“Put it this way,” says Denis George, Director of Energy at Kroger Supermarkets. “We used to give a varsity jacket with a big Kroger logo on it to mechanics and engineers who were helping us reduce our energy expenses. I’ve only given three of those jackets out to people outside our company. Kenny was one of them.”
Until his recent retirement, Kenny Jackson was a key account manager at Southern California Edison (SCE). In that role, he served as the single point of contact for all of the utility’s major food retail customers. The work gave Jackson a rare opportunity to peek behind the energy curtain at hundreds of grocery stores and supermarkets. Along the way, he also earned a reputation as someone who was so good at his job that he ended up redefining it.
Account manager is a common job at large utility companies. At a basic level, the position exists to provide a liaison that major energy users can call on to help navigate issues such as power outages or rate changes. But by all accounts, Jackson did much more. If you talk to his former customers, they’ll tell you about his infectious enthusiasm, ethics of service, and habit of telling it like it is. Above all, they’ll tell you that Jackson studied his accounts’ businesses and was a tireless advocate for energy solutions that might help them thrive.
“He understood the customers’ perspective. In fact, he was pretty bold when it came to making sure we saw the value of [energy management],” says Lance Durr, Refrigeration and Energy Management Supervisor for Stater Bros. Supermarkets. “I could be a little slow. I’d say, ‘I don’t see the value.’ He’d tell me, ‘You really need to do this,’ and explain why. He was a champion of the customer.”
Today, in one way or another, many California food retail establishments bear the mark of Jackson’s numerous partnerships. According to Durr, the utility veteran played an instrumental role in helping reduce the energy use of Stater Bros. by 25 percent. But when asked about Jackson’s legacy, many of his former colleagues also point to impacts that extended well beyond SCE’s service territory. In part because Jackson recognized that his customers’ businesses operated in many utility regions, he was often instrumental in taking good ideas to national forums—thereby helping to seed more widespread change.
According to Jacque Elliott, Director of National Accounts at the Edison Electric Institute, “He was really able to improve the way the entire electric industry supports large corporate customers.” On a recent morning, Ratio Institute caught up with Jackson. Although the new retiree planned to play a round of golf later, he still had plenty to say about utilities, food retail, and energy.
The interview below has been edited for clarity and conciseness.
OK, first question, a lot of people call you Kenny, but I’ve seen your name written down as Kenneth Jackson. Which is it?
[Laughs] Only my grandmother called me Kenneth. Kenny works.
Great. So, I understand you recently retired after nearly 38 years at Southern California Edison. Could you tell me about the arc of your career? How did you get into your line of work, and how did your focus evolve over time?
Sure. I actually started as a meter reader. That was one of the best jobs I ever had. You could take one hour, two hours, seven hours, however long you wanted to do the job. Then, I was a fuel serviceman. I was the guy who came and turned off your lights if you didn’t pay your bill.
From there, I started at a development opportunity. I trained in all aspects of energy management, learning about fridges, controls, air conditioners, pumps, all the like. After about two months of training, I spent about three months doing residential audits, which we were doing back in the late ’80s.
Then, after spending time doing residential audits, I actually got tagged to be part of an audit team. We performed technical audits on all different types of facilities. One of the largest, we spent 30 days in ’90 or ’91 at the old Long Beach Naval Shipyard. We spent 30 days going through all their mechanical stuff, all the housing, all the buildings. Any place where they had to use energy, we documented and made recommendations on energy efficiency. Also, I spent four days going through the entire Queen Mary ship from top to bottom, inventorying all their equipment in the engine rooms, all their lighting. We presented a six-inch binder on things they could do to improve their energy efficiency.
So, that’s kind of how I got started. After the technical audits, I worked for three years with cities, schools, and small industrial consumers in the South Bay Area. I was also responsible for all the school districts in that area.
Finally, I moved into the commercial segment, which I retired from. I was responsible for all the major supermarkets. That included Kroger, which owned Ralphs and Food4Less in our service territory; Albertsons, which owned Vons; Stater Bros. Markets; and also Whole Foods. At the end of my career, my largest customer was Amazon. Also, I had a hodgepodge of other companies, like Sony Pictures and McDonald’s.
Where is SCE’s service territory, exactly? Were you responsible for all of your accounts’ facilities in that region?
