00:00
Welcome to Power the Network. I'm Tim Drake. I lead our utility group here at CBM. I'm sitting in today for our regular host, Tim Locker. On the show today, we have a friend of mine, Mr. Paul Maulberg, who's a general manager for KMEA, which is the Kansas Municipal Energy Agency. I'm interested in learning more about KMEA, as well as interested in Paul's perspective on the energy sector in the state of Kansas, as well as across the country. And with that, we welcome in Mr. Paul Maulberg.
00:30
Paul, thank you for joining us today. You betcha. Hey, so I think we started this podcast, or CBM did, about two years ago or so, and I was asked to put together a short list. And just so you know, and I was asked to put together short lists of guests, you were definitely on the top of the short list. So I'm glad that you're here. I know we've tried to schedule your time or two, but I know you're busy as the GM of KMEA, so I appreciate you being here. Oh, absolutely. Yeah, thank you. All right, so let's start with a very challenging question, one that's, you know, in the minds of everybody.
01:00
not just in the utility industry or the energy sector, but everywhere. What is going on with the Kansas City Chiefs? Because I know you're a fan. So let's just start there. That's an awesome question. Yeah. Well, I am a big, huge Chiefs fan, so season ticket holder. You know, we've been on a great run, right? What's it been? Five, six years? Six years in a row, AFC Championship. I'm not giving up hope, so I still think we can put it together. So we'll see how it turns out.
01:29
Denver Broncos game last week. Of course, I've got my cities all across Kansas. So I got a number of Denver Bronco fans out there. I lost three bets this last weekend. So I've got to buy some Denver, I got to buy a Denver jersey and wear that at our next meeting. So pretty tough. But yeah, I still have faith in the Chiefs. So playoffs, yes or no? Yes, we'll make the playoffs. And we'll make a run in the playoffs. I don't know if we'll make it to the Super Bowl, I think we'll win at least one game in the playoffs.
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Right on. I agree with you. I think we're going to go there. So, all right, we got that one out of the way. let's do a couple of things here. Why don't you introduce us to KMEA? Let's talk about your members and then what KMEA does for its members. Absolutely. So, Kansas Municipal Energy Agency. We're a joint action municipal energy group, non-for-profit, located in Overland Park. serve our
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municipal members. So cities that own and operate their electric systems is who KMEA provides service to. So we have 90 members across the state. quite a few members. um You know, I've got, just, we just had our board meeting last week. So 90 board members come together and, you know, we approved the budget and things like that. But our main purpose for those cities is to provide power supply to those members.
02:53
So, um and to deliver that power across the transmission line. So, we provide SPP, Southwest Power Pool Market participation services to those members. We are a project-based joint action agency. There are two types of joint action agencies across the country. A lot of them are what we call full requirements, which is a tight power pool where those members put their resources all together in a bucket and they socialize costs.
03:23
We are a project-based agency where we provide project opportunities to our members. So we may bring a solar, large-scale solar project to opportunity to the members, and they kind of pick and choose if they want to participate in that. So each one of our members has their own little power supply portfolio. They're all different. OK. And we manage that for them. So yeah, and then more recently, due to
03:51
know, efforts, strategic planning efforts with the members. They've moved us into what we call services. So we are now providing line crews, we're providing engineering, we're providing construction services, we're building substations, we're helping out with distribution line construction, power plant maintenance. So yeah, we continue to move into those services. Let me back up a little bit, our members.
04:18
You know, I said we had 90 members. The average size of the member is 2,500 population. So they're very small utilities. do have Garden City is one of my larger members, you know, 30,000 people, but the average member size is 2,500 population. ah they need help. know, lot of my members may only have one journeyman lineman. Wow. ah You know, you know, some.
04:47
don't even have alignment. So they're relying on us to provide those kind of services. Well, OK, that kind of feeds right into my next question. Because we do provide KMEA with some actual product out of CBN, whether it's a medium voltage breaker or some RTUs for a SCADA system or even batteries. So that makes me ask, so you talk about the services side. Right. Is that your mid-states? Yes. Angle, what's your relationship with mid-states or is that internal?
05:16
Company? Just explain that. You bet. So back in 2018, a strategic planning effort, the member said, we need you to start providing services. It was engineering, it was construction. And so we came out of that strategic plan and said, how are we going to try to meet this? And there was two ways of doing that. That was to organically grow that service organization. Right. The other was, is there a company out there that maybe we could partner with? So MidStates Energy Works, Incorporated, located in Salina.
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had been around for 50 years. We've done a lot of work with them over the years. And it was an interesting story. It wasn't me, it was my assistant general manager at the time, was having beer with the president owner of MidState's Energy Works, Mike Smoderer. uh And I think Sam, Sam Mills threw out the idea, hey, what if we buy you? And uh Mike was, I think immediately finished his beer and
06:15
Ended the meeting and left. oh Two or three weeks later, we were in a meeting and he said, were you serious about buying us? And we said, well, I don't know. So then we started the discussion. They were a small uh company at the time, an eight person company. uh 75, 80 % of their business was our members. So they did some work for other folks, uh oil and gas and so forth.
