What Makes or Breaks a Power Project

Intro (00:00):
Welcome to the Power Bytes Podcast, brought to you by Caterpillar Electric Power with your host, John Thomas. Each month, we deliver the latest insights, trends, and cutting-edge tools to keep you ahead in the dynamic energy industry. Whether you're streamlining operations, embracing new technologies, or staying informed, Power Bytes is your go-to source. Join us as we explore innovation shaping the future and the resources you need to succeed. Welcome to Power Bytes, where energy meets innovation.

John Thomas (00:28):
Welcome to another episode of the Power Bytes podcast, and this time I'm joined by two guests who are going to help me help you understand what goes on during a power project in the field. They work very closely with contractors [who] are executing these projects, and they're going to help us understand what truly determines a project's success. We're going to look at the hidden pitfalls. We're going to look at the collaboration that it takes to get it done between the contractors, the dealers [etc.]. And we're going to hear some real stories from the field, and all of it is going to help you understand how you can best position yourself for success.

(01:04):
I've been joined today by Lila Schandler from Carter Machinery, one of our Caterpillar dealers in North America, and by David Stutzman from Caterpillar. Both of you, thank you for joining. Appreciate you guys spending the time with us today.

David Stutzman (01:17):
Happy to be here.

Lila Schandler (01:18):
Thanks for having us.

John Thomas (01:19):
Well, let's start [with] each of you giving a little bit of a background [about] your role and experience in the power industry. And, Lila, we'll start with you! Ladies first!

Lila Schandler (01:28):
Thank you. I'm the outside sales engineer for Carter Machinery. I represent our Central Virginia territory. I handle all new generator, automatic transfer switch, and switch gear sales that come in through the Central Virginia area. I've been with Carter Machinery for about a year and a half now. And prior to that, I was in school. I got my undergrad and master's degree in mechanical and nuclear engineering.

John Thomas (01:55):
Awesome. Well, welcome! And you're relatively new to the [Caterpillar] family. And then, David, tell us a little bit about you.

David Stutzman (02:01):
Yes, I'm the Electric Power retail senior sales rep. I've been at [Caterpillar for] 20 years now. I cover numerous dealers across North America for electric power retail products. Retail being 1500 KW and below – is what we designated Caterpillar as electric power retail. And one of my dealers is Carter, so I work with Lila all the time. Happy to be here today!

John Thomas (02:23):
Awesome. You guys probably get to spend some “windshield time” together, so that's great. Again, thanks for joining us. Let's first start off... When people hear “power project,” they might not necessarily connect to what that means. Can one of you jump in and give the audience a feel for what we're talking about today when we mention the words “power project”?

Lila Schandler (02:45):
When we mention power project, that's any project that has to do with either prime or standby power. Whether it's powering straight from the generator, where a site may not have a service from an electrical provider, or it's as a standby unit. Should the normal service power go down, they have backup power. So that's generators, whether they be stationary or rental.

John Thomas (03:14):
Excellent. Excellent. And in these power projects, is there some kind of outline of what they usually look like from start to finish?

Lila Schandler (03:22):
What's funny is, I truly believe every project is different. They kind of follow the same guideline. Bid projects will look about the same. You'll get drawings and specification documents and design builds. You start from ground zero and go up from there. But truly, every project is different. Different customers have different needs. It's all about addressing the project's direct needs.

John Thomas (03:45):
When we think about the electrical contractor's role in this process of executing the project, I'm assuming they've got to coordinate with a long list of people. David, who are all the different types of folks that are involved early on the power side of these projects to get them executed correctly?

David Stutzman (04:03):
It's a great question. It can be difficult at times because the list is long and it depends on the project. So, you have the electrical contractor; you can also have a general contractor; you can have the equipment maintenance team of the company actually procuring or purchasing the generator; you can have local site inspectors as well; and then you can have, on the supply chain, equipment suppliers. Not just a generator, but many other items utilized in this project. The list can get pretty big.

