1 00:00:05,560 --> 00:00:11,520 David Latona: Welcome to Co-op Conversations with DEMCO, where we dive into topics that impact your power, 2 00:00:11,920 --> 00:00:16,760 your co-op, and your community. Hey, I'm David Latona, your host. 3 00:00:17,440 --> 00:00:24,520 Today we're continuing a conversation about distributed energy resource management systems. 4 00:00:24,520 --> 00:00:28,160 It's difficult to even get it out when I'm reading it right here in front of me, 5 00:00:28,200 --> 00:00:29,800 Jeff. I know this is crazy. 6 00:00:29,840 --> 00:00:30,880 Jeff Andry: Hence the acronym. 7 00:00:30,920 --> 00:00:33,200 David Latona: Yes, the acronym is super helpful. 8 00:00:33,240 --> 00:00:41,200 DERMS, D-E-R-M-S. What they are, why they matter, and how they can help 9 00:00:41,200 --> 00:00:44,960 keep your electricity affordable and reliable. 10 00:00:45,760 --> 00:00:51,280 Back with us today is Jeff Andry, Chief Strategy and Regulatory Officer at DEMCO. 11 00:00:51,320 --> 00:00:52,360 Welcome back, Jeff. 12 00:00:52,600 --> 00:00:55,040 Jeff Andry: So good to be back. David. Thanks for having me for round two. 13 00:00:55,240 --> 00:01:00,820 David Latona: Excellent. I know it is so much content that we didn't want to overwhelm our listeners, 14 00:01:00,820 --> 00:01:07,940 but we certainly want to get them this deeper dive into information that they might be hungry for after they hear things 15 00:01:07,940 --> 00:01:11,780 from us on social media. They might hear some radio advertisements. 16 00:01:11,980 --> 00:01:19,740 They might even read in our publication some detailed columns from our CEO and information from Randy Pierce about what's going 17 00:01:19,740 --> 00:01:27,660 on at the co-op. But we wanted to have this podcast platform to be able to go a little deeper for folks that want a little more 18 00:01:27,860 --> 00:01:31,900 information. That's why we have Jeff Andry here with us today folks. 19 00:01:31,900 --> 00:01:37,300 It's so good to have him. We've done some research on this, but we know that you're coming in with the knowledge. 20 00:01:37,340 --> 00:01:43,940 It's us and the podcast team just really trying to figure it out before we develop these questions for you. 21 00:01:44,220 --> 00:01:47,860 But we know that you have the knowledge to be able to dive deeper. 22 00:01:48,940 --> 00:01:56,180 So we talked last time about what DERMS are and how we use them, but we'll go even deeper. 23 00:01:56,460 --> 00:02:02,050 So in keeping the grid reliable and affordable, let's talk about that for a second. 24 00:02:02,050 --> 00:02:09,410 So how does a DERMS – a DERMS, like one DERMS – help keep electricity rates 25 00:02:09,450 --> 00:02:11,530 stable for everyone, right? 26 00:02:11,530 --> 00:02:15,730 Jeff Andry: Yeah. So last episode we talked about the relationship between demand and price. 27 00:02:15,730 --> 00:02:20,450 And it just so happens that during those high demand events, it's not just a price consideration. 28 00:02:20,490 --> 00:02:23,290 It does become at times a reliability consideration. 29 00:02:23,690 --> 00:02:27,770 We build our system to be able to withstand the highest load that we can foresee. 30 00:02:27,970 --> 00:02:33,450 But you take an event like Winter Storm Enzo, when one day I believe it was January 22nd, 31 00:02:33,690 --> 00:02:38,050 temperatures were 19 degrees on average across all 24 hours of that day. 32 00:02:38,210 --> 00:02:38,410 David Latona: Oh wow, yeah. 33 00:02:38,450 --> 00:02:41,490 Jeff Andry: Nobody was forecasting that two days before the event, right? 34 00:02:41,530 --> 00:02:47,130 So while we build our system to be able to withstand as much as we reasonably predict it will have to, 35 00:02:47,170 --> 00:02:53,090 there are times when demand could potentially get higher than we could actually serve efficiently. 