How PSEG Long Island found its footing

Brian Kurtz studied biology at Emory University in the early 90s. At that time, many of his friends were planning a semester abroad. While he was intrigued, going to Spain or London, it didn't quite light a fire in him. What he really loved was the mountains.

Skiing, rock climbing, rafting. And when he heard about the National Outdoor Leadership School, it really clicked for him. A full semester, quote-unquote, abroad, but it was in the Intermountain West, Wyoming and South Dakota and Utah. Brian would spend months in the wilderness studying ecology.

It was the perfect mix of science and project management. But it gave him something so much more, an understanding of what his instructors called expedition behavior. How to plan, how to interact on some of the most trying times and some of the most difficult circumstances, and how to be successful, how to go from a plan to execution to success in a safe way, mitigating risks and getting the outcomes we were looking for. That skill set would end up serving Brian well throughout his career.

He worked out west for a decade in forestry and ecosystem management. This was before returning to Long Island. And then in 2009, a conversation with the CEO of the Long Island Power Authority opened a door into energy efficiency and renewable energy. The background experience that I've had fit in a lot of different industries.

And as I started to learn more about energy efficiency, renewable energy, through that conversation, that's what sparked my interest and said, hey, I think this is something that would make sense that I could do and really have a positive impact here on Long Island. A few years later, that expedition mindset would be tested in a very different kind of landscape. In 2012, Hurricane Sandy hit Long Island. Two weeks after the storm, many thousands are still out of their homes and thousands more have no power.

A long stretch of the East Coast looks like it lost a war. Sandy would expose deep vulnerabilities in the region's electric system and it badly damaged public trust. In the years that followed, New York restructured the Long Island Power Authority, with PSEG Long Island being brought in to manage the day-to-day operations of the grid. It offered a fresh start, but it was also a steep climb.

So in that year prior to PSEG Long Island starting its work here, the local utility was the lowest in the east large region of the J.D. Power study by a pretty significant margin. So we were coming on to rebuild, trust with our customers, focus on the customer experience, and all aspects including safety, reliability.

It would become a new kind of expedition, but the principles were familiar. For Brian and his team, it meant understanding the conditions, identifying gaps, and bringing the right people together. And more than a decade later, the work has really paid off. We are not only the most improved utility since the year after we started in J.

D. Power in the residential sector, but we are the top highest rated utility in business this last year. This is With Great Power, a show about the people building the future grid today. I'm Brad Langley.

Some people say utilities are slow to change, that they don't innovate fast enough. And while it might not always seem like the most cutting-edge industry, there are lots of really smart people working really hard to make the grid cleaner, more reliable, and customer-centric. Today, my guest is Brian Kurtz, Senior Manager of Special Projects at PSEG Long Island. We delve into the utility's remarkable comeback story, which wasn't just about restoring poles and wires.

It meant rethinking the customer experience from the inside out. So I talked with Brian about how they did it and how rate modernization played a big role in that story. PSG Long Island took over the management of the company in 2014. It was, the utility at the time was more focused on the traditional measures of success, but wasn't as focused on modernization and customer centricity.

So what we did, started this brand new customer intelligence business unit and started off by looking at what are the best in class in the industry from customer satisfaction doing? What are those lessons learned? Did deep dives into all of that through a lot of professional organizations as well as then started looking at our own customers. One of the ways we did that was through J.

D. Power and other ways were from both quantitative and qualitative surveys. So not only do we want to learn what the best in class we're doing, where were we on par with those services, and where do we have gaps? And as part of that, you organized teams across six indices, billing, rate, safety, reliability, customer service, and I think there were maybe a couple more.

Walk us through how that structure worked and what kinds of projects came out of it. So that was the best part of this. We were looking at all dimensions of that customer experience, as well as the supporting employee experience, having the right offerings for our customers and the right processes and support for our employees to be successful in delivering those programs and services We looked in power quality and reliability price areas billing and payment corporate citizenship customer communications and customer care And when we looked at each of these different dimensions of the customer experience, we developed what we called customer one teams, where we would develop a cross-functional team with a lead from each of the specialty areas as well as a core team to say, okay, what in this area of the experience can we improve?

Which would be the one or two top projects that we should start with until we moved into and got deeper and deeper in those offerings and improvements? We had an initiative then called The Next 50, how we're going to get the next 50 points in our satisfaction ratings to make sure we're focusing on the right things. all the way up. We had a customer experience council and things like that.

In 2018, PSG Long Island shepherded a major regulatory filing under New York's utility 2.0 Clean Energy Act framework. I'm curious, what were the major investments your team proposed, and how did you make the case to get them approved? So PSG Long Island took advantage of that opportunity in 2018 to really have a very robust filing that was not only going to help meet our clean energy and renewable energy goals for New York State, but to help modernize and enable the utility to become more customer centric in the process.

