CEO’s Report: Crypto mining 101

Crypto is like the internet of the 90s.

That’s how Brett Somsen sees the progression of digital currency. Somsen serves as vice president of BigTop Mining and recently spoke at the Heartland Annual Meeting.

When the internet first started, many people were skeptical, believing it was nothing more than a fad that would have no lasting impact. Others saw great potential for this new technology, predicting it would quite literally change the world.

Today, the skeptics have long been proven wrong as the internet is ingrained in our every day lives. We use it to communicate with others, shop, access our news and watch our favorite shows.

Somsen believes cryptocurrency is in the same position today as the internet was in the early-1990s.

Because the technology is still new, and many people don’t understand how it works, there are skeptics. But Somsen believes it will someday be part of all our daily lives, just like the internet.

Somsen helped shine some light on the world of cryptocurrency at our Annual Meeting, and I will share some of what I learned from his presentation.

Man standing behind a podium speaking
Brett Somsen is vice president of crypto mining company Big Top Mining in Howard, SD. He spoke on the industry at Heartland’s recent Annual Meeting.

What is cryptocurrency?

To understand cryptocurrency, you must first understand the blockchain.

The blockchain was created in 2008. It is used for cryptocurrency systems for maintaining a secure and decentralized record of transactions. It is essentially a digital ledger – a record of every time someone sends or receives cryptocurrency.

Cryptocurrency is a digital currency designed to be used over the internet. Bitcoin is considered the gold standard of cryptocurrency, and came about shortly after the blockchain, in 2009.

biotcoin cryptocurrency graphic

Almost all cryptocurrencies are secured via blockchain networks, which means their accuracy is constantly being verified. The blockchain enables secure payments without a third-party verifier such as a bank.

The increasing value of cryptocurrency has made them popular as trading instruments.

When making a payment with cryptocurrency, you don’t have to provide any sensitive information, so the risk of financial information being compromised is significantly diminished. Cryptocurrencies also can be an easier and faster means to transfer funds.

Crypto transactions are secure because they are all vetted via the blockchain. Each currency has its own blockchain, with is an ongoing, constantly re-verified record of every single transaction made using that currency.

What is crypto mining?

Crypto mining is the process by which new cryptocurrency is entered into circulation. It is also the means for the network to confirm new transactions. It is a critical component to the blockchain.

Miners perform calculations to verify and record every new transaction and ensure the blockchain is secure. Mining is central to cryptocurrency’s security. It verifies and secures the blockchain, which allows cryptocurrencies to function as a peer-to-peer decentralized network with need for oversight from a third party.

Avalon 1246 crypto mining machine
Crypto mining is performed by machines such as this Avalon 1246 model built by Canaan. Photo courtesy Big Top Mining.

Miners get paid by serving like auditors, verifying the legitimacy of cryptocurrency transactions.

In the early days, cryptocurrency was mostly mined via personal computers. Today, it is handled by large mining machines and mining farms.

These machines use a lot of energy because they are constantly performing mathematical computations to verify transactions.

Because of the large amount of energy needed, crypto mining companies are looking for low energy rates and significant power capabilities when choosing a location for a mine.

They also consider climate, given the amount of heat the units put out. They also need a facility to house the machines.

BigTop Mining Co.

BigTop Mining Co. was established in 2021 by Greg Nelson and Somsen. They turned their first miners on in Howard, SD in November of 2021.

Bigtop mining co. logo

They are currently mining three different types of cryptocurrencies including Bitcoin, Litecoin and DOGE.

BigTop chose Howard for their mine because of the available space and access to industrial power. The location is in an industrial area, which limits noise pollution. With multiple machines operating at once, Somsen said they can be loud, something communities need to consider when welcoming a facility.

Heartland partnered with the city of Howard to offer BigTop a special rate as they begin operations in the city.

Heavy users of electricity typically pay a separate demand charge to always have energy capacity available. The Energy ONE Incentive offers an energy only rate for the first few years of operation, to eliminate the uncertainty that comes with demand charges during a business’s start up period.

