acceleration of innovation that's occurring.  I use the word acceleration purposefully.

If you look at the industry over the last twenty-five or thirty years, we did a study to look at how innovation has changed over time. I asked the question, "How do you quantify the change in innovation?" We all know it's happening and we see it. We looked at both U. S. and international patents going back to the 1900s. Looked at peer-reviewed journals and so on.  Looked at how long it took to get a product from conception to maturity in the marketplace. We looked at a lot of things and the conclusion of that is what I call twenty-five to eight.

That means if you look at the innovations that have occurred over the last twenty-five years, including the iPhones, the cell phones, all the different things that we use on an everyday basis now, that same amount of innovation is not going to occur again over the next twenty-five years, meaning the pace of change is not linear. 

Instead, it has accelerated.

That's why I use the phrase acceleration of innovation.

It's going to happen, not over twenty-five years, but rather over eight years.

If you look at what has changed and why over the last twenty-five years, you'd say wow.

We'll see the same degree of impact occur over the next eight years. 

That requires EPRI to be in a very special place to think about what's occurring, why it's occurring, and what are the technical issues, the discoveries that are critically important to help drive this change.

What will help drive the acceleration of innovation? We must work with universities and small businesses, and even with international companies and global companies that are on the leading edge.

That is so we can factor that into our thinking of what's important to ensure reliable, affordable, safe, and environmentally responsible electricity for society.

EPRI's role in that is extremely important.

We don't invent many of the innovations applied in the electricity sector; we have to make sure we understand how various innovations impact safe, reliable, affordable, and environmentally responsible electricity for the public.

This has been at the heart of EPRI's work over the last forty-five years.

It's what we do. 

A lot of times, when you look back at the innovations that we have been involved in at EPRI, it's not one plus one is two.

It's usually where you have some innovation here, then you have an idea there. 

You match that up with a problem that we're tracking in the industry, so that at our advisory meetings we come together and someone says, "Well, I'm having this problem with my circuit breaker." We connect an innovation with an identified problem, then help identify the optimal technical and economic solution.

Many times, that means the innovation needs to be demonstrated to show that it works properly and as intended over some longer period.

A sequence of things must occur. 

You come up with an idea; you come up with an innovation.

You have a problem and you have to go and demonstrate it and then tweak it again.

Many times, the innovation occurs during the tweaking that you do during the demonstration and that leads to an ultimate solution. 

PUF's Steve Mitnick:How does EPRI work with all those other organizations involved in innovation? Utilities, startups, larger vendors, national labs, academia?

Mike Howard: It is critically important that we work with national labs and universities, as well as with utilities and even small businesses.

There are people with great ideas that are trying to get things off the ground. 

We understand the problems that utilities are trying to solve.

There may be some unique material that's being developed at the national lab, but can it be applied beyond the bench? We have a national lab that is really good at basic and fundamental materials research, and EPRI can take that work to solve real-world application.

That's the match that we can bring. 

When we conduct R&D, we collaborate with each other and with utilities so that everyone learns from the experience.

When we solve a problem, the learnings can be applied to many utilities.

Leveraging this collaborative R&D model is a win for customers, for society, and for utilities. 

It takes networks of people and organizations to come together to solve a problem economically.

We're right in the middle where we work with everybody. We play a critical role.

American Electric Power Chairman, President and CEO Nick Akins has volunteered for many other responsibilities. He serves on the boards of the Nuclear Energy Institute, the Global Sustainable Electricity Partnership, and the U.S. Business Roundtable. He is a civic leader in Columbus, Ohio, serving on the boards of The Columbus Partnership and the Columbus Downtown Development Corporation. Finally, he serves on the boards of Nuclear Electric Insurance Limited, OhioHealth, and publicly-traded Fifth Third Bancorp.

Tom Linquist:Last but not least, and very cool indeed, you serve on the board of the Cleveland-based Rock and Roll Hall of Fame and Museum.

Nick Akins: I do. That's the one I get asked most about.

Tom Linquist: Let's discuss the enablers - and barriers - to innovation. What specific areas affect American Electric Power from a strategic or financial standpoint? What are the potential innovations on the horizon that could be opportunities or threats?

Nick Akins:We are an industry that's transforming considerably, and our industry is focused on three primary components. The first is development of the infrastructure that supports the interaction with the grid. The interoperability of different types of components and different types of technologies.

We're also focused on many other aspects of what's going on with the industry in terms of rehabilitation of the grid, cyber security, and physical security. Those are technological components that are being added that weren't there before.

The second is this whole notion of interoperability and what role the utility plays. This is extremely important. It really goes to the fact that we've always been a system that was built around one-way flow of power.

Data flow was very limited from power generation where we made the product, then transmission to transport the product and distribution where we distributed the product. The customer interaction side was very limited as well. Customers really couldn't make decisions about how they wanted to use the product that we delivered.

Today it's vastly different. You're seeing partnerships develop. Utilities are focused on making sure that not only is there bidirectional flow of power and energy but also bidirectional flow of data. The big data analytics and those solutions are driving opportunities for us to analyze the data from the energy grid on an instantaneous basis and make adjustments that need to be made.

The third component is the additional distributed resources that are being added to the grid. There's no doubt that we're going to see a new focus on renewable technologies and storage technologies. Also ensuring that we're able to utilize the grid in very different ways to optimize power flows.

For this industry, these areas have enabled us to focus on the customer experience side of things. I think that you're probably seeing a transition of the industry to a more customer-centric focus on the way they use our products, to make sure that there is that ability for customers to choose different types of resources, and the way that they use the product itself.

This is vastly different than a purely asset-driven focus. This has really come with a cultural change too. From a culture and approach dealing with assets and making sure that they're built on time and on budget, to a culture and approach of addressing customers' needs as a central focus of your business.

Tom Linquist: It seems that this innovation creates an opportunity to engage people and ignite their interest. What has been your approach to building a culture around a tremendous amount of enthusiasm? Who is at risk of getting left behind in your organization in this context?

Nick Akins:As a CEO, you must be visible, and employees should hear your message of where you want the company to go. But I also believe the converse is true. You hear a lot about the CEO being the force multiplier for the organization in terms of its ability to move forward.

I really think about it in reverse. I think the force multiplier is the energy of people who are thinking about what the future holds and about their own business and how innovation can impact it. If it's consistent with the strategy of the company, then there's a lot of excitement that's generated around that.

And getting back to your point earlier, about who is at risk of getting left behind. When we started our lean activities years ago, we would have groups of people in power plants, groups of people in our distribution organization, and they'd be looking at certain processes.

They're looking at opportunities for improvement, and they as a team start those processes. Well, probably half of the people are saying, "Okay, this is a fad that's going to go away. Just another thing that's going to have an impact on us, and we'll get past it and move on and do the same thing we're doing."

You have those people who are parked on the side. They're not ready to engage. But by and large as the process continued, you'd see more and more people become engaged, because they say, "Well, wait a minute. My counterparts are getting together to talk about these things, and these things are actually getting fixed."

And I've had thirty-five and forty-year employees be visibly emotional to the point of crying, saying, "I have never experienced something like this at this company." That's what you want to hear. 

I've heard it several times, and it's because they finally see that their ideas are being adopted and discussed, and they are in control of running their part of the business. It makes a heck of a lot of sense. You get ownership, you get credibility, you get excitement, you get all those kinds of things.

And another point I'd bring out is for the young people coming in the organization. They've grown up with computers, with apps, with everything else. I go to many of these report-outs myself, because I really want to stay visible from that perspective.

You'll have a young person say, "Well, you know, I've had an app that I was using. I can use the app for this particular function," and the other participants are in awe. I'm also in awe because you're seeing the introduction of new technologies that the average employee wouldn't know about.

That's starting to become the norm, to have those kinds of options on the table. As we continue to develop, we've developed a strategic IT function, together with our business units, to really focus on what can tomorrow bring to us.

Tom Linquist: Is the 'force multiplier' you describe evident in Spark Tank? Please tell us about Spark Tank.

Nick Akins: Yes, the force multiplier was really around innovation, and it was around ideas, and we do indeed have a program called Spark Tank. It's a take-off on Shark Tank; bringing ideas in on how we can really drive innovation to focus on the customer experience.

Actually, awards are given out. We had six hundred employees, many in teams, submit four hundred and fifty proposals. There were about a hundred and seventy that were evaluated by our Technology Council. The Council narrowed it down to eight finalists. We announced the winner and runner-ups September 21.

