Teri Viswanath: Welcome to Power Plays' Extended Play series, a mini-podcast series of interviews with influential electric co-op managers that are innovating. I'm Teri Viswanath, the lead economist for power, energy, and water at CoBank. In the last of our Extended Play content featured in October to celebrate National Co-op Month, we’re going to get at the heart of how our electric cooperatives serve their communities - by keeping the lights on, and keeping us safe. You know, their service and deep commitment is oftentimes best displayed in times of crisis, when we need them most. We take having electricity access for granted, but living in rural communities, this wasn’t always the case. In the mid-1930s, nine out of 10 rural homes were without electricity. Yet now, periods of severe storm outages are becoming more common, and our cooperatives are innovating to become more resilient to these changes. Looking back on the year, we tested this resilience. Back in February, the country witnessed the coldest winter pattern in more than 30 years. More than 100 million people resided in areas covered by the winter storm warnings and roughly 5 million of those people lost power. The situation was admittedly the worst for Texas. For that reason, my co-host Tamra Reynolds, a native Texan, sits down with Kerry Kelton, the CEO of MidSouth, a Texas cooperative whose community came together to weather the deadly storm. MidSouth's story is a wonderful reminder of the courage and perseverance that our electric co-ops demonstrate. I think you're going to enjoy Tamra Reynolds's interview. Here it is.
Tamra Reynolds: In today's podcast, I'm speaking with Kerry Kelton, CEO of MidSouth electric co-op of Navasota, Texas. Good morning, Kerry.
Kerry Kelton: Good morning, Tamra.
Tamra Reynolds: This year, we're going to be focusing on dynamic stories at five different electric co-ops in the US. In many way MidSouth is the perfect story to tell. Kerry, you'll probably remember that Valentine's Day this year will go down in history. Anything you want to share about the winter storm that occurred?
Kerry Kelton: Sure. We kept hearing that this winter storm was going to be bad, it was going to come down through our area and we were focused on what was potentially going to be an ice storm. We were ready for an ice storm.
The ice didn't quite get to our area as far as really a bad ice storm, but it got to the co-op just north of us. We were actually helping our neighboring co-ops restore power. Then, we had the real cold weather start moving in and we had to bring our crews back and we took those winter drills. It was the middle of the night and I couldn't sleep. I'm watching the Scada on my phone and we're trying to figure out what to do and all of a sudden we see that things were starting to happen. Our engineering team, our dispatch team, they jumped into action real quick, did exactly what ERCOT had asked them to do and began to shed load.
For those that don't know what shedding load means, that just means taking people offline. If you're consuming power, we want to turn you off. I can tell you as an electric cooperative CEO, I never want to turn anybody off. That's never our goal, but we were asked to do that by ERCOT. We initially were able to easily follow the drill plans we had, but then quickly it escalated. As it escalated into Monday, we realized this was going to be an ongoing situation that's going to last for several days, significantly larger than anything we had ever planned for. Let me just tell you what our focus was at MidSouth, and I know I've talked to CEOs across Texas, we all have the same focus. We wanted our members to have as much power as they could. That means we needed to heat their homes for as long as we could. We weren't just going to turn them off and leave them off.
We wanted to make sure that they had some heat in their home. At MidSouth, we were worried about water wells freezing up. We're not used to the cold weather in our area. We don't probably winterize personal water wells as much as maybe people in other parts of Texas. We wanted to keep power to those water wells so members could still have water. We wanted people to be able to cook. Most of our cooking is done by electric heat in our area of Texas. Our heat is by electric heat. So, it was really important to us that people could keep their power flowing. This is something we talked about. It really became more evident after the storm, is people being able to charge their devices.
Their only way to really communicate, they couldn't get out. Their way to really communicate was through their cell phones, through their iPads, through their computers. We wanted people to be able to charge them, then be able to use them when the power was off. Our goal was to keep people on for about an hour and then rotate them off for 30 minutes. That was our standard plan, that's the plan we use at MidSouth. As the storm progressed across the week, we had periods when we had people off for 30 minutes and on for 30 minutes, but that didn't last but maybe for about a half a day. Then, we were able to get back closer to 30 minutes in an hour. Our members initially, I think, were pretty upset. "Why is our power off? We want power all the time, not just for an hour."
I would get calls like, "Kerry, it's like clockwork, y'all are doing it exactly at the same time, what's going on?" The good news is we were getting it off and on, and so people knew as soon as the power came on, the reports I had and that I had one story, and this is a funny story, but they had everything pre-planned. They knew that typically at the top of the hour power was going to come back on. They had all their food ready. They had their cell phones in the charger and they would all run. They had assignments in their house and one kid would start the microwave and somebody else would start something else. That's how they survived.
