Distributed solutions to large load growth

Electricity demand is growing in Minnesota and across the country. Much of this growth is coming from large electricity users such as hyperscale data centers, electrified industrial processes, and beyond. It is crucial that these new electricity needs be met with clean energy solutions — not with new fossil generation.

Join us for a conversation about how distributed energy solutions can help meet growing electricity demand while also creating opportunities to strengthen workforce and supplier diversity.

Guests: 

Tim Hade, Air Force veteran and Co-Founder, Scale Microgrids
Will Mulhern, Director, Electricity, Fresh Energy
Mark Sebree, President, Sebree Consulting 

Moderator:
Shubha Harris, Chief Equity Policy Officer, Fresh Energy 

Fresh Energy’s mission is to shape and drive bold policy solutions to achieve equitable carbon-neutral economies. Together we are working toward a vision of a just, prosperous, and resilient future powered by a shared commitment to a carbon-neutral economy. Learn about Fresh Energy's work and our bold "Vision 2030: Fresh Energy's Strategic Framework" at our website fresh-energy.org.


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Transcript

00:00:11 Jo Olson 

Hello, and welcome to Decarbonize, the clean energy podcast from Fresh Energy. 

00:00:17 Jo Olson 

Fresh Energy is a Minnesota nonprofit working to speed our state's transition to a clean energy economy. 

00:00:24 Jo Olson 

My name is Jo Olson and I'm the Chief Communications Officer here at Fresh Energy. 

00:00:28 Jo Olson 

And today we're sharing a recording from our March 23rd webinar discussing how distributed energy solutions can help meet growing electricity demand while also creating opportunities to strengthen workforce and supplier diversity. 

00:00:43 Jo Olson 

Let's dive in. 

00:00:46 Shubha Harris 

Beautiful day here in Minnesota. 

00:00:47 Shubha Harris 

I'm not sure where all of you are, but I hope it's a beautiful day. 

00:00:51 Shubha Harris 

Wherever you are, we're going to go ahead and get started here. 

00:00:54 Shubha Harris 

My name is Shuba Harris. 

00:00:56 Shubha Harris 

I am the Chief Equity Policy Officer at Fresh Energy. 

00:01:00 Shubha Harris 

For those of you who are not familiar with Fresh Energy, we are a Minnesota-based nonprofit that is working towards a clean and equitable energy transition. 

00:01:12 Shubha Harris 

Before we dive in, I just have a few housekeeping items. 

00:01:15 Shubha Harris 

The first is this webinar is being recorded, and we will send a link to all of those who registered after the event. 

00:01:23 Shubha Harris 

The second is that we will be leaving some time for Q&A at the end. 

00:01:27 Shubha Harris 

We've got a great panel, so I'm sure there will be questions. 

00:01:30 Shubha Harris 

You can use the Q&A feature to pop your questions in there, and we'll try to monitor that throughout. 

00:01:38 Shubha Harris 

And then this isn't really housekeeping, but definitely, definitely something I wanted to mention. 

00:01:42 Shubha Harris 

One of Fresh Energy's guiding principles is to broaden participation in the energy transition. 

00:01:48 Shubha Harris 

We're really trying to bring more people into the energy sector, into the clean energy transition. 

00:01:53 Shubha Harris 

And so we're really trying to work hard to make our language accessible and easy to understand. 

00:02:00 Shubha Harris 

So I'm going to ask my panelists today to do their best to take what can be a very technical and jargon heavy subject, and I know 

00:02:08 Shubha Harris 

So I'm guilty of using four acronyms in a sentence, but I'm really going to try hard to use easy to understand language. 

00:02:15 Shubha Harris 

And with that, I'll kick it off for some intros. 

00:02:19 Shubha Harris 

I'm here joined today with Tim, Will, and Mark, a great panel. 

00:02:23 Shubha Harris 

Let's do a quick round robin of intros, starting with you, Tim. 

00:02:29 Tim Hade 

All right. 

00:02:30 Tim Hade 

It's nice to meet everyone. 

00:02:31 Tim Hade 

Tim Haid. 

00:02:32 Tim Hade 

I've been working in distributed energy for about 15 years. 

00:02:36 Tim Hade 

I started at a cogeneration company. 

00:02:38 Tim Hade 

And then in 2015, started a company called Scale Microgrids, which builds behind the meter, predominantly behind the meter microgrids for commercial and industrial customers. 

00:02:50 Tim Hade 

I'm sort of fascinated with all things distributed energy. 

00:02:53 Tim Hade 

So looking forward to today's conversation. 

00:02:56 Tim Hade 

I think what you all are doing in Minnesota is incredible. 

00:03:00 Tim Hade 

And I'm watching really closely and excited to be a part of this. 

00:03:04 Shubha Harris 

Great. 

00:03:05 Shubha Harris 

Let's kick it over to you, Mark. 

00:03:07 Mark Sebree 

Thanks, Shuba. 

00:03:08 Mark Sebree 

Hello, everyone. 

00:03:09 Mark Sebree 

Mark Sebree with Seabrey Consulting. 

00:03:11 Mark Sebree 

We create and run Main Street small business and water diversity programs, also help corporate programming as well. 

00:03:19 Mark Sebree 

I've spent 27 years in the utility industry for Midwest Utility, where we, I won't use the acronym DSM, but I'll say demand side services or just demand side management. 

00:03:28 Mark Sebree 

We ran programs such as rebate programs, small business, 

00:03:34 Mark Sebree 

programs as well, load management weatherization. 

00:03:37 Mark Sebree 

So I was in that for about 27 years altogether. 

00:03:40 Mark Sebree 

I created and implemented award-winning supplier diversity programs as well. 

00:03:44 Mark Sebree 

And then my last stint there was in economic development. 

00:03:47 Mark Sebree 

And so back in 2014, I started CRE Consulting, which my wife has run that. 

00:03:52 Mark Sebree 

I appreciate Lisa. 

00:03:53 Mark Sebree 

She's on today as well. 

00:03:55 Mark Sebree 

Shout out to her. 

00:03:56 Mark Sebree 

And then concurrently, I went to work for Franklin Energy about eight years ago as the director of diverse sourcing and inclusion. 

00:04:04 Mark Sebree 

So I had 

00:04:04 Mark Sebree 

supplier diversity, and the internal diversity, equity, and inclusion initiative as well. 

00:04:11 Mark Sebree 

So I just retired in January, so now I'm back in CB Consulting, and I'm looking forward to talking with everyone today. 

00:04:18 Shubha Harris 

Well, that's great. 

00:04:19 Shubha Harris 

Congratulations on your retirement, Mark. 

00:04:21 Mark Sebree 

Thank you. 

00:04:22 Shubha Harris 

All right, we'll take it over to you, Will. 

00:04:24 Will Mulhern 

Yeah, thanks. 

00:04:25 Will Mulhern 

My name's Will Mulhern. 

00:04:26 Will Mulhern 

I'm the director of our electricity program at Fresh Energy, and I handle our work at the Public Utilities Commission. 

00:04:32 Will Mulhern 

often referred to as the PUC. 

00:04:34 Will Mulhern 

I'm sure I will slip into that acronym a few times today. 

00:04:37 Will Mulhern 

I've been with Thrush Energy since late 2024. 

00:04:40 Will Mulhern 

And prior to that, I was on staff at the Oregon Public Utilities Commission. 

00:04:43 Will Mulhern 

So I've been in the regulated space a little bit, not as long as the two other folks on this call. 

00:04:49 Will Mulhern 

I'm really excited to speak with both of them and kind of bring some Minnesota specific context to this. 

00:04:53 Will Mulhern 

So excited to be here today. 

00:04:56 Shubha Harris 

Great. 

00:04:56 Shubha Harris 

Thanks, Will. 

00:04:57 Shubha Harris 

It's great to have you all together. 

00:04:59 Shubha Harris 

I'm going to start us off with some context. 

00:05:01 Shubha Harris 

Before I came over to Fresh Energy, I was a regulatory attorney at Xcel Energy here in Minnesota. 

00:05:07 Shubha Harris 

I started at Xcel in 2020, and when I started there, there was still talk in the industry about the utility death spiral. 

00:05:14 Shubha Harris 

That's the idea that electricity demand had been relatively flat for several years and that energy efficiency and distributed resources like rooftop solar could potentially erode the utility business model. 

00:05:26 Shubha Harris 

We'll fast forward just six years, and the picture looks very different today. 

00:05:31 Shubha Harris 

We're seeing rapid growth in the industry. 

00:05:33 Shubha Harris 

Electricity demand is growing. 

00:05:36 Shubha Harris 

Some are even describing this sector as a new industrial era. 

00:05:41 Shubha Harris 

So I'm going to start with you, Will. 

00:05:43 Shubha Harris 

Could you ground us in some context? 

00:05:45 Shubha Harris 

Tell us a little bit about the history. 

00:05:47 Shubha Harris 

Tell us about the past electricity demand and where we're going. 

00:05:52 Will Mulhern 

Yeah, absolutely. 

00:05:52 Will Mulhern 

Excited to talk about that. 

00:05:54 Will Mulhern 

And as you said, it's a great time to be working in the energy space. 

