The following is a transcript of the June 24, 2024, episode of Public Power Now. Learn more about subscribing to Public Power Now at Publicpower.org/Podcasts. Some quotes may have been edited for clarity.
Paul Ciampoli
Welcome to the latest episode of Public Power Now. I'm Paul Ciampoli, APPA’s news director. Our guest on this episode is Mark Kimbell, General Manager for the Gallatin Department of Electricity in Tennessee. Mark recently received APPA’s Mark Crisson Leadership and Managerial Excellence Award, which recognizes managers at a utility, joint action agency, or state or regional association who steer their organizations to new levels of excellence, lead by example, and inspire staff to do better.
Mark, thanks for joining us.
Mark Kimbell
Glad to be here.
Paul Ciampoli
Mark, I wanted to get our conversation started by giving you the opportunity to describe your responsibilities as general manager at the utility.
Mark Kimbell
OK. Well, basically with our governance of an independent board appointed by the Gallatin mayor and approved by the City Council, I'm the only employee of the Gallatin Power Board. And then I'm tasked with the with the day-to-day operations of the electric department. So basically it's left up to me to run the department and of course we have monthly board meetings where the board overlooks what I'm doing. I have six direct reports that keep the place running. A director of HR and Admin services, Chief Financial officer, VP of Engineering, office manager, General Line Foreman and substation meter and supervisor are the ones that really take care of all the day-to-day stuff. I mostly get out of the way unless I'm needed.
I think the key to a successful department is to have great people leading and all these folks at GDE are great leaders, which makes my job easy. I do my best to provide good guidance and I also love to encourage education in all forms. The Tennessee Valley Public Power Association does a great job of providing public power education in the Tennessee Valley, so we're blessed with TVPPA and APPA education programs here in the valley. I also like to encourage higher education and we have GDE assistance for that. We actually have 48 employees at Gallatin Department of Electricity and three of those 48 now have advanced degrees, mostly because of our GDE assistance. And I like to have a philosophy that if you're not learning and expanding your knowledge base, then you are not leading so I really placed a lot of emphasis on education so that that's just kind of a brief overview.
Paul Ciampoli
In preparation for this interview, one of the things that jumped out at me -- and looking at the department’s website -- is the fact one of the things that I noticed is that you note in a letter from the general manager on the website that fiscal responsibility and keeping rates as low as possible will remain an ongoing focus of the utility.
I wanted to give you an opportunity to talk about the ways in which the Gallatin Department of Electricity maintains fiscal responsibility, as well as keeps rates low.
Mark Kimbell
Well, that's always a challenge. Number one is that we haven't borrowed any money in 37 years, which is very, very unusual. That started before me, so our former GM Bill Draper had the bonds of the original building paid off in 1987. And it has served Gallatin well. It has served the Gallatin Department of Electricity well, and only operating with our cash reserves for all these years, which is a challenge. It helps with rates if you are not borrowing, but the challenge is to maintain the electric system at a high level and not borrow.
Gallatin is a fast growing community, so maintaining the electric system and not borrowing for growth has been a challenge. You have to be creative with the way you spend the money, the way you use aid to construction and making sure that growth actually pays for itself so I would say the thing that has best made the rates low in Gallatin, [is] trying to maintain that not borrowing any money over that long period of time.
Paul Ciampoli
You mentioned maintaining the electric system, so that might be kind of a nice transition to the next question I had for you, which is I wanted to give you the opportunity to talk about any ongoing or recently completed projects at your department that you'd like to highlight.
Mark Kimbell
Several big things are going on in Gallatin and happening at the electric department. We're in the process of preparing to build a new substation on the north side of town and revamp an older substation on the south side of town at the same time. Both substations need to be completed within about a two to three-year window to deal with the new loads in Gallatin. If you're anywhere around Middle Tennessee, around Nashville -- which we're just 25 miles north of Nashville -- you realize that growth is a big driver of anything we're doing right now.
We also are adding on to our existing building to accommodate additional personnel that will take care of our growing customer base.
It's a challenge to do all three at the same time, so two substations and a building project at the same time is not anything I would recommend to anybody, but it's made necessary by the growth of the city. We are being very deliberate with our timing of the three projects to be as fiscally responsible as we can. The last time GDE borrowed money was when we built the existing building in 1967 and there hasn't been much done to the building since then, so it's time for a building project, but also the growth within the city dictates that we need the upgraded substation and the new substation on the north side of town. We will probably have to borrow some money to complete the building project over the next several years and then once we do that, we'll probably try to pay it off as soon as we can, so those are three biggies right there.
Paul Ciampoli
A couple of follow up questions, if I could. First of all, with respect to the growing customer base, is that primarily individuals and/or families or is it also businesses that are setting up shop there or some combination of all three?
Mark Kimbell
Well, it's a mix of all three. With our proximity to Nashville there are a lot of apartment complexes being built in Gallatin, and for instance, this past year -- if you're looking from May -- this May to last May, we've increased our customer base, our percentage by....over 6 1/2 percent. That is a lot of growth to deal with at one time. In the past five years, Gallatin Department of Electricity has been the fastest growing electric system in the Tennessee Valley three of the last five years. So that's a challenge sometimes, but you know you just deal with what's in front of you and you keep working the system and that's what us engineers do is we take care of the loads and that's what we're trying to do here in Gallatin.
