INFRA US 5

www.americainfra.com • Q4 2010

THE EMPIRE GOES GREEN How a 20th century icon is transforming itself into a beacon of energy efficiency

Ticket to ride Houston Metro’s George Greanias on his plans to keep the city moving Cutting risk Todd Keil reveals the importance of a national infrastructure protection mission Return to rail Will a cash injection return the railroad to its former glory days?

In focus: Smart cities

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FROM THE EDITOR

The return of the king How a 20th century icon is transforming itself into an environmental leader.

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or nearly 80 years, the Empire State Building has been an integral part of the New York skyline. Since the building opened in 1931, 110 million visitors have made the pilgrimage to the observatory on the 86th floor, to gaze in awe at the cityscape laid out 1050 feet below. The total height of the 102 floors plus antenna is 1453 feet, enough to give the ESB the title of world’s tallest building for more than 40 years.

From a business point of view, however, this regal representative of a bygone era was in danger of sliding downward on the desirability scale. A new generation of buildings has sprung up, boasting the design, technology and energy efficiency components demanded by today’s leading-edge companies.

But the ESB isn’t ready to give up its hard won place at the top that easily. A groundbreaking collaboration between the building’s owner Malkin Holdings, the Rocky Mountain Institute, Jones Lang LaSalle, the Clinton Climate Initiative and Johnson Controls looks set to transform the building into a modern, energyconscious marvel.

It won’t be cheap – the cost of the refit is estimated at $13.2 million – but it will be well worth it, according to Tony Malkin, President of the company that owns ESB, Malkin Holdings. “We were spending a tremendous amount of money on the building in any event,” he tells us in this issue’s cover story. “So we thought, why not incorporate the whole energy efficiency piece? And the reason for that is very straightforward: it’s a tremendous economic reward for us to design our renovation and upgrade program with energy efficiency in mind.”

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The sheer scale of the project is breathtaking. To refit the building’s 6514 windows – which involves splitting them, inserting a Mylar sheet with a spacer, resealing them, and filling them with krypton-argon gas – will cost $4.5 million and require the services of a specialist contractor from Boulder, Colorado.

And the benefits could be equally colossal.

In addition to the environmental pluses, the refurbishment also makes economic sense: the project’s partners predict annual savings on energy of $4.4 million, which would pay back the cost of the retrofit in less than four years.

Elsewhere in this issue, Joseph Szabo examines the proposed transformation of another of the nation’s historic institutions, the national railway network; Jeff Johnson looks at the smart grid’s potential to encourage energy efficiency; and George Greanias outlines his efforts to bring a light rail system to the city of Houston.

While these projects may not have the scale or the star quality of the Empire State Building refit, they all play a vital role in keeping our country at the forefront of the latest infrastructure developments. Like the ESB, we can’t afford to rest on our laurels; we need to ensure we’re looking to the future, rather than feeling smug about the past.

“If we consider that most of the buildings we have now are going to be around for a long time, it is immensely valuable for the real estate world to learn how to do this sort of sustainability repositioning” Robert Hutchinson, Program Director for Research and Consulting, Rocky Mountain Institute

Huw Thomas Editor

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CONTENTS

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Electric avenue Could the gasguzzler’s days be numbered? Pacific Gas & Electric’s Saul Zambrano explains how the utility is paving the way for plug in vehicles

Altered State Retrofitting a 20th century icon to drastically improve its energy efficiency is a huge challenge, as Huw Thomas discovers.

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Ticket to ride Houston Metro’s George Greanias tells US Infrastructure about his plans to keep the city moving

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Return to rail Will the railroad be returned to its former glory days through the advent of high-speed technology and a cash injection?

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CONTENTS

Gold Sponsor

38 Paving the way Smart cities are have been called the next generation of urban infrastructure, but what do they actually entail?

54 Encouraging efficient consumption Jeff Johnson looks at the smart grid’s potential to ramp up energy efficiency

68 Network fail?

Is the smart grid the greatest innovation of the 21st century or a gaping security black hole? US Infrastructure speaks with Professor Ross Anderson to find out

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72 Turn on the power The National Grid’s Edward H. White on the potential of solar energy

74 Modernizing the energy grid How T-Mobile is creatively partnering with utilities to improve smart grid systems

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76 Come together Matt Jackson answers our questions on the latest trends in public safety collaboration

78 Protect and save Welcome to the unsung heroes of emergency response

86 Fading fast Why the US can no longer afford to forget about its water infrastructure

90 Every drop counts Kim Stoll reveals the importance of advanced metering solutions for water conservation

Silver Sponsor

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CONTENTS

Roundtables 48 Getting smarter 60 Super grid

Ask The Expert

Executive Interview 98 Connecting the anywhere, anytime enterprise Jeff Newman discusses how Enfora is focusing on a systems and solutions approach to connecting remote assets to the enterprise

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84 Dennis Smagac, Intelagard 92 Dan Kroll, Hach Homeland Securities Europe

94 Cutting risk With Todd Keil, Assistant Secretary for Infrastructure Protection at the Department of Homeland Security

100 Connecting America The FCC’s bold roadmap for the future of broadband

116 How enterprise content management is making a difference With Philip Cleghorn

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118 Deadly skies IATA’s Gunther Matschnigg talks about the challenges for the aviation authority

124 Bay of plenty A look at the landmark mega-project, Bahrain Bay

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130 Safety first Why offshore health and safety is becoming increasingly important

134 Country focus: Portugal

Details 138 36 hours in…Los Angeles 140 Agenda 142 Objects of desire 143 Books 144 Photofinish

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CIO US Summit 2011 12 - 14 April 2011 The Boulders Resort and Spa, Scottsdale, Arizona The CIO US Summit is a three-day critical information gathering of the most influential and important executives from across all sectors.

The CIO US Summit is an opportunity to debate, benchmark and learn from other industry leaders.

A Controlled, Professional and Focused Environment

Legal Information The advertising and articles appearing within this publication reflect the opinions and attitudes of their respective authors and not necessarily those of the publisher or editors. We are not to be held accountable for unsolicited manuscripts, transparencies or photographs. All material within this magazine is ©2010 US Infra.

A Proven Format This inspired and professional format has been used by over 100 executives as a rewarding platform for discussion and learning.

Chairman/Publisher Spencer Green Worldwide Sales Director Oliver Smart Finance Director Jamie Cantillon

To find out more, call +44 117 915 4812

Editor Huw Thomas Managing Editor Ben Thompson Associate Editor Rebecca Goozee Contributors Ian Clover, Lucy Douglas, Nicholas Pryke, Julian Rogers, Stacey Sheppard, Marie Shields Creative Director Andrew Hobson Design Director Sarah Wilmott Associate Designers Daniel Clayton, Élise Gilbert, Michael Hall, Crystal Mather, Cliff Newman, Catherine Wilson Online Director James West Online Editor Jana Grune Project Director Brooke Thorpe Sales Executives Melissa Luongo, Faro Levy Smith, Oliver Roe Production Director Lauren Heal Production Coordinators Renata Okrajni, Aimee Whitehead VP North America Jason Green Operations Director Ben Kelly IT Director Karen Boparoy Marketing Director John Funnell

Subscription Enquiries: +44 117 9214000, www.americainfra.com General Enquiries: info@gdsinternational.com (Please put the magazine name in the subject line) Letters to the Editor: letters@gdspublishing.com

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GDS International GDS Publishing, Queen Square House 18-21 QueenSquare, Bristol, BS1 4NH Tel: +44 117 9214000 E-mail: info@gdsinternational.com

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THE BRIEF

Katrina: Five years on

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ive years ago, Katrina, a category four hurricane, took the Gulf Coast by storm and destroyed more than 90,000 square miles, forcing 800,000 people from their homes.

The storm was one of the most costly natural disasters – 1836 people lost their lives in the hurricane and its subsequent floods – as well as one of the five deadliest in US history.

In New Orleans, the levee system catastrophically failed, with eventually 80 percent of the city and large tracts of the neighboring parishes flooded with water lingering for weeks. Two months after the hurricane, around 250 billion gallons of water had to be drained out of the city.

The initial response to the disaster was slow, exposing holes in the nation’s disaster preparedness plans, and through the Gulf Coast region, particularly in Louisiana, it was marred by a toxic combination of red tape, turf battles and mistrust between state and federal officials.

A June 2007 report released by the American Society of Civil Engineers states that the failures of the locally built and federally funded levees in New

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Orleans were found to be primarily the result of system design flaws. According to new modeling and field observations by a team from Louisiana State University, the Mississippi River Gulf Outlet (MRGO), a 650 foot-wide canal designed to provide a shortcut from New Orleans to the Gulf of Mexico, helped to provide a funnel for the storm surge, making it 20 percent higher and 100-200 percent faster as it crashed into the city.

Five years later, and sadly little has changed, with thousands of displaced residents in Mississippi and Louisiana still living in temporary accommodation.

‘For Sale’ signs still litter the city as abandoned homes and schools line the streets next to those homes that were renovated. Much of the coastline remains bare where the storm surge washed away infrastructure, including homes and businesses. And while repairs have been made to roadways and bridges, little else has been done.

In the city itself, the residents are still working to restore what they can, but there is no doubt that it has altered the soul of the city – and its population – significantly. But, while concerns remain about

“The devastating consequences of the levee failures in New Orleans serve as a stark reminder of how vitally important critical infrastructure systems are to the wellbeing of its people”

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housing and coastal restoration, New Orleans and the surrounding region is undergoing a slow and fragile, yet positive transformation.

The government has so far spent $143 billion on the reconstruction of public buildings and private homes, roads and bridges, and the Army Corps of Engineers has spent $14 billion improving the system of pumps, barriers, gates and levees designed to protect New Orleans from future hurricane disasters. Now three-quarters complete, these will be finished next year.

A master plan has finally been adopted and the mayor of New Orleans recently announced a list of long-stalled recovery projects, unveiling a roster of 100 projects his administration is committed to launching.

Yet, even with the 411 projects that are currently finished or under construction, the list still falls well short of the 655 projects laid out in the $1.5 billion recovery plan that was set immediately after the disaster.

Why the shortfall? Well the city currently only has $1.2 billion to spend, therefore the project list has been culled, leaving many projects in limbo. Indeed, the gap between the city’s infrastructure needs and its financial resources is huge and it is unlikely the city will be able to fix its many ills; New Orleans will not get enough money to properly build every section of town.

The rebound effort so far as been a piecemeal effort from neighborhood to neighborhood, fueled by newly formed associations, energized residents and volunteers. And that patchwork recovery extends beyond housing to streets, water pipes, sewer lines and the drainage system. The current outcome reflects the warnings originally given by urban planners and others who urged local leaders to reduce the footprint of the city to cater to its reduced population and eliminate the possibility of this very situation.

It’s too late to change that now. However, the lessons learned from the infrastructure and policy failures triggered by Hurricane Katrina have had and continue to have profound implications across America: the protection of safety, health and welfare must remain at the forefront of the nation’s priorities.

The devastating consequences of the levee failures in New Orleans serve as a stark reminder of how vitally important critical infrastructure systems are to the wellbeing of its people. It also demonstrates what is at stake if we do nothing to improve them.

While there is still so much to be done to help New Orleans – among which is the $1.4 billion to replace streets and drainage infrastructure and another $40 million per year for maintenance of those facilities – and the surrounding region affected by Hurricane Katrina, residents remain resilient and positive that the city will eventually recover from the disaster.

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Mourners pray during a healing ceremony at the site of the Lower Ninth Ward levee breach on August 29, 2010 in New Orleans, marking the five year anniversary of Hurricane Katrina.

The sun sets on a gate protecting the levee on the city’s 17th Street Canal.

A casket is filled with written notes and a fire helmet in memory of Hurricane Katrina inside the church at Our Lady of Prompt Succor in Chalmette, Louisiana.

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UPFRONT

Investing in the future

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mbracing the virtues and ethics of sustainable forestry, two businessmen are using one of the most valuable commodities in the world to make a profitable turnover, create capital in communities linked to the rainforest, broaden local social prospects and support the long-term viability of the ecosystem.

Five years ago, Andrew Skeene and Omari Bowers were busy making their fortune in the UK, riding high on the wave of the property boom. However, when the market started to crumble they realized it was time to burn their boats and look for other opportunities. It was around this time that they stumbled upon the forestry investments, a market that has grown 20 percent per annum in the past few decades, overtaking the growing rate of the property market in 2007.

Several years on and Skeene and Bowers are the founders of Global Forestry Investments (www.globalforestryinvestments.com), a company that expects to turn over $6-10 million this year and acquire 10,000 hectares of rainforest. Skeene says, “Five years ago there was no way in a million years we could have imagined we’d be buying land to grow trees in Brazil. I suppose you could say for us trees are the houses of the future. It’s also given us an incredible opportunity to help improvised communities.”

One of the main issues for the two men is creating sustainable forestry that will help transform the lives of villagers living in the area. As part of the project, they also want to help provide education, water supply and a stable economy – something they are extremely passionate about. Inspired by the local people, the entrepreneurs plan to establish a local school, soccer academy and performing arts center within the next few years. They also recognize that Brazil is the main battle ground for climate change, and for every tree an investor purchases through their company, Skeene and Bowers will match it by planting a new tree that will remain completely protected – essentially helping to reforest the Amazon.

Bowers says, “For us, Brazil isn’t just a business venture. It has given us an opportunity to genuinely make a big difference to many people’s lives and that is something that drives both of us. The next 10 years are going to be a huge decade in the fight against climate change and it fills us with a great sense of pride that we are going to be part of that.”

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Brazil is home to more tropical forest than any other nation, but since 1960, 232,000 square miles of rainforest have been destroyed. Between May 2000 and August 2006, Brazil lost nearly 58,000 square miles of forest, an area larger than Greece.

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INTERNATIONAL NEWS 17

Around the world in 80 days Our guide to the last quarter’s global events – and their impact on your business.

Construction suffering

Climate change

Providing pointers

Romania’s construction industry suffered more than any other Central European country during 2009’s economic downturn. Figures released by research firm PMR Consulting showed that the construction industry contracted by 15.1 percent last year, following impressive growth of 33.6 percent and 26 percent in 2007 and 2008 respectively.

Austria’s mountains could be more at risk from climate change than other, flatter countries, according to a recent collaborative by the University of Exeter and Austrian researchers. Unpredictable hazards from landslides, rock falls, debris flows and melting glaciers increases as climate change continues to play havoc with the country’s seasons.

The so-called ‘Australian model’ for infrastructure development – strong government support and robust private-sector involvement and discipline – is being touted as a solution to New Zealand’s infrastructure woes.

More than 50 PPP’s have been completed in Australia in the last decade, compared to New Zealand, which barely left the starting blocks.

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Urban infrastructure

Last place

Urging spending

The Asian Development Bank (ADB) is extending a 150 million multi-tranche financing facility to help India’s National Capital Region (NCR) accelerate plans to build urban infrastructure. The financing facility will allow the NCR to identify bankable projects, extend capacity-building and help attract private investors and public-privatepartnerships into the sector.

The poor quality of Brazil’s roads, ports, railroads and airports is nothing new but a new international poll has shed more light on it, showing that Brazil ranks bottom of the list despite investments launched four years ago. Indeed, the only sector that Brazil shines in is its energy offering , which is far above the average.

Scotland’s economic fortunes are more likely to receive a boost from spending on infrastructure projects than on preserving existing services, a new report shows. The report points to evidence from previous periods of public spending squeezes and suggests that “maintaining and developing Scotland’s infrastructure spend” will be a key element in ensuring a brighter future for the nation.

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UPFRONT

Transportation solution keeps agencies on the right road

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ntergraph’s Transportation Solutions enable transportation agencies to more clearly, efficiently and cost-effectively manage and protect their roadway infrastructure. Working with more than 30 transportation departments across the US, Intergraph solutions help streamline operations, maintain compliance with federal regulations and improve safety and driving conditions for motorists by quickly addressing

potential issues through faster, more informed decision-making. The company’s open solutions integrate with commercial map providers, such as Microsoft Bing and Google, as well as commercial data sets, including NAVTEQ and TeleAtlas.

Intergraph’s Transportation Solutions include Automated Routing for Oversized and Overweight (OS/OW) Vehicles, which integrates information pertaining to bridges, construction projects, turn movements, or other roadway infrastructure data, with the network to safely and accurately route vehicles through the system. The Multilevel Linear Referencing System (MLRS) eliminates the need for multiple data models and manages data translation between linear referencing methods on the fly.

In addition, the Straight Line Diagram (SLD) web service enables users to control the portion of the road they want to analyze, and view data in a way that can be easily interpreted and analyzed.

Now, the company’s solutions enable transportation agencies to gain a realworld view of their network in 3D. With Intergraph’s GeoMedia 3D, it is possible to better visualize and evaluate conditions, which supports improved decision-making.

Intergraph’s 3D-enabled transportation solutions can help users more effectively assess the visual impact of new projects, present data trends more intuitively, and provide an effective communication method for informing authorities and the public. They also equip users to make more confident, informed decisions about your transportation infrastructure. With a 3D perspective of the network, road planning and design can be improved via dynamic fly-throughs of a route. Agencies can also provide the public with a realistic perspective of project impacts and visualize statistical trends. For more information on GeoMedia 3D, visit www.intergraph.com/geomedia3d.

Benefits of public transportation

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new report, released by the American Public Transportation Association, which surveys current research has found that people who live in communities with high-quality public transportation drive less, exercise more, live longer, and are generally healthier than residents of communities that lack quality public transit.

Evaluating Public Transportation Health Benefits, a study conducted for APTA by Todd Litman of the Victoria Transport Policy Institute aggregates the findings of several recent studies and concludes that people living in transit-oriented “smart growth” communities enjoy several health benefits, not seen in other communities, including that residents drive less, exposing them to a lower risk of fatal vehicle accidents.

Such communities also have less pollution, because public transportation produces far less emissions per passenger mile than private automobiles. In addition, people who live near quality public transit are more likely to undertake regular physical activity than residents of automobile-dependent communities.

“Public transportation enhances the overall quality of life of an individual and a community,” says APTA

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President William Millar. “Use of public transit simply means that you walk more which increases fitness levels and leads to healthier citizens. More importantly, increasing use of public transit may be the most effective traffic safety counter measure a community can employ.”

The APTA report notes, transportation activity also plays a role in lessening an individual’s risk in five of the 10 leading causes of reduced lifespan, as identified by the Centers for Disease Control and Prevention (CDC). A recent CDC study evaluated causes of potential years of life lost, including cancer, heart disease, motor vehicle crashes, and other causes. For example, “Pollution contributes to cancer and congenital anomalies [birth defects], and sedentary living ... contributes to heart disease and strokes,” Litman wrote.

One solution is smart growth communities, according to Litman, who cited a 2003 study finding that urban residents had significantly lower violent death rates, whether from vehicle accidents or other causes.

Litman also noted that the 10 US counties with the “smartest,” most transit-oriented growth have approximately one-fourth the traffic fatality rates as those counties with the most sprawling development. For example, the traffic fatality rate for the Bronx, NY was approximately four per 100,000 residents. However, for Miami, KS, the rate was almost 40 per 100,000.

Moreover, other recent studies have found that users of public transportation walk more than those who do not use public transit, regardless of income. The health benefits of public transportation should be given greater consideration in transportation planning, Litman concluded.

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TOP 10

Top 10 design fails

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10. Ryugyong Hotel, North Korea Sucking up nearly two percent of North Korea’s GDP over the past two decades, construction started on the Ryugyong Hotel in 1987 and finished in 1992 and yet it still remains unopened, unoccupied and uncompleted.

The 1083-feet giant, even in its uncompleted state remains the twenty second largest skyscraper in the world.

9. Mets Citi Field, New York, US This field has countless problems from shorting electricity to water leaks and mould. $850 million was spent on the replacement for Shea Stadium, yet money keeps pouring in to mitigate the mountain of problems.

Hunt-Bovis, the contractor that built the field, is being investigated by prosecutors over whether the company over-billed for work on the stadium.

8. Kangbashi District of Ordos City, China In an effort to increase its GDP, the Chinese government decided to build the Kangbashi District of Ordos about 18 miles away from the original city. Built in just five years and completed in 2004, $352 million was spent on roads alone. While a majority of the homes have been sold, most were bought as investment and as such the town intended for one million residents remains empty and deserted.

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7. Olympic Stadia, Athens, Greece Athens spent $11 billion – about double the country’s budget – on more than a dozen sports venues for the 2004 Olympics, including a baseball diamond, a manmade kayak course and a Tae Kwon Do and Handball Olympic stadium. Today, more than half the sites are vacant and have to be patrolled by private security guards.

6. Burj Khalifa, Dubai, UAE The tallest building in the world was completed in January 2010. However, while itc cost $1.5 billion to build, just one month after its grand opening, the building closed to the public due to electrical problems on the observation deck on the 124th floor. It was even forced to change name from the Burj Dubai to the Burj Khalifa after the emirate’s debt problems meant it forced to take bailouts from neighboring Abu Dhabi – part of the loan agreement was that they re-name the tower after the UAE President, Khalifa bin Zayed Al Nahyan.

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5. The Millennium Dome, London, UK Designed to house the Millennium Experience, the Millennium Dome cost $1.25 billion to build and $41 million was spent closing it down in December 2000. With only half the number of visitors that were expected actually visiting, the press largely reported it a flop, despite visitor feedback being extremely positive. The dome was publicly renamed The O2 on 31 May, 2005 after a radical revamp and is now an entertainment district with indoor arena, music club, cinema and exhibition space.

4. Experience Music Project, Seattle, US 4

Intended to showcase rock memorabilia and offer interactive music exhibitions, The Seattle Music Project was founded in 2000 by Microsoft co-founder Paul Allen and designed by Frank Gehry. New York Times architecture critic Herbert Muschamp described it as: “Something that crawled out of the sea, rolled over and died.”

3. Dubai Aquarium, Dubai, UAE Part of the $20 million Downtown Burj Dubai development project, the Dubai Aquarium is located in the world’s largest shopping mall, the Dubai Mall. 60,000 tickets were sold in the first five days, but two years in disaster struck when on February 22, 2010, the central part of the mall had to be evacuated after water was found gushing out of a crack in the aquarium’s glass. It took six divers to stop the leak.