John Thomas (04:39):
Lila, I'll go back to you here. When is the right time for a contractor to bring you or the Cat power team into the conversation? Is there a “right time” to do that?

Lila Schandler (04:49):
I would say the right time is anytime – the earlier, the better! Being involved in the process prior to bidding or prior to purchase day helps alleviate some of the growing pains of going through a project. There [are fewer] exceptions, there [are fewer] notes, there [are fewer] requests for clarifications. We have the opportunity to work with local engineers, and we have people on our team that will work to design a project that best helps the customer fulfill their needs. So when a customer decides they want to build a project, they have an option to come directly to us, or we can work in tandem with the design engineer to find a Cat solution that best helps and solves the project's needs.

John Thomas (05:34):
Getting experts involved in the process early is never a mistake. Can you give us some examples of where that early inclusion in a project has really delivered some value to the end user?

Lila Schandler (05:47):
Absolutely. Our customer had taken a look at their loads and had done some rough math and had determined they needed 2 MW of power to back up their building. And when they brought our team in, our application engineer was able to go into Cat SpecSizer, load in their loads, and [was] able to actually value-engineer a solution to where they didn't need a full 2 MW for their project. They only needed about 1 MW. So that's half the size! It's a fraction of the cost of a 2 MW unit. (It's huge.) And when you're thinking about cost constraints and you're thinking about footprint constraints and even just value engineering at the base, we really want to take a look at what is the best… It turned out that they didn't need all of that power. And especially with diesel engines, we want to avoid oversizing a generator. That leads to wet stacking, that leads to not great performance, and [that] leads to a shorter lifetime. And we want this customer to have a solution that's going to last them for decades to come.

John Thomas (06:54):
Yeah, and you want it to be the most cost-effective solution for them as well. That's a fantastic example. I guess I'll kick that same question to you, David. Do you have an example that you can think of where early involvement helped the end user or the customer?

David Stutzman (07:07):
Big time. One we've seen a lot in the industry lately is the transition from purely standby, where customers now are pivoting a little bit towards wanting to monetize their assets and actually use them for more than just standby, as we see a lot of utilities around North America having incentive plans. They can vary greatly on whether it's a kickback, if it's going offline during these peak times… But there's many programs going on right now around North America. Many customers are wanting to know, "Hey, how can I take advantage of that?" And knowing that early is big for us. We can actually tell you what incentive programs are in your project territory.

(07:46):
When we're sizing it up, we can also put you down a path for the correct rating. Not just a standby, emergency standby generator, but other ratings such as limited time, power, demand response, prime. These are ratings that Caterpillar does offer that can satisfy and monetize your asset when using it for projects like that.

John Thomas (08:05):
Yeah, that's exciting. I think we hear people say “monetize” a lot, and I think you just gave us a good feel for it. You said the word “kickback,” but it's basically earning money beyond what you initially expected the asset was going to accomplish for you. That's a great example. In both of those examples, you guys talked about sizing. I'd like to ask this question… Lila, we'll start with you. I'm assuming that sizing can make or break a project to some extent. What are the most common things that you see happen that get missed when someone is sizing a generator set?

Lila Schandler (08:42):
A lot of the time, we see customers who have just hard thrown in their loads. They've taken a look at all of their loads and they say, "Yep, this generator will cover all of my loads all at the same time." When have we ever gone around a building, turned on every single light, turned on all the HVAC and the fire pump and everything, they're sizing this generator for a hypothetical situation that's likely never going to happen. If you're turning every light on and the fire pump is on and the HVAC is going full blast, something horrible has happened! [laughs]

(09:17):
With SpecSizer, we can do load shedding. We can also size things to come on in increments and in steps. Another thing we run into is we see projects come in where maybe they've sized for the running load of, let's say, an HVAC unit, the chiller, or a heat pump. Well, when those units are on, they may only draw a small amount of power, especially if they're not running full blast. But when they initially turn on, there's a huge inrush. We need to take into account that initial inrush to ensure that the generator is properly sized large enough that when it goes to turn on we're actually getting power out of it. We're getting power from the generator that can feed those necessary units.

