Keywords: electrification, infrastructure, utilities, partnerships, entrepreneurship
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In this engaging episode of BRITElights, Rick welcomes industry leaders, Mike Stacey, KPMG, and Dan Killoren, EPRI, to delve into the infrastructure of energy transition and the inherent challenges and optimism it brings. Co-host Mike, who spearheads the Zero Emissions Vehicle campaign and chairs the BRITE board, shares his insights about the pivotal role of strategic partnerships and an in-depth understanding of customer behavior in innovating effective solutions. The group highlights the way utilities are adapting to meet the increasing demands spurred by the expansion of the electrification movement, emphasizing the critical role of data access in enabling these changes. Dan underlines the importance of aligning utility interactions with consumer needs, keeping reliability, affordability, and sustainability at the forefront. He underscores the need for utilities to keep pace with consumer demands’ evolution and stresses the vital role entrepreneurs play by creating customer-centric solutions within the electrification landscape.
Connect with Dan | Learn more about EPRI | Connect with Mike | Learn more about KPMG
Transcript:
00:00
Rick Stockburger
Welcome to BRITElights. Oh, man, I am so excited. We’ve got a great episode. We’ve got a great co host. We’ve got a great host. I think
00:09
Rick Stockburger
Is that me? So I’m so excited for these next three episodes, we’re really going to be talking about the infrastructure of electrification. And we’re really fortunate. The last couple of episodes we had Randy Cole as our guest host, really talking about vehicle electrification specifically. And now we have a new guest co host who is the national Zev campaign leader for KPMG’s infrastructure practice and also happens to be BRITE energy innovators board chair Mike Stacy. Mike, welcome to BRITElights.
00:45
Mike Stacey
Thanks, Rick. Super excited to be here. Talk about Ev, to talk about the energy transition, to share, to listen and to.
00:55
Rick Stockburger
Absolutely. And I love having you here. Being a former founder yourself, you’ve gone through incubators and accelerator programs. First off, I just want to ask you, before we get into everything else, what inspired you to be involved in this energy transition, whether as an entrepreneur or now, the work that you’re doing at KPMG?
01:17
Mike Stacey
Yeah, I would say just the tremendous opportunity out there to make change as an entrepreneur. I was on the front lines of this, developed a technology, was out there pitching the technology in the market, wanted to make it happen, had the passion for this and delivering it. Right now I’m on the other side. I’m looking at the outside in and looking at the turbulence here, and it’s not easy. There’s nothing easy about this transition, but more than ever, there’s a huge amount of optimism, huge amount of progress right now. So for me, this is in some ways reliving my life as an entrepreneur from the outside.
02:02
Rick Stockburger
Well, that’s awesome, man. Cool. Well, as everybody knows that’s been listening to the podcast, we always start out with our co host being able to kind of go on a little bit of a deep dive, focus on your expertise, and really setting up our episode. So, Mike, I’ll give your time to dive in deep and get a little bit wonky maybe, and talk about the infrastructure of electrification.
02:25
Mike Stacey
Yeah, great. Well, thanks, Rick. So as background, my day job, I lead our zero emissions vehicles and electrification efforts in KPMG. So what that means is I help organizations navigate strategic decisions in energy investments. So things like EV charging, I mentioned about being on the front lines as a CEO, and I think kind of that really molded me for this role the last several years. Last twelve years, actually, I’ve been focused in this concept of disruption in energy, disruption in transportation. For transportation, that can mean new technologies, electric, hydrogen, autonomous vehicles, mobility as a service. On the energy side, it’s really this shift from fossil fuels, more distributed energies, and then also a range of technologies across the value chain of energy. Over the last 15 years, we’ve seen cycles, we’ve seen clean tech cycles, and some call them, maybe call them bubbles.
03:43
Mike Stacey
Right now we’re calling it the energy transition instead of clean tech, which is interesting. But at times there can be two steps forward, one step back. As I mentioned, I think this time is different. This time there’s unprecedented investment, unprecedented grants, incentives. You have red states and blue states that are all in on this right now. You have the private sector that’s made significant investments across the value chain. You can’t turn the ship around at this point.
