Public Power Now
Public Power Now
New CEO of MMWEC Discusses Need for New Generation in Region, Benefits of Energy Storage for Members
In the latest episode of Public Power Now, Tom Barry, the new CEO and Secretary of the Massachusetts Municipal Wholesale Electric Company, discusses the need for new generation in New England. He also details how MMWEC’s member utilities have benefited from energy storage projects. MMWEC is the joint action agency for public power in Massachusetts.
Welcome to the latest episode of Public Power Now. I'm Paul Ciampoli, APPA's news director. Our guest in this episode is Tom Barry, CEO and Secretary of the Massachusetts Municipal Wholesale Electric Company, which is a joint action agency. In September, MMWEC announced that after nearly 30 years of service to MMWEC, Ronald DeCurzio was retiring as CEO and Secretary for the JAA. At the same time, the MMWEC Board of Directors announced Tom as a successor for DeCurzio. Prior to taking on his new role, Tom served as a director of energy markets for MMWEC. Tom, thanks for joining us. Thanks, Paul. I'm really excited to be here. Interesting. So Tom, just get a gun from Central Star. Want to give you the opportunity to talk about, you know, what your immediate priorities have been since becoming CEO and Secretary of MMWEC.
Tom Barry:Sure. Well, before I jump into that, let me let me just say this that very excited about this new opportunity I have here. I'm excited mainly because I believe in the mission that we're we're working towards. I believe the model that we have is is is the right model for uh public power is is absolutely paramount for our system. And I believe in the people that uh I work with. You know, we've inherited, I've inherited uh the best of the best, and my future success is really directly tied to their success. And so I'm I'm fortunate in that regard. But as for for what's what my short-term or immediate term plans are, you know, there's a lot to do, but you certain certainly have to prioritize certain things. You know, taking over for Ron, who was the CEO for 18 some odd years is a big undertaking and a big change for MMWEC, and I'm humbled by the new responsibility, but also excited, as I said. You know, some of the things that are of great importance to me are that there's a seamless transition for the entities, the municipalities that we serve. You know, we do a lot, and I'll get into that in just a bit, uh, for those municipalities. And it's it's of great importance that we don't miss a beat in that effort. And so that's uh uh something I'm very focused on. On top of that, we just need to continue to build and improve on our value statement uh along the lines of those different services that we provide. We do great things, and and we need to continue to do those great things. And maybe more important than doing that is we need to do a little better job than we have in the past when it comes to telling our story and communicating with the the members that we work with and and you know, potential future members that we work with, what we're all about, what we stand for, how we do things, why we do things, how our business is structured. We haven't done a fantastic job on that front. And one of my short-term goals, and it's been kind of my goal as director of energy markets before I moved into this new role, was to get out uh and get face-to-face with people, to be on the opposite side of the table uh of the general managers that we work with, and and and and the general managers we don't necessarily work with today, and and share with them our mission, our model, and and the people that I alluded to earlier before. So that's uh of great importance in the short term. And then the other thing that I really wanted to focus on is uh this isn't a major undertaking, but a little bit of a tweaking. One of my goals is to kind of change the internal culture a little bit. Uh I I want to find a way to have people feel more empowered to feel as if they can have an entrepreneurial spirit. And it's kind of funny to think of an entrepreneurial spirit within a municipality, but I want each and every employee in this company to be thinking about new and exciting ways to do things, and not just to be it to be rote and how they've always done it, but to to take ownership of the business, um, to look for new and exciting ways to improve. And maybe along those lines, and and maybe more important, is I want people to feel comfortable to reach out of their traditional comfort zone. And you know, I think we've fallen a little bit over the years into people working within silos. Uh I want accounting working closely with legislative and regulatory. I want legislative and regulatory working closely with our analysts in the power supply group. And all of those, you know, subsets need to work together. And so one of my goals is to, you know, it's it's it's a bit of a culture shift that uh provides opportunities for the individual to be a bigger part of the of the whole. So those are some of my priorities.
Paul Ciampoli:So with respect to that last point that you made, I would I would assume that uh you've you've you've uh communicated that with your with your team there at this point.