36 00:02:53,090 --> 00:02:56,890 So in addition to the price benefit of being able to control some of that demand, 37 00:02:56,890 --> 00:02:59,600 there's also a very real reliability benefit. 38 00:02:59,600 --> 00:03:05,040 It could even allow us to defer certain capital investments, which also has price implications, 39 00:03:05,040 --> 00:03:06,960 savings implications for the membership. 40 00:03:07,360 --> 00:03:13,920 David Latona: I know that's important to all of our members, certainly, that the cost savings and reliability. 41 00:03:13,960 --> 00:03:19,120 You know, we always say when the power's out, people want the power on. 42 00:03:19,120 --> 00:03:19,760 Certainly. 43 00:03:19,800 --> 00:03:19,960 Jeff Andry: Right. 44 00:03:20,000 --> 00:03:23,880 David Latona: And when the power's on, people want power the cheapest. 45 00:03:23,880 --> 00:03:29,400 And that's what we're here for. That's what the electric co-op, that's what DEMCO is built on. 46 00:03:29,400 --> 00:03:36,480 Bringing that power the most affordable way and the safest, but also the most reliable, 47 00:03:36,520 --> 00:03:44,280 certainly. And I understand from our previous episode and what you're telling us is that a DERMS program can help make 48 00:03:44,280 --> 00:03:45,520 that happen. 49 00:03:45,560 --> 00:03:50,840 Jeff Andry: 100%. David, I'd like to mention an analogy that personally I found very helpful. 50 00:03:51,040 --> 00:03:55,480 But if you think about if you have a four person household and you have a four bedroom house, 51 00:03:55,840 --> 00:03:59,620 but once a year during the holidays you have ten visitors come in from out of town. 52 00:03:59,860 --> 00:04:04,460 Most people, I'm willing to bet, are not going to go add an extra ten bedrooms to their home. 53 00:04:04,500 --> 00:04:07,420 They're going to pull out sofa beds, maybe put two people in a bed. 54 00:04:07,460 --> 00:04:12,980 Whatever it takes. But you're not going to build a 14 bedroom house to accommodate 14 people once a year. 55 00:04:13,820 --> 00:04:16,940 We plan our system somewhat similarly. 56 00:04:16,940 --> 00:04:20,820 In our case, if we think there's ever a period of time where we'll need 14 bedrooms, 57 00:04:20,820 --> 00:04:23,020 we'll essentially build a 14 bedroom house. 58 00:04:23,260 --> 00:04:26,740 But certainly if we don't have to do that, it's going to result in cost savings for everybody. 59 00:04:26,740 --> 00:04:34,740 David Latona: That's a great analogy. I'm not going to build a larger home to have guests in my home just a few nights in a 60 00:04:34,740 --> 00:04:41,460 year, right? T he same thing happens with our infrastructure and how we purchase our power the same way. 61 00:04:42,060 --> 00:04:49,540 So what happens if demand isn't managed, and we don't – whether DERMS program or otherwise – what happens 62 00:04:49,540 --> 00:04:53,100 if we don't manage that? What does that mean to our members out there? 63 00:04:53,380 --> 00:04:56,340 Jeff Andry: Sure. So we'll still be able to serve our membership reliably. 64 00:04:56,340 --> 00:05:00,120 But in that scenario, we're only focusing on that supply side of the equation. 65 00:05:00,120 --> 00:05:06,720 And what utilities across the country are realizing is that it's actually cheaper to work on the demand side of the equation than 66 00:05:06,720 --> 00:05:10,600 to default to supply solutions every single time. 67 00:05:10,760 --> 00:05:13,800 And one thing that's exciting about it, in addition to the cost savings, 68 00:05:13,800 --> 00:05:16,680 is the opportunity to partner with our members, right? 69 00:05:16,720 --> 00:05:21,880 There are many members who've already made investments in things like energy efficiency or rooftop solar. 70 00:05:22,040 --> 00:05:24,200 A lot of upgraded to smart thermostats. 