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Tue, Jun 27

Episode #128: 'Exploring the Complexities of Utility Regulation' with Brooke Trammell, VP of Regulatory and Pricing at Xcel Energy [an Energy Central Power Perspectives™ Podcast]

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The utility sector is undoubtedly among the most tightly monitored and regulated industries across the economy, and with great reason. Reliable and affordable availability of power is not something that customers can go without, and with increasingly present goals like sustainability and equity the intricacies of how regulations interact with the energy industry the challenges are only growing deeper. Luckily for the rest of us, a number of notable leaders continue to step up to provide the type of guidance and expertise needed to continually evaluate utility regulation and ensure the health of the sector remains strong. One such leader joins the Energy Central Power Perspectives Podcast this week, and her name is Brooke Trammell, the Regional Vice President of Regulatory and Pricing at Xcel Energy.

In this episode, Brooke shares with podcast host Jason Price and producer Matt Chester the intricacies of utility policy, the regulatory landscape, and its impact on the power sector. In this conversation, listeners will hear about Brooke's journey into the world of utility regulation and how today Xcel Energy is navigating the challenges and opportunities presented by the clean energy transition, electrification of transportation, and other modern tools shaping the power sector. Listen in as Brooke shares her experience and guidance as it relates to the upcoming decisive decade for the power sector.

 

Prefer to Read vs. Listening? Scroll Down to Read Transcript.

 

 

Thanks to the sponsor of this episode of the Energy Central Power Perspectives Podcast: West Monroe.  

 

Key Links:

Brooke Trammell's Energy Central Profile: https://energycentral.com/member/profile/brooke-trammell-0

Did you know? The Energy Central Power Perspectives Podcast has been identified as one of the industry's 'Top Energy Podcasts': blog.feedspot.com/energy_podcasts/ 

 

TRANSCRIPT

Jason Price: 

Welcome to the Energy Central Power Perspectives Podcast. This is a podcast that brings leading minds from the energy industry to discuss the challenges and trends that are transforming and modernizing our energy system. And a quick thank you to West Monroe, our sponsor of today's show. Now, let's talk energy.

I'm Jason Price, Energy Central podcast host and Director with West Monroe, coming to you from New York City. And with me as always, from Orlando, Florida, is Energy Central Producer and Community Manager, Matt Chester. Matt, we have the opportunity to get wonky in today's episode, discussing the intricacies and nuances in the regulatory side of the utility industry. As we know, the power sector is among the most tightly regulated in the country, and it really sits in a unique position because of that. But not everyone in the industry is plugged into the day-to-day impact of that landscape. Before we dive in, can you highlight for our listeners on the Energy Central website where they may be best able to learn from the leading voices in utility regulation?

 

Matt Chester:

Sure, Jason. I'm always happy to plug some of our great resources. on the pages of energycentral.com, we regularly see discussion about the latest policies and proposals impacting the power sector in our utility management group. And for regulatory and policy that's a bit broader than utilities and covers the wider environmental and sustainability areas, I'd point listeners to our community that's known as the Energy Collective, which again, you can find on energy central.com. And of course, these topics are ones that come up pretty regularly on the Energy Central Power Prospectus Podcast. I'll have a quick note here for anyone listening in to definitely subscribe on whatever podcast application they're listening from now, and hear those discussions that cover the latest and greatest as they have them, because we always try to bring in timely guests and topics.

 

Jason Price: 

That's great, Matt. Thank you for that. No doubt the conversation we're set to have today will inspire some new questions and interest in the utility regulation space, as we're chatting with one of the highest ranking officials covering regulatory issues for one of the nation's more prominent and progressive utilities, Xcel Energy. We're thrilled to welcome from Xcel Energy, Brooke Trammell, regional vice president of regulatory and pricing. Brooke embodies utility regulations since first joining the industry and now is at a critical junction in history where we have a lot to learn from. Brooke, let's wait no further. Brooke Trammell, welcome to the Energy Central Power Perspectives Podcast.

 

Brooke Trammell:

Thank you, and thanks for having me today.

 

Jason Price: 

Brooke, you're a self-described utility regulation nerd. Those are your words. But before we dive into some of the fun topics, share for our listeners how you found this field and where it led you at Xcel Energy.