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main business was municipal electric utilities. So we went down that path with them and uh ended up purchasing them in July. July 1st of 2020 is when we closed on that transaction. We keep the name Mid-States just because of the members are used to that um and it kind of defines our service group. So when we talk Mid-States, everybody knows what we're talking about. um
07:11
We've seen some significant growth. When we did the SWOT analysis on purchasing them, one of the threats that we saw was how do we manage the growth that we think we would see. And so that eight-person crew is now a 22-person crew in five years. We continue to look to hire. The members are just continuing to ask for uh assistance on more more things. So yeah, it's been a real good. uh
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real good marriage. And to continue with that, we just had our board meeting last week. The board approved spending $8.25 million to build a new facility for mid-state. Because they've outgrown it. They've outgrown their current facility. that has been the biggest growth of KMA um is that service side. We've worked with Mike for a long time. He's been fantastic to work with. So 22 people now in that group.
08:08
Right. And that includes your distribution side, your sub side, and are you subcontracting those substations then if you're building them? you doing those? Yeah, mean, Mike manages all our, mid-states group manages that. For instance, when we're building a new substation, we'll contract out the concrete work. We can do most of the, typically we can do most of the engineering work. We, on the high side, we may reach out to, you know, an engineering firm to help us on the high side or to bid out the transformer.
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the substation transformer. So we will partner up with some of the bigger engineering firms if we need to. But the actual construction, our guys are doing that. We've got a fab shop, we can build the steel. uh basically we can do most of everything related to that. So lot of the things that we've been doing here recently has been putting in some uh diesel generation behind them, we call it behind the meter. And maybe we're going to get into that later.
09:06
Is that a question that's coming later? No, that's fine. It does have to do with generation, I guess, where I want to go next. And I want you to kind of address this, not just from your members' perspective, but from the state of Kansas' perspective and even the national perspective. And of course, it's a hot topic, right? So Kansas, you know, right now has, I believe, somewhere around 19 data centers. And it's probably more than that right now, because I think they've added one or two. But tell me...
09:35
Give me your perspective on data centers in general. Is the influx of data centers impacting your members? I know it's impacting SPP, and I want to get back to SPP, Southwest Power Pool. But give me your view of AI and data centers in Kansas and then even nationally. Right. Yeah, well, wow. mean, just in the last couple years, we're seeing this load growth.
10:04
across the country. you know, it's happening everywhere. Right. And, you know, it's, uh you know, I won't comment on whether, you know, it's a good thing or a bad thing because it's a huge, you know, national worldwide issue on, you know, leading and knowledge. So, you know, I think it's needed. But how do we move forward?
10:31
from an electric utility standpoint and providing electricity to these data centers and these high loads. And by the way, it's just not data centers too. We're seeing a lot of growth on the manufacturing side too throughout the region. Good point. So, yeah, so how do we manage through this when for decades we've been at a very low constant load growth and for the most part, and especially in the
10:58
Midwest we had sufficient generation. We had more than we needed and that's all been sucked up now. Sure. And we'll get in and talk. I'm sure we'll talk a little bit more when we start talking about Southwest Power Pool. you know what we're seeing, well for KMA and my member cities, small again, small members. Right. We're not landing data centers. Sure. You know a typical peak load for one of my members is
11:28
10 to 15 megawatts. Served by diesel generator. Served by backup generation. so for us, we're like, okay, how is this going to impact us when we don't land a data center? The Evergees of the world, they've got the data centers and they're coming. And so they can manage that through how they're going to do it with their power supply and how that eventually rolls down to the rates for the customers.
11:58
So for us, we're kind of just like, all this energy is getting sucked up. It's excess energy, which when you had excess energy, prices remain low. uh And now uh prices are going to go up. And so how do we manage that and protect our members as this transition happens? um There's a lot of impact on this load growth. I won't call it data centers, but just this load growth that's happening.
12:27
And uh they want it now. I the timing to build a new fossil fuel generation, five years, six years. And so these folks are, the data centers especially, want to be hooked up right now. And so they're out looking for where does the transmission grid support a 500 megawatt data center, a thousand megawatt data center. Again, remember.
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My city, 15 megawatt peak, you know. And we're talking about thousand megawatt loads coming in at one location. So they're looking for where can we, the speed, when can we get hooked, how fast can we get hooked up? So they're looking on the transmission system, where does that fit? And then now you got to deal with the power supply. So there's now an effort going on where they're co-locating load and generation. So the hyperscalers are looking at
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doing that. And so we got to figure, and that puts a lot of pressure on the utilities now. As we're looking to add generation, we're now competing against the hyperscalers, the data centers on getting generation and getting in the queue. So um I heard the other day that uh a utility was in line to get their generator.