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2. Chelsea Waterside Park, New York, US Chelsea Waterside Park caused quite a stir when it was renovated in 2000 and Manhattan parents got their first look at the phallic shapes. While some have called for the park to be remodelled, the children still enjoy frolicking here.

1. The Lotus Riverside Complex, Shanghai, China

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Rushed and poor construction meant that one of the buildings at the Lotus Riverside complex in Shanghai collapsed on June 27, 2009, killing one worker. The 13-storey apartment building was one of 11 in the complex and was near completion when it toppled. Nine officials, including the real estate developer, contractor and the supervisor for the project were detained by authorities and put under the spotlight for being connected to the massive disaster.

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IN MY VIEW

Rethinking the Bilbao effect Steve Dale, the founder of Creative Urban Projects, discusses the much-valued ‘Bilbao Effect’ – how a couple of iconic buildings can transform a single city.

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ow that the summer vacation season is upon us, ask yourself: Where would you like to be going this year? To see I.M. Pei’s Rock & Roll Hall of Fame in Cleveland? Calatrava’s Art Museum in Milwaukee? How about the Daniel Liebeskind ‘Crystal’ addition to the Royal Ontario Museum in Toronto? Jean Nouvel’s KKL in Luzern, Switzerland?

Unless you’re one of the rather small breed of ‘architourists’, you’re probably going to none of these places. Instead you’re probably going to a Caribbean island with ramshackle houses dotting the hillsides, a hand-built family cottage by the lake, or some old city with charmingly weathered downtowns.

For most, the architecture isn’t the attraction but merely the backdrop. And yet for the last 15 years, cities the world over have been tripping over each other in a misguided effort to recruit the latest ‘starchitect’ in pursuit of the much valued Bilbao Effect.

Named for the Spanish city of Bilbao where architect Frank Gehry built the Guggenheim Museum in 1997, the Bilbao Effect states that one or two iconic buildings can transform run-down, industrial cities into wealth-generating, touristattracting meccas of prestige and cultural envy.

It’s also an effect that probably doesn’t exist. Two years ago Gehry himself called the concept “bullshit”.

The success in Bilbao was a product of too many community-building initiatives to boil ‘the Effect’ down to a museum. Not the least of these initiatives was the suspension of hostilities between the Spanish government and separatist terrorists headquartered in Bilbao.

Bilbao also isn’t – and never was – Milwaukee or Cleveland. The downtown had never been hollowed out due to mass suburbanization and the city center is a conclave of stunning gothic buildings and narrow, crooked alleys. It was always just the prototypical European city you’d never heard of.

Bilbao also benefited from being an overnight train ride from Barcelona; a 45 minute drive from the glorious beach resort city of San Sebastian and a 90 minute drive from Pamplona and its annual Running of the Bulls.

Yet none of those things are ever mentioned when city councilors and boards of directors invoke The Bilbao Effect.

Instead, they use Bilbao as an expensive shortcut to prosperity when proper city building and originality of vision would’ve done the job better. With a blind eye for irony, they believe that by doing what everyone else is doing, they’re going to craft something unique and remarkable and the world will land on their doorsteps.

Problem is, when everyone has a Frank Gehry, what’s a Frank Gehry really worth?

It’s great business for the architects who collect tens of millions of dollars in fees, but a lousy investment for the city and its taxpayers.

Likely the only starchitect to ever have a clear and lasting impact on a city and its fortunes was Antoni Gaudi and his work in Barcelona in the late 1800s. There, Gaudi built dozens of iconic masterpieces and designed a revolutionary plan for the city’s eventual suburban expansion.

The thing about Gaudi is this: virtually every single one of his commissions occurred in Barcelona. And so, if you want to see Gaudi, there’s only one place you can

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do it. You can’t find Gaudi in Pittsburgh.

In the practice of tourist-hunting, what draws people to Barcelona or New York or Paris or Rome is uniqueness of place, not ‘starchitecture’.

Consider Greece, one of the most popular tourist destinations in the world. Greece is blessed with three major attributes for tourists: The Parthenon; being the birthplace of western culture; and the image of whitewashed homes overlooking the Mediterranean. Not a single one of them can be had any place else on earth.

In fact, those whitewashed homes are so specific, they can barely be considered Greek and are instead Cycladic. That is, they’re specific to the Cyclades, a small Greek island group. More specifically, they’re from Santorini, the black volcanic sand jewel of the Mediterranean that some archaeologists speculate is the location of the lost city of Atlantis. Unique, indeed.

There isn’t a single piece of starchitecture in all of Santorini, just some small white homes with blue roofs. But because the city understands that small white homes with blue roofs are unique, they preserve them through some of the most restrictive building codes and regulations around.

Is it any surprise then that Santorini is one of the most popular destinations in all of Greece?

Architects may not like to admit it, but these small, vernacular bungalows are worth more to Santorini than anything Frank Gehry, Moshe Safdie or Renzo Piano could ever provide.

Steven Dale is the founder of Creative Urban Projects (CUP Projects) in Toronto, Canada. He is an expert on Cable-Propelled Transit with several years experience researching and consulting on the matter. Dale recently launched The Gondola Project, an information campaign in support of CPT. For more information, visit www.gondolaproject.com or www.creativeurbanprojects.com.

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Bank of America Tower, One Bryant Park, NYC

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ompleted earlier this year, Bank of America’s 1200foot new corporate headquarters is now the second tallest structure in New York City.

However, that’s not the only area in which it stands out at. Thanks to innovative construction and the latest environmental technologies it is also the greenest building of its type in the world. We take a look at the key ingredients of the globe’s first LEED Platinum-rated hi-rise commercial building.

Water Waterless urinals and systems that capture and re-use rain and wastewater, enable savings of 7.7 million gallons per year

Glass Floor to ceiling windows are made of insulating glass to maintain heat and maximize natural light

Concrete Built with a mix of 55 percent cement and 45 percent slag, a by-product of blast furnaces

Ice Using low-cost off-peak power, ice is made overnight and used to cool the building during the day

Electricity A 4.6 megawatt cogeneration plant provides base load energy requirements and reduces transmission losses, lowering energy use by two thirds

Air Purifying air as it both enters and leaves the building, the tower effectively acts as a giant filter for midtown Manhattan

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UPFRONT

Planes, trains and automobiles On Labor Day 2010, President Obama announced a fresh round of funding for vital transportation infrastructure. We break down the key points.

Money talks

T The speech

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ver the next six years, we are going to rebuild 150,000 miles of our roads – enough to circle the world six times. We’re going to lay and maintain 4000 miles of our railways – enough to stretch coast-to-coast. We’re going to restore 150 miles of runways and advance a next generation air-traffic control system to reduce travel time and delays for American travelers – something I think folks across the political spectrum could agree on.

This is a plan that will be fully paid for and will not add to the deficit over time – we’re going to work with Congress to see to that. It sets up an Infrastructure Bank to leverage federal dollars and focus on the smartest investments. It will continue our strategy to build a national high-speed rail network that reduces congestion, travel times, and harmful emissions. It will cut waste and bureaucracy by consolidating and collapsing more than 100 different, often duplicative programs. And it will change the way Washington spends your tax dollars; reforming the haphazard and patchwork way we fund and maintain our infrastructure to focus less on wasteful earmarks and outdated formulas, and more on competition and innovation that gives us the best bang for the buck.

All of this will not only create jobs now, but will make our economy run better over the long haul. It’s a plan that history tells us can and should attract bipartisan support. It’s a plan that says even in the still-smoldering aftermath of the worst recession in our lifetimes, America can act to shape our own destiny, to move this country forward, to leave our children something better – something lasting.

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he President intends to work with Congress to enact a new up-front investment in the nation’s infrastructure that would help jump-start additional job creation, while also laying the foundation for future growth. This initial investment would fund improvements in the nation’s surface transportation, as well as airports and air traffic control systems.

The President proposes to pair this with a longterm framework to reform and expand American investment in transportation infrastructure. Since the end of last year, when the last long-term surface transportation legislation expired, these investments have been continued on a temporary basis, even as the trust fund to finance them has fallen into insolvency. The administration argues that, if the US is to continue to benefit from a world-class transportation system, Congress must enact a long-term reauthorization that expands and reforms infrastructure investments and returns the transportation trust fund to solvency. To jumpstart job creation, this policy is front-loaded with a $50 billion up-front investment, constituting a significant share of the new infrastructure resources. As with other long-run policies, the Administration is has signalled its intention to work with Congress in order to fully pay for the plan.

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Key spokes

Rebuild 150,000 miles of roads The nation’s highways serve as the backbone of America’s transportation system.

Many roads and bridges are in need of repair and expansion and many of the Americans who want to do this work face high unemployment right now. These investments would be focused on modernizing the highway system’s critical assets while providing much-needed jobs.

“The President’s plan would help address the dilapidated state of much of America’s transit system”

Construct and maintain 4000 miles of rail

Rehabilitate or reconstruct 150 miles of runway

The President’s plan would help address the dilapidated state of much of America’s transit system, by making a major new investment in it. The Administration is also committed to expanding public transit systems and wants to dedicate significant new funding to the New Starts program – which supports locally planned, implemented, and operated major transit projects. In addition, there is commitment to build on investments made so far in high-speed rail.

The aim is to construct a system that will increase convenience and productivity, while also reducing the nation’s dependence on oil and cutting down on pollution. The plan would also invest in a long-overdue overhaul of Amtrak’s fleet.

The Administration proposes to invest in the nation’s airports by improving their runways and other equipment and facilities. It also proposes a robust investment in efforts to modernize the nation’s air traffic control system as part of the ongoing NextGen initiative. This investment will help both the FAA and airlines to install new technologies and, among other improvements, move from a national ground-based radar surveillance system to a more accurate satellitebased surveillance system. This will provide the backbone of a broader effort to reduce delays for passengers, increase fuel efficiency for carriers, and cut airport noise for those who live and work near airports.

Major reforms: establishment of an Infrastructure Bank

T

his bank would leverage private and state and local capital to invest in projects that are most critical to economic progress. It marks an important departure from the federal government’s traditional way of spending on infrastructure through earmarks and formula-based grants that are allocated more by geography and politics than demonstrated value. Instead, the bank will base its investment decisions on clear analytical measures of performance, competing projects against each other to determine which will produce the greatest return for American taxpayers.

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The integration of high-speed rail on an equal footing into the surface transportation program to ensure a sustained and effective commitment to a national high speed rail system over the next generation.

Streamlining, modernizing, and prioritizing surface transportation investments, consolidating more than 100 different programs and focusing on using performance measurement and ‘race-to-the-top’ style competitive pressures to drive investment toward better policy outcomes.

Expanding investments in areas like safety, environmental sustainability, economic competitiveness, and livability – helping to build communities where people have choices about how to travel, including options that reduce oil consumption, lower greenhouse gas emissions, and expand access to job opportunities and housing that’s affordable.

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UPFRONT

Infrastructure 100

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ith the help of specialists from around the world, IJ and KPMG compiled the Infrastructure 100 through months of research and debate. The end result is a subjective reflection of culture, politics, economics and insight from some of the best minds in architecture, engineering, construction, finance, law, public policy and academia.

In 10 sections ranging from education to health, roads and rail projects, the Infrastructure 100 covers it all. Looking at renewables in particular KPMG’s Adrian Scholtz believes that deal-making and transactions will continue to dominate the outlook for the sector.

However, there still remains a significant gap between the valuation expectations of sellers and acquirers.

Growth in 2010

The top 10 leaders in the renewables sector according to the Infrastructure 100 are:

I

n 2010, the US construction industry is forecast to emerge from a five-year decline, which reached its trough in 2009 at -9.9 percent year-on-year (yo-y). Bolstered by the stimulus package, which is due to focus on projects in its second year, the industry is forecast to grow by 1.6 percent in 2010.

Although this indicates only minimal growth, this is due to the influence of the still stagnant residential construction sector on the construction industry value.

In turn, infrastructure, as a component of construction industry value, is forecast to outperform the sector as a whole, with 2.8 percent y-o-y growth anticipated for 2010.

• Construction industry value growth is to peak in 2011, as the majority of stimulus funding for projects is due to be disbursed in late 2010 and early 2011 • Infrastructure is to outperform construction industry over the forecast period • Increasing private sector participation presents upside potential beyond 2011

1

Incheon Tidal Power Project South Korea

2

Arcosol Termesol Spain

3

Cape Wind US

4

Dunhuang 10 MW PV Project China

5

Hidromaule Lircay Chile

6

KenGen 20 MW Geothermal Project Kenya

7

London Array Offshore Wind UK

8

Ontario Wind and Solar Clusters Canada

9

Parc Eolien Taiba Ndiaye Senegal

10

Parque Eolico Talinay Chile

Estimated five-year funding requirements for US rail: Projected shortfall $11.7 billion

Total investment needs $63 billion

Estimated spending $51.3 billion

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State focus: Texas • 22 percent of Texas’ bridges are structurally deficient or functionally obsolete • There are 88 high hazard dams in Texas • Texas’ drinking water infrastructure needs an investment of $28.l7 billion over the next 20 years • 32 percent of Texas’ major roads are in poor or mediocre condition • Vehicle travel on Texas’ highways increased 50 percent from 1990 to 2007 • Texan ports handled 487 million tons of waterborne traffic in 2005, ranking first in the nation

47 percent of Texas’ major urban highways are congested

According to the 2009 Report Card for America’s Infrastructure there is a five-year investment shortfall of $1.176 trillion

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Texas ranked second in the quality of hazardous waste produced and fourth in the total number of hazardous waste producers

Texas has $5.64 billion in wastewater infrastructure needs

103 of Texas’ 7478 dams are in need of rehabilitation to meet applicable state dam safety standards

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UPFRONT

Great Crawl Of China

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f you thought your daily drive to the office in New York, LA, Chicago or any other congestion hotspot was a chore, spare a thought for unlucky commuters in China, where some Beijing-bound travellers were held up in a traffic jam that lasted for over 10 days last month.

Thousands of motorists were caught up in a 60mile tailback that took several weeks to clear. While many motorists took detours, some ended up trapped for up to five days, sleeping in their cars and taking shifts behind the wheel.

The gridlock resulted from a combination of peak seasonal travel, increased freight traffic and road construction. But it was made worse by a lack of information about traffic conditions available to some motorists, according to analysis from US-based research group the Texas Transportation Institute. As the traffic jam grew, many continued to drive into it – probably not knowing what they were in for, because while traffic reports in China’s major cities are thorough, they aren’t as good or as easy to get in outlying areas.

In recent years, China has embarked on a huge expansion of its national road system but traffic periodically overwhelms the grid. According to government data, Beijing is on track to have five million cars on its roads by year’s end, with the four million mark passed last December. And the bad news for frazzled Chinese commuters is that the situation could get worse before it gets better: estimates suggest that with around 1900 vehicles added to Beijing’s street each day, it could take years to get traffic under control.

“If there’s no traffic jam in the city, that would be news,” said Niu Fengrui, Director of the Institute for Urban and Environmental Studies at the Chinese Academy of Social Sciences, while the head of the Beijing Transportation Research Centre, Guo Jifu, warned that traffic in the capital could slow to under 15 kilometers an hour on average if further measures were not taken to limit the number of cars.

Private cars are currently kept off Beijing’s roads for one day per week depending on licence plate numbers, but an alternative solution could be the launch of a so-called ‘super bus’ aimed at improving public transport while minimising the impact on road traffic.

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Due to be tested in the coming months in the western part of Beijing, the bus will travel on rails and straddle two lanes of traffic, allowing cars to drive under its passenger compartment, which holds up to 1400 people.

“We’re going to start laying down test tracks along a six-kilometer stretch towards the end of the year,” Song Youzhou, Chief Executive of design firm Shenzhen Hashi Future Parking Equipment, told AFP in August.

“From the second half of 2011, we’re planning to test the bus with passengers on board,” he added, noting that after a full year of trial runs, authorities would make a decision on whether to use the bus on a wider scale. Authorities hope to install 180 kilometers

“Estimates suggest that with around 1900 vehicles added to Beijing’s street each day, it could take years to get traffic under control”

of such bus lines eventually, including a route to the capital’s international airport.

If successful, the scheme could provide a blueprint for traffic-easing solutions around the world, including the Middle East – which, in common with China, has a relatively immature highway network. According to Shawn Turner, a senior researcher with the Texas Transportation Institute, while the major traffic arteries in fast-growing economies tend to be pretty well developed, the lack of well maintained smaller, alternative routes causes a problem when traffic congestion kicks in. Taking the back roads just isn’t an option in many cases. “There isn’t the redundancy we take for granted here [in the US],” he told the Wall Street Journal.

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Signs of progress

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uch like the baby boom generation, transportation infrastructure is heading for its 50th birthday and retirement. Estimates vary on just how much it would take to fix the nation’s roadway and transit systems, but most experts have predicted about $200 billion a year, ongoing well in to the future.

All very well, but there is less than one-third of that funding available. In Minnesota, the state Department of Transportation projects a $50 billion shortfall between now and 2028. However, while the future is in doubt, there is currently $1.2 billion earmarked for roadway and bridge projects during the current fiscal year in the state.

It is hoped that spending in the recession will allow the department to get more for their dollars, plus improve unemployment rates: for every $1 million spent on road construction, 27 people are employed full-time for a year. And as the state emerges from the downturn, the long-term impacts are more important, as it is proven that states with updated transportation systems enjoy a competitive advantage.

Company index Q4 2010 Companies in this issue are indexed to the first page of the article in which each is mentioned.

American Cable Association (ACA) American Society of Engineers (ASME) American Water Works Association (AWWA) Badger Meter Baltimore Gas & Electric BMW BP BPL Global (BPLG) Cambridge University Center for Strategic and International Studies Chevron Cisco Click Software Clinton Climate Initiative Comverge Constellation Energy eMeter Enfora Environmental Protection Agency (EPA) Federal Communication Commission (FCC) Federal Railroad Administration Frost & Sullivan General Motors Google Hach Homeland Security Technologies Hilson Moran Honda Houston METRO IATA Intelagard

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100 86 86 90, 91 54 42 130 11, 60, 67 68 94 130 IFC, 48 109 30 60 54 60, 63, OBC 59, 98, 99 86 100 104 42 42 42 7, 92, 93 124 42 110 118 84, 85

Intergraph Itron Johnson Controls Jones Lang LaSalle Living PlanIT Malkin Holdings McAfee Meettheboss.com National Grid Nissan Open Text OSISoft Pacific Gas & Electric Polycom Rocky Mountain Institute San Diego County Water Authority San Francisco Fire Department Sandia National Laboratory SmartGridCity Southern California Edison St Louis Area Regional Response System T-Mobile Transocean Twitter University of Boulder US Department of Homeland Security US Minerals Management Service (MMS) Verizon Xcel Energy YouTube

18, 19 2, 48, 132 5, 60, 65 30 38 30 94 129 72 42 9, 115, 116 48, 51 42 13, 76, 77 30 86 78 86 38 42 78 74, 75 130 100 38 94 130 48, 53, IBC 38 100

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COVER STORY

Altered State

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RetroďŹ tting a 20th century icon to drastically improve its energy efďŹ ciency is a huge challenge, as Huw Thomas discovers.

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I

n fi lms, it’s been scaled by a giant ape, vaporized by invading aliens and, most terrifyingly of all, witnessed a romantic clinch between Meg Ryan and Tom Hanks. In reality, it was the tallest structure in the world for over 40 years and is an unmistakable feature of New York City’s skyline. The Empire State Building is a true American icon: completed in 1931, it is still the third tallest building in the US and the 15th tallest in the world, a continuing reminder of the nation’s towering ambition and ingenuity.

With all that said, building construction has moved on significantly in the last 80 years or so, and the Empire State Building risks being left behind. A new generation of skyscrapers is springing up in cities across the globe, which employ cutting edge techniques and technologies to make them more ecologically friendly and sustainable than their predecessors. But as befits a building of its loft y status, the ESB is strongly resisting a slide into obsolescence.

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The former king of the 20th century is currently cementing its position in the 21st with a massive $13.2 million retrofit program that will cut energy consumption by 38 percent and reaffi rm its position as one of New York City’s prime pieces of real estate. A groundbreaking collaboration between the building’s owner Malkin Holdings, the Rocky Mountain Institute, Jones Lang LaSalle, the Clinton Climate Initiative and Johnson Controls is transforming the venerable property from the inside out. One of the world’s most recognizable buildings is now becoming one of its most efficient.

For Tony Malkin, President of Malkin Holdings, the decision to pursue energy efficiency was a natural consequence of a major initiative called the Empire State Rebuilding Program. “We were actually in a position from the start that required us to reposition the building,” he tells me from his office in New York. “We were spending a tremendous amount of money on the building in any

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event; there was going to be no alternative to that. So we thought, why not incorporate the whole energy efficiency piece? And the reason for that is very straightforward: it’s a tremendous economic reward for us to design our renovation and upgrade program with energy efficiency in mind.

Our payback period is very short. The lasting competitive advantage that we create for our tenants and the way we compete in the marketplace is very real. Ultimately, it was a question of not, ‘Why should we?’ but, ‘Why should we not?’ and we could come up with no reason not to.”

In this age of increased eco-consciousness, it is not that unusual for building owners to want to make their properties more efficient. What sets the ESB refit apart is the manner in which it was approached. Rather than looking at the project as a one-off job, it was viewed from the outset as an opportunity to create predictable and repeatable processes that can be applied time and again. “The entire idea behind our work was that it should be replicable,” Malkin continues. “No question. If we did it only at the Empire State Building, it would be a failure. The significant commitment of the team members came from the conclusion that if we set up something which was open-source, free and easily repeated it could really have an impact.”

