Changing the Way We Utilize Electronics with Verizon Wireless’ Mike Brander & Consert’s Jack Roberts

August 15, 2011

JOHN SHEGERIAN: Welcome back to Green is Good, and we’re so honored today to have two special guests on with us for this segment of Green is Good. We’ve got Mike Brander, who’s the Vice President of Sales for Utility and Industrial Vertical Markets at Verizon Wireless and Jack Roberts, who’s the CEO and President of Consert. Welcome to Green is Good. MIKE BRANDER AND JACK ROBERTS: Thank you very much, John. JOHN SHEGERIAN: Hey, guys. Hey, you know, we have such wonderful guests, and you guys are just so perfect to come on to Green is Good and talk about all the great things you’re doing at Verizon and Consert. But before we get going, Mike and Jack, can you just share a little bit of your fascinating journeys? How, Mike, you became the Vice President over at Verizon Wireless, and, Jack, how you became the CEO and President of Consert. MIKE BRANDER: Thanks, John. I’ve been the Vice President of Sales for the Utility and Industrial Vertical Markets for the past couple years. I’ve been with Verizon and its predecessor companies for just over 19 years now, and my team today is responsible for the strategic voice and data solutions within these enterprise accounts. Previously to that, I did support a team responsible for driving custom and strategic data initiatives in a number of different vertical markets, including finance, insurance, media, and transportation, so I’ve supported a number of different verticals across the country for most of those 19 years. JOHN SHEGERIAN: How about you, Jack? JACK ROBERTS: Well, I am an accountant by training. I’ve done a lot of work in venture capital and investment banking over my life. In 1984, I became the first Head of Corporate Development at Bell South, and I left there and went to investment banking to Blackstone and Bears Stearns. I retired once. I went into private equity with AEA Investors in New York. I retired a second time, and then took over as CEO of a company called Telephia in San Francisco. I retired again, and started Consert. So, I just don’t do well in retirement. JOHN SHEGERIAN: That’s obvious. That is so obvious, but it’s great that you don’t, because you’re doing some great things for the world and for the environment, and we’re so glad you’re joining us today. We have a fascinating story. We typically don’t have two guests on one, but this is a fascinating partnership and collaboration, and we’re so glad you both could make it today. Mike, talk a little bit about this partnership and what Verizon Wireless is talking about in terms of leading the way with 4G LTE. What does that even mean? Our listeners out there would love to understand that better. MIKE BRANDER: Yeah. Thanks, John. There’s a lot of buzz in the marketplace today about 4G and what exactly is that? To Verizon Wireless, 4G LTE is our next generation network technology. LTE stands for Long Term Evolution, and Verizon was one of the first companies in the world to commit to the technology and to begin its deployment, which we started rolling out in December of last year. What it is is the fastest, most advanced network that’s available in the United States today. It provides speeds up to 10 times faster than our current 3G network. It’s backward compatible to our existing network, so the coverage is seamless right from the start. The capabilities and the performance of 4G LTE will be unmatched in the marketplace, which is going to allow customers to do things that they’ve never been able to do before in a wireless environment. JOHN SHEGERIAN: Is that already available? Because I’m a Verizon guy, our company’s a Verizon company. As a consumer and a big fan of Verizon, is this something that’s already available to me, or it’s coming out soon? MIKE BRANDER: It is available in a number of markets across the country. We rolled it out in December of last year in 39 major metros and a number of airports across the country. By the end of this year, that will be up to 175 markets. We’re adding additional cities and sites every day across the country, and it will be completely mirroring our existing network today with this 4G LTE technology before the end of 2013. JOHN SHEGERIAN: Wow. That’s so exciting. Let’s start migrating towards how some of the Consert Verizon stuff happened. Mike, before we get to Jack, and Jack, I’m not leaving you out, but I want to work up to this a little bit. Mike, talk a little bit about how Verizon, which we all think of as this wonderful wireless company, and I’m sitting here and my cell phone’s in front of me and it’s attached to my body like most people are attached to their Verizon product. How is Verizon Wireless working with regards to energy solutions? MIKE BRANDER: Well, it really starts with the investment in the network, which we put in on average $6 billion a year to increase coverage, capacity, and to add new services. Having the right solutions is important, but knowing that the network behind them is reliable is essential. So, we’ve done a few things to directly stimulate the development of energy-focused solutions. The first thing we did was we developed an open development group within our organization to facilitate the enablement of non-traditional devices, like the Consert Gateway, onto the Verizon Wireless network. So, there’s a group that’s responsible just for facilitating and streamlining the processes to get these unique devices to run on our network. Secondly, in