Tom Barry:Whether formally formally my first official day was September 24th, and on the morning of September 24th, I pulled the entire company into my office. We were we were like sardines, it was a little snug, but I purposely did it that way as opposed to going into the boardroom. And we had a little town hall, and that was the priority. That town hall, the priority of that discussion was just what I alluded to a bit here, which was uh a little shift in culture, a little, how do I say it, uh maybe taking a feeling comfortable taking a little more risk. Uh I thought in the past people were a little too worried about what if they wanted to do something, how it would be perceived. And I wanted to get away from whether or not it would be perceived negatively or critiqued. I wanted people to to to branch out a little bit. And so I called the entire company into the the uh into my office, and we talked about that for quite some time. And uh I I'd like to think it was a productive time spent.
Paul Ciampoli:Yeah, makes sense. And so just uh shifting gears a little bit, um, wanted to give you the opportunity to to offer an overview of the services and resources that MMWEC offers to its member utilities.
Tom Barry:Yeah, great question, but really tough question in that we do so much. You know, I don't know how long we have on this podcast, but we offer so many different services uh as a joint action agency in Mass as the joint action agency in Massachusetts that that it may take some time, but there's the obvious ones we need to discuss. And and the the first and foremost is power supply. You know, the the MLPs that we work with and work closely with, 80% of their costs uh are are based on on energy costs. And so it's of high priority for them, so it has to be of high priority for us. So we do many, many things around power supply, and that goes from the the day of you know, day ahead bidding in ISO New England to the longer-term hedging. I mean, it's really uh uh the we have to that's the one ball we we certainly we can't drop any balls, but that's uh of great importance. And and our services as a joint action agency on the power supply front are are paramount. And we've made lots of changes on that front just within the two years I've been here. We've we've really restructured how we go about doing that. I'll get into it in just a minute about how we we have uh resource development. But on the hedging side, we've restructured it and made it more disciplined, and we've kind of incorporated more of a dollar cost averaging approach than we had in the past, in that every single month, the 15th of the month, maybe not always every month because the 15th flaws on the Saturday, but the 15th of every month, we go out, we take a small bite of the apple for each and every one of our MLPs that we represent. And what's great about that is that we've got a wide range of municipalities within our system, some really big, some really, really small. And as a joint action agency, we have this ability to go out and do aggregated purchasing for the whole. And so those really small municipalities within our group are able to have the buying power of the really larger municipalities in our group. And so it's it's really speaks to what joint action agency is all about. So power supply is of one of our biggest services. We obviously have other areas that are our primary focuses as well. Resource development. I'd argue that we don't have, you know, we are structured in a way that uh we're exceptional on that front. And but in order to be exceptional on that front, it takes people. And we've got an engineering staff and a resource development staff uh headed up by Jason Viadero, that is uh just outstanding. So that's one of the services. We also have, based on our charter and the way we're structured, we have unique financing abilities that allow us to go on behalf of our members and potential other participants into new generation opportunities and our ability to raise capital and things around that is unique and uh of great importance to our members. You know, uh we can get into this in just a little bit. Going forward, as part of my longer-term goals, and we can talk about this, is you know, this area, the New England area, is in need of new generation or more generation down the road. And, you know, we're structured, we're the entity best structured to help people on that front. So, you know, there's power supply, there's resource development, there's financing capabilities. We also have a strong footprint in energy efficiency run by Zoe Eckert within within this company, and that has been a great part of our business and or an integral part of our business that I'll get to in just a bit. And then on the regulatory uh and legislative services, we've got Kate Roy, who is fantastic at what she does. And um, you know, our members are very dependent on the latest updates uh of what's going on on many different fronts. And not only do they want updates, they want representation, and we do a tremendous job on that front. And then all of that would never be possible if I weren't to briefly speak about all the back office support. And that back office support ranges from communications to accounting services to forecasting, load forecasting, and you know, you couldn't do risk management if you didn't have a strong forecasting group. And you couldn't do any of those things if you didn't have uh the back office support to make them thrive the way they they do. So I don't know, that was a bit of a long-winded answer to some of the services we had, but uh quite frankly, I could go on for another 15 minutes and get deeper into the details, but I don't know if we have the time on that front. But those are the new ones.
Paul Ciampoli:Yeah, yeah. Yeah, no, Tom, that's that's great. And then no time limit. So so feel free to continue if you want to further elaborate on what we just discussed or talk about other areas as well.
Tom Barry:Well, uh, I think that's good for now, but uh I think we were had intentions of maybe talking about connected homes and energy storage down the water. So we can we can talk about that when we get there.
