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Discover how Tri-State and our members are embracing the opportunity to power the West in our new podcast, Western Watts!
We'll dive into the heart of energy issues, from reliability to wildfire mitigation, and share firsthand insights relevant to rural, agricultural and mountain communities across Colorado, Nebraska, New Mexico and Wyoming.
This podcast may contain certain forward looking statements concerning Tri-State's plans, performance, and strategies. Actual results may differ materially because of numerous factors, and Tri-State undertakes no obligation to update these forward looking statements. We urge you to review Tri-State's filings with the Securities and Exchange Commission for a discussion of these factors.
Jennifer Prokop:A lot of times folks don't even think about their energy usage and consumption until they either get their bill or the power doesn't work. Demand response is another way to involve end use members so that they can have a real impact on energy demand and to work together as a system to leverage that operational flexibility to make sure that we keep the lights on for everybody because ultimately, that's our goal. Thank you
Elizabeth Schilling:for joining us for the Western Watts podcast. I'm Elizabeth Schilling.
Julia Eschelman:I am Julia Eschelman. And today, we
Elizabeth Schilling:have the pleasure of talking with Jen Prokop. Jen, thank you for joining us.
Jennifer Prokop:Yeah. Thank you guys for having me. Alright. We're gonna jump right in. What is your role at Tri-State?
Jennifer Prokop:I've been with Tri-State for about two years now. I originally joined the team in the environmental department. I was an environmental planner. Recently, I've moved over to manage the demand response program. Now I'm up with planning and analytics in the energy management department.
Elizabeth Schilling:It was kind of a big pivot for you. What inspired that move from environmental into energy services?
Jennifer Prokop:It definitely was a big pivot. I've always had a strong passion related to building programs from the ground up, and this really offered an internal opportunity to do so while still serving our members and providing value to the end use member participants.
Elizabeth Schilling:And before State, what other kinds of work have you done in your history?
Jennifer Prokop:Before Tri-State, I worked mostly in municipal governments. So I worked for the city and county of Denver and city of Boulder prior to that. But I actually started my career as a biomedical researcher working at the university level. Wow.
Julia Eschelman:What were you biomedically researching?
Jennifer Prokop:I was developing a gene therapy for late stage heart failure in type two diabetic patients using CRISPR gene therapy. Oh, so you're really smart.
Elizabeth Schilling:Okay. Thank you. I'll take it. I'll take it.
Elizabeth Schilling:So you talked about municipal government experience with municipal utility as well. Is that Correct.
Jennifer Prokop:Yeah. So most of my prior experiences in water and wastewater utilities,
Elizabeth Schilling:different style utilities, but still within the utility family. Is there something about utility industry that draws you in specifically?
Jennifer Prokop:I come from a long line of public service employees. I'm third generation now, and I've always felt compelled to serve the community I'm part of. And I feel like this is just another way to do so.
Elizabeth Schilling:Thinking about serving communities, working on the demand response program at Tri-State, does that give you an opportunity to connect at that community level?
Jennifer Prokop:Not only are we providing a service to our members and providing tangible benefits to them, but also that's passed along to our end use member participants. We're having an impact on multiple different levels, which is really great to see through.
Julia Eschelman:For demand response, let's do a baseline. I think a lot of people might be familiar with Excel's program. It's a thermostat incentive program. As an end consumer, they'll give me a credit back on my bill if I give them a little control over my thermostat temperature during peak events or extreme weather. That's my experience as an end consumer.
Julia Eschelman:But what is Tri-State's demand response program?
Jennifer Prokop:Tri-State does have a program similar to the smart thermostat program you're referring to at Excel. Right now, our demand response umbrella has four different programs nestled underneath it. One of our programs is the smart thermostat program, where we do have our members and the end use member participants enroll, and we adjust those thermostats and payout and enrollment incentive and then also an annual incentive. In addition, we have an irrigation program, which is custom developed for our irrigation and use member participants. What happens is we essentially have the opportunity to reduce the usage of their pump either by turning it off entirely or using a variable speed drive, which is like a thermostat that can dial down from a 100% to maybe 50% of the power that would be used by that device.