BigTop is the first crypto mining firm to which Heartland has offered the Energy ONE Incentive.

Reward vs. Risk

Fitch Ratings recently outlined some of the risks cryptocurrency mining poses to public power utilities, as detailed in article by APPA.

Fitch pointed out the energy intensiveness of crypto mining which can significantly increase a utility’s overall electric load. The rating agency noted that crypto mining operations are price-sensitive entities that may be scaled back if mining becomes uneconomical.

Utilities can limit their risk by working with miners up front to lay out terms of power procurement, necessary system upgrades and payment.

Heartland has worked with customers receiving inquiries from miners to mitigate the risk of welcoming a crypto mining firm to your community. While crypto mining firms don’t offer much in the way of new job creation, they can serve as a significant revenue source for the utility, if capacity is available.   

While the jury may still be out on whether cryptocurrency is the next internet, there is no doubt it is shaking things up. Heartland is happy to work with our customers to ensure the correct controls are in place if a crypto mining firm is interested in locating in your community.

Graff honored with Award of Excellence

When Adam Graff joined Heartland in 2008, he quickly immersed himself in Heartland’s power supply portfolio, helping to manage resources to best suit customers’ needs. This led to him quickly being named resource manager.

Today, Graff  serves as director of power supply for Heartland, where he is responsible for the company’s power supply portfolio with additional responsibilities including facility planning, integrated resource planning, system forecasts and more.

For the past ten years, Graff has also served as chair of Public Power Generation Agency’s Engineering and Operations Committee. PPGA is the interlocal agency established for the sole purpose of constructing and operating Whelan Energy Center Unit 2 (WEC 2), a major component of Heartland’s resource portfolio.

To celebrate his years of service and accomplishments on the committee, Graff was honored at Heartland’s recent Annual Meeting with an award of excellence.

Graff’s direction vital to operations

When Graff  began working at Heartland, WEC 2 was three years into design, development and construction. It became commercially operational in May of 2011. Shortly after, Graff took on the role of chair of the engineering and operations committee. As such, he plays a very significant role for PPGA and Heartland.

The 220 megawatt coal-fired generating plant is located in Hastings, Nebraska. As a participant of PPGA, Heartland owns a 36% entitlement share in the project. It serves as the largest generating resource in Heartland’s power supply portfolio, making up 53%.

Exterior of Whelan Energy Center
Whelan Energy Center Unit 2

WEC 2 was built for approximately $700 million and is utilized by five different utilities for reliable, baseload power. It also represents 46% of Heartland’s capacity and 35% of its energy portfolio. The success of the plant is directly linked to the success of Heartland and ultimately, Heartland’s customers.

As chair of the engineering and operations committee, Graff oversees all major operating decisions made at the plant and makes recommendations to the PPGA board. During his tenure, he successfully led the transition of the plant into the Southwest Power Pool, advised and navigated the project on many staffing changes, and consistently ensures sound budgets.

Currently he’s directing the project on environmental concerns regarding Whelan Energy Center Unit 1 that impact WEC 2.

“PPGA is lucky to have Graff in this role, as is Heartland,” said Heartland Chief Operations Officer Nate Jones. “His expertise fortifies our ability to provide reliable, safe power to our customers at the lowest cost possible.”

WEC 2 burns low-sulfer coal from the Power River Basin. It meets all the latest pollution control standards with an air quality control system that includes equipment to remove fly ash, sulfur dioxide, nitrous oxides and mercury. Heartland’s power supply portfolio also includes 51 megawatts of wind power from the Wessington Springs Wind Energy Center located in Jerauld County, SD.

Pictured: Heartland Director of Power Supply Adam Graff, center, was honored for ten years and continued service on the E&O Committee for baseload resource, Whelan Energy Center Unit 2. Presenting the award were Heartland CEO Russell Olson, left, and Chief Operations Officer Nate Jones, right.

CEO’s Report: Annual Meeting features speakers on crypto mining, other industry topics

Heartland’s Annual Meeting is coming up next week on Thursday, April 14.

