Utilities can fight the coming changes to the energy industry or figure out how to stay relevant and create value out of all the new technology and innovation.
CPS Energy is choosing the latter path, CEO Doyle Beneby told a small but influential group of engineers, economists, policymakers, lawyers and other experts in the electric utility industry on Friday.
“Let’s hold hands with the people who are disrupting the industry and figure out collectively better ways” to create, distribute and manage energy while also spurring economic development and continued innovation, he said in his keynote address at the 4th annual Austin Electricity Conference.
Google’s recent purchase of the Nest thermostat, Beneby said, is indicative of the changes to come, where large companies like Google and Apple, which already have ‘portals’ into customers’ homes, will inevitably move into energy management.
“These forces are not going to be stopped, and ultimately, I think that’s a good thing (for consumers),” he said. “These types of innovations are coming, and we’re embracing them.”
But Beneby also drew a line in the sand, suggesting that part of his job is to make sure that new players in the industry do not get between CPS Energy and its customers. Instead, he said, the company will look for ways to create partnerships.
For example, he said CPS Energy is in talks with Nest about a pilot project to add the popular thermostat to CPS Energy’s growing demand response programs.
The programs work by asking certain customers to voluntarily reduce their energy consumption at critical times, in exchange for free energy-managing equipment, bill credits or rebates. CPS Energy recently announced an expansion of its successful automated demand response pilot program with partner Honeywell,and its residential program, Home Manager, continues to grow.
Beneby said CPS Energy is working to bundle those saved megawatts in order to bid it into the market during peak times when demand — and prices — for power skyrockets.
“You’re going to hear more about that,” he said, “because we are pushing hard on it.”
Whether it’s demand response, rooftop solar, the smart grid, battery storage or electric vehicles, CPS Energy is in talks with various companies to create partnerships that will create more value for customers and the company, Beneby said.
“This is innovation, and it is innovation applied. We are not just thinking about it, we are actually bench testing and applying it.”
CPS Energy is able to do that in large part because of its status as a vertically integrated, municipally-owned utility with a supportive board of trustees, he said.
“We have a lot of levels to potentially monetize, and we have a longer runway to realize value.”