Captain Obvious

The name itself comes from the fact that the leaves fall from our trees.  Wow … one more year is about to end, and we thought we were finally done with COVID!  Who would have believed that we are still being impacted by this after almost two years?  This is wearing on everyone in our community and has done so much damage it’s hard to comprehend.

So, when we think of the season of Fall, some become understandably depressed.  We remember how to set our clocks with another negative connotation.  In the spring we set them forward and it the fall we set them backward.  Backward sounds negative, and even the word Fall sounds less than optimistic.  On a positive note, we need to remind ourselves that we gain an hour at this time of the year!  I really like that because I read an article that eating hot dogs took an hour off my life.  You know what?  I really enjoyed that hot dog and I am OK with debiting my life one hour.

Maybe we need a new name for the season … calling it windfall since the winds pick up at this time of the year.  I don’t have the answer here, but I do have an illustration for those of you who want to call things what they are.  Life insurance was originally called what it is … death insurance.  But they couldn’t sell it when they called it what it was.  So, they switched the word and meaning on its head and called it what it wasn’t but in fact what people wanted to buy.

Of course, we are not selling this season for any reason are we?  Perhaps we need to market this season for what it truly is: wonderful!  This is one of the prettiest times of the year here in Atlanta.  The weather is once again mild, the mornings are crisp, and we still have flowers blooming.  We can sit outside most days and enjoy the gentle weather and the first signs of the leaves turning beautiful colors.  It is a glorious time of the year.  Let’s celebrate that!

My Jewish roots remind me of the wise sayings I grew up with about how to think about our lives.  While it might be considered terrible theology, it does help.  I was taught not to complain to God about anything in my life.  My rabbi said if you complain to God he will say: “Oh, you think that’s bad?  Let me show you what bad is!”  I was told, by contrast, we should give thanks no matter how bad things were because God would say: “Oh, you think that’s good?  Let me show you want good really is!”   As I said, this might be bad theology.

Or is it?  My medical friends all tell me that a positive attitude is essential to good health and that despite the best medical treatments a bad attitude can literally kill you.  Then, we should have a thankful attitude, no matter what our circumstances are. But what does it take to do that?

I observe that we allow way too many things into our lives and beings that simply do not help.  I stopped watching TV years ago because I found most of it far from uplifting.  I have chosen now to go back to that strange thing that sits on our shelves that does not need a battery to operate … books.  Read a good book or two.  Trust me, you can still do it.  Turn the TV off and read without any background noise.  Let your mind and heart escape to the world described by that author.  If you have a book you read once before a while back, read it again.  You will find different things hit you upon another reading.

Do you remember the Tom Peters era several decades ago where his research team studied excellence? He wrote several books in the series with the first one titled precisely this way. He pointed out that firms such as Federal Express and Nordstrom used excellence as the critical differentiator to their business success. 

 

Why then is it so common to hear of just the opposite today?  We seem obsessed with mediocrity and everyone being graded the same or not graded at all.  I thought excellence was to be applauded, but apparently I have been sadly mistaken if this article in USA Today is to be believed.

 

Work life balance has been with us since recorded civilization, but today’s younger generation has pulled up hard on the idea of hard work being any kind of a measure of success. I attended a national working session on the tribal polarization questions which centered on one of the missing elements: civics… kids today have no idea what this country was built on.  Evidently civics is no longer taught as part of the core, so kids don’t know how government really works here.

 

The other major culprit identified with the thousands of participants is the dangerous impact of social media as I have been stressing… which almost everyone agreed was tearing up society as I have been pointing out. Then, of course, there is widespread blame deserving in the media. The work ethic that built this country is dying very quickly.

 

I needed to get my wife’s PC to her after she had left it at home on a business trip. I called Federal Express and asked how quickly I could do that. The person who I spoke with asked me for the dimensions and weight which I felt was irrelevant to my question. When she insisted I answer I made up some numbers so she could fill in the computer screen in front of her which would eventually answer that question. She told me it would take 2-3 days.

 

I asked her where the company statement “when it absolutely positively has to be there overnight” went? She said … without a pause … “oh, we don’t do business that way any longer.”

 

Maybe that is why I don’t hear much about Tom Peters any longer either … he is still on that search.

Electric utilities are required to provide service to any and all customers, but they are not obligated to do that and lose money in the process.  Yes, there are some protected classes and situations where they may be forced to offer services below costs but they are then also allowed to recover those costs across other customer classes.