I always look forward to this meeting because it gives us the opportunity to broach a variety of topics relevant to our industry. We also get to throw in some speakers who will hopefully motivate and inspire you.

While we know there are numerous industry topics of importance, we also want you to walk away better equipped to serve your customers, your families, and your community.

This year’s meeting features both education and inspiration and I would strongly encourage anyone associated with the electric utility to attend.

headshot of a man

Our first speaker is Mike Ferguson, who serves as general manager of Western States Power Corporation. Heartland has been a member of this organization for years, but not many people know what it is or what it does.

Mike will give an overview of Western States as well as explain how Heartland’s membership benefits you, our customers.

Mike has spent over 30 years working in the federal power program. His expertise includes the management and oversight of power generating facilities.

What is crypto mining?

Next up is Brett Somsen, vice president of BigTop Mining Co. You’ve probably heard of crypto mining and may have even received an inquiry from a company looking to locate in your community. But do you know what it is?

headshot of a man

Typically, anything related to cryptocurrency raises more questions than answers. Brett has been involved in crypto for over five years and his company recently turned on their first crypto miners in Howard, SD.

Fitch recently outlined public power supply risks tied to cryptocurrency mining, stating it is “energy intensive and requires a considerable amount of power that can significantly increase a utility’s overall electric load.”

Fitch noted that “utilities must balance the revenue prospect of increased electrical sales with the commitment to procure or generate large amounts of power for crypto mining operations.”

Crypto miners look at various factors when choosing where to locate. The climate in the Mid-West is attractive as well as lower energy rates.

Heartland has worked with customers where miners are looking to locate. We recognize the risks associated with these loads and are able to help customers mitigate those risks through proper planning.

Brett will shine light on why this process uses so much energy and discuss the long-term future of mining.

Entertainment & Inspiration

Finally, the meeting will wrap up with professional speaker V.J. Smith. If you’ve never heard V.J. speak, you are in for a treat. He is the author of the bestselling book, “The Richest Man in Town.”

headshot of professional speaker V.J. Smith

V.J. has been a professional speaker for mor than twenty years. He is also a member of the South Dakota Senate and resides in Brookings, SD.

He has given more than 2,500 presentations from coast to coast, border to border. He has traveled more than a million miles and spoken to more than a million people.

Before becoming a full-time professional speaker, V.J. spent 25 years of his working life in various management roles at both a Fortune 100 Company and at South Dakota State University.

I promise you will leave feeling lighter and ready to take on anything that may come your way after hearing V.J.

Networking a bonus

While we take pride in lining up a worthwhile panel of excellent speakers, a bonus to any event is the opportunity to mingle with fellow public power employees, Heartland staff and board members.

We often learn just as much from each other as we do from the speakers. Heartland continues to see many new faces in our customer communities and I look forward to meeting everyone.

Finally, you’ll have the chance to vote for members of Heartland’s Customer Connections Committee. This committee provides a formal channel for customers to provide feedback to Heartland. Three positions are open on the nine-member committee.

I hope you will join us on April 14 in Madison. Check your Inbox for the invite and RSVP today.

CEO’s Report: Meeting customers’ needs

With COVID-19 controlling what most of us did throughout 2020, there wasn’t as much opportunity to interact with customers as we’d like.

Now that many activities and events are returning to normal, we once again can meet in person and connect.

Annual Meeting offers valuable tools, insight

Heartland is excited to host our Annual Meeting May 12 after cancelling the event last year due to the pandemic.

We have an excellent speaker lined up. Mike Oster grew up in rural South Dakota and uses his many life experiences to speak on leadership, teamwork, and motivation.

While not everyone may see value in these topics, I challenge you to think again.

We all serve in leadership positions. All too often the words leadership and management get confused. All managers are not leaders and all leaders are not managers.

Anyone can be a leader, no matter your position. Maybe there is something in your community you’d like to see happen, or an idea you want to come to fruition. It takes leadership to get things done.

Successful communities are full of leaders who turn ideas into reality.