Paul Ciampoli:Yeah. Uh one quick uh follow-up question before you come tapping your experience as uh director of energy markets there. So I mean, just just out of curiosity, with respect to ISO New England, I mean I wouldn't I would expect that I get let me let me reframe what my thought is with respect to ISO New England, any challenges in terms of kind of you know making sure you guys are on top of rule changes, that type of thing, and communicating that to your members?
Tom Barry:Well, you know, I don't answer that. There's the there's challenges only because it's so complex.
Paul Ciampoli:Right.
Tom Barry:And if we didn't have the some of the staff that are, you know, make it their business to understand those complexities, I'd argue, better than anyone else, we wouldn't be successful in what we do. You know, uh the the the ICE in New England system is is a fantastic system, but a complex system. Uh and it really requires an expertise in that field. And so we have, you know, we have an analyst group that, you know, that analyst group is hourly dealing with ICE in New England, but we also have longer-term people within the company that are constantly monitoring the the changes and and how protocol is set up, is put together. So yes, there's challenges in that it's a complex system, but we've got uh really complex people able to tackle that complexity, if that makes any sense.
Paul Ciampoli:Oh yeah, definitely. So uh Tom, I just wanted to talk about, and you mentioned Connected Homes, which is a residential demand response program launched in 2020. And it's offered through MMWEC's electrification and decarbonization program called Next Year. And we've actually uh done a very thorough job in terms of covering uh news developments as a relations program in our newsletter. So uh against that backdrop, I wanted to ask if you could further describe Connected Homes and detail how MMWEC member utilities benefit from participating in the program.
Tom Barry:Yeah, super question. I mean, it really is, and and I didn't mean to downplay any of the other parts of the business when I spend so much time talking about power supply, but you know, our our connected homes and Next Zero program are integral parts of our business. You know, we we work with 2,000 different homes. Uh within those 2,000 homes, we work with 30,000 uh three thousand, excuse me, 3,000 different devices. Those devices uh range from thermostats to EVs, EV chargers, residential batteries, mini splits, hot water heaters, you you name it. But we've had great early success in that area, uh, partly because we've we've we've committed to that area and partly because we've got, as I mentioned, Joey Eckert, who is uh a phenomenal project manager on that front. But it it's it's you know, it's a big part of our business. We now uh are control and I worry about using that word control, but manage seven megawatts of of of peak load through our connected homes program. And and and that's really interesting when you start thinking about, and we'll get into this in a little bit when we potentially start talk about energy storage, but our ability to kind of manage those devices to mitigate low, you know, peak loads, especially when you know transmission and capacity charges are are at the levels they have been of late, you know, they're they're they're subs they're substantial. And so any chance we can mitigate those costs for for our MLPs, we'd look to do that, and we do it in many different ways. And connected homes is just one of them. But what I like about Connected, well, I like Connected Homes on many different fronts, but you know, it's it's a very automated system, but in the same breath, it's it's it's a flexible system. So, you know, we're able from Ludlow, Massachusetts, to to manage how people are, you know, managing or you utilizing their thermostat, but that's not to say that they don't have optionality that goes along with those efforts. There's much optionality built into our uh Connected Homes program that that allows the individual to not lose control of what they're wanting within their own home. And I really think that's of great importance, especially if we want this aspect of the business to thrive. We've got to continue to uh provide users with that optionality. And the other thing that kind of goes uh un uh unrewarded or unnoticed is connected homes is a tremendous uh brand recognition. You know, we it our abilities to speak with MLPs, and we have quite a few MLPs that are not traditional MMWEC members that utilize our Connected Homes program because it is just that good. You know, that ability to have those connect those conversations on the connected home fronts allow us to have other conversations in other aspects of the business going back to all those different services that we provide. So it's really been a great, I don't know, it can be so far as go so far as to say a foot in the door. But it's it's it's it's certainly been uh uh well received with the many different general managers and and stakeholders that that we we talk with. So it's a big part of our business.
Paul Ciampoli:And so you mentioned earlier energy storage, and yeah, as you know, MMWEC has announced a number of energy storage agreements involving its member utilities and the company Light Shift Energy. So I want to give you the opportunity to tell our listeners about some of these energy storage projects and um do you tell how those MMWEC member utilities will benefit from the use of energy storage?
