Teri Viswanath: Welcome to Power Plays, a CoBank knowledge exchange podcast series. An audio program where we connect you with top energy and environmental innovators and policymakers who share their insights, experience and market observations. Hello, I'm Teri Viswanath, the lead economist for power, energy, and water, at CoBank. I'm joined today by co-host and CoBank managing director, Tamra Reynolds. Hi, Tamra.
Tamra Reynolds: Hello, Teri. To celebrate National Co-op Month, we dedicated this month's podcast to celebrating the cooperative business model, the seven co-op principles and talking about the ways co-ops are making a difference in the communities they serve. This year we'll be focusing on dynamic stories at five different electric co-ops in the U.S.
Teri: When we planned this segment, Tamra, you originally called the podcast, our High Five to the Top Five, but in a really tough year, what we found is that there were so many feel good stories about our co-ops. For this program, we landed on a few unique stories that shine a spotlight in how our cooperatives are really coming out to support our communities.
Tamra: That's right. Whether our co-ops are hard at work keeping the lights on, making sure communities have online work and school connections, keeping energy affordable or meeting the challenges of climate change, our co-op stories this month are going to inspire.
Teri: These were all great interviews, Tamra, but your conversation with Kerry Kelton, MidSouth's CEO, about the winter storm this year, and the impact on his Texas community was really something. I know you lived in Texas and have close family that still reside there, and who lived through that winter storm, so there was a personal connection for you in hearing Kerry relay his community's experience. Here's your interview with Kerry.
Kerry Kelton: 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, and then we had the real cold weather start moving in and we had to bring our crews back. 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 begin 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, and initially we're 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'd 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. 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 and 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 that, we were getting it off and on and so people knew as soon as the power came on, the reports I had, and I had one story and this is a funny story. They had everything pre-planned. They knew that typically at the top of the hour, power was going to come back on, and 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, and that's how they survived.
We felt like we were doing the right things, but fact is, some of our members maybe weren't happy until they begin to hear the news and the reports out of Houston and Dallas. We were communicating on social media, as many social media channels as we could get out, and our members really engaged. 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. Electric cooperatives across all segments, really shined, it's because we have a focus on our member every day.
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 north of Houston. We were just “the power company” until this big storm happened. 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.
Tamra: Kerry's story is about a community coming together, but it's also about the importance of collaboration, in this case, the principle of cooperation amongst co-ops. There were two more stories that we're going to share about the importance of collaboration also.
Teri: The pandemic increased attention on the crucial role that high-speed internet access plays in American life. Mohave CEO, Tyler Carlson, and their board wanted to accelerate service development in his community, which was either spotty or non-existent. They identified a service provider, TWN Communication, as the best partner to move forward with. This is your conversation, Tamra, with Tyler and Ami Rodriguez, VP of sales from TWN Communications.
Tamra: Can you talk about why that was important for you and Mohave to partner with TWN on broadband, and why was that strategy really optimal for you guys rather than going it alone?
Tyler Carlson: There's a lot of facets of this, not just the construction and the staging and the relationships, for being able to buy fiber, but the technology, the electronics, the knowledge of electronics on both ends, and then you have the customer care standpoint. Now, we either have the choice of trying to develop that all of our own, and you think about it from that standpoint, that's not the business that we're in. We do know about customer care or member care, but it's specific. It's specific to the electric industry. If we were about to do this, we'd actually add a couple of years on the front, for us to develop our own in-house ability, our own in-house training. It was logical for us to partner with somebody we're already doing business with. We already have a relationship and they're already in this industry and doing it.
Ami Rodriguez: For almost 30 years now, TWN has partnered strictly with rural electric cooperatives and the primary reason for that is, that affinity and that reputation they have with their communities. When we go into an area to build or deploy broadband, having that existing relationship with the members is crucial to our success and that's part of the beauty of this public-private partnership that we keep talking about.
