President, Consolidated Edison Company of New York, Inc., Consolidated Edison, Inc
Matthew Ketschke President Consolidated Edison Company of New York
Consolidated Edison President Delivers Keynote to NY-GEO 2024 NYC Conference- Morning of Day 2. Moderated by John Mandyck, CEO, Urban Green Council.
Transcript (29 segments)
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John Mand0:00
That was fun all right. I'm going to get Venisha up here who is a board member with us, vice president with Con Edison, and she was up on stage during that great 10th anniversary victory lap that we took, and I'm going to have Venisha introduce Matthew.
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Venisha Lannon0:22
Good morning. Yeah, I'm Venisha Lannon, vice president for Environment, Health and Safety at the Con Edison Company of New York. And it's no exaggeration to say I'm doubly excited to be here because I'm also a New York Nyo board member, in addition to being a Con Edison employee. Excited to be the presenting sponsor here and welcome to New York. How many of you are Con Edison customers? By a show of hands. Okay, great. Yeah, we're the hometown team. So I wanted to have the great pleasure of introducing my boss this morning, Matt Ketschke. But before I introduce Matt, I just wanted to set some context and tell you a little bit about who is Con Edison. I told you we're the hometown team, but if you're going to be working in geothermal in our region, and many of you already are in one way or another, you're probably going to come into contact with Con Edison. So I thought it would be helpful to just tell you a little bit about who we are. So the first thing that I would say is that we are big. We are one of the world's largest energy delivery systems. We're one of the nation's largest investor-owned utilities. So we actually are made up of three separate businesses. One that Matt runs that is the Con Edison Company of New York, and that's really the lion's share of who we are, providing electric and gas to the five boroughs of New York City and Westchester. We have 3.6 million electric customers, about 1.1 million gas customers. We split gas responsibility with National Grid, who provides gas to Brooklyn, parts of Queens, and Staten Island. So that's one part of who Con Edison is. The second part of who we are is we are the utility also for Orange and Rockland counties, a little bit north of here, much smaller utility about 300,000 electricity customers for Orange and Rockland County, as well as, a lot of people don't know this, small parts of New Jersey adjacent to Orange and Rockland. We also have about 130,000 gas customers in Orange and Rockland counties. Okay, so it's Con Edison, it's Orange and Rockland, and then it's Con Edison Transmission. A lot of people don't know this, we're actually also a transmission developer. We're going to be investing a billion dollars in transmission over the next decade to bring all this clean energy that we're going to need to our region. So that's a little bit about who we are and how we're made up. So I want to leave you with the fact that we're big. The second thing I want to say is that we're reliable. We are the most reliable electric utility in the nation. We are nine times more reliable than the next most reliable utility in the nation. The PSC found in 2023 that also translates to New York State. So whereas if you're a customer of Con Edison, you will only lose power once every nine years on average versus once a year for utilities in the rest of the state. That's not including storms, that's just regular service. So we are incredibly reliable. We're big, we're reliable. The next thing I would leave you with is that we've been doing this a long time. We celebrated our 200th anniversary last year. We're the longest continuously traded stock on the New York Stock Exchange. We got into the business when there was the big whale oil transition going on, so we've done transition before. We've been doing this a long time. We're actually in the Fortune 500, we're 209th of the largest companies in America by revenue. So we're big, we're reliable, we've been doing this a long time, we're a venerable company as they say. And the last thing I'll leave you with is that as we like to say, we are all in on the clean energy transition. And I think, most significantly for this crowd, we were one of the rare utilities that actually stepped up and supported the elimination of the 100-foot rule that would subsidize gas extensions to new services. So thank you. Not a lot of audiences you get an applause for that, but yes, that's us. So literally we are all in on the clean energy transition. So a word about Matt and I won't say too much because you don't want to piss off your boss early in the morning and he hates it when people talk about him. But I think what's important to understand about Matt Ketschke, our president, is that he has served, he started in 1995 as a management intern and has worked in most parts of the company's operations, been VP of Electric in almost all the businesses we were just talking about including here in Brooklyn. But he also most recently and significantly held roles in our, he was the Senior Vice President before he became President of Customer Energy Solutions, which many of you interface with, and he was Vice President before that of something that was called Distributed Resource Integration. And all that has to do with sort of the future of our company, very future-looking pieces of our work. So I think no one is in a better position than Matt to understand sort of how our company works, what the future looks like, what's going to be realistic and practical to get us there. So without further ado, I'd like to introduce the President of Con Edison, Matt Ketschke. Thank you.
