Practical energy management from R&D to operations: Energy Decision Maker Frank Porretto

Apr 2

Practical energy management from R&D to operations: Energy Decision Maker Frank Porretto

The Megawatt Hour Interview Series: Energy Decision Makers: Frank Porretto

Frank Porretto,
Director Energy Management
Northwell Health

April 2, 2020

Energy decision maker Frank Porretto’s experience in the energy industry spans the supply chain from R&D to cost management. Today, he is in the hot seat, helping ensure that his health care system can maintain normal operations in the midst of a global health care crisis.

Frank is responsible for procurement, monitoring and management of all energy across the 23 hospitals at Northwell Health.

Please note that this interview was conducted prior to the onset of the coronavirus crisis in the United States. We do not address Frank’s role in managing aspects of this work under the duress that he and our healthcare professionals in particular, face. 

How did you start out in energy? How did you get your start?

I graduated with a master’s degree in electrical engineering. After graduation I went to work for the local electric utility (for about 12 years). I then moved on to a consulting firm called the Empire State Electric Energy Research Corporation which did R&D consulting for NY utilities. When deregulation began and the Public Service Commission was planning to implement deregulation in the state, our utility clients started to cut back on the use of our consulting services. They were thinking that they were going to need to compete with one another. Our annual budgets declined, and it became clear that it wasn’t feasible to maintain the office, so we had to shut it down.

I obtained the position here at Northwell really because of deregulation. The health system needed someone to focus on energy because someone had to deal with the user side of deregulation. The procurement of energy became more of an issue for larger users like the health system, more so than it had in the past. Now energy supply didn’t just come directly from the local utility. So deregulation caused me to lose a position on the one hand, but gain a position on the other hand.

Your expertise from the utility side became quite valuable to the customer who had to navigate all this?    

Correct.

What kind of work did the consulting firm for the utilities do?

We conducted research and development of new technologies that could be used by utilities and their customers. We used to work with the Electric Power Research Institute (EPRI). A lot of our projects were done in collaboration with EPRI. We brought the NY State perspective to that effort. Our utility clients pooled their resources with us so that we could diversify risk and manage these R&D projects to try to develop more efficient technologies both for the utilities and for their customers.

Do you remember what some of the promising technologies were back then? This was what, in the late 1990s?

Yes, we closed our doors in 1999. Some of the technologies: more efficient ways of determining and finding cable faults; developing more reliable cables; developing advanced electric rates (real time rates, hourly rates); load management controls for residences and commercial buildings. We developed more efficient technologies for generating power in power plants both using fossil fuel and nuclear power. We developed advanced software for utilities (both customers and internal). Many, many technologies.

Cogen is one strategy that is available to hospitals today.

Now from where you sit today…how do you see those R&D activities in light of what you do today on the customer side?

Well I think that some of the technologies that we were helping to develop back then are now useful for customers. For example, we helped advance the state-of –the-art of electric vehicles, especially the batteries that electric vehicles use. We were a member of the USABC (the U. S. Advanced Battery Consortium), whose other members were the big 3 auto manufacturers. Some of the technologies developed by USABC are being used in electric vehicles today.

Also, in the renewable areas, we were involved in developing photovoltaics and wind energy. Those are technologies that customers are employing these days. So a lot of the technologies that we were trying to bring to the marketplace are now being used by large users of electrical energy, like the health system.

It must be gratifying to know that all that work turned out to be relevant.

You know, working in research and development was always interesting, really exciting. We were on the cusp of new technology development. We were learning things: we worked with academia (Cornell, MIT, UConn). They were engaging in basic science of these technologies. It was a very interesting and exciting effort.

How has your time perspective changed? I remember being involved in deregulation at the end of the 1990s and thinking that we would see a lot of these technologies get adopted much more quickly than they have? 

We felt that because we could no longer remain a viable R&D effort, we thought development would slow down. It wasn’t like what happened when telecom deregulated and when Ma Bell was broken up. When telecom deregulated, there was an impetus for all kinds of innovation in telecommunications. This didn’t happen in the power industry, partly because the technology in the power industry has been more capital-intensive, larger and perhaps more centralized.

Also, deregulation only went so far. Geographically, deregulation stopped and didn’t extend across the country, unlike what happened in the telecommunications industry. We actually thought that the lack of an organized R&D effort would slow the innovation and that as a result customer adoption of these technologies would take longer. That proved to be true.

Did you have a sense for how long this would take and what would be required to get these technologies more readily adopted?

It also took deregulation a very long time to have an impact on rates. I manage both our relationship with Con Edison and the Long Island Power Authority (LIPA). LIPA never deregulated. When I first started here, 20 years ago, the Con Edison rates were higher than the Long Island rates. Now it’s the opposite. Con Edison is completely de-regulated and we can buy power from third party suppliers. In Long Island, LIPA is a municipal utility. It is not de-regulated and we are unable to purchase electricity from a third party supplier.