Jennifer Prokop:And with that, there's associated performance and bonus incentives. And then we also have our commercial and industrial program. That is really looking at our large loads, our large energy usage loads, things like oil and gas pipelines, cement plants, any large scale commercial and industrial user that has an interruptible process within their facility where they dial down the power, turn off a piece of equipment. And with that, we offer reservation and performance incentive. Our fourth program is a bit of an umbrella.
Jennifer Prokop:It's our member demand response program. This includes member smart thermostat programs that already exist within some of our member systems. We could just roll those over to us. And then our member battery storage program. So what this is actually a really exciting program arm.
Jennifer Prokop:We have the opportunity to enroll batteries, things like Tesla Powerwall three or Franklin WH batteries into our program to essentially utilize those and dispatch those batteries during time of high energy load and take a little bit of the stress off the grid. With that, there's also the associated incentives, which come with all of our programs.
Julia Eschelman:You mentioned before that the members have their own demand response programs, which I can understand how that's valuable for them for direct peak shaving. But what's the benefit for Tri-State in our actual system?
Jennifer Prokop:There's definitely a lot of benefits for Tri-State. Some of these include things like avoided maintenance and construction costs, speed, insight into the actual loads. When our members are doing their demand response events, it's almost invisible to us until we see that that demand is ultimately missing. Some other benefits include spending less on power purchases. And, again, that increase in reliability for our grid, the flexibility.
Jennifer Prokop:We also look at demand response as part of our operational fleet when we control it. This isn't so much the case when it's at the member level. But as dynamic as the industry is, we need the speed and flexibility to manage our demand now, and our demand response program allows us the opportunity to do that.
Julia Eschelman:When you say speed, how does DR give us more speed in our operations?
Jennifer Prokop:When we think about building a power plant or building additional assets, even renewables, it takes considerable amount of time when you start with the permitting process and move all the way through actually groundbreaking. Demand response offers that capacity by leveraging our operational flexibility across the entire membership to have the speed to capacity much quicker than actual construction. It seems like there's a
Elizabeth Schilling:lot of benefits for Tri-State. What about at the members end use consumer? What is the benefit like to them?
Jennifer Prokop:Now to touch on the incentives, that's definitely tangible for them as we're seeing energy costs increase across the country. This is a way to offset some of those energy costs. It also, again, creates a more reliable grid for everybody. And when we're all chipping together to leverage our operational flexibility, we lower the amount of energy that we need to purchase on the open market. We're keeping those costs down, and we can pass that benefit along to all of our members.
Julia Eschelman:I'll just say you also mentioned avoided costs in transmission and the operational costs. Can you dive in a little bit deeper too about those avoided costs DR will help with?
Jennifer Prokop:We do see demand for energy changing. Not only are we having big leaps in electrification from things like electrifying the oil and gas industry based on some Colorado and New Mexico regulations, but also increase in electric vehicles, increase in electrification of home heating options. When we're seeing all this, in addition to some of our high impact loads, things like data centers, crypto mining, we are trying to catch up with those. Originally, we hadn't anticipated the type of spike in energy demand that we're seeing today. Three, four years ago, AI wasn't even on anybody's mind.
Jennifer Prokop:And now we're having high impact loads approach not only our organization, but organizations out across the country asking for thirty, forty, 50 megawatts where this wasn't something that was originally planned for. As this is changing, we are trying to make sure that we're able to keep up and have different solutions. It's going to be a mosaic of different programs and pieces that come together to be able to support loads of this type. Demand response is one of them. With the program, not only are we utilizing it as a tool in our toolkit, but we're also avoiding the transmission costs, the maintenance costs, the costs involved with building any generation assets.