So in 2018, we got authorization to finish off the AMI deployment and deploy smart meters to our 1.1 million customers. And as part of that filing, it wasn't just to put out meters that are read remotely, that collect data in much smaller, more frequent increments. You don't have meter readers on the road.

You're reducing gas and fuel emissions as a result of this remote metering. But it's what are all the other AMI-enabled capabilities? What do smart meters and a smart system enable you to do? And there were many different aspects of that, from that safety and cost efficiency to things like our rate modernization roadmap to provide more rate options in a customer-centric way.

Now that we're collecting much more granular data and have the flexibility in our systems to deliver those options. So selfishly, I'm very interested in the rate modernization projects. So let's dig into that a little bit. I know you guys put a lot of time and effort into figuring out what would make the most sense for Long Island residents and customers in that regard.

So give us a high-level overview of the approach that you all took on that rate modernization piece. As we started developing this plan, we knew that we needed to do a lot of research. How are other utilities offering more options to their customers? What were those best practices?

What were their lessons learned? What should we know going into this to avoid potential challenges and mitigate those risks that others had to experience ahead of us? So we had a great opportunity through our professional associations and through our partners to do that research and even go on site visits with our cross-functional team out to places that were ahead of us on the curve. So there was Salt River Project.

There was APS, Arizona Public Service. There was PGE. All of these utilities we had the opportunity to learn from, both on-site as well as remotely. And you guys took a pretty pragmatic approach to this.

You started with a pilot to a smaller number of customers before a full-scale rollout. Why did you take that approach to a pilot before going to maybe more of an opt-out and maybe talk about what the program looked like previously and what it looks like today? Yeah, so we knew we had to go through this learning curve, and we had to figure out not only how do we implement these rate options for our customers, but within our systems and processes. So we needed that operational test, if you will, to both do the research as part of the plan, but then as we implemented the plan early, go slow to begin with so that we can learn and iterate and improve.

And so that was the approach. It was first get our enabling technologies and our core internal processes shored up. We needed an advanced billing engine. We're currently operating on a 1970s mainframe customer information system, what we call CAS, Customer Account System.

And we needed an advanced billing engine. So we went to those partner utilities and said, how are you getting the work that you're doing? What's important to customers in this space? And we wound up discovering the services of GridX here, which enabled us to do those advanced rate calculations, as well as offer some of the things that were important for customers.

Hey, what does this rate mean for me personally? So not just what is a rate design and a rate brochure, which, yeah, you can read about and kind of understand what the relative differences are. A time of use rate, as an example, for higher peak costs when demand is high and costs are high and lower off or even overnight super off times where the costs are less that can be passed on to a customer But they didn know how that worked for them So we needed the capability to do rate comparisons at each customer's level and then make that visible to the customers themselves directly through self-service from the backend program standpoint and through customer service representatives, the single source of the truth.

And so we built these tools and services, tested them out, did the customer research before, got the customer feedback afterwards from additional customer research, and continued to refine what we offered it. How did we frame it? How was it positioned? How easy was it to use?

And we wanted to make sure these things worked for our customers before we expanded the program. And because of that really rigorous methodology that we used in that voluntary opt-in time of use program phase, we came out with great success. We got recognized for that success in different industry associations. there was a decision made to now make time of use and what we now reframed as time of day, the standard rate for Long Island.

Meaning as a new customer with a new account, that would be your rate that you would start on if you didn't elect one of the other options you had as a customer. So that's good for new customers. We'd have all of our existing customers try out that rate. So we would migrate them.

We would change their rate. And then there were some new things we had to offer when we made that decision to go to an opt-out rate for everyone to try out and to be the standard rate, including shadow billing and guaranteed bill protection. So with shadow billing and guaranteed bill protection, if your customers would have been better off on their old rate compared to their time of day rate, they would have been made whole. That's obviously super compelling because it takes risk out of the program.

So I'm curious, what's the response been to that and the broader program as a whole? It's been tremendous with a heavy investment and focus placed on the awareness of the rates, the learning curve pre-enrollment, the adoption of them, and then supporting that through both overall messaging, global messaging in our marketing communications, but as well as personalized analysis of when are they using electricity, what's driving that usage during peak, AMI disaggregation, again, another use case for AMI and our Next Generation Insights, our Home Energy Management Customer Insights program.

Giving them those tools and that information, they've started to shift and save. Over 80% of our customers are now aware that they have rate options, and that time of day is out there. Over 70% of those customers three months after them being on a time of day rate have reported some level of shifting and saving. And we're seeing that whole population move from what was a revenue neutral rate to more than half of the customers saving at this point.

And we haven't been a full year with a good portion of our customers yet. that still to come over this next summer. I'm kind of intrigued. Normally, you think a 50 to 60-year-old mainframe would be a bit of a showstopper in enabling this kind of innovation.

How exactly were you able to work around that? And did it surprise you that you didn't have to do a rip and replace and still be able to successfully run a program like this at scale? Yeah, so we couldn't let that stop us. So we needed to find a solution that would work concurrent with our system and in partnership with our system.

