Welcome to Power the Network.
I'm your host Tim Locker, vice president of Broadband for CBM.
Today we're going to continue on with our conversation with Chris Kurtz, talk a little bit more in the power utility industry, some of the new technologies and what's going to happen here in the future.
So let's get right back into our conversation with Chris.
Talk to me about dorms.
It's a distributed energy resource management system that's way above my head, obviously, but tell me a little bit about that.
Okay.
Well, utilities love their acronyms, right, and so there are a ton of acronyms.
So it goes back to the system we talked about a little while ago.
Traditionally, electric systems were one way started a power plant, go through transmission, substation, distribution, end up at a home or at a business.
Okay, and you had you had one source of power where it may have been nuclear power, it may have been coal firepower, gas fired, or a dam providing hydro power.
But it was always one source that fed one direction down through that system.
The world of today and tomorrow, there are multiple sources at multiple places on that system to provide power into it.
And so now besides just having a coal fire power plant down here at the end, you might have wind generation that's not at the end, but in the middle of that system.
You might have a solar panel on somebody's house, or a car an EV that's plugged into someone's house, and now power speeding back into that system.
Each one of those sources is different in its own right.
You know, solar's different than wind, different than coal, and they all have their own their own advantages, cost advantages and efficiency advantages, and those vary over time.
I mean, wind is very efficient when the wind's blowing, but it's not other times.
Solar's very efficient when the sun's out and not at other times.
What a derms What happened traditionally is utilities used what they called an EMS system or an energy management system to control that power flow from the generator all the way down to the customer.
But an EMS system doesn't have the ability to look at all the new inputs that are coming in providing power into that system.
And so that's what's led to the Durham system.
And what the Duram systems will do for a utility is they'll look at any given moment in time and determine whether wins the best source of power where their coal is, where their nuclear is, and which everyone's the best source of power.
They will close the breakers, you know, make the connection.
They need to bring that source of power onto the system.
Well, five minutes later it might be different, and so they may switch over to it, and it's probably not five minutes, but at some point one of those other sources become more efficient and so they switch over to solar, or they switch over to biomass, or they switch over to coal or gas or whatever it is.
And so it's a very complex control system that takes multiple resources and determines which one needs to feed into the system to make the the lowest cost for the utility and ultimately the customer electricity and power into that system.
So when we hear the term smart grid, right, that's that's exactly what we're talking about.
That's exactly what you're talking about smart grid, and you'll you'll hear about smart grid.
You hear about smart neighborhoods these days, even smart cities, and those are those are areas that have determined that they don't want just one source from the utility.
They may they may put in their own solar, they may put in their own wind turbines, and then hook to the utility and whichever one is the most efficient and cost effective.
They'll feed their neighbors or their city or whatever it is with that source during that period of time.
Okay, so uh, you know, technology wise, you know, smart grid, all these different controls.
Are are we seeing the different use of fiber optics today in the utility space?
Oh definitely.
I could take you out to spaces around here that wouldn't even think of having fiber in them.
Substations for example, you're starting to see fiber put throughout substations where five years ago it didn't exist at all.
Because fiber is a much more effective way to communicate from point A to point B, right, I mean it's just low losses.
You can transmit a lot more over a little wire than you could.
So you go into a typical large power substation, they'll run typically run control wires from the devices out around the substation to the central control whether that's a house, a control house, or whatever it is.
They would run that with number ten and number twelve wire.
You know, big bundles of twelve conductor number ten or whatever it is.
I mean, you know gigantic things.
Now, all of those smart devices that are going into substations have fiber associated with them.
And now you take one small fiber cable and you can take it out to all of those devices and have one cable that feeds back into the control house.
So that cuts down on the cost of the all of the work you have civil work have to do to create cable troughs and duckwork, and you replace it with single cables running out to these devices.
That's just one example in the electric utility, but you're seeing it everywhere.
As a matter of fact.
Every time they put up a large transmission line, which are the big big line you see going across the country, Uh, they'll put a fiber optic cable up in the top of that thing and what we call the static wire toptical ground wire, optical ground wire that's right to connect one end to the other of all of that, and they'll use those wires for the protective relane that they have to protect that transmission line from faults or you know, whatever might occur to it.