David Stutzman (10:02):
To piggyback on what Lila said: it's exactly [that]. It's talking through your loads. “What is your year full load need?” Surprisingly, sometimes customers realize they don't actually need to back up everything, just the emergency options. And then number two, it would be prioritizing your load, right? What are you actually getting emergency standby for? What's the key value here you need turned on? And I'll give you an example from the real world. Many of our customers in the grocery store industry need an emergency standby generator, and you would think for an obvious need like keeping the coolers on, keeping the produce fresh – of course, you wouldn't want that to spoil.

(10:39):
But actually, the number one need is to keep the cash registers on. Because during a natural disaster, humans flock to the grocery store to stock up on what they need, [and] you better have those cash registers working. So, it would just be, as Lila mentioned, a discussion on what are the key loads and then what your actual need is for this project.

John Thomas (10:58):
Thanks, guys. That makes a lot of sense. So, I'm going to float this to the both of you. You guys decide who wants to jump in first, but when a customer says that they need backup power, what questions do we ask that turn that very general, high-level request into something that's a real project or load profile?

Lila Schandler (11:16):
Funny enough, I think it actually piggybacks off our previous conversation. The first thing I ask is, “What are we backing up?” Is this a full building backup? Is this a partial building backup? Is this replacing a generator they've already had and that one's lived out its lifecycle? And really setting expectations early on. We don't think about backup power until we need it. You don't have to think about turning your lights on until they don't turn on. So really pausing to think and brainstorm with customers of, “Why do you need this?”

(11:49):
And most of the time, it's [because] something has happened. Actually, my first day at Carter Machinery, Richmond lost power and the water treatment plant that serves the City of Richmond lost their power at 4:00 a.m. All of the pumps in the station flooded, and the entire station went down. The entire City of Richmond was without water for about four or five days. And we saw a huge inrush after that of other water treatment plants and people approaching us who had wells who hadn't even thought about, "What if my power goes down?" But it was this one event that queued off something in everyone's minds of, "This is why we need our power backed up."

John Thomas (12:35):
Anything you want to add there, David?

David Stutzman (12:36):
Yeah. So very similar to what Lila said… asking, “What is the need?” And you can put them in three categories so you can understand your customer needs. One is the most basic. Maybe the customer actually doesn't even want a generator, but they're legally required to have one for life safety issues in their building. Let's start there. Let's get you the most basic need to satisfy that legal requirement. Number two would be more in line with the grocery store chain we talked about. They want to make sure they can continue to run their business, continue to make money, continue to serve their customers. That's a big one. And number three is really a growing industry, monetizing your asset. Does your project take place in one of the locations where the utility is actually giving back money for those that can go off-grid? And that's become a huge growing area of the industry that we're really into right now.

John Thomas (13:26):
Excellent. Now, you brought up something there early in your answer, David. You mentioned that there are some industries, some applications where they're legally required for backup. Can you give us some examples of what some of those are?

David Stutzman (13:36):
Sure. Most building code in North America, if you're at a certain occupancy or if you're [in the] healthcare industry, you're legally required to have backup power. And then, of course, [in the] healthcare industry, you definitely want to keep that hospital equipment on.

John Thomas (13:51):
Well, I'm going to shift gears a little bit. We talked a little bit about diesel today. We haven't talked a lot about natural gas. How are customers and contractors making this decision and thinking through their fuel choice? What is driving them to go in one direction or another?

Lila Schandler (14:07):
I've seen a lot of initial cost being a determining factor as well as cost of operation. Diesel has a much lower cost of entry, but depending on the economy or fuel prices, perhaps somebody doesn't want to… or they have the flexibility for fuel choices. For example, in healthcare, they must use diesel, and they have requirements on their runtime amount. On the other side of that, for customers that do have that option of natural gas, natural gas does tend to have a higher barrier of entry cost-wise, but it may be more cost-effective for a particular area to use natural gas over diesel.