That this project was undertaken on a property like the Empire State Building is also significant. “When we originally started work with the Clinton Climate Initiative on this, I had suggested that we work with another building we were renovating called 1333 Broadway,” Malkin explains. “However the CCI were very insistent on working with the Empire State Building, in spite of the vast complexity of systems and operations of the building. They felt that if we did it at the Empire State Building, we’d get the attention of the world, and if we did it at 1333 Broadway, no one would notice and no one would care, even if we had a tremendous success.”

to drop. The key consideration was how each element would interact with others in the precise environment in which they were being deployed.

“We call it integrated design,” Hutchinson explains.

“Of course not everything affects everything but you have to get a pretty decent handle on how things work within the context of a particular building, taking into account things like the physics of the weather and the usage. So we ended up with eight out of all those hundreds of options that had a net positive effect, meaning that if you didn’t do one of those eight it would make the other seven less valuable.”

Th is holistic approach led to a process that could be accurately quantified on both an environmental and economic level. “We have the ability to model the expenditure required for any variety of aspects of the program and to model the payback alone and in combination,” says Malkin.

“The biggest thing that we’re doing compared to what other people have done historically is that we are approaching it from a quantitative rather than a qualitative perspective.

We’ve established a system that allows economic modeling, so that we’ve been able to show the return on investment.”

In practice, this means that those behind the renovation can confidently predict annual savings of $4.4 million,

“The significant commitment of the team members came from the conclusion that if we set up something which was open-source, free and easily repeated it could really have an impact”

Unique challenge The bigger the challenge, the bigger the potential rewards. However, a retrofit on this scale with so many different aspects was unprecedented. Getting it right would require some specialized expertise. “We had an interesting role because in essence the owner needed support to help rethink the design ideas in order to emphasize the energy efficiency of the delivered product,” says Robert ‘Hutch’ Hutchinson, Program Director for Research and Consulting at the Rocky Mountain Institute.

“We focused on a long list of energy relevant pieces of the project and ended up working with the project team to reframe what was done and what wasn’t done, actually adding a bunch of things that were not in the original list.

It was a major overhaul project that may have hundreds of particular pieces of the building that are being worked on or adapted in some way. So we started with a pretty long list.”

Th is list originally ran to hundreds of items, many of which had zero impact on energy efficiency. These were swift ly discarded, with the remaining options being closely examined in order to decide which ones to keep and which

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paying back the retrofit costs in full in less than four years.

Environmental and sustainability concerns aside, it’s this kind of data that is likely to be the clincher for many building owners considering sustainability retrofits.

“A company of any size and value recognizes the importance of minimizing their carbon footprint, minimizing their cost,” Malkin confi rms. “It’s not just a carbon thing. It’s also the fact that they’re looking for maximum return on their investments and minimizing their costs of occupancy in general. The neat thing about what we’re doing is that it’s not really built around carbon, it’s built around saving energy and therefore money. The carbon comes along for free. Th is is not an additional expense, it’s an investment, where once you conclude your payback, it’s perennial savings. It’s money in your pocket.”

Along with the fi nancial rewards, the ESB’s retrofit has also resulted in some indirect benefits. Before the work, the building was, in Hutchinson’s words, “a perfectly nice building but arguably not the one that top door fi rms wanted to be in”. The upgrade has made it much

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Break it up The component parts of the Empire State Building refit Radiative barriers

Chiller plant retrofit

Insulation behind more than 6500 radiators keeps heat inside the building, almost half of which was being lost prior to renovation.

Replacing components on existing chiller plants, making them more efficient and controllable.

Annual savings: 480 tons CO2 $190K

Annual savings: 1430 tons CO2 $676K

Remanufactured windows

Demand control ventilation

Existing windows are re-engineered on site.

Thin film and gas are inserted between the panes cutting down on heat loss and gains.

Uses measured CO2 concentration to determine the appropriate amount of air to bring into the building.

Annual savings: 1150 tons CO2 $410K

Annual savings: 300 tons CO2 $117K

Lighting and power outlets

Direct digital controls

Maximizing daylight, installing more efficient lights and controls and providing load energy use monitors on power outlets significantly reduces energy needs.

Upgrading existing building controls and installing new ones helps to optimize HVAC system operation and provide more detailed sub-metering of energy use.

Annual savings: 2060 tons CO2 $941K

Annual savings: 1900 tons CO2 $741K

Air handling units

Tenant energy management

Replacing more than 300 air handling units with a smaller number of new more efficient units.

Engages tenants in the building’s sustainability efforts to realize energy savings over the next several years.

Annual savings: 1520 tons CO2 $703K

Annual savings: 743 tons CO2 $387K

Source: esbsustainability.com

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more attractive to high-profi le fi rms keen to be associated with such a forward-looking project, resulting in the potential for the owners to receive higher rents as tenants change over.

“We’re never going to claim that an energy oriented intervention alone will do that for a building,” cautions Hutchinson, “but if we consider that most of the buildings we have now are going to be around for a long time, this sort of sustainability repositioning is immensely valuable for the real estate world to learn how to do because it makes all the difference.”

Good for tenants Tenants in retrofitted buildings have not been left out of the benefit equation, as Malkin points out. “What typically happens when a building is built is you take a look at all the systems and make sure they are properly commissioned, that they’re running correctly, that all the air distribution is balanced, that sort of thing. It’s a bit like roasting a turkey, you set it and forget it. But uses change, and motors don’t function the same way over time, and things fall out of balance.

“With the ESB project, the entire network is tied together: every fan has a variable-frequency drive. Every motor has a variable-frequency drive; every radiator is tied in to a digital control; so it’s all linked to one master control system. Th is means that whenever one of those units malfunctions, it’s immediately picked up by the system, which gives you actual, real-time, 24/7 commissioning. You’re not in a position of having to recommission your building manually every year because it’s done automatically.”

Tenants, particularly the larger ones, are increasingly recognizing that their three biggest expenses are salary, rent and utilities. And the cost of utilities is one of the biggest variables, because the cost of energy varies so much, so a system that gives them more control is a major plus.

The ESB project contains a suite of tenant measures to be taken in steps, and Malkin says there is a general agreement with tenants that if the owners can show them that any energy efficiency investments they can make as they’re building out their spaces will give them a five-year payback or less, they will put that work into their build-outs.

“Almost every single tenant is taking us up on that,” Malkin says proudly. “We’ve done some very major installations that way. We’re reducing our energy consumption per square foot, including air conditioning, to down around the three-watt range. We have tenants fully installed, where their electric, including lights, air conditioning and computers, are all around the three-watt-persquare-foot range, which is shocking because the typical industry standard when concluding a lease is to demand six to eight watts.”

There are wider implications than just savings – or increased earnings – for building owners and for tenants.

Concerns about America’s ability to keep the lights on have grown increasingly prominent in recent years. A growing population demands the power to fuel its 21st century lifestyle. Without new sources of energy, capacity will struggle

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“As people look through their inventories of assets, they’ll start to figure how to better target where a deep energy retrofit would be a terrific investment right now”

to match this demand, resulting in more expensive, less reliable supplies. Building new power generation facilities is a slow and costly business, and doesn’t really address the issue of carbon emissions. By viewing energy efficiency almost as a power source in its own right, the rewards can be tremendous.

“The math goes like this,” Malkin explains. “In New York City, 80 percent of the energy used is consumed by buildings. The Mayor’s Office of Long-Term Planning has determined that 20 percent of the buildings in New York City consume 80 percent of that 80 percent. In other words, 64 percent of all energy consumed in New York City is consumed by 20 percent of the buildings. Our energy savings, in watts and BTUs, come to approximately 40 percent. Therefore, if you were to have the 20 percent of the buildings that consume 64 percent of the energy deploy our system, you would reduce total energy consumption in New York City by 25 percent.”

Put another way, an energy saving of that size would be the equivalent of dropping a carbon-free alternative generation facility into the heart of New York, a facility

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Empire State of mind Director of the Clinton Climate Initiative Energy Efficiency Building Retrofit Program Arah Schuur explains how the ESB renovation is capturing the imagination.

Why is the Empire State Building project such an important one for the Clinton Climate Initiative?

Arah Schuur. CCI works with large-scale building owners – cities, institutional and private building owners to do large building retrofit projects – and we were very interested in doing the Empire State Building because it’s an iconic building. It’s known around the world.

It influences building owners around the world and represents many of the challenges they face in terms of buildings that are older and have lots of different tenants. The fact that Tony Malkin could do this kind of innovative energy efficiency project in the Empire State Building, we knew would resonate with similar owners around the world.

The project broke new ground and addressed a lot of the barriers that similar projects face. It was a unique team that came together to design and plan this program and it’s a team of organizations that worked together in a new and innovative way that has never been done before. A lot of what happened at the Empire State Building was happening for the first time anywhere.

In addition, the kind of natural tension between environmental impact and economic return was played out in the course of the Empire State Building project.

Over 60 energy conservation measures were assessed and different packages of these measures that had different energy efficiency profiles and cost and savings profiles were analyzed.

It was a very iterative process to find the balance that was right between the environmental and the economic impact. That again was a very innovative way for the owner to approach the project.

They have all kinds of other ancillary positive impacts to buildings. Equipment is refurbished. Buildings can be repositioned. Landlords can attract tenants that are interested in the environment and sustainability.

These kinds of projects have a lot of different benefits for building owners. I agree they do have to be proven and we work with owners with all kinds of motivations to do environmental work.

So you’ve learned some useful things in terms of that balance between business and environmental sustainability?

AS. Absolutely. CCI’s work, and this program specifically, are based on the fact that reducing your energy use is good economically as well as being good for the environment. This is a solution that proves it’s possible to meet both of these criteria, and the owner has been very upfront about those two goals through the Empire State Building project.

Have you got any other projects like this in the works?

AS. We don’t have any that are ready to be mentioned by name, but since the Empire State Building project has gone public, we’ve had owners from around the world as far away as India and Australia come to CCI and say, ‘We want help doing what the Empire State Building did.’ It’s exactly the impact we wanted.

How important is it that a business case can be made for these kind of retrofits if they are to be more commonplace? Do they have to pay for themselves?

AS. You have to show that they can offer a real return on investment. By and large, these are low-risk projects.

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The ESB project was approached almost as a blueprinting exercise to create a set of methods that can be applied elsewhere. How does that tie in with the CCI’s own objectives?

AS. It fits very well with our mission and our mode of operation. Our goal is replicability and scale and so CCI also works on templates and tool kits that can be used by building owners over and over.

What Tony Malkin set out to do is show that a businessman and an owner could use this set of tools and that this wasn’t a one-time, one-of-a-kind project.

Other owners in other buildings could use these tools to do the project and have the same results that he did.

This is obviously a major undertaking. Could some of the lessons that have been learned here be scaled down for owners who are dealing with much smaller properties?

AS. This type of process and thinking can be used on all kinds of different properties. The technologies involved and the energy modeling is probably most applicable to large buildings or large groups of buildings and that’s the ownership group that CCI is working with; people who have either large buildings or large portfolios of buildings that need to address energy efficiency.

On a more technical level, is this kind of job principally a technological challenge or is it more of a question of how you think about going after these objectives?

AS. Absolutely the latter. As I’m sure everyone on the project will tell you, none of the technologies being used at the Empire State Building are exotic or untested products. They are all products that are known in the industry, have been used and are well tested.

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It’s more of the approach to looking at energy efficiency holistically and looking at it, again, from both an environmental result and economic result perspective. It’s the process that the team went through to model the energy use and model the different packages of technologies to find the best fit for the building.

Then it’s the multi-system holistic design and implementation that Johnson Controls is doing. It’s not just looking system by system, but looking at how the systems work together to create energy efficiency and greater savings. It’s more about the thought process and the project development process than it is about the technologies themselves.

I think that what this and projects like it show is that a building is essentially an organism and if you approach energy efficiency and sustainability looking at all aspects of the building, you will wind up with a project that has greater impact.

capable of providing a quarter of the city’s energy needs. It creates huge additional capacity without the need for new power stations or transmission lines, freeing up resources that can in turn enable quicker economic growth.

Knowledge needed Given the obvious benefits for both businesses and the environment, why aren’t these kinds of retrofits happening everywhere? In part it is due to a lack of knowledge and expertise in the market.

“There’s still a fairly significant element of learning by doing,” says Hutchinson. “You have those projects where you have to mix the newbies in with folks that have done it a few times so that they learn and can go off and do it themselves. You have to feed the pipeline that way.

Do you believe that more building owners are going to push ahead with these kinds of initiatives based on the example you’re providing?

AS. I think that these case studies need to be shared and proven with hard numbers. Obviously commercial building owners are business people and the more evidence that comes along about the direct energy savings and cost savings returns and also the positive impacts that energy efficiency has on the building and recruiting tenants and occupancy, the more people will be looking to do these kinds of projects.

There are great examples of buildings and campuses that are doing great sustainability work. I think that the more hard numbers that are shared, the better things will be. One of the things that I commend Tony Malkin for doing is sharing all of his numbers, sharing all of the results and putting everything out there for the public to absorb. That’s the kind of impact and influence that we need, because it’s really those hard numbers and those concrete results that will start to influence people to change.

Are we reaching a tipping point when it comes to sustainable construction? Is the idea in the mainstream now?

AS. We are focused on existing buildings because we believe it’s already happened in new construction. In many parts of the world you don’t build a Class A office building unless it’s green, but that point still has to come with existing buildings.

Obviously changing what you have is harder than if you’re starting from scratch. We’re certainly getting there and the focus in the United States that has been placed on energy efficiency as a way to provide jobs and revive the economy is helping, but I think globally more and more owners are seeing that this is a low risk way to improve their buildings and make a good investment. I think we’re getting there.

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The retrofit program will cut energy consumption by 38%

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“The US government has made some very serious commitments in terms of building efficiency, so they’re a very obvious market for people to try these new skills.

Our friends in Washington tell us that a lot of people are coming to them and saying they can do these kinds of projects, but on the other hand it’s still pretty hard to fi nd a building they’ve actually done this way. There are a lot of people hoping to practice these techniques and frankly we’re all for it. The guys in Washington call up and say, ‘These people are sounding like they’re as good as you are.’ We say, ‘Great. That’s the point.’”

Another potential roadblock can be the sheer logistics of getting the work done. Th is becomes particularly clear when Malkin describes the ESB window re-fit.

“No one has ever done anything like it before,” he underlines. “We have set up a facility in the building, and we’re taking the windows, splitting them apart, installing a Mylar sheet in the middle with a spacer, resealing them, and fi lling them with krypton-argon gas. We’re reusing 96 percent of the glass and the window frames.

“We are taking every single one of the building’s 6514 windows and taking them from an R2 rating to an R8 rating. That will cost $4.5 million. To get the equivalent benefits would have cost something more in the range of $3300 a window if we did them new.

They’re being done in the building, not transported offsite, with 96 percent reuse – so my point is that this is all about the economic argument. And hopefully it will result in a lot of people mimicking it, because it is about the replicability.”

The good news for would-be ‘replicators’ is that technology is developing at lightning speed, and as the technology gets more sophisticated, doing large-scale retrofits on older buildings can only get easier. “Control systems are getting better and the proprietary systems that have been in place for years are starting to develop cracks, which means that things become much cheaper,” says Hutchinson. “You can put sensors in and wireless communication from that sensor at a fraction of the cost that it used to require.’

He points out that lighting technology has developed significantly, along with the understanding of the conditions required for human comfort and appropriate lighting levels. Computers and high-tech equipment, which are a major source of energy use in office buildings, are also much more efficient then they were five years ago, capable of giving the same performance at one-third of the energy use of previous models.

The ESB’s retrofit has also resulted in some indirect benefits. The upgrade has made it much more attractive to high-profi le firms keen to be associated with such a forward-looking project, resulting in the potential for the owners to receive higher rents as tenants change over.

“We’re never going to claim that an energy-oriented intervention alone will do that for a building,” cautions Hutchinson, “but if we consider that most of the buildings we have now are going to be around for a long time, it is immensely valuable for the real estate world to learn

how to do this sort of sustainability repositioning because it makes all the difference.”

Theory and reality Malkin believes that another reason more retrofits are not being done is that people got too hung up on theory. He tells the story of a representative from an environmental group coming to his office during the period when the initial groundwork for the ESB project had already started, but hadn’t been made public yet.

“He sat down with me and gave me a presentation that was very much along the lines of what we were doing with the ESB project. I was taken aback, and I asked him how they had done it and what it had cost. He told me they had a consultant do it for $10,000.

“Then I said, ‘Does any of this exist?’ And the guy said, ‘No.’ It was all theory. And I realized that there hasn’t been anything out there to support this theory and to give us something to work with. There was a only a lot of consultative stuff.”

In Malkin’s view, now is the time to go beyond theory and get down to the hard facts, to the dollars and cents.

He stresses that in the case of ESB, because the quantitative analysis has been so rigorous, the building’s savings on energy costs have been guaranteed by Johnson Controls’ balance sheet. If the get the savings promised in the contract fail to materialize, the owners will be paid back proportionately. “There’s nothing else out there like this,” Malkin says, “and we’re very hopeful that more people will take it on.”

According to Hutchinson, the current slightly tenuous position of the real-estate world has helped stir up interest in refitting buildings for energy efficiency. “We do see a lot of service providers very interested in learning these things once they realize there’s value there. We see investors saying they would like to be aware of it, although they also say they don’t have much in the way of funding for new projects. A lot of folks are in learning mode, but it’s because the commercial real estate world is in a tenuous situation.

“On the positive side, given that we have such a scarcity of skilled resources it does give us a bit of a window for training. We recently put together some training packages that were presented at the big building modeling conference, and we were absolutely overrun with folks who want to get on board, learn the tools and start practicing. There was an executive order from the government last year that set some very hard targets for federal buildings to meet, and that is going to start driving some activity as people learn the art of the possible. As people look through their inventories of assets, they’ll start to figure how to better target where a deep energy retrofit would be a terrific investment right now.”

If things go to plan, the Empire State Building’s celluloid fame could soon be eclipsed by its renown as a leader in environmental conversions. Which can only be a good thing for building owners, tenants, and the environment as a whole.

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Paving way the

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As urban populations continue to grow at an unstable speed in inefficient contexts, smart cities are being looked up to as the saviour of next generation infrastructure – but what do they actually entail?

H

itting the ‘off ’ button on your solar-charged alarm clock after cursing your ability to ‘snooze’ for the third time this week, you walk over to take your morning shower in recycled waste water – heated throughout the night with a reserve store of clean energy – before heading downstairs to program the house for the day and reverse your minimalist, electricallycharged car out of its docking bay. Your toaster knows you’ve left, so off it goes, along with your foe-turned-friend alarm clock. The dull hum of stand-by electronics winds itself down throughout the house just in time for you to hear as the magnetic deadlock on your door clicks shut. The smile on your face, is accrued from another carbon-saving day, as you arrive at work and walk into your double-platinum, LEED-certified office building, surrounded by a depth of luscious flora, of course.

But this isn’t some utopian crossover of Minority Report meets Spielberg’s A.I. – this is real-world, next generation smart thinking – and it’s on its way to a city near you in the not-so-distant future. With the nation’s, indeed the world’s, population growing at an infective and worrying rate, the large majority of the world’s inhabitants have resided in cities since 2007, forcing an overloading amount of reliance on out-of-date power grids that were designed back in the ‘good old days’, sat alongside energy-hungry buildings and infrastructure.

Fortunately, with a rise in population levels has come a rise in technological advances, in turn provoking a deepening of creativity and environmental awareness. The theoretical smart cities of 10 years ago were nothing more than talk of using smart meters in homes and businesses to measure efficiency.

Today, with the accumulation of electronic data, smartphones – and of course the omniscient internet inextricably linked to everything we do – smart grid and city rationale has evolved to encompass the hope for a complete change of social scaffold and lifestyle choices.

Indeed, Michael Carlson, Executive Vice President of GridPoint and former CIO for Xcel Energy (the brains behind Boulder, Colorado’s $100 million SmartGridCity), certainly has his fi nger on the pulse when it comes to understanding the shift in smart grid innovation. “The meter is a secondary component of today’s smart grid,” explains Carlson. “If we’ll allow ourselves to look into the future, I think we should be questioning whether a meter is part of the puzzle at all. That’s not to say that you don’t have to measure your electric consumption in some way, shape or form. But do you need a meter to do it?

“A meter is an archaic device that at the end of the day only serves to measure. It can’t control. It can provide information, albeit not by itself. We need to ask ourselves, are there other, more efficient, effective and less expensive ways to accomplish those tasks?” And with that one question, Carlson manages to exemplify the attitudes of smart grid movers and shakers nationwide – pushing the envelope of technological creativity certainly seems to be the name of the game here, just as it was when formulating the world’s fi rst completely ‘smart city’.

According to SmartGridCity, there are four main components to the success of Boulder’s pioneer grid. First up, the smart grid infrastructure “creates the ‘backbone’ of the entire smart system. Xcel Energy has layered digital capabilities across the grid, including two-way, high-speed communications. Th is has added new automation capabilities and, because the utility can now sense and predict grid conditions, it can proactively monitor the grid’s health and detect outages before they occur.”

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SMART TECHNOLOGY

Secondly, smart meters actually remain an essential link in hooking up homes to the smart grid within the city, collecting household electricity data in 15-minute increments to allow consumers unparalleled visibility into their energy usage. They also act as sensors that help the utility gauge what’s happening on the system at any given time.

When outages do occur, smart meters allow the relevant powers that be to pinpoint specific problems and get them fi xed faster.

Th ird on the success charts is a unique website spun into the system called MyAccount, which provides ‘customers’ with detailed information about their energy usage so they can have more choice about how and when they use electricity. When coupled with a smart meter, MyAccount generates an in-depth snapshot of a house’s energy use, identifying times when consumption is highest and even which systems in a home contribute to the bulk of its electricity bill.

Finally, SmartGridCity cites “in-home smart devices” as the icing on their metaphorical cake to implementation.

“Wireless systems, thermostats and smart plugs connect your home to the smart grid. Th is taps you into the smart grid network and allows your home’s systems and electrical outlets to ‘talk’ to the MyAccount website. You can then monitor your consumption and adjust your energy usage according to your personal needs and preferences”. Pretty simple when you think of it like that, but the reality of the situation is anything but.