Two of the finalists' ideas are being used in our innovation area within Smart Cities Columbus, so it has been a positive thing for the employees. It's like the Google teams that come together and focus on solutions. The winners selected for the Smart Cities Accelerator focused on EV charging stations and smart street lighting.

Tom Linquist:Let's shift gears to you and your dedication to giving back by using your talent as a musician. Perhaps it is not widely known that you are an accomplished drummer. You and several other CEOs in Ohio have given your musical talent and time to charitable activities.

Nick Akins: Yes, I play in a couple of bands for fun and to raise money for charitable causes. One band includes a fellow board member from The Rock and Roll Hall of Fame, George Barrett, who is also the CEO of Cardinal Health.

The band also includes Greg Harris, the president of the Rock and Roll Hall of Fame, as well as Dr. Michael Drake, president of The Ohio State University. The other band includes George and Michael as well, plus Joe Hamrock, the CEO of NiSource, and others. That band is called the Power Chords.

Tom Linquist: I covered the Power Chords at their Thursday, September 28 evening gig fundraiser for the Mid-Ohio Foodbank in Grove City, Ohio, outside Columbus. We were joined by multi-instrument virtuoso and CEO of NiSource, Joe Hamrock.

The CEOs and executives in the band showcased the creativity of industry leaders that's usually obscured by the conservative role associated with their positions. On closer examination, there's always much more than meets the eye.

Nick Akins and his bandmates have day jobs leading the utility and health industries, higher education and historic preservation. A rock band typically conjures up different professional expectations. But given the extensive skill sets necessary to successfully lead in the corporate world, the versatility of the band members should come as no surprise.

PUF's Steve Mitnick:What's happening on the innovation front at NYPA?

Gil Quiniones: If you really look at history, NYPA has always pursued innovation. It started in the '50s, when the company built the first large hydroelectric plant, the first large-scale renewable unit in New York: the St. Lawrence-FDR Power Project, and then the Niagara Power Project.

NYPA also built a 765kV line connecting the U.S. to Canada. We're the only utility that owns and operates a 765kV line here in the states. We've always been innovative. Today the innovation really is centered around the customer and around the edge of the grid.

We've noticed that even earlier on, five or six years ago, our team saw that this utility landscape was changing. From the old grid where you have big power plants, transmission, distribution, and customers, a one-way flow, to a more integrated bi-directional grid. With customers at the edge being able to produce some of their power, whether it's from solar or from other sources, and inject power back into the grid.

It was a change that we saw in the grid, and something that we adapted. We told ourselves, "We need to be ahead of this change. We need to create value and provide value to our customers to remain relevant."

PUF's Steve Mitnick:How do you stimulate and make this a more Silicon Valley kind of company?

Gil Quiniones:First we try things out. We create an environment where it's okay to fail. It's okay to try things out and fail fast, and iterate and get better. That's a culture that we've really encouraged here and we've really supported at the Power Authority.

You will see all across the Power Authority, up, down, out in the field, here in our headquarters, various groups of employees trying things out and innovating. Really making new ideas flourish. That's one way of doing it.

Another way of doing it, is to say that we have this vision. We want to be the first end-to-end all-digital utility. That is a rallying cry. It's a vision that we're trying to inspire in everybody. That's our true north, as we implement Governor Cuomo's goal of ensuring that fifty percent of New York State's energy comes from renewable resources by 2030.

PUF's Steve Mitnick:How do you attract younger people who want to come here and buy into that?

Gil Quiniones: We get the best and the brightest because we have the combination of being a very innovative company that exists solely for the benefit of the public. Our mission is very special.

What we do benefits New Yorkers every day, all the time, and immediately. All this cool stuff that we do in the power sector, cool projects that we do with our customers, actually benefits New Yorkers, and benefits the public.

We don't exist for profit motivation or driving our stock price and reporting our results quarterly to Wall Street. Our success is measured by whether businesses here in New York stay in New York, create jobs in New York, and invest capital in New York. That's how we measure our success.

PUF's Steve Mitnick: Do you see more innovation happening?

Gil Quiniones: Absolutely. I'll give you a success story about our Niagara Power Project. We encountered a couple of failures of our generation step-up transformers in our upstate plants.

Our engineers figured out that there has to be a way to continuously monitor our transformers. If and when there's trouble, and just before they fail catastrophically, we can shut the unit down. Now we have that system. It's been built from the ground up.

We partnered with a company from Israel, mPrest, who has this technology. Now think of it as a continuous MRI system that monitors our transformers. Now we have full control of how they work, and we know exactly what the health of those transformers is like, all the time.

PUF's Steve Mitnick: How are these utilities that you work with creating a culture that nurtures, stimulates, and sustains innovation?

Kevin Fitzgerald: The secret is that it starts at the top. It starts with the CEOs in the industry that are looking at and investigating the future and the technical issues that are associated with it. They're also looking at how they're organized and how the company functions in relation to those technological and business changes.

At the top of these organizations, we have tremendous leaders like Tom Fanning, Ben Fowke, Warner Baxter, John Pettigrew, and Andy Vesey. They are constantly looking at the future. They are challenging their people to think about how they do business today. They're also looking at whether there are any new technologies or approaches that should become part of the process that we have in place to deliver great reliability, great affordability, and sustainability to our customers.

That's the important part.

The next part is: How welcoming are companies below the CEO level to new ideas, new technologies, and new processes that may provide a benefit to customers, but may be done a little differently than in the past?

In a big organization, often there's a rub there.

There's tension because it's very easy to go about your job; if you're an engineer, you put feeders in place and re-conductor things.

Put up a substation the same way you've always done it.

The question is, are there new and better ways and new and better technologies that one can put in place to provide a better customer experience? That's the challenge.

You've got to meet your financial metrics and maintain financial discipline.

You need to meet your goals for investment, and your return to your investors, and it's very easy to do things the same way you've always done them.

That's the cultural challenge.

How do you move to provide the opportunities for those kinds of ideas, technologies and processes to make their way into the company?

PUF's Steve Mitnick: What are some of the ways that the leaders go about it?

Kevin Fitzgerald: Part of this is empowering people that are below the CEO level that have ideas, and showing the rest of the organization that what they're doing is important.

Tom Fanning at Southern Company does something which I think is brilliant.

He has some people that work in the organization on that tier below the president and CEO level, who focus on innovation.

Some of those people are involved with various projects with EIP and our portfolio companies.

They do segment analysis on various aspects of our industry.

Those people, in some cases, have been brought before their board to present.

Maybe it's a new technology, new business process, or new way of thinking.

What's brilliant about that, is it empowers a person in their job below the board and CEO level, and the president's level.

Number two, the word within a big organization then gets around that this person was in front of the board speaking on battery storage or on the evolution of digitization of the grid.

The organization sends a signal that they're not only talking the talk, but they're walking the walk.

They're allowing that person to do the work and present to the most important committee in an organization - which, in many ways, is the board of directors.

Tom's leadership and his style is open, so that sends a signal to the organization.

We're taking these things seriously and we get these board updates.

We need to be looking at these things and bringing some of these technologies forward to address how we do business today.

Particularly as it relates to customer focus.

That's one example.

Because I know Southern fairly well, it has been tremendous to watch.

Another one would be Ameren.

They have what they call the Ameren Accelerator, an innovative partnership with the University of Missouri System, UMSL Accelerate and Capital Innovators.

Its role is to assess, mentor and invest in energy technology startup companies.

Ameren CEO Warner Baxter established this.

Basically, they said, "Hey look, we want to engage with our local universities and communities." They're asking things like: How can we do business better? How can we serve our customers even better than we are today? How can we do it cleaner, efficiently, and affordably in the future? What new products and services are there that you, the customer, would like to see?

It's an earlier stage venture activity, to bring forward ideas and find ways to engage with customers and partners better. From a culture standpoint and getting into the organization, this also helps Ameren because lower level people work with the Accelerator and spend time with the entrepreneurs. They can help the startups while the startups help the Ameren managers and directors think and act in a more entrepreneurial way.

Finally, it's a good signal to send — we intend to be innovative in this evolving marketplace.

We're putting some money into this accelerator program.

Again, that was leadership from the top that also cascades throughout the organization.