We felt like we were doing the right things, but back to some of our members maybe weren't happy until they began to hear the news and the reports out of Houston and Dallas. We had member service reps answering the phone, and we were communicating on social media, as many social media channels as we could get out. Our members really engaged, and so as a CEO that's focused on reliability and focused on all the things that we've done on the electric grid, which I am extremely proud of because it allowed us to have that hour on, 30 minutes off, because of the investments we made on the electric distribution side.
However, our members loved us because we were communicating, because we were out here just really trying our best. They saw our crews in the areas. If there was an outage, we tried to get that outage fixed as quick as we could. It was the communication side as much as it was actually what we did on the engineering side. The two had to go together. This has been many years planning. We've talked to CoBank and you Tamra specifically about a lot of the projects through the years where we've been building backfeeds and making our systems stronger and being able to carry loads across the system that maybe we couldn't have done 10 years ago, but we got a lot of those projects finished. It's just exciting for me that a lot of that worked and it impacted our members' lives during the terrible week, right after Valentine's Day.
Tamra Reynolds: Yes. Kerry, I really appreciate that context. Unless you were down there in it, or you had a family member that was going through that, you probably don't understand the scope of how impactful it was. In fact, I think two-thirds of Texans lost their electricity during that five-day period of time. You and I had talked a little bit about a study that the University of Houston had put out in March following the winter storm. It was really directed at ERCOT consumers. Out of all the data that came back, electric co-ops members were, by and large, extremely happy with the communication and the way that these rolling outages occurred. I think that's really a testament to what you just said, that it was a system-wide or a co-op wide effort.
Kerry Kelton: Electric cooperatives across all segments, really shined, but it's because we have a focus on our member every day. We focus on our member in the planning cycle, we focus on our member as we're building and constructing. Then, it's that focus on the member when we are in a crisis situation. I think that study really showed exactly what we know every day, that electric cooperatives are focused on our member. In my cooperative's case, we have a lot of members moving in from Houston and from different states even as we've been growing kind of north of Houston. We were just “the power company” until this big storm happened, and for them, they realized that we were different. At MidSouth, we say, "People committed to people." That's been our motto for over 20 years. That's what we focus on.
Tamra Reynolds: I think the other neat thing is that concept of mutual aid and cooperation amongst cooperatives. Can you talk a little bit about what that means for you guys?
Kerry Kelton: Let me start off by telling MidSouth’s story during Hurricane Ike. This is a long time ago now, but we were a system just north of Houston, that as the hurricane came across Houston, devastated Houston, came up through, we had a lot of Houston people taking refuge in our area. Our area had poles and wires and trees down, similar to Houston. We were in a really tough spot, and I had participated and we had sent crews to Katrina and Rita and helped our fellow co-ops across Texas and Louisiana.
For years, that's been part of something we've done, but didn't really need that aid ourselves. Contractors are great, and I love contractors, they serve a purpose, but what I realized when the co-op crews roll into your service territory, and they are working on your system just like they were working on their system back home. They're not there because they're just trying to make a profit or make a buck. They're there with the passion to get your members' lights back on. When I had co-op crews, some co-ops that I knew the CEO that I was friends with, some co-ops I didn't know the CEO, but I quickly became friends with them afterwards, that sent crews to help me and they showed up. They worked hard. They worked as hard as my crews did every single day.
We serve a part of the National Forest. One CEO called and said, "My linemen have never seen trees that big, Kerry," but that crew spent a week in the National Forest cutting trees off and putting lines back up, putting new poles in the ground. When I talk about mutual aid and co-ops coming to help me, I get choked up. I get choked up because I realized that those other cooperatives cared about me and my members, and they came to my rescue. So today, if there's a hurricane in the Gulf or an ice storm, I have those same friends that came to help me, some of them pick up the phone and they call and we're their first call, and we're going to head down there to help them and we just had crews in Louisiana this last couple of weeks.
We are ready to do it. My employees, you would think, "Okay, well, you've got to go spend a week or two with no air conditioning, no hot showers." I mean, sometimes the conditions are really rough when you go, but they all volunteer. Again, it makes co-ops special that we are willing to sacrifice, to some degree, our projects that we had going on at MidSouth so that we could go help restore power in Louisiana.
Tamra Reynolds: What are some of the things that you guys do to really continue to meet the needs of your members?
