 talking about energy today energy 808 the cutting edge with Guillermo Sabatier who joins us from where are you Guillermo in Florida with it? I am in Coral Springs Florida which is just in uh just west or Fort Lauderdale. Ah good okay um you're an energy man you have a career in energy tell me about your career so I can try to get your job you know. Oh you know it's uh we definitely need the help so uh I am an electrical engineer I've I've been in the industry 29 well 30 years now I um spend most of that time working for Florida Power and Light which is a subsidiary of Next Era Energy. Oh we know that name here in Hawaii yeah we know. Well I I had a I had a hand in supporting some of the folks that were great bunch of folks that are busy uh doing that project during the they try to do the acquisition so a lot of great people work around that project I mean we all have a regrets that it didn't work out but we can talk some more about that later but yeah I spent 29 years with them uh electrical engineers spent a lot of that in system operations and uh did it worked almost at every point of the utility because it was a vertically integrated utility so I worked all the way from meter reading all the way up to system operations and even the nuclear plants. So quite a bit of experience um towards the very end though I did a lot of regulatory compliance and also training of us of the personnel and then I went to work for for uh had a great opportunity to go work for SOS International at the time which is one of our training support providers and then SOS became HSI now we're part of the greater HSI organization and our group is called industrial skills so and then what we do go ahead I'm sorry what we do is it provide training services for the electric utility industry not just in operations but pretty much anything from utility to health and safety to tracking OSHA and even doing some of the regulatory compliance consulting and quite a whole lot of host of uh of um support roles that we can do for them so so you're part of your you're a part of um HSI what is HSI how big is it what does it do in general as a corporation well HSI is the health and safety institute and and uh there they operate globally they um they have a large number of different subsidiaries or family of companies uh they're about close to like 500 employees but what they do mostly is they provide a lot of like OSHA health related training they train first responders they do there's a number of companies in there that battle for example where they do OSHA compliance tracking but what I'm really familiar with and in my realm is is uh the industrial skills where we focus more on the training utility personnel and also industrial any kind of industry that we can think of the required safety or operating heavy equipment a sort of thing we have our hand in that so my particular expertise though is in electric utility norc regulation and system operations for training personnel so that's okay let me let me get some of that uh you know uh defined when you say compliance what do you mean compliance with what regular regulatory uh you know requirements yes well in the mainland the U.S. and Canada uh we are all subject to norc north american electric reliability corporation and they they they are acting on behalf of FERC the federal energy regulatory commission right now in hawai you may not be subject to the same standards or or requirements that the rest of the mainland is and and the main purpose of those requirements is to maintain reliability right and a lot of those standards have evolved in response to different disturbances meaning blackouts uh the really big one was back in 2003 in the northeast and then we've had a few other disturbances since then and the standards and policies you know evolve uh through time given you know different challenges that happen uh one of the new ones that we're seeing now is is they're they're perhaps putting in some new standards and reaction to what happened in texas last year right with the whole supply shortfall and that sort of thing so there's another one coming up that may have to do with distributed energy resources so we'll talk some more of that in our discussion today I think on I'm thinking of um you know Puerto Rico and texas too I suppose um so these standards would be calculated and um promulgated to prevent those kinds of disasters right absolutely and that's a those are federal agencies FERC and NERC um and they and they operate federal agencies part of what the Department of Energy I suppose right um so how much power do they have that's a that's a play on words actually Guillermo uh well it's um the uh NERC is is the one that does enforcement right and they they act on behalf of FERC and the way that works in NERC is really it's it's by the member companies right and and every company has a hand in developing these standards but the regions which are made up of the utilities but the regions themselves will run an audit and when I talk about compliance basically is there's over like 275 requirements and these and these standards right now just to make something you know like stand out is if you have a violation some of these standards some of these requirements you can get as much as a one million dollars per infraction per day so if you have an ongoing problem that isn't addressed for you know for a period of time you know that could be some you know significant fine now you know those fines don't happen often the industry has gotten pretty good about you know maintaining compliance showing evidence you know hey uh this is what I do but here's evidence showing that I do what I say I do and and then the audits usually happen every three years and other places they happen almost every 18 months and it's got to be a pretty pretty fluid process right when it comes