As an 18-year resident of Houston and someone who moved here to escape the cold weather of the northeast, you can imagine my disappointment with having to endure sub-zero wind chills this past week in a city that rarely falls below freezing.  Had that been the only thing unpleasant about this past week I would have been just fine with it however beginning at 6:37am on Monday 2/15, I became one of the 4 million plus electricity customers in Texas to be disconnected from the power grid.  Hoping that ERCOT would get the situation under control quickly proved to be just that, hope.  During my time in Houston, I have lived through a handful of hurricanes flooding events from non-hurricane rainstorms (eg. Tax Day 2015), and a few other bouts of abnormally cold weather.  The aftermath from the cold temperatures this week rival the worst of any of those previous events.

Having spent my entire adult career in the energy business, a large chunk of that in the Texas deregulated market working for the largest power generator in the state, I became consumed with reading the articles that many were writing during the past week.  Many lay out some key facts but fall short when they use their keyboard to further their political agenda.  Spoiler alert – in the words that follow I am not going to blame the renewable energy sector and call for a roll back of our states’ leading position in renewable energy production, one I am actually very proud of.  Also, I am not going to blame the thermal energy sector – nuclear, coal, natural gas, and oil fueled generation units.  These power plants are necessary to maintain the outstanding grid reliability we all enjoy in TX and serve their purpose at keeping our electricity prices some of the lowest in the United States.

This storm created weather conditions that were not properly planned for and sent a train barreling down the tracks towards all out disaster.  I have read many reports, and I believe their truthfulness, that ERCOT was literally minutes away from the entire power grid collapsing which could mean weeks or months until our power was restored.  The only tool left in the toolbox for ERCOT at 1:25am on Monday 2/15/2021 was to order the transmission and distribution companies to immediately begin firm load shedding activities.  The reason for this drastic measure, which is the absolute last step on the emergency response playbook, was not the cold weather.  It was a fundamental flaw in the underlying design of our market.  Incenting generators only when they produce electricity and not penalizing them when they do not.

Texas is an “energy-only” market meaning if you were a power plant owner you only collect revenue upon being dispatched by ERCOT and producing electrons that go onto the grid for consumption by customers.  Given that under almost any modeled situation, weather or otherwise, Texas has more than enough generation to meet our demand obligations, there is no incentive for a power plant owner to make investment in their current infrastructure nor is there any incentive for someone to build a new power plant.  Other deregulated markets such as PJM, operate as a “capacity market” meaning generators are paid to be available when dispatched and are penalized when they are not able to perform.  It is sort of an insurance policy that is recovered through all customers in that particular ISO area.

I have read articles and had conversations with people in my network over the past week about what can be done for next time.  The answer is very little unless we have a complete overhaul of the market to a capacity market.  Power plant operators may make some investments to harden their infrastructure on their own following this event having missed out on a tremendous amount of money as the real-time price for electricity spiked to the limit of $9,000 per MWh when it usually averages around $30 per MWh.  Those who were not able to produce only faced an opportunity cost loss not a real loss.  The lost revenue opportunity for a typical 600MW natural gas plant at the height of the crisis was essentially $5,400,000 per hour = $9,000 per MWh * 600 MW.  This same plant under normal conditions earns about $18,000 per hour.  That lost revenue may be enough to entice some however if more units were online, it is unlikely prices would have spiked to the cap and stayed there for hours and hours thereby making it more difficult to recover the investment.

Without a carrot there can be no stick.  The TX Legislature is in session now and I assume taking up legislation aimed at preventing a near systemwide collapse will be added to their agenda.  I hope my elected officials take their time and do the right things long-term for Texas.

Doug Golden
VP, Solar and C&I Development
Eco Engineering

February 22, 2021

Webinar via Designhill

Covid-19 has impacted a lot of businesses and has changed everything about the way businesses operate. Now it’s critical for brands to take into consideration the upcoming disruptions and challenges in order to “Thrive” and prepare for the “New Normal”

Learn how digital marketing is evolving and how resilient organizations should leverage digital media to thrive in times like these. Join us for the panel discussion with Industry experts & uncover top tips, trends & strategies in digital marketing space.

We have put together a panel of experts who are the authorities in digital marketing we have with us:-

1.Garrett Mehrguth, CEO @ Directive & International Speaker

2.Michael Barber,SVP, Chief Creative Officer / Marketo 50 Fearless Marketing Leader

3.Neal Schaffer, Author, The Age of Influence | Digital / Social Media / Influencer Marketing Speaker & Consultant | University Educator

4.Carlos Gil Author, Instructor, Speaker, Social Media Consultant

5.Alan See, Marketing at Eco Engineering and a “Top 50 Most Influential Chief Marketing Officer’s on Social Media” and “Marketer of the Year” by American Marketing Association.

 

Chris Lockard, LC
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Acuity – LBK LightBar Kit LED Retrofit System

 

 

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Living in a new world where in-person interactions have been drastically reduced has forced many companies across various industries to transform their business models more rapidly than one would have ever thought possible six months ago. The pace at which companies have scaled their online commerce platforms, curbside pickup and delivery businesses, and remote working capabilities has shown the technology to make tectonic shifts to the status quo can happen in record time.