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John Mand6:02
All right, all right. Matt, good to see you. Thanks, John. I'm John Mand. I'm the CEO of Urban Green Council here in New York City. And we're going to do a little fireside chat with Matt to kind of unpack all the important issues of the day and the ones that are so relevant to this audience and this great conference. And congratulations to New York Geo for all the great work you're doing. So Matt, let's dive right into it. Tell us a little bit about how ConEd is thinking about these massive changes that are happening across the energy landscape.
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Matthew Ketschke6:37
Sure. So first, John, thank you for agreeing to do this, really appreciate it. And thank you to the New York Geo team for putting this on. I think events like this are incredibly important. And to your question, we think about the energy landscape. Venisha, who I'm going to have rewrite my resume, thank you, really hit on it that we have been around a long time and ConEd has been serving the energy needs of New York City for a long time, and I've actually been doing this for a fairly long time. The environment around energy is changing faster today than really anytime in my 28 years of work, and going back to the whale oil transition is one of the most dynamic changes I think that industry has seen really in the recent past. As we think about how we address climate change and the need to decarbonize energy, there are changes in policy and technology that are really driving how energy is going to be produced, moved, stored, and used in very dynamic ways. Energy underpins how this city functions, and we at ConEd really need to think about how we evolve our energy delivery systems and work with customers on how they decarbonize their energy use. For New York City, the single largest carbon dioxide emissions source is from buildings. How we heat our buildings drives the CO2 emissions for New York City, and how we think about changing how we do that is going to be critically important.
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John Mand8:04
Great. So as a follow-on to that, I know Doreen was here yesterday. We've been hearing so much about New York's role as a leader in clean energy policy. Talk to us about what's the value of geothermal in the context of where we want to go from a clean energy standpoint.
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Matthew Ketschke8:22
Yeah, so this is one of the things where no one individual organization has the single ability to drive this transition. I think there are a lot of us that have roles in this transition. As we think about how we heat our buildings, it's critical to how we drive CO2 emissions. So reducing CO2 emissions is going to be critical. Geothermal is going to be a key component of that. Geothermal gives us the ability to lower the overall energy demands and heat and cool our buildings in a much more efficient way. Think about tapping into the ability of geothermal to have an increase in coefficient of performance and therefore lower the energy demands. The heat buildings as we think about how we decarbonize is going to be critical. We're going to have to move to essentially electrification of heating our buildings. Air source heat pumps is going to be a piece of that solution, but the ability to tap into the efficiency increase that come with geothermal will be critical. The challenge is going to be it's harder to do, and how we do that and how we effectively retrofit the building stock that we have in New York City for geothermal, I think is one of the challenges that face all of us in this exercise.
So speaking of that, how do we get all the stakeholders together to actually make it happen? So I think we offer free coffee sponsor — no. I think events like this are part of this. This is a dialogue, this is the evolution and development of new technologies, of new business models. The innovators, the folks in this room, on how we can deploy new solutions. I mean, I am continuously impressed when I see the evolution on how technology is driving this sector forward. This is a hard technical problem. I mean, if walking in this morning you walk by some really legacy buildings, some venerable buildings around New York City. How we think about tapping into the skills, talents, abilities of the community here to bring those solutions. One of the things that we're looking for at a conference like this is your feedback. For ConEd, we have deployed close to $50 million in incentives in our clean heating programs. We want to know what works. We want to know from the development community what we can do better and how we can continue to engage the community between developers, property owners, utilities, and government organizations like NYSERDA to continue to advance the technology.
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John Mand10:52
I know this is going to come as a big surprise to you, but there are skeptics out there that say the grid's not going to be ready for electrification. Of course nobody in this room, right? But we hear it over and over again. Grid readiness for electrification, how do you address that concern?