04:21
Rick Stockburger
No, absolutely. And I think, too, right now it’s so interesting because not even in clean tech or in energy or anything, but in every market, I think we’re seeing kind of like a democratization of information and consumer control. And so I think it’s really interesting that’s kind of coming to the energy market because the energy market in general has been very top down, bureaucratic. This is how you get it. And I think consumers are craving information so they can make better decisions. And that’s, I think, really interesting that’s hitting the market right now in everything that we do.
05:02
Mike Stacey
Yeah. And I do think information is key. On the backside of that, we call it data is the backbone right now of this energy transition. We consider that one of the three pillars, the pathway to make this successful. Before I get into that, I think the key thing that we’re seeing is really this pathway to profitability, we’ll call it for the private sector more than ever, there is a real pathway, and there’s a few companies that have turned that corner. Sure. Tremendous growth, tremendous revenue. What we look at, though, is the unit economics. Are companies actually making a profit one, on the service, on the product they sell, and not everyone’s doing that. And that’s part of the challenge and critically thinking about how to do that.
06:00
Mike Stacey
But going back to that point, information and data, we see that as one of the key pieces.
06:08
Rick Stockburger
Yeah, no, absolutely. I think obviously, innovation has a huge role in that, too. And that’s where we do our work at BRITE and I think where our guests today will talk about as well. But getting those unit economics down, as you say, that’s innovation, that’s better technology that we can get, that’s cheaper, more reliable, more affordable, and all of this really has to do with BRITE’s role in this, so. Well, Mike, I’m so grateful to have you as my co host for these next three episodes. So I’m excited to buckle in and move forward together with you on this. So today we have an awesome. I’m really excited. I’ve got to know Dan Calorin, who’s the program manager for the global innovation hub at the Electric Power Research Institute. I’ve also noticed people get really long titles in this industry from that standpoint.
07:10
Rick Stockburger
But I actually got to know Dan quite a few years ago when he was at AEP and doing some amazing work there and being really a leader in the forefront in the utility space. And it just made so much sense when I heard that he moved on to Epry and now is the global lead for this innovation hub. So I’d like to welcome Dan Calorin to BRITElights.
07:36
Dan Killoren
Hey, Rick. Hey, Mike. Good to be with you.
07:38
Mike Stacey
Hey, Dan.
07:39
Rick Stockburger
Dan, awesome to have you. Super stoked to be in this. And I know this past week we had the electrification conference and that was awesome. So really a great job on that conference. I really enjoyed my time there and thanks for all the hard work you do to get this information out to everybody. It’s really a top tier conference.
08:00
Dan Killoren
Absolutely. Yeah. A lot of hard work by a lot of people. So it was awesome week in Savannah.
08:06
Rick Stockburger
Yeah, absolutely. So when we bring on new guests, I always like to set rails with them. Right. I always like to be like, man, what’s the most exciting, what’s the most terrifying part of this space? And get into it. So, Dan, I’m going to start with the softball. Why are you in the space? What excites you about utility infrastructure innovation? Like all this great work that you do? What’s exciting about this space in this market to you?
08:34
Dan Killoren
Yeah, well, I’ll be honest, I kind of fell into the industry and I have a nontraditional background to get into it, but since I’ve been in for about 15 years, it’s always been regenerating itself and generating new and interesting things to work on. So I think it’s really a dynamic industry that kind of cuts against maybe the image of utilities as being stayed and a bit conservative. I think it’s actually a great place to innovate and if you like change and transformation, utilities specifically, but more generally, energy is a really interesting place. I think even just in the 15 years I’ve been in it, I’ve seen lots of transformations and I expect that to continue for the rest of my career.
09:20
Rick Stockburger
Yeah, that’s awesome. And I think this space is so exciting. And utilities don’t always move the fastest, let’s be honest. But we’ve seen so much change in the last 1015 years. So it is exciting to be kind of on the forefront of these very large behemoth organizations turning into the wind in some ways and getting their sales full in other ways. So it’s really exciting. So with that said, what scares you about this space? What’s the worst thing that could happen?
09:55
Dan Killoren
Well, I think unfortunately we’ve seen that in the last few years in certain geographies, the effects of climate change are going to put real stress on the system and the resiliency upgrades and improvements required to keep the lights on are not insignificant. So I know energy is in the background for many people. It’s not something they think about on a day to day basis. But we’ve seen through these catastrophic climate events that they can pose real threats to the system. And while that’s happening, it’s not like demand is declining. In fact, demand is increasing very rapidly in certain jurisdictions. So there’s this balance that energy providers face of making the system more resilient to climate impacts while also meeting the demands of new customers who expect the lights to be on and the power know every second of the day.