Establishing a process and a program that signaled to the rest of the organization that we mean business about moving forward with cultural innovation.

Those types of activities, by engaging those types of discussions, really send a signal to the rest of the members of the company.

PUF's Steve Mitnick: Is it working?

Kevin Fitzgerald: If you go and look at the customer statistics, the ratings for Southern and across their system, they're always incredibly high.

I think they're going to remain high, if not go higher.

The same thing can be said for Ameren.

One way to measure that would be through customer satisfaction.

My sense is when you're engaging the communities and the customers as effectively as those two companies are, you're in a good position to make sure that metric is met.

Another great example where it's working is Avista. They have committed to encouraging and supporting employees who come up with new ideas and entrepreneurial ventures. Scott Morris, their CEO, has made sure everyone gets this idea and supports those who are creative. Scott and his team then make sure that they iterate quickly and focus on "what do we need to prove or test next?" That way they get to real answers sooner, and know if it's something worth a capital commitment. Look what that has got them, they started and incubated Itron before launching it and they did the same thing with Ecova. What might be next for them?

The other thing I would say is, it's going to take some time. This isn't a near-term process.

This will go on for five, six years or longer.

The utility of the future is a journey, it's not a destination.

Cultural evolution will continue throughout the life of the organization, to the extent that the leadership of Tom and Warner and others, like John Pettigrew at National Grid and Andy Vesey at AGL, continue to do their thing.

As they're challenging their people to be more customer-focused and to look for new products and services beyond the old kilowatt-hour sale, those programs and processes that are in place today will reap benefits in the future years.

It'll mean that five or six years from now it'll be a different structure with their processes and businesses, as each of those companies addresses those customer needs.

PUF's Steve Mitnick: You have a long and distinguished career in regulation. Tell us what you're doing now, how it's different, and how it's similar.

Wendell Holland: I decided to try a very uncommon approach to serve the public interest after I left the chairmanship of the Pennsylvania commission. I try to encourage the very utilities that we regulated to do business once again with Main Street banks - those banks on Main Street in the small towns that they serve.

That's the way business was done thirty or forty years ago, when I started in the utility business. Utilities did a large part of their financing with those banks who are headquartered in the service territories. Over time, the emphasis by utilities moved toward using the large global banks for finances, and we largely lost the benefit of using local banks for financing.

We have tried to encourage utilities to complement their facilities by using the local banks. We've thought that they can get largely the same pricing, but what it does even more, is improve the credit quality of their local banks. That's because the local banks do not otherwise have the ability to get investment grade loans in their portfolio. If they get an investment grade credit, it increases their Federal Reserve score, so, they can loan more.

When the local and community banks improve their credit quality, they can lend to local businesses such as Joe's Pizza Store, Harry's Barbershop or Steve's Pancake House. Those kinds of small businesses and their communities need and can use borrowing from banks.

PUF's Steve Mitnick: Somewhere along the way, more and more lending and banking business was done by the real big banks, maybe because some of the utility projects were very large. Maybe the needle went too far in one direction.

Wendell Holland: It went toward the side of the large global banks. We felt that there are numerous benefits in using local banks. As a regulator, I found that it's a win-win, not only for the local banks, but also for utilities.

It's a win for Main Street businesses and regulators. Regulators can legitimately encourage and strengthen local economic development through our financings. It's wholly within that jurisdiction.

The kind of financings that we do with utilities are those that I used to typically review when I was chairman and commissioner. Those very same kind of financings that we do now are with the local banks instead of the large global banks. That means regulators approving our financings with utilities and local banks are simply acting within their statutory authority to review and approve financings.

It's a win-win for regulators. It's a way for regulators to do a public good and provide a benefit that we think may have gone unnoticed in years gone by.

PUF's Steve Mitnick: If I've got two proposals and one has more involvement with local businesses and local banks, that's going to look better. Is that what you're saying?

Wendell Holland:They're at least equal relative to pricing. They're at least competitive. You scratch your head and say to yourself, "Boy, what extra bang we can get from using local banks." We say again it's the economic development aspect that our financings give.

I'm from Pennsylvania, and I've traveled from Erie to Philadelphia and from Pittsburgh to Scranton. There are many economically depressed areas in my state.

To the extent that I can continue to energize these communities by strengthening our local banks, I will. We've done these kind of financings, not just in Pennsylvania, but in many parts of the U.S., particularly in the old Rust Belt states where any means of economic development is encouraged.

PUF's Steve Mitnick: One moment you're sitting through hours and hours of testimony and proceedings, and then you've moved to a more advisory role. How did you make that transition?

Wendell Holland:It's very easy. I literally started in regulation on September 15th, 1980. I commuted from Philadelphia to Harrisburg to learn and improve my expertise. It's about a hundred miles each way. I did that for four years and three days.

I started at the bottom. I was an assistant counsel. I started to work my way up to where I wrote final agency decisions. Then, I started to try rate cases. My wife essentially said it was too much strain on the family. We moved to New York, and I worked as a special assistant at the New York commission under Peter Bradford.

This was during the mid-80s. Regarding utility budgets, we remember the mid-80s as high inflation and repeated rate cases, particularly in New York.

Commissions were faced with the question of prudence and prudence reviews. After being in Albany for three years, three months, and six days, I came back to the Pennsylvania commission as a judge and heard utility cases.

In 1990, Governor Casey appointed me to the commission for my first time around, and that was a truly remarkable experience. When I left, I had the benefit of sitting on public company boards and actually representing utilities. I got to understand how important finance is to utilities.

Inside the commission, we're overwhelmed and faced with law and policy issues. But on the outside, you understand that while law and policy issues are important, the real crux of what makes a utility go is finances.

I was alerted to that when I first left the commission. I went back to the commission when Governor Rendell became governor in 2003. I was appointed chairman. I had that sensitivity to financing and the financial aspect of utilities, but there I faced increased mergers and acquisitions activity.

In Pennsylvania utilities, I approved about seven major mergers and acquisitions. I had to implement the renewal portfolio standard in Pennsylvania. I started to witness the nascent renewable industry in its infancy.

I knew that I was going to leave. This is the heart of it. I knew that I was going to leave the commission in time, but I didn't want to do what many of my neighbor colleagues were doing. I say this respectfully. Many of my neighbor colleagues, to their credit, go to law firms, or they become government affairs people.

Some of them, like my friend Rob Powelson, go into higher political arenas. Theoretically, it's a higher position. I did that my first term out ten years ago. I left the Pennsylvania commission and became a partner at LeBoeuf, Lamb. I commuted from Philadelphia to Manhattan.

I started an international practice. Among other things, I wrote the energy treaty for the twelve states in southern Africa. I knew my second time out in 2008, that I wanted to do something different.

I wanted to take an independent and fresh look at things. I got a call, literally out of the clear blue, from Stan Garnett, and he said, "Wendell, we have this interesting concept of bringing more financing business from utilities to Main Street banks. Would you be interested?"

I said sure. He said, "Do you want to know who's on the team?" I played college basketball. I played many games at Madison Square Garden. I understood the whole concept of a team.

I understood that every basketball team needed a rebounder and a shot blocker, and a point guard. The team that Stan put together certainly had that. We had a Wharton MBA, and CFOs at two or three different major utilities. One of our partners, Doug Dunn, was the co-chair of the global energy practice at Milbank.

Another partner, Julie Cannell, is an analyst, and Jim Speyer is an economist. We all brought different skills to the table. It was truly a team. That's the way that we were formed.

I believe that our client base included financings that involved about twenty-five percent of the natural gas and electric utility industry. That's kind of the long and short of how I did it.

I took a fresh look with a group that essentially built a theme of everything old is new again, or what goes around comes around. That's largely what we're doing by asking utilities to increase the level of their financings with local banks.

PUF's Steve Mitnick: Do you feel like you're making a difference now? Are there one or two cases where you're proud of your role?

Wendell Holland: Yes. I'm just an old utility lawyer, an old utility regulator. In the syndication process, as part of our process, we invite utility CEOs and CFOs to meet presidents of these small local banks.

We did a meeting in Kentucky. I think it was in Louisville, in a modest hotel. We had maybe twenty to twenty-five people there. The bulk of them were small town bankers. I'll never forget the sense of hope.

They all showed that during the introductory meeting, where they had a chance to meet the CEO of the utility and become part of the "utility club."