71 00:05:24,680 --> 00:05:30,000 This program would allow us to partner with them and actually to provide them compensation for being a part of the program. 72 00:05:30,040 --> 00:05:37,720 David Latona: Oh that's great. So we can benefit the entire system financially and even reliably, 73 00:05:38,000 --> 00:05:46,000 by making an investment in an incentive program where members participate in a DERMS program across 74 00:05:46,000 --> 00:05:49,120 the system, right? So how many does that take? 75 00:05:49,120 --> 00:05:57,030 How many of our 117,000 members would be beneficial to have as participants 76 00:05:57,030 --> 00:05:58,230 in a DERMS program? 77 00:05:58,270 --> 00:06:00,470 Jeff Andry: Yeah. So I'll use the thermostat as an example. 78 00:06:00,510 --> 00:06:02,350 Tends to be about two kilowatts. 79 00:06:02,390 --> 00:06:07,630 And so if we had a thousand thermostats in the program that's 2000kW or 2MW. 80 00:06:07,670 --> 00:06:10,470 If we had 10,000 that would be 20MW. 81 00:06:10,510 --> 00:06:16,190 At 20MW, you're really able to make a meaningful impact on the cost savings side of that equation from a demand management 82 00:06:16,190 --> 00:06:21,470 perspective. And so we think we could potentially get up to as much as 20MW. 83 00:06:21,990 --> 00:06:27,710 That could encompass more than just thermostats. It could also be potentially in the future electric vehicles. 84 00:06:27,990 --> 00:06:31,270 It could be customer-owned residential batteries. 85 00:06:31,270 --> 00:06:34,590 It could be whole home generators. We know we have a lot of those on the system. 86 00:06:34,830 --> 00:06:36,910 So there's any variety of ways to get there. 87 00:06:37,190 --> 00:06:39,630 Smart thermostats is just one of those examples. 88 00:06:40,390 --> 00:06:45,830 David Latona: So I imagine, Jeff, that cold weather is an opportunity for, you know, 89 00:06:45,870 --> 00:06:49,470 in this last storm we face and even previous storms. 90 00:06:50,110 --> 00:06:55,970 School was canceled. People were home from work because there was actually snow on the ground, 91 00:06:56,010 --> 00:07:00,410 and everybody was at home. Everybody was baking something. 92 00:07:00,650 --> 00:07:08,650 Everyone had the heat on. These are things that we know as a power company that use the most electricity 93 00:07:08,650 --> 00:07:16,490 at one time. So how does that DERMS program enable us to keep that load reliable 94 00:07:16,490 --> 00:07:17,450 and efficient? 95 00:07:17,850 --> 00:07:23,090 Jeff Andry: Yeah, you're exactly right, David. What we've seen, especially in recent years, we've had Winter Storm Uri in '21. 96 00:07:23,130 --> 00:07:26,250 Winter Storm Heather, Winter Storm Enzo this year. 97 00:07:26,490 --> 00:07:28,570 There's 1 or 2 more I haven't mentioned. 98 00:07:28,570 --> 00:07:35,210 But during those periods of extreme cold weather in South Louisiana is when our load flexes to levels that we've never seen 99 00:07:35,210 --> 00:07:39,570 before. And it's during those periods of time when stress on the system is highest. 100 00:07:39,810 --> 00:07:44,090 Anything we can do to relieve that stress, especially as we're talking about in partnership with our 101 00:07:44,090 --> 00:07:46,130 members, is a win-win for everybody. 102 00:07:46,170 --> 00:07:52,890 David Latona: Yeah. Excellent. So that's something that will benefit all by the percentage of folks that participate, 103 00:07:52,890 --> 00:07:55,000 that choose to participate in the program. 104 00:07:55,040 --> 00:08:01,840 Of course, it'd be great if everybody would participate, it would be that much more we can use to benefit all in those 105 00:08:01,840 --> 00:08:03,731 future rates, and our reliability. 106 00:08:03,731 --> 00:08:06,200 It just becomes a great system for everybody. 