For starters, any fi rst generation smart grid will need to be placed on top of an existing power grid. After all, the idea behind smart grid induction is more to do with actuating a change in consumer behavior by providing the necessary technology to do so – not merely dumping an excessive amount of decade-redundant tools on top of Edison’s 1880 grid in the hope that someone might use them; the sentiment of which was epitomized by former Sony Chairman, Nobuyuki Idei, who said in a recent smart thinking tweet: “Copying 20th century cities in Dubai and Shanghai is crazy. We need…a city OS”.

And so it is, with the motivation and expertise of an ex-Microsoft guru and a start-up wizard, that the city operating system Idei talks of is fi nally becoming a reality – through a potentially global project known as Living PlanIT. The ambition? To build a prototype smart, green city in Portugal that can then be rolled out worldwide while dragging the construction industry into the 21st century.

Perhaps surprisingly, it’s the latter part of this ambition that holds the most difficulty, as Steve Lewis, the former Microsoft veteran turned CEO of Living PlanIT, explains.

“It’s a bit of a bloodbath really. They’re [the construction industry] using techniques older than God. All of the technology is being used on the design end. No one can look into the future and ask ‘if I put better glass into this building, what does that do for energy efficiency down the road?’ You have developers building to do a quick fl ip, and eventually the building becomes too inefficient and so expensive to fi x that they have to knock it down. There’s no process and no lifecycle management.”

Smart Cities ed.indd 40

In fact, there’s so little incentive to integrate and become more productive that a recent Harvard Business School case study revealed that while non-farming industries have made productivity gains averaging 80 percent since the 1960s, the construction industry has actually regressed, becoming 20 percent less productive in the same time period. Where buildings “accounted for nearly 40 percent of the total energy consumption in the US, including 70 percent of the country’s electricity and 38 percent of carbon emissions,” construction materials accounted for a phenomenal 60 percent of solid, non-industrial waste.

“Most of it ends up in landfi lls. They either broke it or overordered it.”

According to Lewis, the solution is simple. First, streamline the process by applying the same lean manufacturing techniques and supply chain integration that’s been commonplace in the automotive industry for years.

“How do you get the aesthetics and variability right while at the same time keep consistent quality?” he asks. Well, according to Living PlanIT, the idea would be to realign construction fi rms to look more like the computer industry’s original design manufacturers (ODMs), building modular, plug-and-play components ordered from a catalogue and slotted into a city’s Urban Operating System, both of which would be owned by Living PlanIT.

The US population increases

7% every year

“The greatest shortcoming of the human race is our inability to understand the exponential function” Al Bartlett The second tier of the plan would involve creating an “ecosystem” of partners to fi ll in the blanks in Living PlanIT’s plan to code cities like soft ware – in which buildings, sensors and traffic apps alike are connected through the cloud. All the company will own is the Urban OS (the glue in its urban fabric) and the process, from draft ing blueprints to “decommissioning” an obsolete building like you would a junk server. Full build-out of the Portuguese project is projected for 2015, by which time PlanIT valley should have a population of around 150,000 – with almost everyone working in and as R&D for the project.

“They don’t want a campus, they want a city,” explains Lewis. “They need to send their kids to school; they need to be entertained. You end up with a brilliant R&D platform – you live in it, you improve it, you market it. If [a customer] says, ‘I want a medical clinic,’ we already have one.

We backed into building PlanIT valley based on customer demands.” Of course, it goes without saying that Lewis and his team at Living PlanIT are using Portugal as a prototype for the instant cities PlanIT hopes to sell in developing countries such as India and China, which need new ones by the hundreds – built faster, greener and smarter than any city that has come before. But before that happens, further

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projects are planned in the US and Europe to iron out any potential creases.

To ensure that the US continues to entice these kinds of pilot projects, as well as exponentially evolve its own cities and utility attitudes, President Obama recently scribed off on a $787 billion stimulus bill for clean energy and renewed infrastructure. Off the back of this, one of the biggest wins for clean energy now comes in the form of grants for up to 30 percent of the cost of projects started in the next two years. As Oerlikon Solar CEO Jeanine Sargent explained in a release backing the move, the industry expects these grants to “loosen gridlock in the capital markets with funding for shovel-ready solar projects that have been on hold due to a lack of available fi nancing.”

The stimulus also includes $2 billion for transmission grid improvements, with the President himself addressing the need for a “nationwide transmission superhighway”, declaring: “Today, the electricity we use is carried along a grid of lines and wires that dates back to Thomas Edison – a grid that can’t support the demands of clean energy.

Th is means we’re using 19th and 20th century technologies to battle 21st century problems like climate change and energy security. It also means that places like North Dakota can produce a lot of wind energy, but can’t deliver it to communities that want it, leading to a gap between how much clean energy we are using and how much we could be using. The investment we are making today will create a newer, smarter electric grid that will allow for the broader use of alternative energy.”

Inherent with achieving this is the obvious need for smart grid thinking, which Obama has also allocated sufficient funds for – $4.4 billion to be exact. If things stick within budget, and they usually don’t, the stimulus allocation should allow for the installation of various hardware and soft ware to make the power grid an intelligent two-way digital network: the embryo of smart city beginnings. It is expected that these funds will become a blessing for all those in the world of smart grid and smart city intelligence, enabling more efficient management of future smart cities.

With everything seemingly moving off the horizon and towards a new era controlled by the elusive and indefi nable smart grid, those in high places must realize that changes need to be made on both sides of the fence: consumers need just as much incentive to change as utility companies do. Thankfully, the seemingly infallible Obama has even included that in the stimulus, expanding tax credits for more energy-efficient appliances and insulation improvements, to the tune of two billion dollars over the next 10 years. The stimulus also provides $300 million in matching funds for state rebates on energy efficient appliances and increases government spending on weatherization for low- and middle-income homes to five billion dollars, up from the previous $500 million per year, with public housing projects getting $250 million for energy-saving upgrades.

However, while the stimulus paints a rosy picture, many remain concerned about the speed that government can distribute the funds and how effectively the industry

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Smart functions It’s all good throwing around ideas of smart grids and cities, but unless it can sustain its difference with today’s technologies, it’s doing nothing new. According to the US Department of Energy’s Modern Grid Initiative Report, a modern smart grid must: • Be able to heal itself • Motivate consumers to actively participate in operations of the grid • Resist attack • Provide higher quality power that will save money wasted from outages • Accommodate all generation and storage options • Enable electricity markets to flourish • Run more efficiently • Enable higher penetration of intermittent power generation source

can spend them. On top of this lies the real crux of the argument for comprehending the true identity of a ‘smart city’: it means a lot more than just creating and developing a smart grid. As pivotal as that will be, the US-based National Resources Defense Council cites a host of other sustainable factors that smart city planners will need to take into consideration. Transportation, waste prevention, food security, air quality, green space, environmental justice and green buildings cannot be swept under the carpet if a truly smart city is to prevail.

Conflating this, Al Bartlett, an emeritus Professor of Physics at the University of Boulder, has highlighted in his award-winning seminar, ‘Arithmetic, Energy and Population’, that “the greatest shortcoming of the human race is our inability to understand the exponential function”.

Essentially, Bartlett’s belief that sustainable growth is, in fact, a “contradiction” and is based on the understanding that a relatively modest percentage growth in population can equate to huge escalations over short periods of time, does much to detail both the need for smart cities and the challenges faced in getting them to where they can begin to handle the exponential population growth problem the world is already witnessing, yet fails to grasp.

According to Bartlett, if the US receives a seven percent population growth every year, it’s ‘doubling time’ – the time taken for the population to double – is 10 years.

In other words, every 10 years, the population of the nation will be greater than the total sum of its previous years.

And with that, there will come a time where cities will not only need to be smart, but so too will their people. After all, having the most efficient, innovative and green systems in the world are useless if they’re crippled by the weight of a fatally over-populated city. As Bartlett openly admits, that’s “The Greatest Challenge”. ■

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DRIVING REVOLUTION

Could the gas-guzzler’s days be numbered?

Pacific Gas & Electric’s Saul Zambrano explains how the utility is paving the way for plug in vehicles.

I

f there’s a single sound that sums up the American dream, there is a strong case to be made that it is the roar of the internal combustion engine. It conjures up the sense of freedom only felt when blasting towards an endless horizon in a growling pickup or shark-fi nned convertible. It’s a powerful image and the lure of the open road has been immortalized countless times in popular culture, spawning the road movie as a legitimate cinematic genre and inspiring musicians from Chuck Berry to Bruce Springsteen.

Nowadays though, the average driving experience bears little resemblance to that portrayed in the Smokey and the Bandit fi lms or songs like Born To Run. Rather than hurtling through America with the wind in his hair, today’s driver is more likely snarled in traffic, going nowhere fast.

From a potent symbol of personal freedom, for many the car is slowly morphing into a prison. Compounding this is the growing realization that our love affair with the automobile comes at a cost, whether it is excessive dependence on foreign oil or the undeniable environmental impact caused by exhaust emissions from the millions of vehicles clogging the nation’s freeways.

These realities are central to the rebirth of the electric car. Following an abortive attempt to encourage drivers to go electric back in the 1990s, plug in vehicles are currently experiencing a resurgence. Nissan’s Leaf will be available to American consumers within the next few months and already has some 20,000 pre-orders, enough to sell out its entire initial production run. That may not seem like a huge number compared to sales of conventional gas-fueled cars, but the fact that so many people are prepared to spend around $30,000 on such a vehicle is a clear indicator that interest in electric is on the rise.

Naturally, if Americans are going to forsake the gas pump for the power outlet, there are going to be implications for utilities. There are around 250 million cars on the road in the US. While no one is expecting the entire nation to switch to plug in overnight, if even a small fraction of that number go electric it will place a massive strain on already strained generation and transmission infrastructure.

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That amount of investment and development is just driving the cost d st curve down much faster than anyone one anticipated

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One utility tackling this issue head on is California’s Pacific Gas & Electric. With the stated ambition of servicing 45,000 electric vehicles by 2020, PG&E has placed itself in the driving seat for what could be the 21st century’s most important race. One of those steering the utility on its route to a greener motoring future is Saul Zambrano, PG&E’s Director of Clean Air Transportation. When we catch up with him to talk about the scale of the challenge, he is steadfast in the belief that organizations like PG&E will be instrumental if electric vehicles are going to succeed. “You know the famous saying, that it takes a village?

What we discovered with this initiative is that, in this case, it takes a utility,” he says. “We’ve created a market readiness team to specifically focus all aspects of our operations to welcome the introduction of these vehicles into our service territory. When you build these types of teams you basically have to do education outreach. You have to look at your service planning practices and you have to look at your rates, so that you don’t create any dis-incentives relative to charging tariffs for these vehicles. It’s quite an involved effort but within North America, California, generally considers itself ground zero for the introduction of these vehicles. You look at all of the investor-owned utilities and the municipal utilities, they’ve effectively created market readiness teams within the utilities to support electric vehicle introduction.”

Zambrano is encouraged in his efforts by what he sees as a genuine consumer interest in EVs, an interest that is fueled by improvements in technology and evolving social attitudes. “A lot of things have changed,” he confi rms.

“People are focused on sustainability. People are focused on energy security and the automobile manufacturers are bringing a stable of cars to market that consumers can either buy or lease and what we do know is the initial introduction of these vehicles is going be supply constrained.

So the choke point is going be at the OEM of these vehicles.

“The other thing is that the technology itself has matured quite dramatically from the 1990s. The production capacity of the lithium ion packs that go into these vehicles has exploded. The capacity was always there in Asia but the stimulus funding that came out of the federal government effectively created manufacturing capacity within North

America. That amount of investment and development is just driving the cost curve down much faster than anyone anticipated.”

As well as manufacturing capacity, actual battery efficacy is also improving. “Th is time it’s lithium ion which is fundamentally a better chemistry,” Zambrano continues.

“The battery management pack soft ware has really moved quantum leaps forward. The other thing is the maturity of the internet really creates these network-centric information models on how people can and will charge.”

But perhaps most significant development is the fact that the auto business seems to be genuinely behind the move towards electric. While the stalled attempt to push EVs in the 1990s was a largely top-down affair, driven more by federal mandates than real market forces. Today, the situation looks far more organic. “The car manufacturers are driving this to a larger extent than they were the fi rst iteration,” Zambrano says. “When you look at the car manufacturers who have models coming to market or have announced development plans you’ve got GM, Nissan, BMW, Honda. Around 30 or 40 companies have EVs planned or in production. When you compare that to the fi rst go-round it’s a much more market-driven mandate than a policydriven mandate.”

While the early signs seem positive, the biggest challenge for the electric car at this critical juncture will be overcoming old preconceptions and securing a solid consumer base. The customer experience of the thousands of early-adopters will be absolutely critical in this effort.

Just as with all innovative technologies, it is the reaction of the fi rst wave of users that sets the tone for the rest of the market. Fail to win over the geeks who queue up to buy your shiny new product on the day of release and it’s unlikely you’ll be winning over Joe Six-Pack any time soon.

One area of the customer experience under particularly close scrutiny is the performance of car batteries. Zambrano contends that durability is no longer a genuine cause for concern. He points to the fact that GM and Nissan are both offering eight-year, 100,000-mile battery warranties on their new EVs, while utility Southern California Edison are still running a fleet of electric Toyota RAV4s from the 1990s on their original batteries. Instead, it is the pervasive

A CHARGED HISTORY America’s relationship with electric vehicles goes back further than you might think

1835 Thomas Davenport builds a small electric locomotive, the first practical EV

Saul Zambrano.indd 44

1859 Gaston Planté invents the rechargeable lead-acid battery, leading to the development of vehicle batteries in 1881

1891 William Morrison builds America’s first successful electric car

1897 The Pope Manufacturing Company becomes the first large-scale US EV maker

The Nissan Leaf will cost around $30,000

“Around 30 or 40 companies have EVs planned or in production.

When you compare that to the first go-round it’s a much more market-driven mandate than a policy-driven mandate.”

1912 Ford Model T

1900 Roughly 28 percent of cars produced in America are powered by electricity

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DRIVING REVOLUTION 45

RETURN TO SENDER Zambrano discusses the potential of vehicle to grid.

W

e’ve done a lot of work on vehicle to grid. We actually partnered with Google who did the technical proof of vehicle to grid.

There are a couple things that need to happen before vehicle to grid becomes a viable prioritization. One, the cars have to get out into the market in mass. That priority follows how many cars are actually out there. If there are only a thousand cars out there in year one, then it’s not very attractive relative to ancillary services. The other thing is that the utilities and the automobile OEM companies still have to figure out what the car manufacturer’s liability on warranty is relative to these vehicles versus a utility application.

The problem is that they’ve got to get these cars out and into the marketplace and figure out how they perform and then they’ve got to crunch all the actuarial data to understand what is the value from a warranty perspective of a single discharge, because what you’re asking at the battery level is; “Let me take an additional discharge cycle from the battery life and feed it back into the grid in order

1920s EVs cease to be a viable commercial proposition due to demand for longer distance, more powerful vehicles and the availability of gas

1908 Ford introduces the massproduced and gas-powered Model-T, the beginning of the end for EVs

Saul Zambrano.indd 45

1972 Victor Wouk builds first real hybrid vehicle

to support the grid in whatever fashion from an ancillary market perspective.”

In addition to that there are certain ways that the American grid was built that means some safety issues need to be worked out as well. We’re taking these car batteries and using them as backup power and folks want to send that power to the grid to help generate a neighborhood. But if that neighborhood’s down and we have line workers there and those line workers don’t know that the equipment is going be energized, it could be a problem. Right now many places on the grid wouldn’t accept that charge in a power outage situation.

It’s kind of a one-way setup right now in that emergency situation so we’ll definitely have some engineering and technical challenges to overcome. That’s not to say that vehicle to grid is not something that we’re definitely looking at and evaluating. We want to make sure that it’s part of the future scheme of things. We’ve just got to figure out the appropriate applications.

1976 The Electric and Hybrid Vehicle Research, Development and Demonstration Act is passed

by Congress

1974 Vanguard-Sebring’s CitiCar debuts

1996 GM introduces the EV1, a lease-only full-electric vehicle. By the time the car was cancelled in 2002, 1117 had been produced

2001 Toyota’s Prius, the first commercial hybrid car, is released worldwide

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issue of range anxiety which is of far greater concern to most consumers.

“I think one of the key leaps of faith that consumers are going to have to make or understand is the fact that most people drive a total less than 40 miles a day,” says Zambrano. “These new EVs have ranges of around 100 miles, so drivers can charge at home and have enough capacity to get to work and back and even further.” Those drivers who have a longer commute aren’t excluded from the electric revolution, as hybrid models cater for more long-distance jaunts. “Vehicles like the GM Volt have backup gasoline engines to drive the electric motor,” Zambrano continues.

“Once the battery gets depleted after 40 miles, that engine kicks in to drive the electric engine, giving it a range of over 300 miles. People are going to make different decisions based on their lifestyles and on which platform works for them, but both are effectively plug in electric vehicles.”

“We’re quite excited about the fact that we can support the adoption of this technology”

Power struggle?

So what are the key considerations for the utility when it comes to the uptake of more plug in vehicles? “What we do know is that we want these vehicles to charge intelligently,” Zambrano replies. “From 11pm to 6am, we have a tremendous amount of generation capacity with which we’ll be able to support them. We don’t have concerns about generation capacity to support these vehicles. The other reason we want them to charge intelligently off-peak is because it minimizes the impacts to our distribution grid, and more importantly because it’s cheaper for us to provide power off-peak. One of the ways for consumers to play down the up-front investment of these batteries is you have to have a cost-competitive price per gallon equivalent.”

Based on PG&E’s calculations, it can provide power to electric vehicles at the equivalent cost of about one dollar per gallon. With gas prices hovering around three dollars per gallon, this represents a significant saving, but it is only possible thanks to PG&E’s investment in smart grid technologies. “Ensuring that our customers have competitive cost economics of fueling is incredibly important,” Zambrano says. “We have one of the largest deployments of smart grids in the world. We know how to leverage it technically, to send the charging signals to smart chargers.

From our perspective, we think that’s critical for adoption.

That’s where we view our contribution to the adoption of this technology; ensuring that we have programs that support customers at the tariff level and relative to smart charging. All that works seamlessly within all the internal operations of the utility.”

It helps that the utility has been working closely with EV manufacturers in ensuring that capacity exists to power vehicles once they hit the streets. A great deal of advance planning has been done to know exactly where these cars will be going, allowing PG&E to be certain that they will be able to juice them up. “We’re coordinating with the vehicle makers so that we can coordinate with our service planning organizations and ensure that the issue of grid reliability for those hot spots is addressed,” Zambrano explains. “I think one of the underlying themes behind

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Most people drive less then 40 miles a day

this is that this is a collaborative process amongst all the stakeholders. And the stakeholders involve the automobile OEMs, the utilities, the regulators, the policy groups that are driving things either at the federal or the state level.”

Something that has become clear as a result of this collaboration is that early EV adoption is going to be geographically concentrated. Th is information has been invaluable to PG&E in knowing exactly where it needs to harden its grid to cope with the spike in demand.

As befitting a vehicular revolution that is motivated by concern for the environment, renewable energy is expected to play a major role in powering the next generation of electric vehicles, though it won’t be happening straight away. “Once there’s enough of these vehicles in our service territory, and we’ve got them charging off-peak, one of the strategies that we’re looking at is integrating wind generation,” Zambrano says. Wind is the obvious choice for EVs because of one simple fact. “Generally speaking, wind blows hardest at night,” Zambrano continues. “You’ve got to look at renewables in terms of when they are generating electricity. Solar is generating electricity during the day but people are at work and there are a lot of intermittency issues. Wind offers the perfect alignment because people are asleep when it is blowing the hardest which makes integrating that particular generation into the charging of these vehicles much easier.”

No discussion of electric powered vehicles would be complete without a discussion of gas prices. While it remains affordable to fi ll up a traditional internal combustion engine car with fuel, can EVs ever gain a significant amount of traction? “If I can provide electricity that’s a dollar a gallon gas equivalent it’s a very attractive proposition at the consumer level, even if gas costs $3.00 a gallon,” Zambrano says. “The higher the price of gas, the quicker the adoption of these vehicles.” Whatever happens over the coming decades, it is unlikely that the price of oil is going to go any direction apart from up. What’s bad news for some could be quite the opposite for proponents of the switch towards electric.”

Ultimately though, Zambrano believes it is demographic shifts that will provide EVs with the most significant momentum. Increasing urbanization makes cleaner vehicles more suited to shorter journeys increasingly attractive. In addition, a whole new generation of customers are coming into the market who have very different priorities from the ones who preceded them. “My nieces and my nephews are excited about these cars,” he says. “There’s an environmental ethos that’s developing in the younger generation. We can’t look at it through our eyes any more.

We’ve got to be cognizant of the fact that there are people who make purchasing decisions based on this ethos.”

Whatever happens, Zambrano is clearly happy that he and PG&E are involved in what promises to be a very interesting perid of history for the motor vehicle. “The best thing about the generational effect, is that it takes place relatively quickly,” he says. “It happens in 10 or 20 years. We’re quite excited about the fact that we can support the adoption of this technology and help people to adopt these vehicles.”

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SHIFTING GEAR A look at the prospects for the electric vehicle market

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rost & Sullivan’s 360 Degree Perspective of the Global Electric Vehicle Market, published in April 2010, raises some interesting issues for the development of EVs as we move through the 21st century. Anjan Kumar is the analyst firm’s Team Leader, Automotive & Transportation and one of the report’s authors. He is clear that certain trends are making the prospect of widespread EV adoption more likely. “Battery manufacturers are much more confident,” he says. “They have developed safer batteries and are increasing their range to the 100 to 115 mile distance. There has been considerable evolution in this area over the last 10 years.”

Additionally, vehicle emission rules have become much more stringent over recent years, a trend that is likely to continue. Governments across the world are setting targets for the reduction of greenhouse gases, with potential penalties being imposed if these targets are not met. This is a climate that naturally favors cleaner alternatives to traditional gaspowered vehicles.

