Episode 38: The Political Economy of Higher Ed with Dr. Katrina Kelly-Pitou
Dave Karlsgodt 0:00
Welcome to the Campus Energy and Sustainability Podcast. In each episode, we talk with leading campus professionals, thought leaders, engineers, and innovators addressing the unique challenges and opportunities facing higher ed and corporate campuses. Our discussions will range from energy conservation and efficiency to planning and finance, from building science to social science, from energy systems to food systems. We hope you're ready to learn, share, and ultimately accelerate your institution towards solutions. I'm your host Dave Karlsgodt. I'm a Director of Energy Advisory Services at Brailsford and Dunlavey.
Katrina Kelly Pitou 0:38
So if you're a facilities manager, and you're like, okay, I have to transition my entire steam system towards an electrified future, the first thing you start doing is calculating the dollars that you have allocated for budget. It doesn't necessarily even mean that you ever get to be in those conversations with your CFOs on campus, where you can be like, hey, I need an equity partner.
Dave Karlsgodt 0:57
And this episode, you'll hear my interview with Dr. Katrina Kelly Pitou, energy systems strategist at SmithGroup. Given the recent change in America's federal administration, it felt like the right time to bring this economist-turn-energy advisor on the show. We recorded this after the inauguration, but before the recent tragedies in Texas.
You will hear us discuss how higher ed might expect support from federal, state and local governments, but also a broader discussion about politics and the business model of higher education itself. We zoom way out to the international scale and way back in to talk about politics within higher ed. I had fun trying to keep up with Katrina's wide ranging experience and informed perspectives. She both challenges conventional ideas and paints a compelling vision for what a sustainable future for higher education might look like. I hope you enjoy this interview.
Well, Katrina, it's great to have you on the podcast.
Katrina Kelly Pitou 1:54
Thanks for having me on the podcast. This is really exciting.
Dave Karlsgodt 1:57
Well, maybe I should give a little background about why I invited you. We were working together on a project proposal for a client, went and did the interview, got to know you a little bit back in the days when we used to travel together. And I remember you talking a lot about your background. You work now at an A/E firm. But your background is really more in politics. So, maybe first of all just explain, you know, who you are and why a political science background person is at an A/E firm. And then we could go from there.
Katrina Kelly Pitou 2:30
Yeah, no worries. And thanks so much for having me. That was actually my very first interview, that I got to do with the A/E industry with you. So you probably saw me when I was a little bit more raw to the new A/E scene, if you will. But yeah, my background is in politics and economics. Actually, I came up in sort of the public sector agencies, started out at the Federal Home Loan Banks, one here in Pittsburgh, which they really focus on financial, on supporting financial institutions through housing financing community investment. And, you know, it was, it was the Obama years; people were really excited about thinking globally, and all of that. I'm one of those people who grew up in sort of the Michael Jackson age of We Are the World.
So I was working on climate change at a global level. After that I worked in London for 10 years. Did my PhD there. But then, you know, just really quickly realized, actually, there's a huge disconnect between what policy members are doing to kind of save the planet and what's actually happening on the ground. And I got super jaded super fast, especially when I started focusing on more disaster relief, going to countries like the Philippines. And I just realized someone from the politics side of things really needed to go work with engineers to save the planet in the amount of time we had left. It became really scary really quickly working with agencies like the World Meteorological Organization, even with agencies, you know, like IEA. It was, it was just pretty scary to see what was really happening with the world. So I decided the best thing I could do was come back to Pittsburgh, where I'm located now, find a company that really wanted to make a dent in saving the planet, and I ended up helping open up the office in SmithGroup here.
Dave Karlsgodt 4:10
Great, well, maybe just for the record, what is your role, and just tell us a little more about that briefly. And then we'll get into the real discussion today, which is about policy and its effect on higher ed.
Katrina Kelly Pitou 4:20
I'm what's called an energy systems strategist. So I have a very fancy title. But what it actually means is that what I really focus is interacting between the architects and the engineering groups. Like I said, my background is actually a hardcore economics. I'm a pure numbers math geek. So my job is really to kind of sit in between those A/E groups and really help understand just what energy optimization looks like. So a lot of my work is working right alongside our mechanical and electrical engineers to just really help create the most environmentally responsible design for cities, for districts, for campuses, most importantly, which is how we ended up crossing paths. I know that you guys have a deep passion for driving campuses to stainabilities, and, you know, campuses today are like little cities. So it's really, it's exciting to see some of the stuff that's going on in the university side.
Dave Karlsgodt 5:07
Very good. Well, let's maybe set up the topic that we were talking about today, which is, you know, there's, there's been plenty of coverage on our crazy political moments; I will say moments because there's a whole bunch of different themes going on right now.
Katrina Kelly Pitou 5:21
Yeah.
Dave Karlsgodt 5:21
But what I want to focus on today is not to, you know, talk about capital riots or, you know, the presidential transition or any of that stuff, but more about--higher ed right now is in tough times, for sure, I think, by all accounts; but there's also this idea that, you know, there's a new administration, there's a bunch of political change occurring right now. So I think there's also some excitement in higher ed about what that change might mean for them in terms of federal support or federal policy or even state policy. So I think the broad theme here is, how excited should we be? I've heard everything from, it's not going to matter at all to it's going to like save higher ed, and anywhere in between. My guess is it's somewhere in between. But let's tease that out of this conversation. So with that introduction, just what's your initial thought? And then we can dig into the weeds.
Katrina Kelly Pitou 6:16
Yeah, you know, I have the excitement to see just the word energy coming back into play. Although, you know, I will give credit, the Energy Act of 2020 closing out the last year happened, you know, before the administration changes. I was excited about a lot of the the policy measures that came out of that. But when I say excited, you know, at a bit of a 40 degree loop, if you will: not necessarily super excited. I do think it was a bit of, like, a downpayment. I think people are really describing that as this was kind of the first move, the first bipartisan effort, if you will.