10:48
Rick Stockburger
Yeah, absolutely. Well, I’m excited for you guys to kind of geek out and walk out on infrastructure and electrification of electric vehicles and what that looks like. So Mike, I’m going to hand it over to you to lead this segment.
11:03
Mike Stacey
Yeah, well, great. Well, Dan, again, welcome. And I think this topic is something we could have a podcast for a week if we wanted to. There’s so many facets of it. But want to talk a little bit about the rapid rise in demand of electrification because this is something that arguably we haven’t really seen since the air conditioner. And I think it’s at a much higher scale and coming at this not only from transportations, one piece, buildings or another, and then you have on the supply side the interconnections on solar, but tremendous opportunity to innovate. But maybe before we go there, let’s talk about some of the fundamental challenges that utilities face with this type of demand. How would you characterize that?
12:03
Dan Killoren
Yeah, utilities are really being hit by that demand wave in a couple of different parts of their business. From a transportation electrification standpoint, that’s coming by customer demand and it’s kind of hard to predict. Right. Because it’s all based on adoption patterns within their service territory. So they’re getting better at detecting that. But it’s all tied to consumer behavior that really is somewhat hidden to the utility until the EV shows up in the garage or at the charge point. So they’re having to manage that distributed demand showing up in different ways. And they’re also having to manage a large demand being brought online due to the growth of the Internet and manufacturing and onshoring in the US. So some of that enabling infrastructure for evs, but also a different type of demand, it’s larger, it’s more critical, it comes in big blocks.
12:58
Dan Killoren
So as a utility, it’s having to plan the system and make it as affordable as possible. It’s really a challenge because it’s coming in different ways and it kind of presents different obstacles to how to meet it.
13:14
Mike Stacey
Talk a little bit about kind of that connection to the customer. And for the first time ever, it feels like utilities actually have to get to know the end customer a little bit. Their behaviors, the segmentation, kind of. Do you see that as a need and do you see progress there?
13:35
Dan Killoren
Absolutely a need. A lot of utilities faced this in the 90s when they had to prepare for deregulation in their service territories. And they quickly saw that if you have to win the customer, you’re going to have to show up in a different way with services and offerings that interest them as consumers. So utilities have done this in the past with energy efficiency and other programs, but transportation really presents a new challenge because a lot of the consumer touch points are not ones that they traditionally have long experience with, if you think about auto dealers, if you think about chargepoint operators. So it’s kind of a new set of relationships for them to cultivate. And at the end of the day, I think most utilities would say they do not want to be the bottleneck in that particular customer acquisition, right?
14:27
Dan Killoren
They don’t want to be seen as not being able to meet the customer’s desire if it is to move to evs or other forms of electric transport. So I think the answer to your question is yes, they’re definitely moving in that direction. I think the question for many is how to show up with partnerships, because they know they’re not going to be the only solution provider to consumers. So how do they establish new partnerships? And that often, just like anything, requires kind of relationships to be developed and new patterns to be developed. At the end of the day, though, no consumer is going to permit that. They bought this great vehicle and they don’t have easy access to charging, the ability to fuel up because we know that potential anxiety is what keeps some consumers from adopting.
15:14
Dan Killoren
But you’ve definitely seen the innovation from a vehicle standpoint. There’s lots of cool cars out there and options for them. That hasn’t always been the case. So consumers will, at the end of day, pick what they want and they expect their infrastructure providers to be there to support their purchases.
15:31
Mike Stacey
Yeah. Can you talk a little bit more about good examples of partnerships? Because we believe that partnerships is critical to this whole energy transition. And we’re seeing some creative new ones. We’re seeing partnerships within the utilities industry, partnerships within the automotive industry, partnerships across starting to form. Are there good examples, good case studies of partnerships that you’re seeing that it can be shared across the industry as something to build on?
16:09
Dan Killoren
Yeah, well, I’ll give you one. At EPRI, we’ve really been focused on the enabling data that allows the different players within the value chain to just know what each other is looking for. So we have an initiative called evs to scale, which is really focused on providing data access to utilities, to large fleet operators, to vehicle oems. Because the idea there is that with greater visibility and access to data, better decisions can be made about how we play within this value chain. So I think that’s one role, kind of example specifically for Epry. But I think where you see a lot of great examples of partnership are in the fleet space with utilities looking to engage their large customers who are looking at conversion of fleets. Because these represent significant demand potentially on their systems.