 

Brooke Trammell:

I discovered utility regulation as an undergraduate in college, and I say discovered because until 2006, I truly didn't know what the utility industry entailed. I was able to land a job at New Mexico State University Center for Public Utilities, and my job was essentially to plan training conferences. Basically, help the university train industry professionals on the details of utility regulation. My role was essentially that of an event planner. And just like any other experience, you can make more of it based on how you approach the work. I quickly met individuals from utilities and commissions across the country and connected the value of a Master of Economics degree specializing in utility regulation to a unique and likely secure career.

At the time, NMSU was only one of three universities in the country that offered that degree, and that degree has since opened a world of professional opportunities for me. And paired with the relationships that I've developed over time, other degrees and professional experiences that I've had have catapulted my career over the last decade. Now NMSU offers a certificate program in addition to that formal degree, but I really accredit that to my start in the industry and I'd encourage anyone who's interested to check out their program.

 

Jason Price: 

That's great. Brooke, we brought you in today to give us a deep dive into the regulatory office at Xcel. But before we do that, recently in the news, regulators in some states where you operate are permitting Xcel to own the charging networks, and that is counter to what we're seeing across the country. There's been considerable pushback in the marketplace about allowing a utility to own the charging network for EVs. What was the background to this decision and how are you managing it?

 

Brooke Trammell:

Oh, great question. And it's a big part of Xcel Energy's carbon vision, including electrifying transportation, so really happy to address this off the bat today. I think a lot of this controversy, if you will, or discussion stems from the traditional and foundational monopoly nature of a regulated utility and whether utility ownership of EV charging infrastructure will prevent other third party or other investment in this space. And I think what we're seeing across the country, and it does vary, is that utilities can have a role to play in investing in charging infrastructure and shouldn't be prohibited. But again, that's a intense conversation. But I think what we need to stay focused on is that all the investment from all different kinds of entities can benefit this sector.

And in particular parts of the country, where there's lack of infrastructure and range anxiety, we need the investment to come and serve these communities, serve these potentially underserved areas, and be respectful of the competitive forces that will ultimately drive costs down for customers, but we want to make sure the investment occurs. I think that's why you're seeing more utilities propose active engagement in this space, to ensure that the customer need is met.

 

Jason Price: 

Yeah, and we'll certainly have to bring you back in and do a deeper dive just in that topic alone. But let's get into the meat of today's discussion. Knowing that we're in quite a decisive decade for the power sector, and that includes preparing the clean energy transition to getting ready for the EV revolution, which you were just discussing regarding the EV charging and for adapt, the myriad of modern tools that will transform the sector. You sit in the regulatory world. Talk to us about what that means and how it impacts your role at Xcel Energy.

 

Brooke Trammell:

Sure. Fully regulated utilities have a tremendous opportunity to deliver customer value and meet the changing customer preferences almost in every step of our vertically integrated utility framework. That's from generation, transmission and distribution, all the way through the customer experience components, but as well as on the demand side solutions and other customer programs. From a regulatory or regulated perspective, the key is working really closely with our regulators and stakeholders on these key components of our strategy, and discussing the perspectives through these evolutions and through these changing industry perspectives to ensure alignment, but also explain how things are operationally becoming a little more complex, because perspectives are really going to differ on what the right solution is and also what the reasonable price is going to be for these potential future pathways.

But as we navigate this decisive decade, effective stakeholder engagement is probably more important today than it ever has been in the past. And really understanding and respecting those different perspectives, really outlining the utility plans and understanding how they'll be evaluated and decided upon is really going to build the alignment. Maybe not always the agreement, but the alignment that we need to understand the future paths in front of us, ensuring that we pick the right path to go down. At Xcel Energy, a lot of this is materialized into starting conversations about future plans, future initiatives, future programs, future investments, again, a lot sooner than we have in the past, and it's bringing interested parties together earlier in the planning stages, sharing our vision and integrating perspectives into that process. Regulatory processes can take a long time. They can take many, many months as filings progress through jurisdictional regulatory processes. But as we go through that journey together as a group of stakeholders, a group of interested parties, interveners, commissioners, commission staff, utilities, that's going to produce the best result at the end of the day.

 

Jason Price: 

Sure. And no doubt laying a level of complexity on top of it is that what's interesting about Xcel Energy is that you cover a wide range of states, which crosses over different grid operators in different jurisdictions. I have a loaded question for you, Brooke. How do you keep track of all the rate cases, regulatory orders, and all the related regulatory requirements you have to fulfill? What does a utility regulatory office look like? What are some of the tricks to managing all this and how does the regulatory landscape shape the way that Xcel approaches planning its future?