Paul Ciampoli
With respect to the substation projects, any unforeseen challenges set up cropped up, i.e. supply chain issues?
Mark Kimbell
Yeah, so if you're going to build a substation, you're going to have to plan probably four to five years in advance to be able to get it online when you need it, not only supply chain with the substation transformers, but if you have any kind of distance from your source, then you're going to be building transmission line. Of course, in the Tennessee Valley that's TVA. And it may take four to five years to get a tap to your substation, so you really have to be looking out in the future and realizing what your needs are and planning for them way ahead of time -- where before we could probably get a substation built with a tap in a couple of years. And since COVID and all the supply chain issues, it's gone from two years to four years or five years.
Paul Ciampoli
One other substation-related follow up. I don't know how big of an issue this is, but as I work as news director at APPA, one of the things I've come across is an individual community -- there's at times been some resistance to substation projects. I guess one of the issues is visual -- people having issues with having a substation near their neighborhood. In that context, have you guys even informally done community outreach to explain the need for the new substation?
Mark Kimbell
When TVA builds a tap line, they have to have public hearings, so as part of our project, yes. We dealt with a big developer on the north side so we actually purchased the land before there was a subdivision around it. And we used a piece of land that kind of buffers an area where they're going to be putting in medium sized business anywhere from 1,000 to 5,000 kW load. It's more in a kind of a business district than it is residential. So that worked out quite well and again that's planning -- either you're looking ahead to see what best takes care of our needs and what's the best spot for the community to put that substation in? We think we found a good spot. The other piece of it is then you have to decide how are you going to build your substation? So we chose to go with the contained switch gear in a small house, instead of having the outdoor gear where it's more of a visual and trying to hide it. We also are going to put up a nice looking block wall in front of the substation to kind of hide it too. So you do a couple of those things to help the aesthetics of the substation.
Paul Ciampoli
So if you're in the vicinity and you're driving by you wouldn't even really notice it?
Mark Kimbell
Well, hopefully. It's hard to hide a substation for sure. I think the wall helps protect it some too because you have a less visual look down into the substation if you have that wall up, so that helps in some of the protection that we're concerned about these days too.
Paul Ciampoli
I wanted to kind of step out a little bit in terms of our conversation and talk about what you see as the key challenges facing the electric utility sector, not only regionally but also nationally and also what are the ways in which the Gallatin Department of Electricity is positioned to successfully meet those challenges?
Mark Kimbell
Well, as we've been talking about, we're working on capacity right now in our area with the two substations. The substation we're upgrading -- the transformers are from the 50s, so we've gotten a lot of good use out of that substation, but it's time to increase capacity there. It's kind of on the South side of town, so that will help us as far as circuits and loads and things like that and increasing our reliability. Of course, the more circuits you have, the greater your reliability, the more possibilities you have for backfeeding into substations. I was in Murfreesboro one time and when we did that, we used a lot of automated equipment within certain areas to help with that reliability too, so those are some of things you're looking at but increasing loads and demands for many reasons are going to drive what we're doing in the next 10 years especially, I think. You’ve got demands from AI. You have other data centers in general that are looking to relocate to certain areas. You have the electric vehicle adoption and I think that had slowed a little bit, but it's still going to keep driving our loads forward and then the growth here in Middle Tennessee is a challenge as we've talked about a little bit earlier.
So the AI load and demand is kind of still an unknown. What size is it going to be and where are they going to want to go? Where are they going to want to locate but GDE at Gallatin, we're already talking to some people who were saying 100 megawatts at a time and that's crazy.
Paul Ciampoli
And for utilities in general that's going to require a lot of very close coordination before things get too far down the road.
Mark Kimbell
That's absolutely correct. So in the valley, of course, we use TVA -- Tennessee Valley Authority – for generation transmission. And it will end up being more of a challenge for TVA than for the Gallatin Department of Electricity but we will work together to figure it out. As it is for everybody in the country, transmission generation restraints will dictate where the growth goes and who will be able to serve it. I think some of these loads will need to provide their own electricity, possibly. And the question is, how are they going to do that? And that could be a whole other podcast for you.
Paul Ciampoli
Well, on that note, as is customary at the end of my conversations in these podcast episodes I’d like to offer an open invitation for you to come back. Given everything that's going on at your utility, I'm sure there's going to be plenty of things we can talk about based on our conversation today. And also congratulations again on winning the award from APPA.
Mark Kimbell
Well, thank you. I actually remember Mark Crisson and had met him. So it's a great honor to receive that award and I think anytime you get an honor and it's named after somebody, there's a reason. I think for me this is kind of one of those lifetime achievement awards. I've been doing this a long time. I've been in power my whole career and been in the public power space all except for three years. So I've been in power for over 40 and most of that is within public power. I think that what we do in the public power space is life changing for everybody that we work for and with and the dedication of so many great people across the states is one of the reasons I love my job. It's the people at Gallatin Department of Electricity and other power systems in the Valley, we know each other. We help each other. We work with each other and of course, TVA is our power provider. We work very closely with them to keep the lights on and I love all of it.
Paul Ciampoli
Mark, thanks again so much for taking the time out of your day to speak with us.
Mark Kimbell
Absolutely. Good to talk with you.
Paul Ciampoli
Thanks for listening to this episode of Public Power Now, which is produced by Julio Guerrero, Graphic and Digital Designer at APPA. I'm Paul Ciampoli and we'll be back next week with more from the world of public power.