17:05
Dan Killoren
And for the fleet operators, it represents a significant savings in their operating costs. So it’s really a win. So you’re seeing the utilities, I think, be much more proactive to reach out to those customers, even help them think through what vehicle conversion, fleet conversion could look like. And then making sure to plan the infrastructure in advance so they can convert these fleet yards as quickly as possible while the vehicles are showing up. So I think you’re seeing a lot there from a consumer standpoint. And individual drivers, I think there’s still more work to be done. To be honest, utilities have some challenges.
17:49
Rick Stockburger
I wanted to jump in here too, Dan, and feel free to answer or not, however you will. But data can sometimes be seen as like a double edged sword. Right. Too. Because data can also create vulnerabilities from a utility standpoint. Right. And so there is a huge aspect of their insurance and getting too much data out there that can make the grid vulnerable or their business vulnerable from that standpoint. So how are we seeing utilities navigate data from that standpoint in the sense that, yes, we all 100% agree, or at least we’re not going to say 100% agree. I believe that data is unbelievably important, and the more data and information that you have, the better decisions that you can make.
18:40
Rick Stockburger
However, when that data shows very clear vulnerabilities that you’re not incentivized to fix from the way the policy landscape looks like, what happens then?
18:55
Dan Killoren
Yeah, it can be complex, but I think we’ve seen from the Internet and from the growth of mobile that open access to data creates innovation, right? Because then new players can get in there and create services or new capabilities that existing operators just don’t have. I think for the utilities, what they’re looking for is visibility to plan the system. It’s operations and meeting demand, and they don’t need maybe the fidelity of data that some other players within the ecosystem would. But utilities can play a role in enabling that. And of course there’s sensitivities around not sharing individual consumer demand information or exposing vulnerabilities on the system. But I tend to think those challenges can be managed.
19:45
Dan Killoren
The trick is really how do you take utilities, which are locally controlled and there’s thousands of them just in north american alone, how do you get them to aggregate that data in a way that’s useful to a national footprint? So if you’re a solution provider, you’re not thinking just about one service territory, and it would be very time consuming to go aggregate that yourself. So the question is, how can we create kind of a level of visibility across the national international system that allows innovation and doesn’t kind of compromise the individual uniqueness of each service territory and how utilities are going to address it?
20:23
Rick Stockburger
Yeah, I mean, I think EPRI is a pretty decent platform for aggregating that data, right? Isn’t it play in that?
20:32
Dan Killoren
Yeah. EPRI was created for the express purpose of utilities sharing information, collaborating and innovating together, because you realize that you can’t operate this integrated system and not talk to each other about the changes that are coming down the pike. So yeah, we very much play a role at EPry, but I think as a nonprofit and an organization that doesn’t necessarily have a commercial interest in the outcome, we’re really focused on how do we enable innovation by others too. So partnerships and bringing others into that is very critical so that utilities can leverage the benefits of what others are bringing to that equation.
21:13
Rick Stockburger
Well, it sounds like you have a pretty important job at Epry then, with your job title being the program manager for the global innovation Hub.
21:26
Dan Killoren
Yeah. When you’re in charge of innovation, right. There’s kind of the expectation on a day to day basis that you’re delivering new and interesting things, which I enjoy personally, drives me, but I think it’s also neat to work within an organization that has innovation at its core. So it’s definitely a privilege but also an obligation. Rick, so thanks for making me a little nervous.
21:49
Rick Stockburger
Well, managing innovation is like hurting cats, right?
21:54
Dan Killoren
It certainly is, yeah.
21:57
Mike Stacey
And maybe just on that innovation mean, we talked a little bit about kind of the utility challenges and what they’re seeing with rise in electrification. We also talked about the behind the meter challenges. And with the fleet operators, where are they going to get an Roi? And data is key to that. But when we talk about this huge opportunity for innovation, how do you think about solving that? We talked about Epry’s role. We talked about partnerships. Let’s maybe focus on the entrepreneur and maybe to the entrepreneurs out there that are listening in. How would you characterize this opportunity? Because as a past and recovering entrepreneur, this is what excites me. There’s a huge opportunity here.