As account manager, I was responsible for all of my customers’ facilities. West to east, our territory went from the coast to Nevada. North to south, SCE goes from just above Bakersfield to Mission Viejo. South of that, San Diego Gas & Electric picks up, and to the north, there’s Pacific Gas & Electric (PG&E).
Take me back to when you got started. What motivated utilities to work on energy efficiency?
Well, at the time, energy was coming to be in high demand because of growing loads. We were really doing a lot of energy efficiency in the ’90s. We had incentives that gave out 10 to 12 cents per kilowatt-hour to replace lighting. Now, it’s like 3 cents. We were doing that because of the growing loads in Southern California and the lack of plant generation. Even if you’re giving away 10 cents to save energy, producing a kilowatt-hour at that time would have cost twice as much. And then there’s the planning that’s involved in that. Energy efficiency was an immediate stopgap to address the lack of supply of energy.
How have you seen food retailers’ approach to energy management change over the course of your career?
First off, I’m talking about supermarkets but also other retailers that have a lot of refrigeration. When we talk about the evolution of the food retail business, it’s not only supply and demand that changes but also that traditional food retailers have new competition. Walmart has always sold groceries. But Target sells groceries now. Smart and Final sells groceries now. Walgreens sells groceries. So, that has put pressure on food retailers. Food retailers aren’t only in competition with themselves but with all these new companies that are in the space.
I mention that shift because it means energy management has only gotten more important. I remember a lunch I had with a colleague who clued me in to how supermarkets make money. Their profit margins are so low that they have to sell $180 worth of product to make $1 of profit. If you chew on that bit, it means every $1 in energy that I help someone save through efficiency is the same for them as $180 in sales.
“So, if an energy efficiency project saves a store $1,000 a month that never goes away, that’s like $180,000 more in sales every month.”
Knowing this made it a lot easier for me to sell energy efficiency projects to customers. I used to go in and talk about kilowatt-hours saved a month, and your bill is going to be this, and I’d just get a blank stare. After that lunch, I never talked about kilowatt-hours again. I just talked about savings versus sales.
I feel like this is a master class in how to help supermarkets understand the value of energy efficiency projects. What else would you tell someone in your role?
For one thing, I’d say you want to explain how utilities work. People think you make money selling electricity, which I did until the energy crisis and deregulation. Before then, there really was a lot of dissonance in talking about a customer saving energy. But SCE doesn’t make money selling generation anymore.
You also have to work with customers in understanding their business. Again, it’s so they don’t look at you as the adversary, but as a partner. That’s why I think I’ve been so successful. I called myself their energy advisor, and they saw me that way. Whether we were talking about efficiency, self-generation, power quality . . . I was their ally.
I do think many people would be confused as to why a utility would want to help customers reduce their energy use. Could you say a bit more about how the business works today?
So, before deregulation, my typical utility bill was split up into two parts. I had a generation component, which was probably 45 percent of the bill, and then I had a transport component, which was the poles and wires, and that was the other 55 percent.
Once deregulation happened, they divided those components. I, the utility company, still deliver the energy to you. That became my source of income. But the generation portion became a pass-through. Whatever it cost me to generate the energy, I put that on the bill. After deregulation, I didn’t make money on generation. The utilities only make money delivering energy.
Along the same line of thought, after deregulation, instead of using me to generate power, retail customers could choose to purchase that from a third party. For large retail companies, one thing that means is imagine the money you could save just by finding a better generation price. That could be another strategy in your energy portfolio on how to save money.
We’ve been talking about energy efficiency. But the bottom line is saving money, and there’s not just one way to do it. You can save money on generation price, by changing out physical things, or even by better energy maintenance. That’s all a part of energy management.
How would you describe the state of energy efficiency and energy management in food retail today?
I’d give them like a C+ / B-, but again, I’m a tough judge. . . . The larger guys, probably like B+ / A-. For the industry as a whole, I was an account manager for a few smaller chains with quite a few stores. C+ is being very, very generous.
The fellow you interviewed from Vallarata, he talks about fluorescent and LED lights. I’ve been in stores that still have T-12s [an older fluorescent technology]. No one should have T-12s! We were giving away 10 and 12 cents per kilowatt-hour to change to T-8s a long time ago. At this point, no one should even have T-8s, and they have T-12s!
Things like LEDs have just improved so much. They can handle 95 percent of applications and all of the colors. People used to complain about them. But now, LEDs come in like 300 different colors, and they have better color renderings to boot.