order for applications to leverage the network, we formed a developer community, or the VDC, the Verizon Developer Community, and what it does is it provides the software development kits and the application interfaces to interact with our network, so if you were to develop an energy management application like Consert, and you wanted to utilize our network, you can leverage the resources that are there. From a solutions perspective, we’ve built an innovation center a couple years ago. What the purpose of that is, it’s a place where all these great ideas and devices and applications can come together and evolve. It’s almost like an incubator for the future of machine and machine solutions, like Consert. So, we realize that we have a lot of intelligent people here at Verizon Wireless, but we also know that there’s a lot of smart people out there. So, we’ve built this ecosystem so individuals or organizations who have great ideas have a place they can go to for support, access to resources, expertise, and a path to the market. JOHN SHEGERIAN: Got it. So, Jack, over to you. Talk a little bit about how you created Consert as this virtual peak plant solution. What does that even mean? How is that helping to create a smarter electric grid today? Segue that into how does that interrelate with the great solutions that Verizon’s created that Mike just spoke about? JACK ROBERTS: Well, the first thing, in terms of how to create it, started with people a lot smarter than I am, Joe Forbes, Roy Moore, and many other people here. In terms of what it is, if you think about the problem with the electric utility, it’s the only one of the things you would define as utility that has to function without storage. If you think about what would your water system or your gas system or any other utility form be without storage, there is no mass storage of electricity. So what we do is offer the ability to give energy conservation many of the attributes of generation, and that gives the ability for a utility to recognize operational savings, address peak loads, realize new revenue streams, and do many other things for the utility. We do that by uniting the infrastructure of the utility and the consumers and small businesses they serve. This is a very hard group to serve cost effectively, so that’s what we’ve broken through. Verizon Wireless is a key part of how we do that. From the point of view of how that fits into greenness, we’re about making green easy and cost effective. We give people the other form of greenness, as well as conservation. JOHN SHEGERIAN: Got it. That makes a lot of sense. So then, Mike, talk a little bit about then how you partnered up with Consert, how you and Jack have put Verizon and Consert together. What does that mean for the consumers out there, both citizens and also businesses? How does this really work? MIKE BRANDER: Well, Consert was one of the first participants in that innovation center that I mentioned. They’ve got some brilliant individuals in their organization. They had some great ideas, but needed some help putting all the moving pieces and parts together. It’s a lead for the energy sector at Verizon Wireless. I was introduced to Consert a couple years ago, and the ideas that they had for this virtual power plant were exactly the type of transformational, innovative, thought leadership-type solutions we were looking for for this next-generation network. So, what we’ve done is we’ve partnered with them, we’ve provided the right resources, from device partners to technical resources, that have enabled us to develop this commercial solution that’s available today. So, what it means is we’re able to offer a solution to both the utilities sector, as well as to consumers, that can help manage their energy usage and provide demand response and this virtual power plant solution. JOHN SHEGERIAN: Wonderful. Jack, in terms of the impact that Consert’s going to have on utility companies, and ultimately on their customers, that Mike just spoke of, Jack, basically, Jack, you’re saying that this is going to save companies and customers, like Mike and I here in studio, money, and our listeners money. JACK ROBERTS: That’s right. If you really distilled it down to what it does at the consumer level, the consumer gets to save money, save the environment, perhaps gain broadband once we get under 4G, but all of that comes at no cost to the consumer, directly or indirectly. So, that sounds like an extraordinarily good deal at the consumer level. From the point of view of the utility, they gain a virtual peak plant, which gives them operating reserves, it enables them to deal with carbon in various ways, and it reduces both their cap ex and op ex. The capital expenditure to build what we build is, depending on the utility, 20-30% the cost of a gas-fired peak plant. On the operating expense side, it’s less than 60% of the operating expense of a gas-fired peak plant. So, it is a win for the utility, it’s a win for the consumer or the small business. Everybody wins because we have designed a system that puts both parties in harmony. JOHN SHEGERIAN: Gotcha. That makes a lot of sense. Mike, earlier you were alluding to this machine to machine M2M type stuff. What does that even mean? I’m unclear. I love using technology, but I don’t understand it all the time. What is Verizon doing with this M2M machine to machine type stuff? MIKE BRANDER: As the wireless world has evolved and is growing, we’re starting to see a change and a transformation take