These bankers weren't the most sophisticated Wall Street types. They were small community bankers. Here, we've given them literally a financial shot in their credit by introducing them to utilities, so that they can do business together. I'll never forget those meetings.

I'll tell you who was particularly excited about it. My good friend David Armstrong, may he rest in peace, was the chairman of the Kentucky Commission. He attended the meeting himself. He used to be the mayor of Louisville, and was an integral part of building the Muhammad Ali museum there.

I'll never forget how David came to me almost in tears and said, "Wendell, what you're doing is good stuff." Yes, I've got a lot of memories, but to see the joy and the sense of hope on the faces of executives at small banks who help their local communities, and my colleagues, it's interesting.

I go back to NARUC meetings and I get a chance to go to the commissioners' meeting. When you're invited to that, that means you're an official old guy. Everybody talks about what they do.

When I talk about my community banks syndication work, everybody kind of scratches their head as if to say, "Wendell, gee, what is that?" I explain it to them, and I explain it to sitting commissioners.

They say, "Boy, that's different. That's a very uncommon approach to regulation and making sure that the public receives the benefits that we're trying to offer in regulation."

NRECA hosted the third annual Vets in Energy conference to boost the recruiting and advancement of the nation's veterans at utilities and other energy organizations. As in the first two years, the conference was heavily attended by chapters of veterans at a number of utilities and by utility execs who recognize the great fit of vets in utility jobs. Execs and managers from Arizona Public Service, Coles-Moultrie Electric Coop., Con Edison, EEI, EPRI, MidAmerican Energy, NRECA and TVA, served as speakers. Plus, Energy Secretary Rick Perry added his views on the value of vets in energy.

See the Facebook album here.

The National Governors Association, the NGA, convened teams from thirty-four states and leading experts to participate in an Energy Innovation Summit, October 3-5 in Denver, Colorado. It's a part of the 2017-2018 NGA Chairs Initiative under Nevada Governor Brian Sandoval, "Ahead of the Curve: Innovation Governors."

The teams included representatives from governors offices, public utility commissions and energy offices, as well as state officials working on information technology, cyber-security, workforce training and economic development. Familiar names were speakers: Jeffrey Ackermann, Chair, Colorado Public Utilities Commission; Nick Akins, CEO, AEP; Kristen Munch, Deputy Director, Illinois Citizens Utility Board; Armando Pimentel, CEO, NextEra Resources; and Anne Pramaggiore, CEO, Commonwealth Edison.
 

Lead image: ComEd CEO Anne Pramaggiore was keynote speaker at NGA Energy Innovation Summit

PUF's Steve Mitnick: Tell me what excites you about EPRI's Efficient Electrification initiative.

Pedro Pizarro: For the past year or so, a working group of the EPRI board that I'm chairing has focused on efficient electrification.

As always, the heavy lifting is done by the amazing staff there, with Arshad Mansoor and Rob Chapman leading the effort.

EPRI approached this from their usual fantastic technology-based, research-based approach.

They started by asking, how do you think about benefits versus costs, when it comes to adopting different electrification technologies? It really started with analytics.

Clearly, in California a lot is being driven by the environmental benefits of greenhouse gas reduction, but there are other issues too. EPRI is looking at this cost-benefit analysis at a national and global level. It includes a lot of important things on the benefits side: first and foremost, economics.

Can you reduce costs? Can you make manufacturing processes more efficient by using electric technologies? What about environmental costs? Are there pollutant reductions, greenhouse gas reductions? What's the value of those?

Water ends up being another big one because the water-energy nexus manifests itself in several of the technologies; they help reduce water use.

We started by developing the framework. We're going to be deep diving now, on a region-by-region basis, to give us some data points on how big this could be and how valuable it could ultimately be for customers.

Their initial work suggests that if you look at the national level, with an endpoint of 2050, you could see adoption of electric technologies above the usual base case. That could lead to reducing carbon dioxide emissions across the country thirty percent. That means increasing the electric load about thirty percent.

One of the biggest drivers for that will be electrifying transportation, particularly on the passenger vehicle side. The EPRI staff also see improvements in buildings and improvements in different industrial processes.

You could also have heat pumps, electric water heaters, or electric technologies for indoor agriculture, which have outstanding water reduction benefits as well.

From our vantage point, we see that efficient electrification is going to play a tremendous role. California is continuing to march towards a forty percent greenhouse gas reduction by 2030.

We believe that this is not just about California. Technology is creating some real economic opportunities for customers around the country and around the globe.

PUF's Steve Mitnick: With those benefits, what's holding us back? Do still more technologies have to be developed? Is it public policy?

Pedro Pizarro: I think it's a collection of things. First, some of these technologies are mature, and some are still climbing up the maturity curve. I don't think they made any big leaps of faith in their analysis, but they include reasonable improvement in the technology cycle in several areas.

On the policy side, and this is important, the analyses do not assume adoption of new policies. They're not assuming a return of the clean power plan nationally. They're not assuming mandates on electric vehicles.

One other factor is, what's the customer understanding of that potential benefit? I think there's a natural education process as folks get their arms around these technologies.

Two other areas of work can answer your question of what's getting in the way, or how do you help catalyze electrification.

EPRI is looking at the pipeline of some early stage technologies to determine what's expected in terms of their maturation rate and their adoption rate.

They're also looking at how EPRI plays a role in really stimulating research and development collaboration on a global basis.

The idea is how do you start interconnecting potential customers, the technology developers, and the roles utilities and regulators are going to play.

PUF's Steve Mitnick: What does this say about the future role of the utility? Does it change what we do, what Edison looks like ten, fifteen or twenty years from now?

Pedro Pizarro: Yes. I'm going to try to provide both an Edison perspective and a broader national perspective. At a national level, and even a global level, as customers increasingly adopt efficient electrification technologies it reinforces the need for a very robust and modernized grid. A lot of the infrastructure built after World War II continues to age.

We must deploy capital in a smart, efficient way to maintain those grids, to strengthen them, and to modernize them.

From an Edison perspective, if you looked at our current rate case request it's about both continued reinvestment in our grid and a pretty significant investment in modernizing the grid.

It's accelerating the upgrading of older circuits so that they can come up to modern higher voltage standards. I think that's point one.

Point two, utilities will have to help educate customers, help accelerate and enable the deployment of the technologies.

I think there are states where regulators, especially in the vertically integrated states, will call on utilities to play a much deeper role. There will be states like ours where the regulators want to see a different kind of balance between the natural role of the utility and the important role of third parties competing in open markets.

California likes to see more third parties competing, whereas in vertically integrated jurisdictions, you see utilities deploy more of that within their own grids.

When it comes to efficient electrification, one of the earliest examples will be the role of the utility in deploying vehicle charging infrastructure. Edison has some very progressive proposals for helping stimulate the charging market.

We're piloting one now for helping support chargers for passenger vehicles. We have just filed a similar proposal for charging heavy duty vehicles.

We're going to be doing the work and rate-basing the upgrades on the customer side of the meter, up to and including the plug that goes in to the charger. We're treating the charger as an appliance that connects to the grid and is owned by the customer.

We had good support from the charging companies because we had that balanced approach. Some of our peers have proposals in which they own the charger itself. I expect there will be a number of states where utilities may be doing that as well.

Look at passenger vehicles. We think that if you really build in all life-cycle costs, including the much-reduced maintenance costs you get with an all-electric vehicle, you get close to parity with gasoline engines.

I'm not sure if consumers understand that. That's a role the utility can play, as a trusted advisor in the deployment of these technologies.

From an Edison perspective, we also see an opportunity to help large commercial and industrial customers that are likely to be early adopters of new technologies. We're using Edison Energy as a platform to provide advice to large customers as they make these choices. I think there's an opportunity for us to serve there as well.

PUF's Steve Mitnick: Tell me what gets you excited about EPRI's Efficient Electrification initiative.

Tom Fanning: I think the potential demise of the electric utility industry has been way overstated. In fact, I view the electrification initiative as a strategic blueprint for the way forward for electricity use in America.

It has so many advantages: economic, environmental, and operational. It's going to be good for customers, good for the economy, and good for the utility industry.

PUF's Steve Mitnick: Will it make a substantial difference in American society and the economy?

Tom Fanning: I certainly think it offers the opportunity to do that. We've already demonstrated enormous advantages in electrification in the Southeast. For example, when you fly through Hartsfield-Jackson International Airport in Atlanta, you will notice that all the ground equipment at the new 40-gate international air travel complex is electric.