Jennifer Prokop:But there are multiple benefits as we move into this new energy future.
Julia Eschelman:Excellent. Do the members want demand response?
Jennifer Prokop:As we begin approaching members that this is new to, we are getting some really good feedback. The program is fairly new, so getting the word out is a big piece of what we're doing right now. It's a lot of member outreach. It's a lot of going to visit, saying hello, explaining what demand response is. But once we have the chance to actually speak with them and explain the program and the benefits of the program, we're seeing some really great buy in from multiple different distribution co op members.
Julia Eschelman:You mentioned we have an irrigation program. We have smart thermostats, and I think those are pretty straightforward. And then you mentioned a commercial industrial user. And can you just give, like, a few examples of ones that would be able to take part in a demand response program?
Jennifer Prokop:What we're seeing a lot of now actually is cement plants and, like, rock crushing facilities. It's interesting because it wouldn't be the first thing that pops to mind, but as it turns out, they have interruptible operations. If you think of something like three conveyor belts in a line and you crush the rocks from biggest to medium to small, if we could turn off that medium to small conveyor belts and have the rocks pile up after conveyor belt number two, that stockpile almost serves as a battery in a way for allowing somewhere to hold that product until the energy usage goes down, demand on the system goes down, and they can turn back on Conveyor belt Number 3 at 9PM for their third shift to begin crushing those rocks. Any commercial and industrial user that has an interruptible portion of their process like that would be eligible. We're also seeing other commercial and industrial users that are able to switch to a secondary power source.
Jennifer Prokop:With some of our oil and gas, they're able to switch from electric onto a natural gas, and they don't interrupt their operations at all. That's definitely what we're looking for, something with interruptible operations.
Elizabeth Schilling:This wouldn't be a good fit for hospital. This wouldn't be a
Jennifer Prokop:good fit for somewhere that needs to have their power on all the time. But for some of our end use members, this is a really good option in a way that they can adjust their energy usage or provide them with a bill credit or financial payout at the end.
Julia Eschelman:It seems like these programs, it's a negotiation between member and consumer to try and make sure both sides come out whole in the end while avoiding kind of the escalating demands of the utility industry?
Jennifer Prokop:You hit the nail right on the head because our members are the ones that have the relationship with their end use members. They have that retail relationship. And while we're always happy to go with, I've been on several visits out to commercial industrial users, which is always very fun for me. That is where the relationship lies. The retail relationship lies between our member and their members.
Jennifer Prokop:There is a little bit of back and forth. And, again, not every commercial and industrial user is gonna be a great fit for this program, but we work hard with our members to determine which ones would be. A lot of times, the analyst on my team will take interval data from a commercial and industrial user account, run it through some analysis to determine when their energy usage actually peaks throughout the day, and determine if that lines up with our program. We're definitely there to help and be support and, in some cases, the driving force. But a lot of times, those discussions do happen between our member and their end use member.
Elizabeth Schilling:Would you say the programs that we have so far, obviously, are the ones that can fit Tri-State system and the loads that our members are serving and what we may be able to provide in the future? A data you're talking about that either Tri-State has or the member system has. Is that a
Jennifer Prokop:huge part of where we might say, here's an opportunity or there's an opportunity? It's always interesting to see what kind of stories the data tells. We're looking to couple the stories that the data's telling with some of the lessons learned. I think I'd mentioned that this program had only been approved by FERC since May 2025. We're working through the first iterations of our program, and we're definitely seeing areas where this would be a great idea to expand.
Jennifer Prokop:Things like electric vehicle charging stations, the potential for future modifications to our current programs, and the possibility to include additional programs. There's definitely room for this program to grow and develop and further mature as the time goes on.
Julia Eschelman:DR for an electric vehicle charging station, is that something where some of them would be inactive based on the amount of use they typically get, or the power flow would be a little slower, like a 50%, like you were saying?