22:53
Mike Stacey
And thinking about the front of the meter, kind of what’s happening, this disruption in how utilities operate, thinking about behind the meter and the friction and really making sense of ROi and how to do that, how can we better enable entrepreneurs to really kind of zone in on this? And are we already seeing that activity? Is there anything to further catalyze that?
23:20
Dan Killoren
Yeah. Well, as you guys know, the individual that’s willing to take on that risk to be the entrepreneur, I have huge respect for. It’s not easy. Right. And they know that going in. But I think there’s a couple things that kind of present tailwinds to support them and what they’re trying to do. One is it’s a rising demand environment. So we’re in an industry in which electrification is happening. Consumers are becoming more reliant on the service, not less reliant, which means there’s capital flowing in and investment and a lot of interest. So fundamentally, entrepreneurs should look at the industry as being one, a growth industry. Now, it’s not at the scale of maybe tech or other sectors, but it’s maybe not traditionally what they think of as utilities because we are seeing some significant demand growth kind of across the sector.
24:11
Dan Killoren
So one, hopefully that creates the capital and the support to grow businesses within the industry. The other is, I think the direction is towards more open access and innovation across platforms. And I know to many that does seem like a slow process. It does to me as well. There can be this perception of utilities as very conservative, but I think you’ll see that there generally is more openness and the direction is in kind of that direction of travel. So that creates opportunities. But where I would focus entrepreneurs is really on solving customer problems. And I know that’s cliche, but in the utility industry there’s not the muscle of maybe consumer centricity that there is in other industries.
25:02
Dan Killoren
And when you’re focused on the system and society as a whole, you can tend to think big picture, but as an entrepreneur, you really want to think, who are my customers and what problem am I solving for them? When we think about electrification, there’s many consumer roadblocks to adoption of vehicles, of heat pumps, of all sorts of electric technologies. So to me that’s just ripe for innovation and someone who’s really consumer focused to come in and solve those problems because we know the consumer wants to save money, they want to have cleaner energy. Flexibility is important to them, so they want the benefits, but sometimes they have a hard time determining how to leverage those and what the opportunities that exist.
25:48
Rick Stockburger
Yeah, absolutely. With that said and where that’s at, I want to give you a quick opportunity. Incubate energy has been such a cool program over the last couple of years, and obviously we saw what just happened last week at the electrification conference and some of those companies getting the pitch in that space. But tell me about why did every invest their time into this space and then how are you utilizing this as a kind of platform to get more demonstration projects for more utilities? The thing that I’ve been saying at BRITE over the last couple of months is just further faster. That’s what we have to do to solve climate change. And so how are we getting more throughput? And I think it really is programs like incubate energy and the work that you’ve done there with the labs in that space.
26:38
Rick Stockburger
So tell me about it.
26:39
Dan Killoren
Yeah, well, I think a handful of years ago a lot of utilities in EPRI realized that there was all this commercial activity occurring in early stage ventures that just wasn’t really hitting the industry in the way that it could. And incubated energy Labs created a mechanism for those entrepreneurs to come to asset owners and say, hey, we’ve got solutions that we think solve problems for you, but what we really need is to demonstrate them on your systems in ways that we can show evidence that they could work. So that’s really the core of incubate energy Labs is creating that match point between a utility who runs a system is thinking about the day to day and an entrepreneur that’s trying to innovate within that space.
27:23
Dan Killoren
So we’re really proud of the program that it doesn’t pick winners in the sense we just don’t want to pick one company. We want to find as many companies who have a match for energy providers need and run a demonstration and then importantly share those results very publicly and widely so that entrepreneur can take that and say, hey, look what I demonstrated with this utility. Here’s what I can do on your system. At the end of the day, it’s all about commercialization because that’s going to achieve the benefits we’re all looking for. So I think at Epry and our members, we play a role particularly in that demonstration, but then others will come in with capital and support to leverage that to what the next step is for that entrepreneur.
28:11
Rick Stockburger
Yeah, and thanks. That works so important. One thing that I really want to challenge the startups that listen to this on is, I know Dan just talked about demonstrating with the utility and stuff like that, but for startups that’s your first paid what you need to be utilizing the terms. My customer and I did a project together for my product. The way we say things is so important. And I know on the utility side and like, oh, it’s a pilot, it’s a demonstration, it’s all that. And we need to on the startup side really start understanding it’s not just a pilot, it’s not just a demonstration.