When you look at the Georgia Ports Authority in Savannah, we've lowered their operating costs and eliminated using more than 4.5 million gallons of diesel per year by converting ship-to-shore cranes and refrigerated cargo racks to electric equipment.

When you look at the Port of Mobile, Alabama, where we electrified a six-month dredging project, EPRI estimates we avoided more than twenty-eight tons of emissions per day. There are enormous economic benefits, environmental benefits, and huge productivity benefits. It's a better operation using electricity.

If you think about the next layer of things to come, when you think of driverless vehicles, and a sharing economy, more and more of the future is going to be driven by electric transportation.

PUF's Steve Mitnick: What's holding us back? Is it technology? People doing things the old way?

Tom Fanning: Yes, to some extent, it's cultural norms. Those are hard to overcome. Being a Tesla owner myself, when I go fill up my other car with gasoline, I feel kind of dirty, to be honest with you.

I really do like the qualitative attributes of electric transportation. Further, what we're seeing is a generation of people of a certain age and younger who are used to the idea.

They are much more likely to be early adopters of driverless vehicles and a transportation mindset that is centered much more on third parties such as Uber, Lyft, and others. My sense is, these are ideas whose time has come.

The other thing that's going to drive the adoption of this technology is operational improvement in energy storage technology. That will get better and better. As it does, the adoption rates will get higher and higher.

PUF's Steve Mitnick: Does this, in turn, change the role of the utility in society?

Tom Fanning: It certainly has the potential to do so. More efficient use of energy is a driver for the economy. It presents a global, competitive environment for the U.S., and it offers significant advantages in terms of price, efficiency, and environmental impact. We think it will accelerate our move to these kinds of technology, and it will help everyone.

PUF's Steve Mitnick: How are you working to accelerate this?

Tom Fanning: Southern is the only utility in the U.S. today that has robust, proprietary research and development. Our approach has always been that we will attempt to positively influence an uncertain future. We could be just a taker of whatever the future provides us, on the other hand.

But I think it's much better for our customers, and much better for our shareholders, for us to have a direct influence and have that uncertain future unfold the way we want it to. So, we want to play offense relentlessly as this marketplace emerges.

PUF's Steve Mitnick: What's the timeline? Are we going to notice some big changes in which a percentage of the economy is electrified in ten years? In twenty years?

Tom Fanning: Yes. The best guess of that is to look at what Ford and some of the other big auto manufacturers are saying. I would expect to see enormous production increases, and as a result, tremendous market penetration by 2022.

If you want to see a precursor to that, look no further than China. China will drive a lot of the production and demand going forward. In many cases, the barriers here in the U.S. are not only cultural norms but also adoption of standardized technology.

China may lead the way. My sense is that we'll catch up quickly.

PUF's Steve Mitnick: What should the rest of us be doing?

Tom Fanning: Let's just think about it. EPRI projects that electricity could see its total load grow probably thirty percent between 2015 and 2050, and at the same time, non-electric carbon dioxide emissions could fall by forty percent.

U.S. policymakers should enact consistent policy that will enable, not inhibit, a good kind of market development. My sense is that the U.S. moves to a low-to-no carbon dioxide generation portfolio by 2050, and electrification will be a strong contributor to that.

When you think about the positive trade-offs, both in the economy and in the environment, created by a transition from fossil-based fuels such as oil and gasoline to electricity, we should see enormous national benefits emerge. My sense is we will see regulations that are supportive.

You will see infrastructure developed. We should see states adopt constructive policies that enable electric utilities to participate in the development of, for example, charging infrastructure.

PUF's Steve Mitnick: What you're saying is, as electricity becomes cleaner it becomes something that we'll want to use across society as much as possible. To substitute for fuel combustion at the point of use.

Tom Fanning: You've got it. That's it.

PUF's Steve Mitnick: How do you inspire your workers to support this enthusiastically?

Tom Fanning: I've often used an expression that any idiot will jump off a burning platform. The real point of leadership is to mobilize the team to move before we have to.

That is centered on the principle of playing offense relentlessly. We need to influence positive future outcomes, for our customers, for the environment, for our nation, for our employees. These things are a series of win-win propositions that we can help drive and influence.

PUF's Steve Mitnick: What does a board member do?

Sheryl Carter: EPRI's board has six external, or nonutility, members. Since EPRI is a public interest organization and a nonprofit, they have included external board members to provide diverse perspectives.

PUF's Steve Mitnick: Can you say a little about what your involvement is? What you are looking to accomplish?

Sheryl Carter: Like EPRI, NRDC has been looking at how we transform the entire energy system, not just the electric sector. We recently laid out a pathway to how we could do that.

It's called "America's Clean Energy Frontier, The Pathways to a Safer Climate Future," and electrification figures prominently in that. The U.S. can meet its 2050 goals for greenhouse gas reductions primarily through energy efficiency, renewables, electric vehicles and decarbonized buildings with existing technologies.

Clean and efficient electrification is playing a very big role. NRDC came up with numbers separately, but they are very similar to EPRI's. We see ourselves needing to go from the twenty percent of the U.S. economy that is electrified today to about forty-five percent in 2050.

Whether that number is precisely forty-five percent or something in between, it is clear we will need a significant increase. This means we need to modernize the grid. The electric industry will be very important in that transformation.

PUF's Steve Mitnick: Is it possible to move from twenty percent to forty-five percent?

Sheryl Carter: It is very achievable, but it is going to require a lot of work and a lot of support from policymakers going forward. We are looking at the regional, state and local levels for that support.

PUF's Steve Mitnick: It sounds like other leaders, regulators, and maybe the public need to be involved. What is their role?

Sheryl Carter: Making a transformation of this magnitude is going to require a lot of infrastructure change.

We could do it with technologies that are mostly commercialized today, but their performance and costs need continued improvement. But we don't see any real barriers on the technology side.

The industry is changing quite a bit now anyway, but for it to go in this direction, we need policies that are supportive. For example, when we look at electrifying buildings, the first thing we are looking at is leveling the playing field.

Right now, electric technologies are at a little bit of a disadvantage in building codes, which tend to favor natural gas. When they were put into place ten to twenty years ago, the electric technologies weren't as efficient, and electricity wasn't as clean.

We need fuel-neutral comparisons of technologies, when it comes to energy efficiency programs and building codes and standards.

In terms of electric vehicles, charging infrastructure is one of the biggest road blocks right now. That is something that electric utilities can facilitate and help invest in, to accelerate the market for electric vehicles.

PUF's Steve Mitnick: Are you saying there are some policies, zoning and building standards that are biased against electrification?

Sheryl Carter: In some cases, yes. I don't think a lot of policy makers and a lot of people out there are aware of how much these technologies have changed.

The end uses for electricity overall have become much more efficient. Technologies such as electric heat pumps and electric vehicles are commercially available and becoming much more affordable.

The other thing is, the grid is getting cleaner and is on a trajectory to becoming even more so.

PUF's Steve Mitnick: What can EPRI do, and what can NRDC do to push this along and maybe even accelerate it?

Sheryl Carter: We are working to make sure that what the policymakers support is the cleanest, most efficient and cost-effective alternative. That is essential for us.

We are also working with utilities. Technologies that emit fewer pollutants, including greenhouse gases, and that are much more efficient, mean the customers are going to use less energy and pay less.

Working with utilities, EPRI can continue doing what they do best, which is research, development, and demonstration of these technologies. There are certain technologies that need even more work, like heat pumps for space heating.

PUF's Steve Mitnick: All this wouldn't be possible, if we hadn't made major strides in energy efficiency in recent years. Isn't that a big part of the equation?

Sheryl Carter: It's huge. When I first started working in the energy sector, more than twenty-five years ago, we in the environmental community weren't too keen on electrification. That was because it was much less efficient and dirtier than natural gas end uses, for example. That is what has changed over the last couple of decades.

PUF's Steve Mitnick: What are the big impact areas of electrification that you really pay attention to?

Sheryl Carter: In the building sector, I would say heat pumps are the biggest piece. About ninety percent of the thermal uses in buildings can be replaced with heat pumps.

That's a big one for buildings, both residential and commercial buildings. On the transportation side, electric vehicles, passenger vehicles are the big focus. But I really think, even though the total emissions are less, the freight area and trucks and buses have a lot of potential as well.