00:05:57 Will Mulhern 

Definitely a lot different than I think it would have been, or it was, 10 to 15 years ago. 

00:06:02 Will Mulhern 

And we're really sort of at this inflection point, as you mentioned, sort of like this industrial revolution where there's a lot of money being put into this space because we're trying to do a lot of ambitious things with decarbonization, with load growth, and with other kind of novel solutions that we're bringing to the table. 

00:06:17 Will Mulhern 

And so, I'll just say it's a great time to be working in energy and 

00:06:21 Will Mulhern 

excited to be part of these types of conversations. 

00:06:24 Will Mulhern 

So really, the change that's driving that has been kind of these recent increases in demand projections, right? 

00:06:30 Will Mulhern 

And so folks, I'm sure everyone on this call is very familiar with AI and data centers kind of driving a lot of that load growth. 

00:06:36 Will Mulhern 

And that's certainly a huge part of it. 

00:06:38 Will Mulhern 

And that's something that we're seeing in Minnesota. 

00:06:40 Will Mulhern 

But there's a lot of other reasons for that as well, right? 

00:06:42 Will Mulhern 

So we're trying to electrify to meet, electrify a lot of end uses to meet our decarbonization goals, trying to electrify things like heavy industry, like vehicles, 

00:06:51 Will Mulhern 

vehicles, manufacturing, and a lot of that is driving load growth outside of AI. 

00:06:56 Will Mulhern 

So across the board, there's a lot of pressure on utilities, on the energy sector to meet this demand so that we can push our economy forward into a more decarbonized space. 

00:07:05 Will Mulhern 

And so that's sort of the impetus for tackling these challenges and thinking about solutions of how we might meet that load growth. 

00:07:11 Will Mulhern 

And that's a lot different than what was happening really 

00:07:14 Will Mulhern 

since the turn of the century, kind of like really stagnant, kind of consistent, small amounts of load growth, but nothing like what we're now seeing being projected. 

00:07:23 Will Mulhern 

And so that's where we kind of need to think in ways that allow us to bring novel solutions to the table to meet that. 

00:07:30 Will Mulhern 

You know, kind of the focus today is around distributed energy resources, and we'll certainly get into a lot of that. 

00:07:36 Will Mulhern 

But 

00:07:36 Will Mulhern 

We can think of a number of solutions that we could bring to try and deal with that. 

00:07:41 Will Mulhern 

I guess talking just a little bit about Minnesota specifically, we're dealing with the same challenges that we see across the board. 

00:07:46 Will Mulhern 

There's several data centers that are looking to come to Minnesota. 

00:07:48 Will Mulhern 

It's a great economic development opportunity, but it's not without its challenges. 

00:07:53 Will Mulhern 

Those are things we want to address really head on and make sure that we're doing it in a way that works for our state. 

00:07:57 Will Mulhern 

Minnesota also is well positioned for other industries as well. 

00:08:00 Will Mulhern 

We have a big mining sector here, a lot of movement around electrification and mining, which is a really cool opportunity. 

00:08:06 Will Mulhern 

downstream of that, thinking about steel production and how we can do that in a decarbonized way. 

00:08:11 Will Mulhern 

A lot of electricity involved in that too. 

00:08:13 Will Mulhern 

So great opportunities for Minnesota to really lead on this. 

00:08:16 Will Mulhern 

And we're very much kind of at the forefront of this load growth that's happening. 

00:08:20 Will Mulhern 

And First Energy sees that kind of through the integrated resource planning process, which is where we're very involved with utilities and making resource decisions that can meet the need for this load growth without bringing additional fossil fuels on the grid. 

00:08:33 Will Mulhern 

And maybe I'll just close with, I think, 

00:08:35 Will Mulhern 

we're going to talk a bit about the Capacity Connect program that Excel is proposing that came out of an IRP, right? 

00:08:40 Will Mulhern 

So that came out of Excel looking for solutions to meet some of this load growth and to meet their needs in sort of an, I guess you could call it a non-traditional way, a way that doesn't revolve, it doesn't involve adding more fossil resources on the grid. 

00:08:52 Will Mulhern 

And that's a program I'm really excited about. 

00:08:54 Will Mulhern 

I think that's a great use case of how distributed energy resources can be leveraged to help meet this kind of 

00:09:01 Will Mulhern 

moment. 

00:09:02 Will Mulhern 

And yeah, excited to talk more about that and get into that a little bit. 

00:09:05 Will Mulhern 

But that's kind of broadly from our perspective, from our perspective, what we're seeing in Minnesota and across the board in terms of the moment in electricity right now. 

00:09:13 Shubha Harris 

Great, thank you for that context. 

00:09:16 Shubha Harris 

As you said, we're here to talk about distributed energy resources. 

00:09:18 Shubha Harris 

And Tim, I know you've been pounding the pavement for over a decade, trying to raise visibility about what DERs are and what value they can bring to the grid. 

00:09:26 Shubha Harris 

So maybe you can just start by telling us what they are and what they can do for us. 

00:09:32 Tim Hade 

Yeah, for sure. 

00:09:34 Tim Hade 

So I think basically, if you want to understand distributed energy resources, 

00:09:41 Tim Hade 

The short, simple definition of this is just customer cited resources that add value to the grid. 

00:09:49 Tim Hade 

And so to kind of give everyone like a very quick two-minute history of how this evolved, right? 

00:09:56 Tim Hade 

The electric grid was commercialized really in the first part of the 20th century. 

00:10:01 Tim Hade 

And up until the 1970s, it was like a one-way street, right? 

00:10:05 Tim Hade 

And so we have to load balance demand and supply, but the way that was done was just by changing 

00:10:11 Tim Hade 

supply, right, so modulating supply up and down. 

00:10:14 Tim Hade 

It was like that all the way up through the 1970s. 

00:10:17 Tim Hade 

In the 1970s, we had an energy crisis. 

00:10:20 Tim Hade 

During the energy crisis, one of the things that we came up with was the idea of a very basic form of demand response, which is grid operators, when the grid got stressed, would call large loads like factories and tell them to send everyone home. 

00:10:35 Tim Hade 

They would shut down the factory, they would send everyone home, they would get paid 

00:10:40 Tim Hade 

for taking capacity off the grid. 

00:10:42 Tim Hade 

And on a net basis, that helped us manage energy costs through the energy crisis in the 1970s. 

00:10:48 Tim Hade 

And then we kind of didn't really do anything with it until the early 2000s. 

00:10:53 Tim Hade 

We set some of those programs in place, but it wasn't prolific. 

00:10:57 Tim Hade 

And then the 2000s, we had another energy crisis in the state of California where I currently reside. 

00:11:03 Tim Hade 

And the difference is this time in the energy crisis, we had the internet, right? 

00:11:06 Tim Hade 

And so sort of version two of demand response was, okay, now we have the internet. 

00:11:10 Tim Hade 

And instead of making physical phone calls or phone calls to people and telling them to shut off everything, go home. 

00:11:17 Tim Hade 

we can now have connected devices and we can send signals, and we could do this in a slightly better way. 

00:11:24 Tim Hade 

So another evolution happened in the 2000 to 2005 timeframe with demand response version two. 

00:11:34 Tim Hade 

And then, Shubha, as you mentioned, I think over the last 10 or 15 years, 

00:11:40 Tim Hade 

Technological progress has been remarkable, right? 

00:11:43 Tim Hade 

Generally referred to as like the internet of things. 

00:11:46 Tim Hade 

Now you're in a situation where basically everything you own is controllable and connected to the internet, whether that's your refrigerator, your thermostat, your hot water heater, your heat pump, whatever the case might be. 

00:11:58 Tim Hade 

Because demand was flat, we didn't really have the economic signals to take advantage of that. 

00:12:04 Tim Hade 

Now we're in like 

00:12:06 Tim Hade 

energy crisis number three, right? 

00:12:09 Tim Hade 

Which is, we have way, way, way more demand than we have supply. 

00:12:13 Tim Hade 

And we have to try to start thinking about, okay, how do we improve grid utilization? 

00:12:18 Tim Hade 

And how do we make the system overall more efficient? 

00:12:20 Tim Hade 

So we can not only connect a lot more demand to the grid, which is good for economic prosperity, but we can also do so in a way that doesn't 

00:12:30 Tim Hade 

increase rates for people who are paying their electricity bills every day. 

00:12:35 Tim Hade 

We're now in the third wave of distributed energy or demand response in terms of the evolution. 

00:12:42 Tim Hade 

The question now is we have all these IoT enabled devices. 

00:12:46 Tim Hade 

We have all these technologies like cheap solar panels and affordable batteries and all sorts of things in our toolkit. 

00:12:56 Tim Hade 

How do we use those things to increase grid utilization and make a better system for everyone? 

00:13:02 Tim Hade 

And again, I think one of the reasons I'm here today and I'm really excited to talk to the Minnesota constituents here is I think Minnesota's really leading on this front, especially when it comes to public-private partnerships and the utility central role in sort of rolling these things out on the grid. 

00:13:19 Tim Hade 

And so I think you guys are doing a great job in Minnesota and excited to talk more about it. 

00:13:24 Shubha Harris 

That's great. 

