Guest Interview with Charles "Butch" Massey of the Tennessee Valley Authority (TVA)

  How long have you worked at the Tennessee Valley Authority (TVA)?  
  I have been with TVA for 30 years, serving in diverse leadership roles encompassing power
  generation, nuclear power, resource management, transmission, rates, and customer
  relations.  Prior to leading the TVA’s Demand Response organization, I served as General
  Manager of the TVA’s Alabama operations where I led the Alabama TVA organization in
  meeting the needs of the TVA Alabama service territory.  

What is your role at the TVA?
As General Manager of Demand Response for the past 2 years, I am responsible for the TVA’s Demand Response program.  TVA is unique in that we are not a vertically integrated utility.  TVA supplies electric power to 155 Power Distributors and 57 direct served federal facilities and large industrial customers.   TVA is both a summer and winter peaking utility with a territory covering over 80,000 square miles and providing electricity to over 9 million customers in seven southeastern states.   TVA works collaboratively with direct served customers and various Power Distributor and direct served customer organizations such as the Tennessee Valley Public Power Association, Inc., Tennessee Valley Industrial Committee, and Associated Valley Industries, using an iterative process, to design and develop TVA’s demand response programs.  My past experience as TVA’s liaison to the Power Distributors has proven invaluable to gain cooperation and buy-in to the demand response programs being considered.

How long have you been involved in demand side activities?
As the GM in TVA’s Alabama service territory, I worked with Power Distributors and customers to increase their awareness of TVA’s product and service offerings, including TVA’s legacy direct load control and pricing products.  A fully integrated, central DR team did not exist at TVA until approximately 2 years ago, when the new Energy Efficiency and Demand Response organizations were established.  I have served in my current role as General Manager of the Demand Response organization for 2 years.  

Leveraging the experience and knowledge we gained from TVA’s legacy direct load control and pricing products that have been in place for up to 30 years, our current focus is on expanding TVA’s Demand Response program offerings to include both economic and reliability dispatch.  We are developing and implementing a range of pilots and programs to cover all customer segments from large industrial to residential.

What challenges have you faced as a DR professional within your organization and within the industry?
The vast majority of TVA employees are involved in building, operating, or maintaining power generation and infrastructure and Energy Efficiency (EE) and Demand Response (DR) are new concepts.  We need to change the mindset of many of these individuals and educate them on the value and benefits of EE and DR to support TVA’s renewed vision to be one of the nation’s leading providers of low-cost and cleaner energy by 2020.  TVA’s Integrated Resource Plan (IRP), “TVA’s Environmental and Energy Future” plan, approved by TVA’s Board of Directors in April 2011 will further support the focus of greater energy efficiency and demand response.

Additionally, TVA has a goal to be the Southeast leader in EE and DR by 2015.  By 2015, TVA has an aspirational goal to reduce energy usage by 3.5%, the equivalent of approximately 5,500 GWh.

Despite early challenges, TVA’s Demand Response team has made significant progress to increase the confidence of internal Transmission Reliability and Operations (TRO) and Energy Trading organizations, increasing these organizations’ confidence in the ability of demand response to deliver load reductions when called upon.

With energy prices in the Tennessee Valley below the national average and time of use wholesale rates just implemented in April 2011 with price signals not necessarily passed on to end use customers, mass adoption of demand response has been relatively slow.  Additionally, TVA must address the Power Distributors’ (PD) concerns of revenue erosion resulting from Demand Response and reduced sales.  TVA provides incentives to offset the PDs’ capital investments and is actively working to educate the PDs on the benefits of demand response.  Assisting the PDs in making a business case to support EE/DR that their member boards will support and approve is a critical success factor.

What changes have you seen in the industry as it relates to DR and Energy Efficiency over the last few years?
Generally, the expansion of and an increased acceptance of the “virtual power plant” and increased integration of energy efficiency, demand response, and renewables.   This aggregation of a variety of distributed energy resources via communication systems, allowing them to be utilized in the same manner as conventional generation, is transforming the way traditional generation is viewed.  

Also, the flexibility of using DR in non-traditional ways such as off-setting wind and other ancillary services.

What do you expect to be the biggest challenge with implementing DR in the next decade?
Adoption, particularly by residential customers, will be key.  This can be facilitated by technology, allaying customer concerns about “big brother,” and providing them tools to increase their knowledge and better manage their energy usage.  Gaining acceptance of the public to see the benefits and having a “pull” strategy to encourage development by manufacturers and adoption by utilities, Power Distributors, and others will play a key role.     

Establishing Smart Grid standards, standardized technology, and end device connectivity that are universally accepted and seamlessly implemented in a cost effective manner will also be critical success factors.  

What advice or guidance would you give to young professionals who are considering a career in demand response and smart grid?
First, understand power system operations because, ultimately, that is the purpose of demand response and the smart grid.  That knowledge will guide the development of demand response products and services that maximize power system operations.  Also, get involved in professional organizations like ADS to keep current on industry practices and advancements.

To learn more about the TVA, please visit their website.