The Value Idling in Electric Vehicles — Episode 182 of Local Energy Rules

Brian Callnan:

The transactive energy rate came about because back in 2017 our board of directors got together and they developed a strategic plan recognizing that the members will want to use the system in a different way going forward. In order to do that, they felt that the members would wanna transact with a utility in different ways. So more of a bidirectional conversation rather than a single direction of just delivering power to people’s homes.

John Farrell:

A long run barrier to expanding renewable energy has been operational. How can utilities operate a reliable electric system when depending on the wind and sun? Fortunately under the hoods of America’s electric cars, we can find nearly as much energy capacity as all of the grid connected batteries combined. In this episode recorded in January, 2023, Brian Callnan, Vice President of Power Resources and Access at the New Hampshire Electric Cooperative, explored the cooperative’s new transactive energy rate that sets up the hardware, the software, and the pricing to let cooperative members provide energy back to the utilities grid. Their early model suggested could earn electric car owners $4,000 per year for sharing their batteries with the cooperatives grid system – enough to make the concept very compelling. I’m John Farrell, director of the Energy Democracy Initiative at the Institute for Local Self-Reliance and this is Local Energy Rules, a podcast about monopoly power, energy democracy, and how communities can take charge to transform the energy system. Brian, welcome to the podcast.

Brian Callnan:

Thanks John. Thanks for having me.

John Farrell:

So I was hoping to just start out by asking you a little bit about your background. How does one become the vice president of Power Resources and Access at Electric Cooperative? Kind of what is your career arc or has gotten you to this point of being interested in and working on supporting electricity services at an electric cooperative?

Brian Callnan:

Well, I mean that kind of goes from where I started. So I started back in 2003. I’ve been in public power ever since. When you think about a cooperative though, you can say consumer owned, but very similar kind of setup for the corporation. I’ve been focused on how wholesale markets work. So the VP of Power Resources and Access, which is what I’m doing here at the co-op, kind of means that we’re in charge of all of the electricity that flows on those distribution lines that you see on the side of the road. Most of the company is making sure that those lines are reliable, resilient and that they can effectively and efficiently bring power to everybody often as they want it, which is all the time. I don’t get to play with that very much. I just get to try to keep the cost as low as possible for what’s flowing through those lines for our members. And I’ve been doing that for about 20 years. So 2003 I went from a company in Vermont, Burlington Electric, and then I moved to a joint action agency in central Vermont called Vermont Public Power Supply Authority and all since have working on the same type of work.

John Farrell:

That’s great. I’m glad you have some history there at Burlington, I interviewed their mayor and their general manager a couple years ago about their renewable electricity goals and sort of how they were thinking about now the transition from the electric supply, which they, you know, mostly get from renewable resources to electric vehicles and buildings. So kind of brings us to what we’re gonna talk about today. So as I mentioned in the intro, there is this dream, I think among a lot of folks in the advocacy community around clean energy, the techno nerds who love the idea of like managing electricity yourself, that our cars, our electric vehicles will be able to somehow interface with the grid and in a way that can both make people money, make the grid more reliable. So could you talk about this new opportunity that you have for the member owners of the New Hampshire Electric Cooperative to use their electric vehicle to support you and the work that you’re doing at the co-op?

Brian Callnan:

Yeah, thanks John. I’d like to back up a little bit. So I’ll tell you a little bit what the rate is called and that’s important cuz it tells you why the rate was developed. So the rate, we’re calling it a transactive energy rate and there’s folks out there that when you think of the term transactive energy, all kinds of things come into mind. But we had a very specific kind of definition that we wanted to focus on and that’s really just transacting with the members in a different way. The transactive energy rate came about because back in 2017 our board of directors got together and they developed a strategic plan with four focus areas. And one of those focus areas was recognizing that the members will want to use the system in a different way going forward. In order to do that, they felt that the members would wanna transact with the utility in different ways. So more of a bidirectional conversation rather than a single direction of just delivering power to people’s homes. And the business model that was focused on was a transactive energy business model and we came up with the transactive energy rate.