(14:52):
I'd also like to add that, depending on the application, diesel may not be the best option – depending on where the site is. For example, [if] you're doing a site that's in a very busy city. There [are] fuel maximums that are allowed to be inside of a building, so that's one constraint we would have to look at.

(15:11):
And also, in large cities, natural gas may be easier to get rather than having a huge diesel tanker running down a very busy side street location of the generator. Is this generator on a roof? Is it going to be easier to put a whole day tank system and have the fuel pumping up? Do they have the space for a large fuel tank or is it going to be easier for them to have natural gas that may already be servicing their building, other buildings in the block, rather than trying to coordinate diesel delivery? It just depends.

John Thomas (15:46):
Yeah, okay. Are there other aspects, David, that you've seen people balancing and considering if they're making that choice?

David Stutzman (15:51):
Emissions can be a big one, as we just mentioned: the company's sustainability goals, local requirements, legal emissions regulations. Another option that can weigh into the “diesel versus natural gas” discussion could be your rating. It is much easier to get a demand response, limited time power, or even prime rating on a natural gas genset because of the lower emissions versus trying to get that rating (especially a prime rating) on a diesel genset. There [are] a lot more “bells and whistles” aftertreatment you'd have to put on there, driving the cost up, versus to get that lower emissions level to get a different rating to monetize your asset with regard to natural gas gensets.

John Thomas (16:36):
Yeah, that's where my head was going. Thanks for helping me cover that. I greatly appreciate it. Let's talk a little bit about… What site realities tend to change the plan once the project moves from paper and bidding to reality? What I'm trying to dig into here is, it's really nice to look at a pretty set of plans and everything's laid out and there's a lot of space, but what are we seeing with our contractors when we transition from paper to reality?

Lila Schandler (17:02):
It can be anything! My favorite is when we walk a site and it looks nothing like the drawings.

John Thomas (17:08):
[laughs]

Lila Schandler (17:08):
Dimensions are off or, all of a sudden, there's this huge immovable object right where we thought we were going to put a generator pad. I worked on a school not that long ago, and they had massive propane tanks to fuel the kitchens. Well, we couldn't, by code, put our tank within a certain distance of these tanks. We had planned this out. We thought we knew exactly where it was going to go, and as soon as we walked the site, we said we can't do this. And we had to completely shift gears and find a new location. So really seeing things with our own two eyes and being able to see things that maybe the drawing didn't have and being able to adapt and adjust the needs of the project as we go.

David Stutzman (17:53):
Projects involve humans, right? So you can write everything on paper, but when you get out there in reality and are dealing with humans, things can change. An example of a project I was on, the drawing’s done, everything laid out, and then when the team went out to actually walk the grounds and make this a reality, the owner was there. And, all of a sudden, that person decided, "I don't like the look of it there." And thousands of dollars that have been worked on for this project suddenly pivot and change because of one decision of moving it to another place for looks (which I totally understand), but these are just the reality of dealing with humans and projects in this industry.

(18:32):
Another one that can happen quite often is, you've adjusted for the amount of space for the generator, but you've forgotten that that generator will need to be serviced, opening the doors. So you’ve got to have space to come in and work all over the generator surrounding it.

Lila Schandler (18:47):
Can I share something real quick?

John Thomas (18:49):
Sure.

Lila Schandler (18:49):
On top of just [the] owner's preferences, keep taking into account the people that are going to be at a site. Is this somewhere that people are going to be frequenting? I just went on a site, and next to the generator, they had a bench. And this was the one piece of shade that this area got. The workers on their breaks would go and be near the generator because it gave off shade. And when we were talking about moving the generator, well, this generator has become a staple for these people. It is where they can go and get shade during a very hot day. So taking into account how our equipment might not only service the building, but its impact on its environment as well.

John Thomas (19:39):
Yeah. Great examples, guys. Great examples. I think we've covered some of this, but what are some small details that you have seen create big issues later if they aren't confirmed up front?

