In March of this year, Peter Heintzelman took over the helm of Cobb EMC as the Marietta-based electric cooperative’s new president and CEO. He replaced CEO Chip Nelson, who retired after 45 years with the company.
The Cobb Electric Membership Corporation was founded in 1938. The nonprofit electric utility company now serves parts of Cobb, Cherokee, Bartow, Paulding, and small sections of Fulton counties in Georgia. Heintzelman recently sat down with the CBJ to discuss energy, his business and his life in Cobb.
Q: How did you come to the CEO position of Cobb EMC?
A: I was recruited by Cobb EMC by a professional recruiter that found me working in Charlotte and the recruiter actually had seen my performance in Charlotte as an interim CEO of another company. So I was looking at the opportunity here, the company was looking for someone innovative to take the company forward after a very strong performance period under Chip Nelson’s leadership before he retired.
So I got a call and he said, “Would you like to look at this?” It’s a really interesting opportunity. It’s an exciting business, the EMC business. We also have the Gas South business, which is an extremely successful and profitable business that is of huge benefit to the members. So I felt like it was a really exciting opportunity for me to demonstrate my leadership skills and take Cobb EMC to a new level.
Q: Have you always been in the energy sector?
A: Either energy or energy investment banking. I’m always touching energy ... (for) around 27 years now.
Q: Where do you currently live?
A: I have a wife and two kids and we really love living in East Cobb. It’s a fantastic place to live. Great place to settle my family. We came directly from Charlotte. (The children) are three and a half and 11 months, so we’re fairly senior to have such young kids, but we are having the time of our life. So my wife (said) we’re never moving again. So I have marching orders. Very happy about that, by the way.
Q: What’s the biggest challenge that you see facing the EMC right now?
A: I think the biggest challenge is understanding the technological changes that are going to affect our business. We’re going through more change now than at any other time in the EMC business.
And what I mean by that are things like electric vehicles ... (they) will continue to have a huge impact on the utility business and Cobb EMC. Battery storage and what we call distributed energy resources and solar are three of the big ones, right? So how people deal with those technologies and how they start to become a part of our distribution system and affect our distribution system is very important to understand.
We already have the fifth highest reliability of any utility in the nation, because we use very high-tech electrical circuit equipment and we’re one of the best in the nation there. But these other technological items are really going to affect us greatly. So, for example, EVs, are very important. Electric vehicles have now gone mainstream.
A: Because A. they’ve become affordable and B., because “range anxiety” has effectively gone away. The ranges are 250, 300 miles for these cars. Those two things as well as the 10-year track record of people like Tesla has made them go mainstream, right? So in the next 24 months, you’re going to see at least 20 more models that have definitely gone mainstream.
And that’s important to us because we’ve recently released a Night Flex rate (free charging from midnight to 6 a.m. up to a limit of 400 kilowatt hours). Why is that important? Because ... we pay for energy on an hourly basis. If people don’t charge at night, then our reservation costs go higher.
If people charge their cars during the day, then our reservation costs will go higher. If we encourage people to charge at night, then we’ll use all our resources more effectively and all of our customers will benefit even if they don’t own an EV.
Q: How much could that save a consumer?
A: I would say it could save people up to well over $100 a month, if they have an electric car charging.
Q: Can you discern what the consumer is charging after midnight?
A: No. In fact it’s called a time-of-use rate. We’re trying to encourage anybody who can make use of shifting their load to the evening to benefit from that. I can’t tell whether they’re running a dryer or a pool pump or an air conditioner or whatever. And so anybody can smartly shift their energy use and benefit from that.
Q: One of the big stories in energy right now is Plant Vogtle. Can you describe Cobb EMC’s connection to Vogtle and give your personal thoughts on where that project is?
A: I can do that easily. Cobb EMC is not a participant in Plant Vogtle and so we have zero impact. And specifically our rates will not be impacted by any cost overruns at the plant at all.
Q: But you get power from a Vogtle partner, Oglethorpe?
A: So the EMCs subscribe to plant projects individually ... and then you pay the costs associated with that plan. So we won’t have any impact on Oglethorpe in general. Another good example of that is we recently subscribed to 25 megawatts of a new solar plant going into south Georgia. That one we pay. We pay our share of that project. The second cheapest fuel source we have in all of our stack is solar, now that solar costs have come down substantially.
So 2018 has been a big turning point for solar, particularly for us. And the great thing about us is our solar is available to all members, right? Not just ones that happen to have rooftop solar.
Q: What is your thought on nuclear power in general?
A: Nuclear power is great baseload power, but it has to be economic. When they made the decision (to expand Vogtle), gas was at $12. And so at the time ... it was a sensible decision. Things have changed a lot since then and it’s unfortunate for them to have all the cost over-runs.
But I’m pleased that the parties have come together to have a resolution to complete the plan and I hope that it gets completed on time and on the new budget. If they had not gone forward with the project, the ratepayers and the EMC members would have still had a substantial cost in terms of debt repayment. And so I’d like to see them get something for their money even though we’re not involved.
Q: Speaking of nuclear and solar, what do you see as the future of Cobb EMC’s energy mix? Do you see yourself moving toward all renewables at some point in the future? Is that the way that the industry is going?
A: I think the industry is certainly heading to a higher percentage of renewables. We have had a 360-percent increase in our renewables in recent years. We have the largest solar offering east of the Mississippi for any EMC, so we are certainly on the forefront of the solar and renewable offerings in the EMC world on this side of the country. We’re very proud of that. But as I said, because solar has now crossed an economic line where it is cheaper than (other) sources, we would like to do as much additional solar as we can as our needs require.
There’ll be opportunities to add power supply to our existing portfolio. And as we do, more often than not solar and other renewables would be our first choice. But they have to mix correctly within the entire portfolio because we need baseload power as well, right? We can’t just simply have the type of peaking power that solar provides. You still have to have power in the evenings and in the nighttime.
More often than not, economics will rule the day. We had a recent survey of our members where we said who would like renewable power and almost everybody raised their hand and then we said who would like to pay five cents a kilowatt hour for that and there was one hand in the room, right?
Q: Historically, energy consumption has gone up because people have more and more things to plug in. So what is causing consumption to decrease?
A: Generally, between zero and one percent per year is what it has been declining (for) the last five years or even 10 years. I think the main reason is efficiency, right? Things like LED lights have made a dramatic impact on people’s use, more efficient air conditioning units ... So generally there’s been a focus on technology and efficiency across the board and that has really paid dividends for all of us in terms of our energy usage. That will continue. So when we talk about power supply 10 years in the future, will we need less power? I would tell you yes, except for the fact that in 10 years time, 20 to 30 percent of new car sales will be electric.
So I believe that our load is actually going to grow over time because of the mass adoption of electric cars. We have three in the Cobb EMC fleet. We invite our members to drive them. Our members are allowed to come drive them and test them.
When you do the research, it turns out that that electric vehicles fit 80 percent of people’s daily mission. The average commute for most people is 40 miles a day. So even the lowest-capacity electric car, which was the Nissan leaf at 150 (miles per charge), has plenty for people. But you take something like the Chevy Bolt with a 240-mile range or ... up to 300 like the Tesla 3, “range anxiety” is out the window. That’s why these cars will become mainstream.
Q: Anything else you’d like to add?
A: You had asked about the energy mix. So on a sunny afternoon, as much as 30 percent of our portfolio comes from solar.
Q: Have you seen a shift between residential and commercial due to less manufacturing?
A: We still have strong growth in Cobb County, and Cherokee in particular has a high growth rate. So we’re still growing a lot residentially. But the chambers are also doing an excellent job of attracting businesses. So we also have a positive business growth. But I think because there’s only so much land left, there’s probably more residential growth than the business growth. But they both have a positive outlook.