When we define that the best way to come up with a transactive energy business model that people could relate to was to use pricing signals. So if you wanna transact you would respond to a price and that’s where the rate came about. So back in 2017 when that was put together, we started to really kind of define what that looked like. It took us a couple years to figure that out. And then in 2019, 2020, we really started to focus on defining what those pricing signals were and we highlighted a basically a hundred percent avoid cost rate. So the utility stacks up all of its costs and puts them into e every single hour of the year and shows that price to the member. And if you know, the Farrell family sees that you’re a member of the co-op and you see that price and you have a device that can respond to that price to take advantage of it, then the co-op will record that information, record that usage and collect it for you over the period of a month, which is the bill, and then return it to you on your bill with a single line item. So I stated a lot there John, and there might be some questions you had in there, but hopefully that was clear.

John Farrell:

Yeah, no this is great. So one question I have is what’s the technology that makes this work? Do you have metering that allows you to then figure out what the customer is using every hour? Did you have to do what, I guess some people generically call smart meters or advanced metering infrastructure. Was there a new hardware that was required in order to do this or did you already have the hardware you needed in place?

Brian Callnan:

That was a tough nut. It was hard to figure this out so that the, the technology to pull everything together was the biggest lift for us. We looked out there to see what was being used and we settled upon an open source protocol and that part was important. An open source protocol called open ADR, that’s kind of a demand response language that’s open source. So anybody can go and download their libraries and start talking open ADR. And the reason we used that particular protocol was because it was open source. So going to minimize as much as we could to make it easy for other utilities to participate. Which goes back to some of those cooperative principles. What we were talking about earlier, the individual devices that are on our system can communicate with an application that we put in the cloud through that protocol called Open ADR.

So let’s see if we use an example, let’s use your car cuz we wanted to talk about vehicle to grid. So if your car was on the system, it would respond and send basically a file every day to our server and that file has the usage of your vehicle, whether it was either using energy or discharging energy in the proper format. Our application would then send that usage information that we get every day. It sends us, sends it directly to our billing system and more specifically it sends it to our meter data management system. So it looks like a meter. And once it looks like a meter we can do all kinds of things with it on our bill. So one of the unique aspects of this, and I don’t know that this is going to be unique for all that long, I know California is allowing this as well. The meter itself is the car, so there’s not a specific meter associated with it. So the car is talking to the internet and sending in files to our, we call it our TER application, but it’s our cloud application and those look like meter reeds.

John Farrell:

I’m super curious about this in part I think one of my interests in this quite frankly is that I have a 2015 Nissan Leaf, which was listed as one of the few vehicles today that can do this. So I was just imagining on my house, I have a dumb electrical panel, I have an Internet connected charger for my vehicle and then I have my car itself. And are you saying that I wouldn’t need, like if I had just had this car plugged in anywhere on my house basically to charge that that’s all the device I would need in terms and that and I’m connected to your electrical system obviously, or is there some other piece of hardware that I’m having to purchase that acts as that point of interface?

Brian Callnan:

So there’s a step maybe that I went over or, or didn’t explain ahead of that. So in order for, let’s stick with just the car part and then we’ll talk about the Nissan Leaf cuz there are options already today that work with the Nissan Leaf, as you mentioned, it’s one of the only cars that can do vehicle to grid. So we’re working with a company called General Motors. Most people have heard of them fairly big and they’re using telematics to do that. So it’s kind of over the air on messaging in order for a Chevy vehicle to participate. So we’re about to do testing, I don’t wanna tell you that we have the testing done yet with Chevy Bolts and Chevy Volts and this is for managed charging first and then we’ll move with the Silverado to vehicle to grid in the third quarter or so is the goal, which General Motors has done is they’ve integrated with us in our TER application.

So what that means is they, they have tested already with us, can they send us these open ADR reports and we’ve been successful there. So the important part in that arrangement is the cooperative isn’t telling the car to do anything. General Motors is. So General Motors is reading the prices every day, pulling it into their application and then sending a charging schedule down to all those GM bolts that have signed up. And General Motors has signed those up for the benefit of our members. So they would’ve contacted the member and said, Hey there’s this great program at the co-op if you want to help get your charging costs down, we think we can help you do that, go ahead and sign up. And then once that happens, we now see that car because General Motors is now sending us the reports. And then once we see that car, we know who that car belongs to because it’s been associated with one of the accounts in our system, it then can go directly to that member’s bill.