to they announce an audit's coming you prepare and you get all your evidence ready and and that's already at the point of an audit but you know every the operations you just you just shape your entire operation is to make sure that you're operating within that compliance parameter so it must be changing though I mean for example the two examples I mentioned Puerto Rico and Texas Puerto Rico bad storm to my mind maybe in the minds of some of the climate scientists that's a climate change storm and what happened what happened in Texas the same thing you could connect that easily with climate change and the weather and all so NERC must be interested and FERC must be interested in in being as dynamic as the environment in other words if I have a greater risk of extreme weather if I have a greater risk because of environmental changes I have to change my standards to avoid the kinds of things that happen am I right right and they they they usually change uh to in the best case they change in anticipation of what's coming sometimes they change as a reaction to it's not always quick and there's always like a a process where there's voting by the utilities now ultimately it is the utilities best interest is the utilities themselves that come up with a lot of these requirements of standards that's where they have the standards drafting teams but in the end it's a lengthy process and and it's not always as as as quick as we you know we wanted to be but that's also not a bug there's a feature because it's sometimes it takes a lot of time to gear up and get ready to be able to meet those new requirements fortunately there there's a lot of there's a lot of you know smart folks a lot smarter than I am looking ahead and figuring out what's coming up next and you know how to write standards and how to prepare for those standards so HSI as part of this mission would go to its utility clients I guess it's a client tell a client arrangement and say look here's some advice for you you better be careful about this that and the other thing you better right comply with these standards or else you'll get fined or who knows what right and so that's pretty valuable to utility what happens if they don't take your advice though Guillermo well that that's that's usually I'm going to get a few examples right of course without naming names but we have utilities that have asked tape in the very beginning just help us come up with this with this program and we've helped them develop the program from scratch and then really it's us running the program for them the compliance program and they've been pretty successful we've had all the utilities where they've had a turnover personnel retire they don't replace them right away and then they've had a gap and they've come to us all not at the last minute but but we're not with a lot of time left to prepare because they've had an audit coming and we've managed to help them and we've had a pretty good successful track record but the challenges are always different right some of them give you enough time others come at you with a pretty bad emergency and when you do you do your best to help them and and that you know luckily we've done a good job about that but yeah it's it's always it's always um usually it's uh staff augmentation it's just what we're providing a lot of times and the majority of us subject matter experts are you know have been in the utility industry already in that capacity so we bring that knowledge here and help them out yeah like you well let's talk let's shift a little bit to safety and training um seems to me that um you know if you are handling heavy equipment uh equipment which has fuel involved of some kind um equipment that handles a lot of electrical energy right uh these this danger in all sides of that absolutely moving it and operating it and connecting it and so forth um so how do you make it safe and what do you focus on in the training you give them for operating it and and achieving some level of safety well that's a that's a very important point when it comes to industrial skills an example is a personnel that operate a refinery or personnel that operate a power generating facility right but there's a lot of that training begins to happen online uh self-paced and then once you get back on the soil COVID situation we'll have more of the in-person training but we've been very fortunate where we have a lot of like initial training for new personnel to get them at least going in that particular aspect of their of their career or their job function where they're at least familiar with the equipment the dangers and how they operate uh in my particular side uh you safe safe handling of equipment in a substation for example we have a few training modules that deal into that and a lot of the basic issues for example stored energy right like don't stick your hands somewhere where there's like you know a charged spring or compressed gas a sort of thing that that would be just one example many that we have um and and you know usually the delivery medium is is evolving and it's changing and and we look at the possibility of um coming into the whole virtual reality realm of being able to deliver training in that way where you never even have to set foot in this in a facility or a substation and and you get to avoid their risk altogether but that's still the development stages you know but we'll have either eventually. Well you talk about um you know virtual reality or virtual in general and I would imagine in the past two now going on three years a lot of the training you would HSI would offer would be virtual would be on zoom and the like am I right? It's not there yet we're trying to look into that and to develop that uh we'd like to get there one day uh there there's still a lot of material needs to be developed and then the the initial