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Matthew Ketschke11:06
I think it's a fair question. I mean, you know, I think that is a very fair question. We are going to ask our energy delivery systems to do things different than what they've historically done. If I look at the last 30 years of history, electric peak demand really grew at a very incremental level, by about a half a percent a year give or take, driven mostly by economic growth here in New York City. As we think about electrifying all of our heating needs for buildings, we are going to see a ramp up in peak demand that we haven't experienced really since the 1950s and 60s when you began to see central air conditioning going into a number of buildings. That means that we're going to have to build capacity on our energy delivery systems to be able to handle that, and we have to do that in advance of buildings converting. For us, we think that means we're going to spend somewhere in the range of $29 billion over the next 5 years investing in our energy delivery infrastructure to make sure we have the capacity to meet that growing need. In the prior decade we built one new substation at ConEd. Right now we have four substations in construction. One just down the road from here on the Brooklyn waterfront to help integrate offshore wind into our energy delivery systems. Two of them out in eastern Queens near Kennedy Airport to help handle the electrification needs of Kennedy Airport and the surrounding transportation facilities around Kennedy Airport. And one in central Brooklyn to handle a growing load in that part of the area including electrification of heat. And we think we're going to be on that building trajectory for the coming decade at least. So having the capacity to build that infrastructure is what ConEd's good at. Venisha said we've been at this for 200 years and we build long-lived energy delivery infrastructure in New York City. It's what we do and do well. And we're going to have to pick up the pace on our efforts around that.
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John Mand12:55
Just sticking with electrification for a moment, are there or what are the different dynamics? Obviously from a delivery standpoint there are, but what are the different dynamics that you have to think through of electrification for buildings versus transportation?
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Matthew Ketschke13:11
One of the things when you think about energy delivery systems today, we generally see the peak strain in our system on the hottest summer day. Our peak demand is coincident with the hottest summer day because air conditioning load drives our electric demand. That's going to change. With heating, that will shift to the wintertime. So the expectation as we move into the coming decade is that with more and more electrification of heating and heat pumps, that we are going to see our peak demand on now the coldest winter morning, which is markedly different than we see it today. It's one of the reasons that we think heat pumps using geothermal is a key to that because tapping into the constant temperature of the ground, your performance is much better on those colder winter days. So thinking about geothermal as part of how we mitigate the peak demand and the needing to build energy delivery systems that peak demand for the coldest winter day and having enough electric generation for coldest winter day, it's one of the reasons that we think the efficiency that comes from geothermal is key to the energy future and transition for New York.
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John Mand14:15
Got it. So let's talk about that. Tell us about the incentives that ConEd is offering for clean heat like geothermal.
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Matthew Ketschke14:22
Yeah, so across the board, between energy efficiency, clean heat, we're offering over $650 million of incentives to our overall programs. That's true for transportation electrification, transportation, energy efficiency, and clean heating. These are things that we've worked closely with our partners at the New York State Department of Public Service and PSC and NYSERDA on how do we structure incentive programs to help early adopters lower that cost of adoption and make that economic business case to the end-use consumer on deploying these solutions. We're not done with this, but this is where we really need your input as people who are living and working in this space on what works, how can we enhance and improve those programs really to lower those barriers for early adopters to get people to adopt the technology, to help all of the people in this room build their business models and become sustainable business models in the longer term. As people adopt more and more geo as geo energy efficiency and heat pumps as part of the solutions that they look for, as opposed to going back to replacing directly with fossil fuels.
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John Mand15:24
Right. And what's so great about this organization and people in this room is far too often people think these geothermal projects are like unicorns that you can't find, but they're out there and they're real. And can you give us some examples of the ongoing projects that you're excited about here in New York?