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And they got the notice that it was canceled by the manufacturer. And the manufacturer had to pay a uh termination fee. But the cost of that termination fee and then what they could sell that generator to a data center made up for it. So we're now actually competing against uh
14:14
We never had to do that in the utility industry. was the utilities that were building generation. There might have been some independent power producers, but they were selling to the utilities. So huge dynamics going on with this load growth. And again, I'll just summarize. For us, we're just trying to figure out how do we manage it so that we can try to keep the rates uh fairly stable.
14:39
for our members. Right. And that's the biggest concern, How's that going to impact your members, right? And then their households, right? Because you have purchase power agreements, right? Where you're buying the power, whether it's through, and I want to get to that, like, I know you guys generate some of your own power, but then you have purchase power agreements, I imagine. But, right, how do you manage that? How do you manage those costs? Because a lot of that infrastructure cost is not going to go to that specific data center, right? It's going to be spread out through
15:08
Those that buy the power. That's right. That's right. So, yes, all right. So let's talk about AI just in general. Where do you think this whole AI thing is going? And uh people talk about using AI for so many different things, right? I was with a group of young engineers not very long ago, and they said their program's out there that they're not perfect yet, but they can just tell to design a transmission line, for example. Right? Right. And then they're not using it that way, but they're checking their work.
15:37
Right. exactly. So we're a slow mover. I'll just tell you, KMA, we got less than 50 employees. We're slow moving into the AI. And to be honest with you, I'm glad I'm 60 years old and I've got a few more years in this industry. As an older person, it's like, oh my gosh. It was probably like when the internet came around and my older colleagues at that time were just scared. uh
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the death of the internet. So we're slowly moving into it and how we can, uh KMEA can take advantage of that. So we're still trying to figure that out. I know like the Southwest Power Pool is going to spend $19 million in the next year using AI to help with the transmission study processes.
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I was just at a meeting with their CEO, Lanny Nicol, yesterday and was talking to him about it and he was telling me that when they hit the button to do a transmission study, it takes weeks to get the answer back. And they believe they can cut that time by 80 % with AI. So there's definitely going to be some uh advantages to the AI. But what's it going to do to the labor force? I have no idea.
16:57
We know that the linemen are always going to be linemen and the power plant operators, there's always going to be power plant, human power plant operators. But you start wondering about all that engineering, computing, computer science, the IT folks, know, what's that all going to look like? So we're slowly easing into it. So me, again, I'll just tell you, I'm glad that I...
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that I probably won't have to utilize it that much. My staff will need to be doing that. Sure. Okay, well that's good. That's an interesting perspective. Data centers, concern for everybody. AI, who knows where it's going, right? Is it going to eliminate 80 % of the entry-level white-collar jobs? We don't know. We don't know about that. So, all right, I would like you just to explain to me your relationship. Well, first, you have relationships, I assume, with the GNTs.
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Kansas, right? The KEPCOs and Sunflower. And I assume you have relationships with the electric cooperatives as well. So can you just kind of explain for me the structure of the grid per se in the state of Kansas? Sure. And I assume so we can talk SPP, can talk then Sunflower, KEPCO, down to KECs and Munis and then how that relates to your membership. Sure. Yeah, absolutely.
18:21
In Kansas, we have, there's three different types of organization. Well, potentially four, but three, you got your investor-owned utilities in the state of Kansas. That would be Evergy and Liberty Utilities. They've got a small piece in the southeast part of Kansas. Evergy covers basically the eastern half of the state. And then you got your rural cooperatives that are present in Kansas. You have your
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as you mentioned, G &T Generation Transmission Co-ops, which are Sunflower and KEPCO in the state. And they have their members, their distribution co-ops that uh the G &Ts do not serve retail customers. uh Back to Evergy, Evergy is a fully integrated, they do everything, they serve at retail to the end user. The G &Ts just provide service to their distribution co-ops. Those distribution co-ops then
19:17
provide service to the homeowner. And then you have the municipal electric systems. And I mentioned we had 90 members. There's 118 municipal entities in Kansas, which is, think, the third highest in the country for a state. So we've got quite a few municipal members. Municipal members, again, city-owned. They run their electric system. They're fully integrated as well. And that they potentially can do their own power supply or they can rely on us. And then they serve the citizens of
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of their community. So obviously we interact with uh these folks quite a bit, especially the GNTs and Evergy. A little bit on the distribution co-op side. And uh being a regulated industry, we have a Certificated Service Territories, which is controlled by the Kansas Corporation Commission. So uh each utility, distribution co-op, municipal utility, Evergy,
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have a defined area that they serve and there's an obligation to serve within that area. So uh we will deal with the distribution co-ops in Evergy on service territory issues as the city's continuing to grow. That service territory can change if it makes sense for the city to provide service to a new business that may sit right on the outside of their town. um But we deal a uh lot, let me back it, we deal with,
20:44
Average E and the G and T is quite a bit more on legislative stuff as well as interaction with the Southwest Power Pool and um then power supply. we can join in on joint projects and have done that. um So a lot of interaction there. KMEA is like the G and T for the co-op world. So we're doing the power supply, the transmission, which is what the G and T generation transmission is doing for the
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um distribution cooperatives. So, you know, just some examples where we coordinate. KEPCO and Kansas City Board of Public Utilities, big municipal utility, and KMEA went together to um move forward on a 200 megawatt solar project in Kansas. So those three entities are going to be the off-takers of a large solar farm. We have a...