Leaders are excellent communicators. As a public power utility, you interact with consumers every day. While not all those interactions are positive, Mike provides tools and resources to make them more meaningful. The idea is to help build positive relationships through more effective communication.

I encourage you to take a day from the office to listen to Mike. I guarantee you will walk away with at least one valuable tool. You will also have the chance to vote for new members of the Customer Connections Committee.

The committee has been creative over the past year, meeting mostly virtually to share ideas. Workforce continues to be a struggle for many Heartland customers and the committee is looking for creative ways to help recruit quality employees. It is important for your community to cast a vote to elect members.

You’ll also have plenty of time to visit with other customers and Heartland staff. It’s a great time to share ideas and ask questions.

Although our RSVP deadline has passed, you can still join us. Simply reach out to Danielle Kearin or Ann Hyland and let them know you want to attend. I guarantee you won’t regret it.

Addressing critical needs

Heartland offers a variety of programs for the benefit of customers. We pride ourselves on making these relevant to the communities we serve. However, needs are constantly changing, and we do our best to keep up.

With input from the Customer Connections Committee, we announced a new workforce development program at the end of 2020 to help customers tackle the hiring challenges many industries are facing.

Many in the public power sector are nearing retirement and replacements are needed. The areas of power line construction and maintenance seem to be the biggest concern, but customers are also seeing the retirement of finance officers and administrative staff.

Heartland developed a flexible program to aid customers in training and attracting new hires.

A few customers have already taken advantage of the program to offer hiring bonuses and assist with education costs. I encourage you to get in touch with Kelly Dybdahl if you foresee hiring new employees and would like more details.

Education is key

It is important for not just staff but mayors and city or utility commission personnel to understand our programs. We are happy to visit with anyone about the details to ensure communities can take full advantage.

Even if you have been given the rundown of the programs already, we’re happy to do it again. There is a lot of information to cover. Don’t ever hesitate to give us a call if you have questions.

One area I’d like to receive more focus is cybersecurity.

Public power utilities provide essential services. A few months ago, hackers broke into a city’s SCADA system in Florida to poison their water supply. They exploited the city’s outdated operating system and weak passwords to gain access.

Examples like this show hackers aren’t always looking for monetary gain. Significant damage can be inflicted without ever accessing account numbers. Utility and city personnel need to be on high alert and prepare for such instances.

Heartland works with industry partners to provide professional services to ensure your utility is secure. Utilizing these services now could prevent a devastating attack later, and the cost will be far less.

Contact Ann Hyland at Heartland for more information.

Suggestions welcome

We will continue offering programs and services that will make an impact on your community. However, if you would like to see a change to a program or have an idea for a new one, pleas let us know. No one knows better than you what would offer your community the most benefit.

In addition to our Annual Meeting, we are already gearing up for our Summer Conference, scheduled for July 27. We are excited to bring this event back to Madison, utilizing event space offered by the Best Western Plus. We are working on lining up some excellent speakers to help spark ideas for community growth and prosperity.

I look forward to seeing you at our Annual Meeting on the 12th and getting the chance to visit in person again.

CEO’s Report: Teamwork

South Dakota Governor Dennis Daugaard recently signed Senate Bill 60, an act to revise certain provisions regarding the sale of consumers power district assets.

Existing state statutes limited the sale of a consumers power district’s assets to another district, rural electric association, cooperative, municipality or other public body. SB 60 eliminates those restrictions, allowing a district to sell an asset to anyone, as approved by the board of directors.

Like any law, the original state consumers power district laws that were adopted in the 1950s have been periodically updated over the years. Heartland continues to be the only consumers power district in the state affected by these statutes and as the industry continues to evolve, it is important laws reflect a changing industry.

Should the need arise for Heartland to sell an asset, it would be in our customers’ best interests to have the largest pool of prospective buyers possible. An asset doesn’t have any value if there aren’t any eligible buyers.