Kerry Kelton: I believe our cooperative membership expects us to be looking into the future to see what's next. We don't have a full research and development team. We all participate in the research and development. This starts off with us keeping, number one, our members in mind, and then looking out into the future. What's coming in, five to 10 years? This is a continual question you have to keep looking at and you have to be well-read and you have to be engaged in the cooperative community. One of the best things about cooperatives is we share our experience. You have to be plugged into the cooperative community because there's a cooperative, it may be big, it may be small, but they're doing something innovative.
Cooperatives will tell you what's working and what's not. To me, that's very valuable in the cooperative community is our engagement with one another. It's the cooperation among cooperatives. When I'm doing a project, I'm doing it for MidSouth but I fully expect during the process and after the process to be helping other cooperatives, CEOs and boards to walk through that after we did, or to say, "Hey, don't go down that road, or if you do, don't go down this path, because it didn't work for us." Or, "This path did work for us. I don't know if it'll work for you, but this is the one that worked."
It's to have those discussions and CoBank's executive forum, it's something that I've gone to, since the executive forum was like 50 people. I mean, it was a very small meeting and then it's grown over time but I learned a lot. Very, very valuable through the years during that meeting. Our directors attend the directors conference with CoBank, specifically, and bring back ideas for me to think about. Those are two places.
NRECA's TechAdvantage is another place. I send more than just myself and my board. We together made the decision that if we would send kind of our department leaders, that they would have greater knowledge, not just of what can affect their job today but tomorrow. I challenge them all, before they leave, "I want you to find one innovative thing that MidSouth needs to focus on." So, they come back with ideas.
Through the years some of those ideas panned out. We have a water subsidiary that's growing very rapidly, very engaged over on our waterside. Having new and innovative ideas, that came about because our community needed a good water system in that area. Then, we switched and we started doing research on solar. One board meeting, we were having our quarterly solar discussion just as we always had. At the end of the discussion, I had a board member say, "Well, this sounds great, and it's really progressing rapidly. In five years, we really need to be paying attention because in five years, we may need to be doing this." That was his, I mean, quote that I'm quoting him right there. Within 30 days, right after that board meeting, I got a call from our largest developer just north of Houston, and he had been approached by a large solar developer basically to come in and put solar on every house or to build a community solar farm for that large neighborhood. In this case, it was going to be 5000 plus homes.
I told the board I said, "Okay, five years has gone by in 30 days. We now have a reason. Do we want to let our developer go and put solar on every rooftop or do we want to develop our own community solar program? By the end of that meeting, they were, "We need to build our own community solar." So, our board launched into solar. That wouldn't have happened if we hadn't spent really years educating our board and had that discussion through the year. Sometimes innovation, while it seems like it's one day, it's a spark, and it happens, but there are times you need to be laying the foundation. We spend the majority of our board meeting digging into issues like solar. This is something we use CoBank, it was the resources at CoBank that allowed us to meet our members’ needs because you all were out there teaching, educating, bringing speakers in, helping educate us even before we knew we were going to need that. You had the experts. That's a quick story. I will tell you that happened again and it happened again the next time with our fiber project.
We talked about fiber back when we were talking solar. Fiber came in 10 years after our solar did, it was probably eight, but it was a long transition. Even when we decided to start building our internal fiber ring, our board, "Well, okay, let's build it," but at the time, they really weren't focused on how do we impact our members, because we were building a fiber ring and then they begin to hear from their members in their neighborhood down their street, and it went from we're building it for MidSouth to building it for just a small group to a full-blown fiber project in what seemed like just a few months, but it was because we've been educating the board for years. Again, I will say, Tamra, it was your team again that really helped us say, "Okay, now what do we need to do?" These are two big success stories and there are two huge projects. When you're looking into the future you have to remember you have to do the day-to-day great. Well, we did water that just added extra stress and doing it day-to-day great. Then, we did solar. We have to do that every day. Somebody has to manage that, and now we're doing fiber. It's a huge project and that's the day-to-day that we have to do great every day.
My team's already having the discussion of, "What's the future of power supply look like, what about battery storage? What about EVs?" We're testing EVs and we're testing chargers. We've got level-two chargers. We've got level-three chargers. We have them deployed at different locations trying to experiment, but that's all in prep for what's the next thing? We don't know exactly what it's going to be, but we are still continuing that process. Being innovative takes a lot of time and resources and energy.
Tamra Reynolds: You guys are just a testament to continuing to look for ways to meet member needs while addressing the changing landscape. Kerry, I really appreciate your time today sharing your stories.
Kerry Kelton: We have something special with cooperatives and I hope by me telling stories today about what's going on at MidSouth, that it will inspire cooperative CEOs, cooperative directors, others out there to continue to look for new and innovative things, taking care of our members. That's what co-ops are all about.
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