Guest Interview with Roger Levy (Levy Associates)
I started Levy Associates in May 1980, a little over 32 years ago. After stints with Xerox
Corporate Planning in New York, RCA computer systems in San Francisco, and years of world
travel with the management consulting group at Arthur Young, a friend asked if I would take a
special appointment and help organize and manage some energy research projects for the new
California Energy Commission. Those CEC projects included 23 of the first PURPA pilots in
pricing and load management. The success of that research provided the basis for the first statewide load management standards and the implementation of the first mandated pricing and demand response programs in the US. I went back to commercial consulting when my CEC appointment ended. PG&E then approached me and asked if I could help navigate them out of the ‘regulatory requirements’ I had just created. The offer to actually plan and implement a major technology and customer marketing effort created the impetus to start Levy Associates.
What is your role at Levy Associates?
The phrase ‘soup to nuts’ comes to mind. As a sole proprietor you have responsibility for all marketing, planning, client relations, public relations, and doing the actual work.
How long have you been involved in demand side activities?
Officially I’ve been involved with demand side activities for 36 years. However my first involvement actually began 42 years ago when I worked for RCA computer systems and had an assignment to design an automated meter reading system. Little did I know what awaited me.
What challenges have you faced as a DR professional within your organization and within the industry?
It would probably take a book to document all the challenges. On a professional level, consulting as a sole proprietor is rare and most don’t last more than a few years. There are two key professional challenges – establishing credibility and staying educated and informed. The credibility issue is exemplified by a sign hanging in my office with the phrase “What happens if you get hit by a bus?” I can’t recall how many times that question became the reason for not getting a contract. As an independent, staying informed and maintaining professional relationships requires constant work.
There are also substantive challenges related to doing the actual work. I’ve had the opportunity to address almost everything imaginable, with every type of organization and also work with some of the best minds in the industry. The diversity of work helps provide perspective, especially since DR requires the integration of all utility operating functions as well as regulatory and consumer requirements.
What changes have you seen in the industry as it relates to DR and EE over the last few years?
With a few exceptions, most DR efforts today are not that fundamentally different from what was implemented 20-30 years ago. The technology is better and the evaluation is much more complex. As far as key changes during the last few years, I have three observations:
- First, regulation and legislated efforts at the state and particularly the Federal level have increased substantially. From my perspective this intervention is attempting to compensate for a regulated utility business model that was originally designed to expand the industry and take advantage of economies of scale driven my centralization. Today’s energy environment demands a different model, one that rewards efficiencies, innovation, and distributed investment. There is an inherent conflict between the utility business model and regulatory effort. This conflict stymies innovation and real progress.
- Second, there appears to be a growing lack of integration between policy and expectations. Regulatory and legislative expectations push more customer control, more DR, efficiency, improved reliability, carbon reduction, electric vehicles, better compensation for solar PV, and subsidies for the poor and elderly. However, policy decisions endorse pricing and rate designs incompatible with these expectations.
- Finally, even after 30 plus years of research and thousands of pilots this industry seems to have developed very few 'lessons learned.' It is very frustrating to see pilots and actual implementations continually repeating the same mistakes. Why after 30 years don’t we see real technology, cost, and performance innovations in mainstream DR programs? Why are we still arguing over technology (meters) and pricing options (rates) that have fundamentally changed every other industry? Why don’t most customers even know what DR is?
The biggest challenge is and will continue to be regulation. No matter how innovative or creative the design or evaluation effort, if you can’t get it past the regulators it isn’t going anywhere.
What advice or guidance would you give to young professionals who are considering a career in demand response and smart grid?
Try to get some experience outside the utility industry first, preferably in a technology field that works with actual customers. Learn about innovation and what it takes to achieve success that is not defined in regulatory terms. Next, get some actual project management and implementation experience. I learned more from projects that required me to meet the customers, try to make things work, and translate the evaluation into operations than with any other projects. It also helps to learn how to communicate with engineers, lawyers, economists, and regulators. Finally, develop a lot of patience – this glacier moves very slowly.
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