00:13:25 Shubha Harris 

Can you say a little bit more about the Minnesota model and what we're rolling out here? 

00:13:30 Tim Hade 

Yeah, so. 

00:13:31 Shubha Harris 

Hopefully. 

00:13:33 Tim Hade 

Yeah, sure, right. 

00:13:34 Tim Hade 

So, all right, I guess like to be blunt about this, right? 

00:13:37 Tim Hade 

For the last like 15 years, as long as I've been doing this, 

00:13:42 Tim Hade 

There has been what can best be described as an adversarial relationship between people who do what I do, like demand response and distributed energy and utilities, right? 

00:13:52 Tim Hade 

And I think, again, the fundamental reason for that was kind of rooted in economic incentives. 

00:13:57 Tim Hade 

which is, my argument to utilities was always like, hey, there's like a cheaper, better, more efficient way to provide power to people. 

00:14:06 Tim Hade 

And the utility's response was kind of like, yeah, but load's not going up and we're good, right? 

00:14:10 Tim Hade 

Like we have a good thing going. 

00:14:12 Tim Hade 

And again, right, I think there was a lot of credence to that point. 

00:14:16 Tim Hade 

And so again, I think what has traditionally happened is we haven't really had like a close partnership with utilities. 

00:14:23 Tim Hade 

We've kind of been going around as an industry, like picking off homeowners and businesses one at a time. 

00:14:28 Tim Hade 

And it hasn't gotten big enough that it's really been a threat to utilities. 

00:14:33 Tim Hade 

Although like we kind of got to the point to, as you mentioned, and I don't know, maybe five, six years ago, where I think utilities were starting to realize like the technology was getting good enough that it could potentially be a threat if there wasn't load growth. 

00:14:46 Tim Hade 

Now we don't have any of those problems, right? 

00:14:48 Tim Hade 

Because we have more load growth than we know what to do with. 

00:14:51 Tim Hade 

And so the question now is how does the distributed energy industry and utilities work together? 

00:14:57 Tim Hade 

And I think one of the best examples of this is what Excel is doing in the Minneapolis, greater Minneapolis region. 

00:15:07 Tim Hade 

And the idea here is basically the best way to deploy distributed energy resources is in concert with the utility. 

00:15:15 Tim Hade 

Right. 

00:15:15 Tim Hade 

And so if you can work with the utility to manage distributed resources on the distribution grid, then sort of the whole is greater than the sum of its parts. 

00:15:26 Tim Hade 

And there's a really, really interesting program that Excel is running. 

00:15:29 Tim Hade 

They've partnered with. 

00:15:30 Tim Hade 

a company called Spark Fund, and they're deploying a network of distributed batteries around the city of Minneapolis, which will ultimately help improve grid utilization and reduce rates for ratepayers. 

00:15:43 Tim Hade 

It's kind of a first of a kind program, right? 

00:15:46 Tim Hade 

So we don't know exactly how it's going to go yet, but I'm really excited to see what happens, right? 

00:15:51 Tim Hade 

And I think 

00:15:52 Tim Hade 

there could be a case and maybe will be a case in a year and a half, two years, where Minneapolis has the best electric grid of any major city in the United States. 

00:16:02 Tim Hade 

And so we got a lot of work to do between now and then, but I think that's the really interesting experiment you all are running. 

00:16:09 Tim Hade 

And I think it's the right way to do this. 

00:16:13 Shubha Harris 

That's great. 

00:16:14 Shubha Harris 

Thanks for telling us about the program. 

00:16:16 Shubha Harris 

So I know we talked a little bit about the utility owned. 

00:16:20 Shubha Harris 

So the utility here in the Spark Fund partnership is going to own the batteries. 

00:16:25 Shubha Harris 

I understand that there are other models for how we can meet these distributed or these large load additions. 

00:16:31 Shubha Harris 

So maybe if you want to talk about that a little bit or Will, happy to have you both jump in. 

00:16:38 Tim Hade 

Yeah, I can start and then Will or Mark, feel free to interrupt me. 

00:16:42 Tim Hade 

Look, I think there are a lot of different business models with respect to how to do this, right? 

00:16:47 Tim Hade 

I think the thing that ultimately matters is it has to be done in concert with the utility, right? 

00:16:52 Tim Hade 

So what you don't want is a bunch of people like me just running around putting batteries wherever we feel like it, right? 

00:16:59 Tim Hade 

Because that doesn't result in the best possible system. 

00:17:02 Tim Hade 

And so ultimately, what we have to figure out how to do is we have to figure out for the utilities to signal the distributed energy industry with respect to where they want batteries, how big those batteries should be. 

00:17:14 Tim Hade 

Not just batteries, but sort of all forms of distributed energy. 

00:17:18 Tim Hade 

Where do you cite it? 

00:17:19 Tim Hade 

How big should it be? 

00:17:20 Tim Hade 

What should the operational characteristics be? 

00:17:22 Tim Hade 

What are the technical requirements to be able to do that? 

00:17:24 Tim Hade 

And there are a few different business models that you can use to figure that out. 

00:17:29 Tim Hade 

How it's done in most of the rest of the country is 

00:17:33 Tim Hade 

I don't know, pretty bad, right? 

00:17:34 Tim Hade 

And so we have these things called hosting capacity maps, which will show people like me where there's excess capacity on the grid. 

00:17:42 Tim Hade 

But there's a lot of privacy concerns and issues around updating the hosting capacity maps in real time. 

00:17:48 Tim Hade 

And so a lot of times I'm looking at a map from six months ago, and then I go to do my project, I file an interconnection agreement, and the utility is like, sorry, we made some changes, right? 

00:17:57 Tim Hade 

And so it's always been this kind of like fragmented 

00:18:01 Tim Hade 

imperfect sort of working process where I don't have full transparency on information, the utility doesn't have full transparency on information, and the result of that is kind of, I don't know, feelings get hurt, right? 

00:18:14 Tim Hade 

And people that don't necessarily, it's not like a great way to work together. 

00:18:17 Tim Hade 

And so I think what's happening in Excel is they're saying, well, okay, what if we own the resources, right? 

00:18:25 Tim Hade 

And we run a competitive process to find the best people to build, own, and install these resources. 

00:18:31 Tim Hade 

sources, and then we manage them on our distribution grid. 

00:18:34 Tim Hade 

That way, we can tell those developers exactly where we want to put these assets, exactly how big we want them to be, and then we can bear the operational responsibility for running those and making sure they contribute to the grid. 

00:18:47 Tim Hade 

That's the first time this has really been done at this scale. 

00:18:52 Tim Hade 

Again, in a classroom, it's the economic optimal, because you have incentives perfectly aligned between the utility and the distributed energy project. 

00:19:01 Tim Hade 

never done it in practice, right? 

00:19:02 Tim Hade 

And so we're going to do this over the next year or two. 

00:19:04 Tim Hade 

We're going to see what happens. 

00:19:06 Tim Hade 

And again, I'm sure it's not going to be perfect, but hopefully there'll be a lot of lessons learned and we can roll this model out in other areas around the country. 

00:19:15 Shubha Harris 

One of the really exciting parts about this project is the competitive procurement aspect. 

00:19:18 Shubha Harris 

And we'll get to that in just a minute, but I want to just turn to you, Will, and let you talk about what other models that you're seeing out there, what works, what are you excited about? 

00:19:28 Will Mulhern 

Yeah, for sure. 

00:19:28 Will Mulhern 

No, I think Tim set that up really well. 

00:19:30 Will Mulhern 

And I would say, as we talk about kind of the first time, definitely in Minnesota that we have a utility that's leveraging its distribution system to do these types of distributed resources, you can then start to think about what that enables down the road, right? 

00:19:41 Will Mulhern 

So this is very much the first time we've seen it. 

00:19:44 Will Mulhern 

But as we get the use cases established, as we start to understand, okay, there's value here, it can be operated in this way to deliver this value, then you start to think about what the next steps are. 

00:19:52 Will Mulhern 

And it's like, then you can get into a space where customer owned resources might become, you know, 

00:19:58 Will Mulhern 

good model. 

00:19:58 Will Mulhern 

There might be a way to make that work really well if you're targeting resources in a specific place with a specific use case and you have the utility aggregating those and operating those in a specific way. 

00:20:08 Will Mulhern 

So I think what's really exciting for us is this is the first step toward a more distributed grid and toward starting to think about the different ways that we can leverage these things that we really haven't done in the past or that utilities really haven't done in the past to try to 

00:20:23 Will Mulhern 

drive these things forward and it can happen in a relatively quick fashion, right? 

00:20:26 Will Mulhern 

Like once you get to a more realized state of operating this, it becomes a lot easier to bring things onto the grid. 

00:20:32 Will Mulhern 

A lot of these, whether it's customers, like their batteries, like a power wall at home or an EV or whatever it may be, like things are already up. 

00:20:40 Will Mulhern 

connected to the grid and operating. 

00:20:42 Will Mulhern 

And so once you start to understand how those can be managed and how it can be pulled together to deliver value, I think things can start to happen really quick. 

00:20:50 Will Mulhern 

And what we see in the planning side of things, like when we're engaged in a utilities planning process, is they need to bring things online quickly. 