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gas-fired combined cycle plant that is multi-owned by municipals in Evergy in Pleasant Hill, Missouri. Yeah, Dogwood. um Dogwood is. Yeah, Dogwood power plant. So that's a combination of KMEA, KPP Energy, which is another joint action agency in Kansas, the Missouri Public Utility Alliance, and then Evergy and a couple other municipals, Kansas City, BPU, City of Independence. uh we do a lot of coordination there. And we plan
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We plan together on transmission as well and distribution because we're all interconnected via the transmission grid. So a lot of interaction with the GNTs and EverG. All right. So I guess I didn't understand that, and that's a good analogy, right? That you are the GNT for your municipals. That's interesting to me. I never thought about it that way, but that makes perfect sense. Yeah, it's very similar. Very similar.
22:44
Did you ever wonder what's the role of a manufacturer's rep? Reps are independent firms that sell products for multiple factories. We're really an extension of the sales teams uh of these factories. It's a cost-effective way to increase uh sales representation in an area for a factory because we're just a commission-based salesman, so they don't have to have a direct employee in every state that we cover. We offer local expertise.
23:12
We have great relationships in the markets that we in and reps really drive that value for for manufacturers at CBM. We support three specific industries We work in commercial industrial industry uh utility industry and also in uh Communication broadband market as well today more than ever these markets are overlapping and because of how we're structured with with our eSOP We've got the flexibility to put our experts
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uh no matter what field they work in, in the right place. So that's a benefit to both manufacturers and customers because we can better serve our customers, we can better serve our manufacturers, and put the product experts where they need to be. So if you're looking for representation from an awesome sales force here in the Midwest, look no further than CBM. You can reach out to us here at cbmrep.com.
24:10
I understand some congratulations might be in order. I understand that you were recently elected to the members committee. correct. That's correct. on that. Thank you. So let's talk about that a little bit and let's talk about your interaction with Southwest Power Pool. Okay. Well, so a little bit about Southwest Power Pool, you know, I'm sure you've heard this. They're the air traffic controller of the transmission grid. Right. And then in addition, they run an organized wholesale energy market. So those are their two main
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purposes. Back in 20 years ago, more than that, trying to remember, I don't remember the year, I think it was 1998 where FERC, Federal Energy Regulatory Commission, opened up the grid for participation. open access is what they called it. And so prior to that, each utility planned, designed, built,
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their transmission grids, own projects, right? Yep, their own power supply projects, their own transmission. And then there'd be connections made when it made sense to connect to each other. But there was no coordinated planning going on. And then they controlled that transmission grid, that utility controlled that transmission grid. On an island, essentially, right? And if you wanted to purchase power and be able to transport that power across their grid, well, they could say yes or no to it.
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So uh Federal Energy Regulatory Commission said, hey, we need to open this up. And so that's when SPP really started, Southwest Power Pool really started taking off is that they became, again, the air traffic controller of that transmission grid, which they are the making the decisions on, you wheel power from point A to point B? So it's an independent party doing that. So I've been a part of the Southwest Power Pool for a long time, pretty much my whole career. And I've seen it grown.
26:08
First dealing with SPP. I think they had a staff of 25. I think now they got close to a thousand employees because of all the things that they've been doing so Going back to your question mine You know our involvement with the Southwest Power Pool Well, first of all, if we want transmission service We got to go to SPP to get that and when I say transmission service that can be again moving power from point a to point B, right? We've got a power plant here that we need to bring that to our
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our communities, we've got to ask for service and they'll study that. ah If we want to build a new power plant, we've got to ask for, can we interconnect here and what's it going to take to interconnect here? You can always interconnect there. Yeah, go ahead. Are those conversations with SPP on that interconnect or is it with Averagey or whoever? well, it depends on the voltage level. So, Southwest Power Pool controls the high voltage transmission grid. So, if you're connecting at ah
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It depends on what territory you're in, Sunflower. It's uh anything above 69 kV, you go to SPP. Below that, you go to the uh Sunflower or the local distribution co-op. Evergy, it's uh basically the same thing. 69 kV above, you go through the SPP process. Below that, you'll work with Evergy. SPP may get pulled in. um
27:32
We can go on and on about Southwest PowerPool. One of their issues is when you went and asked for an interconnection on a generator, it was taking five to six years to get an answer back. They are trying to improve that. They're going to implement a new consolidated study process next year that's supposed to shrink that down to less than a year. And a lot of that's being driven, again, back to AI, the need for them to get involved.
27:59
So I've talked a little bit about the transmission side, how we interact. Then they uh run a wholesale, an organized wholesale energy market, and we participate in that. that little bit about that, that's a real time, day ahead energy market. So we have to uh offer in, or bid in our load. So um if we've got 100 megawatt load, we bid that in on an hourly basis tomorrow. This is what we need to buy from the market.
