Disrupting the Business of Energy Delivery

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When we think of innovative people in the state of Vermont, it's hard not to find Mary Powell, CEO of Green Mountain Power, at the top of everyone's list. As Bill McKibben pointed out in his recent article in the New Yorker, utility companies are some of the least innovative business sectors in the world. I worked with Mary a decade ago and found her to be one of the most creative people I've ever worked with. Since then she's applied her passion, creativity and drive to making Green Mountain Power into one of the most innovative energy companies in the U.S.

Powell describes herself as "customer-obsessed" and intensely practical. I wondered what she meant by that and how she arrived there. Mary described her biggest obsession for customers is about delivering a clean portfolio that is cost effective. For Mary, that came into sharp focus when she started spending time in a place most people would try to avoid: collections.

"I used to make it a habit of going out with our staff to do collections because I felt that was the hardest work and that they were having the toughest conversations in our business," Powell told me. "And I'd show up at doors in Bellows Falls or Winooski and hear why people have a hard time paying their bills and what things they have to deal with in their lives. When you hear a story from an elderly woman telling you she is down to taking two baths a week because of the cost of hot water, it grounds you in the lives of our customers. All customers generally have a lot of other stress in their lives, big important things, more important than paying attention to their electricity usage. I came away from those interactions thinking to myself 'we need to be obsessed with cost and obsessed with helping our customers use less energy in a way that is easy and transformative for them."

The bigger challenge is how you take that experience and turn it into action throughout a corporate culture. Even though many Vermonters (and others) call Powell "innovative" it's a term she's not always that comfortable with.

Powell says "When I hear the word 'innovation' I immediately think of somebody coming up with this really cool software no one's ever thought of, or coming up with some type of magic machine that can do all sorts of stuff that nobody could ever do before. That's not what I'm doing. I think of our work as being intensely practical. That doesn't sound that sexy or innovative, but that's what's driving our work. We want what we do to be intensely practical for the people using it, we want to create innovation through collaboration and by looking at news ways of combining existing technologies and stacking benefits for Vermonters."

"So maybe our innovation lies in combining existing things in new ways. But I always come back to practical - it has to be easy so that we're improving the lives of our customers and reducing stress, it has to fit into the lives of the people we're doing this for, otherwise they simply won't do it. That's why I like the term intensely practical."

There is one area where Mary Powell does admit that she's innovating: GMP's business model.

"We're trying to lead a radical transformation of our industry. We want to think about how to use technologies and devices to move us toward a much more localized energy delivery system and away from the old, typical bulk energy delivery system. We're innovating around our business model so we can help customers and Vermont become more socio-economically viable AND environmentally strong. Right now, I keep asking my team and myself 'How does every single thing we do and every single investment we make over the next decade either support a bulk delivery system or a distributed delivery system?' If the answer is the former, we need to rethink it."

It's fascinating to hear of the projects Green Mountain Power is working on in pursuit of that goal. It's not just one big initiative either; it's several happening at the same time. In the New Yorker, Bill McKibben described the eHome initiative, now currently up to over 100 homes, where GMP used a number of old and new tools to help customers reduce energy costs, and be more comfortable. They combined traditional methods such as weatherization with newer techniques of solar power, Tesla home batteries and iPhone apps. They packaged all of those changes up and then GMP financed the deal through the utility bill, which fell significantly the first month.

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Meanwhile, in St. Albans Town, Powell and her team are pursuing even more innovative energy projects. Years ago, GMP competitor Central Vermont Public Service launched a program called "Cow Power." The program helped farmers generate electricity from cow manure. After Green Mountain launched an effort, with it's investor, to acquire CVPS and merge it into Green Mountain Power, Powell and her team wondered why there weren't more Cow Power farms, since everyone loved the idea.