But perhaps the largest driver for EVs could be wider demographic megatrends that will reshape the way people live and work over the coming decades. “The rise of megaregions, mega-areas and megacities is particularly significant,” explains Kumar. There is going to be a growing concentration of people inside cities. We have seen urbanisation happen from the early 1900s to the present day. What we are going to see now is de-urbanization. Wealthy people will live in the city, while the middle classes will be situated in the suburbs. We could see a third band outside the ring roads where the less affluent people and manufacturing type industries would be found. We could see homes and workplaces being situated close together, which will obviously have an impact on the types of transport that are used. Neighborhoods will be encapsulated so that residents will be able to find everything they need at a very close distance. This kind of scenario would work well for the growth of electric vehicles.”

But before EV manufacturers start popping the champagne corks, there remain significant hurdles still to be overcome. Despite recent advances in the technology, consumer attitudes have a way to go before there is widespread acceptance that they are a viable alternative to the internal combustion engine. This situation is not helped by the lack of electric charging infrastructure, whereas you’ll pass a gas station every few miles. While states and governments are pushing adoption by offering grants and consumer incentives for buying electric, we will probably be waiting a while until the whirr of electric motors replaces the growl of the petrol engine as the dominant sound on America’s streets.

“According to our forecasts, by 2015 only one to three percent of vehicles – around 400,000 to 500,000 – sold in the US will be electric,” Kumar confirms. “By 2020 we’re looking at five to seven percent. In order for EVs to have a 10 percent share it will take at least until 2025.”

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ROUNDTABLE DISCUSSION

GETTING SMARTER

US Infrastructure asks a panel of experts for their opinion on all things smart grid, from investment decisions to the state of regulations in this fast-moving space.

Nobody wants to make the wrong decision about a major investment. In the current high change environment where the smart grid is in the early stages of a major evolution, how can utilities and the vendor community effectively future-proof?

J. Patrick Kennedy. Future-proofi ng sort of implies that you know what the future will hold. The only practical way to future-proof anything is to maintain as much flexibility in the system as possible. We always recommend that our customers build incremental value on top of a sound foundation as they proceed on one of these ‘projects’. The ‘big bang’ approach of building a pilot of the planned solution will only deliver what they might conceive of today and provide no flexibility for the future. Along with asking their customer what they want and need, the utility also needs to use a building block approach to delivering the solution and take time to assure that what is initially delivered has clear customer value. Additional features

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may be more beneficial to the utility but early deliverables should all be customer oriented. Utilities have not gotten this message and AMI initiatives are clearly ‘utility fi rst’ efforts that will fail to draw customer (and PUC) support.

building a portion of a bridge that will never connect.

At the same time, we have industry groups in which both the vendor and utility communities participate. We do concurrent engineering, working toward the same goal.

But it is also important that we communicate, to be sure the fi nal products meet both vendor community expectations as well as those of the utilities.

Malcolm Unsworth. For something as critical as the smart grid, choosing the right technology can seem like a daunting task. Utilities looking to embrace the smart grid need to fi nd a partner with experience and a strong commitment to the industry – and to innovation. At Itron, we’ve spent over 30 years shaping the energy and water industries.

When we developed OpenWay, our smart grid solution, we collaborated with Southern California Edison to truly understand – and deliver – a system that meets SCE’s needs today, yet can evolve over time. Out of this collaboration was born our commitment to an open-standards approach to the technology, from smart meters to network infrastructure to end-use applications.

Paul De Martini. Utilities are faced with an unprecedented amount of change in their business environment and faster technology innovation cycles. Th is dynamic requires utilities to revisit their technology adoption and risk management practices. Th is involves consideration of appropriate methods of managing lower maturity commercial technology adoption inherent in most smart grid deployments.

Additionally, utilities should consider the integration and implementation of risk management across multiple grid and customer service operational systems. Th is is often discussed in the context of people, process and technology, but the adoption of earlier stage commercial technology combined with changing multiple operating systems means that the complexity of the implementations grows dramatically.

As a result, thoughtful approaches involve a good understanding of organizational (people and process) capability as well as addressing integration and future-proofi ng in the technology. Specifically, integration and futureproofi ng involve two fundamental considerations; use of IP-based open standards, a thoughtful systems engineering approach that includes forward-looking use cases, and modular architecture that allows for graceful expansion and/or replacement of components as needed. Best practice for systems engineering starts with development of business-use cases with input from stakeholders and technology vendors to help identify existing and future requirements. The time horizon for the ‘future’ should be defi ned by the more expensive to implement and replace, and longest-lived (regulatory asset perspective) technology component (e.g., if a smart meter is proposed with a 15-year regulatory asset life, then the future horizon should anticipate a 15-year horizon).

Rilck Noel. First, the vendors and the utilities need to make sure they cooperate on the performance, interface and security standards that will be applied to the whole industry, so they can come together in a meaningful way when developing solutions. Without standards they could each be

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What are the key trends emerging not just in the regulated utility space but also in the deregulated area around providing energy consumption information to consumers? Are these trends moving in similar directions?

MU. In either space, providing actionable data to consumers is crucial. Technology plays a key role in acquiring, delivering and analyzing more detailed information. But without presenting this information in meaningful ways, to consumers to influence behavior, the vision of the smart grid will not materialize. Th is detailed information can be presented a variety of ways – web portals, in-home displays, mobile devices and so on. By understanding their usage and seeing how it impacts their check book, consumers can be motivated to truly change their behavior.

We always recommend that our customers build incremental value on top of a sound foundation

Dr. J. Patrick Kennedy is the CEO and founder of OSIsoft, LLC. Under Kennedy’s visionary leadership, the company has grown from a small software startup in 1980 to a highly profitable global corporation.

Kennedy earned a BS and a PhD in Chemical Engineering from the University of Kansas.

PDM. The regulated and deregulated areas are both driven by the policies and engineering-economics involved in valuing and providing information-related services. Technology is no longer an issue as the soft ware and hardware are available in a variety of solutions. The pace of market activity is now directly related to clear customer value propositions that are dependent on policy direction. This is because the value of customer information involves several value streams, such as societal benefits from carbon reduction and national energy independence, customer benefits in lower utility bills and utility benefits from increased efficiency of the grid. The challenge is that in many instances, utilities or unregulated services firms cannot monetize most of these benefits that often are required to make a cost-effective business case. As a result, the pace of adoption is moving slower than policymakers’ desire. Clarity on the value of the various benefit streams by policymakers would provide better direction to the market and likely accelerate product and services adoption to enable customer empowerment.

RN. A key trend is the availability of home energy management information for customers to help them save money on the energy they consume and reduce the demand that utilities are facing. Utility regulations dictate that they provide data to consumers. Utilities need to ensure they are in a position to verify that those requesting customer information are legitimate. And this applies to either customers themselves, or those empowered by customers to seek information on their behalf.

The second part that will play an interesting role in this debate is that whoever is providing that customer information will want to be compensated for it, so how will they be compensated and will a public utility commission step in to decide the fees of providing the service?

In the initial phase, there will be third parties to help

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ROUNDTABLE DISCUSSION

Malcolm Unsworth is President and CEO of Itron. Unsworth joined Itron in 2004 through the acquisition of Schlumberger Electricity Metering. As an active proponent of smart grid technology, his vision is helping to shape a new energy and water reality for utilities worldwide.

Utilities looking to embrace the smart grid need to find a partner with experience and a strong commitment to the industry

consumers identify the consumption and demand information they need. The same entities can request this information on behalf of consumers. Years down the line, it will become common for information regarding consumption and demand to be available online for either a nominal fee or for free. Utilities will be expected to support reliable, timely, and secure online access to that information.

Finally, utility executives and other stakeholders recognize that they need to communicate with consumers to keep them well informed about the benefits they will realize with the new information and controls available with smart grid. As they do so, utilities need to determine how they can transform their customer call centers into customer engagement centers. Then they can look at possible new streams of revenue allowable by regulators, such as energy analytics and creative payment options.

JPK. It is quite inconsistent and varies from paranoia about privacy (i.e. none) to totally open (e.g. Google) to some middle ground (i.e. user portals). A significant issue with the current utility mindset is in their desire to ‘own’ the network for data transfer to/from the customer. Their use of AMI back haul creates significant data latency that is not conducive to customers interacting in real time to fluctuation in the market prices (10 minute spot market).

The utility can only provide a forecast (a day ahead) of the rates. Also, the data latency eliminates any real-time evaluation of the effectiveness of demand response to price signals. Public back haul over broadband (in 70 percent of US homes) is the better solution.

What challenges exist in managing the coordinated evolution between the regulated and deregulated space?

PDM. A key challenge is clear policy direction and coordination at federal and state level regarding the customer value proposition and methods to monetize the value for customers and regulated and unregulated service providers. Additionally, continued clarification on the roles for utilities and unregulated services firms is needed as new business opportunities emerge. The use of IP-based open standards enables the smart grid platform to support flexibility for policymakers in terms of encouraging broad market participation whether by regulated and unregulated services firms, but also increasingly customers themselves.

RN. Eventually the regulated and deregulated spaces are going to converge when it comes to consumer information and access to data. The data will help consumers change their consumption pattern so they can reduce demand on the system and save money.

After smart grid has been implemented, utilities will still be responsible for maintaining their infrastructure, making sure it is reliable. They will do this through both non-traditional approaches and rate cases. In regard to transmission, distribution and generation infrastructure, there will be a lot of changes, but it will remain regulated for the most part. But in terms of consumer data, regula-

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tion will require that customers have access to their own data and have control over who gets to see it.

JPK. The primary challenge is to allow the market to dictate the price a customer will receive for their demand response (and distributed energy resource) participation.

Th is comes back somewhat to the data latency in the AMI systems but more importantly regulations need to change to allow customers to fully participate in the retail market.

Current subsidies for renewable energy sources should be replaced by transparent cost and pricing that reflects the true value of each option to the market. For instance, centralized wind generation requires transmission lines to be built (paid for by ratepayers) and is subsidized with large investment tax credits. It has no cost associated with increased emissions that it indirectly causes by forcing fossil fuel generation to provide set-point changes in reaction to the variability of wind. So, we have an industry (biased toward centralized generation anyway) betting on significant wind generation not because it is a reliable solution to the supply problem but because they have fi nancial incentive to do so. The result has been the introduction of a variety of new problems (grid stability, increased emissions, transmission congestion, etc.). Residential customers on the other hand, have net metering (avoided cost) and no market signals to incent them to install solar or participate in DR, both of which are 1) outside utility control (negative from utility view) and 2) more apt to directly benefit the stressed distribution grid by injecting energy at the source of the problem.

MU. We need a grid that works for both regulated and restructured (or deregulated) markets, for utilities large and small, investor-owned, public and cooperative – everyone needs to arrive at the same destination. As we see it, one of the biggest challenges facing utilities in the evolution of the smart grid is the link between sales volume and a utility’s ability to turn a profit – often referred to as decoupling. If a utility’s bottom line is tied to how much electricity or gas it sells, what is the incentive to really drive consumers to use less, and to use energy smarter? On the open market, utilities need incentives to adopt new technology and to embrace the smart grid. Th is allows the utility to operate more efficiently over time, while reducing costs, balancing supply and demand and protecting our resources and the environment.

To what extent is building the smart grid a technology issue and to what extent is it a business issue? How is it possible to balance these priorities?

RN. From a technology standpoint, in my estimation, 80 percent of the technology needed to implement the smart grid is already being used, but not in a fully integrated way. There are islands that our current electrical distribution and transmission system represents. If you are on an island, everything is regulated, and running efficiently, but the problem is if you go from one island to another, the efficiency and integration in the operation of the grid is not

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ROUNDTABLE DISCUSSION

At the end of the day, the technology must be leveraged for business benefit

Rilck Noel, VP and Managing Director of Verizon’s Global Energy and Utility Practice, has over 25 years of utility industry experience. He was a partner and a managing director at two other advisory firms consulting to the utility industry. He is also an international lecturer and has authored articles on utilityrelated topics.

there. We are working to ensure the islands connect and the grid operates uniformly and efficiently.

At the end of the day, the technology must be leveraged for business benefit. The bulk of the benefits provided by smart grid infrastructure stem from demand reduction and demand shift ing, resulting in a reduced need to build expensive new capacity to serve peak demands. Substantial and persistent changes in customer behavior will be key to these results, and thoughtful regulatory decisions regarding pricing and controlled usage will play an important role.

JPK. Building the smart grid to meet future requirements could be a technical issue, but it is a business issue to figure out a design that will satisfy both the users and the utility – a function that I do not believe has been accomplished to date.

We now have the issue of AMI projects that are put in only to benefit the distribution utility (i.e. billing) and really do not support user benefits. Expect the intrusion of non-utility entities (e.g. Google) to fi ll this gap.

MU. There is definitely a balance, and both are important to recognize for what they bring in this evolution to a smart grid. Technology provides the foundation for a new reality in our energy delivery system. Our current grid has been patched together for so long that recent gains in technology can impact energy for the better just on their own. We’ve developed our technology with a focus on open standards and interoperability, as well as an eye for long term-reliability to

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ensure we’re building out a viable grid. But to truly realize the benefits of the smart grid and create a new energy economy, consumers need to support the technology. They need to buy in to the idea that they can control how much energy they use – and pay accordingly for it. This is where the business case for utilities needs to evolve and truly embrace the importance of the consumer. Consumer choice, conservation and empowerment efforts need to be top-of-mind for utilities in a smart grid world. Technology can be the catalyst for disseminating critical information, but consumers will have to understand and use that technology to change behavior and provide the environmental, societal – and ultimately business – benefits that will ensure the smart grid’s success.

PDM. There are no fundamental energy technology (ET) or information and communication technology (ICT) barriers to the development of the smart grid. Broadly, ET and ICT products are available to meet most business needs and the next generation of products and services are under development. There are significant technology adoption considerations for utilities; however, market adoption today is directly linked to business and customer value that are largely influenced by policy direction. It is very possible to more explicitly balance policy, value and technology adoption. Development of smart grid roadmaps by utilities for discussion with regulators and customers, as is being done in California and Hawaii, would be a very constructive process. In fact, this approach is recommended to help demonstrate to customers the value of a smart grid.

Continued clarification on the roles for utilities and unregulated services firms is needed as new business opportunities emerge

Paul De Martini is responsible for the vision for Cisco’s Smart Grid end-to-end IP architecture, the technology and deployment roadmaps, identifying key technologies and global standards development. He is a member of the NIST Smart Grid Interoperability Governing Board, the EEI Y2030 Strategic Planning Committee and the EPRI Intelligrid program.

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SMART GRID

Jeff Johnson tells Huw Thomas how the smart grid can be used to get consumers on the road to energy efďŹ ciency.

ENCOURAGING EFFICIENT CONSUMPTION

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rom Atlanta to Zurich, the smart grid is big news.

If all the claims made about it by some of its more evangelical exponents are to be believed, it is a virtual panacea for much of the world’s energy woes. The smart grid will help consumers to monitor and reduce their power consumption, allow utilities to better cope with peak demand, promote energy-efficiency and reduce operational costs.

But as with many new technologies, there remains the persistent challenge of defining exactly what it is. Jeff Johnson is Deputy CIO at Constellation Energy, one of America’s largest power providers and a frontrunner in the smart grid race. Even he agrees that the smart grid can mean different things to different people. “It is something of a Rorschach test,” he confirms when I speak to him at his Baltimore office. “Everybody sees something different in it and I would argue that there are a couple of different themes.

One, it does enable much better real-time information from an operational perspective. So the actual management of the transmission/distribution grid is much more real-time, and thus able to support higher operational capability and ultimately grid reliability. It also enables us to manage the grid as it evolves. Where it was in the past, a hub-and-spoke kind of network, it’s now moving to a multi-nodal network where you’ve got distributed generation, renewable sources, even potentially fleets of electric vehicles.”

Whatever confusion remains over the smart grid’s exact nature, Johnson is excellently placed to cut through it. Constellation’s subsidiary regulated utility, Baltimore Gas & Electric (BGE), is currently engaged in one of the biggest grid innovation projects anywhere in the world. At the time of writing, some protracted wrangling with the Maryland Public Service Commission has just been resolved, allowing BGE to use $200 million of federal stimulus money to roll out the smart grid throughout its Central Maryland service territory.

While Johnson is understandably relieved that a significant potential brake on the project has been removed, he nonetheless understands that the smart grid does raise some very real concerns. “There is the question of are we too early? Is the technology mature?” he says. “Is it really going be good for the consumer? There’s always a negotiation with the utility about how much of this is going to go into the rate base and come out of the consumer’s pocket.

There are legitimate questions and concerns for everybody to get comfortable around.”

But despite these concerns, Johnson fi rmly believes that the benefits outweigh any potential downsides. “We’ve successfully completed a smart grid pilot,” he explains.

“We are currently engaged in pilot programs around home energy management, and the evaluation of a couple of different approaches and technologies in that space. We’ve demonstrated that there are significant consumer savings and behavioral changes that can occur, based on the information that then can be provided to the consumer. We’ve seen that in a real-world context.”

According to BGE’s estimates, smart grid implementation will lead to consumer savings of at least $2.5 billion

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over the course of the project. While the $200 million in stimulus money is currently grabbing headlines, it is really just a part of Constellation and BGE’s long march towards the grid of tomorrow. “We have this multi-year program to re-engineer our whole service delivery approach from a utility perspective.” Johnson explains. “We are currently replacing our whole monolithic customer care and billing system and our meter data management system. That’s all being done based on the requirements that we have defi ned for a smart grid. It is a major platform for enabling of smart-grid capability and functionality. We are also reengineering our approach to how we do e-commerce and customer-facing, web transaction support.”

It is this long-standing commitment to re-imagining the entire energy business that resulted in the Department of Energy’s decision to award BGE with federal funds in the fi rst place. “BGE is clearly ahead of most utilities in terms of a very due diligence-based approach to understanding what a smart grid means to our territory,” Johnson confi rms. “How might it work? What sort of value proposition might it generate? And then, how do

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“It’s incredibly important that this be a business-led, businesssponsored, business-staffed program. If you try to approach it as just a technology project, you will fail”

we scope and plan for an implementation in a risk-managed way?” Now that the fi nal regulatory hurdle seems to have been cleared, the stage is set for all this hard work to fi nally pay off.

Promise For Johnson, the true promise of the smart grid centers around two main threads. First is its ability to provide a higher operational capability, which in turn delivers grid reliability in a safe and effective manner, compensating for fluctuations in demand and the need to react in emergency situations. The second is the ability to provide pricing signals to the consumer, allowing them to more efficiently consume energy and consequently reduce their bills. In some cases, this can even see consumers being compensated for reducing their energy use through a demand response. “There are advantages to the end consumer beyond just higher reliability of the grid and enablement of new functions,” Johnson says. “There’s also the fact that they are then enabled, through better information, to manage their energy consumption in such a way that they reduce their

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utility bill without sacrificing significantly in terms of their comfort and lifestyle.”

For many on the outside, the idea of a utility encouraging its customers to use less energy seems counterintuitive, like turkeys voting for Christmas. However, energy efficiency has become such an important long-term goal that regional and national governments are stepping in to promote it. “Maryland is lead-edge from a regulatory perspective in this space,” Johnson explains. “California was one of the first but Maryland adopted a decoupling approach, meaning that the utility is incentivized to reduce consumption.”

Decoupling is a concept that has been catching on throughout the United States for a while now. It breaks the link between the utility’s ability to recover its agreed-upon fi xed costs, including the profit margin, from the actual volume of sales that occur through a rate adjustment mechanism. If a utility promotes less energy use, they are rewarded rather than punished.

Under decoupling, there are a number of ways to compute the rate adjustment, but the basic principle is that if the actual sales are less than forecasted, there is a slight upward adjustment in rates to compensate the utility.

Adjustments typically would only be between two or three percent and some jurisdictions have applied caps on possible adjustments to protect consumers.

As a result of Maryland adopting decoupling in 2007, much has already been done to promote reduced energy use in the service area. “BGE has a variety of programs under way today to help manage consumption with existing technologies that surround load response and demand management programs for their customers,” Johnson says.

Th is has been under way for several years and has been providing valuable groundwork ahead of the smart grid’s ultimate implementation.

In fact, it is possible to go even further than that and view energy-efficiency programs as a vital component in smart grid development. “Smart grid is not just flipping a switch, and it’s not brand new,” Johnson explains. “It’s more of an incremental approach. The stimulus funding and the grant money has created maybe a perception in the marketplace that somehow this is all brand new and nothing has been done to date. That’s not the case. Utilities have been working towards smart-grid type concepts for years. I think the focus now of trying to accelerate that has created awareness in the consumer’s mind to a much higher degree.”

In the clouds

Change

“For example, we haven’t completely solved this problem of whether we want all of our historical data around, say, meter reads and meter data, which is potentially a very significant data volume, on-site in our data centers, or is that something that we buy in a secure manner through external cloud providers?

Another thing that is far more than just fl ipping a switch is the amount of organizational and process change a move to a true 21st century grid requires. As part of its ongoing business transformation project, Vision 2020, BGE has been breaking down silos and fostering a closer relationship between IT and the business. For example, rather than gas delivery and power delivery operating largely independently of one another, they instead share certain components and functions. As a result, processes can be organized more around end-to-end services than discrete siloed functions.

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Another big business buzz phrase currently rivaling ‘smart grid’ in ubiquity is ‘cloud computing’. Everyone and their dog is talking it up as a game-changing technology but, as with the smart grid, there is a certain degree of debate as to what exactly it is.

“There really are a couple of ways to think about so-called cloud computing,” says Johnson. “There’s software as a service. There are external IT clouds for IT capacity, such as Amazon, Google or Verizon who provide those services.

And then there’s also the capability to build so-called internal clouds, where you have IT loads that need to exist for various reasons – such as IT security or operational realities – within the confines of the four walls of a corporate data center.

“My belief is that major companies, especially utilities which have high data security issues, will for the foreseeable future need to maintain many of their operational systems within their own corporate data centers. Thus, we are looking at how we evolve towards the capability to provide IT services on demand through internal clouds, while leveraging external clouds where appropriate, to provide services as part of our solution set.