107 00:08:06,240 --> 00:08:13,240 Jeff Andry: That's exactly right. And one of the beautiful things about it is those members who do have the willingness and ability to help us 108 00:08:13,240 --> 00:08:20,440 in those situations will receive benefits immediately, in the form of lower kilowatt hour units on their next bill. 109 00:08:20,880 --> 00:08:26,960 But next year, when we set our wholesale rate for the year, those savings will accrue to the membership at large. 110 00:08:26,960 --> 00:08:32,080 So it's an opportunity to do, you know, do what's best for the member as an individual. 111 00:08:32,240 --> 00:08:35,440 And by doing that, you're also doing what's best for the membership as a whole. 112 00:08:35,880 --> 00:08:42,120 David Latona: Okay. So that does lead us into this next subject I want to talk about was our members. 113 00:08:42,120 --> 00:08:47,040 And you know, we're not the same as a user group in Minnesota. 114 00:08:47,080 --> 00:08:49,840 Like we said, South Louisiana, it's different weather here. 115 00:08:50,120 --> 00:08:53,980 We're not the same as a user group in Arizona. 116 00:08:53,980 --> 00:08:59,300 It's a different climate there. But our climate impacts what we use. 117 00:08:59,980 --> 00:09:07,660 So also, I would imagine that our climate and our usage patterns as members are also going to 118 00:09:07,700 --> 00:09:15,660 impact how DEMCO feels the most successful DERMS program, or which DERMS 119 00:09:15,660 --> 00:09:17,580 program would be most successful? 120 00:09:17,780 --> 00:09:25,500 Is that right? Is there, does that carry some truth with different member co-ops or utilities would use 121 00:09:25,500 --> 00:09:30,820 different DERs? Like we said, it's a thermostat or water heater or electric vehicles. 122 00:09:31,060 --> 00:09:33,100 How does that work regionally? 123 00:09:33,380 --> 00:09:38,020 Jeff Andry: Right. So the program should really be custom tailored to each individual utility's circumstances. 124 00:09:38,020 --> 00:09:42,260 In DEMCO's case, we tend to sell the most kilowatt hours during the summer. 125 00:09:42,420 --> 00:09:43,940 So you think about a month like July. 126 00:09:43,980 --> 00:09:50,540 It tends to be hot every day in July, but the absolute highest period of demand tends to occur in the 127 00:09:50,540 --> 00:09:54,290 winter. So we sell the most in the summer, but we peak in the winter. 128 00:09:54,490 --> 00:09:59,130 And so a successful program should be able to produce benefits in both of those seasons. 129 00:09:59,170 --> 00:10:06,490 David Latona: Okay. And I know we're doing a survey of our members to get that input right to ask them, 130 00:10:06,690 --> 00:10:12,730 "Hey, a DERMS program is this. It benefits you this way. 131 00:10:13,330 --> 00:10:15,450 We want to know what would be best for you. 132 00:10:15,490 --> 00:10:23,090 What would convince you, one? And what would you be most likely to participate in?" So in the details of that 133 00:10:23,090 --> 00:10:28,930 survey, the questions that are asked, how critical is that that those members respond to that and give 134 00:10:28,930 --> 00:10:31,450 us a good idea of what they are interested in? 135 00:10:31,490 --> 00:10:34,970 Jeff Andry: It's critically important not only for the membership, but for DEMCO as a whole. 136 00:10:34,970 --> 00:10:39,530 One of the unique things about being a cooperative is that we are owned by our members. 137 00:10:39,530 --> 00:10:43,570 As mentioned, I believe, in the last episode, and so we have an incentive, 138 00:10:43,570 --> 00:10:50,730 but also an obligation to get our members thoughts on things that we're considering that could have implications for their wallet 139 00:10:50,730 --> 00:10:52,550 and could produce savings for them. 140 00:10:52,550 --> 00:10:56,510 So this survey is an opportunity for us to engage with our membership in a very real, 141 00:10:56,510 --> 00:11:01,870 meaningful way, and we just can't stress enough how important your feedback is. 142 00:11:01,870 --> 00:11:04,390 David Latona: Excellent. So we're going to have a survey. 