Jennifer Prokop:I think it'll probably end up being a combination of the two sort of scenarios that you just mentioned. There's the opportunity for chargers that are in homes. With some of the other public chargers that you see out in the world, maybe there's a way to dial down that power. Maybe they are only providing 50% of what the typical charging power would be at that time and when we would be having a demand response event versus a 100
Julia Eschelman:The Lowe's right next to us has 40 Tesla chargers in the parking lot, so maybe they could ramp down. They could do five of those.
Jennifer Prokop:There's definitely a lot of paths towards moving things forward, especially when it comes to electric vehicle chargers, or there are some discussions about using vehicle batteries to flow back and act as actual batteries. Definitely a lot of different options out there, and we're exploring all of those so that we can determine what's gonna be the best fit for our members and how we can really provide that value to them.
Julia Eschelman:You were saying too before it's a mosaic, which makes sense because you'll have some members that have a huge irrigation community or some that'll be a lot more residential. I'm assuming these programs are really bespoke. One DR program works for one member because they all have pretty different types of loads.
Jennifer Prokop:Absolutely. And with the diversity of our service territory, some of our New Mexico members look so much different than some of our Front Range members versus some of the Wyoming members. Every system is unique, and we have a very diverse territory. Our members are very different. You're right.
Jennifer Prokop:It is very custom when it comes to the demand response programs that each member is choosing to enroll in for their membership.
Julia Eschelman:I bet that actually works out pretty well, especially geographically. If you're having a weather event somewhere up in Northern Wyoming down in Southern New Mexico, you they might not be experiencing that same event. You're able to call on different portions that may not be affected at certain times, which is kind of interesting. If Tri-State is able to manage it more holistically, it's a lot more efficient to be able to pull from the full footprint of the system.
Jennifer Prokop:There are definitely some nuances to which interconnect things fall in. And as we move into the RTO and move into SPP, I think that'll become even more apparent how we're strategizing to utilize our demand response assets and program and enrollments to have the most benefit for our system overall. As those sort of items are on the horizon, we're definitely thinking about them and how the program is gonna best fit to maximize its benefit across the entire membership.
Julia Eschelman:I didn't even think about that. How does DR work in an RTO? I don't understand.
Jennifer Prokop:SPP has their own requirements related to demand response, and we're still in the process right now of getting our head wrapped around them so we can make sure that we're meeting those requirements. We're in meetings through the next few months I'm working closely with some of our other teams to make sure that we have everything required for demand response to be an asset that that could be utilized in the future.
Elizabeth Schilling:As far as what we're offering today, can we dive into the technical side a little bit? So if a member signs up, they're part of our DR program, and then their end use consumers are part of it. What happens technically? How does it all connect?
Jennifer Prokop:There are a bunch of pieces functioning all at once, and, typically, this is the path of the process. We approach a member. We talk to them. They say, yes. We wanna join the demand response program.
Jennifer Prokop:We have them sign off on a demand response program agreement, and that's the first step for us. We have a lot of conversations, and we need to make sure that we're aligned with our member. We know that they are at the stage where they're truly ready to enroll. One of the first steps we take internally is setting up what we call a member tenant, which is a slot in our software system that sort of falls under an umbrella. Every enrolled member gets their own slot so that they only see their own information with our associated software system.
Jennifer Prokop:We take care of that on our end, and then we put together a scoping meeting for our member. With the scoping meeting, we find out what kind of AMI they're using, what kind of MDM they're using, and figure out how would be best to build the data pipeline. Our goal is to have this program be very automated. We don't want them to be downloading a bunch of data to send to us for me to hand off to my analyst to say, analyze the data, see if they really participated. Here's a month of interval data, a huge file.
Jennifer Prokop:We're looking for it to be automated. By connecting this data pipeline from the MDM at the member to our software system, our derm system we refer to it as, this creates a data flow that allows for an automated measurement and verification process to show that somebody that was a demand response participant that was dispatched actually participated. We look at the interval data to see, oh, here's the energy usage, and it's dropped off during the hours of demand response. Okay. Your incentive should get paid.