“You can start to build these hybrid approaches to how you leverage this IT service on-demand capability, whether it’s through your own internal cloud and/or external cloud providers where appropriate.

“And then, on top of that, you can also say, ‘Maybe there are some services that we want to buy as a software as a service,’ which is extending cloud IT on-demand capacity concepts up to the actual solution level.”

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BGE estimates smart grids could save at least $2.5 billion over the course of the project.

“It’s important because you start to drive towards more integrated, real-time management of the operations,” says Johnson. “That has implications from a process and an organization perspective. The last part is something Gartner has been talking about for several years, where you start to see a convergence of two siloed domains. Traditionally, there’s been a split between the operations side of the business, and the IT side of the business. As you start to deploy a smart grid, you begin to see a convergence between the traditional operational technologies and the more IT technologies. They start to become one. Gartner calls that the convergence of OT and IT.” Having access to the kind of detailed data the smart grid allows becomes important in order to response to rapid changes in demand and in emergency situations.

There are several different types of load response that are emerging,” Johnson says, “but the most common one that has been supported is the concept of emergency demand/ response and load shedding in an extreme situation. For example, if we have a series of 38-degree-plus days, like we just recently had here in Baltimore, the system is stressed.

In that kind of case, the ISO can declare a demand/response event, and within minutes, we can notify customers that have signed-up as demand/response enabled. Then we can have them shed load, or to allow us to make the predefi ned decisions to shed load.

“They get compensated for providing that load back to the grid, thus avoiding either spinning up much more expensive and dirtier resources in the best case, or outright

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potential grid reliability issues if the utility did not have that capability. That is the area where most utilities often first focus, provided their territory supports those kinds of programs and tariffs.

“As you move forward, there are other kinds of load response scenarios where certain customer types can sign up to provide a more discretionary type of load shift ing.

These can be load management functions where, depending on market price, sheer power demand or power regulation needs, they can manage their demand in such a way to help manage the grid. That kind of thing is more transactional day-to-day load response. That’s a more sophisticated approach that is just beginning to be recognized in various markets.”

Johnson points out that within this process, Constellation is thinking in terms of architecture and thus platform. “First of all, there’s an architected approach to thinking about the business process. Especially in our utility, we’re thinking about what is the re-engineering of the business process fi rst, and starting from there.

And then you drill into what is our technology strategy to enable that from an application perspective, and then from a technical architecture perspective, and a vendor partnership perspective.

“It’s incredibly important that this be a business-led, business-sponsored, business-staffed program. Because, ultimately, you’re re-engineering the business. If you try to approach it as just a technology project, you will fail.”

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BPL Global’s Keith Schaefer, Comverge’s John Rossi, eMeter’s Gary Bloom and Johnson Controls’ Clay Nessler take an in-depth look at the impact smart grids and meters are having on energy consumption.

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What role can giving consumer’s better information about their energy consumption have in reducing peak demand?

Keith Schaefer. Visibility is an important part of reducing energy consumption. Our experience consistently results in a 10-20 percent reduction in energy use from customers using our EasyGreen portal. More and more, consumers are choosing to be green and they have consistently valued lower energy bills. Over the next 10 years, home area energy networks will create a web of connected devices providing consumers with visibility into energy use, information on energy saving and services to optimize energy intensity.

Coordinated management of electric devices in a home, and among homes and commercial facilities, will help level load during peak demand. However, peak load reduction is best achieved with our integrated Demand Dispatch technology for direct load control. BPL Global (BPLG) has demonstrated nearly twice the effective yield compared to traditional load management systems. Direct load control

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Keith Schaefer, President and CEO of BPL Global, a technology innovator and successful entrepreneur, has co-founded or led more than 10 start-ups.

Foreseeing the potential to transform the energy efficiency and reliability of a global industry, Schaefer co-founded BPL Global in 2004 to provide integrated smart grid solutions.

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Gary Bloom. We recently ran a pilot in the District of Columbia (PowerCentsDC) to determine how consumers would react when given better information about their energy use. The program found consumers participating reduced summer peak demand by up to 50 percent, with the greatest reductions occurring when dynamic prices were combined with automated air conditioner control via smart thermostats.

Clay Nesler. You can’t manage what you don’t measure.

Most US businesses and homeowners receive an electric bill that provides them limited information. The bill is not timely and does not provide information on what consumes, when it occurs and how it compares to other consumers. When people see energy data in a timely manner, several things happen to reduce peak demand.

First, they reduce consumption. Several studies establish that feedback via visible displays creates energy reductions typically between five and 10 percent. Second, they adjust consumption patterns. When frequent energy information is combined with price signals, peak demand is reduced.

Commercial and industrial sites in California have used information and automation to reduce demand 10 percent during critical peak price signals. Lastly, they invest in energy efficiency. Good energy data provides a framework for better energy management. Recent research by Johnson Controls shows that organizations that monitor daily energy usage execute roughly 50 percent more energysaving projects than those that do not. These organizations will also have higher energy-savings to cost ratios as compared to their peers because they know exactly where to invest.

and verification takes the uncertainty out of timing and level of load reduction, replacing the need for new peak power plants. Deploying our technology provides utilities with a solid ROI and consumers with the benefits of peak load management.

John Rossi. While empowering consumers with actionable information on their energy consumption has a critical role to play in reducing peak demand, it should not be seen as the silver bullet. Instead, a combination of technology, services and information management solutions are required to intelligently manage and reduce peak demand.

Th is fact has been demonstrated in a number of cases and trials over the years.

For example, dispatched demand control will continue to play an important role as many residential customers would prefer to have their AC cycled off when necessary rather than investing time in monitoring their energy consumption and dealing with the complications of price

response. Th is has been demonstrated in some of our programs as when the customer is given a choice between switching on a compressor that requires no interactions or a programmable communicating thermostat that they need to monitor regularly, they often choose the switch.

That said, it is important to note that one size does not fit all, a sentiment that was echoed by FERC chairman, John Wellinghoff at a recent Demand Response Town Meeting, when he stated that both traditional DR and price response will play a role going forward.

John Rossi, a co-founder of Comverge, has 25 years of experience. As Senior Vice President of Business Development he leads all Corporate Strategic Planning.

Rossi evaluates different approaches to energy use and optimizes the Comverge solution portfolio. He holds six patents for utility related applications and an MS in Electrical Engineering from the University of Detroit.

Do challenges exist in promoting energy monitoring to customers? Are such challenges focused around technology or ingrained consumer attitudes?

JR. Changing consumer behavior is always difficult, even when the benefits are very clear. In the case of promoting new energy monitoring solutions to consumers, the key is to design programs that save the consumer money through a compelling and intuitive user experience. By adding simple “set and forget automation” features, the barriers to adoption are removed and consumers are able to easily realize the benefits of intelligently monitoring their energy consumption.

Th is has been demonstrated in our work over the last decade with Gulf Power on its pioneering price-response

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energy management program. As part of that program, customers are given a Programmable Communicating Thermostat that controls HVAC and three other appliances based on time or price or a combination of both.

Customers love the program and it is easy to understand and respond to. In fact, what we see is that customers program their thermostat once and then just let it do the work for them.

Th is combination of simplicity and cost saving is key to customers embracing a program. Remove either and you’ll face an uphill battle.

GB. The biggest challenge is making energy information available to consumers through a home area networking (HAN) device and/or a web portal.

Consumers are begging for more data. They want to see how consumption directly relates to their bill. In our PowerCentsDC pilot, we found that smart meters combined with smart prices and good energy information give consumers meaningful energy saving opportunities.

Over 90 percent of the customers saved money – and over 90 percent said they would recommend it, with its features of dynamic prices, information and smart meters, to their family and friends.

CN. There are two main obstacles. First, systems are not set up to provide real-time energy data to customers. Every user interface needs data and this means meters, submeters, loggers and other hardware that must be connected and configured to work with legacy building systems.

Today it is a fairly custom process, but energy services companies (ESCOs) continually improve with experience and scale that lowers costs and increases value.

The bigger challenge is the difficulty for customers to evaluate the energy information benefits because it enables further action that may or may not require additional investment. Th is is being overcome as organizations shift to managing facility energy usage with similar processes used in their operations (e.g., Six Sigma). Today, Johnson Controls is helping leading organizations embed energy management into their core business – monitoring usage, assessing priorities, setting quantitative goals, implementing projects, and tracking results – bringing energy into focus and obtaining significant results.

KS. In the US and Europe, we fi nd great enthusiasm for energy efficiency programs. Not everyone signs up, but even 20 percent voluntary participation will transform the industry. The technology exists and enough consumers are ready. The challenge is changing the regulatory paradigm to place more value on investments in peak load reduction and energy efficiency than on generation and T&D infrastructure. With business as usual, the world will use 30 percent more electricity in 2020 according to the US Energy Information Agency. With the accelerated smart grid deployment, we could save 10 percent in efficiency gains and enable 20 percent from renewables. The challenge is greater in high growth countries like China.

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While China is building significant new generation capacity to fuel its economy, a commitment to clean energy and smart grid investment is likely to accelerate energy efficiency programs that engage customers. As the regulatory environment shift s to value energy efficiency, distributed storage and renewables, the industry will evolve to offer a broader array of services that engage more and more customers.

Gary Bloom is CEO & President of eMeter. Previously, Bloom served as Vice Chairman & President of Symantec. He joined Symantec through its merger with VERITAS, where he served as President & CEO from 2000 to 2005. Bloom joined VERITAS after a 14-year career with Oracle rising to the rank of Executive VP.

Do challenges exist around the interoperability of smart metering technologies? What efforts are underway to resolve any issues?

GB. The single most important communications standard in the smart grid is the interface between smart meters and electricity consumers’ premises. And the winning standard for wireless links has likely emerged: ZigBee Smart Energy.

As successful deployments of tens of millions of smart meters in North America, Europe, and Asia-Pacific have shown, multiple proprietary and open protocols work well for two-way communications between utilities and meters.

But the smart grid vision can’t be achieved without a single, open protocol from the meter to the premise.

The next big thing after smart meters is sending messages from those meters to in-home displays, smart thermostats and smart appliances. These messages contain the usage, pricing and control information that enable consumers to capture the desired smart meter and smart grid benefits of demand response, energy efficiency, renewables integration, distributed generation and electric vehicle charging. And an open interface for sending those messages is essential for the free market to invent and deliver, at low cost, all sorts of exciting and creative products and services.

CN. Interoperability is always a challenge. While utility deployment of Advanced Metering Infrastructure is not trivial, the bulk of the interoperability challenge (and opportunity) is within buildings. From the commercial building perspective, there are three primary issues. First, no consensus around the communication standard between meters and equipment exists. Second, the medium for communicating is not settled (e.g., wireless, IT networks, Building Automation Systems). Finally, there are no formal tests to ensure standards compliance. Each issue is being addressed by experts through the NIST smart grid interoperability initiative. The upside benefit of a connected and interoperable systems is massive. Tens of billions of dollars in annual savings are possible through lower energy bills, capital deferral and better grid operations.

KS. Interoperability challenges exist in deploying smart grid solutions across the grid. Th is is a much bigger question than interoperability of smart metering technologies. The value of a smart grid is multiplied by sharing information across applications. Smart grid applications across the energy value chain from generation to consumption must interoperate for the smart grid

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According to the EIA the world will use 30% more electicity in 2020

to realize its full potential. We have built our Power SG smart grid soft ware solution as an open platform designed to integrate vertical smart grid applications. Interoperability enables collaboration across applications.

For instance, when a transformer monitor identifies an imminent failure, a substation automation system takes the transformer off line and the demand management system reduces the corresponding load on the substation.

Efforts are underway in the US and Europe to develop interoperability standards. Having a common, global set of standards is vital to a robust smart grid industry.

JR. Th is is a complex and challenging area, but standards such as Zigbee are being developed that are starting to be rolled out. Alongside industry standards, operating systems such as the Comverge Apollo platform can help overcome interoperability challenges by intelligently empowering a host of emerging energy management applications and smart grid technologies.

Logic seems to suggest that more energy-efficient customers will result in lower revenues for utilities. What business benefits does efficiency bring for suppliers of energy?

CN. It is clear there is a misalignment of incentives between energy efficiency and selling electrons, but the regulated utility business model is more complicated than just selling electrons. Utilities have the “obligation to serve” their customers with safe and efficient service.

If building power plants and substations is not the best way to meet customer needs, utilities should promote and be compensated for these alternatives. Th is is happening in some markets. In these markets both Johnson Controls and utilities see the benefits of working together.

The benefits of energy efficiency to utilities are numerous.

Smart investments in energy efficiency can substantially decrease peak demand, extend the life of existing infrastructure, improve the ability to shape the demand curve, enhance customer relations and decrease business risk.

Working with credible ESCOs that guarantee their work creates an extremely reliable “supply source” to meet future needs with no fuel price risk, no siting issues and can be implemented now.

KS. In the short-term, efficiency can result in reduced utility revenues. However, regulators can approve decoupling to sustain utility revenue while lowering consumption, aligning utilities and their customers on energy-efficiency goals. In addition, we fi nd operational, environmental and economic advantages to deploying smart grid solutions. Reducing peak demand on congested substations or replacing spinning reserve assets with load management solutions provides a measureable ROI for utilities even though demand is reduced. Energy efficiency is the most cost-effective approach to reduce utility asset costs as well as reducing carbon emissions that contribute to global warming. Investments in the smart grid create local jobs for a nation and help achieve energy independence.

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Energy efficiency creates lower energy intensity, generating the same benefit with less energy. Just like a capital investment in new generation or T&D infrastructure, returns on investments in energy efficiency and the smart grid must be built into the rate base. Done correctly, this can be a win for the utility, the regulator, the consumer and the environment.

JR. While that would seem to be the case on fi rst glance, decoupling utility income from the amount of energy delivered, as is the case in California, eliminates this concern.

In addition, performance metrics for utilities can be put in place that tie returns to customer satisfaction or other parameters not tied to the quantity of electrons pushed through the wires.

Another way of circumventing this issue is a legislative mandate like Pennsylvania Act 129. Th is is one of the most forward thinking energy laws in our country as it sets both peak demand reduction and energy efficiency improvements goals that need to be implemented by 2012. The law provided a budget for the program and imposes penalties if the goals aren’t met. Both of these approaches, the carrot and the stick, accomplish the goal of having utilities embrace energy efficiency.

GB. Regulators are cognizant that the current business model does not reward utilities for promoting energy efficiency. For this reason, a number of states (California,

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Clay Nesler is the Vice President, Global Energy and Sustainability for the Building Efficiency business of Johnson Controls. In this role, he is responsible for energy and sustainability strategy, policy, marketing, education, innovation, operations and NGO relationships on a global basis. He also serves on the company’s global environmental sustainability council.

Connecticut, Idaho, Maryland, New York and Vermont) have all created market structures that decouple profits for one or more utilities. Decoupling effectively removes a major disincentive for promoting energy efficiency. We expect decoupling to become even more commonplace as consumers and regulators become increasingly energy efficiency conscious.

Efficiency also leads to improved asset utilization.

Currently, more than $200 billion of assets are used only 100 hours per year. We can halt the production of additional power plants and learn to better use existing resources by making information available and giving consumers the tools to manage usage.

There is also concern that some of the new innovations hitting the market such, as electric vehicles and renewables will have difficulty incorporating into the grid. With improved efficiency, we can help solve these issues and provide a more solid platform for further innovations.

Here are some of the facts that drive the move towards the smart grid: US utilities will realize about $3-5 billion in annual operating savings from smart meters.

Demand response savings, at a 10-15 percent reduction in critical peak demand, will save about $5 billion per year total. Also, energy efficiency (at just five percent) will save about an additional $18 billion per year or so. Most of the demand response and energy efficiency savings will flow through to consumers via lower wholesale power purchase and production costs.

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SMART GRID

Is the smart grid the greatest innovation of the 21st century or a gaping security black hole? US Infrastructure speaks with Professor Ross Anderson to ďŹ nd out.

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J

ust about every great scientific advance comes with a catch. The Romans’ pioneering work on domestic plumbing brought with it widespread lead poisoning. No sooner had penicillin come into everyday use than bacteria were mutating into more virulent and resistant forms. More recently, the rise of the internet has allowed us to shop, communicate and work without ever leaving our homes, while simultaneously making us targets for a faceless army of online crooks and scammers. Now the smart grid is promising to revolutionize the way energy is delivered and used, throwing the systems that preceded it into the dustbin of history. For utilities it enables closer control of the network, the ability to manage peak loads and new ways to push energy efficiency. For consumers, there is the chance to save money by monitoring energy usage and a potential end to frustrating power outages. But just as with previous leaps forward, there can’t be a silver lining without a cloud, and concerns are being raised about new security vulnerabilities that the move towards smart power might bring.

Misgivings chiefly center around the communications technology at the heart of the smart grid. Designed to allow real-time contact between utilities and meters in customers’ homes and businesses, there is a very real risk that these capabilities could be exploited for more nefarious ends. One of the key capabilities of this connectivity is the ability to remotely switch off power supplies, enabling utilities to quickly and easily cut off or modify supplies to customers who default on payment. Th is is undoubtedly a massive boon for energy providers, but also raises some significant security issues.

“The off switch creates information security problems of a kind, and on a scale, that the energy companies have not had to face before. From the viewpoint of a cyber at-

tacker – whether a hostile government agency, a terrorist organization or even a militant environmental group – the ideal attack on a target country is to interrupt its citizens’ electricity supply. Th is is the cyber equivalent of a nuclear strike; when electricity stops, then pretty soon everything else does too. Until now, the only plausible ways to do that involved attacks on critical generation, transmission and distribution assets, which are increasingly well defended.

“Smart meters change the game. The combination of commands that will cause meters to interrupt the supply, of applets and soft ware upgrades that run in the meters, and of cryptographic keys that are used to authenticate these commands, create a new strategic vulnerability.”

The above words come from the introduction to a paper titled Who controls the off switch?, which outlines the threats lurking behind the smart grid’s promise. Ross Anderson is Professor of Security Engineering at Cambridge University and the paper’s co-author. He believes that the rush towards innovation risks undoing much of the work that has gone into protecting critical power infrastructure.

“In 1996 the IRA tried to blow up three of the super grid substations in London, and they only failed because their paymaster was in fact in the pay of the British Army,” he says. “At the time these facilities were undefended and had the IRA been successful then they would havr wrecked the power supply to London for maybe six months. The social and economic consequences of that would has been simply horrendous. Since then governments have been trying to put walls around major substations whenever they’re refurbished. But nonetheless, these are big targets. These 400kV transformers are made to order; if Al Qaeda blows one up you can’t just phone the supplier and tell them to stick another one on a ship and get it there by Friday; it doesn’t work like that.”

A dark New York skyline in 2003 during a citywide blackout. Office workers crowded bridges and streets in a mass exodus from the city. The power outage affected much of the northeastern United States and parts of Canada, and trapped many commuters in subways and elevators.

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Critical care Energy’s status as critical infrastructure is backed up by some of our most recent military adventures. In Kosovo in the late 1990s and during both Iraq wars, power networks were key targets. Cutting off supply has impacts on a nation that are both swift and significant. Modern economies cannot function without power and populations are quickly demoralized when they cannot heat and light their homes. Creating the opportunity for malicious actors to cause this kind of disruption without recourse to large supplies of explosive ordnance does have worrying implications.

“If you’re going to create a strategic national vulnerability like that it’s got to be done with eyes open and it’s got to be done with proper protection,” says Anderson. But first, the good news. “It’s not such a big deal in America, where there are thousands and thousands of utilities, most of them tiny,” Anderson continues. “If some ecoterrorist does manage to turn off the electricity meters in Des Barres, Montana then, quite frankly, who the hell cares, apart from the people who live there? But in a large market like Britain you’ve got these problems of scale. It becomes a big enough target for somebody to invest the effort to have a go at it. There are a few targets in America – Con Edison for example, or PG&E – that supply electricity to key industrial and fi nancial centers that are clearly potential targets, but most of America is simply not an interest.”

However, that doesn’t mean that the US is off the hook when it comes to smart grid security. Following publication of his paper, Anderson spoke to cyber security representatives at the National Institute of Standards and Technology (NIST), who confi rmed that they were concerned about these issues and looking to address them. Concerned or not, with smart meters building momentum, it is unlikely that the habitually slow-paced government can come up with any solutions in short order. “The government takes 10 years to do anything,” Anderson states. “In the meantime you’ve got all these smart meters rolled out and the master keys are just sitting in a laptop somewhere in a power company. If that laptop goes walking, there’s not much they can do.”

Attack vectors While a lot of the biggest noises being made about smart grid security are focused on attacks from outside, many of the most significant dangers are actually much closer to home. “There’s fi rst the risk from insiders,” Anderson explains. “As many power industry workers retire over the next 10 years there will be an opportunity for ill-intentioned foreign governments to have their own agents inserted in key facilities. Th is is generally outside the system of national vetting and clearances in most countries. Second, it is straightforward to install malware on peoples’ PCs. Social engineering, spear phishing can be used easily.”

When it comes to digital security there can be a tendency towards defeatism and an acceptance that total protection is an unattainable goal. Put this to Anderson

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however and the rebuttal is swift. “Don’t go down that clichéd route,” he says. “There are ways in which stuff can be very well defended indeed, but you have to know in advance that you’re trying to do that. If you’re going to have a tamper-evident suitcase carried around by an armed escort walking three paces behind the chairman of OFGEM, for example, that’s doable. But you have to know that it’s necessary. Alternatively, if you want to keep master keys under the same kind of conditions that banks keep their master keys; locked and tamper-evident processes in data centers that are professionally managed with situation awareness and monitoring and all the rest of it, then fine.” Rather than a failure of security processes, it is instead inexperience that poses the biggest threat. “At present the utility industry knows nothing of this world,” Anderson continues.

“It’s completely ignorant of the world of high security IT systems, because there has been no need for it.”