Dave Karlsgodt 6:48
Tease that out for us. What is, what was in that bill? And I mean, I think I'm slightly aware of it. But actually, I'm just curious myself. I know it was passed, but I don't really know--
Katrina Kelly Pitou 6:56
Yeah, so it's funny, I think when, when we look at the COVID relief package, a lot of people don't even know that the Energy Act of 2020 was included right within it. And, you know, largely since 2005, we've seen energy really be a bipartisan issue. We've seen that there's been both Republican and Democratic support for it. In the Energy Act of 2020, which was passed by Lisa Murkowski and by Joe Manchin, was definitely an example of this. It came out of the Energy and Commerce and then the House Science, Space, and Technology committees. It was just really an example of kind of putting energy back on the map and saying, okay, we really do need to put some investment back down for energy. The biggest thing is that it revamped a lot of the biofuel, solar and wind tax credits.
I think a lot of people were quite sad, especially me, that we didn't see anything about energy storage really coming out in that package. So I would almost say, you know, for the past kind of three/four years, we've seen energy almost kind of linger in limbo in terms of funding, if you will. And this was one of the first instances in the past few years, where we've really seen the federal government recognizing, okay, we do need those subsidies to come back into play, we really do need to incentivize states to really drive towards this zero carbon future that we need to get to. And I think it was one of the first times where we've seen a billion dollars worth of R&D investments really be pushed out.
So I think from the university side, there's a lot to be excited about that research capacity there. Although the jaded side of me does the quick math of how many universities there are researching; you know, a billion dollars divides it up, and it's not that exciting. But I do think for me, you know, it, what it shows is a market signal. And I think that's really what we need in the States. And that's the biggest thing that universities should take away is in this age of like, well, should I or shouldn't I double down on my capital investments that are needed for decarbonization? It definitely shows you the signal, excuse me, that the US is kind of back on track, and we're back and focusing on, on what the other 192 countries in the world are doing.
Dave Karlsgodt 8:54
Yeah, well, it sounds like most of it was tax credits, which I know is a bit of a challenge for higher ed because they don't pay taxes. So they have to find a tax equity partner, and it makes it more expensive to take advantage of things like that. Was there anything else that you're aware of beyond the tax credits that, that higher ed might be affected by directly other than the research, which you already mentioned?
Katrina Kelly Pitou 9:13
I think that the diversity of those tax credits, but also like some of the subsidization, the grant fundings, that are going to be made available for state level agencies were a little bit interesting to look at. I think some people were excited about things like combined heat and power packages being included in there. But as always, and this is I think, a bit of a moment for, for universities actually to start speaking up. There's just not enough focus on the demand side interventions and policy ever. It's just a hardcore discussion.
Okay, this is how we transition our slide forwards in the future. And I think for me, and especially, you know, those of us in the A/E industry now who really work on infrastructure at the end of the day, and that's what's keeping our lights on at campuses, is I didn't necessarily see the uptake or even the wording of you know, infrastructure support, planning support, etc. I think a lot of people are hoping that that's what the state level interventions will do. But again, like I said, I, to me, this was like a big tee up that was, hey, okay, a bunch of really cool funding is hopefully gonna come down the line in February/March/April. And so, so I think that's a lot of what we hope to see coming down the line in the near future.
Dave Karlsgodt 10:19
Yeah, I guess there's two thoughts I've heard too, is getting folks like Lisa Murkowski and Joe Manchin on board--or leading, in this case--on this bill. Will they--was this all they wanted to get done, and they're done, and they're not going to be supportive anymore, or is this a downpayment? And I guess it remains to be seen on what, where that goes from here.
Katrina Kelly Pitou 10:37
Yeah, I think on my side of the world, especially whenever we look at, you know, Joe Manchin and Lisa specifically, regardless of their committee assignments, especially Joe Manchin has been someone who's really been pushing for energy, probably because of his geographical location. But I always go back to like "West Wing," they, you know, I think it was it literally in a 1997 episode, you kind of had one of the characters saying, don't talk about climate change because we'll never get any votes from West Virginia and Pennsylvania.
Pennsylvania is like the Saudi Arabia of coal. But I think sometimes people underestimate, even for universities that are located over here, that, you know, Texas is not just our, our only big energy producing state. There's still a bunch of states up here in, in the Midwest and kind of the northeastern region that are really haven't decoupled their economy. So for universities, I think, that're located within that space, it's tricky for them, because they're focusing on, you know, building back better already, building more sustainable buildings where they can, transitioning their campuses. And their broader state governments right now are still focused on hey, how do we create jobs out of a dying fossil fuel industry? That is a tricky cup of coffee, I think.
Dave Karlsgodt 11:45
Yeah, no, that's basically what I'm hearing, though, is there's there's different ways to get the same results. But you may have to frame the problem differently. And I think that's, that's something we found in higher ed too. I mean, even when I'm working with a campus that has the moral clarity about what they need to do from a climate change perspective, you still got to make it pencil at some level, like they have to be able to afford to do it at all, you know.
Katrina Kelly Pitou 12:09
Yeah.
Dave Karlsgodt 12:10
Especially in a, in a--so it's, even if, even if you have everybody on board, you still have to make all those other arguments anyway, right?
Katrina Kelly Pitou 12:17
No, and I think you hit it on the head whenever you started talking about if you're a university, you still have to find an equity partner to take advantage of the tax credits. And I think overall, as an industry right now, it's probably something that people in energy don't appreciate. But energy is hugely complex. And, you know, I'm a prime example. It's an economic issue, if you will. Like, energy is a really easy way of measuring the economy and calculating your supply and demand cash flows. But at the end of the day, energy assets themselves, energy infrastructures and on campuses are often handled by people who are running facilities, right. So if you're a facilities manager, and you're like, okay, I have to transition my entire steam system towards an electrified future, the first thing you start doing is calculating the dollars that you have allocated for budget. It doesn't necessarily even mean that you ever get to be in those conversations with your CFOs on campus where you can be like, hey, I need an equity partner. I mean, it's not necessarily the background of people who handle infrastructures traditionally to understand that part of the, the entire financial equation. And I think that that's actually a huge problem that we're still encountering in universities and energy broadly, which is just that disconnect between almost your financial engineering and your overall just traditional campus wide engineering. It's really tricky.