28:28
And then our resources we offer in our resources, our generating resources. And we say, is what we're willing to take as a price if you call on us to run. And so then Southwest Power Pool matches that all up. They have to match the load in the generation. And they do that every five minutes during the day. And at the end of the day, they give you a, well, this is what you're going to have to pay for your load. These are the hours and how much power we want out of your power plant.
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So we pay for the load, receive revenue from our generators. if you have, it doesn't really change power supply planning for us. You still want to bring resources to match your load, but you run that through the market. So um again, we provide ah that participation with the SPP for our members.
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That's what KMEA provides for the members. Otherwise, they all each would have to do that themselves. It takes a lot. It takes a lot to do all that. you do want, ultimately, you want your load to match your generation, right? Unless you have excess, right? Which then you can sell and be a revenue generator. absolutely. And you can still do bilateral sales uh on a capacity basis. oh
29:45
You know, we do buy power from other utilities. We lock in some contracts. That becomes our resource, you know, if we buy that, it still gets offered into the market and decides how it ends up running. But we, you know, we get the revenues associated with it when we contract bilaterally. Yeah, so it's, again, it doesn't really, some utilities are long, so they're generating wholesale revenues. Some utilities may be short.
30:13
And so they're relying on that market to cover that. When you think about power supply planning, you don't want that risk of relying on the market because you just don't know where it's going to go. So it really doesn't change. What we used to do 40 years ago about power supply planning, it still really hasn't changed. You want to try to match your load and resources together so that you know what your costs are going to be. All right. That's very interesting. So you guys, I mean, that's happening every five minutes at SPP, right? And they're balancing the ins and the outs. That's exactly right.
30:42
That's fascinating. I did not know that. and then a little bit about you mentioned that I'm on a new committee there, the Members Committee. So, know, the Southwest Power Pool is governed by an independent board of directors. So it's folks that are not a part of the members of SPP that are running the Southwest Power Pool making decisions. The Members Committee, which is I think a 22-person committee, uh chosen from the members of Southwest Power Pool, are the first committee below the board of directors.
31:12
And so it was a great honor to be put on that. I got to start a three-year term starting in January to serve on that. And I'm one of the two municipal sector uh representatives on that uh committee. So one of the things we found out early on is that you need to be involved at SPP. They've got uh multiple working groups, uh committees that my staff serve on.
31:41
you know, make sure that we're protecting the municipal sector as well as our members as they're developing these new rules and trying to meet these challenges of high-low growth. I'm very fortunate to be able to serve on that and be able to have a voice that's right there with the board of directors to represent the municipal sector. So does that member committee represent a position on the board? Is that essentially the way that works or no? It's not a... No, it's more like an advisory.
32:10
So uh during a board of directors meeting, and they're making a decision here just recently, they just approved spending nearly $9 billion on next year, or $9 billion for their integrated transmission plan. And so the members committee, there was probably a good two hour discussion that was taking place between the board and the members committee. And the members committee providing thoughts on to.
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Do we approve this? Do we approve something less? Do we approve something more? And you can imagine, depending on where you're coming from, you may want none of that to be built and others that want double that to be built. They had up to 20, I think the initial study came back saying we need to spend 21 billion. And so through the process, it got whittled down to close to 9 billion.
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I'll be able to participate in those discussions with the board to help them make the right decisions, hopefully. And provide insight to your own organization, right? Exactly. As to what SPP could or could not be doing. Yeah, absolutely. Absolutely. Yeah, the members really rely on us or KMA to add interaction with the Southwest Power Pool and trust us on what we're doing for them. yeah. OK. And then at the member level, are you generally dealing with like a city manager?
33:35
Is that who you're interacting with? Something like that? Yeah, yeah, great question. the super, I'm just, yeah, how's that interaction? Well, just all depends, right? So, for like my larger members like Garden City, we're dealing with a utility superintendent director, most likely. As you get down to the smaller members, we are dealing with the city manager directly in a lot of cases. So, you can just see the dynamics there. uh
34:02
I can't give enough kudos to folks that want to be a city manager and all the things that they have to deal with. And then the cities that own an electric utility, they're responsible for the electric utility as well. yeah, so we've got to be able to communicate at those different levels. But I'll tell you what, it makes for a our board.
34:27
works really well together and it brings a lot of different facets. They each bring their own thoughts from a different perspective when you're dealing with utility directors and city managers. We have some cities that don't have city managers, so we're dealing with the city clerk. So oh we get all these different perspectives and I think it makes us a better organization because of all those different perspectives.
34:52
Sounds like a perfect cross section of Kansas. Exactly. From farmers to business owners, which I guess farmers are business owners. yes. I'll tell you that one of the, um I've been at KMEA 10 years now and one of the first things that I came to see right away is how salt of the earth, the people that we're dealing with in Kansas and the rural, these are rural communities for the most part. So it's probably one of uh the things that I enjoy most about.