Tyler: If you look at customer care, if you look at customer response from existing carriers, and then you compare that to the model that TWN has, TWN models their customer care, their responsiveness and everything to the co-op’s model, which is fast response, instantaneous response, same-day service. I think that alignment with their business processes is almost as important as the experience, because we don't have then two dissimilar business processes.
Ami: We walk into a community as yet another internet service provider, a big, huge conglomerate. I hate my internet provider at home, and that seems to be the sentiment across the board. When we say we're doing this in partnership with an electric cooperative, that automatically tells a customer, my service levels are going to be different than what I'm experiencing now. We have to carry that message across our employees, other co-ops, everyone we work with.
Tyler: Each co-op is a little bit different. The folks that you serve are different, the geography is different. The areas that we serve are different. The makeup of your members is different, but one of the things that we've done and we're doing this jointly, and we're spending effort and time from Mohave's standpoint is, actually training them to know what our members are like.
Ami: There is a reason that this 3P, public private partnership, message is quite the buzzword these days, and that's because it works and if entities were going to do this and serve rural areas with good broadband, they would've done it a long time ago. These are expensive projects, they're risky projects, and so to try to go it alone is really risky.
I believe in this model, when you have two or more good partners together that are working with the same values, same goals, and are just in lockstep together. I guess the thing I'd like to leave listeners with is that, it does work. Find a trusted partner, and this can be a very successful initiative.
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Tamra: In my interview with Tyler, he mentioned he thought that private industry would see the need, and opportunity then fill the void for high speed internet. This didn't happen. On behalf of their members, Mohave set out to meet that need. I can see the parallels of this story, providing broadband access and the story of our electric co-ops’ creation with providing essential electricity in the 1930s. In fact, Mohave is one of many co-ops that are now providing broadband to their rural communities.
Teri: At the heart of this story, is meeting members where they're at. Aligning the co-op's purpose with the highest priorities in the community, and then delivering excellence.
Tamra: My interview with Roanoke Electric CEO, Curtis Wynn, was also very member-centric. As Curtis points out, at the heart of piloting a vehicle-to-grid program is the ever-present need to keep the member bills affordable. As he highlights, he's serving an economically disadvantaged region of the country, his members can barely afford to pay their bills, and a rate increase just adds an additional burden to the families they serve.
Teri: Roanoke's V2G program has the promise of lowering peak demand for power during times when the cost of capacity is high, and then selling more electricity during those times when they're paying for capacity that they don't use, but I think Curtis tells the story best.
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Curtis Wynn: Roanoke Electric Cooperative is currently experiencing slow growth and has been for quite a long time. As with most electric cooperatives, we're experiencing at the same time rising costs, which really produces tremendous rate pressures that ultimately have to be passed on to our member owners. Now for us, this has the added challenge of us serving in a region that is economically distressed. Simply put, I'll just say it this way, our members can barely afford to pay their bills and a rate increase just adds an additional burden to the families that we serve.
If you take a look at these factors, these have really caused us to be laser-focused on the overall goal of lowering our costs as a utility, and creating more value for our member owners, and we're striving to do this in two different ways. The first is, putting programs in place that allow our member owners to control and lower all of their energy costs, not just the electricity costs, but fuel costs such as gasoline costs, it falls right in there.
We're also establishing some initiatives that lower the largest expense that we have as a co-operative, as an electric co-op, that is our wholesale power costs. We see two major opportunities to do that. We are becoming more efficient as a utility as we work on these. The first of course is, reducing our line loss and that's pretty common among several co-ops. The second speaks to what we believe this pilot, V2G pilot program can lead to in a very exciting way, that is improving our load factor.
The two areas of focus basically positioned us to lower peak demand for power during times when the cost of capacity is higher, and then selling more electricity during those times when we are paying for capacity that we don't use. This is not a new concept, but what is new is the technology and the data that are becoming available to us that allow us to operate our utilities much more efficiently today than we've done in the past, and that's pretty exciting.