But then they'll also take some of that dark fiber and they'll they'll let their neighbors.
Well they won't let them, they'll let them pay to use that dark Yeah, that's right to use it for communications or whatever purpose they may need.
So fiber is a is a growing growing, Fiber is getting big and utilities and we'll continue to do so.
And obviously that's been my background.
I got a lot of experience in the utility space, but I do have a lot of experience in fiber.
And you know, OPGW has been around a long time, but you know, we're starting to see you know, in the R E C market and co ops et cetera, you know, doing a lot of fiber at the home.
Uh.
Maybe not so much fiber at the home in a generation type of public utility.
But you know, those easements are are very valuable, you know.
And that's also like you said, you can make an I RU agreement.
Uh.
And so we're starting to see a little bit more of that where the power utilities are.
Uh, you know, seeing the value and the opportunity for you know, different deals there.
I agree with you.
I agree it's a revenue source that they didn't traditionally have.
Yeah, if you've got if you've got an easement across you know, a great span, right, you know, somebody wants to be there, no doubt.
So you know, there's been a lot of mergers in the utility space recently.
Do you expect more of them in the future.
How does that effect the customer, the end user?
You know, we've seen you know, different rate change plans and you know, based on peak grade, et cetera.
How does all this affect us as an individual end user of the utility.
Well, let's start with merger and acquisitions.
What you've seen in that arena has mostly happened in the IOUs or the investor owned utilities.
You haven't seen that to the same degree and the co ops or the rias, and certainly not the municipals.
But the reason that happens is a konmye of scale, and it's it's happened enough.
Well, let me just give you a statistic.
Twenty years ago, there were one hundred and forty eight investor own utilities in the country.
Today there's less than forty two.
Oh wow, these are mergers happening all the time, so and they will continue to happen.
And so the reason all was given is just the economy of skill.
So you bring two utilities together, especially to that are geographically close to each other, right next to each other, and so that that those two operating areas become one operating area.
And while you still have to have a lot alignment to cover those two areas, you still have to have a lot of substation folks, technical folks.
To do that.
You can combine the legal groups, you can combine the HR groups, the accounting groups, all of those you know, back office groups, and you can scale down.
The other thing you can do is when you when you go to manufacturers to buy equipment, Now instead of buying it as a single utility where you buy may buy twenty of whatever this is.
Now it's two utilities, you may buy forty of that, and so you'll get a better price on that.
So you put all of that together and it creates an economic model where it makes sense to bring those those companies together into a single cost.
Are those typically a friendly deal or are they?
Yes?
No, yes, no.
Some of those are takeovers, some of those are hostile mergers.
Some of those are friendly mergers.
The ones I've been associated with, I've been associated with a takeover and been associated with a friendly merger.
Sure, well, actually it was a takeover that didn't get approved and became a friendly merger.
But and so, and there's obviously there's some risk to the employees, especially the redundant groups.
There definitely is what the customers though see and this has been proven time and time again, is you look over a five year window after those mergers and customers have been impacted positively by that.
Now, I'm not saying the company can bring their cost down, right, and it doesn't necessarily mean that their rates are going to go down, but what it means is the rates wouldn't have don't go up as much as they would have outside of that merger.
So it helps the customer from that perspective to understand that when it comes to time of use rate, you mentioned that that's that's a very common thing in the electric utility space these days, and that goes to efficiency around peak.
So we've talked about peak what peak is, and peak is that moment of time, whether it's the middle of the summer where everybody has their conditioners on, the middle of the winner, where everybody has their heat pumps on, those are normally the two peaks you see an electric utility at that point that is when the most electricity is needed at any instant throughout the year, and an electric utility has to size its generating fleet, so all of its power plants for that very moment.
So when you flip that switch on, you're that last person right that's turning their switch on.
There.
If that if you don't have enough generation, enough power plants making power to cover that switch flipping, then the lights don't come on for that person.
Well, that's really bad for everybody.
And so what that means is they have to build enough generation to have enough power plants to cover that, and then the regulators make them usually cover at least twenty percent more than the little sex.
Yeah, you gotta have extra on that.