I hope that gives you a path of how the data gets from the car to the, we call it an aggregator. So General Motors would be the aggregator in this aspect and then to the co-ops systems. Now there’s another way to do that. There’s this company called Fermata Energy, they’ve also integrated with us. They have a vehicle to grid bidirectional charger which works with a Nissan Leaf. So you can buy one of those and then sign up with Ramada Energy and say, Hey I want, if you were in our service territory, I want you to go ahead and maximize or optimize my benefit on behalf of myself using the rate that the co-op is providing. And then they would, they would send instead to the car and that aspect, they’re gonna send it to their charger, their charger will say whether it’s to charge or discharge that vehicle. So those are two different ways to do the same thing, but they both get you a similar result.

John Farrell:

I was sad to hear that you mentioned one criteria to participate, which is that you have to be in the New Hampshire electric service territory because I had a small hope that there was a way for me for Minnesota participating, but I suppose that’s not terribly practical.

Brian Callnan:

Well, do you have a cooperative that’s close by to you? Have ’em give us a, give us a call. All right. Much of what we set up is fairly transferrable because we all use a similar billing system.

John Farrell:

As a Minneapolis resident, I am served by the investor-owned utility Xcel Energy. So I think unfortunately the opportunities for cooperation there are a little bit low. But we’ll move on because I wanna ask you so many other questions about this. In the piece that I read from Energy News Network back in September of 2022, they were giving kind of an overview of your billing rate, the transactive energy price. And then you were working, I think it was with Plymouth University in New Hampshire, was partnering with you to kind of give some estimate of what could the outcome be like for the owner of the car, for the, for the member. And they estimated they could make as much as $4,000 a year participating in this. Now they did say in the article as well that they were really only using these vehicles for like short distance trips. So one of my questions was like, how much charging or discharging is required to participate? I mean, is it totally up to the person who owns the car? Could the battery actually end up being emptied if you wanted to do that? How does that work?

Brian Callnan:

We are very fortunate to have a university in our service territory. They’re actually right by our headquarters. The name of the university is Plymouth State University and they were really excited to help us test this, this raid. And so they’ve been actively on the transactive energy rate since July of 2022. And that allowed us to get some kinks out. So it’s been super helpful. Um, that is two Nissan Leafs. They wrapped it up with some great graphics. So they had some marketing folks within the university participate. I think some business students did like a business plan on it. And some of the technology, because it’s new technology, they were so, it just fits really well with the university at learning institution to see where things are moving. So they were excited to do this with us and we’re super grateful that they’ve been helping us.

So since July we have been seeing how that car will charge and discharge based on the signals that we’re sending every day. And in that example that’s using the Fermata Energy charger. So Fermata Energy is actually giving the commands to the charger and then if car is plugged in, then it’ll follow those commands. If it’s not plugged in, then, it obviously can’t, right? Because there’s, there’s nothing telling it what to do. But what’s nice about that is when a state doesn’t have to make those decisions on a day-to-day basis, they’re not waking up every day and having their cup of coffee and trying to figure out what they should do with their car. So most people buy cars to transport themselves, not necessarily to take advantage of a transactive energy rate.

So we’ve been able to test out what does that value look like because everything was theory before. And what we did is we backcast, you know, hey, what if we were running this rate back in 2018 all the way up through 2022, what would it have looked like? And when we did that, we came up with some averages and we said, well if you were trying to optimize value, you could see up to $4,000 a year for each car that’s per car. That’s, that is a lot of value. I mean that really changes the way a family would think about a car. You know, your car is getting you from A to B that does that very, very well. And what cars don’t usually do is keep money in your pocket all that well, right? There’s all kinds of things associated with cost when it comes to a car, which is fair, it’s doing transportation, but you’ve got fuel costs, you’ve got insurance costs, you’ve gotta pay for the car itself, you’ve gotta budget for maintenance. So there’s a lot of expenses that are associated with that.