Source: GTM Research A graphic depicting the complexity facing most energy managers today

You have such an interesting perspective on this industry. So glad to have this background. I want to shift gears to what your primary responsibilities and priorities are. How do you view your priorities for energy management at the health system?

 My priorities relate to reducing cost. We are always trying to reduce our energy costs. Energy use is very intensive in health care. We’re constantly buying new medical equipment that uses more and more energy. As a growing health system, we’re acquiring more and more buildings which require more and more health care technology which ultimately means we’re going to be using more energy.

So, we’re always trying to reduce our energy costs. We do it both from the supply side and the demand side. On the supply side, we’re trying to lower our rates, lower the rates we pay for energy, electricity, gas, oil and steam. We do that by going out to the market wherever and whenever we can to secure lower rates.

On the demand side, we’re concerned about using more advanced technology that lowers the use of energy. For example, the one that comes to mind first is lighting. Lighting is a significant percentage of the energy we use. So, we’re doing things like a mass retrofit of our lighting, converting all of our hospitals to LED lighting (light-emitting diode). We’re doing things like that to reduce our energy consumption.  So we try and reduce our costs both from the supply (by lowering our rates) and demand side (by using less energy and more efficient technology).

How do you get comfortable with new emerging technology? I would think your background in R&D would be really helpful in this area. But you need to make sure that these are proven technologies, right? Is there a committee that helps in this area? Do you have engineers you work with?

 We have an Energy Steering Committee that is charged with reducing our energy costs. And we have a group of engineers who review technologies to see how we might apply them. In the healthcare industry, our primary purpose and objective is caring for patients. We’re not going to be trying new technologies until they’ve been proven by other industries, other firms. We wait to see that technologies are reliable and that they perform in a way that is not going to interrupt, in any way, our healthcare directive. My knowledge of technologies is very useful, of course, but we’re so concerned about the performance of technology that we’re a bit conservative when it comes to application and implementation.

What role do data and analytics play in your work?

Very large role. We use a lot of energy and of course we need to understand engineering units, kWh, kW, mmBTU, therms, gallons of oil, mLb of steam. We’re constantly working with data to understand the dynamics of our usage and cost. That’s how we define energy. Highly technical. All this work requires an engineering background and massive amounts of data. We work with data and analytics all the time. So, you know, we’re constantly looking for ways to better manage that data, as you know, because you’re helping us to do that.

What would you say is your favorite part of your work?

Good question! I think it is seeing the impact of what we do. Seeing the lower rates, the lower costs and seeing how we turn those savings into advanced healthcare.

Even though R&D is a long-term process, what you were seeing was the future in your former role at the Empire State Electric Energy Research Corporation. The practical realities of working in a health system is that things don’t move as quickly because the patients always have to come first. It must be gratifying to evaluate proven technologies, implement them and see them turn into better results in a patient setting.

 Yes, it is.

Does anything keep you up at night? At 4am?

 I worry about the things that are difficult if not impossible to control, like the weather. Patient care and comfort are our primary concern.  We must make sure that natural gas and oil are being delivered. Energy prices go up when it’s cold. Getting the energy to our hospitals and ensuring we are getting a competitive price, that is a concern.

The energy industry is in transition

What major trends/transitions do you see for the future of the energy industry?

The major transition is the concern over climate change and the environment. We’re faced now with penalties for just using energy. Ten years ago, we started tracking our carbon footprint realizing that it was gaining more and more importance. Now we have laws in effect (Local Law 97) in NY City that will assess penalties based upon carbon emissions related to our energy use.

I see very significant changes coming because we’re not going to be able to burn fossil fuels. We might have to rely more on technologies like heat pumps, which we helped to develop when I worked in R&D.  I see that some of the heat pump technology that we were advancing then are now in the marketplace. More and more people are turning to technologies like that because of the energy impacts on the environment and the political/government reaction to those impacts.  In fact, I see great changes in the industry. More and more responsibility will be placed on the customer, the user, than in the past.

It is an interesting time and very challenging time to be in the energy industry. The velocity of the change has also picked up. I think because of the politics—there’s a divergence between the national and state energy and environmental policies. The national position is very conservative and the local is more liberal and that divergence has contributed to the new local laws that stipulate penalties for energy use.

If you could solve any sustainability or energy problem, what would you try to solve?

I would find more ways to lower energy use cost-effectively—that would also improve resiliency, lower costs and energy use, and minimize environmental impacts. People are making connections between energy use, unusual weather and fires in California and Australia. There is no magic solution. My colleagues and I are trying to address these problems every day.

Note: This is the 3rd Energy Decision Maker profiled by The Megawatt Hour in our Energy Decision Maker series. We have interviewed Bert Bland of Cornell University, who discussed the challenges of running a research and teaching facility. See his interview here. In addition, Bert discussed the evolution of the Cornell campus in this article. We also talked to Thomas Mort about properly supporting the valuable resources available to energy decision makers. 

Comments are closed.