143 00:11:04,910 --> 00:11:09,030 How can how can the members participate in that survey, and what's in it for them, 144 00:11:09,070 --> 00:11:12,670 right? What do they get out of even responding to that survey? 145 00:11:12,990 --> 00:11:18,750 Jeff Andry: First and foremost, your feedback gets incorporated into our considerations and our construction of the program. 146 00:11:18,750 --> 00:11:23,390 But more tangibly, the member survey will be open from May 1st through June 10th, 147 00:11:23,390 --> 00:11:27,470 and everyone who participates has a chance to win a $250 gift card. 148 00:11:27,870 --> 00:11:35,630 David Latona: Oh that's great. So if we get those responses and you know, a few lucky members who respond will win an 149 00:11:35,630 --> 00:11:40,030 opportunity to host their family for Thanksgiving with that $250 gift card. 150 00:11:40,470 --> 00:11:42,790 But that's great to get that information. 151 00:11:42,950 --> 00:11:50,940 It is so important, I know, to our leadership and our board of directors to understand what members need and what they 152 00:11:50,940 --> 00:11:52,700 want and what benefits them most. 153 00:11:53,140 --> 00:12:00,700 So as we move through this survey, we know that that decision will be based on what 154 00:12:00,700 --> 00:12:08,580 members feel. So, when you said May to June, so we'll take that 155 00:12:08,580 --> 00:12:16,460 and process that, and it will give us a foundation for building our own DERMS program here at 156 00:12:16,460 --> 00:12:19,620 DEMCO. So what's the next step after that? 157 00:12:19,620 --> 00:12:22,900 What's the next step after we understand our members needs? 158 00:12:23,060 --> 00:12:27,700 Jeff Andry: Absolutely. So when we get the feedback from the membership, that will factor into our program design. 159 00:12:27,700 --> 00:12:33,940 And our plan is this is a key component of DEMCO's 2025 through 2029 strategic plan. 160 00:12:34,140 --> 00:12:36,340 Our strategic plan is super important to DEMCO. 161 00:12:36,340 --> 00:12:42,260 It informs every decision that we make, and our current target is to have a program up and running 162 00:12:42,340 --> 00:12:44,460 sometime in 2026, so next year. 163 00:12:44,500 --> 00:12:49,260 David Latona: Excellent. Yeah, and I know that that is, when we see that develop and build, 164 00:12:49,580 --> 00:12:53,240 it's advantageous for our membership, and that's what it's all about. 165 00:12:53,280 --> 00:12:56,870 We always put our members first in everything that we do. 166 00:12:56,870 --> 00:13:00,040 Jeff, this has been enlightening. 167 00:13:00,040 --> 00:13:03,120 I know that I've learned a lot. Our team has learned a lot. 168 00:13:03,160 --> 00:13:05,680 Thanks again to everyone for joining us. 169 00:13:06,160 --> 00:13:11,160 Don't forget that survey will be coming to you, May 1st through June 10th. 170 00:13:11,760 --> 00:13:14,640 You can visit DEMCO.org and click on the pop-up box. 171 00:13:14,960 --> 00:13:20,400 When you complete the survey, you'll be entered into the drawing, but that is just for DEMCO members. 172 00:13:20,400 --> 00:13:25,440 We appreciate your input in shaping the future of this program. 173 00:13:26,760 --> 00:13:30,080 Thank you for listening to Co-op Conversations with DEMCO. 174 00:13:30,560 --> 00:13:32,920 Be sure to subscribe so you don't miss an episode. 175 00:13:33,240 --> 00:13:36,224 If you like what you heard, leave us a review . 176 00:13:36,224 --> 00:13:38,200 Like and share the episode with a friend. 177 00:13:38,760 --> 00:13:40,960 For Jeff Andry, I'm David Latona. 178 00:13:41,360 --> 00:13:43,040 Let's keep the conversation going.