One reason we should really be looking at that goes beyond just reducing greenhouse gas emissions. They can make a big difference in disadvantaged communities by reducing diesel fuel use and the local air emissions that cause serious health problems.

PUF's Steve Mitnick: People like me may think, "Okay, electric cars, that's doable." But those long-haul trucks, they are so big, you could never have them running off batteries.

Sheryl Carter: Long-haul trucking is much harder to tackle. We are probably looking at some other kind of renewable fuel: sustainable biomass or synthetic fuels made from renewables. But ports offer a good example of where heavy-duty transport can be electrified - a confined area, with short distances.

Europe is looking at putting infrastructure along frequently traveled highways that freight companies can use to run electrified trucks. That is probably a little further out and still limited.

PUF's Steve Mitnick: Let's look out into the future. How about 2030? Are we going to have some discernible progress by 2030?

Sheryl Carter: Because the technologies are here today, certainly for passenger vehicles and for the heat pumps in buildings, we are going to see a lot of progress. The one challenging thing, other than the policy, is infrastructure. Charging infrastructure for electric vehicles is a key challenge.

But also, making sure we don't build too much new natural gas infrastructure, for example, where we might create stranded investments. Planning is going to be important. What kind of a transformation do we want to see and how are we going to manage it? Those are the big questions.

PUF's Steve Mitnick: I want to get your take on EPRI's Efficient Electrification initiative. How are you involved in this initiative and with EPRI?

Bill Spence: PPL has been involved in several of EPRI's research projects, including projects focused on electrification, end-use efficiency and evaluating the potential for electrification in PPL's service territories. I have also been serving on the EPRI Board for several years and I'm a member of its task force on efficient electrification.

Overall, we believe the opportunities for efficient electrification are significant and growing. I think what's really driving this are advances in technology. That's enabling many of these opportunities to become cost efficient and very effective.

PUF's Steve Mitnick: Will it be a real game changer?

Bill Spence: It could be a real game changer. The key to how rapidly change comes is how quickly the technology continues to evolve and how well customers adapt to and adopt these new technologies.

I'll give you three examples. PPL is currently focused on three specific areas that we believe hold promise for our customers. The first is commercial food service equipment. These are relatively small items but could be of significant benefit for our customers. These include things like electric fryers, griddles and combination ovens.

The second area is commercial and industrial electric forklifts. The Lehigh Valley region of Pennsylvania, where we have our headquarters, is a significant logistics and transportation hub because of its proximity to major population centers like New York and Philadelphia. Whether it's FedEx, Amazon or others that operate these large warehouses, they can use electric forklifts to great advantage.

The third area is commercial next-generation rooftop heat pumps that could also benefit warehouses, and others such as restaurants and standalone retail businesses.

PUF's Steve Mitnick: Why are those electric technologies and others so good for customers? What are some of their promising advantages?

Bill Spence: Electrification offers potential economic and environmental benefits. This includes the potential for greater energy efficiency, reduced costs to customers, lower emissions from customer activities, and job creation as new products and technology are developed and deployed. 

The benefits can extend to other less obvious areas, as well. These include saving water. For example, applying efficient electrification to agriculture, farmers could see water use drop by sixty to eighty percent.

PUF's Steve Mitnick: As these things progress and get accepted and have an impact, do you see an effect on the role of the utility?

Bill Spence: I do believe the role of the utility will change over time. If these electrification technologies are adopted, that could take many forms. As we focus on advancing a cleaner energy future, utilities can play an important role in advancing these technologies and communicating the benefits to customers.

PUF's Steve Mitnick: What's the time frame?

Bill Spence: Many of the opportunities are happening now and are growing rapidly. I believe the industry will be communicating a lot of the benefits and the technologies in a much more meaningful way than we have in the past.

In other words, we are going to promote these technologies and these business opportunities in a very direct way to customers. For example, you may be aware that EPRI is going to be hosting an electrification conference in California next year. While EPRI is not in the business of promoting any particular fuel or technology, they will be sharing the research aspects of electrification.

Utilities are hoping to bring thousands of customers together to show them what's new and exciting as it relates to efficient electrification. 

I think this is probably going to be just the start of our industry's efforts to get the word out on how these technologies are evolving and how they can benefit consumers.

PUF's Steve Mitnick: Where is this ultimately going?

Bill Spence: I think you're going to see a very meaningful component of our electricity sales being driven by this electrification initiative, especially beyond 2025.

I'll say it's an initiative, but it's really a trend. That trend is going to accelerate as adoption rates climb. You're also going to see a lot more investment by industry, as well as private equity, in some of these technologies. I expect to see the cost come down significantly as we get to scale.

I see this trend happening as it has with battery, wind and solar technologies. Those technologies began fairly modestly, but are now mainstream components of the electric grid.

PUF's Steve Mitnick: What about your companies in the United Kingdom?

Bill Spence: Our four electric distribution companies in the U.K. are currently piloting a project called Electric Nation. It's the largest electric vehicle charging pilot in the U.K. We're testing various charging methods to better understand customer behavior and vehicle use, and the impacts to the distribution network of charging a diverse range of electric vehicles at home. Overall, electric vehicles hold the most promise

in terms of future electric sales in both the U.K. and the U.S.

PUF’s Steve Mitnick: Mark, what’s your take on EPRI’s initiative, this Efficient Electrification initiative? And how do you fit in with EPRI?

Mark Bonsall: SRP was a founding member of EPRI at their formation in 1973 and has been a full member of EPRI since its beginning. We’ve had a significant involvement with EPRI’s R&D program over the decades. I currently serve on the board of EPRI and have been on the board for several years.

The Efficient Electrification initiative is a continuation of work that EPRI has been doing for several years as the whole industry works to decarbonize the economy.

Economy wide, if your objective is decarbonizing by X percent by Y year, then you can change X and Y in a number of different ways. One option is by electrifying customer applications that result in a net decrease of carbon emissions. 

EPRI’s mission is to focus on factual analysis. It poses the questions about where electrification could occur, identifies possible directions and options and analyzes the impact of those options. Given that factual background, utilities can then work with their customers to identify potential applications and jointly work on the best path forward for that customer
or group of customers. That is what the Efficient Electrification initiative is about.

Hank Courtright: A key question in the debate on carbon reductions is how can we reduce carbon in the overall economy? We can do it through electricity. This is especially true as the electric generation portfolio becomes decarbonized, as we utilize existing nuclear power along with more wind, more solar, and a migration from coal generation to gas generation. As the generation portfolio gets cleaner, it enables carbon reduction in other parts of the economy.

PUF’s Steve Mitnick: This initiative in electrification, can it make a big difference? Are we going to see, say over the next ten years, a big change or a very gradual change?

Mark Bonsall: It may be spread over that time frame. However, things are happening now throughout the economy. One of the most evident places right now is the transportation sector. You’re seeing many of the major auto companies, here in the U.S. and in Europe and Asia, moving towards electric vehicles as a way to decarbonize the auto fleet. That will take time, actually decades, as that phases in.

Today, many utilities are working with major customers to reduce their carbon footprint by looking at industrial and commercial processes. In some cases, those processes could be done through electrification versus a natural gas use or even some type of oil use.

A good example is the number of major airports looking at how to modify or change out the airport “tugs” that move the baggage and push planes, from being diesel driven to being electric driven. That also helps with the local air quality issues where those airports are located.

It will be a gradual transition. I don’t think you’re going to see a huge bulk of it in any particular timeframe, but just a gradual trend towards more electric use and less fossil use.

PUF’s Steve Mitnick: There’s going to be a big conference next summer in Long Beach. What’s EPRI’s role and what is the utilities’ role going to be?

Hank Courtright: There are a couple key roles for EPRI. Probably the most important role is to provide thought leadership coupled with factual analysis. It is important to work with the electricity industry, regulators and legislators across the country to develop a better understanding about the value and impacts of moving from fossil fuel-driven applications to electric applications.

Another key role EPRI will have is providing information to individual utilities so those utilities can better work with their customers on electric applications. EPRI also serves as an information clearinghouse, as utilities share information with each other based on successful customer applications.

It’s a joint effort between EPRI and the electric industry to share data, share expertise, and work with each other to enable Efficient Electrification to be applied this across the country.

Mark Bonsall: This will take some time and a concerted effort. To me, the profound importance of the work is the analysis that goes into it.