35:22
KMEA is to be able to work with those kind of type of people. Well, I was fortunate when I was hired here a number years ago at CBM. That was the first, like I had accounts here around Kansas City, but they also put me in what we call Southwest Kansas. So I called on Garden City and the cooperatives out there and Ken Pado, if you probably. Oh yeah, can't. You probably got with. I told you I'd have to wear a Denver Broncos jersey. Oh, is that your bet? Yeah, it was can't. So, exactly.
35:49
Yeah, sorry to interrupt. No, good. But tell him I said hello. Yeah, absolutely. Because I've been in different role for a little while, so I haven't been out there to visit with him. no, so I really enjoyed that part of my learning process and growing process with CBN was dealing with those folks in Kansas because they are just really good people. Yeah, exactly. Good people. So uh if you're going to be part of a municipal, think Kansas is a good choice. Yeah, absolutely.
36:14
So, all right, let's talk about just your background a little bit. So, did you go to Iowa State? Is that what I heard? Absolutely. Did I research that correctly? You did. Okay, so how did you? I mean, Missouri fan, right? Well, I had three daughters that went to Mizzou, so there's more money that went to Columbia than Ames, Iowa. So, yeah, I am a Missouri fan, but first and foremost, Iowa State side. Iowa State. So did you grow up in Iowa? I don't even know. Yeah, yeah, absolutely. Yeah, so small.
36:41
small rural community in Iowa, Harlan, Iowa. If you're up in Iowa and you're a football fan, you know that Harlan is a dominant football program. So I think we've won, I don't know, it's crazy. So town of about 5,000 people. It's funny, I was always strong in math, going through school. And my wife and I talk about this all the time. My wife, Susie, we were high school classmates.
37:10
Didn't start dating until we were college. So we always talk about this, that our guidance counselor, you know, when you were deciding what school to go to or whatever, you went and see the guidance counselor and he would just look at your grades and say, oh, you're really good in math. You need to go to Iowa State and go into engineering. So my wife was also very good in math. She got the same advice. You need to go to Iowa State and go into engineering. She's the farthest thing from an engineer that you'll ever see.
37:34
and she tried it for about six months, maybe a year, and then switched over to graphic design. She's got a very creative mind. So it's kind of funny to say that I'm here because of this guy in counselor that wasn't really good at his job, but you just followed him. You're 18 years old. So yeah, I ended up going to Iowa State, electrical engineer. yep. I have done very little engineering in my career. let's talk about that. So you go from, and let's just talk about your post-.
38:02
Postgraduate, right? So you leave school, I guess I should say. And then do you go and up straight at Independence Parallel Eye or what do you do first? Yep, I ended up at, again, you find out it's like who you know, not what you know sometimes when you land a job. So my neighbor in Harlan, Iowa, he was the assistant utility director at Harlan Municipal Utilities. He took a new job with a consulting engineering company and he knew I was going to...
38:30
becoming a double E. So I did a summer intern at his consulting, the consulting company he worked for. After school, I went to work for them. it was a, their name was RWVAC. used to be, their client base was municipal utilities for the most part. So I did eight years at RWVAC in um Columbus, Nebraska. The reason why they were in Columbus is there's a big utility located in Columbus, Nebraska, Nebraska Public Power District. uh
39:00
We did a lot of work with them. And then I found out, had three daughters. The life work balance was kind of getting out of whack when you're a consulting engineer. It doesn't matter whether you're working at two o'clock in the afternoon or two o'clock in the morning. You just got to get the work done. So I ended up taking a job at the City of Independence, their power and light department, and spent 20 years.
39:28
there and kind of work my way up from power supply planning engineer to the assistant director there. And then 10 years ago, took the general manager job at Kansas Municipal Energy Agency. So just it just popped open. You just saw it come open. How did that step work? Yeah, no, I was 20 years. Yeah, and I was in line to become the director there. The director there was nearing his uh retirement uh and we had a great relationship.
39:56
He just kind of kept hanging on. And so I wasn't actually really looking, you know, there's in this industry, it's small industry. I got contacted about the KMEA job and would you be interested? so, yeah, I kind of wanted to tell Susie this and others this that, you know, I wasn't really looking, so I didn't really prep for the interview. I just kind of went in there.
40:23
Kind of like this interview. Right, right. And, you know, went in there, whatever, because I was happy in Independence Power and Light. And again, I thought, you I was going to take over the director's job at some point. But yeah, they ended up uh offering me the job and a hard decision, hard decision. But it's been a great, a really good decision for me, so, in my career. yeah. Good, good for you. So that's interesting.
40:51
Wondered how that transition has taken place. I want to step back just a little bit because you made a comment on SPP that I'm interested in and as it relates to data centers. So you talked about local generation for these data centers. So if they have local generation, then they don't have to go through SPP, right? Is that true? Yes, no. If they want to connect to the grid, yes. got to... They want to sell anything back? If they want to...
41:21
electrically tied to the grid, they have to go through an SPP process. If they just want to sit there and run on an island without connecting, no, they wouldn't have to. But I don't think any data center is not wanting to connect to the They need to connect. Yeah, it goes down to reliability, 100 % of, they don't want to have any curtailments at all. So what's the most reliable way to do that? Well, connect to the grid. It's not building power plant.