Perhaps the more important question today is “what is basic electric service” in the first place?  Restoring service after storms is clearly implied, but offering underground service just because it is more reliable is clearly not.  In fact, even though it seems to be the obvious answer to reduced outages due to wind it exposes utilities to even more widespread challenges when they have to deal with flooding.

Personally I would gladly pay a premium for enhanced electric service, but I would expect the lights to stay on all the time: something they don’t do during storms for sure.  I was impressed how hard Georgia Power worked to restore service at our house when they detected that the problem was a damaged underground feed to our house.  They did some amazing digging and then restored all our plants to their original places.  Very impressive and a lot of people working together seamlessly.

But, let’s take a deep breath and step away from the front line situations and think creatively.  Why do we assume people value things just because they are better?  Don’t people buy “Junker” cars because they are prepared to face the maintenance headaches along with the cosmetic fixer upper tasks.  Don’t you know people who buy dilapidated houses and fix them up and make money doing that?

Isn’t it time to recognize that many people have the same idea about electric service … they just want cheap service … they don’t value the reliability others do.  As we continue to see our world segment into those who embrace and care about energy stewardship and those who don’t, isn’t it time the prices reflect that?  Personally, I think it is high time we start thinking about this in all dimensions of electric service.

You want hassle free electric service with no requests for demand response and no warnings about system reliability? … you just want to flip the switch and be assured the lights come on? … you should pay more!  Or, if you want to be a prosumer and partner with the energy industry as an active part of the system?  You should pay … ?

Caught you!  You wanted to end with “less” didn’t you?  Why?  Does it cost us less to partner with customers?  Are they as good as the supply side options?  If they do perform well, they will pay less.  However, if they don’t they will pay more.

Our industry must face the music.  We are on a path that leads squarely to pay for performance in all aspects.   Just because you can afford solar and batteries doesn’t mean you are a partner to the industry.  Act as one and your costs can go down.  Act as a self-serving elitist and your costs for the electricity you continue to demand from the system will go up.

There is no free lunch.

 

We all remember the famous warning in management: whatever gets measured gets done.  You can’t manage what you fail to measure.

Why is it that so much of today’s political posturing forgets all this?  Can’t they see they are setting themselves up for real trouble.

Take for instance the banning of natural gas for new construction.  In almost all cases, the electric grid is far from carbon free, so doing so will have clear consequences that fly  in the face of the stated objectives of the laws they are passing.

Don’t they know that this will backfire?  Or, do they know something that we engineers, scientists, and accountants fail to recognize.  Do they know that the average American will simply ignore these future facts?

What shocks me the most is that the natural gas industry has failed to point out these facts and instead is trying to “green up” its image rather than call out the fact that the emperor is nude.

I admit I am biased by my history in this business.  I remember the speed limits being reduced to 55 from 65 because the energy crises in 1973 and 1978 were the moral equivalent of war.  I remember banning natural gas in new power plants because we had so much coal and we were running out of natural gas back then.  Hmmm … seems strange now in retrospect doesn’t it?

We have made huge strides in the past 40 years since then and we should applaud that. But, perhaps it is time to also take a closer look at what we learned along the way.  After all, as the adage goes: if you fail to study history you will be doomed to repeat it.

 

It is certainly a good thing that we look out for those in our society who “fall through the cracks” of life and it’s about time the energy industry looked beyond the bad debt consequences and customer satisfaction drag of what we once called low income customers.  Almost all energy companies have bans on disconnect for non-payment during extreme hot or cold weather seasons and work tirelessly to figure out pricing schemes to protect this segment.

Nevertheless, the needs are growing and now this segment has grown to more than a third of the customer base.  Energy burden is the new politically correct label and just about everyone is on board to think creatively about how those living in substandard housing can be lifted out of the situation that traps them: energy costs that are disproportionately high compared to the rest of the communities.

Some can rightfully argue that there is no economic way to fix these old public housing and mobile homes to make it economical to live there.  Tearing these down and starting over with modern high efficiency construction makes better long-term sense but you have now opened up a much larger agenda.

Perhaps the real solution here is to consider the larger societal agendas so we don’t simply replace the current housing but possibly relocate the families to more sustainable situations where they would then live in affordable housing, be able to walk to work or use public transportation, and learn how to budget rather than just live from paycheck to paycheck.

Isn’t it about time to realize that energy use is the result of choices?  Wouldn’t it be better to manage the choice portfolio first and then let consumers make their choices?  Central planning like this is routine when we look at city planning, public transportation, etc.  Where are we on moving to a new form of least cost planning in the energy space?  The time seems ripe for this kind of thinking.