INTERVIEWEE: Bob King (BK)
INTERVIEWER: David Todd (DT)
DATE: November 19, 2018
LOCATION: Austin, Texas
TRANSCRIBER: Robin Johnson
MEDIA: HD video
[Please note that the numbers given below mark time codes for the interview recording.]
DT: My name is David Todd. I’m here for the Conservation History Association of Texas and we’re in Austin, Texas. It’s November 19, 2018 and we have the good fortune to be visiting with Bob King, who is an engineer who’s been involved in many aspects of—of energy conservation, energy efficiency, energy modeling, just a whole suite of things, and we’re looking forward to learning more about that work. And I wanted to thank you for taking time to talk to us.
BK: Sure. A whole—a whole suite of things that mean I’ve got attention deficit disorder.
DT: Well let’s—let’s try to start as close to the beginning as we can. I understand that you were born in Albany, New York, grew up in Cocoa Beach, Florida. And I was curious if—if there was any experience—early kind of instances of—of interest in energy or the environment, in general, that you can trace your way back to?
BK: Well, you know, the very earliest memories I have of enjoying myself as alive and in this world were really as a kid outdoors. And we lived in Buffalo after—after Albany and moved to Florida a little bit later. But—but even initially in New York, we lived near woods where there were, you know, trees and build forts and all that kind of stuff outside. And when we moved to Florida, it was, you know, you could be outside all year round. And we lived within a block of the beach.
I could literally climb a palm tree on the corner of the second floor and get up on the chimney and check the surf in the morning, decide whether to go there or back to bed until it was time to go to school. And—and we had the inland waterway behind the house. So we were literally on the wetlands on the backside where I could paddle out and see manatees and all kinds of things in—in a kind of wilderness for a young kid even there. So I think that was—that was part of what made me alert to and aware of the environment generally, although I just thought of it as, you know, my environment, where I lived, you know, what was around me.
And—but I was aware we—you know, as a kid, we knew all the birds, we knew all the snakes, we knew all the sea creatures and so on. So I think exposure to that was—was good. But I also grew up in, as you’ve said, there in Cocoa Beach, Florida. It’s actually right next to Cape Canaveral. And I have a—a family of police chiefs and—and fire chiefs. And my grandfather was actually the Port Authority at Cape Canaveral. They now have a bridge and a road named after him and so on. He developed that—that port right there.
But that whole area when I grew up was really thriving and alive. I mean, Kennedy, while I was a kid, changed the name from Port Canaveral to Port Kennedy or—or Cape Kennedy at Port Canaveral I guess so the military and the missile launching part was called Cape Kennedy. And, as a young boy out of high school, in summers I actually worked as a surveyor out on—on the Cape. And dodging wild boars and snakes and whatever to try and do a topographical map of the Cape as a result of one of the—the problems they had where they had a fire and had to eject the capsule—land it in the swamp someplace.
And it took them a while to find it. So the—that whole cape was a wilderness area and I got to know that because I was one of the surveyors for another great sort of wild experience for me. But—but I also came into contact with so many scientists in that community where I grew up, in fact, the next door neighbor was with RCA which, back then, was a lot more than, you know, albums to play on the record machine. It was a lot of telecommunications and science associated with the satellites that were just beginning to be put up at the time.
And they were already experimenting with solar cells and fuel cells and things like that. So, you know, I just heard about things the average kid in America probably didn’t hear about. I had a little bit of a intuitive knack for math I think and was attracted to that sort of thing. So I’m getting old enough I don’t remember a lot of names but, oddly enough, I remember Mr. Griffith, who was the seventh grade science teacher at—at—at my school. And he told us more about those kinds of things and had the—the ability to answer lots of questions.
And so I told him that I wanted to design a solar car for the seventh grade science fair. That was the first time I really kind of delved into it. Should I just keep talking?
DT: Go right ahead.
BK: So—so the important learning from that was actually that you couldn’t design a solar car. The fact is it was the—the first time that a—in a less conscious way or less mathematical kind of way, I was able to understand that solar energy is a very diffuse form of energy—want to—I don’t want to say weak necessarily, but, I mean, no you go stand outside. And, after a while, you get a sunburn, but it’s not like standing in a gasoline fire, right. It’s energy, but it’s a different quality of energy.
And so I discovered even in seventh grade that I had to cover the entire roof of a ranch style house to generate electricity sufficient to drive a little car, right. It was all model scale. But the ratio of the area to, you know, the amount of energy you got out of it, helped me to understand that there are different qualities of energy. And later in life, I read a book called—I want to say it’s Energy, Power, and Society [Environment, Power, and Society is correct title] by Howard Odum, who, with his brother, had won a Nobel family award called the Crafoord Prize for energy systems analysis.
And we actually spent a few years together doing analysis of energy quality of different kinds of energy to help understand kind of what makes the whole engine of the economy go. But we—we can come back to that. I’ve jumped into the future.
DT: Well I, you know, I’m—I’m intrigued by this—this place that you were growing up in Cape Canaveral, later Cape Kennedy, where you had this—this mix of, you know, wild hogs, snakes, marsh, beach, surf and then you had this very high tech world at—at the Space Center, and, you know, that you had this mix of exposure to the natural world but also its artificial manmade world at the same time.
BK: Right, right. It was like anything was possible. And—and we were living in—in what was really beautiful paradise at the same time in a way. I did grow up a surfer and I still surf actually out here at Inland Surf, where they’ve built a surf pond or lake here in Austin. Did you know that? So anyway.
DT: Well, you know, and I’m—I’m glad you mentioned that because I know for some people who are surfers, it is one of the most intimate yet holistic kind of all body experience of being in the natural world to be on a surfboard in the surf. Is that the case for you?
BK: You can sometimes have a moment of real presence when you’re in the—in the power of the wave and—and let it take you. And, you know, just be with it. And the—one of the most exciting moments you can have is on a—on a wave in the ocean and have a porpoise come up next to you, for instance, and just ride the wave with you or something. Yeah, it’s indescribable.
DT: Well, so you—you’ve told us a little bit of your childhood there in—in Florida. Ca—maybe we can go forward and—and talk about your college experience. You—you went to Vanderbilt, studied civil engineering, is that right?
BK: Yeah, yeah. I—I got a swimming scholarship actually to prep school and then Vanderbilt. And so I had to spend a lot of time in the pool, but I was determined to go, I thought by now, to learn how to build solar homes, which I, you know, tinkered with in the seventh grade. And I—I’d drawn homes and thought about architectural design and things like that as a kid. And I was following up on it. I wanted to—I wanted to go learn more so I applied for Engineering School. I wanted to know how not just to design them, but how to make them work.
And—and m—the functions as well as the design of it was interesting to me, right. Now at the same time I showed up at Vanderbilt at the—about a month after Bobby Kennedy had come through and—and then gone on to L.A. to be killed and the Vietnam War was really—and the protests against it were really kind of reaching a peak at the time. And part of that—I don’t want to say radicalized me—but opened my eyes a little bit more on politics side of things.
At the same time, the community—I’d moved off campus in my second—or third and fourth years of college there and was in a very nice community that was kind of wiped out for urban redevelopment. And so I also became more aware of local politics and planning and how those things affect things and so on. And I ended up, instead of going off to design houses, became more engaged in the broader policy issues. It became clear to me that the technology isn’t actually our limiting factor.
It’s the people agreeing on a joint vision of the future and a shared kind of—yeah, future vision that we want to try to reach and how to get there. And so I ended up applying to the LBJ School of Public Affairs, and—which is how I got here to Austin.
DT: And so what were you hoping to study when you were at the LBJ School?
BK: Well, it was—I saw an advertisement for, believe it or not, it’s what kind trig—tripped it off and I was, you know, receiving letters of interest from certain employers and so on, you know, doing highway work or other things civil engineers could do, none of which seemed really exciting to me. And the—when I said it was in the pitch of battle over the Vietnam War, the economy was down so the co—job market was not real strong anyway, so going back to school made some sense.
So my thought was just simply to try to understand more about how the policy process works and how these decisions get made. As I said, I’d, you know, been kind of alerted more—became more aware of this. I wasn’t just a surfer and a swimmer and a student anymore. I was becoming more aware of the world around me, coming to me a little bit late because I was engaged in those other things. But the LBJ School actually had a scholarship program available and I was not a rich kid, so that was attractive. And I interviewed and the dean I really liked.
I liked their attitude and they—they were offering me an opportunity not just to learn about government, but part of their promise was to help me become engaged in it and to help me understand how to have an impact. And—and that was attractive. So I—I didn’t mention my father, when we were in Florida, had started his own business, but broke away, let my mother run that and ran for local office there and then ultimately state office. So I had a little bit of experience of political world.
I had a—Uncle Carlton was a congressman from back in New York and, like I said, police chiefs and fire chiefs run through the family too. So, public life was not foreign to me.
DT: Well that’s a—I guess one kind of total immersion way to understanding about politics if you’ve got some politicians in your life. Well and—and I think you were talking about how going to the LBJ School, not—not only gave you access to classroom experiences but also that there was some sort of internships or externships. Is that right?
BK: Right. Well my first internship was with the Lieutenant Governor, Bill Hobby at the time, who I have so much respect for. He was really a class act. And he was very aware of energy, of course. Here we are in Texas where energy is such a—a mainstay of the economy, but he was very open-minded and very intelligent and very interested in exploring alternatives and thinking about the future. And, in fact, I think he saw the early oil embargoes coming and was already thinking about, you know, how we protect our place in the world and that kind of thing, and had started something called The Governor’s Energy Advisory Council, which Dolph Briscoe was the governor at the time.
And he was more of a anti-government—government person. Came in from, you know, his huge ranch in Uvalde and was a very Christian upright, honest guy who had a big following, but was a little bit disengaged about some more modern economy problems. And Hobby was smart enough to make it The Governor’s Energy Advisory Council and the governor occasionally showed up for meetings but Hobby really ran it. And—and that was exciting time for me because I was just made a staffer as a, you know, I was still a student—graduate student.
But I got to staff the Energy Supply Committee. And there were people on that committee like George Brown, like T. L. Austin, who was kind of the—I think he was CEO of what was then Texas Electric Utilities. Who else was on that? Just—anyway. One of my old teachers was Al Hildebrand, who was the father of the solar power tower, did all the mathematics to figure out all the angles from a field of mirrors to a single concentration point to—to boil water or some fluid to make steam and generate electricity from the solar power tower.
There was actually a solar power tile—tower now finally in California. And I think there’s a smaller demonstration somewhere, but this was back in 1972 that Hildebrand was doing those calculations with Lorin Vant-Hull, another scientist from the University of Houston, started the Houston—University of Houston Energy Center or something to that effect which is gone now I think, unfortunately, but they—they’d done some really great work down there. And I met a guy named Peter who—I’m not going to remember his last name—at Texas A&M, was an electrical engineer doing some good things on efficiency, later helped me start the Texas Solar Energy Society.
And Vaughn Nelson was a—a wind power theorist and an engineer at what was then West Texas State University. And so anyway, I was just introduced to all these guys who were really out there trying to work on the kinds of things that I’d imagined and was trying to think about. So I helped bring them together and put together reports for the Governor’s Commission or—or Council, which included some statewide elected officials, as well as the—the big names from private sector. And—and we put out some very interesting reports that were way ahead of their time back in that was ’72 to ’74 I guess.
And as a lot of things happened in my life for a few years in there, but—but when I came back to Texas, I got a job at then what was called the Texas Energy Advisory Council, which was a—another—a second iteration of that, where the legislature actually passed a bill creating an actual agency, so not just a governor appointed circle of people with a little budget from lieutenant governor or the governor’s budget, but—but an actual agency. Milt Holloway became the director and I was—I was the lead staffer for solar and renewables.
And, in fact, we called—we called all renewable energy solar energy at that time. The Attorney General called it So-Lar energy, very Texas twang to him. But…
DT: Well was a lot of this—this interest, especially after ’73, influenced by the Oil Embargo? Was that fueling a lot of the—the pressure?