"What we found was that while Cow Power was solving one problem, it was also creating additional challenges along the way," Powell explained. "First, farmers had to be a certain size to do it, which limits access. Second, you're asking a farmer who's already stressed and busy to get into the generating business. So not only do you have to cobble together funding, you also have to find customers willing to pay more for the power. It was complicated."

Part of Powell's philosophy is the idea that real innovation can't just solve one problem; it has to solve several problems or layers of problems at the same time by creating multiple benefits. It was the philosophy that drove eHomes as being "intensely practical." That's what GMP is now doing to take Cow Power to a new level through a Community Digester program in St. Albans.

"Now we're building a community digester where we'll help a number of farmers better manage the manure on their farms. We take responsibility for the generating and distribution, because that's what we do. We're solving one problem for the farmers, which is managing manure and the nutrients that come with it. But that wasn't enough. I challenged the team to keep stacking benefits. We realized that there would be a small water quality improvement by digesting the manure for generation and returning the byproduct to the farm - we wanted to do better. We asked ourselves how this could become a huge phosphorous benefit because of the pollution problems we face in Lake Champlain."

"After a lot of work, the team found a technology, known as Dissolved Air Flotation or 'DAF', we could use with the digester. This generation project alone will allow the St. Albans Bay watershed to reach 1/3 of their phosphorous reduction goals, and we're working with only three or four farms! The farmers have to adopt standards for spreading in a compact they're agreeing to with us. In return for all of this, we deliver back to these same farmers a fertilizer by-product they can use and on top of that, they get a revenue stream from the generation."

"We're also building a microgrid in St. Albans and the best part of this model is that it doesn't ask customers to pay more. But that's not enough, we're also partnering with Casella Waste to use food scraps in the digester that will help Vermonters deal with the new food law that went into effect."

Mutual benefits. Collaboration. Intensely practical. Maybe those are ingredients for innovation. It feels a lot different from what we're used to hearing about energy use, efficiency and conservation. When it comes to Vermont, one of the main electricity challenges facing the state is the various spikes in energy prices. We talk about Peak Usage in the summer and the winter. If the state can avoid paying peak prices, we reduce our energy costs. The same is true about Time of Use, during the day.

"Time of Use has been around forever," says Powell. "I hate the thought of having to go to customers and say 'I'm sorry your bill was so high this month. You must have been washing your clothes at 6:30 PM instead of 7 PM.' That doesn't feel like innovating to me or being customer obesessed. It feels like nagging."

"My goal is to not have to dump that on to customers. They have more important things to do with their lives. I'd like to move to a relationship where we help you manage your electricity. By innovating and using technology and collaboration, we can help people reduce energy costs and we can reduce stress. But we can do it in a way that ultimately benefits other Green Mountain Power customers and the state as well. That's what we're trying to experiment with in Rutland and in St. Albans."

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Mary Powell's energy and engagement is infectious. It's one thing, though to be a dynamic leader; it's another to inspire and change an organizational culture, especially in a utility. I wonder how Mary has been able to shift the culture internally.

"As far back as I can remember, whenever I was running departments wherever I was, I would always ask my team to imagine how we might make our department obsolete. I challenged them to think of how we could put in place ideas or systems so the company would run great without us. To me, that helps sharpen the mind and to continually look at what we're doing and asking ourselves if we're really doing right by the customer and company. This, to me is the innovation mindset."

"We're doing little things like our 'energy of the future' team that meets weekly. It's a diverse group that discusses all sorts of ideas and issues. But the real challenge of creating an innovation mindset is getting comfortable challenging, thinking creatively and positing how to 'stack benefits' with everything we do."

"That cultural work is never done. It's an ongoing challenge."

Customer obsessed. Intensely practical. Solving multiple problems at once and stacking benefits. Asking how to make yourself obsolete. These are ingredients of Mary Powell and Green Mountain Power's innovation juggernaut. We're lucky to live in a state where these things are happening. But both the state, and the state of utilities, needs more people like Mary to radically disrupt things for the better.

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