Senior Director of Transportation & Aviation Services, PG&E
Dave, tell us about the current focus of your fleet management. What are you doing now to position your fleet for the next couple of years?
The positioning of our fleet really has a lot to do with working closely with our clients. We have a very large company, more than 21,000 employees. We have clients in our gas business, our electric business and our generating business in addition to ancillary groups like customer care and other corporate functions.
We work very, very closely with them to learn what their needs are and what their job duties are. We have been working to develop vehicles and equipment that really meet their needs; very specialized pieces of equipment that make safety and reliability in their world better.
What are some of the issues that you are facing right now?
Of the biggest challenges that we face, fuel price has is definitely one of them. With fuel being as inconsistent as it has been over the last seven or eight years, it is very difficult to align in a particular alternate fuel strategy because the price of fuel is what makes the payback models work. As one of the leading alternate fuel utility fleets in the country, that a big challenge for us.
The second challenge is our incredibly talented, but senior, workforce that will reach retirement age in the next couple of years. That is an especially large challenge for us. Recruiting quality people has never been a problem for our company but it is very difficult to replace the historical knowledge that leaves when our senior people retire.
The third thing that we really work on every day is cost effectiveness and the operational efficiency in our fleet. How do we make sure that we have the right vehicles available for our clients, when they need them, and make sure that we do it at a reasonable price?
How are you cutting costs?
I tend to look at fleet pretty simply. I call it the four “P”s; people, payments, parts and petroleum. Those are the four big buckets of money that we have.
As far as fuel goes, it’s all about price and consumption. I look at how many gallons we are buying and how much we are paying for that fuel and then we try to optimize both of those cost drivers. Then I look to see if there is an opportunity to fix the price through some sort of a hedging program or fixed price fuel agreement.
On the parts, much like fuel, it is a combination of both consumption and price as well. We need to make sure that we are consuming the right amount, that we have the right controls in place in our inventories and that we routinely bid that to make sure we have the best purchasing price.
As far as people, it is simple. Do I have the right number of people, with the right skill sets, and am I working the right amount of overtime?
The last one is payments. In our case, we have more than 14,000 pieces of equipment – and that adds up to a lot of money as far as truck payments go. We look at maximizing the useful life and residual value and making sure we buy that piece of equipment at the right price on the front side.
Let’s talk about alternative fueled and electric vehicles. What are you buying for your fleet?
Historically, we have done a lot of natural gas on the light duty side. I think we will be spending more of our time on the electric side for the next few years. While we have almost a thousand natural gas vehicles in the fleet right now, I do think that, particularly in California, we would like to get to the point where we have zero emissions, not just low emissions, and that is the difference between natural gas and electric. In our case pure electric isn’t going to work very well for us because of the size of our service territory but we really like the idea of plug-in hybrids.
What do you think of all-electric versus plug-in hybrids?
We have a little joke around here where we talk about range anxiety. If you think about anxiety being the unrealistic expectation that something is going to occur, in an electric vehicle that is not really range anxiety, it is a statement of fact. It only goes so far and in our case that “so far” just isn’t good enough for our application. In our case, as a utility that has to respond to emergencies, we move people and equipment up and down the state of California and even out of state to support major events such as Hurricane Sandy in New York or Hurricane Katrina in New Orleans. If we had an all-electric fleet, the limited fueling infrastructure and the speed of charging would impede our ability to respond quickly to any art of the country.
What is your experience with biodiesel?
Our experience with biodiesel has been pretty good in total. We have had issues in the past and when we got right down to it we found that the issues were primarily on our side of the equation not on the supplier’s side or the product side. When we used biodiesel, if we didn’t take really good care of our own storage tanks we got some algae growth and that ended up causing issues for us. But once we put a process in place where we actually tested the product at the provider site, and made sure that we started with high quality fuel, and then all we had to do was control the quality of the tanks on our side. Once those two things happened, most of our issues went away.
What types of plug-in hybrids are you using in your fleet and what are their application? How does your charging network work?
In our case, we are currently using plug-in hybrids primarily on the light duty side. We have a series of Chevy Volts and Ford C-MAX Energies. We are also working with a couple of manufacturers to bring plug-in hybrid pickup trucks, vans and SUVs to market. We should be taking the delivery of our first production models early in Q3 of this year.
From an emissions perspective, CNG is great and we currently have about a thousand units in service. But, unfortunately in California, we are really trying to get to zero emission transportation and CNG just doesn’t get us there.
As far as our charging infrastructure goes, we have a series of internal charging stations at our facilities where we have electric or natural gas based vehicles. In our building here in downtown San Francisco, we installed 26 electric charge points last year in one of our parking lots downstairs. We also installed another 53 charge points in the field, which brings our total charge points up to 133 at 40 different locations.
What has been your overall experience with the NGVs?
We have natural gas vehicles in classes one through seven. The performance has been mixed. In our light duty they have been generally very good. When you start building really large vehicles like we do, which have a lot cabinetry, very large tanks and go off-road, there have been significant issues. We have had durability issues with the larger dedicated CNG vehicles.