BK: Yeah, certainly. I—I told you that I think they anticipated that to some extent. I was actually—I’d gone from the Energy Council to the Texas Railroad Commission for a little while. I worked for the Chairman there and was trying to create a public information office just to begin to educate people about energy and the role of energy in our lives and why it’s important and how it affects the price of everything because it’s embedded in everything and why maybe paying the full price for it would make sense because it would, you know, teach people also to conserve it, how valuable it is.
But, of course, we live in an economy in which we try to keep energy cheap and we do all kinds of things through taxes and policy to keep energy cheap because it props up the en—the economy and also chews up the environment faster. But that’s a—that’s another topic. But I was just, again, I—I thought I’d found a place where I could have some impact so I was creating the Office of Public Information for the Railroad Commission on behalf of the Chairman there for a couple years. But anyway, then came back and did the governor’s energy—or the Texas Energy Advisory Council as their renewables guy.
DT: You know, I—this is probably naïve but I’m—I’m just surprised that there was interest at that high a level of the, you know, the governor, the lieutenant governor or the Railroad Commission, in the alternative energy when I think, you know, here we are gosh, forty years later and I think that—that some of the ideas of renewable energy are—are still kind of a hot potato and they’re a little bit—raise eyebrows and concerns, you know, among those who are—who are at the very top of—of political power.
BK: Well I think they’re, you know, some of those people were interested in it just from the point of view of what do we have to worry about in the future or is this something we should invest in, right. If you’re in the oil business and you think you’re running out of oil, maybe you ought to know about wind and renewables and that sort of thing.
[misc. phone ringing]
DT: Well I’m just curious about the—the reaction of people in—in politics to alternative ideas when, you know…
BK: Yeah. So it is interesting that the leadership back in the ‘70s was quite open to learning about renewable energy, energy efficiency, other things that were all kind of just initially coming into awareness as potential real resources back then. But, on the other hand, they weren’t really threatening yet at the time, right. So I think the difference is today that these things have become so mainstream that—that they’re now battling for the—the money, right. I mean, follow the money. This is now big business.
One of my clients in recent years has over a billion dollars in windfarms in North Texas and they’re not the biggest ones. You know, when I first did this, we—I’m jumping out of order again but, you know—built the first commercial windfarm in Texas, they were little 35 kilowatt—or no, 350 kilowatt machines and looked kind of small and—and insignificant almost compared to the 2 megawatt machines that we’re putting out now.
But it’s—but the rate at which this industry has grown here in Texas to where we have 20,000 megawatts that’s 20,000 megawatt sized machines scattered all over Texas, you can’t really comprehend th—how quickly that’s happened and how much impact that’s having. And that’s threatening to people who really know how to build power plants and burn gas or burn coal or other things that—for a living, right. And it’s changed so quickly that that’s become something of a threat to them.
And so and part of what policy has to deal with is making sure the competition’s fair and that we have reasonable transition period and retain reliability in all the things you need to retain from the old system as we move into the new. So…
DT: Well, and maybe you can talk a little bit about that—the transition to these alternatives that—that you first saw. I think that while you were in this phase of your life, you—you wrote a report on alternatives to the energy crisis. And—and I was wondering what—what sort of changes you were seeing, what kind of options you were envisioning?
BK: So—so that report was really a research report for the Texas Energy Advisory Council. So it—it was kind of a survey, right. I looked at how much biomass was available to burn but had to take into account that you still want to be able to plow a lot of the biomass back on the topsoil because it has a function there. You do not want to use food for fuel necessarily. Howard Odum used to say using corn to make gasohol or the alcohol for burning in cars was a little bit like eating your grandmother for sustenance. It’s really too high quality for that, you know.
It takes so much energy to grow food quality biomass that it should be used for food and that we should try to find other lower value things to burn if we’re still going to have to burn things. So had he lived to see it, I think he’d be excited about the new electric vehicle surge that’s we’re seeing and the potential for electrification of a lot of things that burn fuels and so on. But—but he and I both tried to warn folks about using food quality biomass for—for energy. But we did look at growing algae, even in West Texas, for example.
There’s issues with evaporation and so on, but algae had some potential as a biomass source and grows really quickly—even Shell and Exxon are looking at that now. We evaluated wind power, just in terms of the resource that’s turned out to be fairly significant obviously, …looked at solar. You know, but those studies back in the ‘70s—we were still looking at oh gee, if you build a solar farm the size of Long Island, you could power most of Texas or something, right. Well th—that was all theory and—and we weren’t quite understanding the economics of it and the resource economics of what it would take to actually be competitive with oil and gas.
And—and that was something that I struggled with for—for a few years actually because, you know, when we were young, it was like solar energy is good. In fact—in fact, a friend recently told me solar’s a fire hazard. And I said, “What do you mean?” He said, “Well if you say anything bad about solar, you could get fired, you know.” This was from a utility manager.
So it’s true it’s just kind of popular, but—but I really wanted to understand how it worked. In fact, you know, I left Texas and worked for Tennessee Valley Authority for a little while doing their solar program started the—some of the first residential solar programs in the country and then went to work for Jerry Brown. And we have all these incentives and we couldn’t—couldn’t quite get it to take off. I mean, we did things—I started a warranty program. We started marketing program. We had a 24-hour hotline to explain tax credits.
You know, it wasn’t quite taking off. And it wasn’t until I did the studies with Odum that I began to understand this energy quality issue, right, that the—the amount of energy it took to make a solar system back in the ‘70s was still more than you got back from it. We had to cross over a certain point at which the amount of energy going into the product was much less than what it would produce, right. If you think about it, when we first discovered oil, you would get, you know, 50 barrels of oil for maybe three barrels of oil that we put in.
So the net result was quite healthy, right. So that was—that was real wealth creation in the sense that you were able to make that available. Now that’s not giving credit to the earth and all the geological work that went into making it. That’s the energy that it took to make that oil. But when you get it, it has all that energy now compressed into it, think of it that way. And if it only takes three barrels to get 50 out, you’ve got a net energy profit of 47 barrels, right. Well it was about ’72 or 3 when I was studying with Howard Odum that we did analysis of the wind systems that were being built.
Actually it was a little later than that. Oh, no, I’m sorry. You may want to start this over again.
BK: It was in the ‘90s. I’m sorry—early ‘90s when I was working with Kenetech that I was also going to work with Odum and trying to do the analysis of it. We found that the actual manufacture of wind systems had become cheaper energy-wise than natural gas exploration. So on land, you were getting a better net return from building a wind farm than you were from drilling for natural gas. That—that crossover point happened somewhere in the early ‘90s.
And so, I—that was when I made the commitment to go work for Kenetech I guess because I had this confidence based on that that maybe it was time for wind to start actually growing because it was competitive in a sense it didn’t show up in the numbers yet economically. But—but there was energy return there so that meant that the economy would figure out how to align itself to allow that to happen. I’ve got off into theory now.
DT: No, no, this is great because I think, you know, you’re showing that there’s this economic calculus, that you just can’t ignore that there’s embedded energy in all sources of energy and sometimes they—they yield a profit and sometimes they don’t and they won’t really I guess be capitalized [inaudible] until you, you know, see this net return. I—I think that’s what you’re saying.
BK: Right. So—so part of what I learned from Odum was that if energy is going this way, dollars flow that way, right. That’s what we know of as the economy. But not everything in the energy is actually represented in dollars, like all the geologic work and so on, right. So there’s a lot of value in oil that we didn’t have to pay for, just like there’s a lot of value in a tree that grows if you just leave it alone, right. So it’s absorbing renewables and water and minerals and so on in its own cycle and developing capacity. We just go and cut it down. We capture all that.
And that—that was the nature of early energy in this country, right. I mean, you—you go and you chop down the virgin forests or you drill into the earliest oil deposits which were easy to get. In fact, they were, you know, where the pressure was such that it would come up to the surface by itself. You didn’t have to frack to get it out of the—the ground. So you were getting all this value for very little input. Well those—those ratios is what drives the economy. It’s what net value you get for the energy and effort that you put in to get it out.
And if nature contributes some of it, then all the better, right. So we figured out that oil, for instance, is about 50 or 60,000 times more concentrated than solar energy and wind is somewhere in the 15 or 20,000 times more concentrated. So that’s the energy quality associated with each. Electricity—we did analysis of a biomass plant to figure out all the energy that went in to make the wood and to make the plant and all that. So electricity was about 150,000 times more concentrated than solar. So now you understand, by the way, so why it’s so hard to make a solar car, right.
You have to concentrate 150,000 times more solar to get each unit of electricity to drive a car because electricity is a very concentrated form of energy and very valuable for that reason.
DT: Well, so when you were working on this study that I think covered a number of these alternative forms of energy supply, were you also looking at—at ways to save on energy demands through efficiency improvements and conservation work?
BK: Yeah, sure. So it turns out efficiency just basically helps that ratio some, right. If you can use less of it in some value added process in the economy, then you use less value to make something or le—you’re—you’re using up less value to make something, then you can make more of it or you can make more profit on it or whatever. So it—it’s all related. And so I began, particularly after the Odum years, to see efficiency as sort of a feedback loop that it’s man having, you know, intelligent input on the use of these valuable resources, in order to use them as productively as possible.
And—and there is sort of natural urge of the environment and the economy to try and improve the efficiency with which we use things. It’s not necessarily to use less but even to use more sometimes, but—but the more efficiently you can use it, the more productive you become. And there’s kind of a natural pull for that. And you see that in ecosystems that Howard used to model, but you see it in the economy as well. So some of these things that—that add real economies get taken up and—and, you know, become part of the economy.
In fact, my—my latest project is really focused on information because the information feedback loop to the economy is really the most productive area right now or productive frontier for activity on a lot of industries, right, using information to more intelligently do and consume things today. It’s funny. Howard used to say you could replace sleep with calories. He used—he’s, you know, mad scientists used to stay up and do things all the time late into the night or—or go all-nighters. And—and he would—he’d eat and he said you can replace sleep with calories up to a point.
And, in a sense, energy is the same way. You can replace energy with intelligence up to a point, right. You ge—get better and smarter about how you do it and coordinating it and so on, can really reduce what you actually have to use. And so I’ve been fascinated with that too ever since is a—as a sort of part of this bigger picture of how—how the economy absorbs and uses resources and so on.
DT: So, Bob, you were telling us about the Texas Energy Advisory Council and the Texas Energy Development Fund where you’re working for the state and trying to educate people about these, you know, ways of powering our economy and alternative ways to—to the traditional fossil fuel and sources. And I believe that about this time you also helped start the Texas Solar Energy Society as a way to do it on a nonprofit footing. Can you talk about that experience?
BK: Yes, well I guess I thought, in addition to what the state was doing, we ought to do something to institutionalize what we were learning, you know, that I saw pretty early politicians come and go and policies change, but what we were doing felt important and I was, you know—part of what I was doing and researching for my report on the whole range of renewable energy and include—I didn’t even mention earlier, geothermal energy we have in West and South Texas. I really had networked into the whole community of people who were on the forefront of these sciences in Texas.
And so I thought there has to be some way to try and institutionalize that, right. And so pretty early I guess in my life, I realized there was kind of an association for everything. And if there wasn’t one yet then, by God, I’d start one. So—so I did learn about—there is an American Solar Energy Society and we decided we would start a local chapter of that and proceeded to do that. And we, you know, the first newsletters, Robert Floyd, a former architect here in town brought over the, you know, this is all pre-computer, right, he brought over the old sheets of press type—do you remember this—you rub on the paper and the letter comes off.
We—we were doing the titles with one letter at a time press type to, you know, on a piece of paper that you would then take to the printers and have them—and—and cutting and pasting little typed cutout stories. It was really crude, but we put together sort of the first newsletters for that.
DT: Do you remember some of the other partners who were involved in the early days?
BK: Oh gosh. Well the—the guy, Peter, who I can’t remember from A&M—if he ever watches this, ma—come find me. George Smith, who was a solar water heater company president or owner. Warren Cole, who had a solar water heater company here in Austin, Texas. Al Hildebrand, the scientist from University of Houston. Vaughn Nelson, the wind guy from—from Texas Tech. I’m sure I’m forgetting others, but we had probably ten original board of directors that used to meet in my office on Saturdays when we could, you know, have it all to ourselves and plot the course for trying to educate people about solar energy in Texas, yeah.
DT: And was it mostly a sort of grassroots—you were going to try to educate the public, in general, or was there a policy angle to this, talking to administrators?
BK: Well, I mean, I was trying to work with companies that actually go out and do this stuff too, all right. We wanted to try and see if we could create some movement to, you know, help convert people and to have an impact and that kind of thing, although I will say the society was more of an academic thing. So, like I said, we included the university people. Didn’t—don’t believe we had utilities at the time. It was before they really started becoming a serious player in it frankly. But—but it was more of an educational organization.
When I came back from California later, we started the Texas Renewable Energy Industry Association (TEIA) that was meant to be more of a advocacy organization and—and even more focused on businesses and—and how to make money doing good things.
DT: Well we should talk to TREIA—talk about TREIA later. Tell me about the Society though and do you recall what drew some of your partners to join this society in trying to get it up off the ground? Was it concerns about sort of geopolitical problems with reliance on the Middle East, or was it air pollution, or was it, I don’t know, some other cause?
BK: I think we were—I think we were aware of all those things. I mean, like you said, this was just after the oil—oil embargo from the first OPEC activities. You know, the—people were aware of that, but there was very limited understanding in the general public and certainly even among elected officials on policy about what were these capable of doing and what would it take to scale up. I mean, we were still trying determine among ourselves like well, you know, there’s like three solar companies in the state with a half a dozen employees, right.
What would it take to scale, to actually have some impact, right? And so those were early days of just trying to figure out what policies would we adopt. And, you know, we certainly were talking about, you know, could we do tax credits or that sort of thing in the early years to try and help stimulate this because we knew it was still more expensive than conventional and that it was going to have some time getting going, but in theory, as I said, it all seemed—seemed to make sense and w—was certainly popular.
People liked “So-Lar” energy and all the renewables, but, you know, we were still trying to figure out why it wouldn’t work, which, like I said, I was still trying to figure out why it wasn’t going faster. When I went to work for Jerry Brown and it was—it was really the—the energy analysis that I came to later to help understand where some of the barriers were. The prices basically had to come down. We had to get much better at making all those technologies, but, you know, in the ‘70s, we were just in the early days of, you know, such a limited number of people even being involved in it.
DT: Well it sounds like a lot of this was not feasible either for price reasons or technological reasons, or maybe a combination of both, but it—it sounds like, at least from some of the early partners, that—George Smith I think you mentioned—that—that solar water heaters were somewhat viable. Is that correct?
BK: Yeah, yeah.
DT: Why—why was that a sort of workable idea at the time?
BK: Well it was relatively simple. It just took a couple of collectors on your roof and, you know, hooks directly into a water heater. You put a second water heater in to kind of preheat the water for your normal water heater and that was installation. You could do it, ah, relatively cheap. I’m not sure that it even made great economic sense at the time because, here in Texas, prices remain pretty low for electricity and we use gas for heating water a lot of times. So I think it got to where it was fairly competitive with electricity, probably not so much with gas prices the way they were.
But, you know, there were a lot of people that wanted to promote solar for social reasons and environmental reasons. And—and a lot of the early adopters that’s, you know, that’s who you attracted while all the, you know, and we knew you had to scale the industry, like I said, not just to reach more people and have impact, but to build up the capacity to make it cheaper and cheaper as you see today where the price—I think the price of photovoltaics back there was something like 1,000 dollars a watt and it’s down to fifty cents or thirty cents now.
So it’s—it’s just, you know, been a very steep drop on the—the price of—of solar energy. But we were way back—we were back at the high part of that curve back then. So it was more theoretical.
DT: Well, but nevertheless, it sounds like there were some—some options that worked. I mean, the—and I was intrigued that [overlapping conversation]
BK: They—they were struggling a little bit.
DT: Yeah, I guess if you had somebody who felt a compulsion and interest in this, you know, that they would adopt it may—knowing that they were probably on the bleeding edge.
BK: Well or they were an entrepreneur and they knew it was popular and they had skills in the right place like Warren Cole, the other one I mentioned was here in Austin and he made a—had a factory in South Austin making, you know, flat plate solar collectors for solar water heaters. I had one on my roof in my South Austin home that worked just fine. But he struggled for years because he was a little ahead of the curve. I mean, in terms of popularity.
DT: Well I—I believe that in 1979, you—you went to work for the Texas—Tennessee Valley Authority and—and I—as I understand it, you were managing the residential solar applications branch. And so I—I guess you were trying to encourage adoption of some of these technologies from, you know, solar water heaters to wood stoves, to green retrofits of other kinds.
BK: Yeah, yeah. Things had moved on by the late ‘70s and we’d had another sort of natural gas bubble break and prices were high again. And David Freeman, who’d run a Ford Foundation study called “A Time to Choose,” had been noticed by Jimmy Carter and appointed as chairman of the Tennessee Valley Authority. And he had a real vision for things. In fact, the reason I went and applied for a job there is I saw a speech that he gave in Atlanta and he said he was looking for people that weren’t afraid to make mistakes. And if you didn’t make mistakes, you weren’t trying hard enough.
And he also said something about we need to think about our values and—and how we use energy and—and pointed out that we could probably save 20 or 30 percent of what we spend on electric infrastructure if we were willing to take one cold shower a year, which is just, you know, showed kind of open minded thinking about the fact that right now we build the entire electric system to make sure you never turn the light switch and have it not come on, right. That—that you have 100 percent availability of electricity all year round, 365 days a year, 24 hours a day.
And yet, if you would accept one cold shower a year, you might save 20 or 30 percent on your bill because we wouldn’t have to build for that peak day. You just, you know, look the other way for a few hours and it’d all be over. Anyway, I just thought man, for Chairman of Tennessee Valley Authority in the 1970s, this guy’s really pretty cool. And so I applied. And he’d put together an interesting team of people, but they took me in, partly because I had a policy background. I think they wanted one person on the—on the renewables team that had that sort of perspective.
And I was put in charge of the residential solar branch. And we built oh 128 modular solar homes. We built 36 stick built solar homes, just demonstrations with builders to try and get people experimenting with it and thinking about it. We measured everything on it, of course, and monitored them. We put in 16,000 wood stoves in Appalachia where we had plenty of wood and lots of poverty. And we spent about 40 million dollars on solar water heating in Memphis and Nashville, where they had municipal utilities that we served.
And—and did zero interest weatherization and conservation program all across the 55 util—or 155 utilities that the Tennessee Valley Authority is the wholesale provider for. And it was a very exciting time. It was an exciting time. And it, you know, it was funny. We were all trying to take over this old line organization that David had been made chairman of and, like I said, I went because I was impressed with him, but there were two layers of management between—no one—three layers of management between me and the board.
And I was actually—and—and this—this is heady stuff if you’re in charge of it. I was in the office of power. And the guys between me and Freeman were not so sure about this renewable energy stuff. So Freeman used to actually—he was in Knoxville and we were in Chattanooga—he used to come down to Chattanooga and informally he’d hang out with us drinking tequilas at the Governor’s Lounge in Chattanooga, Tennessee. I still remember that. But anyway, we’d plot together on, you know, how to get things going.
And I told him one of the problems if you wanted us to just, you know, insulate the valley was it—it took 128 days to hire somebody through the bureaucracy at Tennessee Valley Authority, so how could I build the kind of empire that I envisioned you would be required to build in order to deliver these services, right. Well he was—he was more creative than that. He said, “No, no, you have to figure out how to use community organizations and churches and schools and people out there that want to do this in the private sector that are already looking for job opportunities.
How do we just enable all these things to happen?” And I said, “Oh, that’s great. You like that, you know, you could—can we do that, you know?” So he said, “Yeah, well we’re going to have a board meeting and I’m going to invite you up and then we’ll talk about this in front of all the management. And I said, “Well I’ll come to that meeting if I get invited but nobody’s going to allow me to try and do that down here and the staff will never hear it.” He said, “Well you bring a recorder with you and I’ll say everything that needs to be said and you can record it and take it back with you.”
So—so I drove up to Knoxville for a board meeting—first one I ever got to go to—with the—three board members—Freeman was the chairman—and we had this conversation about, you know, he would—he would—acted impatient like why aren’t we doing more? We need to do this faster, you know. We got real problems ahead of us if we don’t figure out how to adopt these things. And so the—eventually he looked at me and asked me what were we going to do and we had a little conversation between the two of us and he said this thing about using volunteer organizations and working with the states and the local governments and all this stuff.
And—and my management was just like, “Oh my God, where is this going?” This is really loosy goosy, you know, for a bunch of utility managers. And—and I just said, “Well do you mind if I record this because I’d really like to be able to capture this for the folks back home and let my staff hear it or whatever?” And he—and David goes, “Yeah, bring that out here. Let’s talk about this.” So ye—and—th—so this was all planned. So—so anyway, at the end of the meeting, I take the recorder and I put it back in my briefcase and the managers are all like huddled in a corner to talk about oh my God, what do we do, but this was a Friday.
And so I went back out and got in the car and drove back to Chattanooga. And I invited all the staff and—and the whole re—Efficiency Renewables Group that we’d put together by then and—and had a listening party and let everybody hear it because on Monday morning, the management asked for that tape and took it back. So they didn’t want everybody listening to it. We were still having a fight inside the agency to make this stuff happen. But and, again, it was a exciting period because we had people at the very top that really wanted this stuff to happen and kind of looked out for us and protected us.
As long as Jerry, I mean, as long as Jimmy Carter was the president, we were okay. Now Reagan got elected after that and Chili Dean got appointed Chairman of the Tennessee Valley Authority and I got offered a job in Siberia someplace. So it all changed very quickly, but, for a couple years there, we—we did some great things and—and—and I think, you know, you can’t take that back once you let it out of the—out of the cage, right. So that was pretty cool.
DT: Well yo—and you mentioned earlier some of the—the—the—the models I guess that you put together—the—some of the solar houses that you built. Was that part of those strategies, to just show people how this is done and to convince them that it—it could be a reality that it could be manifest?
BK: Well sure, not just convince them but commercialize it, right. I mean, we were working with a modular homebuilder out of Miami that was doing things like flying hotels to Bahrain in—in an airplane. They—they come in little panels and you take it and snap it together into a 30 story hotel. I mean, there’s some very clever things going on. What we were trying to do was embed solar technology into the walls so that the walls became Trombe walls to do passive cooling and heating or to include solar water heating or photovoltaics in certain panels so that this company could then slap together one of these modular homes and it would come out well insulated and—and solar.
And so we were trying to help actually create companies that could go on and do that after we were gone. And, like I said, on the stick built, we were trying to work with builders so that builders would get experience and overcome the fear of it, right, I mean, because, until you actually do it, you don’t really have a good, comfortable feeling that you can do this for a living. So we were helping them past that by just getting some experience in it. And the same way with solar water heating.
We were actually—the Memphis Project was actually working with low income group to help train people out of—out of work how to make solar collectors. Anyway, so we were trying all kinds of things like that.
DT: Well and—and I—I’m curious how you got traction for some of these ideas. I mean, were you se—helping TVA make loans or grants or educate builders or what was the way to make [overlapping conversation]?
BK: Well it was the beginning of—of utility seeing itself as a energy service company, not just electricity, generator, and distributor, right. It was trying to think about whether or not we could be the energy service company and deliver the best service for the lowest price and even take into account some of the externalities, right. Let’s provide safe, sustainable environmentally acceptable kinds of energy and where you could—Amory Lovins said, “Using electricity to make hot water is kind of like using a chainsaw to cut butter,” right.
It’s back to the energy quality issue. You don’t need high quality energy like electricity to make hot water. Sun will do. That’s a good match between the quality of the sunlight and the quality of the energy that you need. You just need to warm it up, right. So we were just trying to be more sensible about how you match up those kinds of things to be—to offer the most efficient sort of total package for customers. And so, for instance, the zero interest loans that we were offering were really popular all over the valley.
I mean, I think all the co-ops and munies took us up on participating in that program so that any customer could get their home weatherized at zero interest. So we—you end up saving money from day one because you—your loan payment is less than what you’re saving every month pretty much. And those kind of things just made sense for us to do. And there are some efforts still to do a lot of that stuff.
Now lot of—lot of utilities don’t want to be bankers so the low interest loan things had trouble catching on, although there are still—still efforts to do that, like the PACE Movement here in Texas, the Property Assess Clean Energy, where they roll your energy improvements into your property tax. So it’s another way to—so government can help finance to make efficiency pay from the first day. So there were things that are, you know, we learned back then and that we were able to demonstrate back then that are still—still have an impact I think.
DT: Well, and I guess this work was happening within the sort of envelope of the TVA and I think you said municipally owned utilities and co-ops. And so was it only there that—that I guess utilities were seeing their business being in the kind of focus of—of providing services rather than just sending electricity down the wires?
BK: Well, somewhere back in the ’79 or ’80, congress actually came out and required all utilities to come up with a residential conservation service. And it was kind of modeled on some of the things that we were starting and, you know, we put in one of the first pretty complete plans on how to do that, but all utilities were being asked to do that. That was coming out of Carter Administration. I mean, that was, you know, all part of which—that had spawned our activities was—was shown up in congress as well.
Tennessee Valley Authority, just so you understand, was a wholesale provider for the 155 utilities in that seven-state region. All of the utilities that it served were municipal and cooperative. It was a—a creature of the—FDR’s administration basically that it had been created to bring cheap electricity to poor areas of—of Appalachia and Tennessee, Alabama, and Mississippi, and parts of Kentucky that it served.
And so it was creating dams for hydropower and was one of the first to build nuclear power in the area and other—other power and distribution, in order to bring electricity to a lot of those areas back in the ‘20s and ‘30s. So that was the history of the organization. It was—it was interesting to work for but very it was very different than investor owned utilities. Sort of where you were going I think by that question. But…
DT: Well, and it sounds like it was also a—a kind of interesting time to be at the TVA, if I’m following you, because you’ve got sort of a schizophrenic organization where one part is—is sort of in the status quo and they’ve—they’re operating nuclear power plants and sort of, you know, high tech aspects of producing energy. And then the other half is—or your branch at least—is—is providing wood stoves.
BK: Well, we were a really small part actually. TVA had 55,000 employees. So it was a large organization. That does not include all the st—the 155 utilities that they serviced, just in TVA. So we were tiny back then. But, you know, it was the biggest thing going in—in this area of the clean energy thing around pretty much. And I—I give Jimmy Carter a lot of credit for that.
DT: Well, maybe you could take us to the next chapter in your life. I believe you next went to California. Is that right—1981?
BK: Right, right. Well, like I said, Reagan got elected and so I—I wasn’t going to last long at TVA because I—I’m kind of impatient and if they didn’t want to go ahead quickly, then maybe somebody else could use me. And I looked around and, in fact, it was a editor of a solar magazine introduced me to somebody in California that said that Jerry Brown was looking for the Executive Director of the Solar Cal Council. Well it was actually something that was a creature of Tom Hayden, who, with Jane Fonda, had created something called the Council for Economic Development I want to say.
And y—no, it was—it was the Council for Economic Democracy. That’s what it was. Sorry. And it was based on a book by that name by Derek Shearer, Economic Democracy. And basically, in addition to looking at a whole lot of things like how employees are treated and employee ownership plans and all kinds of—kind of creative economic business development kinds of things that Derek was looking at, they were organizing local elected officials all over California and trying to figure out how local policies could begin to progress in this direction and also working with the private sector industry, some of the early solar companies, the Labor Unions and other people that were involved in the early days of—of solar as we knew it and renewable energy.
And so really there were—there were two jobs. There was the Local Government Commission that was—I guess went—by the time I left, there had been 128 county supervisors or judges or city mayors or councilmen or women. And the Solar Cal Council which, like I said, was environmentalists and labor union—like the sheet metal workers that make the ducting for air conditioning, you know, they were involved. Solar contractors, all the utilities had participants on the council.
So Jerry Brown actually appointed them, but it was kind of in cohort—coordination with—with Tom Hayden who was the ambitious political organizer behind all that, he and Jane and their organization. And I had a very interesting interview with Tom Hayden actually to get this job who was—he was kind of wired individual. Boy, he had so much energy. Just very—very intelligent, educated, a lot—or a lot of self-education maybe, but very well read. You know, he was one of the Chicago Seven, right.
So he came out of a real revolutionary kind of mindset, but he was mellowing into what became a—a state representative and he was a very effective one for many years after this. But under Jerry’s, you know, second term back in ’80—early ‘80s—he was the chairman of both of these councils and trying to figure out how to use them to spin a positive policy for renewables and efficiency and that sort of thing.
And I ended up—I actually had to campaign kind of for the job. Show you how political he and his organization was, he—he kind of liked me I think and we got along okay, even though he threw a little temper tantrum while I was in a meeting because of some phone call he got. I was pretty cool. And so anyway, he said, “Well, we’re going to have to think about this. I’ve got to go to Sacramento. We’re having the State Convention and I need to be there.”
So I just put that thought in the back of my mind, thanked him very much, and then I went to Sacramento, as well to the State Convention, because I figured if Hayden was going there—this was a political kind of appointment really even though, you know, it’s arguably state employment—that maybe I should go up and see who’s vote I could get for this. So I actually went to the State Democratic Convention, had buttons printed out with a Superman that said something like “elect Bob King for Solar Cal” or whatever and I handed out buttons and I met everybody at the convention.
And somebody thought it was cute I guess and I met Fred Branfman there, who’s working for Jerry now on the—on the train issues, by the way. But anyway, so they brought me into a dinner in which the Campaign for Economic Democracy was having sort of a side event and whatever. And somebody brought a button up to Hayden and so I’m sitting in the very back of the audience, you know, eating this, you know, cheap spaghetti dinner that everybody gets or whatever and Hayden announces from the table that there’s somebody out here that’s apparently campaigning for Director of Solar Cal.
And—and I had talked to enough people, I got some applause. But anyway, so the next—the next week I got notified that I’d won that job. And I had a great time doing it. We had—we had a lot of fun. Like I said, we had a—we had a 24 hour call center telling about, you know, all the benefits of solar and the tax credits and the, you know, why we can help you with it and that sort of thing. We—we helped pass local ordinances for solar rights and do things to try and make it easy to do it, remove barriers and work with the fire department or fire marshals to make sure that they understood how solar systems are installed so that the codes didn’t become barriers down in the weeds.
We helped pass all the first efficiency building codes that we were just sort of concentrating on all the cities where we had local elected officials on the coun—on the Solar Cal Local Government Commission. And just in the two years I was there, we passed codes in several cities and came to a legislative session to where the builders and the—the tile—title companies were so tired of us passing these local initiatives and causing there to be different building codes in every jurisdiction that they said basically, we give up.
Bu—pick one, make it the state code and we’ll just all do that. And that was the beginning of the Title 24 Building Code now in California which is probably the most advanced in the country. I mean, they’ve continued to keep it up and—and evolve it and done a great job with it, but it’s a very strict—it’s essentially a zero net building code, right.
DT: Well, could you describe maybe two things you’ve—you’ mentioned in passing. One is solar rights and then the second is building code and what that sort of included and governed.
BK: In—in what? Government?
DT: Yeah. Well so solar rights I guess is—is trying to protect against shading [overlapping conversation].
BK: Right, right. So somebody that ca—can’t build a building next door and shade your solar collectors, right. So—so that’s a very complicated policy issue actually. And there’s still different ways to address that, but we were trying to educate people that if you want people to adopt this, then you have to have the ability to say, you know, in this area, you can’t build above so high or you can’t build above somebody that would shade an existing solar collector without their permission. You would have to pay them something for the right to shade their—their roof.
I mean, these were some of the very early conversations about things like that. So there are different ways you could go at it. I’m not sure I even remember all the solutions we came up with, but it was like a—a right of way essentially in—in some cases.
DT: And—and a property right?
BK: And a property right, a tradeable property right.
DT: Well, and—and then the building code—is that emphasizing weather stripping and insulation and other kinds of sort of passive solar design?
BK: Yeah, well, again, back in the day, it was simpler than it would be today, but it included things like quality materials as well as process. In other words, what order you put things together in, what overlapped what, or what, you know, whether the—the moisture barrier goes on the inside or the outside or whether it—there even is one, what the R value of a wall is and what the R—minimum R value of a window is. That is, the resistance that—the inverse of the—the insulating value. So—so there’s, you know, lots of things come into play.
I mean, they also already had things like earthquake resistance going into building codes and, you know, lots of other things. We were just focused on trying to make the—the home as efficient as possible, so tightening it up, higher insulation basically in the early days.
DT: So I understood that while you were in California working with Jerry Brown’s ministration, you—you also led the Solar Energy Assurance Labeling Program. What did that involve?
BK: Yeah, there were—there are two creative things I tried to do while I was there. One was I kept hearing people worried about having bad experience. There were some, you know, any new industry, you get people come into the business that are not offering a quality product. They were giving out bags of coffee, you know, to get a meeting with you and then quick selling you something that was going to save you all this money and it didn’t really work very well and so on. So—so we thought well what we needed to do was create some kind of assurance for customers, some kind of warranty system.
And a lot of the companies in the—at the time in the business were relatively small, but the—there were enough people that were serious about wanting to stay in the business long term that what we did was we create this assurance labeling program or Cal SEAL we called it, Solar Energy Assurance Labeling Program, and Cal SEAL then started advertis—well we had to recruit members. They had to pay dues and they had to commit to support the SEAL. So if you were a member, you would get a SEAL for your solar water heater.
It would go right on the water heater and it would say that this is a Cal SEAL approved member system and a phone number to call if you ever had any problems and a second number if your company, for any reason, went out of business. And that was the assurance part of it, right, because these co—young companies come and go or, like I said, maybe they didn’t do as good a job installing it or whatever, but if they were a member, we’d checked out their equipment, we knew it was real, but we knew they could go out of business.
So if you got one with a SEAL on it, our guarantee was if your company isn’t there to fix it, somebody will. We’ll come out and one of our other members will just take over that system and take care of it. So your warranty, whatever that was, would be good. And I spent a lot of time flying around the state doing TV commer—not commercials but, you know, news—press releases with solar companies or mayors on the local government commission, things like that saying you could rely on that stuff.
DT: And probably an important thing with a young industry with small companies and new technology and…
BK: Yeah, exactly. The other fun thing that I did was I came up with this crazy idea the—watching the—the California Raisin Bureau or whatever it was—commercial—do you remember the dancing raisins? And—and the potato and the milk commercial—all the—so agriculture had figured out—because there are a lot of small companies too, right, most of them. I mean, now it’s got a lot of agribusiness now, but—but they’d all get together and have these collective advertising efforts that were official and sanctioned by the government.
So I studied that a little bit. And I said well there’s no reason why we couldn’t do a solar energy collaborative like that blessed by the state. So we had to have a vote for the whole state for all the solar companies to approve of a tax essentially that would be placed on each of them so that one dollar or five dollars per solar panel that went in or whatever would go to this marketing fund and you would create a—a fund then that would market the idea of solar, that would have a lot more capacity than any one of the little companies.
In fact, I brought that idea back to Texas because it wasn’t too long after that I came back here and I helped the propane companies do that and they still had an office of educational—what is it—FRED—the—AFRED—the Alternative Fuels Education and Research Division was actually supported by a collaborative that I helped pass through the legislature here in Texas for—for propane dealers, but that’s another story.
DT: Well, before we leave California, I was hoping you could explain your stint at the California PUC Advisory Committee and I guess there were some incentives that you were working on?
BK: Well that was just a—a third job while I was working for Jerry. I had two staff doing each of the commissions, but then the PUC want—want—was trying to figure out how could they get involved in renewable energy and push the utilities to do more on renewables as part of all this. And we’d come up with lots of ideas out of our groups of what they could be doing and we even had for the utilities on the Solar Cal Council so we—we were in dialogue with them. But then the PUC decided that they would appoint a Citizen Advisory Council and they looked around like who could help us run this.
And somehow I think John Geesman or somebody suggested that Bob King could take that on. So that was my third committee—sort of simultaneous appointment that I had to try and do for a year or so. And, again, it was very interesting and we–I think might have been one of the first—net metering policies came out of that—rebates. Also some of the first sort of RFPs for larger utility scale wind might have gen—been generated out of that. So it was interesting period for sure. Lots going on.
DT: You—you mentioned a term that I’m sure it’s going to come up later—it’s net metering. Can you explain what that involves?
BK: Well just if your solar system generates more than you’re using in the house at the moment, that you would essentially get to run your meter backwards. You get credit at a retail level for whatever you netted back to the—the system. And the system benefits by that because you’re generating the power out in the end where there are a lot of losses trying to get you power from somewhere else. And so we just allowed people initially to get the—well to run the meter backwards, which effectively gives you retail credit, regardless of what time of the day it was generated.
DT: I think the other term that—that probably would be good to understand is renewable portfolio. What—what—what does that entail?
BK: Well that came much later. We actually passed the first renewable portfolio standard here in Texas and—and actually you can either credit or blame, depending on where you come from, Jim Marsden with that because we were all involved—I was hired at the time—this was now—oh gosh, the portfolio standard didn’t happen until ’99. So when we—in ’97, we created the wholesale competitive market and then in ’99, we were trying to restructure the retail part of the electric market in Texas.
And one of the things we figured out is that part of what would be stranded when you broke up the industry and the generation, wires, and retail, was this whole set of energy efficiency and renewable energy stuff that I’d started way back in Tennessee Valley Authority, right. Some of the—that was some of the first stuff. We were about to see the last stuff in 1999 only twenty years later if we didn’t figure some place to put those.
So the legislature here in Texas effectively agreed with us that—that there was a value in still encouraging efficiency and renewals that were cost effective, and that the—the state had a role in promoting that or encouraging it and that the utilities, the—the wires, the remaining poles and wires distribution companies were the last regulated vestige of the utility business and, in a sense, because they were regulated or kind of representatives of the state and that we could delegate to them policy functions like renewables and efficiency.
So we created—Marsden had a negotiation session with the AECT folks, the Association Electric Companies of Texas, and some people were mad because they weren’t in that room, but—but basically a deal got made between him—or he and the environmental interests and—and the utilities that, okay, you guys want to do something, maybe we can cap what it is. Let’s just make a goal for how much you want to do and then we’ll put that in there, if we get everything else we want in this restructuring business, right?
It was one of those times where the utilities all wanted a lot. And so there was some negotiating room and Marsden wa—happened to be in the room where this discussion took place and maybe—I don’t—I wasn’t there—you’ll have—you interviewed him, you have to ask him. But what came out of that was we would pick a specific goal and that they would get that goal. So it was—we called it a portfolio standard, that in your portfolio of resources—coal and gas and so on, that you would add certain amount of renewables, which was only 2,000 I think megawatts in the first—the first version.
And—and then I was the lobbyist for the Wind Coalition so I helped to pass that legislation. But I was also the lobbyist for the National Association of Energy Service Companies at the time and we—we were quick to figure out that if this would work for renewables, this would work for efficiency. And we had started off with legislation that require utilities to spend some money on efficiency but putting the amount of money in there was a distractor for a lot of legislators. It worked a lot better if we just said that they would achieve a certain percentage of efficiency and money wasn’t discussed, right.
And so it has a zero fiscal note because the state’s not paying for it. It does show up in your bill for electricity, but if, in fact, we’re right and the—and—in fact, the law says the utilities have to buy cost effective efficiency that by law now requires that we save more than we spend. So it was a beneficial thing to require but it does, in fact, require the utilities to acquire cost effective efficiency. In fact, that law’s still in place. And we’ve spent—since 1999—let’s see—the first year that that came into effect was 2004.
So 4—we’ve spent 1.8 billion dollars, something like that since then—no, more than that—almost—a little over 2 billion dollars on efficiency because of that law. And—and now we have 20,000 windmills at a million dollars apiece or so. So it’s been a huge impact from those two things.
DT: Well just to—as [overlapping conversation].
BK: I’m sorry. We’re rambling again a little bit.
DT: No, I—I just wanted to make sure I understood that—that the—this idea of a portfolio standard that has some sort of a pie where there are different slices for different elements of the utility, that that didn’t start in California. I thought that the C—PUC Advisory Committee [overlapping conversation].
BK: No, no. No, no, Texas-no, no, Texas was where…
DT: That was my fault but I thought you said portfolio standard and I…
BK: Oh I didn’t mean to say that. We—we looked at incentives and trying to have some kind of RFP to—to solicit for renewables in California first. I mean, the—they were probably in advance there on that. But when it came here, we—we were sort of forced into developing the portfolio standard for the reason I said. Texas was not going to spend tax dollars on renewables.
DT: Well I—I’m getting ahead [overlapping conversation].
BK: But the utilities wanted something and we wanted something. And so we figured out that—and—and, like I said, Marsden gets a lot of credit maybe for this or it just happened in the meeting he was in, but—but we realized that you could simply say that utilities must acquire 2,000 megawatts of renewable energy and—and proportionate to whatever their load is, divide up that responsibility and they have to get it by a certain time and you just go do it. Well it doesn’t say anything about money and it doesn’t take any tax dollars.
And so we were able to pass that. And I did the same thing for energy efficiency basically, working with Smitty and Carol Biedrzycki and a few others, but I literally negotiated that language on a little bench in the foyer—in the lobby of the Texas House, which is why they call us lobbyists.
DT: So—so, Bob, in 1983, you returned from California to Texas and, as I understand it, went to work for the new commissioner, Jim Hightower, to be Director of the Office of Natural Resources at the Ag Department.
BK: Yeah, I had been—I’d been advising him—well I actually helped him run for the Railroad Commission years earlier. While I was at Tennessee Valley Authority, they’d call me all the time and talk to me about—because I worked for the chairman of the Railroad Commission, remember. And he didn’t win. He barely lost that, unfortunately, but came back years later with his partner, Susan DeMarco, since deceased recently unfortunately—and decided to run for Agriculture Department which some ways fit him better because they’d done a lot of work on food and pesticides and health and safety and environment and so on that they were quite conversant in.
And, at the same time, Hightower liked to remind me that agriculture commissioner is elected statewide just like governor and he gets just as many or more votes as governor. In fact, in his case, he got more. So he could talk about whatever he wanted to talk about. And he liked the energy things that I was working on, felt like it was a good fit for the kind of policy that he wanted to adopt in agriculture and that there was some tie-in for water conservation, energy conservation, land use reforms and so on, that all kind of fit together and I agreed.
So, from California, I was advising him on policies and letting him know oh, here’s all the exciting things we’re doing in California and things I’d done back in Tennessee and suggesting things he could use in the campaign. And so, at one point, DeMarco was on the phone with me and said, “I don’t think you understand. We don’t need to get elected. We’re now worried we’re going to get elected and we need to know what do we actually do, not just what are we going to say.”
And at the end of the call she said, “No, you don’t understand. Can you just come back here and do this?” And—and I was like, “Well, I’m kind of hoping Tom Bradley, who was the mayor of L.A. is going to get to be the next governor and I’m going to work for him and we’re doing all these things, and Jerry might be president or,” but, of course, none of that happened. And so, you know, by November 7th, I was calling back Hightower and saying, “Do you really want me to come back to Texas?” And—and they said, “Yeah, come on.”
So I raced back and I spent a few weeks before the Commissioner was allowed into his office trying to plot out what we were going to do and how to attack the job and—and then went into the office the day he went in and—and stayed there for all eight years he was there. And I had just a little—the deal we made was I got a little “Office of Natural Resources” so I had, you know, three or four staff, little bit of travel money, little bit of play money, and it was like having my own nonprofit—I used to tell people I made mountains out of molehills. That was my job.
So I—we would go out and find some thing that needed to be addressed and we would try to make something out of it, right. So we helped try and bring clean water to colonias. We actually set up a revolving fund with private money that I raised to drill wells and help people get clean water in the colonias. We put together a real intense campaign to drive DOE away from the Panhandle where they wanted to bury high level nuclear waste underneath the Ogallala Aquifer, which is the—the lifeblood of all of the Panhandle, which had anything happened to that water, the—it would be a wasteland.
We—we actually closed down a low level radioactive site in South Texas that has a fun story I’ll tell you sometime over a beer, that we pressured the Health Commissioner into closing that one time. We—we helped start the Texas Renewable Energy Industry Association, which, unlike the Texas Solar Energy Society, was more aimed at business and advocacy instead of just education. Tried to get that going. What else? We—we passed legislation on water, made water efficiency money available to—to do the, you know, the big circle irrigation systems in West Texas you see flying over?
DT: The pivots?
BK: Yeah, the center pivots. Well you could do drop tubes off of those to turn them into drip systems. And—and so we set up a revolving loan fund to help finance those kinds of things. And anyway, it was a—it was a good time and it was—it was actually during that period that Howard Odum came to the University of Texas and was trying to figure out how to apply his energy systems analysis to policy. And I had just read his book and I’d read Dave Freeman’s book, of course, and been involved there.
So all this started to make, you know, sense to me and I wanted to meet this guy, Howard Odum—and understand how his energy systems analysis really worked. And I spent a year attending his classes, just auditing his classes, but every—he had a Wednesday night class and he and his wife, Betty, and I used to go out and eat Mexican food and talk policy late into the night every time. And I ended up having a lifelong relationship with him. He’s now deceased, although Betty’s still alive and doing well, and I helped do the work that led to his last book, which was called The Prosperous Way Down. So that was—it was interesting time for me.
DT: Well I—I’m intrigued by how you have been so nimble, moving from one state and one job to another as, you know, turns in the political fortunes. I mean, when Bill Clements was elected, Ronald Reagan was elected, and Pete Wilson was elected, Rick Perry was elected. What do you—what do you…
BK: I have a—I said when we started, I have a little bit of a short attention span problem. I like starting things, right. I’m an idea guy. I see—I see things. I see the potential for things. I have—I’m not terribly analytical, left brain kind of thing, but I have kind of an intuitive side that I see things maybe—patterns emerge before other people maybe, I don’t know, but I tend to be early into things. And—and I love the high energy of a startup, of the beginnings, of the—the formation of something, the art, the creative piece, right, the—the creative parts what’s interest me.
And so yeah, when I see another opportunity to do something creative, then I’m off onto something new. And when Hightower didn’t get reelected and the Republicans swept in, I just said I—I’m going to try a different approach. I don’t like not having a job every time somebody doesn’t get reelected and that’s when I started what I called Good Company Associates. I didn’t know what I was going to do yet but it had to be good and it would be good for you and it had to show that you could make good money doing good things. And that was kind of all I knew at the time, but…
DT: And this is ’91?
BK: This was ’91, yeah, exactly. And I left the State (government) and started my own little company. And—anyway, so we—we ended up doing energy efficiency. I was lead contractor for the state’s Energy Efficiency Revolving Loan Fund.
DT: Yeah, LoneSTAR?
BK: The LoneSTAR Loan Fund. We were the lead contractor so we coordinated all the contractors statewide that were doing energy audits for state and local buildings—hospitals and so on—trying to educate people about that and trying to find creative ways. Like I—I’d go with a senator out to his district so he could get people together and we could tell them there’s money available here for you to get more efficient and it pays for itself and—and, you know, it’s low interest. I mean, back then it was two or three percent interest, which was a big deal.
It’s not so big a deal today, but anyway, yeah, we promoted that. We…
DT: What were some of the efficiency ideas that you were trying to promote then?
BK: Oh pretty much just standard stuff. I mean, getting local governments to just put in more efficient air conditioning, more efficient lighting, go from incandescent to fluorescent. I mean, we’re talking the ‘90s, right, so it wasn’t—wasn’t revolutionary stuff. It was just people weren’t yet thinking about, you know, for instance, replacing things before they broke because they were less efficient. And yet, the most efficient technologies were probably, you know, doubling what was in those buildings already. Every five years maybe you were getting twice as efficient as you were before.
So if you have a 20 year old air conditioner, it’s pretty inefficient. It turns out replacing it before it actually breaks might save you a lot of money. Getting people to think about things like that. And anyway, I—I wouldn’t have called that a revolutionary thing, but it was something that we could do and help and trying to figure out where our niche was and that kind of thing. It was also during the er—early years of my company that we were working for a company called Kenetech, which was the first U.S. manufacturer of wind power.
They ended up actually buying Good Company and we became Kenetech’s Regional Office a couple years later and built the first windfarm—first commercial windfarm in Texas. Mike Osborne had a few homemade Carters up on his place in—in the Panhandle. But—but we actually built a 35 megawatt windfarm and sold the power to LCRA in Austin. And…
DT: Where were these turbines? Where was the windfarm?
BK: Well, we made the mistake of building this windfarm in the windiest place in Texas. Now you would think that was a good idea. And back then, we did. But it turned out, about six months after we put this up and had financed it, that eight of the wind turbines were blown over or blades were literally blown off in a windstorm that took place—it was on the Diablo [Delaware] Mountains just south of El Capitan, if you know where the highest point in Texas is. It’s on the Van Horn Hi—or on the road from there, the National Park, down to Van Horn. And we don’t know how windy it was.
The anemometers stopped working at some point. It was 90 mile an hour winds on the streets of Laredo and El Paso, and we think it may have been 150, 160 miles an hour up on the ridge, but it was unheard of wind power. Anyway, you don’t necessarily want to build windfarm in that kind of environment. So now they’ve moved a little further west [east] where you just capture some of the jetstream—drops low enough in West Texas and the elevation’s high enough that the two of those come together, right.
So when the—the Jetstream drops and the elevation is just right and you have a 300 foot tower, you can get those blades up into a real steady, constant wind, and that’s much better than just, you know, the highest winds that you could find. Th—it was so windy on this site that the—the contractors had to be careful because if you drove up on the top of our ridge, faced the wrong direction and you opened the door, the—you could lose it. It would take it right off. It was that windy.
So anyhow, like I said, kind of the bleeding edge of the wind development business, but anyway, we—you know. It was Good Company—we did a lot of things over the years that I’m pretty proud of. The…
DT: Well while you’re with Kenetech, maybe this is [overlapping conversation] to talk about some of the early wind tax abatements and power purchase agreements, how you figured that out because this was all early days?
BK: Yeah, well they’d done power purchase agreements in California, but most—I think they were all with utilities at that point. You know, now we’re doing corporate ones and so on. But it—it’s basically just a long term price agreement because you don’t have fuel, right. So once you know the capital cost to put in a windfarm or a solar system now, you know what the cash flow stream is you need to pay off your debt on that asset. And so a power purchase agreement just is you need somebody on the other end to say well if you’ll give us electricity, we’ll pay X amount for that electricity.
And if you have enough electricity coming out of the windfarm to pay off those loans, then that’s a good agreement, right. So yeah, in the old days, you had to have a 20 year agreement to pay off that whole thing. And we sold wind power to LCRA in the City of Austin for five cents and I think a penny for transportation. And, at the time, it sounded pretty good and everybody was sure that electricity would be way more than five cents a kilowatt hour in 20 years from now. And—and that’s not quite true. I mean, for a lot of reasons, we’ve managed to keep electricity low and this is such a competitive state.
Now in California, it’s quite a bit more expensive but at wholesale everywhere, it’s so competitive that that’s actually quite high now. And the price of wind power has come down so much that—that actually you can get it for almost half that. So it wasn’t as great a deal for LCRA and the City of Austin as we thought it was, but it was good enough to get it done and to be the first and to get the thing started and open up the way for a lot of other people to come behind. And that was—that was ahead of the RPS. And it was ahead of even retail wheeling or wholesale competitive markets, right.
So it was actually against the law at the time for us to move that electricity acar—across West Texas Utilities to Austin and LCRA. So we had to pass a special piece of legislation that Ed Wendler, Sr. helped me negotiate with Gary Morrow, who was the Land Commissioner in a little, tiny sentence buried deep in a 800 page technical update of Land Commission legislation that said if you built it out there and on—on state land, that you would wheel the power anywhere in Texas so that Texas, the state, could perfect its ownership of that resource for the benefit of the children of the state of Texas because it goes into the Permit Education Fund.
DT: So before you we get wheeling, the electric—electricity was sold within regions. Is that correct?
BK: Yeah. Utility was like that. You had the power generation here owned by the company and it sold out to the edges of its territory and there was very little connection even between utilities in the early days. Now they began to connect up but still you couldn’t sell across lines. They would exchange energy sometimes for emergency but nobody was wheeling power through their system. They were the electricity companies. Well, all of a sudden, we weren’t selling to this guy—we were not part of his network.
We were trying to go across him to here and there was—that was against the law literally at the time. So we had to change the law and make a special exception for the wor—the first windfarm, but that was ten years ahead of Order 1000 by FERC which allowed that nationally.
DT: And then was there capacity to cross these other regions? There’s—you got legal authority, but was there…
BK: Yeah, yeah, yeah, forced them to use their line. Well we ha—we had to build 125 mile an—mile transmission line just to hook up to West Texas Utilities, which is now AEP [American Electric Power], but then yeah, they had to wheel it across because we got this legislation passed saying the state had the right to access that power.
DT: So, something else that I—I…
BK: And we had—you—you realize we had to pay the state their piece of the action off of that deal in order to—to make that all come together though. So th—there was a three way thing between us and the utilities and the land office so that they got a piece of it.
DT: And—and I think you mentioned that these—how you structured the power purchase arrangements and then the—the ability to actually get the electricity from the supply point to the demand market. But what about wind tax abatements? Did you have some role in that?
BK: Yeah. So I don’t know that anybody had done that before, but there were tax abatements for other things had been done. You know, big factory moved to town sometimes as an incentive, people would offer that. So yeah, I negotiated wind tax credits, essentially, or “abatements” for the local county that we were in th—down in West Texas anyway. Yeah. That was an experience. I think we were—we might have been the first to do that. We were certainly the first to do that for a windfarm.
DT: And so who would be granting the abatement or the credit?
BK: The county. So the county has a tax—property tax—that would be on property including the wind turbines themselves, not just the land. And it could be substantial because we were, you know, those early windmills were quite expensive. So if you taxed them at the property tax rate for the value—when most of that county was very low productivity and so had low tax rate on it—but ours looked like, you know, we would have been 30 percent of the taxes for the county. So—but the county wanted us there.
Hell I bought four Ford Explorers the first week we were out there for people working up on the ridge and, you know, Charlie—what was his name that owned the Ford Dealership—loved us so, you know, we were the first action in town and employed any electrician or any plumber or any, you know, body that wanted to work in—in that county. So we were pretty—they held a parade for me. I—I actually Hightower would have been proud of me. I actually got in a car and went in the parade. But yeah, they were pretty excited about the first windfarm coming to West Texas.
And I’ll tell you landowners are still happy with it, right. I mean, they’re making pretty good money on these things. It’s not quite like having a big oil well on your place, but it’s pretty—it’s pretty remunerative.
DT: So—so wind power development out there was—was not just about providing alternative source of energy, but it was really sort of undergirding the whole economy in some of these rural counties.
BK: Oh absolutely and it’s a lot better than raising sheep. So, yeah.
DT: So I’m trying to piece together in my mind more of what you were doing, you know, in the many kind of episodes of—of Good Company.
BK: Yeah, so I—so, you know, after working for Kenetech, for a couple of years, they ended up going bankrupt and it wasn’t because anything they did, but California had held a—I don’t remember what BRPU stands for—but an auction that was supposed to be an “all-resource auction,” where wind and solar were going to get to compete against natural gas and coal and, again, very California, very progressive kind of thing. We’d won somewhere around 250 million dollars’ worth of contracts, which was big—no, it was more than that actually.
We had already bought 250 million dollars’ worth of parts to meet the contracts that we’d won because our prices were so attractive compared to some of the conventional generators. So we had contracts with the big three IOUs in California for—I think more like 600 megawatts. Anyway, we were going and, you know, building windmills in our factory in Northern California and the three utilities appealed that auction to FERC because they’re—they’re under FERC jurisdiction where most of Texas is not.
But any event, this is one thing I never forgave Bill Clinton for—I don’t know if he was just not paying attention—but the utilities managed to overthrow that thing and abrogate contracts which is kind of unheard of, but the utilities were so freaked out about so much renewable energy winning in that contest, that they appealed it. And I don’t even remember the rationale for it at this point, but—but got that overthrown. And, of course, you know, one—when I’d been acquired, part of my acquisition had been stock which now tanked so that didn’t do me much good.
But the first US wind manufacturer ended up going bankrupt because of those contracts being abrogated by the FERC. And we had all this inventory we couldn’t sell fast enough ev—everywhere else. So—so I ended up leaving that. My wife died about three months later, left me with two kids, and we—we bought a house not too far from here on a bus stop so I could put them on the bus in the morning and be there when they got home. And I had to figure out how to be home more often, which is really kind of how I went back toward lobbying. I had to stay in Austin.
I couldn’t any longer travel and develop windfarms in West Texas, right. So I ended up getting more involved with policy. And, in fact, one day Allison Silverstein, who was Pat Woods’ aid, called me up and said, “We haven’t seen you in a while. Why aren’t you down here?” I said, “Well, Kenetech’s in trouble and I’m trying to, you know, hold a family together and not sure what I’m going to do next.” And she said, “Well somebody needs to represent the renewables efficiency people down here like you used to do because we’re doing a lot of stuff here policy wise that matters.
So I thought well, I could do that. So I called all the people that I had done business with in the energy bus—in the clean energy business side of the house and said, “Why don’t you let me represent you in Austin. I’ll, you know, do what I can to try and help your business and figure out policies and that kind of stuff.” And for 25 years, with only one interruption, the—for a couple of years—I—that’s basically what I’ve done is had a small consulting practice that does sort of outsource business development and lobbying and—and regulatory affairs for a—a list as long as your arm of clean energy companies. And…
DT: Let me see if I’ve got my—my mind around which chapter this might fall into, but—but I think that there was something called a MUSH market. And was that while you were at Kenetech or was this when you came back to Good Company?
BK: MUSH just stands for Municipal Utility Schools and Hospitals. And that was—that was the LoneSTAR loan fund that was their focus, although Kenetech had a subsidiary that did that as well. So we did—we did wood fired boilers and biomass projects. We did MUSH market performance contracting. And…
DT: Which in—involved the—you getting a share of the savings. Is that correct?
BK: Well there are several ways that could be done but performance contracting essentially boils down to a performance agreement that we will help you save energy and it will either perform or will make up the difference one way or another. So some people did it as shared savings that we’ll just take a share of whatever you save. Turned out you can get a little fuzzy about what the estimate of the savings was because you’re trying to measure a counterfactual, right? That is, something that didn’t happen. How much did you not consume?
So, and some people wandered into the grey area there and got bad reputation. So most of that business has gone to actually measuring performance of something that you can say it did what it was supposed to do and you get a certain payment for that and your savings should be enough to more than pay for that. And, in fact, we even helped pass legislation that allowed state agencies to take advantage of that and schools and local governments.
There’s all fairly complete law now that sets up how they can use performance contracts that essentially pay you from day one to—to go to the savings and you use money that’s not part of the school’s budget so it doesn’t detract from educational spending and yet allows you to do a lot of maintenance and upkeep of—of your buildings and keep everybody comfortable.
DT: You know, something that I—I think came under the umbrella of Good Company was your—your assistance to development of the CREZ transmission system. You talked about wheeling power and I guess that was part of the…
BK: Yeah, we weren’t—we weren’t really the main force there. We were supportive but Mike Sloan and Susan Sloan were among the—the real movers there and the Wind Coalition pretty much took the lead on that. I was sort of focusing on different things by the time that came up. Really since—since ’99, one of the things I started focusing on was information and intelligence.
And in 2004, I finally helped pass—or I guess had to be 2005—2005, we passed legislation that encouraged all the investor-owned utilities to adopt advanced metering infrastructure so you would have a digital meter on your home that could communicate in real time and actually keep five minute increments of data on your consumption, even communicate directly onsite. If you had a device that could read your own meter, you could get real time information even quicker than that onsite.
And that was really the beginning of—of something I think real important and that’s kind of my current work. So…
DT: And—and can you help us understand the—the—the value and importance of smart metering which I guess that would fold into?
BK: Right. Well the value of efficiency or renewables or any other kind of distributed energy resource that I might use, for instance, here on my own home is partly dependent on when I use it or when I save it, right, that the price of electricity varies during the day. In fact, in ’99 when we created the retail market—and—and in ’97 we created the wholesale market—we actually create the situation where everybody that generates electricity is offering that into a marketplace. It’s bought and sold every five minutes.
Most people don’t know this is going on, right, but, beneath the surface, electricity is bought and sold every five minutes. And there are markets, not just for electricity,.. for ancillary service as we call them, things to help prop up the—the frequency of the power are separately acquired in order to—to give the market operators the ability to bring on more or take some off, in order to keep it right at 60 hertz or within a range around 60 hertz so lights don’t flicker and engines don’t burn out—motors rather–don’t burn out, things like that.
So—so anyway, you’ve got this market going on, right. Well now we can communicate with consumers about what’s going on in the market. As the price fluctuates up and down, if your consumption can now intelligently respond to that price as it goes up and down, you can be a much better consumer. In fact, today there’s a company called Griddy that you—for 40 dollars a month, you can belong to the Griddy Club and they will sell you electricity at the wholesale rate. No markup.
You just pay your 40 dollars a month and they—all the administration of moving that power at that price to you is paid in that 40 dollars. Otherwise, you’re paying a wholesale price. And they send you signals so that you know at what time the price is what so that if you see the price go above a certain level, you can decide to use less of it or you can actually buy equipment now to buy less of it on command automatically without you having to be involved. So you set it, forget it, and you can be efficient.
In fact, my last client in this space was of—a spinoff of WeatherBug, the weather company—created WeatherBug Home. They’re now Whisker Labs. But they actually figured out how to create a thermodynamic model of any home using 2 ½ second weather feedback from their neighborhood level weather fe—stations information—historical information—about the house, thermostat information that they’re hooked into—Honeywell, Emerson, Ecobee, Nest, whatever.
They—they’re integrated with the back office, of each of those, and if they can get meter data to see the consumption of the house, they can tickle out what your energy patterns are, what your energy behavior is, and they can help keep you more comfortable, more efficiently than humanly possible because they actually run your air conditioner only when it really needs to. So if you say you want to be at 70 degrees when you get home at 5:00, normally your air conditioner would just come on a certain time ahead.
Well when it comes on actually should vary ideally, depending on what the outside weather is and what the thermodynamic characteristics of your house is. How long does it take to heat up? How long—how quick does it lose that heat? You know, well how hot out is it? Is it sunny and baking on the roof or is it kind of cloudy and overcast and humid and how does your house behave in that? So they could figure all that out and turn on the air conditioner at the last second to get you what you want and not use anymore energy than you absolutely have to. Now you can do other things too.
You can make sure that my electric car doesn’t start charging until the price goes down later at night, that it can calculate, you know, when do I need the battery full to leave in the morning and—and do it at the last minute, things like that. All those kinds of things start to become possible, right. The integration of home energy storage and photovoltaic systems and electric cars and the storage that comes with them and just running the air conditioner and the appliances and so on.
There are—it’s taking time and we’re not there yet but there are companies that are evolving to be able to help us control all those things in a very organized way. And part of what I’m working on now is access to that meter data because the market needs that data to build these kinds of applications, right. It has to have easy access to that data. Does that make sense?
DT: Yeah. I mean, this reminds me of I think what you were talking about before where there are these feedback loops and—and that you want to get information as being part of—of the—the circuit of energy use and…
BK: Right. Right. Well, and if you want to sell your flexibility of your house into that five minute energy market that serves the entire ERCOT system, Electric Reliability Council of Texas, that’s where the market takes place, you can agg—be aggregated with other homeowners and a—and a third party like WeatherBug could actually bid your flexibility into that system. In other words, my willingness when it gets to a certain price, to use less, to turn down the thermostat, can actually be paid, can be compensated by participation at market.
And we’re evolving toward that. There are a lot of barriers and a lot of pushback, like I say, because it involves big money, right? So the coal –huh– the Trump Administration’s trying to save coal and nuclear industry, for example, because they’re being priced out by these things which is way more efficient and way more available and—and environmentally sustainable. They’re becoming a huge competitor—all this. In fact, the—Wood Mackenzie which was just bought by Greentech Media’s research arm put out a report that said, “By 2023, there will be 88 gigawatts of flexibility just in residential homes from connected things.
That’s 88 one thousand-megawatt power plants equivalent in the United States and only three years from now—four years from now. So this is evolving very quickly and it’s very exciting and people don’t yet have a sense of how significant it is, but it—but it’s pretty significant. In fact, 95 percent of the peak—remember I said we have to build the electric system to meet the absolute peak? Ninety-five percent of the difference between the off-peak and the peak is residential and commercial. And it’s mostly weather sensitive.
So to the extent that you can be flexible around that and be intelligent about managing and in those times, there’s a huge amount of value in all this. And we have to be able to get access to the meter data in order to quantify that and be compensated for that.
DT: So I guess you’re saying that you could sell that hot shower at a really high price, that if you were able to…
BK: If you want that hot shower, you can pay a high price for it or you can actually take a cold shower now and get paid for it. Yeah, that’s right. So—so let me tell you about the project I’m working on now because it’s directly related to this. In 2011, Obama’s White House—they called him the Chief Technology Officer or something—and I ca—I’m so sorry I can’t remember his name—I am getting old and having trouble with names—but in 2011, he kind of challenged the industry to come up with a standard—how we would share the data from these AMI systems, these Automated Meter Infrastructure systems.
Now we got all this data—35,000 readings a year instead of 12, you know, monthly readings, how do we share that? And—and—and the data, like I said, you can tickle a lot out of it about what you’re doing and so on, so people consider it private. In fact, in Texas, legally the consumption data belongs to you. Your—your meter data, your consumption data is your personal property. Utilities are custodians of it, but they’ve been charged with finding a way to safely and securely share that with people you designate, right.
So you need a system for permissioning—for authenticating who the customer that—that the customer is who they say they are, that they are authorizing the transfer of their data to a third party, and who that third party is and for what purpose. So we developed something we short-named the Green Button Standard and it’s—the idea is to push a simple button and make all that happen so that it’s frictionless for the customer. And the idea was good but the way we’re implementing it is wrong because every utility is developing their own portal except in Texas.
We ha—in Texas, we actually got four utilities on the same platform we call Smart Meter Texas. What I’m trying to do today—I’m calling Smart Meter global because we need to expand that so that all utilities can get their data onto one simple platform. See today, if you’re in Nest and you want to get compensated for the flexibility that you’re creating in millions of homes, you have to go to every utility and get, through their own different individual system, permission from each and every customer to get their meter data. Okay. It’s very cumbersome.
Most of the systems out there, customers don’t make it through. Even California, where they had Green Button (Standard) compliant systems, they were taking 13 pages and 17 clicks on the utility website to get it, right. We’re only now trying to make it where you can sign in on the Nest website without feeling like you’d left the Nest website and sign in and give your approval and allow Nest to access that. But—but even if every utility was identical, it still requires a Honeywell or a Nest or an Ecobee or a WeatherBug Home or an EnergyHub to integrate with 9 or what is it—3,000 utilities across the country to have a national product.
So I’m trying to create something analogous to the ATM system, a single system that every utility is linked with and every third party service provider with a application or a service that depends on data, can integrate one time and reach customers across the geography, regardless of whose service territory you’re in. That suddenly becomes really powerful. In fact, you can even turn the business model on its head and charge them something to access that and it begins to pay for itself. So the whole thing is—is quite interesting.
I just gave a speech on it last week at the National Association of Regulatory Utility Commissioners. So I’ve come out of the closet about this and I’m speaking publicly about it. And I think we’re going to put together a utility collaborative to try and see how we can do this. And there—there are other models beside the ATM system. The SWIFT system for international banking transfer of funds was actually done by a collaborative of banks and actually structured as a co-op.
So anyway, we’re exploring those kind of things to try and free up the internet of things to really compete head on with the traditional resources. Isn’t that exciting?
DT: It is. And it—so it sounds like you are trying to—to create values through aggregating a lot of the—this demand flexibility. And—and I wondered if you could talk about the flipside of the—the market, you know, the suppliers? And what happens to the coal plants, the nuclear plants, that can’t compete on price with this aggregated data that—that, you know, you’re—you’re marketing?
BK: Well there is going to be a transition period where not everybody makes it, right. Buggy whip makers lost market share to Ford and, you know, you’re going to see some of that. We’ve overbuilt generation plants and we’ve got more people in the business of building generation and—that are going to have to find some other way to make a living because, frankly, where we’re going—it’s going to be much better coordinated and you’ll need less.
And if we can use intelligence to replace the need for energy, the cost of that is so low we’re talking about, right, machine-to-machine kind of interactions ultimately and—and—and artificial intelligence and communications doing the work that’s so inexpensive it will better coordinate the fr—the—the use of the variety of resources that we have. So it will actually increase, I hope, the—the load factor or the usage factor of the resources that we have. Like today, for example, we use power plants and power lines 50 percent of the time on average.
Again, remember because we’re building for this peak. We—we—it’s like we’re blind and we just say we don’t know what’s going on in the world, we just want our electricity now when we flip on our lights, right. Well that’s why we built the system the way that we have that a few hours of the year, like less than 60, we’re anywhere near the peak. But we build out for that peak, right. So intelligence right away clips the top of that peak off.
All of a sudden, all those peak plants are unnecessary or the—or the ones below them that are inefficient are unnecessary and we’re beginning to have a different looking fleet of plants meeting this new lower peak. And we’re beginning to shift the peak by intelligence and storage and things like solar, which generate during the middle of the day are changing the profile of energy consumption and net demand in California completely. All those things have to be somehow tied together using intelligence.
And that’s where data is just right now the most important sort of front on development in the energy business and it’s an exciting place to be. The—the applications that are evolving out of it are going to be—it’s just going to be substantially different than where we’ve been.
DT: Well, maybe you can give us a little insight as well about how you deal with these volatile sources of renewable energy—the solar and—and wind that—that can be very cheap but they’re not dispatchable?
BK: Right, right. They’re also weather sensitive. The thing about them is, you know, they’re—they’re unpredictable in certain ways, but, you know, people used to be able to predict how long it took to sail the Atlantic pretty close because, on average, you kind of know what’s going on, right. They do come and go, but there’s a predictability about it. And, to some extent, they also interweave a little bit, right. Like there’s almost no overlap between great solar days and great wind days.
Great wind days tend to be—well tend to be early in the morning and the evening, you know, so sun is the opposite, right. So the sun comes up and it’s at its peak in noon and even afternoon and then goes down in the evening and wind tends to pick up in West Texas about that time. So the two of them actually are quite complementary. In fact, people were worried about, you know, we were running out of transmission to West Texas for wind, but there’s—there’s actually quite a bit of room left for solar because some of those lines are not loaded during the best solar hours.
So there’s only about a single digit overlap of—of when the peak of both of those resources are—are actually running. And then you have storage capacity that we don’t necessarily think of this way, but like industrial production, right. So if we start using intelligence, what—we’re doing now what we call demand response—large factories can actually make things in batches and simply turn off when there’s high demand and price goes high, and then go back into production hours when the price is low.
And part of what that does is improve the utilization factor of all our assets, so the power plants get—that do survive and are cost-effective, are running more and are more cost-effective. And the distribution system we’re using more than 53 percent of the time maybe—I think South Korea’s gotten to 77 percent—so you can actually improve the use then, you know, think about if you’re Southwest Airlines and you were flying with half your seats empty all the time. That’s where our utility business is today, right.
So what we’re talking about is the ticketing system to fill those seats, right. Make this cost effective because we’re all paying for it. That’s part of the—the whole idea. Does that make sense?
DT: Yeah, I think so. So you’re saying that—that there’s a—a—a kind of storage that happens by shifting demand from one time to another.
BK: Yeah, that is one of the things I just said. I’m sorry. I unloaded a bunch on you, but yeah. So, again, intelligence comes back in the form of helping align even industrial production with capacity and price and availability on the system. So—but it’s also happening in my home. I showed you my application earlier, that I control my air conditioning from, but it’s being optimized by a third party company who is coordinating with the ERCOT market and also trying to make me more efficient. Now I can change it.
We overrode it for this interview, but—but the rest of the time, I don’t—I don’t have to worry about it. Somebody else is actually running my house and taking credit for it.
DT: Well exciting stuff. Is there anything else that Good Company Associates is doing that you’d like to share with us?
BK: I think we’ve covered a lot. We—we—we’ve done a lot over the years. I—I didn’t mention that I started SPEER, the—one of the other nonprofits that I started in recent years. In fact, I moved all my staff over into SPEER so I could start this data project. But..
DT: This is South Central Partnership for Energy Efficiency as a Resource?
BK: Yes, yeah, yeah.
DT: What—now what does that involve?
BK: Well there’s a group of energy efficiency organizations around the country that DOE calls REEOs, Regional Energy Efficiency Organizations. And, again, I was looking around trying to figure out how we could institutionalize some of the work that I’ve tried to do on efficiency and just so somebody is left behind to try and, you know, continue promoting efficiency and—and ju—intelligent thinking about efficiency. And I realized that if you draw a map of where all the other states are participating, that Texas and Oklahoma participates in none of the Regional Energy Efficiency Organizations.
So we pulled together kind of a Noah’s Ark of, you know, two of everything—universities and solar companies and efficiency, performance contractors and bankers and code officials and appraisers and professors and, you know, whatever, and spent a day locked in a room and just said, you know, what could we do if we all worked together? And—and we ended up starting our own REEO and we traveled to Washington and talked to Department of Energy. And, after hearing from us, Kathleen [Hogan] got up and said, “Well welcome to the REEO world.”
And so we have been working with Department of Energy to try and promote building codes and efficiency in other ways and so on. I think under Trump we’re going to suffer some. They’re not as interested in—in supporting these kind of activities, but we’re—we’re well entrenched and have a pretty good budget and 50 corporate members and have had a huge impact in Texas. You know, Texas we now—I was involved in this, speaking of Good Company, passed a legislation that creates a statewide building code for efficiency now.
And it’s upgraded every few years when the codes are upgraded nationally, but, when the state adopts it, that doesn’t affect anything. All the local jurisdictions are the ones that enforce it—cities basically. In fact, we’re still working on trying to get enforcement capability for counties because they don’t have any. And a lot of counties like Harris County, for example, very important—a lot of houses being built there, but anyway, cities enforce codes in Texas.
And the first time this happened, it was like 80 percent of counties had not adopted, much less enforced, the new building code within several years after the state adopting it. So we realized that there was a lot of education required. And now, the last time the building code was upgraded to almost a net zero building code for Texas, we have been working very hard with local jurisdictions to help them understand that it is the law, that they are the ones responsible for enforcing and helping them understand how to enforce it.
And we now have over 50 percent of the cities in Texas within a year and a half have adopted the code I th—it—it may be better than that. Now I’ve retired as the CEO of SPEER now, but the—now that I’m focusing on my ATM system for energy data—but—but I’m really proud of some of the work that they’re done on—on building codes because we’ve saved people a huge amount of money and—and—and really delivered value to people buying homes in this state that might not have got it otherwise, right.
DT: Well it—it sounds like you—you’re finding lots of ways to lower energy demand and lower the need to produce so much energy and I guess lower the amount of CO2 that’s going into the atmosphere. And I’m curious what—what you see as the—the opportunities and challenges for confronting climate change going forward?
BK: So climate change is, of course, the crisis of our age even though a lot of people don’t want to recognize it or in denial about it. And, you know, we’re—we’re having to do things now, even through SPEER, to look at resilience and begin to prepare for the impacts of it because of the last IPCC Report, pretty much says well actually even though we’ve been saying it’ll be 2050, it may be more like 2030 we start experiencing real impact from this. And a lot of people feel like maybe some of that impact is here already like the fires in California and the worst storms and so on.
You know, everybody knows it’s hard to draw a line directly from one to the other, but this is the kind of thing that’s serious enough that, even if it might be true, we ought to be trying to do something about. And, in Texas, it doesn’t do as much good to talk about it directly, so we have definitely been trying to address it indirectly through these things that I’m describing, right. I mean, renewables, efficiency—all those things do address it.
They’re—in fact, that was part of—we thought was a big victory in the Clean Power Plant, right, is that we—we had the Obama Administration recognize that this is a way to address it if you go outside the fence of the power plant to try and do things. And, of course, they reversed that now, but the—the scary thing for me is that the latest study says that—that maybe all these things we’re talking about though aren’t enough, that we’re going to have to also be able to find ways to begin to capture carbon dioxide in the air and—and—and hold more of it somehow captive.
And—and those technologies are in their infancy and ma—maybe that’s just the beginning like where the renewables were. I don’t know, but I think that—that there is a frontier there for study that is going to need an increasing amount of attention to—to help complement what we can do. And the—the possibility, of course, is there that if we’re unsuccessful saving enough or producing enough renewables and reducing enough of the other things causing climate change, then the impacts will take their own toll.
You know, that we—we will adjust—we’ll adjust to the planet because we won’t have any choice, right. And it may be things that, you know, take out parts of the population, it may be things that we just have to adjust to or accept. It may depress economy so we end up consuming less because we got less to spend, you know. I mean, one way or another, we end up adjusting. And I would favor doing it in a planned way, in a way—well, in fact, the—the title of Howard Odum’s last book, The Prosperous Way Down was his attempt to try and explain to people how we can go to a lower energy lifestyle without giving up our current comforts, right.
Lower—I guess I should say a lower energy consumption level without giving up our lifestyle, right, that there are ways that you can do it, but we have to think about it and it has to be systematic and we have to have real policy about it. We can’t put it off. That’s the bottom line, right.
DT: Well, I—I think we’re probably coming close to wrapping up. And so I—I’d like to ask two more questions and then, of course, open it to if you’d like to add anything. But one question is sort of a follow up on—on what you’ve been saying about climate change and these sort of big picture issues. And I—I was hoping that you could look at the big picture of your career and your life from, you know, the work you’ve done with renewables through efficiency, so many aspects of the energy world and—and if you might have a way of sort of distilling it into a kind of message in a bottle about why other people should care about this, why say a young person who might be curious about the conservation field would decide to get engaged and—and enter this—this field?
BK: Well, we only have one planet and certainly have to be thoughtful about how we use it and what our role is in it, what responsibility we have to kind of shepherd our resources for generations that follow us. I—I just had my first grandchild recently and it’s very exciting, but I also, you know, I worry I’m not going to be around, I don’t know what the world’s going to be like for her. And, you know, Indians used to have philosophy that it was a seven generational planning process of, you know, how they lived on the land and how they conserved and how they treated their resources and so on.
They—they tried to think seven generations out. I worry that we don’t do enough of that, right, that we need to think about what we’re leaving. And right now we have an economy that’s built on consumption and the economy does better when we consume resources more quickly. And when we do it more cheaply, which often means cutting corners about well maybe there’s a little spillage or a little waste or a little emissions or a little pollution or a little toxics left over, but it’s a big world, you know. And the problem is it’s not so big anymore.
It’s getting smaller and smaller and these things are tied together. It’s—I was reading recently that something like one out of every three fish in the ocean has plastic in its guts. I mean, the—the things are all coming together. You can’t—you can’t ignore that what I’m doing here is going to have an effect on—on my neighbor and my—and much less next generation. So I think that’s really important. Also just understanding that having a healthy relationship with the energy is what makes the economy move.
I mean, we use money as a accounting system, but what’s really trading are real things, right, real material things—food, shelter, clothing and so on—that we need to survive. And—and we have more than enough at the moment so we don’t necessarily—or I say we—some of us, I mean, fair fraction of the world don’t actually and we can’t—we can’t ignore that. We shouldn’t be hogging it all, but we really need to be cognizant of the fact that energy is the most important underlying resource for everything that we do. It’s embedded in everything we do.
It’s required for everything that we do, that we make, that we have, and even that we are. And even carbohydrates are a form of energy, right. You have hydrocarbons and carbohydrates but they’re all kind of forms of energy—energy for us or energy for the car we drive and for the machines that run the factories that—everything, right. It’s so omnipresent and ubiquitous that people just take it for granted and yet, it’s incredibly important to realize how it works and to be as efficient as we can be with it and recognize what the dangers are of—of misusing it or running out of it or, you know, all those things. So it’s just critical.
DT: Well one last question from me and that doesn’t mean to foreclose things that you might want to add, but I—I did want to ask the standard last question we pose and that is, is there a special place that you enjoy and getting—going to, thinking of in the natural world that gives you some sense of repose and peace and—and—and a reminder of why you do this sort of work?
BK: Well I took my son climbing in the mountains in Big Bend last Thanksgiving actually. And it’s nice to see that there’s still wide open spaces and whatever and I think I like that. I like going to the beach. I like kayaking down a river. You know, I’d like to see all our natural resources preserved and that kind of thing. I don’t know. I haven’t thought of a good answer for that question. I—at my age, I’m doing a little bit less of the outdoor activity and, like I said, thinking more about just liking to be home with family and seeing my granddaughter raised and that sort of thing, thinking about the future.
But may—maybe we’ll stop and I’ll try and think about something. Did—didn’t you say you were going to ask me about—oh, oh, I guess you did ask me the question about future jobs, but I—I thought you were going to ask me something about—you did say why would somebody do this? That was my cue. So—so if you’re still recording—the thing I was going to say to somebody that might find this kind of thing interesting because there’s so much to be done yet, right. There’s so—things are changing so quickly and the demand for people that understand this stuff and can help with this is significant.
I mean, there is plenty of room for people to help with this and—and do fun and yet really meaningful things. And my only advice to a young person want to be involved in this is first try to understand something that needs to be fixed and then just work at that. And—and I—I’ve actually sort of done that as my life work and I keep finding other people who are willing to pay me to do it. My wife does not understand how, you know, like changing a—a—a word in a piece of legislation to something else is the way to make a living, but even that, right.
If you know where that word has to go to make the world a better place, there’s value in that. If you can see where the value is and you can explain that to people and find people who understand the benefit of it, then, you know, money comes. I’ve, you know, never run out of things to do and I’ve been well taken care of over the years and I just keep, as you pointed out, bouncing a little bit from one thing to another. As I see something new that needs to be done, I just try and organize people to go do it and it’s taken care of me all this time.
So it’s—we just have to pay attention.
DT: Fair enough. Is there anything you’d like to add?
BK: Trying to think of anything worth adding that I’ve left out. I’m sorry. I’ve talked for so long. The place to be, you know, I should have a better answer for that. That’s interesting question. I’ve been so focused on abstract things that places have taken less importance in my life. Used to have a friend that said, you know, when somebody talked about touring and going to visit different places, which I love, by the way, and my wife wants me to do more of—but he used to say, “Oh you’re still looking at the big buildings, huh.”
And that was kind of his way to go, “Yeah, it’s stuff. There’s stuff everywhere but, you know, your being and yourself, your presence, and what are you contributing and, you know, bigger issues of what’s going on in the world and so on that may be more important than looking at the big buildings. But anyway…
DT: [inaudible] just fine as an answer. Thank you very much for covering so much. I appreciate it.
BK: You’ve got me in memory land now. So that was interesting.
[End of Interview with Bob King – November 19, 2018]