Dave Karlsgodt 13:34
Yeah, I was talking to an energy manager the other day, and he was making the same point, he said, you know, I'm more financially illiterate than most, but he knows that, you know, a lot of his colleagues at other campuses, they don't, you know, they can barely do a simple payback calculation, let alone, you know, make a complicated tax equity deal pencil in Performa for their CFO to buy in on. You know, so that the only way he ever got anything past the CFO was when he had like, you know, it's got a six month payback, you know, so I can take a couple $100,000 and turn it into a million dollars. And he's like, oh, yeah, why wouldn't we do that? You know, but anything short of like, something about a equivalent to winning on Reddit Vegas, in terms of payback, with, which's much lower risk, you know, he can't get past the CFO because he doesn't have the capacity do that, you know. Anyway--
Katrina Kelly Pitou 14:18
No, I think it's really important. I've started using the word which, you know, for some, they're like, oh, another policy person making another buzzword. But I kind of quit talking about climate action planning. And I've really started about talking about energy acidization. Climate action planning is so important; it focuses on how you decarbonize your campuses. But what I actually figured out is it's much easier to talk to people about how let's figure out a plan for the future that takes away your deferred maintenance costs, which takes away just your overall capital investment costs and rolls them up into a nice package where you go away from spending money on your energy infrastructure towards making money off your energy infrastructure.
And when you start talking about that, I think from a, from a campus wide perspective and you start actually looking at kind of the gaps and investment dollars or even financial vehicles that are available for universities, people get really excited whenever you say, have you ever thought about yourself as being a power producer, not just a power consumer. That's where I've really seen facilities get excited. And, you know, that's my pride and passion point. I love, I love making a deal, if you will, and getting getting things built on the ground. It's fun.
Dave Karlsgodt 15:25
I like it. Yeah, we've been, we've been trying to use the phrase, talking to the facility people, hey, we want to show what a great investment you are to, to the, to the financial team, because that's kind of helping them get their heads around it as well. But yeah, but you have a different message to different folks. Right? When you're talking to the CFO, it's not the same as when you're talking to the folks who are literally keeping the lights on. All right. Well, let's, let's shift a little bit. We talked federal policy; we talked, really, subsidies for supply side assets. You kind of shifted us into infrastructure. There is a lot of talk about infrastructure. It was the joke was every week was infrastructure week during the Trump administration. Yeah. But it does seem like maybe that's, that's shifting now, that there is some really serious talk about infrastructure. What does that look like? And what, or what might that look like? Actually, that's probably a better way to frame it.
Katrina Kelly Pitou 16:16
Yeah, this is where the academic side of me is like, should we sit back and talk for the next 10 hours? I mean--
Dave Karlsgodt 16:24
Well, and I don't want to conjecture too much, but I mean--
Katrina Kelly Pitou 16:27
No, totally. Yeah.
Dave Karlsgodt 16:28
I guess more importantly for campuses is there's no lack of infrastructure investment need on campuses. What should they expect from the federal government? And its, I don't imagine it's going to be that the federal government comes and says, hey, here's the exact amount of money you need for all your energy transition projects to decarbonize. That's not what it's going to look like. But what could it look like?
Katrina Kelly Pitou 16:49
Yeah, I think, you know, it's really funny, I almost have like a "Field of Dreams" phrase that I would use. What it is, like, if you plan for it, they will come, not necessarily if you go for but if you plan for it. I think a big problem that we have actually in, in America broadly is consistently looking to the federal government to provide that level of funding, and even looking towards public sector institutions to provide that funding. And I know that you guys are passionate about this as well.
But that's not necessarily, you know, if I was marriage-making a university public entity with another public entity, that, you know, part of me kind of struggles with just, you know, the, the financial stress that that places on our institutions. I get quite excited about the P3 world, if you will, on the partnership side of infrastructure development, and where we can actually start thinking about how can we start using some private funding and mix that up with the public sector needs? And I think when we start actually taking that federal government out of the equation--yes, we might need them to subsidize some of the technologies, you know, (here's looking at you, battery storage, like, thanks for leaving us out).
That's a big message to the federal government, especially for California campuses. But I think we really desperately need to start encouraging universities actually to start connecting more with financial institutions. In Europe 10 years ago, like really, when I was kind of first starting out in the industry, there was a word that was used all over the place, but I think actually, Americans should be using it more and more here, which is really creating a bankable project. And that's when you look at universities, right, as these places where they have infrastructure, they know that they need to upgrade it. I mean, a big problem for investors is like, will people actually build this or not? That's where the risk comes into play.
But if you're an investor, and you're looking at a university, and you know that they're mandated towards keeping those lights on for their students, towards keeping their buildings heated, that's such a low risk investment opportunity, that seeing the opportunities between these big energy companies, actually, from an infrastructure perspective, being able to crash onto campus, making the same types of deals that we've been doing for years from a real estate play, right, but applying that same type of deal making towards an energy infrastructure play, to me starts to be very exciting. So I almost feel like when I talk about energy, and you know, infrastructure broadly, right now, it's like, if we continue waiting for the federal government, to give us the funding, etc, that we need, it's just not going to happen in the time that we need it to. So there's a world of capital out there, let's start connecting the dots between those who have the capital for investments and those who deeply need it. What does that look like?
Dave Karlsgodt 19:21
So I want to just call out a few things you just said and maybe frame it a little differently. Basically, you're saying that Europe's the, you know--who's often talked about as being like, you know, the social socialist continent or something like that--is doing a better job using the private markets than, than free enterprise America? Is that what I just heard?
Katrina Kelly Pitou 19:43
I, in terms of infrastructure developments, let's keep it--
Dave Karlsgodt 19:47
Okay. Yeah.
Katrina Kelly Pitou 19:48
--very specific to infrastructure.