If you replace your lighting, there is a standard in California for new construction. You have to meet Title 24 standards, and you can’t do it with fluorescent lighting. But there’s not a standard for replacing lighting. If you remodel a certain amount of your space, you do have to upgrade your lights. But you can do a lot of replacements. If there was just a government standard, fluorescent lights wouldn’t be sold at all.
That’s a good segue. . . . Reading about energy efficiency in food retail, it sometimes seems that companies are leaving a lot of money on the table. What most often prevents food retailers from taking efficiency measures?
There’s a couple of issues.
The energy managers always battle with the marketing guys. There’s an internal struggle. For instance, one of the highest ROIs a supermarket does is put doors on cases. Simply putting a door on those kinds of open cases, you reduce the energy use of that case by 60 percent . . . and that’s before you start tweaking. You can also change out fluorescent lights. You can also change your controls in your refrigeration room to take advantage of horsepower no longer needed to run that case. But we did studies in the early 2000s. Just putting a door on open cases saves 60 percent of your energy. Just put a door on it.
But the marketing guys used to push back on putting doors on cases, because there was an idea that customers wouldn’t buy products. Five years ago, the Food Marketing Institute (FMI) finally did a study showing that people would actually buy things behind doors. I’m going to tell you that the supermarket I go to most has their beer behind doors. They have the coldest beer anywhere because it’s behind a case. So, there’s a method to my madness.
But there are other issues, too. Remember when you were a kid. In the summertime, what was the coldest place you could go? Just go to the supermarket. That was because of the refrigerators without doors.
These days, supermarkets that do put doors on fridges tend to have a humidity problem. They’re using air conditioning instead of refrigerators to cool the store, which is how it should be. But typically, their original air conditioners weren’t sized for the store, because all of the cooling was coming from refrigerators. So, I’ve known a lot of customers that have had to change HVAC. They’ve taken the heartbeat of their core energy use, the refrigeration. They’ve worked on that, and then they have to deal with HVAC. It’s a good problem to have, but it adds up.
Even some of the big guys still struggle with making all these changes. For instance, when Albertsons and Safeway / Vons merged, a lot of the Safeway stores were older and needed a lot of work. It’s just getting the dollars together to make bigger changes.
So, there’s marketing, there’s financing, and also there’s an educational piece. Utilities and groups like the FMI and Ratio Institute are helping with that. Food retailers have to spend their time operating their stores. When I used to work with Vallarta, for instance, they didn’t yet have an energy manager. They had an operations manager. For a lot of smaller companies, as a utility, I could provide a one-stop shop, showing them the ROI, installing the equipment, maintaining it. They didn’t have time to do it.
These days, more companies have a guy responsible for energy management. That makes a big difference. I don’t have to sell that guy. We immediately start talking about new technology, EV charging stations, and how he’s going to install solar to offset the charging. Or how to deal with electric trucks coming in. Or how he’s replacing propane forklifts with all electric forklifts. We can talk about, How do we mold all these things? What can we do in the store that’s going to offset the four new forklifts you’re buying? And also, when we get those forklifts, how are you not going to charge them at this time in the day that’s more expensive? Having someone in-house focused on energy helps a lot.
Also, when we talk about energy management, only 50 percent of it is replacing stuff. The rest is all the things around it, like maintenance and controls. If you install LED lights and they run all night, where are you now?
I had one customer that used to have an energy meeting once a quarter. They used to invite me to the meeting. What can we do better? What can we study? I’d just bombard ‘em. . . . I’d try to prioritize things that I thought they should look at. There’s so much you can do.
What’s the difference between food retailers that successfully leverage partnerships with utilities and those that don’t?
The ones that do, it’s not just having good partnerships with utilities but also with their vendors and with all these organizations like FMI or GreenChill, which is an EPA organization. They take the time to make these partnerships. The reality is if you want to get into energy efficiency, you don’t have to create something new. It’s already there. You just have to customize it. It’s pretty easy. If you haven’t done anything on energy efficiency, you don’t have to figure out a strategy from scratch. There’s partners and resources out there that say, If you have this, do this.
“Some food retailers are gone now. The ones that are still around are good at energy management. They constantly try to get good at it. Most of them have really good partnerships with their vendors.”
