The following is a transcript of the Sept. 2, 2024, episode of Public Power Now. Learn more about subscribing to Public Power Now at Publicpower.org/Podcasts. Some quotes may have been edited for clarity.
Paul Ciampoli
Welcome to the latest episode of Public Power Now. I'm Paul Ciampoli, APPA's news director.
Our guest in this episode is Brad Bickett, general manager of Kentucky public power utility Henderson Municipal Power and Light. Brad has served as general manager of the utility since early 2022.
Brad, thanks for joining us.
Brad, to get our conversation started, I wanted to give you the opportunity to offer an overview of your role and responsibilities as general manager of the utility as well as describe your overall career at the utility.
Brad Bickett
As general manager, I'm responsible for all operations of the utility and we provide electric services to our customers as well as fiber Internet and phone.
Henderson Municipal Power and Light....[is an] electric and Internet provider under the city of Henderson, Kentucky, and we provide services in and around the city of Henderson. So as you said, I started as the General Manager in 2022 [in] February and I originally began working for this utility in 2010 as a reliability compliance manager and moved from that role into power supply and so I was the power supply director before being offered the position of general manager.
And before that I worked for a power plant that was actually owned by the City of Henderson and I was an electrical engineer at the plant and so I've been at Henderson Power and Light now for about 14 years and really enjoying working in this industry at this time.
If you're interested in the customers we serve, we have about 12,000 meters --electric -- and we just began offering fiber to residential customers and we've been doing fiber to businesses now for about 25 years.
Paul Ciampoli
We're closing in on 200 episodes for this podcast and one of the themes that I've noticed emerging over those almost 200 episodes, I talked to a lot of executives such as yourself and a lot of times they do have that prior experience with their respective utilities, so I'd imagine that gives you a lot of advantages when you take over the reins as general manager.
Brad Bickett
I believe it does and like most utilities that that are providing electric, the largest part of our budget is the purchase or the production of power. And so having the experience within the power supply space, that certainly helps.
And then obviously there's a lot of other things and other areas of the utility that you have to learn as well, but that's certainly a big piece of it, what I have [with] my background and experience.
Paul Ciampoli
In May of this year, the utility entered into an agreement with NextEra Energy for the construction of a battery energy storage system.
I have a three-part question for you. One, can you offer additional details on the system? Two, can you discuss the history leading up to HMPL’s decision to pursue battery storage and the third part of the question is how will the utility and its customers benefit from the battery storage system?
Brad Bickett
What we're planning for is a 12 MW system that will discharge that amount over a four hour period, so you could call it a 48 MW hour battery.
So far, we're working with NextEra towards a definitive agreement and right now...terms have been agreed to generally and the pursuit of this project began after conducting our most recent integrated resource plan....basically looks out over a 20 year time horizon and evaluates what our options are and what's the lowest cost option to be able to serve our customers.
And out of that that study, there were a couple different recommendations and so we actually issued an RFP – a request for proposals -- for a natural gas reciprocating engine peaking plant and based on what we got back in response to that, we ultimately decided not to pursue.
At that time, there were some challenges with the supply of gas as well as the cost came in quite a bit higher than what we had had planned and budgeted for, so we focused a little bit more on the storage, which was also a part of the outcome of the IRP -- to pursue storage combined with solar and or wind and in our region solar is the more economic option, if you will, when you talk about intermittent resources.
And once we began looking at, you know, storage and looking at kind of how the prices have trended down we issued that RFP and we were very pleased with some of the responses we received and so that led us to continue forward...just generally speaking in our region, we are pretty heavily reliant on fossil fuel generation and that's changing over time but probably more quickly than a lot of people are comfortable with and expect that storage is going to be very important for us as we see a lot more intermittent resources being put on onto the system...the benefits from this storage project are going to be coming from the different value streams, if you will, that we can receive from being a participant in what's called MISO, the Midcontinent Independent System Operator, the regional market operator that we’re a part of.
So we believe there will be some value from this battery storage project in the form of capacity which we're required to have to meet the needs of our customers as well as ancillary services that we could see some revenue from and also with basically buying the energy that we use to charge the battery and then selling the energy at a time of higher demand.
So we could see some value there by what I'll just call...kind of giving us some control of the energy in the time of use where today, and traditionally, power is used at the time when it's generated and the market which we are involved and participate in, we buy all of our power from MISO in the market and then we hedge ourselves with contracts that we have.