The Northeast blackout of 2003 affected

10 MILLION people in Ontario and

45 MILLION in the US

“While it is vital to protect communications between substations and network control centers, installing such technologies internally is both expensive and unnecessary” Money talks While one of the key drivers behind smart grid adoption is the opportunity for utilities to save money, the failure to approach security issues with sufficient attention could come with a very high price. As Anderson says: “If they knew what the likely bill would be for protecting the stuff properly they might very well decide not to do it.”

While some of these costs are associated with there being insufficient protection for critical power assets, the inverse could also prove true. Take the standardization drive currently being pursued by NIST, which is pushing the installation of security mechanisms where they are arguably not required. “An example of this is a proposal that communications within electricity substations be authenticated,” Anderson explains. “There’s a draft IEC standard that hopefully is going to be abandoned or rewritten, but that called for all message traffic within a substation to be digitally signed. There is simply no need to provide this kind of protection, because if the stuff remains inside the substation then it’s only accessible to people who physically get access. If someone does get physical access they can cause mischief anyway by tripping circuit breakers or taking a crowbar to the engineering workstation, for example.”

While it is vital to protect communications between substations and network control centers, installing such technologies internally is both expensive and unnecessary. In some cases it could even be counterproductive to the point of hampering a facility’s operations. Anderson

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Regional security Anderson on the smart grid differences between Europe and the US. “The challenges are different between regulated monopolies on the one hand and deregulated markets on the other hand.

American states have got both models, whereas the EU has moved towards deregulation.

However, there are problems of scale in Europe because whereas most US states are of a manageable size, a lot of European countries are quite large. In the UK for example, the regulator OFGEM is trying to become the smart grid integrator for the whole country. That is a role that in the US would presumably be done by a state-level distribution operator, and would therefore be more manageable.

“You also find that in a place like the UK the various big energy companies own all bits and pieces of stuff up in there in the stack. They own generators, they own energy retailers, they own bits of the distribution infrastructure.

There’s a hodgepodge of business ownership, which makes the whole situation very much more complex. So the scale and complexity of doing smart metering in Europe is significantly worse than they are in the US.”

provides the example of GOOSE messages, which are sent within a substation in response to events such as the failure of a circuit breaker. “These typically have to be acted on within five milliseconds,” he explains. “You cannot generate and verify a digital signature within five milliseconds; the process is just too slow, even in high-end processes. So you either have to abandon the dream of digitally signing all the messages, or else you have to accept the significant performance degradation. And if you install this kind of protection, which doesn’t protect against any realistic threat, you can be involved in hundreds of billions of

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dollars to replace substation equipment that is perfectly serviceable.”

There are other ways in which the smart grid revolution could bring unwelcome side effects. In the rush to implement security standards on a national scale, a number of organizations are getting involved, including NIST, the Department of Homeland Security and even the Securities Exchange Committee. With new standards come new compliance rules, along with all their associated costs. According to Anderson, the desire to circumvent that compliance burden is already having negative impacts. Take the recent requirement that any piece of infrastructure deemed critical must have information security measures installed. The defi nition of critical includes power-generating facilities described as ‘black start’, meaning they can still be fi red up should the grid be compromised. Th is description applies to hydroelectric plants, which only need open the gates to get the turbines spinning, and coal-fi red plants, but only if they have an auxiliary diesel generator to fi re up the furnaces in the event of an outage.

“What we’ve observed over the past two or three years in America is that some generating asset owners were simply taking out the auxiliary diesel engines,” says Anderson. “They reckoned it was better for their generating plant to be no longer critical than to have to go and retrofit information security. Utilities tend to be very much compliance-oriented because of the heavily regulated world that they work in. So they just see to it that they do whatever the minimum cost is to comply with those rules and avoid getting sued.”

Clear and present danger?

So far, so depressing. Is there any good security news that can restore some of the smart grid’s lustre? Yes and no. On the subject of whether the grid is at imminent risk from terrorist groups or foreign powers, Anderson is a little more positive. “I don’t think it’s a threat yet, but maybe in 10 years-time it will be,” he says. “There is an awful lot of hype going on. The security industrial complex, the NSA and the big security vendors are talking up the threat from China, for example, so they can encourage the sale of their products. At present I don’t think the Chinese could do very much to pull down a nation’s infrastructure, but that will change. In a decade or so we will be so dependent, for example, on the internet and on various middle layers of smart information systems and trading systems that there will undoubtedly be issues there.”

While it is true that the smart grid offers significant benefits, it is vital that the rush towards implementation doesn’t obscure legitimate concerns about security. A system is only as strong as its weakest link and failure to address these issues risks handing a terrible power to those who would seek to do us harm. “The message for people working at board level in investor-owned utilities and also for people working in state energy commissions and other regulators is clear,” says Anderson. “Th is is an area that they’ve got to get up to speed in.” ■

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SOLAR ENERGY

TURN ON THE POWER National Grid’s Edward H. White explains the potential of solar energy in the 21st century.

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merican utilities are facing a host of new challenges today. Challenges that urge us to re-think the landscape of available energy solutions we provide to our customers.

From global threats to our environment in the form of climate change, to dwindling and hard-to-reach domestic fossil fuel supplies resulting in an increasing dependence on foreign fuel, to unfortunate incidents that impact our natural resources and public image, the choices we make – as utilities and as a society – are worth examining. Further, our customers are becoming more aware of the impact that these traditional sources of energy have on our daily lives and the adverse effect they have on our environmental footprint. In fact, it is both logical and expected that utilities need to think differently if we are to change the landscape of energy solutions currently available to our customers. Utilities need to introduce a myriad of energy solutions that both suit our customers’ needs and minimize any further impact on the environment.

Renewable energy needs to be an integral part of the solution. And why shouldn’t it be? Renewable energy generations such as solar, wind and hydro-power are environmentally friendly, green, sustainable and are right here in the communities in which we live and serve.

National Grid believes that climate change is one of the most important challenges facing society today. While conservation and efficiency are the most affordable ways to reduce carbon emissions and energy costs, critical investment is needed in renewable generation and smarter grid technology across the industry. National Grid is looking to mitigate climate change with a diverse blend of energy efficiency, a smarter grid and renewable generation offerings.

As the second largest utility in the US, National Grid has been actively participating in and leading debates across the industry and beyond to address the challenges the utilities of the future will face. With more than 20 years of experience in delivering energy efficiency programs and installing solar generation systems, we are committed to being a leading advocate of solar generation and other renewable technologies across the Northeast.

We have learned that the successful integration of renewables into the energy mix is only attainable when states and regions work collectively to share a similar vision of creating a green economy.

Recently, the Commonwealth of Massachusetts passed the Green Communities Act (GCA), which set goals to meet 20 percent of the Commonwealth’s electric load by 2020 through renewable and alternative generation. Moreover, the Commonwealth set a target to install 250 megawatts (MWs) of solar generation by the end of 2017 and has challenged utilities to be part of that solution. National Grid rose to the challenge and was among the first utilities to submit a fi ling to the Massachusetts Department of Public Utilities (DPU) to construct, own and operate approximately 5 MWs of solar generation on five separate company-owned sites. Four of those sites that National Grid chose were former manufactured gas plant sites. The company is turning these brown fields that previously had very limited use into renewable energy generation sites. National Grid took the Commonwealth’s challenge seriously and we hope that other states and utilities will join us.

The 5 MWs of solar generation in Massachusetts, while a small contribution to the state’s entire renewable energy needs, will help decrease emissions by approximately 2.9 tons of sulfur dioxide, 6.37 tons of nitrogen

oxide and 3044 tons of carbon dioxide per year. At that emission rate, 5 MWs of solar generation in Massachusetts would save approximately 160 tons of sulfur dioxide, 73 tons of nitrogen oxide and 76,100 tons of carbon dioxide over 25 years.

Evolving technologies such as smart grid are increasingly becoming part of the mix of the comprehensive energy solutions for customers.

Several utilities in the US are either engaged in full-scale system implementations or pilot programs. It is widely believed that smart grids will be the fundamental service platform for future years. Smart grids have the potential to help customers reduce energy consumption and greenhouse gas emissions while enhancing the reliability of the electric grid.

As part of the American Recovery and Reinvestment Act of 2009, the US Department of Energy committed more than $4 billion of stimulus funds for Smart Grid Investment Grants and Smart Grid Demonstrations.

Subsequently, National Grid was one of 54 smart grid workforce training programs in the US that was awarded a share of nearly $100 million in DOE funding.

National Grid has proposed smart grid pilot programs in our Northeast service territory. National Grid’s vision is to deploy smart grid technology to optimize the flow of green energy resources, enhance the performance of the electric transmission and distribution grid, and provide customers with the ability to make informed decisions about how they use energy.

In making the case for renewables, they should not be seen as an initiative or some temporary buzz word upon which forward-thinking utilities need to seize upon. Understandably there are some concerns that could affect the addition of renewables to the energy mix. For example, some renewable options are not as cost effective as others. Frequently, the market is slow to respond to providing funding to offset the initial cost. Moreover, while some customers are early adopters and embrace cost-effective energy solutions, the reality is that there remain certain segments of consumers who are not ready or fully aware of the benefits of renewable energy. Th is should not be a deterrent to the utility model of the future. It just means that we need to work harder to engage and educate our customers, shareholders, governments and other stakeholders on the benefits of renewable energy that go beyond the initial implementation cost.

At National Grid, part of our vision is to ensure that we commit to being an innovative leader in energy management and in being environmental stewards who safeguard our global environment for future generations. It is critical that we, as the utility industry, realize that the actions we take today will serve to address climate change will benefit our customers and communities in multiple ways.

“Critical investment is needed in renewable generation and smarter grid technology across the industry”

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EXECUTIVE INTERVIEW

Modernizing the energy grid Ryan Keefe reveals how T-Mobile is creatively partnering with utilities to improve smart grid systems.

Ryan Keefe currently leads T-Mobile’s Smart Grid initiatives nationwide and has been developing T-Mobile’s efforts to address connectivity requirements as they relate to the smart grid. Keefe works with several business units to bring a turnkey solution to many utilities that would like to utilize existing commercial networks.

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Can you describe the main business challenges in the utilities market and explain how you are attacking these challenges?

Ryan Keefe. The main business challenges we face are overcoming the incentives utilities have to make a rate of return on CAPEX. As a result, much of the industry is attempting to own and operate their own private communication networks. Th is is translating into longer pilots, additional R&D, regulatory education, new standards development, etc. All these issues are delaying the modernization of the energy grid.

History has shown us that all industries should focus on their core competencies. We are attacking these challenges by developing alternative business models that align better with utilities daily business practices. We are also creatively partnering with utilities to align national broadband efforts with smart grid deployments.

What is the difference between commercial and private networks?

RK. There are many difference, however, the biggest difference between the networks are licensed vs. unlicensed spectrum and how they are operated. Private networks typically operate on 900mhz or 2.4Ghz radio frequencies (RF). Unlicensed RF must accept interference and cannot interfere with anything else. Additionally there are thousands of pre written scripts that can be used to exploit and hack into these networks, generating much of the cyber security concerns from regulators.

Unlicensed RF is also used in many household and consumer devices such as: cordless phones, wireless speakers, wireless headphones, baby monitors and Wi-Fi routers. In addition many home area network devices, such as thermostats, light switches and appliance modules are in development to operate in the 900mhz space. These devices are constantly in jeopardy of interfering with each other, add millions of meters to the mix and you drastically reduce the reliability of these networks, indirectly increasing OPEX. Commercial networks operate on dedicated spectrum.

T-Mobile operates on 1900mhz and AWS (1700/2100mhz).

T-Mobile operates above 99 percent reliability with milliseconds of latency, and we must meet federal mandated guidelines for security, reducing cyber security concerns.

Additionally, the network is already built and stimulus funds (tax dollars) shouldn’t pay to duplicate what already exists. Commercial networks cover 99.6 percent of the population that live within a census block.

Can you describe how your relationships with strategic partners provide an end-to-end solution?

RK. Our strategic relationships leverage their AMI and smart grid systems with commercial networks. For example, we have a great partnership with Echelon Corporation, which combines commercial networks and their technology, delivering the benefits to the utility and consumer. Their new Echelon Control System (ECoS) provides an open applications platform that can host a range of third-party applications that provide intelligent distributed control services to utilities and their customers. With ECoS running on transformermounted ECN 7000s throughout the distribution grid, local, autonomous control decisions are made in near real-time for maximum reliability, survivability and responsiveness of the electric grid. All connectivity is made possible through commercial networks. This solves your interoperability and longevity concerns that many regulators and utilities have.

“T-Mobile benefits by expanding our network, utility gains access to commercial networks for smart grid, and consumers benefit by gaining a broadband network”

How can you address coverage concerns when working with utilities?

RK. Today, the T-Mobile network covers 96 percent of the population. 100 percent of our network is built within utilities service territories. In many cases our network is built on utilities real estate. T-Mobile and utilities can swap real estate for tower sites in order to provide ubiquitous coverage for smart grid initiatives. It’s a win-win-win. T-Mobile benefits by expanding our network, utility gains access to commercial networks for smart grid, and consumers benefit by gaining a broadband network.

What can we expect to see from T-Mobile in the next 12 to 24 months?

RK. You can expect to see T-Mobile continuing to be the easiest to do business with and lead the M2M industry.

29/09/2010 13:57

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EXECUTIVE INTERVIEW

Modernizing the energy grid Ryan Keefe reveals how T-Mobile is creatively partnering with utilities to improve smart grid systems.

Ryan Keefe currently leads T-Mobile’s Smart Grid initiatives nationwide and has been developing T-Mobile’s efforts to address connectivity requirements as they relate to the smart grid. Keefe works with several business units to bring a turnkey solution to many utilities that would like to utilize existing commercial networks.

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Can you describe the main business challenges in the utilities market and explain how you are attacking these challenges?

Ryan Keefe. The main business challenges we face are overcoming the incentives utilities have to make a rate of return on CAPEX. As a result, much of the industry is attempting to own and operate their own private communication networks. Th is is translating into longer pilots, additional R&D, regulatory education, new standards development, etc. All these issues are delaying the modernization of the energy grid.

History has shown us that all industries should focus on their core competencies. We are attacking these challenges by developing alternative business models that align better with utilities daily business practices. We are also creatively partnering with utilities to align national broadband efforts with smart grid deployments.

What is the difference between commercial and private networks?

RK. There are many difference, however, the biggest difference between the networks are licensed vs. unlicensed spectrum and how they are operated. Private networks typically operate on 900mhz or 2.4Ghz radio frequencies (RF). Unlicensed RF must accept interference and cannot interfere with anything else. Additionally there are thousands of pre written scripts that can be used to exploit and hack into these networks, generating much of the cyber security concerns from regulators.

Unlicensed RF is also used in many household and consumer devices such as: cordless phones, wireless speakers, wireless headphones, baby monitors and Wi-Fi routers. In addition many home area network devices, such as thermostats, light switches and appliance modules are in development to operate in the 900mhz space. These devices are constantly in jeopardy of interfering with each other, add millions of meters to the mix and you drastically reduce the reliability of these networks, indirectly increasing OPEX. Commercial networks operate on dedicated spectrum.

T-Mobile operates on 1900mhz and AWS (1700/2100mhz).

T-Mobile operates above 99 percent reliability with milliseconds of latency, and we must meet federal mandated guidelines for security, reducing cyber security concerns.

Additionally, the network is already built and stimulus funds (tax dollars) shouldn’t pay to duplicate what already exists. Commercial networks cover 99.6 percent of the population that live within a census block.

Can you describe how your relationships with strategic partners provide an end-to-end solution?

RK. Our strategic relationships leverage their AMI and smart grid systems with commercial networks. For example, we have a great partnership with Echelon Corporation, which combines commercial networks and their technology, delivering the benefits to the utility and consumer. Their new Echelon Control System (ECoS) provides an open applications platform that can host a range of third-party applications that provide intelligent distributed control services to utilities and their customers. With ECoS running on transformermounted ECN 7000s throughout the distribution grid, local, autonomous control decisions are made in near real-time for maximum reliability, survivability and responsiveness of the electric grid. All connectivity is made possible through commercial networks. This solves your interoperability and longevity concerns that many regulators and utilities have.

“T-Mobile benefits by expanding our network, utility gains access to commercial networks for smart grid, and consumers benefit by gaining a broadband network”

How can you address coverage concerns when working with utilities?

RK. Today, the T-Mobile network covers 96 percent of the population. 100 percent of our network is built within utilities service territories. In many cases our network is built on utilities real estate. T-Mobile and utilities can swap real estate for tower sites in order to provide ubiquitous coverage for smart grid initiatives. It’s a win-win-win. T-Mobile benefits by expanding our network, utility gains access to commercial networks for smart grid, and consumers benefit by gaining a broadband network.

What can we expect to see from T-Mobile in the next 12 to 24 months?

RK. You can expect to see T-Mobile continuing to be the easiest to do business with and lead the M2M industry.

30/09/2010 16:02

“Breaking down the barriers to M2M”

T-Mobile USA M2M team m2minfo@t-mobile.com +1 877.284.1009

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EXECUTIVE INTERVIEW

Come together Matt Jackson answers our questions on the latest trends in public safety collaboration.

What impact has the National Response Framework (NRF) had on public safety agencies?

Matt Jackson. Since 9/11, the need for tiered response and unified command has increased significantly. In order to be prepared for a crisis, whether man-made or natural, localities require the ability to directly engage higher levels of government to assist in responding when their capabilities are outstripped by events. The NRF provides a mechanism for collaboration and partnership between leaders at all levels of government to prevent any one level from becoming overwhelmed. However, to achieve this type of tiered response effectively, scalable operational capabilities are required.

Scaling requires seamless coordination across various governmental jurisdictions in order achieve common objectives.

As a result of NRF driving for unity of effort, government agencies are better prepared to respond swiftly and affect better decision making. To enable these efforts, a key change has been in how geographically distributed levels and agencies collaborate to share real-time information and make decisions under crisis conditions. Video conferencing and telepresence are being adopted to support life-like communications and information sharing between various government agencies whether in command centers or in the field.

Have state and local budget cuts had an impact on public safety?

MJ. Resulting from the economic downturn, the recent cutbacks in government spending are having a real effect on the public safety of citizens. In Tempe, Arizona, a $30 million budget shortfall for 2010 had local leaders looking to eliminate needed police positions. A $14 million cut in the 2010 operating budget of Gilbert, Arizona, had officials there warning citizens that layoffs of nearly 100 positions could lead to “possible loss of life and property due to more than a four minute response time.”

A $39 million budget deficit caused Los Angeles Fire Department to impose ‘rolling brownouts’, or temporary furloughs, which removed 87 fi refighters from the daily work rotation. The result is one battalion command team, three emergency battalion offices, 15 fire trucks and nine ambulances would be left unstaffed every day for a year.

With fewer resources, response times will likely grow longer, according to officials.

Clearly, the cuts are having an impact so public safety agencies are having to be creative in how they maintain response times on a smaller budget. One approach is to leverage video conferencing and telepresence to reduce the need for transportation when offering classroom training. Additionally, training can be offered to multiple or all stations in

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a district simultaneously instead of serially, thus resulting in quicker roll-out and recording of sessions allowing playback for those who miss a session or need a course refresher.

Matt Jackson, Director of Global Government Markets, oversees solutions at Polycom for public safety, judicial and agency collaboration. Jackson holds a BS degree in Computer Science from Virginia Tech, an MBA from NC State University and a graduate certificate from the University of Virginia.

How have you seen public safety agencies benefit from telepresence and video conferencing given these current challenges?

MJ. Collaborating using timely, accurate information can determine the difference between a disaster and a crisis averted. Th is is a key reason that public safety agencies use video communications to prepare for and respond to events and conditions that threaten lives and property.

In my experience of working with public safety agencies, comprehensive audio and video communication infrastructure helps to streamline emergency response and effectiveness, better prepare for the crises to come, and reduce ongoing operational costs.

During an emergency, combining audio and video can enable more immediate understanding of complex and highstress situations in the field. Agencies can enhance decision making and response by using video communications to equip emergency management personnel with real-time information, visuals and intelligence to provision resources and response where they’re needed most. They can also enable centrally located experts to provide remote support by having video-equipped field personnel serve as their eyes and ears on the ground and streamline coordination among different agencies by sharing rich information for comprehensive command and control in an emergency operation center.

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As events of the past couple of years have unfortunately shown, disasters and emergencies can – and inevitably do – show their faces time and time again.

Fortunately, there are those ready, waiting and prepared for precisely that.

Welcome to the world of the unsung heroes of emergency response.

I

n the days of old, emergency response involved little more than the rolling up of sleeves to help a fellow being in times of desperation and need. Common sense and ingenuity were the weapons of choice, a calm head the prevailing champion. But times have changed exponentially since then; an unstable growth of the world’s population and an excessive build up of urban infrastructure worldwide, regulated or otherwise, has translated into a battleground of potential risks and disaster areas, becoming increasingly more difficult to fight and repair.

Fortunately, the accelerated world we live in today is also witness to the unstoppable advancement of technology, intelligence and human comprehension that has paved the way for next generation emergency response and understanding.

Instead of dealing with a disaster as it happens, emergency

tress”, whole nations can arise, merge and respond to disasters and emergencies with priceless levels of experience and speed accrued from planning, education, training and improvements months prior to a potential hazard unveiling itself.

However, emergency response is a lot more than just bringing cutting edge management and theory to the table – although that remains part and parcel of the industry.

Ensuring that IT systems and communications between emergency response units, both those in-house and those in-field, continue to push the boundaries of time and knowledge is pivotal to succeeding in keeping people alive and delivering temporarily dangerous situations from the hands of trauma and back to their former glory.

For the emergency response teams of the US, this is a daily occurrence. The question q is, with so many casualties t and scenarios to deal with, how h do they ensure top-notch results? r Well, for the stars of our first article, the St. Louis Regional R Response Team (STARRS), it’s a case c of working with disruptive technologies t to grow a truly inn novative patient tracking system that t functions across all emergency c response disciplines. Not only does it mesh the dedication of all teams – from ambulatory to firefighters, hospital staff to police – but in doing so, it increases the survival chances of the casualties in question.

