In her keynote at the American Public Power Association’s 2019 National Conference on June 10, Association President and CEO Sue Kelly urged public power utility executives to focus on what she called the industry’s three greatest challenges: customers’ increasing use of technology, cyber and physical security, and greenhouse gas emissions.
Kelly cautioned that if public power utilities do not face these challenges head on, “we could lose our customers’ business and risk being disrupted—indeed, we could be left behind.” Conversely, Kelly said tackling these challenges can help public power “become shining examples of nimble, customer-focused and respected twenty-first century utilities.”
For each challenge, Kelly laid out the landscape and offered advice on how utilities can take them on.
Technology will disrupt the utility business
Kelly gave examples of how industries such as hotels and taxis have been disrupted as a result of Americans’ embrace of new technologies over the past few years, and cautioned that the electric utility industry is not immune from such disruption.
“It is unlikely that electricity itself will go out of fashion. It powers more and more aspects of our lives,” she said. However, “how we generate and use electricity is rapidly changing. Retail customers increasingly will be generating their own power, and at times putting it on our grids. It is already happening in some parts of the country. It will soon come to the rest of the country.”
To get a handle on this rapid change, Kelly said that utilities should consider how technology impacts their services and rates, and explore how to leverage technology to keep up with customer expectations. Kelly noted that customers will want to track their usage and have onsite generation and storage and bill pay options through a variety of devices. Anticipating customer wants and needs, Kelly said, will help utilities to develop service offerings to meet them “before customers vote with their dollars to meet them a different way with a different provider.”
Kelly encouraged utilities to pick technologies and services to invest in implementing based on their community’s needs. She acknowledged that doing so involves the risk of premature obsolescence and customer push back.
“But these headaches will be minor compared to what could happen if you do nothing,” said Kelly. She noted that utilities without the expertise or resources to develop new technologies and services can take advantage of services offered through their joint action agency or state association or enlist help from public power-owned service providers, third-party vendors, and consultants.
A culture of cybersecurity for all
When it comes to utility security, “The more I learn, the more I am concerned,” said Kelly. “They say you are not paranoid if they really are out to get you—and in this case they are.”
She noted that with funding from the Department of Energy, the Association has developed assessment tools, training and technologies to improve utilities’ cyber and physical security. (See www.PublicPower.org/Cybersecurity for these resources).
“Please don’t think that because your utility is small, what you do does not matter,” said Kelly. “We must build and internalize a culture of security at all public power utilities, just as we have done with safety.”
Finding common ground on climate change policy
Kelly reviewed how the “policy ground is shifting” on climate change and gave examples of how politicians on different sides of the aisle are focusing on the issue. She noted that at the Association’s Legislative Rally, both Republican and Democratic members of Congress talked about policy strategies to address climate change. At the Rally, Rep. Greg Walden (R-Ore.) said that there is broad bipartisan agreement in Congress that “prudent, practical steps should be taken to address current and future climate risks.”
Kelly noted the increasing pressure to address climate change is “coming from the top-down and the bottom-up” – due to Congress’ increased attention and actions by state and local governments to reduce greenhouse gas emissions.
Kelly said that although comprehensive federal legislation on climate change is unlikely to become law in the next few years, “the conversations in Congress are starting now about what climate change legislation should contain.”
“If public power wants to impact those legislative provisions, we have to be at the table for the discussions,” she said. “And if we are to participate, we need to know not only what we must oppose, but what we can support.”
Kelly said the Association is gauging where its membership stands on this complex issue through a Climate Change and Generation Policy Task Force, which is composed of public power utility CEOs. The group will be chaired by Mark Crisson, a former CEO of the Association and of Tacoma Public Utilities in Washington, and a former Association board chair. At a meeting in April 2019, a small group from the task force volunteered to work on possible consensus policy principles, which they hope to present to the full task force in the fall. The hope is that the task force can develop principles that can serve as the foundation for a revised policy resolution on greenhouse gas emissions. That resolution would then guide the Association’s advocacy on greenhouse gas issues.
“We need to decide where we, as a family, stand on this issue—or whether we simply cannot speak with one voice,” said Kelly.
Kelly also noted that the Association’s long-time former leader, Alex Radin, wrote about climate change in his 2003 biography. He said that “additional steps—many of which will affect electric utilities—are being demanded. It would be prudent for public power to anticipate the changes that are needed rather than react to pressure after the fact.”
Kelly praised public power utilities for reducing their carbon dioxide emissions by 33 percent between 2005 and 2017. “If we can help our customers use electricity more efficiently, electrify new loads like transport, and incorporate more lower carbon resources into our power supplies through the use of battery storage and demand response, we can do still more.”