Dave Karlsgodt 19:49
Yeah, no, that's fair. Okay. But yeah, we're not talking about health care; we're not talking about a bunch of other topics that--
Katrina Kelly Pitou 19:53
Yeah, we're not, I mean, you know, I'm not getting into, like, blue chip technologies or whatever that stuff is like, you know--
Dave Karlsgodt 19:59
Yeah, no, that's about it. And I call that out just because I mean, I think that's true, right? And it's just a, it's a frustration I have as well, because it's, like you said, there's all this opportunity that you just need money to invest in it; it's a great deal, but our public institutions just are not structured to take advantage of that. And so how do you, how do you get around that? So, okay. Well, that's good. I didn't mean to, you know, reduce down what you just said, because--
Katrina Kelly Pitou 20:31
Just to clarify, I'm all about, as you said, I think Europe's done a really great job of helping set up what those deals look like, from an infrastructure perspective, whenever it comes to energy. They've definitely done it. But, you know, the also econ side of me, like, dares not offend those who are in the traditional banking industry of America. And well, you--
Dave Karlsgodt 20:51
No, that's fair, and we talked with my colleague, Ron Herbst, who was the head of sustainability for Deutsche Bank for a number of years.
Katrina Kelly Pitou 20:58
Cool.
Dave Karlsgodt 20:58
And he was based out of London, and he had basically a similar story, and that was, he talked a lot about bankable projects as well. So that's a common theme through this podcast, even.
Katrina Kelly Pitou 21:06
it's really exciting, I think, to see that happen. Because I think the, the one thing that I do get frustrated, or the one thing that where you can encourage universities to be more positive to look at, is where these places have already happened. Right? Like, it's not necessarily whenever people start to panic a little bit, how do I get this deal made? What do I do? You know, there are a lot of campuses. I'm, I'm a prime example of one: I went to the University of Nottingham, where I did my PhD.
And the Jubilee campus that we created was done in partnership with a lot of big engineering firms. I got exposed as an economist to even what environmental engineering looks like, just because I was working inside of a super sustainable building, right. I knew what a green roof was because it was right in front of me. So I think, you know, to give universities that excitement, especially when, you know, we see some of the research funding that has come out recently--and I know you wanted to go back there, so I'm excited about it, too. But I think the demand side level of innovation is where America as a whole, and universities as a whole, can really do leaps and bounds ahead--leapfrog, if you will--over what the Europeans are doing.
The Europeans definitely figured out how to clean up supply side a lot faster and quicker. It's economically a benefit for them to do so as well too, you can make that geopolitical argument. But I think from when you look at that innovation, that tech that's coming out of America, the stuff that we're wicked good at right now, I mean, that's where it starts to get really exciting for me as a university. Like, why, what can we take out of the supply side equation? What learnings can we take? But then, what can we do in terms of building controls and micro grids, and I mean, you know, me, I'll geek out about what we can do from an infrastructure demand side intervention. It's super exciting.
Dave Karlsgodt 22:43
One other topic I wanted to get into is, there's a bunch of other things in the federal level that are likely to come. I think back to the George Bush years, and there's a, there's a park in my neighborhood that was built basically off of money that was designed to help fight terrorism. They covered over what was an open reservoir and put concrete over the top of it and built a really lovely park, which I walked with my family all the time, we have beautiful views of the mountains and things up there on top of the hill in Seattle. It was built to keep terrorists from poisoning the water supply, and was probably over funded by the federal government with that kind of background.
But what it was, what it created was a really beautiful space in my neighborhood. And there are a whole bunch of other reasons you might want to do that, but you would never get the funding to do it. So the neighborhood group that was there, they had planned and got it in front of that funding. When we think about, you know, we've got the pandemic, we've got economic--the economic crisis, we've got racial justice issues, and, you know, in addition to climate change, what else? Like how might a university position themselves to take advantage of some of those other streams? Federal government often overreact to certain topics and underfunded others. But so the creative people seem to, like, get in the way of it. But can you see any opportunities there for campuses?
Katrina Kelly Pitou 24:03
Yeah. And I think you summarized them really well there, which is like a lot of these relief packages, I mean, the, the more that we can connect our economic development to positive sustainable development, you know, that's where maybe it's like the socialist side of me that you just alluded to really believes in, but there, there definitely is, right now, when you look at those Covid relief packages, and you even like, kind of look at the overall title that the Biden administration is really pushing forward, right, this Build America Back Better. As much as Covid has been just an absolute crisis for our country, the economic reality that we're facing right now is also one of a big challenge. So I think whenever we look towards those, where can we use money creatively and start coupling it, the more universities can actually do that, identify what role they play within that local environment.
How does the university interact with, whether it's the neighborhood or the city or even the rural community that they're located in? What types of opportunities does the university know of a need? And how can those connect to other outside campuses for supports that will ease some of that economic disparity that has just been hugely happening here. You've seen the, I think, Biden administration for the first time has even used the words environmental justice within the context of energy legislation, which to me was a really big win. And I'm someone who's very focused on energy disparity, and just making sure that utility is a portion of income is really fair for all residents.
And when we look at university campuses, actually, and I'm gonna go back to like the crisis moment that universities are in that you touched on before, because I think that's so important. One thing that we haven't really reconciled or thought about is actually now this paradigm shift that has been caused for universities. Right now, the economic situation is caused right now, so the more housing is really concrete issue for me, where I start to think, how can universities start interacting with those broader relief packages, even from an infrastructure perspective? Or from an energy perspective, if you will. I don't think the one thing that we've gotten our head around right now, from just a broader public sector perspective, is that a lot of these universities are actually going to be in a bunch of financial trouble right now. Right?
The California State system is such an example of that. And I think that's something where before we even talk about the opportunities that, that campuses might take advantage of, for those COVID Relief packages, I think we also need to spend a moment talking about what is the reality actually of just the higher education system as as it relates to energy, what can you do. For me, the number one thing is realize that actually, you probably have a bunch of space that you're never going to use again. So step one, what are you going to do with that? And that, that's a bold statement, I guess, but it's one that I think we're not paying enough attention about.
Dave Karlsgodt 26:45
Well, but it's, it was one we talked about prior to the pandemic, right? People with two offices or buildings that were utilized 20% of the time. You know, you build some buildings, or use some parts of the day and not other parts of the day, or, you know, it's, we used to call that like "deef." Like, if you think back to the old days of your defragging your hard drive, we would always call like defragging your campus, like, how do you--
Katrina Kelly Pitou 27:06
Yeah.
