Paul Lau became CEO and general manager of the Sacramento Municipal Utility District in October 2020 , replacing former CEO Arlen Orchard , who retired that month after three decades with the utility . Lau , another veteran employee , joined SMUD as an electrical engineering student intern in 1982 and has been a member of the executive team since 2008 . Comstock ’ s spoke to Lau about leading the country ’ s sixth-largest community-owned electric utility and about his plan to reach zero carbon emissions within 10 years .
What are some of your top priorities for your first year as CEO of SMUD ? Some of the top priorities are making sure that we ’ re keeping employees safe during this whole COVID pandemic and making sure that we ’ re doing everything we can to also assist the community in getting through it .
The second priority is our board passed a climate emergency declaration back in July and wanted me to develop an action plan for SMUD to get to zero carbon for our energy supply by 2030 , and I ’ m expected to deliver action plans to them by March 2021 .
Another significant thing that we ’ re working on is new rates for solar . … We want to make sure that the rate actually reflects the benefit of rooftop solar for all our customers and not just those people who put on rooftop solar at their homes or businesses . So those are the three big ones that are on top of my mind right now .
How has it been to come into this role during a pandemic and a recession , and how have these crises affected day-to-day operations ? We have 1,400 of our employees out of 2,200 that are working remotely since March ( 2020 ). … It ’ s quite a challenge to become a new CEO during these pandemic times , and at the same time also being understanding of the impact COVID has on family life . It ’ s been really challenging , especially for young families .
Then you also have a good chunk of your customer base that is heavily impacted by COVID . Our low-income customers went from about 70,000 to 100,000 . Their incomes are being impacted by COVID . And then also , you have small businesses being shut down , shut down for good or shut down temporarily . That had a big impact on our revenue . We also had a nondisconnect ( policy ) for nonpayments for our customers .
But , fortunately , I ’ ve been with the company for 38 years . … I think that makes it a little easier , because I do know most of the folks already . I had the good fortune of probably leading — out of 2,200 employees — about 1,800 of them .
SMUD is a community-owned utility that is not part of the California Independent System Operator . How does that independence benefit customers ? We ’ re a nonprofit organization , so we don ’ t make a guaranteed rate of return on our capital investments . … Our board of directors are elected officials … so they look at how we spend our budget . It ’ s really local decision-making .
During the energy crisis ( 2000-01 ), SMUD was forced to take part in the rotating outages because we ’ re part of the California grid , and because of that decision , SMUD decided to form our own balancing authority . … We actually formed , in some regard , a publicly owned ISO that we operate all the way to the California-Oregon border , and so we act like a small CAISO within the public utilities in Northern California . We buy and trade power on our own , we use our transmission just like CAISO does , and then we manage the whole grid operations like CAISO does . … We are kind of a master of our own destiny .
Now , to be fair , we trade with CAISO , and we also trade with the Northwest . We arbitrage both markets . And so SMUD is in a very good position … with the ability of bringing some very favorable , low-cost power to the region of Sacramento .
What are some of the main points of the clean energy plan you helped develop ? Back in 2018 , we developed something we call the Integrated Resource Plan for 2040 , which is really about how SMUD is planning to get to what we call net zero carbon ( when greenhouse
My vision is that I really want SMUD to pursue an aggressive carbon reduction goal to get to zero carbon emissions by 2030 without compromising our world-class reliability or affordable rates .
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