Experts, Payments, Parts, and Petroleum


Dave Meisel

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.

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