Dave Karlsgodt 27:07
--consolidate people in different buildings, but that's a, that's a third rail topic in the politics of, of higher ed, typically, right? I mean, people work their whole career to get that nice office or to have their own facility for their program. And--
Katrina Kelly Pitou 27:21
Yeah.
Dave Karlsgodt 27:21
So it's a, it's a tough one.
Katrina Kelly Pitou 27:23
I, you know, I'm an adjunct professor at University of Pittsburgh still, and, you know, I mean, obviously, I've been been out of higher ed as a student for quite some time now. But I even think just, you know, whenever you look at the changing demographics, it's now like 37% of students who are getting ready to go to college next year are thinking about where they can get skill building the best from, right. There's only 16% who are like, okay, I want to get a bachelor's degree, and that's the most important thing to me. Whenever I think back to like, whenever we were applying to colleges, right, I remember it was like, what is the corporate alumni program like?
How can I get an internship with Michael Bloomberg? How can I go to the UN? And how amazing is the football stadium and those games? Like that is so done of an age. And actually, I think that's a bigger problem is we have these huge assets themselves that energy feeds into, and it's like, this is not the campus experience people are looking for right now. So how, whenever you think about campus infrastructure, it's like, but are you sure that's the demand level you need first? And I think that's actually causing a bit of a tricky discussion right now to be had too which is like, have we oversized a bunch of infrastructure that's prepared for campus expansion, but should we actually be preparing for campus contraction? And then electrification?
Dave Karlsgodt 28:38
Right.
Katrina Kelly Pitou 28:38
I feel like yes.
Dave Karlsgodt 28:39
Yeah. Well, and meanwhile, we have a housing shortage and much of the country--and it depends on where you are, certainly here in Seattle and some of the west coast cities. Yeah, no, it's a, you're, you're raising the right question. So it'll be interesting to see just kind of what next fall looks like, let alone what the next five or ten years look like.
Katrina Kelly Pitou 28:58
Yeah, I think there's, like you said, opportunities around housing are the ones where we see the greatest room for intervention. But I think, you know, that that's also super interesting, too, because those are different types of typologie for infrastructure demands then, right? If we're saying that universities are going to become places where essentially like, you just need to research and teach maybe a little bit more, it's where you're--that's a different type of energy demand from just kind of the broad range of infrastructure that we've prepared for in the past. And for me, what gets exciting then to think about there is like, instead of just thinking about the supply side there too, should we be really planning and thinking about where options for waste heat recovery really lie, where we think about how we can capture that heat from lab equipment.
I do think the one thing that the Biden administration hasn't gotten out aggressively enough--maybe I'm just biased because, you know, I'm like you: I spend time talking to people on the green side of the spectrum quite a lot. But even for me located in western Pennsylvania, the signal that gas is not going to be favored as much as renewables, or a carbon price is coming down the line. I haven't heard that signal strongly enough yet. So I think that that's something that everyone needs to hear in the next kind of two or three months for a lot of that decision making that's on kind of a critical juncture right now to truly be made. But again, without that battery storage investments, I think it's, it's complicated some infrastructure decisions for people right now.
Dave Karlsgodt 30:28
Yeah, no, I mean, that everything's changing. The business model of the university is changing. The world in which the university operates is changing. The, the technologies themselves are changing. So the only constant is change, as the old saga is, right. So we've been talking mostly about federal policy and the, you know, the federal government. And that makes sense, since we just went through a major federal transition. But I know that--what's the, the old expression, and I think this comes back from "West Wing"--is all politics is local. I mean, that predates "West Wing," but they use that a lot. What's happening at state and local levels that we should be paying attention to, or that people may not be paying attention to? Is that something more important for universities and campuses? I mean, I certainly am seeing that a little bit in our work in Massachusetts and in California, somewhat in state of Washington here, too. But talk to us about that.
Katrina Kelly Pitou 31:24
Yeah, I, first I'm just really excited that we had two "West Wing" references in this so far. This is very exciting to me. I just want to point that out. Still a big fan of Rob Lowe. Um, I, yeah, whenever we look at the local discussion, you know, and I think we touched on a little bit of how can universities, you know, be creative about that financing, etc, I think actually, maybe we're not giving enough credit even to universities in how much they've, they've kind of kept the pedal, or is that the phrase? No, kept the pedal to the metal?
Dave Karlsgodt 31:52
Yeah.
Katrina Kelly Pitou 31:52
For sustainability?
Dave Karlsgodt 31:53
Okay.
Katrina Kelly Pitou 31:53
Is that it?
Dave Karlsgodt 31:54
Yeah, you got it.
Katrina Kelly Pitou 31:56
I'm a biker, not a car driver. As you can probably tell,
Dave Karlsgodt 31:59
You have to call it an accelerator, not the gas pedal, though. That's the new.
Katrina Kelly Pitou 32:02
Oh okay, good. We keep the pedal to the--anyway. So I think, yeah, whenever we look at universities, when we see how much they've been pushing and leading the way, I mean, I'm just, you know, it's been so amazing the past four years to see how universities have just continued to try and do the right thing, not just for the students, but you know, for the planet broadly. It's been super cool to see how universities have pulled those entities along. I'm doing a lot of work in Colorado right now, doing really cool work in Michigan, even here in Pittsburgh. Of course, I'm biased, because, you know, this is the university I'm still affiliated with. But it's just absolutely amazing to see how much--I think even professors who are located within universities are reaching out into communities to try and conduct studies to understand how they can better impact the ecosystem that they're within. But also just seeing how much professors are leaning into that facilities discussion with, hey, you know, here's how we can use the data that you're aggregating on campus. You know, I have a grad student who's willing to lean in and do the analytics for your campus planning. And I think that's been really exciting to see. For me broadly too, the part of the world that I get so much excited about is just the other side of the rust belt that hasn't, for me, being given enough kind of applause for the efforts that they've really taken over the past few years to push the level on innovation. As a firm, but also individual, the stuff that's going on in Cleveland right now is just amazing to see them push the bar on it.
Dave Karlsgodt 33:32
Well tell us about what you're talking about there.