 

Brooke Trammell:

Well, first, if you look at a regulatory team, you're going to see a great group of people. People from very diverse backgrounds, people who have worked in other departments in the company, people who have started their career potentially even in entirely different professions. And we process hundreds of regulatory proceedings every year and every jurisdiction. Organization is of course key, and we're increasingly finding ways to leverage technology. With geographically dispersed teams, we're leaning into the collaboration capabilities of various systems, including Teams, SharePoint, but also using these technologies to help us automate repeatable tasks, to help us coordinate projects schedules and attract compliance matters. In any given day, we're regulatory team or writers, we're financial analysts, we're project managers, were problem solvers, but probably most importantly, we're translators.

Within the company, we translate regulatory decisions, regulatory implications, requirements. Similarly, externally, we translate our business and the needs of our customers and we share a story. But when it comes to planning for the future, we recognize that each jurisdiction, each community that we serve is unique. As an organization, how we approach our work has some pretty common threads across all eight states that we serve. And strategically, our priorities are to lay the clean energy transition, enhance the customer experience, and work to keep bills low. That means culturally, business strategies are evaluated alongside the regulatory effectiveness they promote within each regulatory jurisdiction. Just like I was describing earlier, it's not about regulatory effectiveness through the lens of one entity, like the utility, but rather a comprehensive evaluation of regulatory effectiveness for all stakeholders, all customer groups and the regulators involved in making those decisions.

 

Jason Price: 

All right, but I want to pull some customer thread a little bit here, because every customer is different in every state. Not only are the jurisdictions different, but customers may be different in terms of where their values are and what they're demanding or expecting from their utilities. Perhaps some are more eager for renewables and some are not. Some are willing to pay a little bit more, some aren't. Some are willing to offer or allow development to go on in their community, some do not. Where do you draw the line and how do you manage through this? When does Xcel Energy plan for its future in the world you play in, where regulation and pricing, and how does the varying customer landscape shape general approach to all this?

 

Brooke Trammell:

Well, this might sound a little simplistic, but I like to start with an initial analysis, that if one were to put it down on a piece of paper, it'd probably look a little bit like a three circle Venn diagram. And I start this by trying to answer three questions. What do our customers want or what do our communities want? What do we want and what is our regulator going to approve? If the answer to those three questions is the same or looks very similar, obviously delivering on those items and achieving cost efficiencies while doing that becomes the priority, particularly if those answers look real similar across all the states that Xcel Energy serves.

When alignment exists in these answers within a jurisdiction, but maybe doesn't exist across the Xcel Energy footprint, our approach obviously becomes a lot more agile. And if the answers aren't lining up at all on those three questions, it's really a health check. We need to potentially check our strategy or engage externally to better understand the gaps so it can be closed. That sounds really simple, but it's a good place to start. And if we can't answer for ourselves those questions, we're not ready to propose something. But like I said, if the answers aren't consistent and aren't delivering goals for all of our stakeholders, we might not have the right strategy to begin with and need to go back to the drawing board.

 

Jason Price: 

So far, we've been talking about the challenges that Xcel Energy uniquely faces, given the big landscape that you cover and the diversity of the territories and such. But what about some of the benefits or opportunities that are not necessarily afforded to other utilities that you may have? Can you talk about some of those? Are there lessons you've been learning, perhaps still ones that other types, sizes or located utilities could benefit from?

 

Brooke Trammell:

Well, I'll start with two benefits that I see at Xcel Energy, and I'm sure every person, every utility would start with this one, but I'll start with our people. I really believe that we've got a really great workforce at Xcel and a cultural bind within the company that creates a bit of a family atmosphere, and there's such a strong commitment to service within our company and within our communities that really creates a great company culture. But also, we have pretty incredible geography, and we're very fortunate in the states that we serve to not only have these wonderful communities and wonderful employees, but access to some of the best wind and solar resources in the country. When we look at the resource profile or the resource potential, particularly for renewable resources and other clean resources, the resource profile in our backyard is very strong and we can turn that resource profile into customer benefit.