They know their chill guys, their lighting guys, because each one of those people brings things to the table like I do. When I taught people about doing projects, I’d say, If everyone doesn’t win, there’s a problem. Everybody has to win.
What are some examples of utility–food retail partnerships that have made you say, “Wow”?
That’s kind of hard. There are some good partnerships, but none of them really wow me, because they’re doing what they’re supposed to do. When you wow someone, you’re going above what you’re supposed to do. When I was in school and I got Bs and As, my mother used to say, “So? You’re not dumb. You’re intelligent. You’re supposed to get As. Go get A+s. Wow me!”
The EPA’s GreenChill program, because they focus on refrigeration leaks, that’s a good program. Because if you think you’re doing good on energy management, it’s time to figure out how you’re doing on refrigerant leaks. If you’re losing over 20 percent, it’s a huge opportunity. Refrigerant is not cheap, especially with lower–Global Warming Potential (low-GWP) refrigerant leaks. The national average for leaks is 22 percent, and the guys who win GreenChill awards are in the single digits.
Speaking of refrigerants, I’ve read reports suggesting that companies may not always know how much they’re leaking. That’s potentially a big deal because those refrigerants are really potent greenhouse gases. Do you think companies are accurately tracking refrigerant leaks?
I think the larger ones are now. Ten years ago, probably not.
One issue is that probably 90 percent of the companies I work with hire outside companies to handle their refrigeration. That’s good and bad. It gets done, but when there’s a problem and the refrigeration guy comes, he doesn’t get to the bottom of it. Every month when there’s an alarm that refrigerant is low, he comes in and replaces 30 pounds. He doesn’t plug the leak. The companies with single-digit leaks are those with in-house people working on it.
So, is there a kind of program that would make you say, “Wow”?
Well, at SCE, we still have an emerging tech department. What we did with that was we looked for emerging tech. We’d find someone to help test it, and then we’d write papers on it, and then it would become part of the incentive program. That was one thing we did really well, and PG&E did, too. When there were new widgets that came out, we’d get the vendor and say, If you give us ten of those, we’ll monitor those things and get them into the mainstream. Those are wow things, but utilities are starting to get out of that business. I don’t know how much of that there will be in the future.
What are some examples of government policies or utility programs that you think should be widespread but currently aren’t?
Let’s go back to the LED issue. There should be some kind of buy-down program, because obviously LEDs aren’t everywhere. Maybe you scale it so that if your revenue is $100 million, you don’t get an incentive. If your revenue is $50 million, you get 20 percent of an incentive. And so on. I’m talking the retrofit market, because the new construction market is already taken care of. Ninety-five percent of buildings are already built, so how do we help companies meet their sustainability goals or draw down their carbon footprints in existing buildings?
A simple program like that could be designed for different things. You do need to scale the incentives to the competition of the companies. We’ve had programs where the big guys use all the money up. Clearly, there are a lot of markets out there that need help doing things.
I do think we need programs to look at refrigeration. Personally, I wish I was a refrigeration mechanic right now. I could make a ton of money. I could help a lot of people make more money. And not just money. Global warming, you know that’s important. I have grandchildren, so I have some skin in the game.
Looking to the future, what do you think food retailers should be thinking about over the next five years?
Electrification, low-GWP refrigeration, and automation.
We’ve talked about electrification and refrigerants, but with automation, it’s because it would help with better maintenance and also having systems that can police themselves.
You don’t want to have to leave it up to a person to make sure the timeclocks are set. You want all that automated so that when a store is closing at midnight, the system turns out all the lights in the cases. You don’t want someone with a checklist saying, Oh, is our closing protocol correct? An automated system can do that. You can tell the system, Until it gets to 4 o’clock, pre-cool the store, and after 4, just run fans around, and if it gets above 74 degrees, turn the AC back on, but not all at once, so that we can ride through the peak of the day. . . .
Only 20 percent of retailers have good automation right now. It also goes to things like your big baler that just bales boxes. That can all be a part of your automation system. All of those systems affect each other, and they have to talk to each other.
What makes you passionate about this work? Has it changed?
It’s increased. The way I was taught is that if you do the right thing, everything takes care of itself. That’s at the heart of it. Once I learned about this job and all there is to it . . . it’s always evolving. It’s always changing. I’ve been to tons of seminars, trainings, classes. It’s all very interesting to me because if my customers succeed, I feel like I succeed.