place. Historically, wireless has been used primarily by individuals interacting with the devices, whether it’s a cell phone or putting a card in a computer or something like that. But we’re seeing a shift to more and more devices interacting with other devices, so this machine to machine communication that’s going on, such as the Consert solution communicating back to a server at the utility. So, we’re seeing this evolution, and we’re anticipating, and there’s been projections of growth in machine to machine devices 300-500% of where we’re at today. This is important because it’s going to change the way that we live our lives day in and day out. I mean, imagine if your refrigerator could talk to your thermostat or your electric meter, and know that it shouldn’t defrost right now because electricity is in high demand and the cost is higher, so it waits an hour or two and then it defrosts. Or, if your electric car charger could communicate back to the utility and actually send the power back to the grid, which would reduce the cost of electricity and the utilities don’t need to build as many power plants and other types of generation facilities. The possibilities are endless. JOHN SHEGERIAN: This is for both of you guys. I saw this recently, and again, as Jack said earlier, I saw people who were much smarter than I speaking about energy and the future of energy, and some of the deepest pockets said they’re not investing anymore in new energy sources such as wind and solar in Silicon Valley. They’re investing in exactly what you guys are doing. They’re investing in energy conservation because they said it’s statistically been proven that somewhere around 50% of all the energy that’s produced in the world is wasted. Did I hear that correctly? JACK ROBERTS: You’ll hear various numbers from different people, but a large portion of it is wasted. Let me give you a way to test this. We talk about what we do for a consumer as the elimination of ghost consumption. Ghost consumption is basically changing the temperature of water or air that you’re not using right this minute. For example, when you left today to come to your studio, did you change your thermostat? Most people would have said no. When you last went on vacation, did you turn off your hot water heater? Most people say no. What this means is that, using the water heater as an example, most people use hot water four hours a day. We don’t all use it the same four hours, but we all use it about four hours. That’s what our studies show. But the other 20 hours a day, your water heater, if you have a normal tank water heater, is returning that water to the set point. If you can not do that because you have used our system to design your own profile, your own program, by which you will use your electricity, and you do that with just three or four devices, the most common being your HVAC, your hot water, and a pool pump, if you happen to have one. In most parts of the country, that would reduce your electricity consumption by 15-20% just by knocking out the items are easy, just two or three items. So, that’s the way you can save money there. Our system also helps electric utilities find where the problems are in their electric grid. In doing that, you can save more by limiting the amount of regulating capacity that you need to serve solar and wind, you can save some more also. So, there is a variety of different ways in which we help address that waste, if you will. No one will ever eliminate all of it because in order to be able to serve people with an unknowable demand without storage, there will be a bit of waste. JOHN SHEGERIAN: Fascinating. Jack, that’s well put. For our listeners who just tuned in, we are so lucky and honored today to have both Jack Roberts, the CEO of Consert, on the line with us, and we’re so lucky to also have Mike Brander, the Vice President of Verizon Wireless. They’re talking about their unique and forward-thinking partnership, which is going to save both consumers and businesses across the United States and eventually the world energy. What you’re saying is your partnership, your unique partnership, your M2M technology, working with Consert, is going to actually let us customize our own energy usage around our own personal lives, so people and businesses will be able to literally program their little life and world to work the right way around themselves, but still not create all this ghost consumption. JACK ROBERTS: That’s right, and it’s so valuable to the utility the way we do it, that the utility is willing to provide that to you as a consumer, generally at no charge. It is under dual control, primary control being the consumer. The consumer then yields up a bit of control at his wish to the utility. In doing that, everybody makes money. JOHN SHEGERIAN: That is just amazing. Now let’s look back at those numbers, Jack and Mike, that Jack just laid out. 15-20% savings if a couple things are tweaked in your life and entered into your system, 15-20%, and then some of the inefficiencies are eventually also taken out of the utility system, in terms of the transmission and stuff. So, we’re talking about people and households saving anywhere from — what? — 20+% on their energy consumption using your great partnership? JACK ROBERTS: That is certainly well within the range of reason. The reason that I can’t be more absolutely precise is that every utility has a different generation mix, a different cost structure, and so forth, so I don’t want to be pinpoint precise, but