Definitely see that that benefit from the economic piece of it as well as it will improve the local resiliency as we're going to connect this to our distribution system.
And just to give you some idea of scale, it's the 12 MW battery and our peak or projected peak demand, which will probably hit this week with these high temperatures, is 102 megawatts, so it's right at the let's say 10% or so of what our peak demand is expected to be.
Paul Ciampoli
As you know, the utility has been recognized by APPA for high levels of reliability.
Could you talk about the steps that HMPL has taken to maintain high levels of reliability?
Brad Bickett
I didn't mention this earlier, but we have a five-member utility commission that's appointed by our mayor and approved by the City Commission.
We have a board that oversees our operations as well and they are very supportive of us being able to maintain the system and I think that's key when we talk about reliability as being able to have a robust tree trimming program which is what I think is the single largest way that you prevent outages...we do track our data by cause and duration and...72% of outages last year in 2023, were caused by either squirrels, birds, trees or storms, and so tree trimming certainly benefits -- helps to prevent outages that result from tree contacts.
But even with squirrels, other animals that like to use the trees near power lines, tree trimming certainly helps decrease those contacts with the live wires as well...I would say between 15 and 20% of our distribution budget is for tree trimming.
The other steps that we've taken is some part of our system -- it's, well, mainly downtown -- it's preferred, right, if those utilities are underground and...it's a little bit expensive to do those underground conversions, but that also provides a reliability benefit because you do avoid having to have the lines overhead and so I think that's also a contributor, but that's something we've just started the last five years, but we'll continue as it makes sense in certain areas, especially downtown.
Paul Ciampoli
I wanted to dig deeper in terms of the utility’s relationship with customers, which as you know is obviously front of mind for public power utilities always.
So I wanted to have you discuss if you could the ways in which the utility is proactively engaging with its customers in terms of explaining the value of public power and as well how HMPL is always keeping customers front of mind every day.
Brad Bickett
One of the first things that I focused on as GM was to get the name of the utility out more to our customers, which had not been done a lot before that.
So we now have a lot more of our apparel with logos and we provide funds for our employees to go buy a certain selection, if you will, that they would like to have with the company logo...on the apparel and that's showing people in the community that the people that provide the power and the fiber services to them live and work in their community...a lot of times they may not know that.
The other thing is we really promote community engagement.
And when it makes sense, involvement with civic organizations around town and the fact is we, like many other municipals and other public power utilities, do have very low rates.
And so communicating that message that combined with the excellent service that we provide is the message that we that we try to get out there.
And I think it's about being involved and it's about a small town like us -- we get that message out a lot by direct communication with our customers, word of mouth.
Paul Ciampoli
One follow up if I could. Just circling back to the storage project -- any comments you could provide in terms of communication between the utility and customers about that storage system?
Brad Bickett
One of the very important steps that we're taking right now in this project is to work very closely with our local fire department and our city manager and others [in] the local leadership in the city and in the county.
Because there's some concerns with safety and what might happen if there's what's called a thermal runaway event with this type of a facility. And so we've spent a lot of time working with the local leaders around town and some of the folks with planning and zoning to develop an ordinance, number one. And then to even go further than that and talk about what guidelines we want to have in place.
So we continue to talk to the public about this because I think that it's really key that the information is communicated accurately, otherwise people get their information from the Internet. And while it's not necessarily false information, sometimes it's not accurate based on what project we are going to pursue here in town. So there have been some concerns and I found that it's very important to stay engaged with with the folks.
And so far we're moving in the right direction. But I do want to emphasize that we're spending a lot of time answering questions and asking and asking NextEra to go a little bit over and above when it comes to communication about this project and what they're going to do in order to address some of the concerns that have been raised.
Paul Ciampoli
Yeah, that's a great point you raised in terms of -- I know nationwide other communities have been grappling with addressing safety concerns related to storage as well. So I think that sounds like that's a great plan that you guys have been implementing.
Brad, thanks again so much for taking the time to speak with us. Love to have you back perhaps around this time next year to talk about an update on the storage project and I'm sure there's a lot of other things that will be going on at HMPL that we could talk about.
Brad Bickett
You're welcome. I'll be glad be back on and appreciate the interest.
Paul Ciampoli
Thanks for listening to this episode of Public Power Now, which is produced by Julio Guerrero, Graphic and Digital Designer at APPA.
I'm Paul Ciampoli and we'll be back next week with more from the world of public power.