SB 60 gives us greater flexibility moving forward and I appreciate all the support we received from our customers in South Dakota for reaching out to your senators and representatives in support of this bill. You helped them understand the importance of making this change and how it could affect your cities and your residents. The bill passed both the Senate and House overwhelmingly which proves the impact your calls and emails had as well as what we can accomplish when we work together.

Speaking of teamwork, Heartland’s Annual Meeting is coming up April 20 and as always, we will be electing new members to the Customer Connections Committee. There are currently three positions up for re-election and two additional open seats.

The Customer Connections Committee was created to increase transparency between Heartland’s staff, board of directors and our customers. Committee members have actively attended our monthly board meetings and meets quarterly or as needed with staff.

Communication is key to any good relationship and I believe Heartland’s relationship with our customers has been strengthened by this committee. It has provided a forum for customers to ask questions and provide input and for Heartland to bounce ideas off those impacted by decision making.

Any representative from a long-term Heartland customer may serve on the committee. If you would like to be more involved and have a greater understanding of Heartland operations, I encourage you to throw your name in for consideration to serve. We look forward to continuing to build a stronger relationship with our customers with open communication and increased transparency.

I look forward to seeing all of our customers at our Annual Meeting. We have some great speakers lined up as well as a Heartland Year in Review including updates on our strategic plan. If you haven’t already, be sure to RSVP by April 12.

Annual Meeting recap: Social media enhances customer experience

APPA Director of Digital and Social Media Sam Gonzales speaks at the Heartland Annual Meeting in May.
APPA Director of Digital and Social Media Sam Gonzales speaks at the Heartland Annual Meeting in May. Annual Meeting Gallery

According to a recent article in The New York Times, more than one-sixteenth of the average user’s waking time is spent on Facebook or its Instagram and Messenger platforms. Those 50 minutes a day is more time spent than on any other leisure activity surveyed by the Bureau of Labor Statistics, with the exception of watching television and movies, and almost as much time as people spend eating and drinking. With so much guaranteed face time, more and more businesses are turning to Facebook and other social media platforms to communicate with consumers. According to Sam Gonzales, director of digital and social media for the American Public Power Association (APPA), public power utilities can also leverage social media to communicate more effectively with their communities. At Heartland’s Annual Meeting May 9, Gonzales discussed the customer experience and how it can be enhanced with social media, and shared how electric utilities across the nation are taking advantage.

In 2015, APPA launched a Raising Awareness of Public Power strategic initiative, which included a national survey of 1,600 public power customers through December 2015 and January 2016 to gauge customer satisfaction levels, utility awareness and communication preferences. Gonzales highlighted a few key takeaways for the organization:

  • Electric utilities rank high: over 66% of public power customers positively rate the quality of customer service they receive from their electric utility — higher than gas, water, wastewater, phone, cable and internet providers
  • The younger generation is less impressed: customers over 55 years in age rated satisfaction at 78% while those under 55 rated significantly lower at 54%
  • Only one in five customers under 55 knows their utility is community-owned and not-for-profit
  • Information is key: 58% of customers want to be educated on rates; customers predominantly want utility websites and social media to be the sources for rate and outage information

According to Gonzales, APPA concluded it takes a robust mix of channels to communicate effectively to consumers. As younger generations become bill-paying customers, utilities should consider sharing information via email, web and social media in addition to more traditional methods such as bill stuffers.

social media landscapeGonzales is an admitted early adopter of technology, social media and digital tools, having been involved in social media since the early days. However he understands that while utilizing new technology is an important step in communications, it can also be quite daunting.

“The social landscape keeps growing, and popularity of one platform can shift depending on features,” he said.

Rather than dive right in, Gonzales recommends utilities get their feet wet with one or two of the top three most popular platforms today: Facebook, Twitter and Instagram.

“Facebook is the most popular platform, and it is great for updates, videos, live video and photo albums,” he said. “Twitter is great for real-time updates. Users are limited to 140 characters, so it forces you to be creative yet to-the-point, and the application now lets you add images and short videos. Finally, there’s Instagram, which is photos and short videos. A growing number of utilities are using this platform.”