If there’s an opportunity to provide needed services to your local distribution cooperative and you can pay for those services what they’re worth, you’re now taking a vehicle that you’ve invest, which is a big investment, separate of it, second to probably your home, it’s your biggest investment, maybe your education and now you’re adding some benefit to that monthly budget for that family. So we were kind of excited about that cuz that seems like that’s going to really provide a new benefit to our members. And so when we backcast that, that was all theory and, and we were able to test it since July and those numbers are proving out to be about right. I mean we had, I think in the first 45 days we were able to see a little over $850 I think of benefit by discharging at the right.

And one of the questions I think you were kind of alluding to John is that it’s like, well, I mean that’s all well good, but you do want to, you do want to take a trip to the Sea coast once in a while or you want to go somewhere with that car. You don’t wanna necessarily just be waiting around for the right time to charge or discharge the transactive energy rate or the day ahead rate that we’re putting out there for our members. There’s, I don’t know, I’d say around 300 hours per year that you’re going to see some dramatic price increases. And when you see those price increases, you either want to one or two things. You either want to discharge your car or you want to not charge your car because then you can save from those high priced hours. I mean there’s 8,760 hours in a year. I didn’t do the math, but I think we’re around two, two and a half percent or so of that is about how much time that you would be using. And usually those hours are in the evening just about when you get home. If you were, you know, working on a nine to five shift when you get home, there might be a time to go ahead and discharge your car.

Now when it comes to if I discharge my car, will I be able to go anywhere, the way it’s been explained to me so that – this is not what the co-op is doing. You know, this is what the auto manufacturers would do. They will say, Hey, there are user parameters for everybody’s vehicle. So for the Farrell family you might say, look, I always want to have enough mileage to get to the hospital and back. So if you wanna make sure you can get and say you’re, you’re not in Minneapolis, but you’re not in the outskirts of that and it takes you 15 miles to get there. So you always wanna leave 30 miles in your car no matter what. And then you might also have other restrictions on that saying, I need to be at work by eight o’clock. I wanna make sure that I always have another 20 miles or something in the car at eight o’clock every day. So now you, you’ve added another restriction on what you can do with charging and discharging of that car so that you now have 50 miles at seven o’clock cause you gotta get there, right? So 7:30, so you the whoever is going to be your aggregator we’ll say it’s General Motors or maybe it’s from Auto Energy is looking at it. They will make sure that the status of your battery will always allow you to meet those parameters that you’ve put in there. So you’re never left without enough energy to what you have stated you always want to have.

John Farrell:

We are going to take a short break. When we come back, we discuss whether car companies are becoming energy companies, we get into some details about the components of the transactive price and we hear how the New Hampshire Electric Cooperative is eager to share their system with others. You are listening to a Local Energy Rules podcast with Brian Callnan, Vice President of Power Resources and Access at the New Hampshire Electric Cooperative.

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John Farrell:

I am so fascinated this and I kinda wanna ask you sort of a broader question. I sometime recently I was talking to someone about the transition to electric vehicles and how auto manufacturers are investing, you know, billions of dollars in manufacturing vehicles that are powered by batteries instead of gasoline. And somebody mentioned this idea that has really lodged in my head about how they are really not just investing in a new technology to drive the car. They’re basically entering another industry like the GM as an aggregator is now like a virtual power plant owner essentially. And well two thoughts about that. One, does that seem like that rings true for you about the role that auto manufacturers might play? And the second question I have is with this transactive energy rate or to the degree to which we have them, is there something in it for the auto manufacturer? Like are they gonna get a cut? Is there gonna be a contract they sign with the co-op that rewards them in some way? Like is there a, a business model I guess for them to be doing this for their customers or will it be sort of baked into the price of the car or something like that? I guess I’m just, it seems so fascinating that it, this is one of those I think really interesting like on the boundaries of your business, all of a sudden there’s a whole opportunity opening up here.