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Matthew Ketschke15:39
Yeah, they are real. I mean, these are not unicorns. Now I would say they're still hard, they're not easy, and we wouldn't be here having this conference today if this was easy. But there are some real success stories. One example I had a chance to visit, the Beresford building, which is a historic landmark building on Central Park West, it's a co-op, 22-story co-op building. So talk about historic legacy buildings in New York, a perfect example. They did a geothermal project where they bored through their foundation to offset part of their heating load, their fossil fuel natural gas heating load, with a geothermal project. I was incredibly impressed when I saw this project in person. They went into a small room that actually had been part of the coal storage facility for this building when it was originally built. That coal shoot coming down, that's how they got the boring equipment into the basement. Bored through the basement to set up a geo field through the basement. Incredibly impressive, but challenging, really challenging. The area I think we'll have probably easier near-term success is in some of the new construction and campus kind of setup. And talk about, there's buildings here in Brooklyn right there. If you leave here and kind of walk down toward the Williamsburg waterfront, there's one Java Place, it's right on the Brooklyn waterfront, it's a 50-story new commercial mixed-use residential commercial building. What's really interesting about that, it's an all-electric building, and they essentially built geo into the design of the building. So they put their bore field essentially in with their foundation planning. So when you plan for this from the outset, it becomes much easier to execute on. So that project has about a four and a half million ConEd incentive to them, and that will be an all-electric building and geothermal heating in the building. Impressive overall project.
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John Mand17:26
Great. Let's transition a little bit. I understand ConEd has proposed several utility thermal energy networks, or UTEN, projects. What are they?
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Matthew Ketschke17:37
So UTENs, these utility thermal network projects, are proposed ways to look at how can we share geothermal and thermal energy resources between customers. So in many cases, you may have a customer, say a data center, who in portions of the year is producing excess waste heat that they are just venting to the atmosphere, and other customers who could tap into that waste heat to essentially heat their building or produce domestic hot water. I think this is an area that's been a lot of conversation around the nation about how do we think about moving off of fossil fuel and moving towards heat pump systems and potentially doing more than just a single customer exercise. So we have three UTENs proposed. One is in Mount Vernon, New York, which will share among a number of resources from single-family homes to government buildings to multi-tenant facilities, but kind of a smaller more residential mixed-use area sharing thermal resource among them. A second project we have proposed is in the Chelsea neighborhood in Manhattan, where we'll utilize waste heat from a data center and then move that to low-income NYCHA housing. And the third project is in the Rockefeller Center portion of Manhattan, where we're looking at sharing thermal resources between multiple large commercial buildings. So if you think about that, these are each three proposed pilot projects that we submitted to the New York State Department of Public Service to really test the different models around thermal energy networks and geo heat pumps to see if we can make those work. I think there's a lot of questions to be answered about how do you make the business model work, how does the customer engagement work, how does the technology work. But the UTEN process and the proposed projects give us opportunities to test those things to see if we can really scale them. And our proposed projects really run the range from single-family homes to 70-story skyscrapers in Manhattan.
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John Mand19:26
Yeah, let's unpack that just a little bit. Because in addition to delivering the energy that you need, what are you looking for from a success standpoint with those pilots? Like what are you hoping to learn?
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Matthew Ketschke19:36
Yeah, I think it's across the spectrum of activity. From how do we think about customer engagement, how do we think about that relationship with a customer to make this something that works for them? You know, you're in the phase with some of this of early adopters, and early adopters will often put up with more friction in the transaction and how it works. But if this is really going to work, we have to scale. So how do we think about customer engagement, customer option, and making a positive customer experience? How do we think about constructability? How do we think about building some of these things? So we have thermal networks on campus setups where you have a single property owner, and I think we're going to see traction around the campus setup, particularly college campuses and academic campuses and hospital campuses are good sources, I think, for us to tap into now for thermal networks. But how do we think about going across the public right-of-way and making those things constructible? And then there's the operation. How do we think about operating these where then you have multiple potential customers, you're no longer optimizing across a single college campus or hospital campus, but optimizing across multiple different commercial customers to make the things work? So I think it's customer engagement, technical constructability, and then how do you operate them. And I think we're going to learn across all of those.
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John Mand20:50
And then what do you think is the biggest challenge? Is it the construction part of this?
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Matthew Ketschke20:54
I don't think the construction is... I am not minimizing constructing in New York City. You know, a lot of you folks work across New York State, constructing in New York City is not always the easiest thing to do. But for me, I don't think that's the most challenging piece. I think the customer is really important. How do we think about engaging a customer in a way that's going to work? And then I think there's the business model of this. You know, thermal networks have been proposed across a number of jurisdictions across the United States, including Massachusetts, New York, and California. But how do we figure out an economic and business model that works for the customer, that works for the developer, and potentially does this work as a regulated utility service, or is this something different than that? And I think those are all learnings that we're going to come out of these UTEN projects.