Jennifer Prokop:One of the initial steps of the process is connecting all those systems and making sure that they really are talking to each other and the data is flowing back and forth.
Julia Eschelman:Is there anything you have to add for that layer of communication?
Jennifer Prokop:Typically, no. There's sometimes the need to build out an SFTP site. What? The secure file transfer protocol. Oh, thank you.
Jennifer Prokop:Yes. Some of our members already have that set up for numerous other reasons. If that already exists, we typically use that same one. Another alternative is to use an API or a little bit of code that speaks to the two systems in the background and allows for data flow in between our derm system and the MDM system at the member. But, typically, it's fairly straightforward for a process, and there is no cost to our members.
Jennifer Prokop:We worked hard to ensure with some of our initial economic modeling prior to the rollout of the demand response program that there wouldn't be any costs incurred on them. We want them to participate. We wanna minimize the barriers to entry. We felt strongly about it when we were developing the program that they shouldn't incur any costs. I have
Elizabeth Schilling:a definition question for you. You mentioned AMI and MDM. What do those mean?
Jennifer Prokop:AMI is advanced metering infrastructure, and then MDM refers to meter data management.
Julia Eschelman:Thank you. Step one is you align the communication between our system and the member system and automate it so that you're able to track whether the program's actually being followed. What's the next step?
Jennifer Prokop:Typically, we run test events. We'll test that process to make sure that those two interfaces are really actually talking to each other. Run a test event, and then it is moving on to the member marketing the program to their end use members. Once we have that data pipeline, members enrolled into the program are end use members in the members territory, marketing that and understanding how they're going to reach out with the help of our internal folks here helping us with social suites and different website elements that might be useful, email blasts, things like that. Each program, again, is a little bit different.
Jennifer Prokop:This might mean for member smart thermostat that they are pushing out email blasts or some other associated communication to their large scale membership. For commercial and industrial loads, this may mean for our member systems that they are looking at, okay, who are my largest energy users? Most of our members know this already. They know what their big accounts are. Approaching them to see, would you be interested in this?
Jennifer Prokop:What type of interruptible processes do you have? That would be another aspect as a real sort of grassroots, boots on the ground, get into the commercial and industrial users and talk to the right people. With irrigation, this might be putting together almost a focus group. We've seen sort of an irrigation key accounts group that some of our members have put together to bring irrigators together at a roundtable and explain the program, discuss the benefits, and see if it's something that would work for their system. There's definitely a couple different aspects there, but moves from the data pipeline setup to our member reaching out to their membership to try to get folks enrolled and just spread knowledge about the program.
Jennifer Prokop:From there, once those members are enrolled some of our programs have a seasonality irrigation in particular. You can't turn off pumps and pivots when they're not running. Once those folks are enrolled into the system, making sure that they have the proper software that they need for different events, ensuring again that everything is connected properly. But then it's a matter of us pushing the button up in our real time room to say, run a demand response now. The signal goes out through the cell service and then powers down those pumps if the irrigators have chosen not to opt out.
Jennifer Prokop:Then their equipment will power down, and we'll see that impact up in our room so we can see that the energy usage has been decreased. But it's really just a a few steps to move from original signing of the DRPA or demand response program agreement all the way through a member who's enrolled participating in an event.
Julia Eschelman:What's the communication path from you pressing the button to the end consumer's tech or the industrial user's operation ramping down?
Jennifer Prokop:The general overview goes something like the button is pushed. There's typically a notification window involved four hours before an event to allow the end use participant to take whatever steps they need. The button is pushed. The signal gets sent through our derms or our software program, which then sends out either a notification email. In some cases, in instance of commercial and industrial, they'll actually manually go shut down equipment either via SCADA or physically shut down pieces.