upfront effort and cost is significant but but yeah that that's something that we like to do at some points. And this again is for clientele and the clientele could be in the US it could be in North America um I suppose it could be anywhere and I'm thinking of some of the um utility installations and developing countries must be well below the standard of safety that you would like to see um you know they may have a different approach to safety and training how do you how do you handle the situation um where you know this is a country for example where the utility is really rough at the edges how do you make that safe? Well that a lot of times is it has to be up to them to approach you uh and them wanting to actually take that kind of advice and that kind of guidance and and invest in that kind of training I mean you can't really force them to do anything you know whenever it's outside of this nation but but it's ideally you would hope that that would they would approach and and and invest in that kind of training for their for the personnel it's not always the case but um so far we've had a pretty good track record of being able to present that that particular case and they go ahead and invest in get that training and we've had quite a few countries that that have taken advantage of that and and and their overall operations have improved because of that training and safety training yeah and the training has to follow the technology I mean so if you look 20 or 30 years ago that was one kind of technology and in many cases the technology was delivered to the hinterland um you know on on barges and and and the like and uh who knows how long it would last or how whether it was being maintained and so forth but now the technology is electronic the technology has built in safeguards the technology is is um as you say you know virtual in many cases and so um if you're going to train somebody it's sort of like the military if you're going to train somebody you have to you have to train them on the latest equipment that means you have to follow the latest equipment wherever it is made or deployed how do you keep up that is uh a lot of fresh SMEs and always staying in touch and up to speed with the changes of technology luckily for us we we stay in contact with a lot of folks in the in the industry and of course you know like anybody else attend the shows attend the the white papers publish you read the published papers and just you know work with manufacturers right and what they're doing and that usually you know keeps you pretty current with what's happening in the industry but you know they're and our material we're you know we're constantly inspecting it and kind of trying to keep it up you know up to date and updating it or changing certain things about it and no longer apply right and especially with when we see images in some in some cases that are pretty old so we will go ahead and change those of you know the side to be recommending changes to the utility I suppose say look if you want to be safe you can't use this kind of thing anymore right well there are definitely changes that that a lot of that is driven by OSHA and and you see a lot of that happening I should believe another one and then the utilities themselves at least here in the US and Canada are pretty good about staying up to date with safety practices and then of course a lot of that is the IBW as well as greatly involved in that so you have to stay in touch with them read their pubs see what they're working on and where they are warning you that you can in turn warn your your clients now when you talk about the equipment and all that you're not just talking about generators and you know connection points and stations and substations you're talking about all the equipment for all kinds of energy resources I suppose including wind turbines and solar and what have you whatever whatever works whatever is generating or distributing electricity right that's a lot of stuff to keep track of them yeah yeah and it goes from the generator to the transmission system all the way down to a distribution and we've been all the way down to the customer's meter and a lot of different topics and areas of of education and safety that are involved so that's a lot of things to cover yeah and it's changing so that must be very interesting and what what it leads that leads to my next area of inquiry Guillermo and that is jobs you know that there's so many people say hey this is a very profitable area because there's so much money passing hands because so many people need energy and because of the appliances we have and the electronics we use at the consumer level we need more and more energy all the time there's more of a demand on utilities and other sources of energy and therefore lots and lots and lots of jobs and so the training you're talking about has to apply to the the newbies as well right they have to be trained to get into it and be experienced on a rapid basis am I right absolutely and just one example of the many things NERC itself just for the operators of the electric system these system operators have to be certified it's kind of like a license right and and just to get that certification it's it's usually a pretty big intimidating exam so we provide the test preparation training which is online and then we have the actual instructor led training and we provide a lot of support for a lot of these new operators and and it's the one thing they need to be able to work on the system we also provide some training for distribution operations personnel right so that is also gaining a little bit of popularity because now it's NERC maybe getting into that realm when it comes to regulation so so you know getting ready for that change as well but then that's just one example there there's other opportunities right for just