00:20:57 Will Mulhern 

We talked a lot about load growth, setting this up. 

00:21:00 Will Mulhern 

And as data centers come online, they want power and they want it fast. 

00:21:04 Will Mulhern 

And so when you have things that are already connected to the grid, 

00:21:07 Will Mulhern 

and the utility begins to understand how it can operate those in a beneficial way. 

00:21:11 Will Mulhern 

I think that's another exciting aspect of it too. 

00:21:14 Will Mulhern 

And then, you know, I know we're kind of turning to the supplier diversity piece after this too, but we're talking about all these 

00:21:20 Will Mulhern 

all this money that's being spent and these things that are being built and investments being made. 

00:21:24 Will Mulhern 

And I think that also creates a really cool opportunity to think about how that creates economic opportunity throughout the state, throughout the service territory. 

00:21:33 Will Mulhern 

So there's lots of different models for it. 

00:21:35 Will Mulhern 

I think what we're just really excited about is that it's happening, right? 

00:21:37 Will Mulhern 

Like we very much believe in kind of an all of the above approach to this approach to this stuff. 

00:21:42 Will Mulhern 

And so seeing Excel kind of take the first swing at this is something that's really excited us on the fresh energy side. 

00:21:48 Shubha Harris 

Great, thanks. 

00:21:49 Shubha Harris 

I think that's maybe a good segue to shift gears over to the supplier diversity topic. 

00:21:54 Shubha Harris 

Mark, I'm going to ask you, so many of us are familiar with workforce diversity, but some not as familiar with supplier diversity. 

00:22:01 Shubha Harris 

So for those of us that are less familiar with supplier diversity, can you just kind of tell us what it is and how it's different from workforce diversity? 

00:22:09 Mark Sebree 

Yeah, so I'll just make the statement that, you know, supplier diversity and workforce diversity are, 

00:22:15 Mark Sebree 

inclusion programs, they're different. 

00:22:17 Mark Sebree 

They're related, but different. 

00:22:18 Mark Sebree 

So if you think about supplier diversity, it's really, it's a business imperative. 

00:22:22 Mark Sebree 

It's an internal process that really helps to push a business strategy forward that includes a wide array of different types of businesses, whether it's minority-owned, women-owned, veteran-owned, 

00:22:34 Mark Sebree 

Disabled-owned businesses. 

00:22:36 Mark Sebree 

It really sets a platform that all these different types of business and business owners can participate, and it really enhances the competitiveness of a program of a supply chain and fosters innovation. 

00:22:50 Mark Sebree 

It really... 

00:22:51 Mark Sebree 

I think work towards supply chain sustainability. 

00:22:53 Mark Sebree 

So you can really characterize this as sort of an external facing initiative within a corporation and within the supply chain organization. 

00:23:03 Mark Sebree 

If you think about workforce diversity or employee inclusion, 

00:23:07 Mark Sebree 

That's more of an internal facing. 

00:23:09 Mark Sebree 

So that's where you're really trying to, you're working with HR or people and culture, whatever that organization called. 

00:23:17 Mark Sebree 

You're working with them to make sure that everyone feels included within the company and valued. 

00:23:22 Mark Sebree 

And if a person, if people feel included in value, that's also going to increase productivity. 

00:23:29 Mark Sebree 

The studies are and they've been done, you know, they study this thing to death, and we know that if employees are happy, you're going to get a better product. 

00:23:35 Mark Sebree 

It's just going to be better for everyone. 

00:23:37 Mark Sebree 

So that's where employee inclusion is so important. 

00:23:41 Mark Sebree 

And when I say inclusion, I want to make this statement. 

00:23:45 Mark Sebree 

I had to make, you know, I make this statement whenever I talk about this, that includes everyone. 

00:23:50 Mark Sebree 

And sometimes white males may feel excluded. 

00:23:52 Mark Sebree 

This is including everyone. 

00:23:54 Mark Sebree 

We need everyone in this process. 

00:23:57 Mark Sebree 

So that's kind of the difference between the internal employee inclusion and external supplier diversity. 

00:24:04 Mark Sebree 

Again, it includes everyone. 

00:24:05 Mark Sebree 

So there's things such as employee resource groups that are put together to help employees on the internal facing aspect to feel valued within a company. 

00:24:14 Mark Sebree 

So these, again, 

00:24:15 Mark Sebree 

Again, they're not nice to have. 

00:24:18 Mark Sebree 

These are now business imperatives. 

00:24:20 Mark Sebree 

We need everyone. 

00:24:22 Mark Sebree 

I'll use the phrase later. 

00:24:23 Mark Sebree 

We need all hands on deck in these types of initiatives. 

00:24:28 Shubha Harris 

Great. 

00:24:28 Shubha Harris 

I appreciate the 

00:24:32 Shubha Harris 

distinction between the two. 

00:24:33 Shubha Harris 

We're here to kind of talk a little bit more about supplier diversity. 

00:24:35 Shubha Harris 

I know that's your sort of forte. 

00:24:37 Shubha Harris 

The Minnesota utilities annually report their supplier diversity numbers, which include veteran owned, women owned, 

00:24:47 Shubha Harris 

businesses owned by people of color. 

00:24:49 Shubha Harris 

And the general numbers that the Minnesota Utilities reporting right now are all sort of around the 5% or lower number. 

00:24:58 Shubha Harris 

Can you just kind of tell us, give us some context, what is considered a strong or meaningful benchmark when it comes to spire diversity? 

00:25:07 Mark Sebree 

So, and that's a great question. 

00:25:10 Mark Sebree 

Spend dollars, spend percentages, that certainly is a good measurement. 

00:25:14 Mark Sebree 

It's not the only measurement, but often the question is asked, what is a good number? 

00:25:19 Mark Sebree 

That depends. 

00:25:20 Mark Sebree 

It depends on the type of project that's being put forth. 

00:25:24 Mark Sebree 

It depends on the demographics. 

00:25:27 Mark Sebree 

You know, if you look at census data, that's going to tie into, you know, what can be expected as far as spin data, but not just the the the amount of spin or the percentage, but also what types of projects or do we have companies, small and diverse businesses who are just doing the the basics or do we have companies also participating in some of the the more. 

00:25:50 Mark Sebree 

I would say complex span and projects that we see that we're talking about right here. 

00:25:55 Mark Sebree 

So I think, you know, single digits, I feel that there could be improvement to that because if you compare that to the demographics, particularly to Minneapolis, I believe what I last saw, there seems to be about a 40, 50% demographic. 

00:26:13 Mark Sebree 

I could be wrong on that, so don't quote me on that, but that tells me that, you know, single digits, there could be an improvement there. 

00:26:19 Mark Sebree 

But if you look at other parts, 

00:26:20 Mark Sebree 

to the state or other states that, you know, there could be a reason for that. 

00:26:25 Mark Sebree 

So I think looking at spend is one thing for a KPI, but also looking at, you know, how well does the business perform? 

00:26:34 Mark Sebree 

Those are always important measures, just like we would for any non-diverse business or non-small business as well. 

00:26:41 Mark Sebree 

So there's a lot of things that could be measured, and that's what we look at when we put these programs together. 

00:26:47 Shubha Harris 

I was surprised when I was preparing for this webinar, the demographic difference in population between Minneapolis and Minnesota, the demographics of Minneapolis and the racial demographics of people of color are much higher in Minneapolis. 

00:27:00 Shubha Harris 

So 40 to 50%, I think is what you had said. 

00:27:02 Shubha Harris 

But statewide, I think people of color approximately 20%. 

00:27:06 Shubha Harris 

So I know the project, a lot of the project will be in Minneapolis, but there will be some 

00:27:12 Shubha Harris 

outstate work that's done by the Excel and Spark Fund. 

00:27:17 Shubha Harris 

And so what you're kind of generally saying is sort of tracking the racial demographics of the of the locale, both at the granular level, but also at the statewide level is kind of where what we should be shooting for. 

00:27:31 Mark Sebree 

Yeah, and that's that's a practice. 

00:27:32 Mark Sebree 

When I was at Franklin Energy, you know, we worked all across the country and 

00:27:36 Mark Sebree 

We were asking, what are your what are your supplier diversity goals? 

00:27:40 Mark Sebree 

And again, my answer is always, well, we look at we look at the state or the region that we're working in and what are the demographics there? 

00:27:46 Mark Sebree 

So yeah, I think that that would apply here as well. 

00:27:49 Mark Sebree 

And so that's why it's important to, you know, make these relationships locally in Minneapolis to the different community organizations and workforce development organizations and the list goes on. 

00:28:00 Mark Sebree 

And we've already identified a lot of those, but it's important to really, 

00:28:05 Mark Sebree 

get close to these organizations so that we can find out where that potential is. 

00:28:09 Mark Sebree 

And I think we'll probably talk a little later about how much these projects are, we're looking at like $1.4 trillion of spend that's potentially going to be coming up. 

00:28:21 Mark Sebree 

And I think that's low. 

00:28:23 Mark Sebree 

I usually, if I see a budget that there's always going to be overrun. 

00:28:25 Mark Sebree 

So if you look at all the, you put all the small and diverse businesses together, 

00:28:30 Mark Sebree 

And these businesses are not just bidding on utility programs, they're bidding on projects like across the spectrum and whether it's infrastructure for our departments of transportation for states and that sort of federal levels, that sort of thing. 