For example, it is critical to understand how the use of electricity for transportation purposes has a larger benefit in reducing carbon from gasoline use than the corresponding increase in carbon from the electric generation needed to power those cars and other vehicles.

That’s the premise. One of the challenges that poses is, how do you measure all of this? 

Our production of electricity may go up, but the aggregate amount of emissions goes down. How do you measure and account for all of that? Those are the type of questions being addressed by EPRI’s analysis.

EPRI is holding lots of industry and stakeholder meetings in the process of answering those questions. And the Electrification Conference in 2018 will be an important event to discuss the analysis developed and the pathways for future electrification. Is that fair to say, Hank?

Hank Courtright: I think that’s accurate, Mark. EPRI is providing that analysis not only at a national level, but we’ll be helping to do similar analysis at a state level, and an individual utility level, too. As we build the databases around the country, we’ll have a better indication of how to measure and document the emission reductions.

PUF’s Steve Mitnick: What are the main barriers as you see them?

Hank Courtright: The primary barrier is lack of information. As more people get to understand some of the benefits of going to electric vehicles or electrifying certain business processes, it tends to sell itself.

Mark Bonsall: The concept of generating more electricity, nonetheless, seems to run counter to a belief that it would lead to lower overall emissions. That point needs to get across. 

That’s one of the barriers. Although, I don’t think that’s huge because it’s so obvious in relation to the electrification of transportation.

PUF’s Steve Mitnick: Are you going to Long Beach for this mega-conference on electrification next August?

Mark Bonsall: SRP is a platinum sponsor of the conference. We think it’s a very important way to get the conversation going, develop a broader consensus and get more people working on the basic ideas. Yes, we absolutely will be there.

We are a sponsor of the work. I think it’s very exciting work. To be quite honest with you, it is terribly important work. I don’t think the focus on emissions management or carbon is going to go away, as many utilities (SRP was the first) have established long-term corporate sustainability objectives. This is a long-term issue, and it requires some long-term thinking and application of sweat equity. I think it’s a good way to get it started.

Hank Courtright: We expect attendance at the conference to include several of our customers who want to learn more about electrification, representatives of the environmental community to help build a broader understanding of the positive benefits of electrification and representatives of the supplier community who provide the products, vehicles and services to the marketplace. It should be an exciting event.

PUF's Steve Mitnick interviewed David Rosenberg, CEO of AeroFarms.

PUF's Steve Mitnick: Why is indoor vertical farming a big game changer for society and the electric industry?

David Rosenberg: It helps illustrate some of the innovation that needs to come together to solve big problems. How are we going to feed our planet with its growing population? By the U.N.'s estimate, we need fifty percent more food by 2050.

Seventy percent of our fresh water goes to agriculture. Seventy percent of our fresh water contamination comes from agriculture. Additionally, the world lost thirty percent of its arable land, that is, farm land, in the last forty years.

We need new ways to feed our planet and indoor vertical farming allows us to, essentially, do more with less. Also, the cost structure of indoor vertical farming is going the right way.

The biggest part of the cost is the lights. The LEDs are becoming more efficient. The capital cost and the energy costs are being reduced.

PUF's Steve Mitnick: Can indoor vertical farming have a big impact as far as its costs, and its acceptance by consumers?

David Rosenberg: It can have a big impact, and it really needs to. We need lots of ways to solve problems, but this is going to be one of them. There is less and less land. Less and less water. More and more pollution. More and more contaminants in our soil. More and more people. Those are big problems out there.

PUF's Steve Mitnick: I am astonished at the scale and technical sophistication of AeroFarms. How do you see your company pioneering this revolution?

David Rosenberg: We have been doing this since 2004. It is not easy, and the scale is a big part. That signals how we've evolved past where a lot of the competition is. There's a big difference between growing small systems and growing big systems. There's scaling biological processes. New problems emerge, and we're just further down that path of solving a lot of these complex problems.

PUF's Steve Mitnick: What do you do there? What are you growing, and how are you growing it?

David Rosenberg: We're predominately focused on leafy green vegetables. We're growing kale, arugula, watercress, mustard greens, Asian greens, and lettuces. We're growing them in a warehouse, as opposed to a greenhouse or the field. There's zero sun, zero soil. Instead of soil, we have a patented cloth growth media. Instead of sun we have a series of LED lights.

We are figuring out what the plant wants when it grows in its optimal setting outside, and working to mimic those conditions inside. Figuring out, not only what are the right seeds for these conditions, but also what's the right amount of light, intensity, frequency, nutrients, temperature, humidity, and carbon dioxide. All of these are different aspects that stress the plants, and help drive optimal plant production.

PUF's Steve Mitnick: Does an AeroFarms salad taste pretty good?

David Rosenberg: I used to think that we were a supply chain play and that's our competitive advantage. As it turns out, we can also compete on taste and textures. We've gotten good at understanding how to grow these plants, giving them what they want, and therefore, positively impacting their taste, texture, and nutritional value. It's a better experience for the customer.

PUF's Steve Mitnick: Your power bill and managing the power, isn't that a big part of your cost structure and operation?

David Rosenberg: It is. The biggest part of our cost structure is energy. We've got to be smart about energy. Being smart means two things; one is design. Whether designing the right light, right luminaire, right climate controls, or the right pump. Next is operations.

That's the one that is meaningful for your readers. It means great relations with the energy providers and this is tied into the design. There are better places to put these farms, where there's more capacity from an energy standpoint. Also, there are better ways to integrate the grid with the energy producers.

PUF's Steve Mitnick: You use very large amounts of energy, which means where you locate, which utility, and, also whether you're near a substation that can handle you or not. That's really important.

David Rosenberg: Absolutely.

PUF's Steve Mitnick: You're producing for supermarkets in pretty big numbers. What's holding you back from going even faster and growing more?

David Rosenberg: Two things. While we're the leader, there's still more to prove out. We just built our 9th indoor vertical farm that is largest in the world. We're still integrating elements of automation. That reduces the labor components of our cost structure.

Now coming out of Q4 2017 and Q1 of 2018, we will have more pieces of the puzzle to inform future debt financing to build more farms. Financing strategies are also part of the pioneering work at AeroFarms.

It's expensive and we need capital suppliers that are willing to take on more risks than they might with tried and true systems. They need to appreciate the environmental and societal benefits and have a willingness to do a hard deal, as things get proven out in both the project finances and debt in that group.

Proving it out further and the right capital partners are really two things tied in together. We have a pipeline of projects. It's putting the capital together in different pieces, and it's still coming together in pieces, not as elegantly as if we had X number of years of proving out the business model.

PUF's Steve Mitnick: You were telling me about how sophisticated some of your staff is, using some pretty advanced technologies, automation, and machine learning. Talk about that a little bit.

David Rosenberg: What I'm most proud of is our people. We have a hundred and twenty people, of which about half have a technical background. Here, for example, we have mechanical engineers, structural engineers, lightning engineers, electrical engineers, PLC engineers, and system engineers.

On the plant and science side, we have plant scientists, plant biologists, plant physiologists, plant pathologists, microbiologists, and nutritionists. It's the data science that really pulls it together. Engineering needs horticulture, and the bridge is the data science and these programmers.

PUF's Steve Mitnick: What can my industry do if they want to promote this?

David Rosenberg: A few things come to mind. One, we are aware of all the complexity around changing an industry, and changing the world. We're going to get there faster, working in partnerships with different industries. The energy is, absolutely, one way.

There's room for collaboration in terms of how we can better draw down energy from the grid, how we can better set up our own energy sources, and whatever that right combination is. There are ways to optimally pro-locate, and explore if there are opportunities in being more energy efficient in some of the features of a farm. Whether that's our environmental controls, or specific lights, pumps, things of that nature.

There's a tremendous amount of research and development. For example, we could lower our energy just by understanding what optimizes photosynthesis. What spectrum, what intensity, what frequencies, could have significant impact. There's a lot of innovation collaboration potential.

Then beyond that, it's easier when we go in to build a facility if the infrastructure of an existing city is up to date. There are too many antiquated infrastructure grid systems in cities. We looked at projects where one of the challenges in cities is upgrading a transformer.