With transportation needs shifting because of workers no longer being required to go to an office in a centralized district, the financial strain that will be placed on our cities’ mass transit systems will be huge. Coupled with the fact that many still view mass transit as unsafe because of many people in a small area point to a long recovery before we see crowded subway cars and buses again. Gathering with coworkers for lunch will no longer involve an elevator ride followed by a walk to a nearby restaurant. It will now consist of multiple people getting into their individual cars and meeting somewhere. Other tasks that may have been done on the way home by commuters will be short trips from home and back.

Those alone point to increases in dependence for personal vehicles but when you add in the increased demand for delivery services using light duty vehicles and ride sharing like Uber and Lyft, the potential increase in emissions could be huge. Studies already show that Uber and Lyft generate up to 50% more emissions than if that rider took themselves from point A to point B in their own vehicle. Because of this Lyft recently announced their goal of having 100% of their US “fleet” to be electric by 2030. Traditional delivery services like UPS and Amazon have already placed large orders for electric delivery vehicles however these orders still only represent a small percentage of their overall fleets. Short trips to the grocery store, to lunch, to get a haircut, to go to a place of worship, and the like, are all ideal for being able to say yes to becoming an EV owner.

However, to drive adoption of electric vehicles there needs to be a tremendous increase in charging infrastructure. Germany has recently announced a requirement that all gas stations to install an EV charging station thereby making charging locations equally as convenient as filling up with gasoline or diesel. Germany, also a large adopter of renewable energy, will be able to fulfill this increased electricity demand largely without increasing carbon emissions. In the US, renewable energy investment is projected to top fossil fuel exploration investment for the first time ever. While this is a good start, the amount of future investment needed to meet the goals set forth by many cities, states, and businesses has to keep increasing at a record pace.

The piece that ties this all together though is cost effective energy storage. Being able to build a coast to coast network whereby people don’t suffer “range anxiety” when thinking about taking a trip beyond their local grocery store will require that some charging stations exist in remote locations which may not have the necessary electrical infrastructure today. Also, to ease congestion on the electricity grid it may be necessary to switch between grid supplied power or power stored in batteries (or some other system) to allow for reliability of charging.

We have a once in a generation opportunity to reshape the future of transportation. Policymakers, traditional and non-traditional automakers, the private sector, and utility companies are all headed down this path already. We have proven that what seemed like monumental tasks in other industries where they were happy to settle for incremental change over the next many years was possible to effect step function type change in a matter of months. Global emissions are down leading us to see wildlife in new places, clear water where it had been dirty as long as anyone could remember, vegetation growing where it hadn’t in years and people breathing cleaner air. Let us not let this opportunity to keep a lid on those emissions slip away.

 

Doug Golden

Director of C&I Business Development

The Mindset List for the incoming college class of 2024 provides some valuable social, economic, and cultural markers for this group of individuals born for the most part in 2002. Let’s take a look at the world through their eyes:

  • Like Pearl Harbor for their grandparents, and the Kennedy assassination for their parents, 9/11 is an historical event.
  • Thumb, jump, and USB flash drives have always pushed floppy disks further into history.
  • The primary use of a phone has always been to take pictures.
  • Oklahoma City has always had a national memorial at its center.
  • Because of Richard Reid’s explosive footwear at 30,000 feet, passengers have always had to take off their shoes to slide through security on the ground.
  • PayPal has always been an online option for purchasers.
  • They have witnessed two African-American Secretaries of State, the election of a black President, Disney’s first black Princess, and the rise of the Black Lives Matter movement.
  • As they crawled on the floor, TV headlines began crawling at the bottom of the TV screen.
  • “Pink slime” has always been a food additive.
  • YouTube has become the video version of Wikipedia.
  • Apple iPods have always been nostalgic.
  • They have always been able to fly Jet Blue, but never Ted and Song.
  • Quarterback Troy Aikman has always called the plays live from the press booth.

In general, the Mindset List is a statement of experiences and events that shape the views of this year’s freshmen. It’s how they see and understand what occurs around them. And since most people believe their views are accurate it must also represent their understanding of the truth. Their perception is their reality.

Marketing is involved in the process of dealing with perceptions. What makes the process even more challenging is that consumers make purchasing decisions based on how light mingles with form. Light transforms our perception of the colors around us. For example, natural light, influenced by the weather, season and position of the sun (and moon), affect the intensity and hues of an object. Artificial light also alters how we discern color. For instance, a standard incandescent bulb will make everything in its vicinity look “warm,” similar to a sunrise or sunset, while modern LED bulbs can emit a much cooler light, close to that of an afternoon outdoors. These differences can help tell a story and even manipulate the emotions that influence a purchase. The positioning and intensity of light are also influencing factors.

In short, we make purchasing decisions based on our perception of reality. If your organization views the world through a product-centric position you may be inclined to dismiss the light perception challenge. Market research facts and figures convince you that the real truth is on your side and that the best product, your product, will win. Do you believe that all you need is to have the truth on your side?

Most of us struggle to get past our perceptions, that’s why marketer’s need to embrace the phrase “through the eyes of the customer.” Let the engineers at Eco Engineering help you position your merchandise in the best possible light.

 

Alan See, Marketing at Eco Engineering