While each platform is unique, Facebook, Twitter and Instagram each utilize hashtags, which are words or phrases preceded by a hash or pound sign (#) to identify messages on a specific topic. Hashtags are searchable, allowing users to find related content and be more engaged with each topic, so utilities should consider using their city as a hashtag, such as #SiouxFalls or #AkronIA, as well as more broad terms, such as #energyefficiency or #publicpower.

“Hashtags draw attention, organize and promote,” said Gonzales. “Tweets with hashtags receive twice as much engagement than those without, so make them relevant, simple and memorable. Most importantly, be consistent and use it everywhere.”

Utilities can use social media to share outage information and respond quickly to customers.
Utilities can use social media to share outage information and respond quickly to customers.

Gonzales also addressed a common fear among utilities in regards to social media: negative comments.

“Social media is the first place people turn when they are unhappy with a product, for example when their power is out,” he said. “Social media helps you listen to your customers like never before, and if you are not there to hear them, they will speak anyway. Why not take advantage of the situation and address it – let them know they have been heard.”

He shared examples of other utilities utilizing Facebook and Twitter to provide outage information and responding to unhappy customers. Most often, Gonzales said, updates and responses such as these help alleviate the situation.

“You could be missing the good stuff too! If someone provides positive feedback of your utility on Facebook, you now have great customer testimony for future marketing pieces,” he said.

Gonzales offered other tips for social media use and how to engage customers:

  • Show a sense of humor when appropriate
  • Ask for customer opinions
  • Humanize your utility: give a face to the company by highlighting staff with photos and information
  • Be relevant: take advantage of trends, holidays and special social media days, such as #MondayMotivation or #ThrowbackThursday
  • Follow other relevant accounts in your community and industry for shareable content
  • Do your research and be unique
  • Look at your analytics and insights: learn the best time to post to reach more people
  • Schedule your posts: websites such as Buffer.com allow you to manage up to four social accounts for free and allow you to schedule posts by date and time
  • Involve and empower your employees: give admin roles on Facebook and share the workload among staff
  • Download the apps on your phone to post on the go

Sam Gonzales is a professor of social media at Montgomery College and has helped companies with their digital marketing strategies as principal of 202Labs before joining APPA. He has presented numerous times on how social media has changed the customer experience and most recently spoke at the APPA Customer Connections Conference on how to step up your social media game. For more information, contact him at sgonzales@publicpower.org or follow APPA on Twitter and Instagram.

Is your utility on social media or would you like assistance in setting up one or more social media accounts? Call 605-256-6536 or email drosheim@hcpd.com for details, and be sure to follow Heartland on Twitter with the handle @HeartlandPower.

16 Social Media postcard-print

CEO’s Report – May 2016

Every strong organization has a plan, a vision of where they want to be five, ten or even twenty years in the future. A strategic plan outlines that vision, the company’s future objectives, as well as how we plan to meet those objectives. It provides everyone – staff, board members and customers – with a clear direction.

The importance of planning is evidenced by our recent rating upgrade by Moody’s. We had a goal of increasing our financial strength, and although it wasn’t always easy, we stayed the course and were rewarded with a positive outcome. This also reaffirmed the need for a formal plan, something that addresses each aspect of Heartland and a clear path for achieving our goals on every front.

Several months ago, Heartland started our strategic planning process. Staff and board members worked together to assess our current situation and lay out our goals. We identified our strengths, weaknesses, and key performance indicators, performed an industry analysis and laid out a financial model to assess potential results of opportunities pursued.

After working on individual sections of our plan, we decided to bring in an outside perspective to help us tie it all together into one comprehensive strategy. We retained the services of Brian Bonde, who over the next three months will be facilitating a board strategic planning session, interviewing customers, and helping us to roll out the final plan.

As we discussed the necessary elements of the plan, we realized it was vital to get customer input. At our upcoming Annual Meeting May 9, we will be holding roundtable discussions to do just that. All customers in attendance will be able to share their thoughts and ideas on the direction of Heartland. Brian will be working with staff in advance of the meeting to prepare an activity that will provide meaningful feedback.