The whole prospect of using a parked vehicle, whether it's a cooperative vehicle, a school bus, or vehicle owned by a small business that is on our system, creates tremendous opportunities for us to engage with our member owners and to leverage battery technology that both creates low-cost transportation as a solution for those member consumers, while we're supporting the co-op's ability to more efficiently manage our distribution system.
Partnering and collaborating are important for two main reasons. One is, that we are a very busy co-op at Roanoke Electric. We're managing several initiatives as we speak. Finding and paying for the bandwidth that is needed to keep up with the pace of change that is coming our way, is a major challenge and it's a major challenge on many fronts, especially for a relatively small electric cooperative like Roanoke Electric.
The other thing, they provide the conceptual knowledge and we at the cooperative are best-positioned to make it practical. What have we gained? Well, we've taken advantage of their intellectual bandwidth for one thing, and what that does is that, it really enables us as a cooperative to gain greater speed to market. This is important because disruptors are in a literal foot race to get to our member owners before we do.
Taking three to five years to develop and execute a strategy is going to become more and more problematic as we move into this environment of being in a fast-paced environment and having to do things quickly. I really appreciate the fact that we're a part of a network that has so many resources that we can tap into, makes our jobs much easier and makes solving the problems that we're faced with much more doable.
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Tamra: Our last two co-op stories have something in common. Kit Carson and Vermont Electric both serve communities that have prioritized addressing climate change.
Teri: That's right. These communities in Vermont and New Mexico are miles apart, but in complete alignment in their desire for zero carbon energy supply. Let's hear from Rebecca Townes, CEO of Vermont Electric, on why this goal was important for her membership, and the steps her co-op has taken to meet those member requirements.
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Tamra: Earlier this year, Vermont Electric Co-op committed to procuring zero carbon emission power supply by 2023, pledging a longer-term commitment to achieve 100% renewable power supply by 2030. Why was this project important for your membership, Rebecca?
Rebecca Townes: Our members, we heard from them a member survey that over 70% of our members told us that they would support a small financial impact, to move to a 100% carbon free or 100% renewable, and our board spent a lot of time educating themselves on all of the pieces that would go into this commitment, everything from understanding renewable energy, credit markets, and our own standards in Vermont. We were already required to reach 75% renewable by 2032, so this commitment is above and beyond, and our board felt strongly on behalf of our members that they really wanted to do what we can do in terms of making a commitment towards reducing our impact on the climate, in a way that was responsible and continuing to serve our members.
Tamra: Walk me through how this pathway towards clean energy will evolve. Will it involve members, will involve different tools at your disposal? What does that look like?
Rebecca: Yes, great question. Our initial strategy is a power supply contracting strategy, so we do not ourselves own any generation, although we own parts through contract, so 2023 is not that far away and our team is already working hard on how to meet our 100% carbon-free commitment. We were already 75% of the way there, so it's really piecing together that last 25% in an affordable way. That's the first strategy.
However, as you mentioned, our members already have an important role to play and that role will only grow over time. As they start to adopt electric vehicles, heat pumps, and transition their personal heating and transportation to non-fossil fuel, then they can basically be cleaning up their own carbon footprint and on behalf of Vermont, be able to clean that up as well.
We also know that operating the grid cost-effectively will be increasingly complex. As more intermittent renewable sources come on, we know that maximizing the grid that we have will be incredibly important and members have a role to play here too. We actually just rolled out a program to allow members to purchase their own residential battery. In return for an incentive, we pay them that offsets the cost of the battery a little bit.
They allow us to manage that battery to minimize our peak loads at certain times. We're doing that with utility scale batteries, but members can also get involved and the benefit for them is that, in addition to being able to participate in this program, offsetting the cost of that battery, they're building their personal resilience and moving off fossil fuel generators onto these very easy, very clean batteries. As more and more members move to these types of devices, these programs will be of critical part of managing the flow of our power supply.