Brian Callnan:

Are they energy providers? Does that seem about right? And I would say most definitely, right? If you think about, you talked earlier about the amount of energy that’s stored in vehicles based on the projections of EV sales moving forward being pretty substantial, right? I have this quote that I use that’s from Volkswagen and it just states that between 2025 and 2030 they will have one terawatt hours worth of storage in their vehicles. And that’s just one auto manufacturer that’s not all of ’em <laugh>. And based on what this gentleman said that he said that that’s more energy than is currently generated by all the hydroelectric power stations in the world. And that’s a pretty tall statement, right? So I looked into that and it, it’s not quite that. It’s what I looked at it and I think you want to caveat that by saying as much energy that’s almost generated by all hydroelectric power stations in the world for one hour, but the whole, the for one hour part is important.

John Farrell:

<laugh> very much so. I’m very familiar with the capacity versus energy conversation that will note out, light up my inbox if we didn’t clarify

Brian Callnan:

<laugh>. Yeah, but it’s just, I think it does highlight really well that there’s just, it’s just saying there’s a lot of energy out there and if you think about how you’re using a vehicle, you’re probably only in your car 5% of the time. You know, it’s just basically sitting most of the time most folks will drive a, drive their car to their place of business, park it in a parking lot, pick it back up at the end of the day, drive it home and then park it in their garage or park it in their driveway and out of the full day 24 hours you’ve used it maybe an hour. So you’re not using that vehicle all that often and you’ve got all of this kind of potential energy stored in that battery that could be doing something if it was connected. And I think the auto manufacturers are fully aware of that and there’s no reason to have a large paperweight sitting there that has all this extra stuff that it could do if it can provide value to the owner.

There are ways, I’m not gonna say that we have the only way to do it, there’s lots of other ways to do it, but I think we have a way that it can help provide that energy for anything that can provide stored energy. So that could be a standalone battery or that could just be shifting your overall loads in your house. But from the car’s perspective, the auto manufacturers, their business model there is, you know, they’re, they’re helping provide that asset which is a very big purchase for our family, provide new value, new things to that family which may make them more interested in buying that particular car. So the auto manufacturer’s selling a car, that’s their primary business and this is another revenue stream or another thing you can do with that asset that they can take advantage of and it might just be a tipping point for somebody. The other part to that is they’re providing additional services for you. So when I talked about in order to take advantage of this rate, you really need to schedule your vehicle. Most families probably won’t wanna do that. I mean if you think about trying to get the kids to school and get ’em on the bus, get ’em fed and making sure they got their backpack and everything’s ready to go, that’s a busy morning and, and you don’t wanna have your laptop open also scheduling your car for the day…

John Farrell:

I’m stressed just hearing you mention that thinking about my school carpool and swim practice. So I appreciate you covering that.

Brian Callnan:

Yeah, it’s a busy day, you know, so you can provide a service to the aggregator in this case the auto manufacturer to provide that service for you. And there’s similar models now there’s, I think I can pick on GM again. They have an OnStar service where that’s if you push a button in your car, you can talk to somebody if you need something and it’s not, I think they’re a monthly subscription that’s associated with that. So in this way the auto manufacturer can have an additional kind of touchpoint with that customer through this subscription of trying to optimize the value for the families that bought their automobile.

John Farrell:

I wanna come back to the transactive energy price really quick. There is a part of me that really wants to go into the weeds with you about how you set the price and like wholesale versus distribution level costs and stuff. Cuz there’s fascinating conversations across the industry by that. So maybe I’ll come back to that. Maybe I’ll start by just asking is there a place where you have sort of published the components or whatever that are involved in that price if people wanted to look into that. And then I have my second question and I’ll save it until you answer that one so I don’t have to make you write down all of my multi-part questions. But yeah, is there a place to find out more information about how you built that transactive energy price

Brian Callnan:

In a way there is, there’s a website that we have dedicated on our homepage. Um, well it’s not on our homepage, you can get to it, right? It’s about the different rates that we offer and it’s called the transactive energy rate. It’s not live now so you can’t find it John. So I’m sorry about that. But we actually haven’t gone live with our rate and we’re hoping to do that by the end of the first quarter of 2023. But it’s all ready to go. So we’ve been prepping the thing and in our terms and conditions, which is what someone signs when they decide to take a new rate that has a description of how that rate is calculated so a member can look at it. Um, but we don’t know that most members will want to look at that, you know, to try to understand that cuz the rate will show, you can just see what the price is. There’s a spot where you can see the price every day if you wanna look at it. You can download historical prices if you wanted to see what prices were in the past so you can see whether this rate is right for you or not. We try to give as much information to the members so they can make a, you know, an informed decision when they try to install a new device or you know, sign up a new device on this screen.

John Farrell:

My next question flows right from that, which is sometimes when utilities do these rates like a time of use rate, I know for my utility for quite a while, the only way to get on a time of use rate for any device was to sign up your whole house for it. But I heard you saying device, so I was curious, are you, would you, could I just sign up my car for this but then keep my home on your standard residential rate?

Brian Callnan:

I’m glad you asked that question because we went through a lot of pains, <laugh> to do this. So we wanted the Farrell family to be able to just sign up a device and not their whole home. When you think of time of use rates, you can think of beneficial rate or penalty rate, right? You can see, you can see both sides of that coin when those prices are quite high. You could view that as a penalty if you were using a lot of energy at that time. And the real benefit to this rate is for load that is flexible and controllable, not all the load in a home might be flexible or controllable. So you wouldn’t be able to completely avoid those high costs if you had your whole home set up. And if you did, it would be very difficult to figure that all out. I’m sure someone could, but I don’t think any, not most folks could turn their whole house, house off for those couple hours.

So we really wanted the ability of just using an individual device so that it was controllable for the member. I had this example that way I would use from a teenager. So if you went home, if you took off for the weekend and your teenagers had a great big party at your house and they were using all types of energy, it happened to be one of those events, you had a poor experience because your whole house was on that. It’s most likely if you had, even if you did go out for the weekend and your, your teenagers had a big party at your house, they probably didn’t go and change the schedule on your standalone battery or go and change the schedule on your, your vehicle that was in the garage.

So you were still kind of held harmless from that, right? That activity that you couldn’t control, you kind of think of the device as like a submeter in the home. So all of the energy that’s either used or discharged or or produced from that device is backed out of the main meter. Yeah, we call it reconstituted but it’s, it’s, it’s set up so that you’re not paying twice for energy that’s being used in the car and you’re not getting double credit because you’ve discharged your car and you’re also feeding into the grid at the same time. That part was not that easy. That’s why I mentioned that John, is that we wanted to make sure that the member that was using that device on the transactive energy rate was really just using it on that rate. Everything else was on their, their other rate, which would be a flat rate.

John Farrell:

Yeah, it’s fascinating to think, I love your example by the way, because of the implications. If you do have a teenager who has a party when you’re away that involves reprogramming your car’s discharge schedule, then you probably a different kind of problem. Or maybe, maybe it’s not a problem at all. Maybe it’s a good sign of taking an interest in transactive energy.

My last question about the rate then comes in from my experience dealing a lot with distributed solar and with net metering, which is people will talk about net metering. Let’s just say that the conversation is very fraught between utilities and regulators and solar companies and solar customers about is this rate a good measure of the value of the energy that’s being given to the grid? There’s a lot of weeds about net metering alone about how often do you net and, and all that kind of stuff. But one of the points of general agreement is that at some point net metering as a flat fixed rate to transact with the utility, if you will, for like, for like a solar project becomes less representative the more solar projects are on the grid, especially if they’re all configured in the same way. They’re all like south facing and just trying to maximize kilowatt hour output. And so maybe that was a way longer setup than I needed for this question, but is that rate likely to change as more people participate and, and if so, how?