the the trades working well there's working in the in the industry working in in in power plants that's just one example line workers I mean there's a serious gap in the amount of available line workers in this country both distribution and transmission and and it's interesting because like like a lot of the trades right now they they have a definite you know a personnel shortfall so a lot of opportunities I mean if somebody doesn't really want to go to college but they want to you know start working and earning some good money right away that's that's a one option for them to actually look at I know I took a tour of the IBEW here and other other such unions and they have programs to teach you energy to make you competent in installing for example solar energy because there are there are dangers and there's a need to understand and I suppose that makes an electrical energy degree all the more valuable with a school like you did would be in great demand right now wouldn't it yeah yeah and and I've such as that it's the it's the the very different opportunities that you have but just by understanding this industry and this science there's so many different opportunities from design to science and even and then not even getting into the business side of it right where you have all these different investments and and and I myself have an MBA so so so you know I joined the dark side long ago and I looked at the business side of this of this industry and and you know you ultimately see you know the costs and the operating dynamics of the sort of thing and and even the the challenges that you're facing as the science changes right so so many different opportunities right that that we can look at especially now and we're at a great time where things are definitely changing so well let's talk about the MBA side of thing you've been writing articles what is the focus of your you know professional image interest and and what are the articles you've been writing about what are you covering what are you talking to the community about well I've I've talked a little bit about the opportunity of like meshing this new technology where it's we've all seen peer to peer business right where it's like uber or or right sharing or the gig economy or you're selling things you know at the very granular level but in in the massive quantities right where it's like an example would be this peer to peer energy marketing right so as more and more people develop and they get into the whole producing their own energy whereas solar panels or storage or batteries or even their EVs eventually we're going to get to the point where we can actually sell power at the distribution level to our neighbors to folks that are on the same feeder in the same substation and never getting into the the transmission system so ultimately that'll present the opportunities and also a lot of challenges for utilities right part of that being now you're going to have power flowing the opposite direction right from from we should be the and consumer analysis a producer or prosumer so that'll change the way the system behaves dynamically but you know given what with AI and the way we're developing our technology and our smart systems you know that can definitely be managed and I see a lot of opportunities there so some of my articles you know I have to do with that it's very exciting I mean I remember reading that in Texas back years ago there was a law that was unique to Texas where you could sell power to your neighbor across the street right in other states the utility laws would not let you do that they would require that you qualify for the regulators as as a utility which is not easy so now this peer to peer thing could be a statement of the future I suspect it is a statement of the future and they will have everybody connected with everybody else everybody distributing to everyone else all participating in this kind of mesh of electrical energy how do you see that unfolding I mean I see it unfolding over time it's already being piloted in a few regions I mean California is one of them they're doing that in Europe as well one of the big concerns is cybersecurity as you can imagine you know the one big dominant provider has an app and they managed to hack that then you can imagine how that can lead to certain reliability issues right that that's one aspect of it the other one really is from a utility standpoint right it's it's they can they could probably take advantage of that in the sense that now they've had to offset the need to build generation and transmission lines so so they can help you throw up your system and run it and manage it but at the same time they're offsetting their their own generation cost so there are opportunities there depending on the utility and how they're structured but again there is going to be some regulatory hurdles and that's why fur quarter 22 is 22 which is coming into effect pretty soon like in the next couple of months what it really was was for the aggregators to give them a little bit more flexibility meaning that they compete in the open markets so an aggregator would just buy all this power from these different little prosumers and aggregate it and then go and bid and sell and buy in in the open market but that distributes the capital the capital requirements in other words you can have a business somewhere in that mesh and you can have a much smaller investment than utility would make but you can make money it can be something where you put some money in and you have you have a return on your investment and a lot of people can do it and and control it it's very exciting to me that this is possible well and and at some point one thing that utilities have been working on a lot it's not really capacity they've been looking at dispatchability so so though they I see at one point they