28:58
Rick Stockburger
My product is to a point that somebody is paying me to deploy and it might not be deploying at huge scale just yet, but it’s paid, it’s a customer, we’ve acquired a customer and I think that’s really important because I think we get kind of caught up in the space and being say, hey, we’re pre revenue and all of that. And investors are looking for technology that’s starting to be proven in the space and folks that are willing to take a chance on being a first customer of these products.
29:34
Rick Stockburger
And so I’m going to challenge my entrepreneurs that even though Dan and Epry and the utilities are going to say this is just a pilot project or this is a demonstration project because it’s so small on the scale of what they do, but it’s really big and important milestone for the scale and work that you do.
29:54
Dan Killoren
Absolutely. And I would kind of build on that and say I’ve worked in utilities and you will find them to be very long term in their thinking and very focused on developing solutions. So if you’re satisfying a need, if you’re helping advance something that’s important to that organization, they’re going to be with you for the long haul, which I think is really important too, as you build that customer base and maybe diversify to other industries. That that relationship we see often forged in that pilot go on for years after. And it’s been neat to see that in our five years the kind of fall on work that happens outside of our program, which we.
30:37
Mike Stacey
Absolutely, yeah, maybe just one question. So I totally agree, Rick, with this quest for the customer from the entrepreneur shoes and how important that is to get to the customer, to get to the pilot, because that’s real money. But what about the next step from pilot to scale? This is also another big challenge for entrepreneurs and particularly in this industry. Right. When we think about getting an early demonstration, getting a pilot, it’s a huge milestone. However, scaling is another thing. Have you seen some good success stories? Because I believe the success stories are what inspires the entrepreneur and understanding the full journey. Getting to that pilot, that first customer is huge and it’s a beachhead that should be celebrated. But there’s a much bigger prize, any color on kind of success stories there. Has that path been accelerated to cross that second chasm?
31:52
Dan Killoren
Yeah. As always, the economics matter, right? In scaling and the business case has to be there where in a pilot you might permit that. You’re still learning. But as you go to scale, particularly with utilities being so cost conscious, it has to work out from an economic standpoint. I think where I’ve seen the greatest success is where entrepreneurs are tapping into a consumer demand and value pool that was kind of previously maybe unknown or untapped by the energy provider. So really I think the best relationships are one where the entrepreneur sees himself in partnership with the utility to go out and capture that new value from a customer segment or standpoint. That’s why electrification is so exciting, because the demand and consumer awareness and adoption is growing. So there’s great value to be created there.
32:52
Dan Killoren
And you’ll find that utilities are very focused on what they do well, building and maintaining infrastructure. And so they’re very good partners in the sense of going after more consumer facing opportunities because they don’t need to have all the value. Right. They’re willing to share that with the entrepreneur and with partnerships. And I think that’s maybe different than some industries just because utilities are so focused on excellence in their core business. But they realize that if they lose the consumer in the sense that they’re disintermediated. And people look to them as the old stodgy utility. They’re losing an opportunity. So I think they really look to entrepreneurs to provide those ideas. And then when they go to market together, that’s where I’ve seen the greatest success of both, kind of leveraging what they bring to the.
33:43
Rick Stockburger
On that. I think it’s so important, too, that I don’t know if defending utilities is my job or what I need to do or anything like that. But Robert Blue, who’s the CEO of Dominion energy, said something to me that just, I’ve always thought about. But utilities have to meet multiple criteria. Right. But it’s really kind of a three pronged approach to reliability, affordability, and sustainability. And those three things have to be at 100%. Right, or have to be moving to 100%. From a sustainability side, we just can’t go to 100% renewable energy right now, today because affordability and reliability will go down. And then the other side. Right. Like affordability. I think solar is coming on and is actually cheaper in the United States now than natural gas fired power plants or coal fired power plants.