Brian Callnan:

In a perfect world the answer would be yes to that because that’s what you would want to have happen, right? Is if you think about the way the rate is set up and I didn’t, I didn’t give you a lot of detail on the different components that are within that rate, but I’ll, I’ll give you a little bit of it just so it’s not too in the weeds, but there’s an energy component, there’s a capacity component and there’s a transmission component and then there’s a lot of other stuff that’s in there too. But those particular units, one has kind of a, an energy or time-based focus to it. And then the other one is more demand based, right? So a lot of energy being used at one time, one hour. And because of that there are some particular hours during a month or during a year that can get quite costly because that’s how you build on those components.

So if you’re trying to send a signal to folks and say, hey, pricing during these particular hours of the day are really high because the system is kind of stressed a little bit, there’s a lot of energy being used on the distribution lines and the transmission lines and if we could reduce the amount of energy that’s going through those lines, it would be less costly and we can keep the system we have for much longer so we don’t have to build new lines and we don’t have to build new substations or things like that. And so by sending that signal that during those particular hours, the costs are quite high, you would wanna see folks start to use the energy at different periods of the day, like maybe when the costs were quite low at two in the morning or something if they, if they were able to do that.

And that’s good because now you’re moving energy use to times of the day where there’s no concerns on the stress of the system. There’s plenty of capacity. The lines have plenty of room, you know, the pipes are only an eighth full, you know, instead of three quarters full. So you’re, you’re shifting energy to those hours, which gives your system kind of longevity. You don’t have to continue to build it out and build it out. So if you were to be able to do that perfectly, you would shift all those high cost hours over to those low cost hours and now you’re serving the same amount of energy every hour of the day. And then if that was the case, then the prices would be the same every hour of the day because you’re serving the same amount of energy and you’re using the same system for that and everybody’s super happy. But in reality that just won’t ever happen. So yes, you could start to see some equilibrium with the prices, but the systems are so big that the amount of energy that’s being used in those high cost hours and the next 20 to 50 years if, if everybody was sending very strong price signals, we don’t see that it’s, it’s going to change it. So those low cost hours don’t become low cost hours anymore.

John Farrell:

It’s hard for me to avoid the weeds because I’ve been involved in this kind of stuff. So I’m gonna ask you one weedy question then we’re gonna move on, which is, when you talked about the system being strained, it sometimes there can be a distinction between when the transmission system is constrained, the ability to import or export energy from your region versus maybe just your local neighborhood where a bunch of people are running their pool pumps or something like that, or other high usage devices or might all be trying to push power back onto the grid at the same time with rooftop solar or something. Do you account for those two different levels of where the stress can be so far in the pricing or will you at some point?

Brian Callnan:

So we have a bucket for that. So when I was explaining before the different components of the energy price, you can kind of think of it as A plus B plus C plus D plus E, et cetera, right? You just add those all up for that particular hour. So we do have a distribution component, which is a locational component within our distribution territory, but right now the value is zero. So let’s just say that’s F, so right now F is equal to zero <laugh>, but we have that in there because there will be areas in our service territory where, let’s say the whole neighborhood puts in solar and then everybody puts in heat pumps and then the electric cars are there as well. So it’s just they grow very quickly. So there would be a need to upgrade that system at that point. And prior to that system being upgraded, we could send a signal within this rate, increasing the cost during those hours where the system is getting strained locally. And that might help alleviate some of those concerns until we can get in there and start building up the system.

So it’s not a perfect solution, but it does help maybe extend a little bit of time before you have to do an upgrade. So we do have it in there, we just don’t have it valued yet. One of the things that we have been talking about around this is we worked really, really hard to make this, the application that we have out there in the, in the cloud, the communications protocols that are there and then also the connection to our billing system. We try to keep that all super easy. So if there’s another cooperative that’s out there, it’s easier with cooperatives because we all kind of, most of us use the same billing system. So this application is already connected to our billing system, but we really wanna make sure that folks are aware that if like, hey, if you guys want to do something similar to this, you don’t have to go near what we went through to pull it together. We can we’ll share it with you.