Tom Barry:Yeah, sure, of course. Great question. I am have been completely amazed by the early results that we've had on this front. And uh large credit goes to Jason Girardero, who I mentioned earlier before. But you know, these are all shared savings contracts, uh, some already in place and and some uh signed, but not, you know, um not operating quite yet. But these are all shared saving contracts with a trusted partner in Lightshift. We have a long-standing relationship with Lightshift going back many, many years. We've found that uh their reputation and their backing of their reputation makes them one of the leaders in that industry, and and that's our hope is to continue to work with with people like like LightShift. Uh, we've had great success on that front. I mean, just in the past year alone, we've already put 17 megawatts in place. And and and and that those 17 megawatts in just that one year period that I mentioned have have amounted to about one point fill $1.5 million in avoided cost savings on transmission of transmission avoided costs and capacity avoided costs. So we're really excited uh about what we've done to date, but we're even more excited about the interest that that that's that's coming through the door recently. You know, we are right now, just within the last couple months, signed contracts for another 13 megawatts uh of energy storage in in the area. Um and that's just kind of the tip of the iceberg in in my mind. Uh I'm a big proponent of energy storage uh projects for many different regions, or different reasons, excuse me. Um and so we're we're having a lot of interest, we're fielding lots of calls, and we we're very excited about the the partnership we have with LightShift, and we're very excited about you know uh this early success. And again, back to this whole notion of brand recognition and and and maybe even going back to something I should have got to before anything else when I talked about you know immediate priorities. What we do is all about trust. And we need to have the trust of the the MLPs and their staff going forward. And so the trust on power supply, trust on connected homes, trust on energy storage projects. But what's really interesting, and I and and you know, you've you've got an an educated audience on this front, but you know, in New England, you know, transmission charges and and and capacity charges, as I mentioned earlier, are quite expensive. So anytime we can capture the peak to avoid those costs, it's a great, great savings. I'm very pleased uh to be part of uh the our analyst group, which is uh a phenomenal group of individuals that has a 92% success success rate um going back to capturing peaks, um, going back uh uh for quite some time, but in just since 2017, that success rate of 92% has amounted to $28 million in avoided cost for the people we're lucky to work for work with. And so, you know, that's tangible dollars. Um, these systems are of uh of great savings to the individual MLPs, and it makes sense that there's more and more interest. So the exciting part of our business. That was maybe a long-winded uh answer to your question.
Paul Ciampoli:No, not at all. And and just just a quick follow-up. So I mean, I guess if you're another JAA in a different part of the country and and perhaps your members are starting to express interest in energy storage, but they haven't gone down as far as the road goes in terms of what you guys have been doing, uh it it it seems like it goes without saying that it there's a there's a a host of benefits that would flow from working from a trusted partner like LightShift Energy.
Tom Barry:Yep. You know, LightShift with, you know, in in in unison with your your local joint action agency, uh, I think that's the recipe for success.
Paul Ciampoli:Okay. And so Tom, just to wrap up, uh, one who gave you the opportunity to to talk about your long-term goals for MMWEC.
Tom Barry:Yeah, well, thanks for the opportunity uh to to to to speak to that point. You know, on top of some of those more immediate uh not concerns, but but uh focuses, you know, my focus in the next five to to 12 years, and and I hope to be lucky enough to stick around for that long, uh is really twofold. Uh well, you know, I've already talked about where you know we want to build, where we want to build on, which is, you know, I I spoke about seeing the seamless transition and defending our value statement and expanding the the footprint within the within the state we uh we serve. But on the longer term, you know, I'd like to explore expanding our footprint into more non-traditional areas. And when I say that, you know, with there are 40 municipalities within the state of Massachusetts. And I'd like to pursue over the course of those those years I've already mentioned, uh, looking into uh other loads within the state that are traditional IIU loads. I feel very strongly, and I mentioned this when I when I talked about how why I'm excited about what I'm doing. You know, I believe that public power is the right model. I think I believe we have the better uh of models when it comes to supplying power, and it it ranges from, you know, considerably uh cheaper rates to local control to reliability, all those things. So for me, it's frankly hard to understand why there isn't more expansion of public power in the state of Massachusetts and and in other states. The other big goal I have is that, and I mentioned this briefly when we started talking in the beginning, you know, New England is unique. It's it's kind of its its own peninsula, many other regions. I spent a lot of time in the