Jennifer Prokop:With irrigators, we're in the final stages of a vendor selection for a direct load control switch. The button would be pushed in our room. It goes to our derm system. The derm system then goes through a thin layer software solution that controls our direct load control switches via cell signal that then would power down those pumps and those pivots. And with our thermostat program, it almost looks similar to a direct load control switch solution.
Jennifer Prokop:We push the button. It goes through our derm system to a secondary thin layer software system that then would adjust everyone's thermostats from 68 to 72 on some of the hottest days of the year. That's typical of what it looks like.
Julia Eschelman:The incentive for the person to actually enroll is monetary. Correct. And for Tri-State, we're saying that even paying them money is still less expensive and more reliable than just building on additional generation still?
Jennifer Prokop:Yes. In many cases, is, especially on those highest use days. And a lot of that peak that we're seeing is from a combination of energy users, but a lot of them are residential, are commercial, and industrial. If we could take some larger scale users and push them out towards the edges, it allows for that natural peak that occurs during the day to still occur but offset the cost that might be associated by going over the amount of energy that we generate ourselves to needing to purchase it on the open market.
Julia Eschelman:DR is a pretty interesting concept because it's really the first time people are able to interact with the grid in a way they haven't before. Because if you think about it, maybe people dipped their toes in with electric vehicles and power bank storage or home battery storage and stuff like that. But this is the first time people putting solar on their house. I think people are getting more interested in the grid and how it works and being a part of the system, whether they know what that means or not.
Jennifer Prokop:Yeah. I would say that. And a lot of times folks don't even think about their electricity and their energy usage and consumption until they either get their bill or the power doesn't work. This is another way to further inform and further involve not only our members, but their end use members so that they can feel involved and have a real impact on energy demand and ultimately our load and the ability to curtail that.
Julia Eschelman:Since you only got approved May, obviously, you don't have a wealth of data to draw from, but how many events do you expect to have in a year?
Jennifer Prokop:Right now, in our past season, we had a member who was enrolled in our irrigation program, and we dispatched 10 total events from the July through September 10, and that was only for irrigation. I think as our energy demand continues to increase, we're gonna see the number of events across the portfolio of our programs increase. Right now, it is a little bit hard to say. We're eager to develop a strategy that definitely maximizes the benefit for membership, specifically related to affordability metrics and keeping the costs down. I think we're still in the process of figuring out how it is gonna look for Tri-State moving forward.
Elizabeth Schilling:Is there any common misconceptions that you think people have about demand response? There's probably a
Jennifer Prokop:few, but what we're running into more than misperceptions is just a lack of knowledge. Specifically related to the thermostat program, I think some folks might think, and then misperception might be that your house is gonna be so hot or we're gonna control your thermostat all the time, and that's definitely not the case. We'd be judicious about how we dispatch those events. What we're running into more than anything else is just a lack of market saturation and exposure at this point. A lot of people don't know what demand response is even internal to Tri-State.
Jennifer Prokop:It's a new program. It's a new way of shifting how energy is used that a lot of people just aren't aware of yet.
Julia Eschelman:Historically, if there is a demand response and they do go in and control the thermostat, how many degrees do they set it down? Or is it just there's a temperature in the summer that's okay, and there's a temperature in the winter that's okay?
Jennifer Prokop:With our thermostat program, it's only summer, and we do have the ability to customize some of those variables, I guess, you would call them related to the program. With that, we'd been in conversations about adjusting the temperature by four degrees. And so we'll see if that's what we end up going with for the upcoming season because we do take a look and make those decisions as we get closer.
Julia Eschelman:Do we have any members in our DR program right now?
Jennifer Prokop:Yes. We currently have five members enrolled. We're working with them to make sure that they have everything they need in terms of outreach material and information and that their data pipelines are set up appropriately. Very excited to
Elizabeth Schilling:have our first five participants. Nice to have some real examples of how it's gonna work. And then as you look forward, trying to get the program more fully realized, more members enrolled, are there any specific challenges that you're facing?