the utilities and the consumers that we have interviewed, the consumers generally are 15+% pretty straightforward and pretty easily. MIKE BRADY: Jack and Mike, also has it been your experience that in dealing with the various utility districts, when you talk about the dual control where the consumer regulates what they use, but also gives up partial control to the local utility, based on the level of demand, that in so doing, when the consumer agrees to do that and let the local utility regulate during peak hours, there is a financial incentive offered to the consumer, the end user, by the utilities. Is that pretty much a widespread practice? JACK ROBERTS: No, not the way we do it. Historically, there has been a system called a manned response, in which usually the utility paid people to be able to turn off their air conditioner on the 10 or 12 hottest afternoons of the summer. The way our system works, consumers use it on a daily basis, 365 days a year, and therefore save 15% or 20% on what, on a national average, would be $125 or more electric bill. Therefore, the utility doesn’t have to pay them anything additional. They get the money by just using it better. When they do that, they also are contributing to our conservation goals. Fuel not burned, green is preserved. We think the purest form of greenness is abstention. JOHN SHEGERIAN: That’s well put. Mike, we’ve had Jim Gowen on with us before from Verizon, and we just think the world of all this forward-thinking technology you’re doing with Consert and things of that such. But, you also have other great green corporate initiatives. Do you want to just hit some of those other great initiatives that you’re working on in 2011 and beyond? MIKE BRANDER: Sure. We have too many initiatives that we can cover. We work every day to protect our environment and give our customers the opportunities to do the same. Recycling phone programs, we have solar-powered cell sites that we use, we have a number of different trials that we’re doing with smart building technology. There’s one initiative there that I’d really like to highlight. It’s a relatively new one. It’s with Duke Energy and Sysco, and it’s the Envision Charlotte project. It’s one of the Clinton Global Initiatives, and its goal is to reduce energy consumption by 20% and avoid nearly 220,000 metric tons of greenhouse gases in the city of Charlotte by 2016. That’s just one of a number of initiatives that we’re doing over the next 12-24 months. JOHN SHEGERIAN: And, let’s talk about also what you guys are doing together in San Antonio and Austin and beyond. Don’t you guys have some of the Verizon Consert stuff working in Texas together? JACK ROBERTS: We do indeed. We have just announced this past week a large deal with San Antonio, with CPS Energy there, for 250 megawatts of virtual peak plant. We also have pilot programs going in Pedernales and Blue Bonnet, two areas to the southeast and southwest of Austin. We are having discussions with Austin Energy, and we also have a project with Grayson Collin just north of Dallas. In all of those, we’re working with Verizon. JOHN SHEGERIAN: That is great. Mike, do you have any other thoughts that you want to share about the energy savings and this great partnership that you’re doing with Consert? MIKE BRANDER: We have a number of solutions that are available, anywhere from basic meter reading to this virtual power plant type solution. Every community, every utility, has a unique situation, so it’s really about companies like Verizon and Consert partnering, going out, meeting with these entities, understanding their unique needs, and making sure that we’re able to address them. JOHN SHEGERIAN: And, Jack, for you, you’ve done so much, Jack, in your history, and I know retirement’s not in the cards for you in the future. But what is in the future? What does the future hold for Consert? JACK ROBERTS: We are going to continue looking for forward-thinking utilities that are trying to do something that’s really innovative. What we provide them is an ability that is hard for consumer to object to. When you think about it, the idea doesn’t present any NIMBY issues, no permit issues. It improves reliability. It improves costs for the utility. It does a lot of things for consumers, but it does require a change of thinking. So, we’re looking for those areas in which people are ready to really step out and do something beyond meter reading. We think meter reading is fine. We’re all for that, but this offers people a chance to do something really good and to save money. So we intend to continue to partner with Verizon and see how far we can take this. JOHN SHEGERIAN: I just want to say thank you to both of you. Unfortunately, we’re out of time today, but you both laid out a tremendous case for our listeners here in the United States and inspiration for our listeners around the world in terms of what the future holds, what’s coming today with regards to energy conservation. It just goes to show you, with great collaboration, we all are in this world together. We really can make a difference, and we can make great changes. Mike and Jack, I thank you both. For our listeners out there, to learn more about the great work that Verizon Wireless is doing, go to www.verizonwireless.com. For our listeners that want to learn more about the great work that Consert’s doing, please go to www.consert.com. Mike Brander and Jack Roberts, you are both wonderful sustainability leaders, and are truly living proof that green is good.