00:28:46 Mark Sebree 

You put all that together, there's no way that there's capacity to handle all the work that's coming down the pipe. 

00:28:51 Mark Sebree 

So that's why supplier diversity is so important because it's bringing a new set of people into the, you know, to the table as well and a new talent. 

00:29:00 Mark Sebree 

that we need to really support all these projects that are coming down the pike. 

00:29:06 Shubha Harris 

So I know that you've been involved with several utilities in the mentoring or coaching relationship to help take utilities from single-digit numbers to double-digit numbers. 

00:29:16 Shubha Harris 

So could you talk a little bit about the how? 

00:29:18 Shubha Harris 

How do you do that? 

00:29:19 Shubha Harris 

How do we grow the supplier diversity base to the degree that reflect positive benchmarks? 

00:29:26 Mark Sebree 

Yeah, so I think 

00:29:28 Mark Sebree 

This takes me back to, I had a mentor that I worked for at the utility and he always told me, In God, we trust everyone else bringing data. 

00:29:37 Mark Sebree 

Data is so important. 

00:29:38 Mark Sebree 

So we need to know what we're dealing with. 

00:29:42 Mark Sebree 

So from the project standpoint, that's why scopes are so important to know what exactly is it that we're working for and do that on a timely basis. 

00:29:49 Mark Sebree 

So when I do try to help some of my utility colleagues and mentor them, we talk about really learning and understanding what it is that 

00:29:58 Mark Sebree 

the company's looking for, or the business unit's looking for. 

00:30:01 Mark Sebree 

So learning that. 

00:30:02 Mark Sebree 

And then on the other side, learning what capabilities are out there. 

00:30:04 Mark Sebree 

So that's that partnering with the local and diverse suppliers, knowing what their capabilities are so that we can match scope to capabilities. 

00:30:12 Mark Sebree 

And if we need to divide scope to a certain extent, if we can, we do that as well. 

00:30:19 Mark Sebree 

So it's really just being intentional, being intentional about 

00:30:23 Mark Sebree 

trying to bring others into the fold to, again, come out with a solution that's going to work for everyone. 

00:30:31 Shubha Harris 

So you had mentioned the being intentional. 

00:30:35 Shubha Harris 

So can you talk a little bit more about kind of how does that work with utility? 

00:30:40 Shubha Harris 

How do you work with the utilities to ensure that there is intentionality? 

00:30:45 Mark Sebree 

Yeah. 

00:30:45 Mark Sebree 

So I think, I mean, looking back on one example, 

00:30:50 Mark Sebree 

I can remember a utility that their safety supplies are going to go out to bid. 

00:30:56 Mark Sebree 

This is kind of a, it was kind of a big deal for the utility because it's like they felt if it's not broke, don't fix it. 

00:31:03 Mark Sebree 

But what we found was 

00:31:06 Mark Sebree 

there were a lot of, there's a lot of money being spent. 

00:31:09 Mark Sebree 

I call it rogue spin. 

00:31:10 Mark Sebree 

Some may use that term, meaning that there was dollars going out the door that did not need to be spent. 

00:31:15 Mark Sebree 

So what we did is we looked to find a supplier that was not just a safety supplier, but also a safety consultant that could come in to look to see what is it that we're spending money on and how can we 

00:31:30 Mark Sebree 

get this under control from a rogue spin standpoint. 

00:31:32 Mark Sebree 

So this particular supplier, he came in, he was very prepared. 

00:31:37 Mark Sebree 

He brought his KPIs to the table, which is kind of different because usually we have to ask for all that. 

00:31:43 Mark Sebree 

So I think when I try to help and coach others and say, you know, have your suppliers come to the table prepared. 

00:31:49 Mark Sebree 

So have them be prepared on number one, what is the main thing that they do? 

00:31:53 Mark Sebree 

Don't say they can do everything. 

00:31:55 Mark Sebree 

What's the best thing? 

00:31:55 Mark Sebree 

What's the thing they do best? 

00:31:58 Mark Sebree 

talk about how they measure their success, and then have them bring solutions to the table. 

00:32:02 Mark Sebree 

So just one solution this particular supplier came to the table with, he looked at all the gloves that were being used in safety. 

00:32:12 Mark Sebree 

And again, there were like a lot of SKUs, SKUs of gloves being used. 

00:32:16 Mark Sebree 

He came through and said, basically, well, you may have, I'm making up numbers here, maybe you have 20 SKUs of gloves, I can get that down to five. 

00:32:24 Mark Sebree 

Now what that means is initially he was going to be 

00:32:27 Mark Sebree 

basically making less money with the utility, but over time, because it's growing as a partnership, he would make that would increase the trust and also increased his work within that utility. 

00:32:39 Mark Sebree 

So that was done. 

00:32:40 Mark Sebree 

And again, we saw that that spend number, it started to go up, but with a value to it. 

00:32:45 Mark Sebree 

He did the same thing with batteries. 

00:32:48 Mark Sebree 

It's kind of interesting in the utility world. 

00:32:52 Mark Sebree 

Around December, the use of batteries goes up exponentially. 

00:32:55 Mark Sebree 

You couldn't figure out why. 

00:32:56 Mark Sebree 

Well, the Christmas holiday was coming up. 

00:32:59 Mark Sebree 

People were taking batteries home left and right. 

00:33:01 Mark Sebree 

So what this supplier did was bring a solution. 

00:33:04 Mark Sebree 

He says, well, what if we use vending machines and we have each battery expenditure tied to an individual and tied to a business unit? 

00:33:14 Mark Sebree 

This is value that this person brought to the table. 

00:33:16 Mark Sebree 

So when I work with different utilities, I really talk about what value can they bring. 

00:33:21 Mark Sebree 

And then, of course, that value gets recognized by all as a really a business imperative, but also helping the supply chain sustainability. 

00:33:30 Mark Sebree 

Those are some of the tips that I help when I try to mentor others. 

00:33:34 Shubha Harris 

Sure. 

00:33:35 Shubha Harris 

Sounds like there's a matchmaking component and then just getting really specific or getting that relationship built so that it can last. 

00:33:43 Shubha Harris 

Tim, I know you work with utilities a lot, quite a lot. 

00:33:46 Shubha Harris 

Maybe you can talk a little bit about here about what it's like to work with utilities on the DER side. 

00:33:52 Tim Hade 

Yeah, look, I think the first thing, just to sort of piggyback off what Mark was saying is, look, supplier diversity at this point in time is an imperative, because we need to grow the pie of people who know how to do this work, right? 

00:34:07 Tim Hade 

And so if you think about, I don't know, every day in the newspaper, you read about how we're running out of electricity. 

00:34:13 Tim Hade 

The bottleneck is not turbines or transformers or switchgear, the bottleneck is people. 

00:34:18 Tim Hade 

right? 

00:34:19 Tim Hade 

So if you go look at all the data, like the problem is there are not enough EPCs who know how to do this work in order to get all this work done. 

00:34:26 Tim Hade 

And then once we solve that, then there are also turbine and transformer and switchgear supply chain issues. 

00:34:31 Tim Hade 

But like people is the number one thing. 

00:34:34 Tim Hade 

And so look, I mean, I think that's kind of changed the way that companies like mine think about working with utilities, right? 

00:34:42 Tim Hade 

Most of the companies that are in the DER space are startups, right? 

00:34:47 Tim Hade 

And if you're a company like mine, you're heavily populated with engineers and energy nerds and people like that, but not really well equipped to think about, well, how do we grow the vendor workforce in the city of Minneapolis, right? 

00:35:04 Tim Hade 

That's not really something I know how to do. 

00:35:07 Tim Hade 

I know it has to be done, but I don't know how to do it. 

00:35:10 Tim Hade 

And so I think that's kind of where the partnership with utilities is heading, where it's like, hey, if you want to do this at 50, 100, 150 megawatt scale, we have to start thinking differently about how this relationship works. 

00:35:25 Tim Hade 

And again, right, I think it's pretty clear that when you're trying to execute projects of that magnitude, utilities are uniquely positioned to think about those types of programs. 

00:35:35 Tim Hade 

And so again, I think how we've traditionally worked with utilities is, let's just say it's kind of like a leadership void, right? 

00:35:46 Tim Hade 

Where like the utilities over here and we're over here and there are programs, but there's not really a clear chain of command in terms of how any of this stuff works. 

00:35:54 Tim Hade 

And like, I have my legislators and the utilities have their legislators and typically they're better at that than I am, right? 

00:36:02 Tim Hade 

And so we kind of play that game. 

00:36:05 Tim Hade 

But again, 

00:36:06 Tim Hade 

It's really, really inefficient. 

00:36:08 Tim Hade 

And so I think where the opportunity is, is when utilities could take a leadership role and play in that coordination function, right? 

00:36:15 Tim Hade 

And they could say, okay, look, we know that we have to deploy a bunch of distributed energy, but we're not just going to do it in an ad hoc way. 

00:36:22 Tim Hade 

We have a plan, and this is how we want to do it. 

00:36:25 Tim Hade 

Then you can start to think about, okay, what else do we need to build around that in order to really make this work and make this work in an optimal way? 

00:36:35 Tim Hade 

That's really where I think the workforce development and the supplier diversity angle of this comes in, which is, we have to do it, right? 

00:36:44 Tim Hade 

We have to have more electricians, we have to have more developers, we have to have more procurement people, right? 

00:36:51 Tim Hade 

But coordinating that on a regional basis is like a big undertaking, right? 

00:36:57 Tim Hade 

And there aren't a lot of 100 person companies out there that are equipped to do it. 

00:37:01 Tim Hade 

And so I think that's a huge role for the utility moving forward. 

00:37:04 Tim Hade 

And I think what you're going to see is, 

00:37:06 Tim Hade 

in utility territories where the utility takes a leadership role in doing this, you're going to have better outcomes than when it's just kind of like, I don't know, the Wild West, right? 

00:37:15 Tim Hade 

And so one of the interesting things to look at over the next 10 years is, are these systems going to be better in Minneapolis or Austin? 

00:37:23 Tim Hade 

right? 

00:37:25 Tim Hade 

Because in Texas, there are no rules, right? 

00:37:27 Tim Hade 

And it's just kind of like, go for it. 

00:37:29 Tim Hade 

And again, I think that means you move fast, but it doesn't necessarily mean that you're building projects or economies of scale that are going to last. 

00:37:38 Tim Hade 

And I think the way you all are approaching it in Minneapolis potentially turns out that that's the best way to do it. 

00:37:45 Tim Hade 

And not only do you get it done pretty quickly, but you also have something that lasts and an ecosystem that can build upon itself. 

00:37:52 Tim Hade 

And so again, I think 

00:37:53 Tim Hade 

That's why this is a really interesting experiment. 

00:37:56 Shubha Harris 

Yeah, I see a lot of parallels in the... 

00:37:59 Shubha Harris 

Oh, sorry, go ahead, Will. 

00:37:59 Will Mulhern 

No, I was just going to say if I could jump in and build on that a little bit. 

00:38:02 Will Mulhern 

I think another interesting part of this is whether it's a new supplier working within the supply chain of a utility or a data center or whoever it may be, or a DER company that's trying to sell something to a utility or integrate into the grid. 

00:38:15 Will Mulhern 

It's also just very esoteric space that for a long time, nobody has cared much about, except for people like us on this call who are nerds 

00:38:23 Will Mulhern 

in the weeds. 

00:38:24 Will Mulhern 

And now it's getting all this publicity and it's like driving the economy. 

00:38:28 Will Mulhern 

And every time you open any sort of like financial publication, there's talk about investment in data centers and what it means for utilities and what it means for generation companies. 

00:38:36 Will Mulhern 

And so I also think there's sort of an impetus on the utility and to some extent on regulatory agencies to bring people into the fold and to understand how to break outside of this kind of like very niche industry that we've been in to get diverse suppliers, to understand the value proposition of what it means to work in the space and to get folks who have typically thought of themselves as like a microgig company that works outside the bounds of the distribution system, right? 

00:39:00 Will Mulhern 

Like they're kind of doing their own thing, but think about ways 

00:39:04 Will Mulhern 

pull those together into a broader effort to really push this forward and to meet the challenges we're facing. 

00:39:10 Will Mulhern 

And I think that's, speaking to utility folks a little bit, I think that's a role that they need to be playing in bringing people into this and understanding those structural barriers that exist, whether it's even just acronyms or understanding how a tariff works or how a utility is regulated. 

00:39:27 Will Mulhern 

I think there's a lot of opportunity there as well when we talk about that. 

00:39:30 Will Mulhern 

So another theme that we definitely see in Minnesota and I know is consistent across 

00:39:34 Will Mulhern 

the country. 

00:39:36 Shubha Harris 

Yeah, I think that dovetails with what I was gonna say right after Tim is just that I see a lot of parallels in the kind of working in the Der space with with supplier diversity in the sense. 

00:39:46 Shubha Harris 

It's like you need leadership that understands the value that there's willing to 

00:39:52 Shubha Harris 

to say, bring visibility to the topic of, you know, whether it's DERs or it's supplier diversity to say, this is really important. 

00:40:00 Shubha Harris 

We need to work with the folks that understand how to do this so that we can build the right ecosystem so that we can meet the demand of the, you know, the trillions of dollars that's gonna be spent over the next several decades. 

00:40:13 Shubha Harris 

I think that kind of goes a little bit to the topic of the why is this important in terms of supplier diversity. 

00:40:21 Shubha Harris 

Mark, can you just maybe tell us a little bit about what you see as the value proposition? 

00:40:28 Mark Sebree 

Yeah, again, I think it's just really bringing really fresh blood, I mean, so to speak, to the table, fresh ideas. 

00:40:36 Mark Sebree 

As I mentioned before, these trillions of dollars, we need new ideas, new approaches. 

00:40:42 Mark Sebree 

I grew up in a 

00:40:45 Mark Sebree 

Navy veteran household, right? 

00:40:46 Mark Sebree 

So my pop, I heard probably twice a week get a move on or it's kind of like all hands on deck or what's the other thing he used to say? 

00:40:54 Mark Sebree 

Get the lead out. 

00:40:56 Mark Sebree 

We need that approach. 

00:40:57 Mark Sebree 

Like we kind of need a sense of urgency around this because I've been around this for about 30 years and we were talking 30 years ago about. 

00:41:05 Mark Sebree 

workforce development and training people up because at the time I was at the utility 20 years ago, I was average age 45 and we were like really alarmed that we don't have all the craft workers that's needed to do this work. 

00:41:18 Mark Sebree 

Well, that that hasn't changed. 

00:41:20 Mark Sebree 

It's only gotten even worse now. 

00:41:22 Mark Sebree 

And as I think Tim talked about earlier, you know, we're now hair is on fire. 

00:41:26 Mark Sebree 

So, so supplier diversity and workforce development and workforce inclusion, all of that is these are, these are all, I think, 

00:41:35 Mark Sebree 

things that can bring solutions to the table, right? 

00:41:38 Mark Sebree 

And so that's why, within the supplier diversity arena, we have a lot of professionals that are very committed to doing this. 

00:41:45 Mark Sebree 

And when we do work together through different industry groups, I'll just 

00:41:50 Mark Sebree 

give a shout out to one, Edison Electric Institute. 

00:41:53 Mark Sebree 

We come together and share best practices to do things like this. 

00:41:57 Mark Sebree 

So I think it really is imperative now that we see that we need this more than ever. 

00:42:03 Mark Sebree 

Back when I was doing demand-side management, 

00:42:07 Mark Sebree 

When Tim was talking earlier, it made me think about a data point. 

00:42:10 Mark Sebree 

Tim mentioned the Internet of Things. 

00:42:12 Mark Sebree 

When I started this, this was two years before the Internet was even commercialized. 

00:42:16 Mark Sebree 

So it didn't exist. 

00:42:17 Mark Sebree 

And now look at the exponential change in technology and connectivity and everything we have. 

00:42:23 Mark Sebree 

So that's just going to drive demand even more, demand for energy, but also demand for talent and business and all that sort of thing. 

00:42:30 Mark Sebree 

So I think the time is right for us to really act and act 

00:42:35 Mark Sebree 

really intentionally to get things done. 

00:42:39 Shubha Harris 

That's great. 

00:42:40 Shubha Harris 

I'm just going to let my audience know that we're going to open it up for questions in a few minutes here. 

00:42:44 Shubha Harris 

So please go ahead and pop your questions in the Q&A if you have questions. 

00:42:49 Shubha Harris 

But Tim, I'm going to go back to you and Will for your respective fields. 

00:42:53 Shubha Harris 

I want to talk a little bit about sort of what you see as the challenges and the barriers to achieving the mission of meeting the growing demand from the DER's perspective. 

00:43:06 Tim Hade 

Yeah, I mean, there are a lot of challenges, right? 

00:43:08 Tim Hade 

I mean, I think that's one of the things that, I don't know, is both interesting and terrifying about the moment that we find ourselves in. 

00:43:19 Tim Hade 

So look, right, I think like, 

00:43:21 Tim Hade 

The 800-pound gorilla in this whole thing is the AI data centers, right? 

00:43:28 Tim Hade 

Part of the challenge we have as an industry is that no one really knows how much compute we need, right? 

00:43:34 Tim Hade 

You go to San Francisco and you talk to some of these frontier model companies, and they're like, we need 300 gigawatts of compute by 2030. 

00:43:43 Tim Hade 

At a PUE of 1.25, that's 400 gigawatts of power, which is like, I don't know, a third the size of the entire US 

00:43:51 Tim Hade 

electric grid, and that's one company, and that's four years away, and that's probably not going to happen, right? 

00:43:56 Tim Hade 

And then you go talk to other people, and they're like, yeah, I was doing this in the 1990s when people told me the e-mail was going to be 15% of global electricity use, and it's not. 

00:44:08 Tim Hade 

And so we're going to figure out more efficient ways to do this. 

00:44:11 Tim Hade 

And so the uncertainty about what the future looks like is really challenging to think about, right? 