Lila Schandler (19:52):
We're seeing a lot of projects come to us in early development stage that are not fully fleshed [out]. It comes to us as a concept, and someone asks us to price it and they say, "Yep, we're ready to buy it." And they go to buy it and, all of a sudden, the project completely pivots. And we've done this work, they're ready to purchase a piece of equipment, and all of a sudden, everything changes or pieces of equipment are changing. And it's difficult because now you risk delaying the project, you run the risk of increased pricing, and not to mention just the time it takes to do this. We want to make sure that we're putting our best foot forward all the time and acting in a customer's best interest. And it's difficult to do that when we don't even know the full scope of the project that's being presented to us.

John Thomas (20:35):
It sounds to me a little bit like what you're saying there, Lila, is that if they haven't really done the design thoroughly, then they're changing the design as they go forward. That to me, speaks to why you should get the professionals involved early in the project, right? I think that was a good example. Any other examples you can think of?

David Stutzman (20:55):
Definitely! Getting a responsible electrical contractor involved earlier can help mitigate a lot of little issues that end up being major issues down the line. For example, sound requirements. What is the enclosure sound level you have to be at in that area? If that generator ships with a different enclosure on it and you set it up and then later realize the local code is a different sound level, that's going to be tough. You're going to actually have to rip that enclosure off, put a new one on; that's a pain for everyone. There [are] local codes that have certain sizing of fuel tanks, certain ventilation required. These are all things… Caterpillar or a good contractor would know some of these up front.

John Thomas (21:34):
Yeah. Those are good examples. Well, let's close out with this last question here. We talked a lot about some projects that haven't gone well today, right? Let's flip the script on that, and let's think about some examples of some that went really well. Were there some common themes that helped that project be successful?

Lila Schandler (21:53):
We got involved from the get-go. We knew the customer, and we were brought in by their engineering team. This customer happened to have an engineering team that brought us in, and we sat and worked with them through the drawings, through the Specsizer, through everything, every question they possibly could have had. And what that led to was: they knew exactly what they were getting, they knew the price point that they were getting it at, and they knew the expected schedule. If questions came up about scope, we were able to have those conversations live and in-person rather than a month down the road after the bits come out. And it ended up being a successful project. It has solidified my belief that the earlier we can be involved, the smoother project will go, because we can [smooth] out any road bumps that may come from unknown information, we're there to provide that information up front.

John Thomas (22:46):
Certainly sensing a theme with you, Lila: “Early, early, early!” How about you, David? How would you answer that question?

David Stutzman (22:52):
Exactly what Lila said. I mean, it sounds cliche, but communication early and often – that's the key.

John Thomas (23:00):
Yeah. Can you share with our audience, what is SpecSizer and who has access to it?

David Stutzman (23:04):
So SpecSizer is Caterpillar's generator sizing tool. It's available to customers, contractors, and dealers, and it's a very user-friendly system. You can go in and actually put in your loads, put in your project details, and SpecSizer will do its work and its magic, and then it'll spit out the suggested generator size for your project.

John Thomas (23:27):
Perfect. And I would tell our listeners, you should think about the output from that tool as a starting point. You should always talk to the professionals to get some guidance, but it is a great starting point and a great tool to use.

(23:40):
I greatly appreciate you guys both taking the time and having this conversation with me today. This has been a fantastic discussion. I'm hoping our listeners enjoyed it. I hope that it was especially beneficial for anyone who might be looking at getting a power project started. So once again, thank you so much. Any closing comments or things you'd like to share with the audience?

Lila Schandler (24:03):
Anytime is the right time to reach out. It's what we're here for. At the end of the day, we want the best solution for our customers, so that when they lose power, they don't have to think twice about it.

David Stutzman (24:16):
Can't beat that! That was incredible.

John Thomas (24:20):
Well, once again, thanks guys. And to our listeners, thanks for listening and we hope you hear us again soon.

Outro (24:27):
Thanks for tuning in to the Power Bytes podcast. If you enjoyed the show, head on over to cat.com and check out Electric Power for more exciting content. Let's power tomorrow, together.