34:49
Rick Stockburger
But the cheapest and fastest way potentially, to get the reliability of the grid up. And maybe the affordability would just be like coal all the time, but then that brings them to sustainability. And so having to weigh those three things constantly, it’s amazing. But then take on the fact that on a reliability side, people, as we’ve seen when there’s blackouts and like that across the United States, if there isn’t power to people’s homes, people die. It’s real bad. We have to understand the pressure that they’re under, because I hear a lot from entrepreneurs like, oh, gosh, this utility has billions of dollars and they won’t spend $50,000 on this pilot project. And it’s like, well, you got to understand, maybe they have money for it, but putting your project on the grid causes vulnerabilities that could affect reliability very quickly and safety.
36:03
Rick Stockburger
The grid is not a safe thing to walk up and touch a wire from that standpoint, too. So it’s not like utilities who are risk adverse by nature, are risk adverse for no reason, I guess, is what I’m getting to. Their risk aversion is very real to very real negative consequences if they’re not risk averse.
36:28
Dan Killoren
Yeah, absolutely. And in a lot of ways, they’re required by law to fulfill these obligations, too. So it’s not just a sense of personal obligation, it’s a requirement placed on them by their commission or by their legislature. So it is a real challenge. I think, though, it motivates people within the industry. To be clear, if you work in the utility industry, you’re excited by the idea of providing that service on a reliable, affordable and resilient basis. So there’s a real commitment to it by people in the industry to fulfill that. I think the challenge then with entrepreneurs is how do you work with utilities and others to see what could be kind of base service for the future.
37:15
Dan Killoren
So not just having the light turned on when you flick the switch, but when you plug in the vehicle or when you show up in a new way on the system, that’s really exciting because we’re becoming more reliant on the system, not less reliant. But that’s going to take innovation because as you point out, rick, there’s real consequences when it goes wrong in terms of human life and impacts to safety. And unfortunately, we’ve seen with climate change, there’s going to be more stress on the system. And those events which people maybe thought were very remote are coming true in service territories, which is causing, I think, everyone to stand up and take notice that, hey, we can’t get away from reliable, affordable and resilient service, but we also can’t use that as an excuse not to innovate. We got to do both.
38:15
Dan Killoren
And I think that’s kind of the challenge and where honestly entrepreneurs and other partners come into that equation to support.
38:25
Mike Stacey
And maybe one last question related to that. I mean, I think the reliability, affordability, sustainability, should that be the cheat sheet for entrepreneurs when they’re approaching utilities? On the flip side of that are utilities, is that their scorecard? Because knowing how you’re scored, how you’re evaluated, in my opinion, can accelerate the sales process.
38:50
Dan Killoren
I think it is, yeah. And I think knowing your customer from a utility standpoint applies the same, right. As utilities as customers or as their customers as your customer. So if you can prove an affordability case, I doubt there’s many utilities in the country that would not be interested to hear that. If you can help us provide our service or serve customers in a more affordable way, that’s a very good entry point. But you’ll also find that utilities are willing to invest for resiliency, for decarbonization, for benefits that may be longer term incoming or harder to quantify because they’re also trying to change that equation. And Rick, you talked about renewables. We’ve seen tremendous cost declines in renewables, but in the last couple of years, we’ve seen that kind of tick back up, right?
39:45
Dan Killoren
So it’s a little different business case there doesn’t change the trajectory or the appetite to decarbonize, but it does change maybe how we’ll do it. And so I thinking through that, as an entrepreneur, it’s dynamic, it’s not going to be linear. And so how are you creating new equations for utilities and their customers? I think that’s where I’ve seen the most progress. The entrepreneurs are kind of enlightening that for utilities, and then they both work together to go capture it.
40:18
Rick Stockburger
Yeah, well, man, I think we could have this conversation. I think Mike started off saying, like, this could be a whole week that we could talk about, and maybe we’ll do that in the future, but right now, I think it’s important to be cognizant of our time. And a first off, I want to thank you both so much for spending the time with our listeners and the fans of BRITElights and in the space. Your expertise, both from KPMG and EPRI, are unparalleled in this space. And you both are world class organizations that really get shit done as far as I’m concerned. So I appreciate you spending time with us. Dan, great job with the electrification conference. I had such a great time there with entrepreneurs and utilities and just everybody that’s really trying to move forward faster and do it together.
41:16
Rick Stockburger
So thank you so much. And Mike, thanks for co hosting. Excited to see you on the next episode as well. And Dan, we’ll catch you, and we’ll catch all the rest of the audience of BRITElights. On the BRITE side.