Not only is there a capital expense when you upgrade a transformer, but also in a lot of poorer cities the infrastructure just isn't there. It's not only upgrading it, but it's knowing when the work is going to be completed. Even if we pay for it, or help pay for it, understanding when the work is going to be completed is critical. It's hard to go into a project with those unknowns.

Then, sometimes, it's hard to navigate each of the providers to get answers. What's the capacity of a transformer, or what part of the grid it is, and when it would be upgraded, and what an assessment is and who's going to pay for it. Sometimes, what sounds like a simple question is hard to get simple answers to.

The other piece, are there incentives in place that encourage innovative companies that have a positive environmental footprint? Incentives work. Incentives help get projects moving faster and they help policy makers encourage the kind of projects they want.

PUF's Steve Mitnick: Your senior team includes some people with real energy experience. What professional background did you come from, and why you are doing this? Why did you create and grow AeroFarms?

David Rosenberg: For me it was water. Before AeroFarms, I built a nanotechnology company that was involved in water proofing and corrosion control. I learned how much water gets wasted in agriculture and how much water pollution comes from agriculture.

Inspired by that, I wanted to build a company that had a positive impact on water. From there, I realized I wanted to focus on agriculture. Then, I liked the plan of local food production.

I focused on leafy greens because of high rates of spoilage. Fifty percent of all food that comes from a farm in this category doesn't get eaten. They also have high rates of contamination. Eleven percent of food contamination is in leafy greens. They get infected with listeria, salmonella, and e-coli.

It's some of the most nutritional food we have in the world. For a confluence of reasons, we decided to focus here. We're also trying to make the business plan as good for shareholders, as well as have a positive and social impact.

Here we're helping alleviate a food desert, we have a model that helps educate kids, and we get them to eat more leafy greens. Most importantly, we're inspiring people with our innovation.

PUF's Steve Mitnick interviewed Kenny Coleman, Senior Vice President, Marketing, Georgia Power.

PUF's Steve Mitnick: Tell me what the CRC is.

Kenny Coleman: This is our Georgia Power Customer Resource Center. We opened this place in 2014 to use as a demonstration showcase for electric end-use technologies. We're able to demonstrate everything here, from end-uses like cooking, heating, and water heating, to many of the electro technologies that are available to customers in those fields.

Through our manufacturing applications process, we are demonstrating things like infrared heating and paint coating applications. We've had seventy-five hundred customers come through our doors in just three years, and have been excited to have this as a place for our customers to come.

PUF's Steve Mitnick: What's so good about these electro technologies?

Kenny Coleman: We think electrification provides a lot of benefits to customers. One of the things that we at Georgia Power have been very specific about, is we want to do what's right for the customer. If you do what's right for the customer, things will turn out right for the company.

What we found with some customers is they come in and they're able to demonstrate their products with our equipment. They're able to find out in real terms, does this work for my product? Can I take it back to my application at my home or office?

In many cases, it saved them some significant dollars. Schools came in, and they were redoing their kitchens and cafeterias. They were looking at natural gas alternatives, and electric end-use alternatives, and could come in and visit the CRC to compare different electric equipment. As a result, those school cafeteria kitchens are now all-electric.

PUF's Steve Mitnick: The companies bring in their products, like food or equipment, and try it out?

Kenny Coleman: We had a customer come in who bakes pizzas for a living, and we let them come in and use our cooking equipment to cook their product. They baked sixty or seventy pizzas, and now the pizza ovens in their facility are all-electric. They will tout energy savings, less heat in the kitchens, consistent quality and a better environment for their cooks to work in.

PUF's Steve Mitnick: This Customer Resource Center is unusual. I don't know how many other utilities have one. Is this a good way to get the message across?

Kenny Coleman: Oh, no question. In addition to customers coming in to see the benefits of electrification, we also use it as a training facility for many of our reps. We've got sales reps who are out working with builders, developers, and industrial customers, trying to help make sure we are in a place where we can create value for their operations.

Hopefully they expand in Georgia, add more employees, and use more energy. We use this as a place where they can come in, get early indications about both the benefits and challenges of certain technologies, and then take that knowledge back to customers.

PUF's Steve Mitnick: How does this work?

Kenny Coleman: We've got partnerships with many of the vendors across Georgia. If the customer is interested, we can connect them to a vendor partner who manufactures, and in some cases, installs and maintains the equipment.

Or, they can choose their own vendor. For us, it's not really a vendor selection process. It's more of an awareness. Hopefully we encourage some zealots to go out there and champion electrification.

PUF's Steve Mitnick: Is Georgia electrifying faster than other states? What's the reaction out there?

Kenny Coleman: We are thankful that many customers have seen the benefits of electrification. We've got electric end-uses in the residential customer space. More than fifty percent of those customers have all-electric heating, cooling, and even water heating in some cases.

We've embarked on this effort. It's been a couple of decades of work. We have high saturation rates of electric end-uses, particularly in our residential space, and we continue to work and grow in the commercial and industrial space.

PUF's Steve Mitnick: Why is electrifying further a good thing? Why the push to electrify more?

Kenny Coleman: We believe that every kilowatt-hour now being produced is cleaner than in the past - we're focused on that aspect, as well as making sure that the energy we produce is reliable and affordable as well. Our customers are watching the continued transition of our fleet toward more natural gas and renewables in the generation fleet, while also expecting low energy costs and high reliability. More electric end uses mean more demand for electricity, which equals further opportunity to diversify our fuel mix with more low and no-emission sources.

Whether it's the end-uses we were talking about here, or electrifying transportation. We have continued to work with many of our vendor partners across Georgia. Georgia has over twenty-six thousand electric vehicles, now registered in Georgia.

As recently as 2015, we were the second fastest growing state, next to California. We think that electrifying transportation not only saves customers money, but the operation and maintenance costs in owning electric vehicles now has a value proposition: it costs less to maintain them than cars with internal combustion engines. Customers get benefits from the value proposition, and there are environmental benefits as well.

PUF's Steve Mitnick: What is your role in the company?

Kenny Coleman: I'm thankful to be the senior vice president of marketing. I get a chance to work with the great folks here at the CRC who work with customers every day on electric end-use. We've got a team of people working with our customers across the state to do just that. Our team also runs our energy efficiency program, which is also one of the most successful in the country.

This year we have launched ten new programs across our residential and commercial classes of customers. We work with those folks, and our electric transportation teams. We also work with our renewables team, which operates the largest voluntary renewables portfolio of any utility in the country. By year-end 2021, we'll have nearly three thousand megawatts of renewable generation online, procured both through purchase power agreements and self-built.

I get a chance to work with our renewable team. I also work with our pricing and planning team who does our long-range energy planning, our rates, design and administration, and our forecasting, among other things.

PUF's Steve Mitnick: Take me through what marketing means at Georgia Power.

Kenny Coleman: You'll hear our Southern Company CEO, Tom Fanning, and our CEO in Georgia, Paul Bowers, talk about our customer-centric business model. For us, that puts the customer in the center of all we do and the decisions that we make, relentlessly focusing on keeping prices low, keeping reliability high and doing the things that increase customer satisfaction. That helps us, hopefully, have constructive regulation in our jurisdictions. Then we can invest further in our business through those things.

We view marketing as figuring out how we can improve the lives of our customers through our efforts, products, services, and energy efficiency programs. We wake up every day trying to figure out, 'how do we make life better for Georgians?' In some cases, it's the industries in Georgia that will help create better jobs and a better way of life for our customers.

That's the way we view marketing. We continue to ask our customers, what do they want to see from Georgia Power? We continue, in some cases, to be surprised by their belief that we should offer additional products and services beyond electric end-use.

Those are things like home automation, security lighting for our communities, or advanced lighting technologies. We're doing those things for our customers. We'll continue to listen to them and figure out how we can add more value.

PUF's Steve Mitnick: Efficient, as well as electrification. Both E's?

Kenny Coleman: Yes, absolutely. We've talked with other utilities about it. For some people marketing is load-building. But we view it as helping our customer. If you're able to find opportunities to sell or get additional off-peak kilowatt hours, that don't add to your peak, that's great.

They help us spread more kilowatt hours over our fixed costs. It's really beneficial for all customers. You take, for example, a heat pump: what you're doing now is adding winter load. You're not really adding a summer load.

Add some winter load. That gives more kilowatt hours to spread. The specific customer benefits because their overall cost profile goes down. Customers as a whole in Georgia benefit because now we're spreading more kilowatt hours over the same fixed cost.