I think you are going to see an amazing investment in CNG and LNG for the over the road truck drivers. And I think you are going to see mostly electrification on the smaller vehicles. That is Dave’s view of the world. But when you think about it from an application prospective, building the infrastructure to support a nationwide network of vehicles is a very, very daunting task whether it is pipelines or tank farms or whatever. But when you think of the highway infrastructure for this country, it was designed to move commerce from the East Coast to the West Coast. It was designed to be about as efficient as possible so all the major transportation companies use the same roads – I-80 from San Francisco to Washington. We don’t need pipelines up and down I-80 we only need tank farms every four or five hundred miles. That becomes very, very practical. And then in class eights you have enough size and enough weight to take those larger tanks; that becomes a real challenge on the smaller vehicles. Space is at a real premium on smaller vehicles.
How did you get involved in the GreenGov Symposium and what was your takeaway from the last conference?
I got involved with The GreenGov Symposium in Washington when I was asked to present on our experience implementing alternative fuel vehicles in the fleet. GreenGov is primarily attended by governmental agencies looking to learn from each other and become better stewards of taxpayer money. The government has a very tough bidding process which is much more complicated than what we have to deal with in the corporate sector. It was a great opportunity to talk to many different government departments about alternative fuel vehicles. I am still in contact with people I met at the symposium.
What is your total fleet size, and how many people do you have managing that fleet?
The PG&E fleet consists of almost 15,000 pieces of equipment ranging from class one to class eight. Of those 15,000 pieces we have about 3,300 alternate fueled vehicles either electric, natural gas or biodiesel. When you look at our fleet size, we have 433 people in our organization. Of that 433, about 375 are technicians or people in the field that actually maintain or support our equipment. We also have about fifty people that administer our business such as supervisors, managers, regulatory compliance, and other important support positions. In addition, we have a small group that manages aviation services for the company which includes our helicopters and fixed wing aircraft.
When we talked some time ago you were just looking at GPS for a narrow usage. How are you using GPS technology now?
We use GPS primarily for dispatching some of our crews. The system is external facing so when a customer calls us we can dispatch the closest crew to that customer. We don’t necessarily use it for driver behavior as far as monitoring where they go or things like that. We are doing a driver behavior technology pilot program right now that includes GPS as one of the components. We would be collecting data that will allow us to look at driver behavior from a safety prospective. For example, is the driver speeding, accelerating rapidly or decelerating quickly? This won’t be a discipline issue but instead an opportunity to learn where our drivers can be safer drivers.
How are your drivers accepting this?
We did a proof of concept in the fall which was about 20 units. It went exceptionally well; the feedback from the operators was fine. We worked with the operators on the front side and said look – this is not a discipline issue. This is where we want to make sure that we are training our drivers to be the safest drivers on the road. We have an obligation to the motoring public as well as our employees. It went so well that we are expanding the pilot in Q2 and Q3 of this year. We are adding another 250 units in 2013 and an additional 1000 units or so in 2014 and 2015.
Have you looked at GPS as a tool to monitor fuel usage?
Some companies use this type of a system as an operating performance system. We are committed to using it as a safety improvement system. We are very interested in whether or not our drivers are operating our vehicles as safely as possible. Where they are not at the level where we want them to be, we will help train them and get them up to speed. Any fuel savings that might occur would be an unintended benefit.
Are you working with an outside supplier for this?
We are working with Inthinc, which is one of the major providers of that type of product. We looked at a series of providers; maybe ten or twelve different companies. We applied a rigorous scoring process that included both product and company performance. After we had scored all the companies, the system that met the majority of our needs was the Inthinc product.
How do you make the bid process go smoothly?
There are two things that are very important to ensuring a smooth bidding process. One, we maintain great relationships with all of our suppliers. And two, we have a small group in our sourcing department that is dedicated to the transportation team. They are people who truly understand our business. When we go out for a bid, we engage both at the supplier base and our sourcing group.
As I mentioned before, we use a scoring process to evaluate bids, which is especially important with complicated bids. Our sourcing team is spectacular at working with our legal department and our supplier base to ensure that we get the right contracts in place. Mostly I just sign my name on the bottom when they are finished negotiating!
Dave Meisel is the Senior Director of Transportation and Aviation Services, at Pacific Gas and Electric Company. In his role he oversees the following areas: Transportation and Maintenance Operations, Transportation Engineering, Transportation Fuel & Alternate Fuel Strategy, Aircraft Services, Fleet Information Systems and the organization’s Fleet Asset Management strategy.
Meisel has more than 32 years of experience in the transportation industry including fleet operations, logistics and distribution. He has held senior fleet management positions in the utility industry as well as the transportation and distribution industries with responsibility for managing up to 16,000 assets. He also held several general management roles with responsibility for sales, safety, strategic planning and business operations.
Meisel received a Bachelor of Science degree in Business Administration from Central Michigan University and a Master of Business Administration degree from Indiana Wesleyan University and has held a variety of certifications in both light and heavy duty fleet maintenance.