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next to it and running the power plant. So they all want to connect to the grid. Just due to this five year process to connect to the grid, that's why a lot of these data centers are like, well, let's bring generation so that we can serve this data center while we go through the process to connect to the grid. Now, Southwest Power Pool, they've got it before FERC. They're trying to fast pace.
42:15
this co-location so that they don't have to wait five years. So if a data center wants to connect to the grid and they're bringing generation, they're trying to do a separate kind of study process that could get turned around and they're claiming that they'll be able to do it in 90 days. obviously there's um a lot of, uh I don't want to call it pressure, but a lot of momentum coming from uh the federal level that we need these data centers.
42:44
And so how can we get these things deployed quicker? So that was one of the options. Well, all right, hyperscaler, Google, if you're willing to bring generation and you want to connect to the grid at the same time, that has less impact on the grid because they've got that generation sitting there. So if there's transmission issues, they've got the generation to keep the energy flowing to that data center and not have to rely on the grid.
43:14
I think they thought maybe uh spring of next year, they'll be ready to start implementing that quicker. It's called high load impact, high impact large load study process at SPP. It's called HILS. And then they got one called CHILS, but they're looking at a couple different processes really for these data centers and how can we get them connected and up and running quicker. And again, I think that's just coming from
43:45
You know, just the demand. So the Googles, the Metas and so forth, that they need these as well as I think there's again this race to, you know, who's going to be the, what country is going to lead this knowledge industry. So. And it's a challenge all the way around. mean, for the utilities for, well, frankly, utilities, anybody's going to try to produce power, right? For these data centers and supply that power. Right. It's hard to get equipment today.
44:11
Right? Absolutely. And the question is, these manufacturers in the industry, who do they want to serve? Do they want to serve the customer base that they've had for decades? Yeah. And decades? Right. Or do they want to jump off, like you said, and cancel the generator uh order because they can get three times from a data center? Yeah. And I think um manufacturers are going to be well served to keep their long-term alliances. Right? I mean, they're going to have to pay attention to these data center folks, right? I'm a big believer in it.
44:41
but we can't forget about the people that got us here and the people that need the energy. Yep. And again, that's who we are. That's who our members are. We are the non-data center folks. uh make sure affordability is still there for these folks for their electricity needs. Now, my next one for you is another maybe right field question, but Grain Belt Express. Yep.
45:06
High voltage DC line going from what I believe is Dodge City, cleared through Kansas, Missouri, and Illinois, Indiana. How has that or the consideration of that impacted your members? I'm sure it has from a job standpoint. so is it impacting them? It could impact them from a job standpoint, right? There are manufacturers in some of those communities, right? That could really benefit from that line. And I believe that's an Invenergy line, if I remember right. The federal loan guarantee just got pulled.
45:35
How involved are your members in this HVDC line and how is it impacting them? Yeah, so not much, but I will tell you that routing. So I think the route at one point was going to go, you know, they came out with like this big five mile gap and, know, and laid it out and it went right through the city of Russell, which is one of my members. So they got super excited, you know, the city is like, what?
46:04
And it's like, well, don't worry, it's not going to go right through the community. So we get involved in routing. But other than that, very little directly with the transmission line, the DC transmission line. But we're concerned on what it's going to do to the wholesale energy market. Basically what that line is meant to do is to take this all the wind generation out in Western Kansas and move it to the east where there's
46:33
you know, significant load pockets, you know, the Indiana, the Illinois. And so, you know, from our view, it's taking this low cost wind energy and shipping it out. And skipping. Yeah, yeah. And I don't think it has any, you know, DC, you got to have a, you know, an ACDC substation. You to have converter station. You have to have a converter station. I don't think there's any one located in Kansas. I think the first one is in Missouri. So all this energy.
46:59
will be uh being shipped to Missouri and farther east. That's a good thing for the folks that are involved in those wind farms, because it provides uh another uh market for them to sell energy to and to potentially build more wind farms. So that's good for the local area as well. As a municipal utility out there, we benefit with that low energy right now. And if it's moving to another market that
47:27
that we believe that the energy prices will rise in Western Kansas and that's how it's going to affect us. We're not opposed to it, but we just got to be ready for that. That potentially we're going to see some of the wholesale price rise. Data Center's probably going to do more of that than this transmission line. are KMEA. We are a big believer that we got to build out the transmission system. are. So we'll support those kind of things.
47:57
you know, what Southwest Power Pool and their plans they're coming up with, the $9 billion, we support that. And we need to continue to expand that. Concern is, again, affordability. If the load shows up, if all this data center manufacturing load shows up, we should be fine from a transmission perspective and investing in transmission. We're a little bit concerned what's going to do the wholesale energy market though. oh
48:21
Okay. So anyway, thank you for that. And I wanted to ask you too. So you've had a long career. You've come out of the consulting world, right? In engineering, you went to IP &L and then KMEA. Did you have some mentors along the way that helped you? Yeah. So great question. um And I'll turn to my 20 years at the City of Independence. My first, the first utility director there, he hired me. I won't name his name. I'll tell you, I learned more about what not to do.