Katrina Kelly Pitou 33:34
Yeah. So Cleveland right now as a city, in partnership with Cuyahoga County broadly, has just really pushed the bar on redevelopment over the past five years. So starting a lot with the Euclid redevelopment of the shoreline, kind of creating Cleveland a beach, if you will, which, for those of you who've never been to Cleveland, perhaps listening to this, that's so much more difficult, I think, than anyone anticipated. And now see in Cuyahoga County, you know, keep in mind that Pennsylvania, Ohio, West Virginia, these are hardcore gas producing states, where people were making decent amounts of money off of the fracking industry for the past kind of decade almost.
So seeing Cuyahoga County, which is where Cleveland lies, pushing for community microgrid discussion, installing utility scale solar, and now pushing ahead on the icebreaker, which is going to be the offshore wind project located in the Great Lakes, to me is just so amazing. Like we hear these coastal innovations happening all the time, but to see that and then seeing places like Ann Arbor, Michigan, adopting a netzero energy code, seeing the University of Michigan coming out with a related Climate Action Plan--that's honestly more aggressive than a lot of discussions I've seen even in California recently--is just hugely, hugely amazing to me. So I think for me, I'm really excited about the fact that the push from the local is actually not even reflective of that discussion that keeps happening at the federal level.
I mean, I live in Pittsburgh, so I almost had a heart attack when again, Ted Cruz was like, you know, Pittsburghers don't want to see us go to Paris. It's like, no, we were literally, you know, we're one of the cities who is pushing for the Pittsburgh to Paris legislation, but whatever. But it's really cool to see the local level of politics become completely bipartisan, to see our local representatives reaching across the line and just really focus on how can we create good jobs for the energy industry there. And to be honest, a lot of that type of innovation has been directly pushed by the universities in the area, whether it's Case Western Reserve University, whether it's Cleveland State, University of Pittsburgh, like I said, University of Michigan, it's just really, really cool to see how much people here are kind of leaning into the opportunity to do the smart thing about energy instead of the quick thing.
Dave Karlsgodt 35:44
Yeah, no, that's great. I, one, thinking back to my friend, Brian Campbell, who has been on this podcast a couple of times, and he talks a lot similarly about the Midwest. And I mean, maybe from a, back to our politics theme here, agriculture and its role in its intersection to higher ed, Can we tease anything out of that topic? That's kind of a curveball for you. But I'm just--
Katrina Kelly Pitou 36:08
Yeah, no, I mean, it's, it's such an important one. One of the biggest projects that I did at the UN level is the energy-water-food nexus. And to be honest, it's one of those moments where someone who's focused on energy, you realize that you're actually missing the mark half the time by focusing on just on energy, consumption of water, right, on campuses, like, oh, man, should we be talking just about water consumption--and then to throw food in? Oh, my God, it's, you know, these things are so related, and we so often fragment them, to your point earlier, intentionally, whenever, actually, a lot of the smartest things we can do is identify those co-benefits.
So I think from an energy perspective around agriculture, and even looking at rural campuses, that part of the conversation has definitely been left out from more of the, I'd almost call it like left side, if you will, right, more of the Democratic--there has been a huge focus on what cities need, but I don't know that really focusing on what agricultural communities need to do that transition has has been discussed or fleshed out further enough. And whenever we see things like the opportunity to start using new types of crops in the middle of Pennsylvania to bring in additional revenue, I think it's super exciting. You know, we're seeing marijuana is like a real type of industry that's coming out of the gate, making people lots of money now, but you know, that's also a super energy intensive process. So I, you know, I always go back to microgrids, because I get really excited about the opportunities to create decentralized infrastructure. But how cool is it to think about in the middle of nowhere, you can start thinking about how to create these islanded innovation ecosystems in partnership with agricultural communities. Like, let's get "Westworld" with our intermittent innovations, you know?
Dave Karlsgodt 37:48
"West Wing" meets "Westworld?" All right.
Katrina Kelly Pitou 37:50
Yeah exactly.
Dave Karlsgodt 37:52
Well, cool. No, I didn't mean to, like, you know, we'll focus on, on the areas that you're most comfortable, which is great. I like your comment about, the more you get into one topic, the more you realize how little you know about the whole, the whole system. And that's, that's part of the point, I guess.
Katrina Kelly Pitou 38:07
Yeah.
Dave Karlsgodt 38:08
All right. So we've gone from the federal to the local. What if we go to the hyperlocal? You've studied politics. What about the politics of the higher ed institution itself? Is that something we can get into for at least a few minutes here before we wrap this up?
Katrina Kelly Pitou 38:23
Do we, I mean, so many, should we get into the--do you mean between facilities and just leadership and that overall governance structure for success? Or even just talking about how your econ department will push for something completely different than what your engineering department pushes for?
Dave Karlsgodt 38:40
Maybe a different way to word it would be what is, like, how would political science study higher ed as a political entity?
Katrina Kelly Pitou 38:47
Yeah, I mean, I probably am stuck on the word because I just got excited that you used it here. But I mean, defragmentation in university ecosystems is such a real thing, isn't it? Like academic silos just tend to, tend to be so real, not just amongst different departments, but amongst different generations as well, too? I think that from a university standpoint, when we talk about the hyperlocal, it, honestly, is that one of the biggest challenges to the energy transition at a university campus? Not even the infrastructure itself, but just the disconnection between what the provost wants to do from research perspective, what kind of your president wants to do from you know, your second nature commitments, and then what your facilities manager is actually capable to capable of doing in terms of your budget.
And then background over here, you needing to hire a birector of sustainability and everyone thinking, does this go in operations? Does this wait, no. Is this my real estate side? No, it goes in planning. Right? Like it's, the world of university fragmentation is so real and large but the political science, I guess, part of me is, goes towards, you know, how do you, how do you defragment policy and make real things happening. And that's where I think, universities, the more they can get ahead and actually almost create their own policies, we keep using words like climate action plan or energy master plan. Even just having a vision, a man on the moon moment, right--from a climate perspective, or carbon perspective, whatever you want to call it--for the future, I think is a really important signal to send to everyone, which is, hey, we're all going to get underneath this same kind of direction and start steering our ship forwards together. That's really I think needed.