will probably pay you money to just be available for dispatch and not really not really absorbing power or sending power back out but just to be available and that's something that they consider more important in some cases right just to be ready to withstand the mass contingency and well we we promised our viewers we would talk about national and for that matter international energy markets and and we have oil going up nicely as anticipated again and and we have gas on the horizon including the strange set of circumstances around Ukraine and gas prom and the pipeline oh yeah Nord Nord Stream I think it is from Russia to Germany we have the U.S. trying to sell gas hither and yon and including to Asia it's it's all changing it seems like it's transforming in front of our eyes right and how is this affecting the energy markets energy prices in the utilities and in the supply right now well gas natural gas has definitely gone up a little bit you know on the cost per million BTUs I never thought I'd see this but the fact that they're actually got compressing gas and tankers and they're shipping it overseas was something that I never thought I'd see but yeah here we are you know so the cost of gas over there has finally offset the cost of transporting it which which is mind blowing right and but we're finally here and the other thing too is is as we transition from fossil fuels or or anything else over to renewables you can't run on renewables all the time right you're you're going to need some dispatchability on that and and a lot of that bridge fuel has become natural gas and states like California for example where they they've had very aggressive goals they've seems seems like to me they walked it back a little bit where the governor was declaring natural gas once again the zero carbon fuel which you know shows how their their their expectation of what was going on versus the reality and and not to mention the fact that they're they're they're mothballing diablo canning which is our last nuclear unit out there um a lot of mixed opinions about that I mean uh nuclear right doesn't admit it any you know no emissions no carbon but yeah you have the weight so but but you put nuclear together with cyber cyber security issues it does make you worry make sure worry by the same time it's it's part of your supply and part of your portfolio and your energy mix and if you get rid of it you don't have anything to replace it with now you've got a shortfall so and then then they ended up having to bring units back online that were they have been mothballed and some of those are a little dirty but so as right now they're they're leading more on natural gas again so so it's a good bridge fuel natural gas is a lot more demand for it now for that reason and it's just you know to shame that it's kind of so expensive yeah okay well last question is by the way it's not my last question I want to admit something I've been thinking throughout this whole show that we have to have another show absolutely we have to drill down on so many the issues we're just we're skipping the stone across the pond and and there's so many things we could talk about but let me ask you about let me ask you about renewables you know where do they fit in all of what we've been talking about are they succeeding what's the political environment for them what's the pressure of the climate change contingent are we able are we going to be able to make our goals such as they are are we going to be able to make some significant contribution to you know the global effort at dealing with climate change I mean we're definitely making some good good good progress and good goals the the challenges when we shoot too far ahead and we don't have the bridge fuels right we don't have the bridge generation and what I mean by that is is you cannot run your system on solar alone right I mean I mean you're good from 10 a.m. to 2 p.m. and before that and after that what do you what do you do right and batteries can only give you enough energy for maybe a couple of hours and most utilities don't want to run them every day because they have a limited number of cycles so so storage is important right when it comes to that sort of thing so we're getting there eventually very clean burning of natural gas and for the for the good foreseeable future definitely getting away from coal definitely getting away from oil and I think florida got rid of his last oil burning power plant I mean over a decade ago or longer than that so but you know a lot of the portfolio here is natural gas but they do have a lot of solar and no wind of course and I give you one guess as to why no wind is a wind we have problems about wind too for many reasons anyway right we get hurricanes yeah well you can imagine what happens to a wind turbine in a hurricane never mind yeah right uh okay Guillermo we're out of time I I have to say I really enjoyed this conversation and I want to come back and we'll set up another show or shows to deal with some of these issues and some of the changes that we are going to find going forward this is a very important topic it's important for the economy in a number of ways it's important for the future of the country in a number of ways and I envy you being so close to the center of it having you know having all these all these areas of expertise thank you so much Guillermo well thank you for having me and next time I really look forward to talking more about Hawaii because I really really want to bring that up again because it's a it was something that that was really enthusiastic about when you were looking at the back of my day in next era and I would like to see one day you know that they you guys make that a really able goal at some point yes sir absolutely yes okay we'll be back Guillermo Sabatier HSI.com thanks very much thank you Jay.