And so when they're looking at planning for the future, not only to replace old power plants, but what are the new power plants when things like EVS are now coming on and that peak is going to jump up, Well, that means now over here, ten years down the road, we're going have to build a new power plant.
And those power plants, especially if their nuclear, could be billions of dollars to build.
And who pays for that, Well, the customers pay for that.
Over the next forty years or whatever, and so utilities are being encouraged by the federal government, by regulators to help customers understand that and then help customers help keep that peak down as much as they can.
So if you're now not doing your laundry at the same time everybody else is doing their laundry when the air conditioners are running, that peak will be lower.
And if that peak stays long enough, the utilities say, I may still have to build a power plant, but instead of ten years, it's now twenty years away, and so it allows them to put off those big capital investments that then flow to the customers through rates.
Does that make sense, Yeah, yeah, I think that helps a lot.
All right, real quick, let me tell you a little bit about what we do here at CBM.
So we're manufacturers rep located here in the Middle West.
We work in three different vertical markets, utility space, we work in communications, and also commercial industrial markets.
We've been in business since nineteen sixty been an employee owned esop since nineteen eighty eight.
We really value that employee ownership in our organization and I think it brings a lot to value our manufacturers as well.
So if we can be of any service to you and help you in your next project, or if you're a manufacturer looking for expert representation, feel free to reach out to us here at CBM at cbmrep dot com.
Let me ask you this to just real simple then, So, in terms of the cost of power when it's if it's at the peak, does that power cost more than to generate?
It really does because what happens is we talked a little bit ago about baseload generating plants.
So baseload generating power plants are the ones that utilities have on all the time to provide power because they're the ones that they can produce power the cheapest, and those tend to either be nuclear or and we don't have a lot of hydro, so they tend to be either nuclear or coal power plants.
They produce the cheapest amount of power, so you're going to run them all the time for just regular power.
But as that peak starts to climb in the middle of the summer, right, those can't handle it.
There's not enough power being produced by them to do that.
So power our utilities will have smaller peaking power plants, and many of those are either run by natural gas or by fuel oil or something like that, which is pretty expensive to produce power with, so you don't use it all the time, but you use it during those peaks.
And because you're using the more expensive sources during that time, it makes that power during those peaks more expensive to generate, to create.
And that was my assumption too.
But so how much advanced notice do you have for these peaks?
I mean, obviously they're monitoring this stuff right twenty four to seven all the time.
But you know, in May, as the air conditioners kind of kick on one by one, is it a slow thing or does it ever just boom hit all at once and catch you off guard?
So normally it's a slow thing normally, And utilities track that peak every year they're required to, but they do anyway, and they plan their next summer based on what the peak was last summer or winter, depending on the peak that they're dealing with, and so they know, you know, given these conditions.
That's why when they're going to take a power plant down to do maintenance, they don't do it anywhere near that time.
They do it in the middle of you know, the sp early spring or late fall or something like that to do maintenance because there's less chance you're going to have one of those peaks the last one.
But there are surprises.
The last thing that really surprised utilities was that winter of vortex that came through a couple of years ago, because you go down to Texas and what happened in Texas was not only did the wind and the solar that they and they have a lot down there, not only was it al out each period of time and there wasn't the wind wasn't where it needed to be, but they'd also taken down a couple of other nuclear power plants for maintenance because normally it would be fine to do.
Yeah, so they're offline, they're offline, and all of a sudden, they're having rolling blackouts because they they're just not enough power being produced and they can't bring it in from other utilities because all the other utilities are having the same problems.
Right, Because that that hit the whole center part of the country when that happened, So surprises happened very seldom.
And I can tell you that regulators since that vortex have changed mandates around when power plants can go down for maintenance and when they can do other construction work that that limits power flow to overcome that type of thing in the future, and so they continue to evolve their rules and regulations round it.
Okay, let's change the change the subject a little bit.
You know, so you've been with us for about a year now, by CBM, and we're grateful to have you.
How is it for you on the other side of the fence, you know, in a in a sales role versus you know, you know, in your director level or management role there right at the utility.
Well, you know, I didn't think it was going to be very different, but I was wrong.
I can tell you when I was on that side of the fence, I didn't think twice about going to somebody at CBM, because you know, the company I worked at had a long relationship with CBM and asking a question about something.