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John Mand21:42
What about policy? In what way will UTEN projects inform future policy when it comes to this area?
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Matthew Ketschke21:48
Yeah, so there's a lot to be sorted out on how do we think about the policy around this, the economics, the regulation. I mean, today electric service and natural gas service operate under a policy regime that has been in place for 100 years on how we think about regulating, how we think about being a provider, a provider of last resort, how we socialize costs across the energy delivery systems. I think all of those elements of policy need to be sorted out as you think of utility thermal networks, particularly public utility thermal networks, and how they will function as part of the overall regulated utility regime that could be in place. New York City today actually has one of the largest district heating systems already. You know, ConEd owns and operates the ConEd steam system, which provides steam, which is a form of a thermal network, to 1,500 customers across New York City. And those 1,500 are the large commercial customers. They're things like the Empire State Building, the Chrysler Building, Grand Central Station. So how you evolve that to have that work as a regulated utility service, or if it's not a regulated utility service, as an offering that helps improve the overall efficiency of electric usage, is something I think we'll sort out through the policy in this.
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John Mand23:02
Great. I'm going to go off script, which is probably going to scare your staff here. But I always like to ask this question. If you had the magic wand, what would you wave? What's the one thing you would want to change when it comes either to clean energy or electrification? Like what is that technology change, that market barrier? Like what do we, what's out there that we really need to think about?
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Matthew Ketschke23:27
So you know, I think one of the key elements of the policy... So if you're saying from a policy standpoint what would you change, we have ambitious policy goals in the state of New York. They are looking to essentially be nation-leading in how we think about decarbonizing our entire economy. Those ambitious goals and the technical challenges that go along with getting there, there's a gap. So if I could wave a magic wand and get more time to help us figure out how do we make these technologies that are continuously evolving... And if I think about conferences like this and where we were just a couple years ago, I did a walk around this morning and saw some of the displays and really impressive the amount of innovation that's going into this space. But we need time. The technology has not quite caught up to the policy ambitions about fully decarbonizing heat, particularly in a city like New York where we have legacy buildings. I talked about one Java. If this was a building where we were building all greenfield, I could see the line of sight to how we get there from a technical standpoint because we can do it with the technology today. But if we think about how do I retrofit the Chrysler Building to be geothermal or to be fully heat pump and fully electrify that heating system, that's where I think we have a technology gap. And I'm not sure how we bridge that technology gap yet today because I think that's part of the innovation. Is it going to be through heat pumps? I think absolutely part of the solution. Is it going to be through decarbonized fuel? I think yes, that will be part of the solution. Will it be through increased utilization of renewable electricity that's going to need storage solutions that we don't have today? I think yes. But for all three of those, there are technical solutions that have to be bridged. So if I had a magic wand, it would be for more time to help us figure out how those things, or a time accelerator.
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John Mand25:24
Great. Well, this is a room of clean energy warriors. Do you have any parting words for us that you want to leave?
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Matthew Ketschke25:30
So I think the biggest one is, you know, we're here because we want to engage in the conversation around what's working, what's not. There's a big piece of our team here today because we want to engage with you. What's working in our programs today? What's not? What could we do better or different? There is no single individual that has all of the answers to these problems. These are complicated problems that face our society. And really if I had an ask, it's you bring all of your skills, talents, and abilities to this conversation, and we're here to listen and help be part of the solution.
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John Mand26:01
Great. Ladies and gentlemen, Matt Ketschke. Thanks.
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Moderator26:13
John, well all right, strong start, love it. Thank you, Matt and John. I am going to start to bring up our next event. So Zack is going to moderate a panel of developers, and so we need to do a little bit of physical rearrangement. So maybe some of my folks could help out. Yep, yes. Please, Jeff Hoffer, what's wrong with you? On your feet, soldier. Yeah, we need to move this stuff and we need to get this... Just give us a minute to rearrange and we'll... Zach will get this thing going.