In addition, Brian will be conducting interviews with a select group of customers, most likely members of the Customer Connections Committee, to address the strengths and perceptions of Heartland. While the conversations will be reported back to us, it will be done in a way as to keep the identity of the specific interviewees confidential. We feel this will be important to ensure honest feedback.

It is our hope to roll out our strategic plan at our Summer Conference in July. While it will take time to analyze and summarize all of the information gathered at our board planning session, annual meeting and in customer interviews, as well as complete the final plan, having this plan in place is a priority, and we want to complete it in a timely manner.

The intent of all this is to have a guiding document, something we can look at when making a decision and say, “Does this fit with our strategic plan?” This is not something that will get put aside once complete and left to collect dust. A good strategic plan is a working document, something that is re-visited often and revised as needed. We will use this as our roadmap as we move this company forward.

Economic trends and key accounts focus of Annual Meeting

Heartland hosted our fourth Annual Meeting April 10. This year’s event featured presentations on current and future economic trends as well as the art of key account program development. The meeting also included a “year in review” from Heartland staff and the election of members to the Customer Connections Committee.

“Our Annual Meeting continues to grow in popularity,” said Heartland CEO Russell Olson. “This year’s speakers focused on relevant topics and we heard a lot of positive feedback from those in attendance.”

Dr. Chris Kuehl
Dr. Chris Kuehl

Dr. Chris Kuehl, managing director and co-founder of Armada Corporate Intelligence, shared his insights on the good, bad and ugly of the 2015 economy. He provided three theories on oil production and how each could affect U.S. consumers and the global economy as well as weighed in on the Keystone Pipeline. He also offered forecast scenarios for interest rates, labor supply, manufacturing growth and more.

Kuehl noted a distinct characteristic of energy prices, stating that the problem with energy is that if the price changes, people don’t change behavior. They still drive to work, heat and cool their homes, and run appliances. The problem lies in the fact that the price of energy affects other products. When people spend more on energy, they have less to spend on other things, such as food, clothing or travel.

Kuehl has a doctorate in Political Economics and advanced degrees in Soviet Studies and Asian Studies. Prior to founding Armada he was a professor of international economics and finance for 15 years. He is currently the chief economist for the National Association for Credit Management and is on the board of advisors for their global division.

Erick Rheam, vice president of business development for Automated Energy, Inc., spoke to the group about the importance of key accounts. According to Rheam, a customer is designated a key account because it has a unique set of characteristics that greatly impact the utility and the community. These characteristics may include a large consumption of energy, large job creation capabilities, a significant revenue stream for the community, or political or strategic influence. Retaining key accounts is the most cost-effective way to ensure a utility’s success and enhance revenue. A strong key accounts program nurtures relationships between key accounts and the utility through a municipal-wide effort involving support from all city departments and leaders.

Erick Rheam
Erick Rheam

“The municipality’s job is to be a resource for your business community,” said Rheam. “If a key account were to leave your city, it could have a dramatic impact on the entire community, affecting the local tax base, revenues and more.”

Rheam shared three myths associated with key accounts programs and addressed common pitfalls as well as best practices. He also shared indicators of a successful key accounts program, offered tips for program development and introduced three program levels: basic, standard and master.

“The level and commitment of a formal key accounts program may vary, but a clear customer service vision must be cast over the commercial accounts in your service territory,” said Rheam.

Rheam has been active in the public power industry for 15 years and previously served as vice-chair and chair for the American Public Power Association (APPA) Key Accounts Committee. He most recently partnered with Wallace Barron of Barron and Associates, to write Key Accounts Field Manual: A Guide for Public Power Professionals for APPA. Prior to joining Automated Energy, he managed the key accounts, mid-market, conservation, marketing and industrial pretreatment programs for Loveland Water & Power in Loveland, Colorado.

The three levels of key accounts programs are discussed in detail in the Key Accounts Field Manual, available online in the APPA Store at publicpower.org.

For more pictures from our 2015 Annual Meeting, click HERE.