We talk a lot about making sure that we have programs that serve all our members. Some members just want to turn their light switch on, have it work and pay the lowest bill possible. Other members want net metered solar, and a residential battery, and energy efficiency improvements, as well as technology that monitors all of that in real time. We talk a lot at VEC about how our job is to serve all of those members and to meet them where they're at. We also spend a lot of time involving all of our staff in thinking about innovation.
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Tamra: For our last interview segment, Luis Reyes, the CEO of Kit Carson Electric, held open member engagement sessions to really understand what energy supply the community wanted, and what other services his co-op should be prepared to provide.
Teri: Luis speaks about the original intent of the co-op programs in the 1930s, which was to make sure they were providing value to communities by providing electricity. That mission of bringing value to those communities served by co-ops is still very much alive today. You're going to see with our Kit Carson interview,
Luis Reyes: We have a very active and progressive membership. We're located right at the base of Rocky Mountains in the Sangre de Cristo mountains. Our prime economy is tourism. We have a lot of ski areas. We have ranching and farming. The environment is extremely important to us, not because of tourism, because of our livelihood in ranching and farming, we need blue skies and clean water and clean air.
It's been a little over five years that we decided to really engage the membership on what kind of energy supply do you really want in the future. We embarked on a goal to hit a 100% daytime solar. Up here in northern New Mexico we have over 300 days of solar, days that the sun shines practically all day. That made sense for us. We had already a radio station that was completely solar, and we had a bunch of different groups that were interested in solar for different reasons.
We had old Spanish land grant folks who really wanted to use it to leverage or to encourage people to go up to the mountains, because it was clean air. We have two tribes, two pueblos that really embraced renewable energy as basically getting back to Mother Earth and what Mother Earth can offer as prosperity. We have a very dynamic progressive membership that really wanted us to see clean renewable energy alternatives. We embarked on that, by the end of this year we'll hit that goal.
We've done it with distributed energy. We have solar arrays about 18 of them ranging from 40 KW parking canopies, to one under construction a 15-megawatt array with battery storage, and they're located around our system. One of the things we found is, our members wanted their own solar facility. We have spread them out across different communities to make sure everyone has their own power. I think that's helped because they see where the power is coming from.
In the early days, solar was more expensive, and now as solar has become more mainstream, it's become the cheapest power supply. We decided then to add storage. We start to understand the value streams of storage, and what storage could help in the future with both non-solar times and resiliency. Really what's missing in this transition to renewable energy is that transition generating supply. Right now we have natural gas and coal that is base load, but what do we do when those start to close?
I think it's important to start getting some experience on batteries, see what their limitations are, understand their cost and their life cycle. It puts us in a good position to be ahead of the curve to make sure when that last coal plant is closed, that we can continue to offer reliable, affordable, electricity which is the foundation of the co-op program. My point is, the way we deliver power in the future is not the way we deliver power today.
I can see a whole slew of energy services being offered to our members, where they want to generate their own energy. They may want to generate their own energy at different times. We act more like a battery and I think we should be in a position to support those ideas instead of fight those ideas because again, we have to get back to our roots where our members are owners. I think that the more you engage people, listen to both what they want us to do and their complaints, really makes them feel at home, that they do have a voice in, at least in this case, their energy future.
Tamra: I love that story. I'm looking forward to watching how these co-ops evolve to meet member needs. I applaud these co-ops for taking on projects that at the onset might have seemed impossible.
Teri: They were clearly up to the challenge, oftentimes working with other cooperatives or collaborating with those leaders to accelerate critical programs for their communities.
Tamra: I really enjoyed these interviews and I hope that our listeners have as well. Please join us next month when we sit down with Chris Wright from E3 Consulting, hearing his experience in developing storage projects. Continuing our theme of building community energy resilience, we're going to learn the ins and outs of building and procuring energy storage. Hope to see you then.