And then, you know, the second part underneath it is you've got to establish those clear governance mechanisms, whether it's a steering committee for sustainability, a carbon committee. Giving people the empowerment that they need to interact with those higher ups--so they don't have to go through the traditional 18 different levels of tenureship and staffers, faculty, blah, blah, blah--is so real and so urgent. So I just think it, you know, especially for those of us in the industry who work alongside universities, one of the first things that I think I tend to do, whenever we go in from a planning perspective is ask the question, who, if we're going to implement this, who has to give the okay on it? It's not just one person, it's 10 people. And how often do they meet? And I'd say nine times out of ten, the answer is like, occasionally, and that's okay.
But the real scary is when they're like, oh, never, no, no, we've never met. And it's your point. You know, now, I think as we're evolving away from just climate action planning, now, you know, sustainability masterplanning being a true thing, I think a lot of us have realized that we've pushed universities towards focusing on this is how you decarbonize. And now there's definitely the equal problem. I mean, we've, we've looked at water a decent amount, but we most certainly, as an industry have not looked at, you know, the food aspects, and definitely not the equity components enough. So I think that that's going to be a bit of a tricky thing is realizing that a lot of universities have made these 10 year plans. But now the 10 year plans are up, and I think a lot of us have been planning towards 2030. But you know, 2030 is now only nine years away. So now we've really actually got to do the even crazier thing, which is like how do we plan for 2050. And people hate making long term plans. Right? But we've got to do it.
Dave Karlsgodt 42:18
I've been planning 30 years in advance for at least 10 years now. So it's been a--I start to finally see some of the original projections, you know, be off by whatever they're off. All of what you said makes me think about all of the rock star sustainability professionals that I know. And basically, their job is to go into a fragmented organization that was structured based on like, you know, whatever Harvard decided to do in, in 1557--or whenever they started, I don't know what year they started--but, and they have to go fix the system so they can get anything done. Right? Like that's, that's the job of the sustainability professional, right is to navigate all of that. So it seems like there's a lot of room to, as we try to take on all these problems at the same time, you know, we're going to have to change the actual institution in the process. And I think the good news there is, maybe we can get a handle on some of the racial justice issues and the inequities, maybe we can get a handle on some of the financial business model problems, maybe we can get a handle on some of the, how does the university interact with the community and all those other things--if we can do all those things simultaneously. So, but I think you're right, I think it's about creating spaces for change to occur. But they're long, you know, big institutions. They, they're, they're designed not to change, right. Like, that's their whole point is to like, be what they are for as long as they can possibly be. So it's, it's challenging, for sure.
Katrina Kelly Pitou 43:45
Yeah, I think the word that I almost tend to use when I, when I talk to universities about frequently is to understand what their true impact is. You know, from a carbon perspective, we so often are talking about what's your carbon footprint, and I think those of us in the sustainability realm are starting to hear more and more, leave a handprint, not a footprint, of positive impact for the next generation. But I think something that's more useful for university leaders to really think about now is just to really quantify that impact from an economic perspective. I think this is one where we are, we don't tend to pay enough attention just to simple things, understanding those very fine lines very often between universities from an economic perspective, how they're affecting, you know, land prices, how they can do that more of those sharings with the institutions that are right next to them that you pointed to before.
And I think whenever we talk about, okay, how can universities actually start to find secret pots of money that might have been, you know, either appropriated through funding mechanisms or put out through the Covid relief plans, etc, the more that they can actually partner and be seen as what they're actually really meant to do, right, be, be really an anchor for economic development within their regions. The hardcore, I guess, academic side of me thinks that there is a bit of a return of universities going really back to where they should be, which is understanding how to create the best value for citizens within the communities that they lie within possibly right now.
Dave Karlsgodt 45:13
Yeah, that--
Katrina Kelly Pitou 45:13
And I--
Dave Karlsgodt 45:14
No that's, let me stop you there for just a second. So that's, I think that's important, right? Because within the institution, people don't tend to think that way. They think about their department or the outcome of that student, or whatever I mean, which are also important. But what you're saying is, the university, when it wants to do bigger things, needs to see itself in the context of the community and--it was created by the state in a lot of cases, you know, for public institution. So why and what was it supposed to do? And if you lose sight of that, you're missing the boat.
Katrina Kelly Pitou 45:43
Yeah, absolutely. And I mean, it--this is the first year I'm part of the, the Governor's Council on Environmental Quality in Pennsylvania where we work with a PA state Board of Education to pass legislation relating to environmental STEM curriculum. And this is the first year that we've been able to insert language mandating that STEM education must include the topics of sustainable development, must include the concepts also of environmental justice, but also just really include a more inclusive understanding too of who their attendance rates look like, from a local perspective. I think in the northeast, especially, it's really tricky.
You know, a lot of times these are the really old academic institutions, like you said, even, you know, you said Harvard, but this is, we have lots of Ivys here, and even our state universities here are oftentimes, you know, aca-elite level--like California is too--and people come from afar, but that means that they've become hugely unaffordable at times for your local citizens. So the more that universities, I think, can understand that interaction and, and just go back to that mission and connect sustainability directly towards that mission, the more we're doing, you know, a better service, not just to the planet, but like, literally to the ethos of education, which we really need right now, in the States. I think when we talk about energy in the future, that's something that we need to be conscious of is that there's still a lot of room to go in terms of innovation that we need to produce.
And the more that we can get diverse voices and more diverse thinking in, in the room of who creates that innovation, the more creative our technologies will be. So I think, you know, when we talk about that university fragmentation, oftentimes we don't plan enough in partnership with the research that's happening there. But that's my favorite thing to do as part of the master planning process. How can we go on the campus? How can we set up a governance for success? How can we solve the problems? But what's the unique sort of special sauce that each university has? And what can they bring to the table for it? I think that's where you can get people really excited about delivering on that mission. So you know, if there's like a hopeful word for 2021, what are you excited about for energy? I think it's just there's been a signal for people to lean in and to share their research, to share innovation, and share what they're, theyre learning from an operational perspective directly with the university leadership. And that's very exciting.