Jennifer Prokop:A lot of people don't know what demand response is, and sometimes it's the first time they're hearing about it. Challenges involved with making sure that we put to bed any misconceptions that there might be. With our irrigators in particular, we would never want an irrigator to think that we were gonna turn off their pumps and that they were gonna lose a crop related to a demand response event. We really want to impress upon everybody that this is a voluntary program with opt out functionality almost across the board. Being a new program, right now, we have a team of two.
Jennifer Prokop:That can also be challenging when we're looking at 40 members and trying to get out there. Doing
Julia Eschelman:individual custom programs for each member?
Jennifer Prokop:Exactly. I find that a lot of these meetings are facilitated best in person. I like actually go out to the membership and meet there on-site, get to know some of their staff, understand what their system looks like, because that provides insight that I think is helpful when we're talking about our programs. Right? It can be challenging, and it can be time consuming to drive out to all the members, finding that right balance while building the data pipelines, while dealing with software implementation.
Jennifer Prokop:Right now, it is a bit of a balancing act between all those items to make sure that we're paying the appropriate amount of attention to each bucket so that the program is moving forward holistically and not in an uneven fashion where we aren't able to provide the best service to our members. One thing that
Elizabeth Schilling:I think we've learned about you is that problem solving is not something you're afraid of at all. Even though there's a lot of workload ahead to continue to refine and build up this program, You still seem really excited. Why is that? What's the opportunity?
Jennifer Prokop:There's tons of opportunity here. And, again, just tangible benefit not only to our membership, but to those end use members is really energizing for me. It's always fun to solve a puzzle, to have a challenge, and to overcome it. In addition to the benefits we're providing to membership to their members, it's the opportunity to learn, to grow, and to be part of a really dynamic and inspiring team that all the folks within energy management are just incredibly supportive and really intelligent, and there's so much to learn from them. I'm just grateful to be part of the team.
Julia Eschelman:What's harder? CRISPR gene editing or demand response?
Jennifer Prokop:At this stage, I'm gonna go with demand response, but I've only been here a short time.
Julia Eschelman:And then we've gotten to the nitty gritty, and we've talked all about it. But give me the 10,000 foot view of the DR program.
Jennifer Prokop:We're looking at the DR program as one of the tools within our toolkit to offset the tremendous increase in load that we're expecting to see over the next five to ten years. We're doing this and using this program not only as a way to offset that load, but also provide tangible benefits to our members and to their end use member participants. We look at this as a way to keep our grid reliable, affordable, and responsible for all of our members.
Julia Eschelman:How important is it for Tri-State to offer members programs like this?
Jennifer Prokop:I think it's really important. It shows we wanna make sure that we keep our energy affordable, and demand response is one of the ways that we're able to do that. It shows that we're there to serve them. We're trying to develop these programs ultimately as a service to them by providing these incentives in some ways as a passive income stream and helps offset some of the costs associated that we're seeing with our electricity supply.
Julia Eschelman:Yeah. I can tell there is an undercurrent with all these programs that are being developed. They're designed not as a handout, but as a win win. Because as a not for profit, you don't have extra money to throw around. If there wasn't these benefits for both the member and Tri-State, I don't think we would do them.
Jennifer Prokop:Absolutely. And we do look at it as a win win, especially with this program. We have the good fortune of being able to provide those incentives and pass along the savings that we have that are created by the shift in energy usage by leveraging that collective flexibility that we have.
Julia Eschelman:Does it give us more reliability? Because these are usually tied to an event like extreme weather or extreme demand use? Does that increase reliability as well?
Jennifer Prokop:Definitely. When we see things like winter storm Uri, the opportunity to have somebody be able to dispatch demand response events during extreme weather events like that and to take large energy users off our system to make sure it's resilient for everybody else so that our end use participants and our member systems still have the opportunity to provide energy for heating, for maintaining the food within their freezers, it makes a big difference. And we're seeing more and more of those extreme weather events as we move forward. This is just one way that we can, again, offer another tangible benefit in making the system more resilient.