48:50
through his process. uh But I learned lot from him as well. He was an exceptional uh power supply negotiator, contract negotiator. I learned so much through that process. He lacked a little bit in uh personal relationships, employee relationships, employee management. But my next director, and I will mention his name, Leon Daggett, uh I spent 10 years underneath Leon, he was exceptional as taking
49:20
his staff and pushing them up and making them the best they could be. Reason I got the KMA job is I can just directly point to Leon. uh He wasn't as good at technical stuff and the business, know, the detailed business stuff, but he was incredible at staff management, uh encouraging people, motivating people. And I've taken those two things to try to, you know, develop myself. So...
49:47
As far as mentoring somebody right now, one of the things that my executive committee tasked me over the next couple of years is find my successor, at least have an option within KMEA. I'm working through that process right now and got a couple of good people that I'm going to start working there. Take that, what Leon taught me about pushing people up, bringing people up and trying to do that. So kudos to Leon out there. He passed away a couple of years ago, but... uh
50:17
was a personal friend as well. So yeah, thank you for that question. Absolutely. That's great. It's a gift that you get to give others, right? If you can help lift them up and bring them through an organization and mentor them and help them. So I'm glad that you're doing that. And then let's talk a little bit about your family. And you can just disclose what you want. But I've got to ask about Susie, right? Because I know you two have been married a long time. And I've seen some. m
50:44
some artwork that maybe she's done or maybe you both did right in this game, like this bags game, these beautiful boat drawings. Now, was that all Suzy or were you involved in that sketching? I'm taking zero credit. Zero credit. I built the cornhole games, I built the boards, but all the artistic stuff is her. So again, I told you about how she, you know, that our guides counselor pushed her to engineering. Took her about a year to figure that out. So she ended up getting a graphic design degree at Iowa State.
51:14
And so, and she's now taken that and ran with it. She worked for commercial design companies until we started having kids. We have three beautiful daughters and they're all married now. I think, Tim, you know this, that I had three weddings in two and a half years. That was tough. That was tough. Three daughters. So. Very difficult, I imagine. Yeah, but we got through that and now we're getting the fruits of the benefit of marriages.
51:44
three grandchildren right now with a fourth on the way. So our focus has turned to those grandkids. But back to Susie. So over the time that we've been married, and we've been married, oh boy, 35 years, she has done so many different things with her artistic ability. So of course she worked initially. we go back to Columbus, Nebraska, where I started my career.
52:09
We can drive through that community and can see the billboard signs and the logos of companies that have her name on it. uh So she did all that. But as she became a stay at home mom, her creative abilities came out in different ways. So one of the things she did was uh murals. So she would paint walls in people's homes, generally baby rooms or kids' rooms.
52:36
And so she did that for about 10 years. um Got tired of that and then kind of moved into uh with our kids getting married. She moved into doing uh all the stuff around a wedding, the programs, the signs. And so she started uh doing that as well. And then she moved into baking cookies and designing cookies. And so that's what she's currently doing. And she does this.
53:05
just for friends and family. And it grows from there. It's not a business. It's just something that she wants to do. So we did cornhole bags when that uh sets, when that was popular a few years ago. I think we put 50 of those together, pairs of those together. And of course, she'll paint anything on those boards that you want. So I'm the least artistic person there is, and she's the most artistic person there is.
53:31
Combine us, we're about an average artistic person. So I say I'm an average artistic person. yeah. Okay, so that's what she's doing. What are you doing in your spare time? Like, uh weddings are over, grandbabies are here on the way. So what do you do outside of work and family? Yeah, so, well... There we go, maybe they're not separate. First and foremost is family. Right. Then that, our family as well as our extent, our Mike siblings, her siblings, we do...
54:00
So we're family oriented. Outside of family, and I'm a big sports guy, and we talked a little about the Chiefs. we're, Susie, I'm a huge Royals fan. She's a bigger Royals fan than I am. So we do a lot of sports events, season tick holders at the Chiefs. um Woodworking, I personally will do some, we're uh at home, do it yourself type uh people. So we do a lot of things.
54:30
um building our own things and so forth. yeah, it's a great question. uh I golf a little, not well, but as I start nearing my retirement age, I think we'll both soon as now start taking up golf or something like that as well. yeah, family first, big sports nut. um And yeah, that consumes my time. Sounds like it's enough. It sounds like you'll have plenty to do in retirement. So now you just have to decide when that is. Exactly right, yeah.
55:00
I still got a few years to go. Right on. All right. Thanks, Paul. All right. Thank you, Tim.
55:08
Thanks again, Paul, for joining us today. And remember, if you're working on a project or if you're looking for representation in the commercial, industrial, utility, or communication space, look no further than cbmrep.com. Remember to like, subscribe, and repost. And thanks for joining us on Power of the Network.