It may not have even been that important to me, but I needed to know about a piece of equipment or test equipment or whatever, and I had a question about it, and and I was always expecting a quick answer.
When I wouldn't get one, you know, I'd get a little frustrated at those He's going on here, Yeah, And what I found out on this site is there is a lot that goes on behind the scenes to answer those questions, whether it's multiple email conversations or voice conversations with manufacturers, and then manufacturers may have to ask you know, sub manufacturers.
You know, there's there's just a lot that goes in to answer in questions and doing the leg work that it takes to make the customer happy.
Whether that customer is a big one or a little one, we treat them all the same, right, and so you want to get the right answer for them in a timely fashion so they can make good decisions.
And I just never realized how much work goes on on this side of the fence.
So I appreciate that much more now than I did.
Yeah, oh that's great.
So what's one assumption that people make about your job that's not not true?
Well, okay, so there was always this image electric utilities and big ones anyway that these these manufacturer reps all they did was go to lunch and play golf and go to the do and that is definitely not true.
There is I haven't played golf in nine months I've been here, I got to tell you.
So it is.
There's there's some time you got to have relationships right, And you've got to spend time with your customers and develop those relationships.
But there's a lot of work that goes on.
It's it's not easy.
There's a lot that goes into it.
When you look at we're happy to we're working on a project right now to bring a major piece of equipment into a utility that's never had this equipment from this manufacturer.
And I've been here nine months and we've spent eight months and two weeks working on this and involved multiple trips to the manufacturer, multiple trips out to the field to people that are already using this equipment to see how they like it and how it works, and then starting to work on partnership agreements and working with the procurement group at the company in order to get all the t's and c's you know, right and everything.
And so it is not a straightforward process, and it is not an easy process.
Yeah, nothing's easy, nothing's quick, right, But it is very enjoyable, isn't it, No doubt, no doubt.
And the thing I love about is relationships, right, So one thing I love about CBM is CBM.
I always had a great relationship when I worked at the utility there had for thirty eight years.
I was there as a matter of fact, and in the substation group because CBM has been around sixty and they've been dealing with the utility I was at for my thirty eight years and so working with CBM during that period of time, Uh, the relationships were always the strongest thing.
And you you would like to think it's all whether a utility is going to purchase some piece of equipment, is all about bottom line cost, or it's all about you know, a service agreement.
It's really about those kind of things, but it's much more about the relationship because I need to be able to trust you that's going to do what you ask, that's right through and then and then if something does go wrong, be there to support me.
That's how are you How are you going to take care of the issues when when we have And so it's the thing I love most about this is relationships and forming those, even with some of the new people I didn't know when I was working at the previous utility I was at.
So it's great.
There's a lot I mean, utility people are good people, right, and you know, the one thing, especially about Linman, I thought was always funny was that lineman will normally have a second job.
They'll normally be a farmer cat guy.
That's right.
And they would always tell me when I was working at this utility that their second job was really the utility, right, Their primary job was out on the on the farm or doing whatever they do.
But that's the kind of mentality you won't working for you at a utility.
Someone with that kind of work ethic that's going to get the job done.
And as as a manufacturer rep, we need to have that same kind of attitude.
We need to be able to go the go the mile, go past the mile for the customer and and create that relationship that's going to last.
Yeah.
Well, you know it's always fun.
You know, I share the same thing that you know.
My favorite part of this job is relationships.
You know, friends turning or customers turning into friends over the years, and you're going to go to the end of the earth forum and that's really what matters at the end of the day.
I agree.
Well, Chris, thank you so much.
I appreciate you coming on with us today.
We're grateful to have you here at CBM.
We helpe you stick around a long time, but well, I really appreciate being here.
I didn't know what it was gonna be like being on this side of the fence, but now I've been here nine months, I'm really starting to love it.
To kill it, we appreciate it, all right, Thanks, all right, that was great.
We're truly fortunate to have Chris as part of our team.
He's an absolute wealth and knowledge in the power utility space, and we're grateful to have him.
If you have any questions from today's episode, feel free to reach out to us here at CBM at cbmrep dot com, and thanks again for joining us on Power the Network.