I mean I think that’s cooperative number, principle number seven, right? You cooperate among cooperatives and we wanna do that and we kept things as open source as we possibly could. I mean not everything can just be free, right? We had to develop some applications that they would have to modify on their own so they’d have to hire somebody and make it work or do it internally. But for the most part it’s not that difficult. Like if you think about the client server relationship, the server is the TER application. The client would be your device, right? But in order for that device to talk to it, you have to be, you have to have this thing called a virtual end node, which is open ADR speak, right? We created AVE and we’ll give it to people and say, hey, if you want to connect to our system, here’s AVE that you can use to do that. And in order to test to see if it would work, one of our employees took that Ven and attached it to their water heater and was starting to deliver meter reads, right? Quotes, meter reads to our application in a day. And they’re not like some programming wiz, they are technically adept, right? Cuz they’re even trying to do this right? <laugh>. So there’s that, those types of people out there. But I wanted to just make sure that you were aware that we try, we did, we really worked hard to try to make it easily transferrable.

John Farrell:

Perfect. Thank you. I’ll just ask you one last question then to wrap up, which is why is it taking so long to do this, to provide transactive energy rates and to allow people to discharge energy from their electric vehicles back to the grid? I feel like I’ve been reading about it for years now. I’m obviously an outlier in terms of my being in tune with the news about this. Probably, probably even before I bought my car, electric car, which would’ve been at least five or six years ago, I’d been hearing that this was possible that people were testing the concept, what were the two or three things that really had to be solved to make this possible.

Brian Callnan:

We, we talked with ComEd quite a bit from Chicago about this. They, those in Illinois, they’ve been doing real-time pricing for quite some time. So our, our biggest hurdle really was the fact that the rate would change every hour. That was, I’m not gonna say the biggest hurdle, but that was a significant one, is how do we deal with an hourly rate? Um, and we saw that Illinois has been doing this for quite some time, so we took a lot of hope in there that we could actually figure it out too. So we asked them quite a few questions about how they did it and, and what were some of the benefits and they’ve seen quite a few benefits for their customers, for folks that have moved to kind of a more of a real-time pricing component versus a day ahead pricing. It’s just one day difference, right?

Well that’s out there and I think that’s been in place for multiple years now. I think four or five years maybe. I have seen stories as well as electric buses. As more electric buses are coming into the system. There are some demonstration projects that are out there for helping to use those buses for vehicle to grid. And we’ve talked with some companies about that as well that are having some projects that are around the country that they’re doing. And an electric school bus is a great example, right? It’s a much bigger battery and it’s used at a finite amount of time every day. So it’s very schedulable. And sometimes in the summer when you have capacity concerns, there’s hopefully no school going on depending where you are. And you can use those buses for rather than transportation, you can use them to help provide services to the grid. So I think there are some examples out there that projects like these are starting to take off.

John Farrell:

Well Brian, thank you so much for taking the time to talk me through work that you’re doing at New Hampshire Electric Cooperative and to give us a vision of transactive energy and how it might actually work. It’s exciting to hear that you’re planning to launch later this year and it’s definitely something that I’ll be following. I’m sure many people like myself that are working in this space will be watching as well.

Brian Callnan:

Oh, thanks for having us John. I’m glad that you can, uh, give us an opportunity. We’re trying to make sure that our members are fully aware we’re using all of our channels.

John Farrell:

Thank you so much for listening to this episode of Local Energy Rules with Brian Callnan, Vice President of Power Resources and Access at the New Hampshire Electric Cooperative, provide a new way for utility customers to transact with utility using their cars or other devices. On the show page, look for links to coverage of this project by New Hampshire Public Radio and the Energy News Network, as well as a presentation about the transactive energy rate. We’ll also link to previous Local Energy Rules podcast interviews, including the one I mentioned with leaders from Burlington, Vermont about their 100% renewable electricity goal and their shift to thinking about buildings at cars, as well as my interview with Kauai Island Utility Cooperative CEO David Bissell, which covers the operational challenges of running a grid on mostly solar power. Local Energy Rules is produced by myself and Maria McCoy with editing provided by audio engineer Drew Birschbach. Tune back in to Local Energy Rules every two weeks to hear how we can take on concentrated power to transform the energy system. Until next time, keep your energy local and thanks for listening.