Dave Karlsgodt 47:59
Well, and I like, when we started talking about supply side of things, and you kind of said you were really more focused on the demand side and all of that. Demand side is really personal, right? It's, demand side is who are you? What do you need? What are you asking for? And that's, that's very tied up in what do you want to be as an institution? And how are you going to interact with your local community? And things like that? So I, I like that connection. That's, that's not really maybe one I've seen super strongly articulated before. So thank you for, for sharing those thoughts. That's great.
Katrina Kelly Pitou 48:30
Thanks. Demand side interventions are where we have to go. I mean, we've got, when we look at our carbon inventory in the United States, over 40% of that carbon comes from buildings alone. So we're talking all the time about how do we get more solar? How do we get more hydro? I almost dare not comment. But nobody's talking enough, like what happens when our nuclear baseload goes away? That honestly keeps me up at night. But whenever we start thinking really about, like, how can we actually get to--somebody around me used this word recently, I did not use it myself, I just want to clarify--someone used word megawatt with me recently.
And they're like, everybody's talking about the megawatts that we need but nobody's talking about the negawatts. So you just reduce your energy use intensity in the built environment. And I had a real thought actually, I'm, I'm the first person to love a brick and mortar institution, like, nothing gives me greater pleasure than delivering a lecture on one of these, like Oxford campuses, etc. I really need to quit being, having that obsession, but it's just deeply ingrained. But the first thing I do when I go into these buildings is be like, wow, I mean, these things have been existing for 200 years.
My next thought is an oh my god, the building facade is so aged and just absolutely leaking heat. Like how old are these windows themselves actually? Like how many kBtus are just coming out? And I think that that's something that we haven't wrestled with as universities too, is that you know, from an infrastructure perspective, just understanding especially how much these buildings are interacting with age systems. The buildings are just as old as the systems oftentimes. So its, it gets really fun, I think, from an A/E perspective, to just think about really the world of adaptive reuse and how you can start applying that to a campus perspective. That's pretty cool.
Dave Karlsgodt 50:09
Very cool. Well, we got, like, six more podcasts to get out of that last little section there, I think. Well good. Well, I, I know I could talk to you all day because I have done it before. But to, just for the benefit of our listeners, we should probably wrap it up. Any, any other closing thoughts or, kind of--the framing of this whole podcast was, was intended to be if I'm at a campus, what should I expect around policy, especially in this, this changing time? So sort of bringing us back to that general theme, how would we wrap it up?
Katrina Kelly Pitou 50:41
Yeah, not to be a used car salesman of energy, but probably to be a used car salesman of energy infrastructure--
Dave Karlsgodt 50:48
What will it take to get you to microgrid today?
Katrina Kelly Pitou 50:51
Exactly where I was going--well, you should actually start thinking about--but I really do think it's there. I mean, the policies are going to be there, we saw the market signal. I think the honest, the best thing you can do as a campus and university right now, is start directly involving your CFO into conversations with your facilities and operation managers and start saying, okay, how much money are we actually spending on energy? What's the cost of energy right now? if you're not modeling that with carbon right now, you're missing the boat, and you're also missing opportunities to just decrease your overall spend. So I think from a policy perspective, you know, we see the signal that's coming down the line. We're moving towards this same kind of highway plan, I guess, that the rest of the world is on. It's going to happen. We're going to have to become sustainable.
So the best thing you can do is actually, you know, make an environmentally conscious decision. So I think from a policy perspective, the other thing to do is to probably interact with the local AIA if you can and to really, like, start to put pressure on creating further subsidization in the next few months. I think universities, if they're not interacting with their policy departments--internal lobbyists, if you will, your government relations groups--I think if they're not saying, hey, we need subsidizations for heat pumps especially, we need extra money for planning to come out. I don't know that that side's been heard loud enough in DC, but I do know legislation is coming down the line. So I'd say as the universities start getting active and start getting demanding as what you need to kind of fill that gap between business as usual and sustainability performance.
Dave Karlsgodt 52:25
I like it. Yeah. No that's, I, it's, it's more than just bringing down the cost of solar right, I guess is maybe a quick way to summarize that.
Katrina Kelly Pitou 52:34
Yeah.
Dave Karlsgodt 52:35
Excellent.
Katrina Kelly Pitou 52:35
I mean, like you said, we'll talk about it in hopefully another podcast someday, but we could spend time just talking about the costs of heat pumps, and like how much we're in trouble in this cold area alone if we don't start focusing on it soon. So that's definitely, for me, in the next three months, the more that universities in the northeastern states can--and Midwestern states--can start talking about, okay, but like, this is what we actually need to adapt in cold climates. I think that's where we've got to be exceptionally vocal in the next few months.
Dave Karlsgodt 53:06
Very good. Well, if people want to get in touch with you, is there a place they can find you online? Social media, etc?
Katrina Kelly Pitou 53:13
Yeah, the SmithGroup website is obviously just the easiest one, www.SmithGroup.com. But otherwise, I think you can follow me on Twitter. My handle is @KatrinaMKelly. I'm normally found under the hashtag of climate Twitter, apparently, which I didn't know but I'm very excited about to find recently, but otherwise, they can just get in touch with you guys. I think you know how to hunt me down. And hopefully everybody is emailing you to tell you how much they love your podcast after every episode, so--
Dave Karlsgodt 53:43
Well, it's--
Katrina Kelly Pitou 53:43
That's my recommendation.
Dave Karlsgodt 53:45
I like it. I like it. Thank you for that. Well, it's been a pleasure talking to you and I look forward to the next conversation whether it's recorded or not.
Katrina Kelly Pitou 53:52
Thank you so much for having me. I so appreciate it.
Dave Karlsgodt 53:55
That's it for this episode. Thanks to Kelsey Harding for her production assistance. Our music is "Under The Radar" courtesy of Dallas based musician and composer, Gio Washington-Wight and his studio Big Band. If you'd like to follow our show on social media, our Twitter handle is @energy podcast. You can also find us on LinkedIn, just search for campus energy and sustainability podcast. If you'd like to support the show, consider leaving a rating or review on iTunes. As always, thanks for listening.
Transcribed by https://otter.ai