Not everyone has the luxury of having those kinds of resources, again, in their backyard, and that's not something that we take for granted. We're very, very fortunate for our geographic location, and we do think this sets us apart even from other utilities who now have very similar goals as Xcel Energy. When it comes to lessons learned, I would offer speed. As we think about the future, particularly in the next 10 to 20 years, not every customer, community, regulator, policymaker is going to want to move at the same speed. And in fact, we can probably count on they're going to want to move at different speeds. Some are going to want to move faster in a particular area. Some are going to want to move fast in every area, and some are going to challenge even what their neighboring states are doing.

That's okay. But there needs to be an understanding of the pros and cons of those different paces. And as a company, we have to understand what those different paces mean for cost efficiencies in a large organization, but also what it means for where the company might be, where our customers might be, where our programs solutions may be down the road if we're taking a different starting point now. Again, that goes back to stakeholder engagement and helping our stakeholders and our regulators understand where the decisions we make today will place us further down the road.

 

Jason Price: 

I want to go back to a phrase I used earlier, which we actually picked up from you in our pre-planning session. And that is that you had described that we're living in a decisive decade. Xcel Energy is well known to be among the earliest and most aggressive in terms of its targets for the clean energy transition. What went into Xcel Energy making this decision to lead in this the way it did? And so many utilities have been anxious about being first to make such broad public goals, but Xcel seems to have embraced it. Why is that?

 

Brooke Trammell:

Before we announced our first carbon goal in 2018, we were confident in our ability to deliver customer cost savings, and we believed in the potential for technological advancements. Before anyone else was aggressively committing to clean energy goals, we were confident in our ability to deliver those savings because of the clean energy resource profile and our geographic footprint, but also because we were demonstrating the delivery of those savings through our Steel for Fuel initiative. We launched our Steel for Fuel initiative, which included numerous wind projects in, I think, over 11 states in the 2016, 20 17 timeframe. And since those wind farms have been developed and placed in service, we've secured over $3 billion in avoided fuel costs and PTC savings for customers across Xcel Energy's footprint.

I remember our CEO at the time was quoted as saying, "We backed up the truck because the fuel of tomorrow was on sale today." And that was really a recognition that we could capture remaining, at the time, federal production tax credits for wind generation and replace the fuel component, some of our fossil units on the system with the fuel of the renewable wind facilities. Obviously wind doesn't have any fuel costs, so we were replacing that energy from our fossil generation with renewable energy, again, in our resource rich service territory. We knew to get beyond 80% carbon emission reductions, we were going to need new technology and flexible technology, especially as we added more and more intermittent generation and incorporated new resources across the system. This was technology that didn't exist at the time. And in 2016 and 2017, you'd hear our CEO Ben Folk talk about not even knowing the technology that was going to be present in the 2030s, 40s and 50s, but having confidence that it would be developed.

As we see today, government policy and investment community continue to fund technologies as well as provide financial support to further the development and deployment of affordable, reliable, and increasingly clean technologies. These are all proof points, in my opinion, that our vision almost 10 years ago was the right one, and the reason as a corporation that it hasn't changed. We continue to believe in our ability to deliver customer cost savings through the integration of renewable and clean energy resources on our system that secures our clean energy vision because it's really founded on reliability first, and it's also founded on affordability. Because no matter how reliable our clean energy transition is going to be, if it's not affordable, it's not going to work for anyone.

 

Jason Price: 

Nicely put. And I really enjoyed having an opportunity to nerd out with you on some of these regulatory topics and decisive topics that is impacting our industry, so thank you for that. Brooke, we now are going to pivot to what we call the lightning round, which gives us an opportunity to learn more about Brooke Trammell the person, rather than the professional. We ask you a set of questions, five or six questions. You are to keep your response to one word or phrase. Brooke, are you ready?

 

Brooke Trammell:

I am ready.

 

Jason Price: 

What is your comfort meal?

 

Brooke Trammell:

Ice cream.

 

Jason Price: 

What superpower would you pick?

 

Brooke Trammell:

As a mother of a three-year-old and a five-year-old, I'm going to go with telekinesis. That could be very useful.

 

Jason Price: 

Who are you inviting to your dream dinner party? And it could be a major celebrity or historical figure.

 

Brooke Trammell:

Ooh, I'd say historical figures. If I had to pick one, I think my husband would want me to invite John Wayne. That's probably a topic for another podcast, as well.

 

Jason Price: 

If you didn't end up at your current role in this energy industry, what alternative career path would you have taken?

 

Brooke Trammell:

I definitely probably would've picked a career in some kind of immersive industry. I'm going to go with animal health.