Julia Eschelman:Question out of left field. Do you know how DR compares to something like a brownout that they do in California?
Jennifer Prokop:DR is a way to avoid brownouts. And I'm not sure what the energy landscape looks like in California. Complicated, I'm sure. And some of those places where they are having these rolling brownouts. If we're able to dispatch demand response events with end use participants that already know that they're enrolled in the program and say, oh, we're gonna shut down group a of our irrigators group, and we're gonna ask the cement plant to shut down Conveyor Belt 3, and we're gonna turn everybody's thermostats from 68 up to 72.
Jennifer Prokop:We're alleviating the stress on the system. By alleviating that stress, there's no need to alleviate it through things like rolling brownouts, which is what we see in some of the other areas of the country.
Julia Eschelman:I guess in the end, if there was an extreme weather event, it does end up even being in the residential and consumer's best interest because Would you rather have a power outage because of the extreme demand, or would you rather move your thermostat down or up a little bit but you maintain that power.
Jennifer Prokop:That's a big part of it. Right? We're all combining to collaborate and to work together as a system to leverage that operational flexibility to make sure that we keep the lights on for everybody. Because, ultimately, that's our goal, making sure the lights stay on. And if we're able to all work together to do this, it's to everybody's benefit.
Elizabeth Schilling:It feels like a big part of this whole concept working is the relationships that are built, the conversations that are had around, hey. We can give you a little incentive if you can give us a little flexibility, maybe a little bit of control. And it feels like those relationships are important to establish ahead of these events where we need to say, hey. Can you help us out? Can you turn this off or do that work later?
Elizabeth Schilling:Can you tell me just a little bit about that?
Jennifer Prokop:You articulated it really well. A lot of this sort of hinges upon building relationships and explaining the value of the program. Not only is this increasing flexibility and reliability and ultimately affordability across the system, But it's building those relationships to show that we're all in this together, explain why it's important, and how we are avoiding the potential for things like rolling brownouts, things like stress on our grid. The early stages and those foundational relationship building aspects are definitely very important. Feel like it's a key element, a key intangible to this program for sure.
Julia Eschelman:I have one more thing too. Tacking on to what we were talking about with water flow and water utility. As in end consumer, when you talk about avoided infrastructure costs, it's actually really easy to think about if you think about the water utility words. Okay, you have your home originally put in. There was a certain amount of people that lived there.
Julia Eschelman:And if you want to upgrade your plumbing, that involves you need an additional water source, and then you actually need to go in and dig out those pipes and replace them with something with more capacity. When you're talking about transmission, it's kind of a one to one. It's like you need more for more. When we're talking about avoided costs, we're also literally talking about infrastructure needing to be added to support all this additional stuff.
Jennifer Prokop:That's a really good parallel and comparison to draw. Our transmission lines, our delivery points only have a certain amount of capacity. Our substations only have a certain amount of capacity. To allow the flow of energy through all those components, even if we did build additional generation or additional renewables that we placed throughout our system, there still is that additional component of making sure that energy can actually flow to our members and then on through their distribution system. By utilizing the the tool of demand response, we avoid some of those costs that would be associated with increasing the input that's needed to allow for energy flow because we're not increasing the amount of energy on the system.
Jennifer Prokop:We're flexing when we're using energy. Jen, thank you so much for joining us today. I think we have a lot
Elizabeth Schilling:more information about the benefits of this program, and thanks for helping everybody learn a little bit more.
Jennifer Prokop:Yeah, absolutely. Thank you guys for having me. Eager to come back in a year or two and tell you all about how the program has further developed, our success stories, and what we're seeing with our members throughout the system.
Elizabeth Schilling:Sounds great. Thanks for tuning in to Western Watts. You can find us on Spotify, Apple Podcast, YouTube, or on our website at tristate.coop/wwpod. We'll catch you next time.