Energy: Meter leader

 In Business Handbook 2017

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The person responsible for keeping the lights on — or turning them back on after severe weather — in much of North Carolina and South Carolina is Duke Energy Corp.’s  Lloyd Yates, who oversees customer and delivery operations. He is the last senior executive of Progress Energy to remain with Duke, four and a half years after the two N.C.-based power companies merged. While innovations in energy are challenging electric utilities, Yates says Duke has the mojo to stay ahead of the pack.

LLOYD YATES
EXECUTIVE VICE PRESIDENT, DUKE ENERGY

WHY HIM
Units led by Yates include about 5,000 employees in the Carolinas. He has a bachelor’s in mechanical engineering from the University of Pittsburgh and an MBA from St. Joseph’s University. He is a director of New York-based insurance giant Marsh & McLennan Cos.


What is your main focus in 2017?

We are really working on transforming our customers’ experience. We believe that our customers have a different experience with other service providers, and we’re going to have to step up our game.

This mostly involves technology and innovation that gives our customers more choices, more control and more reliability. Customers want more control over their energy use, and automated metering is part of our goal to leverage technology to do things more efficiently.

Instead of meter readers entering information manually, they can now use automated metering infrastructure that can provide a new reading every 15 minutes. We’re deploying this technology now in South Carolina and will expand it significantly in North Carolina in 2017. We’ve made strides on providing more information over the last 10 years, but it’s nothing like what you will see in the next 10.

Any other examples of improvements?

One of our great tools has been the document we give customers that compares their usage to their neighbors’. It has really encouraged people to study their energy use.

With the new technology, a customer can tell how much power they are using when they turn down the AC to 68 degrees on a 95-degree day. This will help modify their behaviors.

The technology also helps us see when and where there are power outages. We can dispatch crews to restore power more quickly. And technology lets us cut power on and off more easily, saving us from having to send crews out. A good example is college campuses, where people move in and out frequently.

Doesn’t reducing usage cut Duke revenue?

We’re trying to make investments that create significant customer value. Even though usage will go down in some cases, over the longer term the changes also help Duke Energy. Automated metering represents reduced operating costs and it is a beneficial capital investment that we would expect to recover through the regulatory system.

Will more use of alternative energies hurt Duke financially?

We see them as more of an opportunity than a threat. North Carolina has the second-most installed solar production capacity in the U.S., and Duke drives a lot of that. We are not threatened at all. Customers want cleaner energy, but we want to make sure that we get the rules right.

North Carolina has the Southeast’s highest avoided-cost rate — the cost we would incur if we supplied the power from another source. The N.C. Utilities Commission sets the rate. We also are required to buy all solar energy built on our system even if it is in a location that doesn’t benefit the system or our customers.

As we connect more solar, we need to maintain energy-grid reliability so that all customers benefit.

How has the Progress merger aided North Carolina?

Our greater scale drives our ability to respond more quickly. The merger made sense four and a half years ago, and it makes more sense today. When Hurricane Matthew struck, we moved 10,000 people into eastern North Carolina and South Carolina to help restore service. That is a lot more resources than if the companies had remained independent. About 680,000 customers had outages after the storm, and we restored service within seven days. N.C. customers have also benefited from $700 million in savings because of joint dispatching arrangements.

How has Duke Energy staffing in North Carolina changed over the last decade?

It hasn’t changed as much as people think because there hasn’t been as much outsourcing as people think. Our call centers and distribution centers are our people. Contractors help us during peak periods, including outages. [The company declined to disclose its 2007 employment.]

What other changes are afoot at Duke?

We are developing a strategy on how we modernize our grid, which mostly hasn’t changed in the last 100 years. After we have employed automated metering, the next step is how to improve reliability while gathering more data. Rather than relying on a centralized grid, how can we make sure the grid accommodates a two-way flow of information that connects the company with customers?

The tolerance by customers for outages is going down. More people are working from their homes, and many small businesses have their own servers. They need better reliability, so we need to employ devices that help us respond effectively rather than just sending people out for two hours in the middle of the night with a flashlight. A more digitized, smarter grid is what you’ll see.

Will the Trump administration’s pro-coal strategy affect Duke?

We’ll keep focusing on a lower carbon environment and generating cleaner energy. We aren’t ramping up our coal plants.


GOAL FOR 2017

To read a book per month.

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Martine RothblattAaron Newton