 

Jason Price: 

This next question is an important one. Given your role in regulatory, what is your trick to staying positive for the work-life balance?

 

Brooke Trammell:

Effective planning.

 

Jason Price: 

What are you most passionate about?

 

Brooke Trammell:

My family.

 

Jason Price: 

Fantastic. You have perfectly navigated lightning round, and for doing so on the podcast, you've earned the final word. What single most important message you hope our listeners retain and internalize from our conversation today, especially those in the utility sector that may not be as entrenched in the regulations as you are?

 

Brooke Trammell:

I would offer, and I think everyone in the industry can recognize we have a lot going on. Perhaps maybe now more than ever, recommend to folks to listen at least twice as much as we speak. There's a lot we can learn from each other. There's a lot we can learn from our customers. There's a lot we can learn from other industries too. And as we see the dynamics of our industry changing and being influenced by so many other forces, customer preferences and technologies, it is really, I think, a time to lean in to what's happening around us, listen, and take those perspectives and really build them into our future planning and future strategies.

 

Jason Price: 

Fantastic. Brooke, we've hit about 130 podcasts and we've rarely, if ever, had a deep discovery in the regulatory world. I want to thank you for your insight and your willingness in your busy day to share some insight and best practices and perspective with the Energy Central community. Thank you so much for taking the time and spending time with us on Power Perspectives today.

 

Brooke Trammell: 

Absolutely. Thanks again for having me. I enjoy the program.

 

Jason Price: 

As did we. And you can always reach Brooke through the Energy Central platform, from where she welcomes your questions and comments. We also want to give a shout out of thanks to the podcast sponsors that made today's episode possible. Thanks to West Monroe. West Monroe works with the nation's largest electric gas and water utilities in their telecommunication grid modernization and digital workforce transformations. West Monroe brings a multidisciplinary team that blends utility, operations, and technology expertise to address modernizing aging infrastructure advisory on transportation, electrification, ADMS, deployments, data and analytics and cybersecurity. And once again, I'm your host Jason Price. Plug in and stay fully charged in the discussion by hopping into the community at energycentral.com, and we'll see you next time at the Energy Central Power Perspectives Podcast.

 

About Energy Central Podcasts

The ‘Energy Central Power Perspectives™ Podcast’ features conversations with thought leaders in the utility sector. At least twice monthly, we connect with an Energy Central Power Industry Network community member to discuss compelling topics that impact professionals who work in the power industry. Some podcasts may be a continuation of thought-provoking posts or discussions started in the community or with an industry leader that is interested in sharing their expertise and doing a deeper dive into hot topics or issues relevant to the industry.

The ‘Energy Central Power Perspectives™ Podcast’ is the premiere podcast series from Energy Central, a Power Industry Network of Communities built specifically for professionals in the electric power industry and a place where professionals can share, learn, and connect in a collaborative environment. Supported by leading industry organizations, our mission is to help global power industry professionals work better. Since 1995, we’ve been a trusted news and information source for professionals working in the power industry, and today our managed communities are a place for lively discussions, debates, and analysis to take place. If you’re not yet a member, visit www.EnergyCentral.com to register for free and join over 200,000 of your peers working in the power industry.

The Energy Central Power Perspectives™ Podcast is hosted by Jason Price, Community Ambassador of Energy Central. Jason is a Business Development Executive at West Monroe, working in the East Coast Energy and Utilities Group. Jason is joined in the podcast booth by the producer of the podcast, Matt Chester, who is also the Community Manager of Energy Central and energy analyst/independent consultant in energy policy, markets, and technology.  

If you want to be a guest on a future episode of the Energy Central Power Perspectives™ Podcast, let us know! We’ll be pulling guests from our community members who submit engaging content that gets our community talking, and perhaps that next guest will be you! Likewise, if you see an article submitted by a fellow Energy Central community member that you’d like to see broken down in more detail in a conversation, feel free to send us a note to nominate them.  For more information, contact us at [email protected]. Podcast interviews are free for Expert Members and professionals who work for a utility.  We have package offers available for solution providers and vendors. 

Happy listening and stay tuned for our next episode! Like what you hear, have a suggestion for future episodes, or a question for our guest? Leave a note in the comments below.

All new episodes of the Energy Central Power Perspectives™ Podcast will be posted to the relevant Energy Central community group, but you can also subscribe to the podcast at all the major podcast outlets, including: