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5 Questions with Direct Energy Business President John Schultz

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With advances in technology, improvements in customer engagement, and a number of major policy and regulatory developments, it’s an exciting time for the energy industry and Direct Energy Business.

Recently, we caught up with Direct Energy Business president John Schultz to get his take on some of the latest energy industry trends.

Here’s what he had to share.

Leading Direct Energy Business – one of the largest retail energy suppliers in North America – must provide a unique view of the industry.  From your perspective, what’s the biggest trend happening in the energy industry today?

JS: It’s innovation – advances in energy technology, data analytics, and customer engagement. All of these trends are major game-changers for our industry.

At Direct Energy Business, we’ve long strived to be more than just a commodity provider to our customers – we want to be their trusted energy advisor. And, somewhat counter-intuitively, that also means helping them use less of the electricity and natural gas that we sell.

With cutting-edge technology that provides personalized and real-time energy usage information to businesses – such as Wireless Electricity Monitoring by Panoramic Power and the 3rd generation Nest Learning Thermostat – we can help our customers not only gain useful insights into how their business uses energy, but also valuable insight into how they run their business.

The industry is abuzz with major policy and regulatory developments right now, especially EPA’s Clean Power Plan, SB 350 in California, and PJM’s Capacity Performance. What’s your take on each of them?

JS: These are all developments that will have a tremendous impact on our industry.

With the Clean Power Plan, we’ll see what plan specifics are rolled out by states in the coming months and years. In general, it’s a great opportunity for Direct Energy to further demonstrate the innovative, energy-conserving products and solutions we’ve already been providing to our customers. While the regulation is likely to be challenged in the courts for years to come, most states will file compliance plans and begin to take action. They won’t want to leave implementation to the federal government. I think renewables and natural gas will be the winners and coal is clearly going to be challenged. This year has already had more coal power plant retirements than any other year in history. 

The same holds true with SB 350 in California, which Governor Brown signed into law last week. We really believe that we can play a large role in helping California meet its goal of increasing renewable energy to 50 percent of the state’s generation mix and doubling the energy efficiency of commercial buildings by 2030.  

PJM Interconnection’s Capacity Performance proposal, however, is very concerning to us. The plan will reward power generators with higher capacity payments, which will translate to price hikes for customers in PJM’s footprint, with as-yet unclear improvements to system reliability. The ink on this deal is barely dry and we are already seeing the generation community lobby PJM stakeholders to minimize the underperformance penalties.

Because of that, we’ve provided regular updates to our customers. It’s why we filed a complaint with the Federal Energy Regulatory Commission (FERC). And it’s also why FERC chairman Norman Bay dissented with the rest of the commission.

We will continue to represent and advocate for the best interests of our customers.

It was a busy summer for Direct Energy Business, unveiling one of the largest rooftop solar installations in Texas with H-E-B and SolarCity. Why are these types of distributed generation projects important?

JS: Above all, these types of solar projects offer immense business benefits to our customers. This is a 1.2 megawatt installation that’s going to cost-effectively serve about half of the electricity demand for H-E-B’s distribution center in Weslaco, Texas while also providing significant energy savings and carbon emissions reductions.

The industry is also making progress in bringing the cost of battery solutions down. Solar-plus-battery systems offer customers a compelling way to self-generate power and to effectively reduce their peak demand charges from the grid. This is the fastest growing part of their bill, so managing consumption around peak hours will only increase in importance.

You are – among many other things – a natural gas expert. Tell us a little about the latest natural gas trends that have caught your eye.

JS: The shale gas boom has been one of the most important economic developments in the United States this century. The sheer magnitude of the resource is transforming the industry. Historically, our natural gas infrastructure was designed to move resources from places like Texas, Oklahoma, and Louisiana to major population centers in the Northeast. As a result of shale gas production – especially in Pennsylvania –  and pipeline build-outs throughout the Northeast, we have fundamentally altered the flow of natural gas in the United States in less than a decade.

But, the shale gas revolution isn’t just impacting the energy industry – it is having a positive impact on almost all other industries. Remember that in the five years preceding 2009 (the beginning of the shale revolution), we rarely saw natural gas prices dip below $4.50/MMBtu and, in all the years since, we have rarely seen natural gas get above that price.

This fundamentally alters the way people think about natural gas and its potential uses. Look at our transportation segment, for instance. CNG is quickly becoming one of the leading fuel choice for fleets because of its advantageous pricing, emissions benefits, and opportunity for businesses to reduce maintenance costs. At this stage, it’s really just a matter of expanding the infrastructure and technology, which is well-underway.

The innovative CNG production facility and distribution terminal that Direct Energy Business and Xpress Natural Gas opened this past summer in New York is good example of what we are doing in the CNG space and it’s really just the beginning.

One last question: what makes you most excited to come lead Direct Energy Business every day?

JS: Without a doubt, it’s our people. In our fast-paced and competitive industry, we have some of the sharpest minds in energy ensuring that we provide our customers with the best offerings, personalized insights, and cutting-edge technology that helps manage their energy use.  

We have 18 offices in North America and I always am impressed by the energy and engagement of our people. We’re also rapidly growing and always looking to bring even more talent aboard. I would encourage our readers to explore some of the exciting career opportunities on the Direct Energy Business website.

John Schultz is president of Direct Energy Business. In his role, he leads our North American commercial, industrial, and wholesale customer business. Follow him on Twitter @JohnSchultzDEB.  

Posted: October 13, 2015