The relationship between the solar industry and utilities can be fraught with tension and mistrust. The adversarial rapport becomes especially apparent when the two sides come to blows over net metering rates.
Utilities in states like Arizona have argued that crediting solar system owners for the electricity they add to the grid is not cost-effective, and it leaves non-solar customers picking up the financial slack to support grid infrastructure. And pro-solar organizations have come back swinging, citing studies that dismember such utility concerns.
For Mary Powell, president and CEO of Vermont’s largest utility, engaging in such combative debate is counterproductive, and a distractor from the nation’s inevitable reliance on renewable energy. That is why she has embraced solar and is grooming Green Mountain Power to be the model of the utility of the future.
Green Mountain Power started a notable transition toward becoming a greener energy company in 2008, the same year Powell took the company’s top executive position. During Powell’s first year at the helm, Green Mountain Power offered solar customers an additional financial perk on top of its net metering rate. Powell has continued to be a vocal supporter of expanding Vermont’s net metering program.
As previously reported by SolarEnergy.net, Green Mountain Power is now moving on a series of new solar projects.
The company has a plan to make Rutland, Vt., the solar capital of New England. As part of that plan, the utility is building a 2-megawatt solar farm coupled with a 4-megawatt battery storage system. The project is on track to become the United States’ first microgrid powered solely by solar and battery back-up.
In March, Powell’s work to advance solar as part of Green Mountain Power’s business model earned the utility a Solar Champion award from Vote Solar, a national solar advocacy organization based in San Francisco, Calif.
Powell’s business acumen is also credited for saving Green Mountain Power from itself. When Powell first came to Green Mountain Power in 1998 as vice president of organizational development and human resources, the company was heading toward bankruptcy. The utility was a slow-moving, hierarchical, costly bureaucracy. As Powell climbed the corporate ladder, including a seven-year stint as chief operating officer, she led major reforms that transformed the company and its culture. Gone, literally, is the executive suite with its private bathroom that was once guarded by two private secretaries.
Today, Powell has created an open work environment where employees are empowered to make decisions, and respond quickly to customer needs. Powell herself works from a standing desk situated among her staff.
To help ensure that Green Mountain Power’s success isn’t strictly based on financials, Powell announced last week that the company has become the first B Corp certified utility. Through a third-party assessment by the nonprofit B Lab, Green Mountain Power proved it met specific standards of social and environmental performance.
Powell’s visionary ability has also landed her as a finalist for the power generation industry’s 2014 Power-Gen Woman of the Year award. The winner will be announced today.
SolarEnergy.net spoke with Powell about why Green Mountain Power supports net metering, how the utility’s renewable energy projects are preparing the company for the future, and the challenges of turning an outdated company on its head.
Why did Green Mountain Power decide to become an early net metering adopter?
We started looking at solar back in 2008 and we found that a lot of the highest-cost, dirtiest forms of power that we were relying on came in the summer months, during those hot, sunny days. When we looked at what we could offset in terms of purchasing in the market against the benefits of solar, we actually went ahead and were one of the first utilities in the country to develop a solar rate. We started paying customers $0.06 per kilowatt for every bit of solar that they generated, in addition to the net meter benefit. Since then, we’ve been steady supporters of the net metering policies that have gone into place in our state because we believe they are supportive of where customers want to go.
Both utilities and pro-solar organizations have conducted studies on the impact of net metering. Why do you think there has been so much discrepancy among the findings?
Data requires judgment. So depending on what judgments you apply to what data, you can come up with very different answers. I think this is very classic in a disruptive environment. What happens in the case of solar organizations is they get fearful that they’re not going to get the incentives they need to accelerate the kind of adoption they would like to see happen. And you have the utilities that get fearful and concerned, because they’re scared, in some cases for some legitimate reasons, about cost shift to other customers and loss of revenue. I feel like we have been one of the examples of a group that is trying to live in what I call the messy middle. The truth is always in the grey. It’s never at one extreme or the other.
What are the biggest challenges utilities must overcome to be successful as the demand for renewable energy goes up, and the technology to make greener power comes down?
The biggest challenge utilities face is resistance versus acceptance. If you look at any industry sector, the long-term winners are always those who figure out how to innovate and move in the direction their customers want to go. That’s why for us, it’s not a debate. We don’t need to waste intellectual and emotional energy debating whether we should go this direction. What we can do is dedicate that emotional and intellectual energy into figuring out how to innovate, and move in ways that make sure all of our customers prosper. We launched this vision a number of years ago. While many states around us are raising rates, we’ve actually delivered two rate decreases.
How is Green Mountain Power’s work to make Rutland the solar capital of New England impacting the company’s business model?
We are going to become the solar capital some time in the first quarter of the next calendar year. But really, that is almost of secondary importance, because the team has continued to innovate. Now it’s really about how do we create what we are calling the energy city of the future? What that means is that we are doing a tremendous amount of smart electrification, along with the battery storage projects, and the microgrid.
We are also doing a major electric vehicle build-out, as well as cold climate heat pump technology, which helps customers get off of oil and propane and move to much more efficient, comfortable systems of heating and cooling for their homes. We really want to prove out a model that shows we can help customers radically transform their relationship with energy – use less, live more comfortably, use more renewable forms of energy, and have greater local resiliency. All of this would be accomplished through creating a new value-added relationship with the customer.
Why are microgrids important for Green Mountain Power’s business model?
Fundamentally, the bulk power system wasn’t built to deliver energy economically. It’s a system that loses a lot of its product over its delivery system. We feel from a forward-looking perspective that having more locally generated power that is then served through microgrids is a much more financially, environmentally and socially sustainable model for the future. This way the bulk system becomes the backup grid to the microgrid.
You led the charge to turn Green Mountain Power from a stodgy, slow-moving bureaucracy to an agile, trendsetting company. What’s the secret to successfully turning a company on its head?
Cultural transformation is really, really hard. It takes years. My credo is that we are going to move to a fast, fun and effective culture. It reflects how we feel operating inside, and it reflects how our customers feel interacting with us. I’m very fond of a flat organization. It limits a supervisor’s ability to get into power and control, because when you have 15 direct reports you simply can’t. You have to trust people, trust the process, and give people awesome goals, and then the tools and capability to do their job. We really have a culture of folks who feel empowered to make decisions. They know that I, and others, will back them up, even if the decision they made was the wrong one. We really want decisions made closest to the customer.
Photos courtesy of Green Mountain Power.