00:44:17 Tim Hade 

And so I think the first thing is, we have to have a, at some 

00:44:21 Tim Hade 

level, a national strategic plan for how we're going to think about this, right? 

00:44:26 Tim Hade 

Because I think what you have right now is you have a lot of people making very speculative bets about what's going to happen. 

00:44:34 Tim Hade 

and that's driving a lot of capital allocation, and that's driving a lot of investment decisions. 

00:44:39 Tim Hade 

And I don't know if that's the optimal way to go about this, right? 

00:44:43 Tim Hade 

So trying to understand to some extent what the demand side actually looks like is really, really challenging. 

00:44:50 Tim Hade 

Then you get into, okay, well, what are we actually using AI compute for, right? 

00:44:55 Tim Hade 

And so right now there's training and there's inference. 

00:44:57 Tim Hade 

And when you talk to computer scientists, they say like, for sure, we definitely need big one gigawatt training clusters to do 

00:45:04 Tim Hade 

do model training. 

00:45:06 Tim Hade 

I don't really understand why, and I've been digging into this for the last year, and I haven't gotten a great explanation yet. 

00:45:13 Tim Hade 

But if you assume that's the truth, right, and that we really need to build one gigawatt data centers in order to handle this kind of stuff. 

00:45:20 Tim Hade 

I mean, we've never done that before, right? 

00:45:22 Tim Hade 

There's never been like one site on a distribution node or a transmission node that consumes a gigawatt of power at like a 95% load factor, right? 

00:45:32 Tim Hade 

And so the technical challenges about like, how do you actually integrate that into the grid are really, really, really 

00:45:40 Tim Hade 

That's like the cutting edge, right? 

00:45:41 Tim Hade 

Like how do you actually do that? 

00:45:43 Tim Hade 

And then if you're a state like Minnesota and you also care about climate change and you want to lead on sustainability and you want to minimize local air pollution and all that kind of stuff, like adding a layer of complexity to that is like, how do you do that without building a gigawatt gas plant next to the data center, right? 

00:46:00 Tim Hade 

And so I think like 

00:46:02 Tim Hade 

We don't know, right? 

00:46:03 Tim Hade 

The answer is like, we don't know how to do that, but we have a lot of really smart, innovative people in this country, and we have to figure out a way to get all those people working off the same sheet of music and collaborating to figure this stuff out. 

00:46:16 Tim Hade 

Because on the other side of the ocean, there's a country that has a different system for doing this, and they're dominating us from a power generation, electrical capacity standpoint. 

00:46:28 Tim Hade 

And as much as I'm uncertain about AI, I'm much more comfortable 

00:46:32 Tim Hade 

in a world where America wins AI than I am in a world where China wins AI. 

00:46:36 Tim Hade 

The national security implications of that are a real thing. 

00:46:40 Tim Hade 

Again, I think we're in unchartered territory here with the amount of load growth we're talking about. 

00:46:46 Tim Hade 

If you use, I think what most people are talking about, which is 100 gigawatts of net new load by 2030, I don't know how to do that, right? 

00:46:56 Tim Hade 

That's like a big challenge. 

00:46:58 Tim Hade 

I know that distributed energy is going to be a piece of that, right? 

00:47:02 Tim Hade 

And probably the cheapest megawatt that exists on the grid is the megawatt that we're not currently using with the infrastructure we have. 

00:47:10 Tim Hade 

So if you assume like nationally we're running our transmission and distribution system, it's something like a 50% average load factor or 50% efficiency. 

00:47:20 Tim Hade 

Can we get that to 70%? 

00:47:21 Tim Hade 

And if we can get that to 70%, okay, there's your 100 gigawatts of power. 

00:47:26 Tim Hade 

And now we've bought ourselves another three, four, five years to figure out whatever we're going to do in 2030 moving forward. 

00:47:33 Tim Hade 

But again, right, like that's talking about, okay, we're going to build 100 gigawatts of load flexibility or distributed energy on the grid in the next four years. 

00:47:43 Tim Hade 

No one's ever thought about that before at that scale, right? 

00:47:47 Tim Hade 

And so, again, the only people I'm skeptical of that I talked to in like this industry are people who definitely know what's going to happen, because no one does. 

00:47:56 Tim Hade 

But I think again, right, like the answer here is really collaboration. 

00:47:59 Tim Hade 

And I think that's where utilities leading on this and then bringing the ecosystem and bringing the communities into the fold and sort of giving people clear rules of the road. 

00:48:10 Tim Hade 

I think it's a really interesting framework for how to do it and could well end up being like the optimal way to do it after we try a few different things and see what works. 

00:48:20 Will Mulhern 

And I would maybe add on to that. 

00:48:22 Will Mulhern 

I agree with a lot of that very strongly. 

00:48:24 Will Mulhern 

I think there's also like a spectrum of risk and like how we respond to load growth, right? 

00:48:29 Will Mulhern 

So like on the riskiest side, it's like we're going to build a bunch of behind the meter gas and nuclear plants and then we're going to use that to meet this low growth. 

00:48:36 Will Mulhern 

And then on the other side, it's like we're going to do the things we're talking about today where we rethink how we use our grid, where we get better utilization out of the existing grid, where we minimize some of those additional capital investments and where we just are smarter about how we use electricity. 

00:48:49 Will Mulhern 

And it's like maybe 

00:48:50 Will Mulhern 

the load growth doesn't materialize after we do all that, but that's a huge benefit regardless that we've done the work to use the grid better, and that also enables a ton of stuff, whether it's clean manufacturing, whether it's mining or steel production, things we've talked about, and those are obviously a little Minnesota specific, but I think that just 

00:49:09 Will Mulhern 

using this opportunity as a way to rethink how we use our electric grid is a pretty low risk thing to do. 

00:49:16 Will Mulhern 

And so I think bringing all these folks into the fold, like bringing in the private capital, getting regulators on board with these types of ideas is like a really smart approach in any event. 

00:49:26 Will Mulhern 

And people can disagree and certainly do on the use of AI and what the future of AI looks like. 

00:49:32 Will Mulhern 

I don't know what it's going to look like. 

00:49:33 Will Mulhern 

If I did, I might not be on this webinar. 

00:49:35 Will Mulhern 

I might be making millions of dollars for an investor somewhere, but 

00:49:40 Will Mulhern 

I think that the truth is that there are steps we can take that are very low risk, that are very smart, and that can just move forward the state of our electricity grid. 

00:49:48 Will Mulhern 

And I think that's a great opportunity there too. 

00:49:51 Shubha Harris 

Yeah, I think that's right. 

00:49:53 Shubha Harris 

Mark, what do you think about from the supplier diversity standpoint, the challenges you're seeing? 

00:49:58 Mark Sebree 

Yeah, so one challenge is, I think, just the 

00:50:02 Mark Sebree 

just getting into the game. 

00:50:03 Mark Sebree 

So the barrier to entry, sometimes that's a pretty high bar for a company starting out or maybe a company that's been in business for some time, but not in this particular arena. 

00:50:14 Mark Sebree 

So that's one. 

00:50:15 Mark Sebree 

And so, but there are things that can be done, mentoring and partnerships and that sort of thing as well. 

00:50:22 Mark Sebree 

Also, I think tapping into 

00:50:25 Mark Sebree 

resources that we haven't tapped into before. 

00:50:27 Mark Sebree 

And Tim kind of reminded me when he was speaking, I see his uniform, they're, you know, tapping into the veteran, the veteran network, that's talent, that talent and also technologies that they're aware of that maybe many people are not aware of that could be used. 

00:50:45 Mark Sebree 

And I know here locally, there's in the university have what's called a commercialization program where they actually take technologies that were created by the 

00:50:55 Mark Sebree 

the military and they're commercialized them onto the public sector. 

00:50:59 Mark Sebree 

So I'm saying using collaboration and coordination to use all that to bring it to the table because I really feel like we have not tapped into some of the resources that we could. 

00:51:10 Mark Sebree 

And I think if we leverage all that, then we can come up with some really good solutions and quickly not taking years to do this because we don't have years to do. 

00:51:20 Shubha Harris 

Okay, Tim, I'm gonna kick this one back to you. 

00:51:22 Shubha Harris 

You had said we have to get this done. 

00:51:25 Shubha Harris 

We don't know how we're gonna do it. 

00:51:26 Shubha Harris 

It's very difficult challenge. 

00:51:28 Shubha Harris 

So maybe could you lay out a couple of like what I call low hanging fruit? 

00:51:33 Shubha Harris 

Like what are some of the easier things that we could do? 

00:51:35 Shubha Harris 

And then maybe spell out like if we could be a little more ambitious or accomplish all the things that we wanted to, what would those be? 

00:51:44 Tim Hade 

Yeah, well, look, I think to oversimplify, right? 

00:51:49 Tim Hade 

The one sentence answer to what to do is put batteries everywhere, right? 

00:51:53 Tim Hade 

And so when you look at all the research on this, right, we've actually built enough peak demand to be able to, or peak supply, to be able to handle a lot of what we have to build out on the grid. 

00:52:08 Tim Hade 

And that's not just AI, that's also advanced manufacturing, robotics, all the other things people want to build. 

00:52:14 Tim Hade 

But generally speaking, we have this problem where like 100 to 200 hours a year, we don't have enough capacity. 