And that's where the offerings that of an external, quote unquote, bolt-on advanced billing engine that partnered and worked back and forth with both our AMI systems, our meter management systems. and that data not being constrained by our current core billing system and yet being able to get the critical information back into our core billing system and to produce bills was essential. And we were happily surprised to find a solution with GridX that had all of those different features of both the billing experience as well as the customer experience.

And that's the technology side. There's a human element to this, too. And I mean, you touched on some of the marketing work you guys did, but you guys did some really creative and fun stuff, too. So I think there's like a mascot associated with this.

There's a lot of great videos. You know, talk a little bit about, you know, how did you make this accessible and attention getting for people that just don't think about their usage or bills regularly? Yeah, our marketing and customer engagement teams were phenomenal. First of all, all of our communications that were direct customer communications were customized to several really key segments of impact and or importance, whether that was a low-income, income-eligible segment, customers that have electric vehicles, our net meter and solar customers, each that have some different key attributes that we wanted to make sure we tailored the communication to.

But then from the fun standpoint, right, the format, the clarity of the message, the 20-hour energy deal, and eventually the time of day coach, Todd. Time of day, Todd, is a cute little clock and he is a coach now in many of our both online services social media in videos as well as in education materials those nurture emails and print mail He's there to help us, our customers through their journey. And PSG Long Island's current focus includes what's called an affordable and flexible load future.

And obviously, those are the two of the key macro things going on right now. But I'm curious, what does that mean in practice and why does it matter to PSG Long Island right now? So what drives the cost of the generation services that we have to obtain? We have to obtain a certain level of capacity for the demand of customers on Long Island.

So the highest demand periods when customers need the most electricity tend to be on those summer weekdays in the late afternoon and early evening hours where businesses are still operating. Their customers are coming in and out, and we need to provide all of that air conditioning, load, and things. Those businesses need to function at the same time. The kids are coming home from school, and they're turning on the electronics.

Maybe some of the parents are doing some of the laundry, getting home and they're plugging in their electric vehicle. So we need to plan for that highest demand of electricity, that highest capacity requirement at those hottest days of the year. And most of the time, all of that generation and power supply isn't being used for the majority at that highest of all levels. And it drives the cost of services here.

So when we can get our customers to change when they're using some of their highest flexible loads, like an electric vehicle, when are they charging it? When are they running their pool pump on high for cleaning mode? Running the dishwasher? How are they managing their cooling mode?

are they running that as high as it can be or is it something more efficient from a pre-cooling standpoint and then dialing it down a couple of degrees during those peak times that drive costs down for the utility and those all get passed right along to our customers so what you described in total has really been a complete transformation in many ways for psg long island and it's getting a lot of really great attention i know your time of day program and time to use pilot has won some awards.

And then last year, you all won the J.D. Power Business Award for the most improved electric service provider in the nation, which is incredibly impressive. After starting lower than that, what does that arc tell you about how organizational transformation actually happens?

So organizational transformation happens when you have a steady focus on the customer experience, the needs of your customers and who you're serving, the employee experience, providing the tools that you need to deliver that opt-in customer experience. And when you drive on that continued modernization, efficiency, reliability of all of those things, and you invest and you commit to that all the way from the highest levels of the organization with consistency, the executive committee, the senior leadership team, down to the frontline employees at all those different levels that have that consistency in investing in these improvements, real change could be made.

We call this show with great power, which is a nod to the energy industry. It's also a Spider-Man quote. With great power comes great responsibility. So, Brian, tell us, what superpower do you bring to the energy transition?

I think it's my drive and passion for continuous improvement. And it's enabled me to be successful on some really large challenges, but have had all these opportunities with our entire team pulling in that same direction. It takes a village. And when you get together, you pull in that same direction, you tackle those big challenges and make these improvements with consistency, you're going to achieve great things.

Awesome. Brian, so good to have you on the show. Thank you so much for your time. Thank you.

Brian Kurtz is Senior Manager of Special Projects at PSEG Long Island. With Great Power is produced by GridX in partnership with Latitude Studios. Delivering on our clean energy future is complex. GridX exists to simplify the journey.

GridX is the enterprise rate platform that modern utilities rely on to usher in our clean energy future. We design and implement emerging rate structures, and we increase consumer investment in clean energy, all while managing the complex billing needs of a distributed grid. Mary Kathleen O'Connor produced the show. Anne Bailey is our senior editor.

Stephen Lacey is our executive editor. Sean Marquand composed the original theme song and mixed the show. The GridX production team includes Jenny Barber, Samantha McCabe, and me, Brad Langley. If this show is providing value for you, and we really hope it is, we'd love it if you could help us spread the word.

You can rate or review us at Apple and Spotify, or you can share a link with a friend, colleague, or the energy nerd in your life. As always, thanks so much for listening. I'm Brad Langley.