Midwest. And you know, you look at areas like ECAR or PJM or my, well, I shouldn't say ECAR anymore, MISO and PJM, they all have the luxury of better importation abilities. You know, they can look to the north, they can look to the south, they can look to east, to west. You know, we in in New England don't have that fl as much of that flexibility. You know, there's not a whole heck of a lot that makes finds its way through uh New York. We've been fortunate in the past to have lots and lots of power coming uh down coming south from from Canada, and we'll continue to have that, but that has been uh less available than it has in the past. So I'm a big advocate or proponent for diversity, uh, you know, energy dependent uh independence, excuse me, energy independence is what I was trying to get out there. And so I want to be part of bringing more generation into the region. We've done tremendous work on the um intermittent generation in the past couple of years, and not to take anything away from that. It's of great, great importance. All the new intermittent generation, the environmentally conscious generation that we've brought on, and I'm excited about that. But I do think we need, not that I think, I'd like to see more natural gas generation in the region. And then in the longer, in the long, really long term, I'd like to be part of exploring nuclear generation in the region. You know, I it's one of those things that, you know, it it wouldn't if if we started today down that road, it wouldn't be for a very long time before the first actual megawatt of generation would would come online. But we've got to start today, uh, and I want to be part of that. And so those are some of the things that that I'm really excited about. But I'm really excited more than anything to work with the staff that I work with. We've got amazing people here at MMWEC all doing great things uh for a great cause. And those are the things that are on my mind.
Paul Ciampoli:A quick follow-up question, if we could. So uh one thought that cropped up in my mind as you talked about baseload generation and uh is uh any if could you is do you have any sense in terms of uh the interest of uh potential data center companies coming into that region?
Tom Barry:It's on everyone's mind. Yeah. Um and you know, you you get a you get a wide spectrum of of thoughts on that front. You know, some some people will argue that it's not coming quickly because it because of the alternatives, you know, more uh easier site availability, potentially cheaper rates down in the southern economies. Uh-huh. There's many, many factors that that lead some people to think that that may not be the case in New England. I tend to disagree. Uh I think that it's coming. I I think I'd argue that we have one of the benefits we have going for us in New England is the uh really tremendously uh educated uh workforce. Uh and so, you know, I don't need to tell anyone that's l potentially listening to this podcast that, you know, we in Massachusetts have some of the the the greatest schools in the country. And so uh I I think the the the potential's there. I don't foresee in the near future these massive, massive facilities that that that people are are are greatly talking about, but that's not to say that there's not the potential for more smaller ones coming down the pipe.
Paul Ciampoli:And so uh I'm excited about that. In terms of gas pipeline capacity, any concerns?
Tom Barry:Well, that's that's a tremendous question. You know, for us to have success on the natural gas generation, um, we have to have uh success on natural gas capacity. We are the uh, you know, the many when people people talk about um natural gas quite often, they're talking about natural gas delivered at the Henry Hub down in Louisiana. We are a very long ways away from Henry Hub, Louisiana. We are the the last stop or one of the last stops on the train. We've got, and that was very clear this winter, you know, we saw uh not only were gas prices, the the basis differential between uh Henry Hub and the Massachusetts area blew out, and not only was it uh uh the the the basis market blowing out, but the deliverability, the volume deliverability went down considerably. I don't know if people recognize this, but not only you know, it wasn't only cold in New England, it was cold in the Midwest this past winter, and it was cold in the southeast. So a lot of that gas that traditionally finds its way uh all the way up to us was diverted this past this past winter. So you you asked the the million-dollar question. 100% we need to have uh serious conversations about expanding our the natural gas uh pipeline capacity to feed that new baseload generation that I think this region, and I'll go so far as to say is starving for. We need to we need to make big strides on energy uh independence. And uh, you know, not to go too far off topic, uh I'm pretty excited uh of late of what I've seen from you know uh the legislative group and the executive uh branch of uh of the state. And and I I see a recognition of that that really makes me excited about what's possible in the future.
Paul Ciampoli:I would love to have you back. Perhaps around this time next year, we could revisit some of these topics and other topics as well.
Tom Barry:I'd love to do that, and thank you so much for the opportunity. I've really enjoyed the conversation.
Paul Ciampoli:Thanks for listening to this episode of Public Power Now, which was produced by Julio Guerrero, graphic and digital designer APPA. I'm Paul Ciampoli, and we'll be back next week with more from the world of public power.