00:52:22 Tim Hade 

And that's what really drives the need for additional generation, additional transmission and distribution resources. 

00:52:28 Tim Hade 

And so again, I think the value that batteries have today, and that can traditionally be in the form of lithium ion or LFP, 

00:52:37 Tim Hade 

which is more of like a two to four hour short duration technology, or it could be all the way on the other end of the spectrum with Form Energy and what they're doing in Minnesota. 

00:52:47 Tim Hade 

So there's a lot of different kinds of storage, but the net being that if you can free up capacity during that 100 to 200 hours a year, then that's the number one thing that will get you through the next four or five years. 

00:53:00 Tim Hade 

And one of the big advantages of batteries, right, is that is 1 area where on a global basis, we don't have any supply chain constraints. 

00:53:06 Tim Hade 

So we actually, right, if I order a battery today, I can get it with a 16-week lead time. 

00:53:12 Tim Hade 

If I try to order a transformer today, I do not get a 16-week lead time. 

00:53:17 Tim Hade 

And so I think that's just kind of where the global economy is and sort of the supply-demand balance. 

00:53:23 Tim Hade 

And so we can deploy a lot of batteries really, really quickly. 

00:53:26 Tim Hade 

I think ultimately, like the perfect solution down the road, right, is generally what you would call like transactive two-way power flows, right? 

00:53:36 Tim Hade 

And so the idea that the grid for 150 years now has been a one-way street. 

00:53:42 Tim Hade 

And what we really need it to be is a two-way street, right? 

00:53:44 Tim Hade 

We need to be able to not only send electricity from the top down, but also the bottom up, and we need to figure out how to load balance. 

00:53:52 Tim Hade 

And, technically, we have the ability to do that. 

00:53:55 Tim Hade 

So, one of my favorite companies in the world is a company called the Octopus Energy, which is, I think, now the most valuable company in the UK. 

00:54:03 Tim Hade 

But literally, when the Ukraine conflict happened four years ago, 

00:54:09 Tim Hade 

the UK went through this amazing transformation where they just started to do load flexibility everywhere. 

00:54:14 Tim Hade 

And as a net result, relative to their European counterparts, electricity rates have stayed low, performance has gone up, and that's really been enabled by technology 

00:54:26 Tim Hade 

really computer-based technology that's helping to balance two-way power flows as opposed to one-way power flows. 

00:54:33 Tim Hade 

And you start to get into things like, oh, we can actually pay people to plug in their cars from 4 PM to 6 PM. 

00:54:40 Tim Hade 

And the amount of money they're making by plugging their electric vehicle into the charger during those times is offsetting their entire monthly lease payment. 

00:54:49 Tim Hade 

right? 

00:54:50 Tim Hade 

And you start to get into these really interesting economic outcomes that can sort of help everyone go through this energy transition on a global basis, right? 

00:55:00 Tim Hade 

Because we're trying to do this in the US, but all this stuff has to happen globally. 

00:55:04 Tim Hade 

And so again, I think that's kind of the longer term thing, but point number one is just put batteries everywhere, and then figuring out how to do that in the best way possible is a challenge. 

00:55:14 Tim Hade 

Which again, there's a few different experiments happening around the country, and you guys are leading one of them. 

00:55:19 Shubha Harris 

Yeah, that's great. 

00:55:20 Shubha Harris 

Batteries, the value that batteries can provide to the system is really unlimited potential. 

00:55:26 Shubha Harris 

Will, how about you on that one? 

00:55:30 Will Mulhern 

Yeah, I mean, I agree with, you know, largely a ton of what Tim said. 

00:55:34 Will Mulhern 

And I think, you know, 

00:55:37 Will Mulhern 

That feels like a very straightforward, and that's kind of getting back to what I was talking about in terms of the low-risk opportunities. 

00:55:42 Will Mulhern 

Like we know batteries work, we know how to use them in large part, and the technology is only getting better, whether it's in terms of how long it can discharge for. 

00:55:50 Will Mulhern 

or the amount of material it uses, things like that, it's only moving forward. 

00:55:55 Will Mulhern 

And again, I think it's just very low risk to plug in a bunch of batteries across the grid. 

00:55:58 Will Mulhern 

And to be clear, I think that looks like utility-owned batteries. 

00:56:01 Will Mulhern 

I think that can be customer-owned batteries. 

00:56:03 Will Mulhern 

And I think there's tons of ways, and we're not going to get into rate design at all in this webinar, but there's lots of questions about how you can design rates to make that work for the utility and for customers. 

00:56:13 Will Mulhern 

And I think that's where you start to get to the frontier of some of these interesting questions. 

00:56:16 Will Mulhern 

So maybe at a high level, I would say that rate design is a huge 

00:56:20 Will Mulhern 

component of this and an economic question that we're going to have to tackle. 

00:56:24 Will Mulhern 

And unfortunately, not something we necessarily have time to get into today, but something that I think will be a core component of looking forward and transition. 

00:56:31 Shubha Harris 

Yeah, I agree. 

00:56:32 Shubha Harris 

And when Tim was saying this is a national strategic conversation, the conversation around how do we do this so it's affordable for customers and customers can really benefit is a key to the conversation. 

00:56:45 Shubha Harris 

All right. 

00:56:45 Shubha Harris 

I think we're we're coming on to time. 

00:56:47 Shubha Harris 

So, Mark, I'm just going to end with you. 

00:56:49 Shubha Harris 

What do you see as some low hanging fruit? 

00:56:51 Shubha Harris 

And then what do you see as the kind of the, you know, the ideal scenario? 

00:56:57 Mark Sebree 

So I think low hanging fruit right now is, you know, get your supplier diversity or your supplier management engagement, whatever title that you're using, get those people in the room with your energy efficiency teams, start talking and figuring out again, 

00:57:14 Mark Sebree 

ways to collaborate and get that communication out. 

00:57:16 Mark Sebree 

And then low hanging fruit, I think looking at, you know, your current supply base, figure out who you have right now, if there's some development that can be done, and that's something that we can help with as well, get those folks to the table. 

00:57:30 Mark Sebree 

And so I think we get a head start. 

00:57:33 Mark Sebree 

The more time before the project, the better. 

00:57:37 Mark Sebree 

That way, you know, we, again, can come up with a better outcome. 

00:57:42 Shubha Harris 

Great. 

00:57:43 Shubha Harris 

Well, I'll, if anyone has any final last words, please go ahead. 

00:57:48 Shubha Harris 

Anyone want to throw in something that was burning? 

00:57:52 Will Mulhern 

I'll maybe just close on, you know, throw 

00:57:56 Will Mulhern 

Energy. 

00:57:56 Will Mulhern 

We do a lot of work in Minnesota and it's very cool to have two experts from kind of nationally come together and support us on this. 

00:58:02 Will Mulhern 

So very fortunate for this conversation and also maybe want to underline that like kind of the impetus for this is we can do these cool things. 

00:58:08 Will Mulhern 

We can make this investment in the future and we can do that in a way that's going to sustain businesses and is going to build the economy across our state and across the country. 

00:58:17 Will Mulhern 

And so I just appreciate having the opportunity to kind of have some back and forth with experts on those subjects. 

00:58:23 Tim Hade 

Yeah, I guess the last thing I'll say very quickly is perfect is the enemy of good, right? 

00:58:28 Tim Hade 

And so look, I think any program that anyone in the state of Minnesota does, every project I've ever built, right, there's room for improvement. 

00:58:36 Tim Hade 

You're not going to get it perfect. 

00:58:38 Tim Hade 

There's going to be things that you wish you had done that you didn't do. 

00:58:41 Tim Hade 

What we need to do desperately right now is just do good projects. 

00:58:44 Tim Hade 

And one of the reasons I'm so excited for the state of Minnesota and the city of Minneapolis is because I think what's happening in Minneapolis is a good project. 

00:58:53 Tim Hade 

project, right? 

00:58:54 Tim Hade 

And we're going to learn a lot from it. 

00:58:56 Tim Hade 

It's going to help a lot of people. 

00:58:58 Tim Hade 

And it's going to help the rest of the people in the country watch this model and see how it evolves and all that kind of stuff. 

00:59:04 Tim Hade 

And so I know there are criticisms and critiques. 

00:59:07 Tim Hade 

There are criticisms and critiques of every project that you can ever build, but this is a really, really good project. 

00:59:12 Tim Hade 

And thank you guys for the leadership. 

00:59:16 Shubha Harris 

Great. 

00:59:16 Shubha Harris 

Well, we're at time. 

00:59:17 Shubha Harris 

And I just want to also echo Will's comments. 

00:59:19 Shubha Harris 

I really appreciate being on with such a great panel. 

00:59:22 Shubha Harris 

I'm really excited to see how this project rolls out and continue the discussion on how we're meeting large load here in Minnesota and nationally. 

00:59:29 Shubha Harris 

And it's just been great to be on with you all. 

00:59:33 Shubha Harris 

Thanks, everyone. 

00:59:35 Jo Olson 

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00:59:41 Jo Olson 

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00:59:47 Jo Olson 

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01:00:00 Jo Olson 

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01:00:03 Jo Olson 

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