Where novel technology works for some, managing the right system works for others – which is certainly the case of the San Francisco Fire Department. Providing an estimated 1.4 million people across San Francisco with their services, Captain Robert Kuzma gives US Infrastructure the low down on precisely how they keep their IT and communications systems as sharp as they can possibly be while keeping his staff on their toes and ready for action right around the clock.

For the men and women of emergency response teams, the key to success lies not only in the ability to respond and react when crunch time comes, but to involve themselves in the incessant discipline of preparedness; the time spent doing so will not only serve them well as professionals, but as people. After all, emergency response has, and will always be, a pioneer industry based on the ethos of people working for people.

AND SAVE response bodies and governments now mitigate, prepare, respond and recover – in that order – before, during, and after a disaster or emergency. For the catch 22 of an increasing population equating to more frequent and intense disasters, we’ve done well to counter balance our retort.

Take, for example, Moditech Rescue Solutions, a Dutch company offering a database that US fi refighters can call up on a laptop to pinpoint and deactivate potential rescue hazards when using the ‘jaws of life’ to recover a casualty from a car wreck. The system includes diagrams and other data for 20,000 vehicles – essentially every make and model they could come across in the US – eliminating much of the risk that ‘fi rst responders’ face every time they cut into a car. Potential hazards, a battery or an airbag for example, are highlighted on the system in different colors. Clicking on any given hazard pulls up the procedure for avoiding or deactivating it.

And that’s just on the micro-scale. In the event of an infrastructure-affecting disaster, subjectively defi ned as: “an occurrence causing widespread destruction and dis-

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SUPER STARRS it was the first system to allow collaboration capability, coordinated planning and response across multiple jurisdictions around emergency operations. Nick Gragnani explains how and why the St Louis Regional Response System is a groundbreaking emergency tracking system.

“The federal government realized that that magnitude of attack will require a response from a large region and that it needed to start preparing now in order to prepare a coordinated response”

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Since 2003, STARRS has spent over $70 million across the St Louis metropolitan region

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L

ike many other regions across the US, the St Louis region emergency response was weak and disjointed, with the lack of regional perspectives, further hindering response efforts between the 200 regional fire departments, 40 plus hospitals and multiple EMS providers. But in 2003 everything changed with the development of the St Louis Area Regional Response System (STARRS) to coordinate planning and response for large-scale critical incidents in the bi-state metropolitan region. Nick Gragnani, Director for STARRS, explains that the system was developed as a response to the 9/11 attacks.

“Prior to 9/11, there were a couple of agencies within the St Louis metropolitan area that were working on disaster mitigation and some terrorist mitigation programs preparing the region in case an attack were to occur, but is was a disjointed effort. After 9/11, the federal government realized that that magnitude of attack will require a response from a large region and that it needed to start preparing now in order to prepare a coordinated response.”

Right away it was obvious that STARRS would require the implementation of advanced communications technology in order to ensure that it would be possible to collaborate with every function that was involved in the system in order to convey what was required when a major incident occurred. “Using Hurricane Katrina as an example, the area received warning that something was going to happen and it was possible to start collaborating on what to do all the way up to the event, the recovery from the event and then rebuild after the event,” says Gragnani.

“We established what we refer to as our Virtual Emergency Operations Center or VEOC, which is a way for the entire region to instantaneously start collaborating over a web portal where we can share information as to what is known, what is going on and then line up resources; everything from cots, blankets, response equipment, medical supplies and so on, for the particular event.”

Another part of VEOC is the patient-tracking program, within which, explains Gragnani, a triage method is established at the scene, incorporating a load balancing concept that means the most critical patients are sent to the closest hospitals that are capable of handling them.

Load balancing means that resources from across the region can be used as opposed to one individual hospital being under pressure.

“Patient-tracking is very much like a UPS or FedEx package delivery – we put a regular MCI tag on the victim that has a barcode on it, we scan that barcode with the handheld scan device, which then identifies that individual and we’re able to enter information about their condition.

The whole time that we’re at the scene the hospital is watching over this on a website so the minute that a victim is picked up and transported they know exactly what to expect and how best to treat them.”

By using existing technology in a new format, it has proven possible and successful to track patients and ensure they receive the best possible treatment in as short a time as possible, and besides patients the system can be used to track equipment, stashes of pharmaceuticals and other

resources, allowing even more value with the technology.

And the patient-tracking system has been working so efficiently in the St Louis region that Kansas City, Missouri has implemented a similar plan, although it is only to be used when a disaster occurs. Across the St Louis region, the program is being used all day every day by emergency personnel to improve the efficiency in day-to-day operations and help responders maintain proficiency with the system.

“Our concerns are that if the system is used like it is in Kansas City it’s being put in a box and it’s only going to be pulled out in an emergency. The problem there is how do you know if your personnel are trained on it, plus are you going to be able to get to the boxes in the middle of a disaster and start handing out handhelds? In our mind it just doesn’t make operational sense that way,” says Gragnani.

However, this system doesn’t come cheap. The soft ware costs alone are $125,000 a year, which is what Gragnani dubs the “Achilles heel” of the whole program. Indeed, these costs are huge when there are years going past before any mass casualty incident actually occurs. Does it make sense to spend over $125,000 a year for a system that you may use once over a five to 10 year period?

Gragnani believes it does, particularly when the benefits of the whole system are looked at. “There’s a high percentage of people that when they are sent to hospital have been known by that hospital before and there are records on fi le about them. Where we’re trying to go with this is that once that medical technician scans them they’re automatically tapping into the hospital network and can then do the admitting right there on the scene because they will already have been known by that hospital and can start that recording procedure so that all the records are taken care of.

“And not only that, but the medical technician in the past will have had to sit down and write the report on what happened. With this new system in place, when they get to the ER they simply have to print their report from a computer and it will be done.”

Looking forward, Gragnani is working on a regional interoperable communications network, a voice communications network for public safety and fi rst responder agencies across the region, in other words, all the fi re, police, public health or any other agency that could be considered as a fi rst responder.

“We’re right now building an eight-county microwave network that is very similar to an office computer network.

The only difference is that instead of a hard wire cap five line that runs between computers and then back to a server and a router, it’s all being done with a microwave link that would serve the same purpose, but over the eight-county area.

“Each county has its own individual microwave ring and each of those are tied together across the region so that we don’t have any one single point of failure and the whole system should survive no matter what’s going on. What that allows is the LAN mobile radio system to be connected up to 50 miles away from their home base system – not only can they travel across the region, but a fire fighter in the base of a building in downtown St Louis will be able to transmit for additional help and resources.”

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The San Francisco Fire Department provides fire and emergency services to an estimated 1.4 million people across San Francisco with ,approximately 1700 fire fighting staff.

Captain Robert Kuzma is in charge of ensuring that vital communication and IT infrastructure helps keep the department running as smoothly and effectively as possible.

In your opinion, how important is communication and IT infrastructure within a fire department?

Robert Kuzma. Communications and information technologies are critical to all aspects of the San Francisco Fire Department including response, planning, records management, cost recovery and public communication.

However, the current economic climate is driving the burgeoning question of whether fire departments should continue to invest in publicly owned communications and IT infrastructure or to examine the cost effectiveness of application service providers (ASP) for IT and commercial cellular for wireless voice and data.

The decision will be driven by an analysis of past investment, anticipated revenue, economy of scale, and risks, real or perceived, of using shared offsite resources.

The San Francisco Fire Department as part of the City and County of San Francisco is an example of where previous investments in publicly owned IT and communications infrastructure provide an opportunity to continue to invest and upgrade essential public safety systems.

As one example last year the 10-year-old Public Safety Data Network (PSDN) was upgraded from a Motorola DataTac system to a Motorola High Performance Data System (HPD) using existing City and County of San Francisco owned radio sites.

The decision to upgrade versus migrate to a commercial cellular 3G network was driven by the previous public bond funded investment in a city owned network and the real risks of relying on private providers in an area oversaturated with cellular devices and at risk for disruption due to natural or manmade disasters.

What are the main challenges facing communication and IT infrastructure in your opinion? How are you tackling these challenges at San Francisco Fire Department?

RK. The greatest challenge for fi re departments – and the public sector as a whole – is how to secure funding for IT infrastructure and support. The San Francisco Fire

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“When prolonged response times result in the loss of lives and property, leveraging technology and infrastructure is often the most cost-effective means to improve service delivery”

Department, through the leadership of Chief of Department Joanne Hayes-White, has a proven record of leveraging IT systems to improve efficiency while decreasing administrative costs. Specific examples of cost effective technologies and fi re department or San Francisco owned infrastructure include: in-vehicle GPS with GIS routing to emergencies; human resources ERP with integrated personnel scheduling, and online training; electronic records management for fi re and emergency medical services; planning solutions through SAS and ESRI GIS; and, wide area networks (WAN) connecting over 50 facilities.

For example, the justification for funding the infrastructure to support in-vehicle GPS and mobile GIS mapping, was the opportunity to reduce response times by leveraging the city-owned wireless data network. The alternatives would have been either to contract to a commercial vender with an annual maintenance fee that would have equalled the overall project cost or to have staffed additional apparatus. When prolonged response times result in the loss of lives and property, leveraging technology and infrastructure is often the most cost-effective means to improve service delivery.

What impact is technology having on infrastructure at San Francisco Fire Department?

RK. Over the past decade, technology has had a tremendous impact on IT infrastructure in the San Francisco Fire

Department. The simultaneous implementation of a fiber optic WAN and enterprise level relational database based applications, required the procurement and maintenance of multiple standalone servers and SANs. The current technological push is towards centralization of IT through the virtualization of servers and cloud computing.

Even for the largest of fire departments, the economic pressures will push, at least in the near term, towards the sharing of infrastructure and support costs amongst city and county departments. The pressure may even necessitate that smaller fire departments partner with larger departments to host the infrastructure and shoulder the initial development costs for enterprise level applications. In this model you may see the development of public sector to public sector ASP as a cost effective means to develop and maintain public safety specific infrastructure and applications.

What improvements do you hope to see in the IT and communication infrastructure in the fire and emergency sector?

RK. The hope is to see a modernization and standardization of computer aided dispatch systems that will provide opportunities analogous to those provided by ODBC for relational data base applications and P25 for digital RF Voice Communications. The opportunity would be to integrate localized premise hazard information, GIS information, city assessor data and even occupant data.

Th rough the use security levels all public safety responders would have access to information including hazardous materials, recent medical calls and patient treatments, and where permitted, law enforcement contacts or registered fi rearms.

Current proprietary systems lack the capacity to seamlessly integrate data sources and provide access through an elegant mobile application. With the movement to smart phones, there will be an increased pressure for public safety technology and infrastructure to catch up to what the consumer is currently enjoying courtesy of 3G and soon 4G bandwidth.

What are your current priorities in terms of IT and communication infrastructure? What’s in the pipeline over the next 12-24 months?

RK. The current projects involve the procurement, installation and implementation of P25 compliant 700MHz voice and data infrastructure, both in San Francisco and in the Bay Area region. The initial emphasis will be on providing shared voice capability amongst complimentary response personnel functioning within a unified command structure, for example public safety and transit personnel responding to an incident involving commuter light rail trains.

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ASK THE EXPERT

The technological advantage Dennis Smagac explains why using technology in emergency response situations makes sense.

M

odern ingenuity has provided technology that transformed communication, entertainment, transportation and the way we do business. It has transformed some aspects of emergency response, and improvements continue to be developed.

As the population increases, water conservation is more important than ever, changing the notion of water as a widely available commodity for fi refighting. Fortunately, compressed air foam (CAF) technology combined with fi re suppression formulations offers a viable solution for effective firefighting that uses 78 percent less resources than water alone and knocks down fi re 79 percent faster than water alone.

The British Navy experimented with CAF technology in the 1930s. Adding a chemical formulation to water to create foam to extinguish fire can be found in an English patent dated 1877. These technologies have also evolved over time, becoming more effective and efficient. Some systems that deploy CAF have also been evolving into systems that may

“Using technology to maintain and protect our way of life just makes sense” be used for a wide variety of applications, from fire suppression to decontamination and hazmat remediation.

Today, fi rst responders have been tasked with responding to a wide range of incidents, whether accidental or man-made. Local fi rst responders have the advantage of getting to the scene faster to at least contain the incident. A fast and effective response will reduce the incident’s economic and social impact. Yet to date, not all fi rst responders have the tools they need to respond to today’s wide range of potential threats. The time and expense required to accomplish this is substantial. Multi-asset equipment – equipment that may be used for more than a single type of incident – can ease the burden on tight budgets. Rather than focusing on equipment training, more time can be dedicated to incident training, since the equipment would work in much the same way.

Intelagard equipment has been designed with today’s first responders in mind. Intelagard systems are easy to use and maintain, with a low cost of ownership. The systems may be used for a wide variety of purposes. While it may generally be expected that the systems will primarily be used for rapid fi re suppression, the ability to quickly swap out formulations as appropriate to the incident at hand

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while using the equipment in much the same manner may provide a level of comfort to responders when they dearly need it. When seconds count, Intelagard equipment provides users with fast and effective response ability.

During tough economic times, organizations naturally tend to protect their budgets. However, should an incident occur that local first responders are not equipped for it could cause a significantly greater economic impact than the cost to prepare would have been. There’s a correlation between an effective response time and the cost to mitigate and remediate many incidents. It would be wise to also consider the emotional and social impact of a fast and effective local response to a wide range of incidents.

Everyone wants to believe that they are safe in their own community, and that if something were to happen, it could be dealt with quickly and effectively.

The availability of fresh water has come full circle.

Populations used to settle where water was readily available. Over the years, many came to take water sources for granted. Now it seems that once again the availability of water is becoming a more important social issue. Using water alone to fight fi re no longer makes good economic sense, not when systems and solutions exist that more effectively and rapidly suppress fire. Using less water reduces damaging run-off and lessens mop up time.

We live in a world abundant with technology. Using technology to our advantage to maintain and protect our way of life, including in emergency response situations, just makes sense.

Dennis Smagac is one of Intelagard’s founders. He combined his expertise in compressed air foam technology with his knowledge of decontamination to create a technologically advanced product line of multi-hazard response equipment for fire suppression as well as decontamination and hazmat remediation.

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WATER FOCUS

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Why failing water infrastructure can no longer afford to be forgotten.

F

or far too long water infrastructure in the US has been forgotten. And it’s only a matter of time before a major incident happens to the crumbling, failing pipes.

Most of the buried water infrastructure in the US is over 100 years old and has been starved of investment for decades. Sustainably managing, maintaining and repairing water assets is now becoming impossible and astronomically expensive upgrades and maintenance means that water utilities today have little knowledge of water main condition until breaks and leaks happen.

With approximately 160,000 public drinking water systems and 16,000 publicly owned wastewater treatment systems in the US, around 84 percent of the population receives their potable water from these drinking water systems and 75 percent has its sanitary sewerage treated by these wastewater systems, which all adds up to a huge logistical challenge.

So what’s happening to combat this huge challenge?

Well, in a word, nothing. Infrastructure built around World War II has remained untouched since and with basic information about the pipes, including their location, depth and materials, never recorded, it means that water authorities are in the dark as to where a pipe is in the ground, what it is made of or even how old it is. The innumerable impact on the water sector includes poor water quality, water contamination, public health risks and costly infrastructure repair.

But overstressed, deteriorating pipes are not the only difficulties currently facing the industry. Tom Curtis, Deputy Executive Director at the American Water Works Association (AWWA), believes that the biggest challenge is fi nancing. And without fi nance it’s unlikely the dire situation will be getting better any time soon. “Financing is just a huge, huge issue: it’s related to inadequate rate structures, inadequate revenues for water systems and the difficulty water systems have in investing in the replacement and rehabilitation of the water infrastructure,” says Curtis.

Many things are being done at different levels to combat the tricky fi nancing problems. The AWWA for instance, is promoting a campaign entitled ‘Only Tap Water Delivers’, which includes messaging and advertisements that water systems can use locally in a campaign to revise rate structures. “Many utilities are themselves looking at their rate structures and seeking to raise rates over the coming years in order to increase their ability to invest in repairing and rehabilitating their water infrastructure,” adds Curtis.

And the Environmental Protection Agency (EPA), responsible for regulating the quality of drinking water and wastewater quality, has recognized that rates are an important issue and is itself developing materials relating to sustainable utilities. One important feature of a sus-

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tainable utility is an adequate fi nancial base, so the EPA is helping to promote awareness and consciousness of that among not only utilities, but also their governing boards who set the rates.

“Many water and wastewater systems have done a marvelous job of moving forward on making progress in the fi nancial sphere, while many others still have a lot of work to do,” admits Curtis. “There’s a reluctance on the part of elected officials who set the rates to rise water and sewer rates sufficiently and we need to make progress on that. Frankly, water and wastewater services are underpriced in the US, that said, there’s a growing awareness of the challenges that that brings so I really hope we can continue to move forward on that.”

Despite the slow, yet positive work going on in the sector, it still remains vulnerable to a variety of attacks from terrorist contaminations to natural events like hurricanes. Curtis explains that a number of improvements are going on in this regard. First of all, the AWWA has spearheaded the development of a group of networks called WARN systems, which stands for Water Agency Response Networks. These are state-by-state networks of utilities that together in a collaborative effort establish intra-state mutual aid and assistant agreements for water and wastewater utilities to enhance preparedness and response. Utilities involved are prepared to help others out if they experience a trauma of any sort, be that a terrorist attack or a natural event.

“No one is better equipped to help a utility in distress that another utility,” claims Curtis. “The utilities that are like a stressed water system and close by in the same state are prepared to lend crews and equipment and materials, as well as advice and support immediately. And the networks for delivering and coordinating that kind of assistance have been largely set up, almost every state now has a functioning WARN network.

“Utilities join this webpage, which is a consistent way for sending out a distress call and describing what the needs are, and other utilities have an organized way of describing what materials or assistance they can offer to help. We believe the WARN networks are very important and have already been activated and used in a number of instances where there were natural events that required assistance.”

In the same vein, the AWWA worked together with the American Society of Engineers (ASME), building on the earlier work done by the US Department of Energy and Sandia National Laboratory, to come up with an officially-sanctioned standard for judging risk and resilience and taking measures to protect utilities.

The Sandia National Lab has developed a risk assessment methodology called the risk assessment methodology for critical asset protection (RAMCAP) as a sophisticated and robust tool for identifying the risks relevant to critical assets. AWWA and ASME took the

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WATER FOCUS

RAMCAP method and adapted it for water and wastewater utilities. It identifies critical assets, points of vulnerability, and potential points of failure as well as how to get those assets back online or replace them quickly.

“The standard recognizes that it’s not possible to have 100 percent guaranteed protection against a determined attack so the standard is all about resilience. It’s important to have as much resilience as possible and be able to bring assets back online quickly so that essential levels of service can be restored and protected as much as possible,” says Curtis, who goes on to explain the enormous progress in the sector.

“We’ve done so much since 9/11 to prepare, plan and defend the water sector. We’ve offered lots of training and workshops, alongside developing the standard I mentioned and the campaigns to promote awareness.”

With respect to potential terrorism attacks, utilities in the drinking water sector have assessed their vulner-

ability to man-made events and have developed emergency response plans in case of an attack, which has been required by federal law. Many wastewater utilities have done the same thing voluntarily, even though they have not been required to as a matter of law – they recognize that they are at risk and want to take steps to protect themselves and the population they serve.

EPA has also been working with its security partners with the goals of enhancing the water sector’s ability to plan for and respond effectively to security threats and breaches.

In response to the Bioterrorism Act of 2002, which provides EPA explicit authority regarding community water systems, it handles the receipt of community water systems’ vulnerability assessments and emergency response plan certifications. In support of maintaining a resilient infrastructure, EPA is partnering with the water sector on multiple programs and efforts including WARN and the National Incident Management System (NIMS).

“No one is better equipped to help a utility in distress than another utility”

CASE STUDY: San Diego County Water Authority “We are facing a variety of challenges at San Diego County Water Authority,” explains Maureen Stapleton, General Manager at the authority.

“The first is the new and evolving regulatory restriction we have in California and in our Bay Delta region, which is one of the most significant imported water sources in the state. The second area of challenge is climate change and then third is related to the pricing of water and the increasing cost, not only to acquire water, but its delivery.

“Our business plan at San Diego County is a five-year rolling plan that ensures we are implementing our multi-faceted approach to water reliability for our region. It’s made up of three focus areas: water supply, water facilities and our core business, which relates to the support programs to the supply and facility focus areas.

In each of those areas are a variety of specific management strategies, goals, objectives and timelines.

“We have found that the business plan allows us to truly focus in a laser-like approach to the key strategic areas around water reliability and overall our mission of supplying water to San Diego County. It really moves it forward in a deliberate manner. We have a formal update every couple of years and we have an annual report out and update it. In addition, we’ve real-time monitoring of our various goals and objectives and we’ve put it online so that the public, our retail water agencies, our board of directors and anybody else can see what we’re working on, how well we’re doing, if we’ve succeeded in achieving an objective or if we’re lagging behind on the issue of timing.”

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Gary Eaton, San Diego County Water Authority’s Director of Operations, talks through some of the technology improvements seen at the authority: “We continuously monitor emerging technologies that will help us become more efficient and more effective in what we are doing.

“We’re the first agency in the world that was able to deploy acoustic fiber optic cable in our prestressed pipelines, which has given us the ability to monitor pipelines 24 hours a day, seven days a week to provide us early warning should we have an issue with the pipelines.

“We’ve also implemented a GPS system that monitors our pipelines that are in the ground – we have 52 different corrosion monitoring systems and this network monitors and alerts us, which has been a big saving in staff time because we don’t have to go out on an annual basis and examine each of those systems. And finally we have a continuous water quality monitoring system that we’ve put into play. It monitors a baseline condition on the water that’s being brought into the county and should that baseline deviate for any number of different reasons, it alerts our operations staff.

“Security is a key issue for us so we’ve gone through several vulnerability assessments and participated at the state level on the development of a guide for water districts here in California on how to conduct vulnerability assessments and we continue to upgrade those. For instance, the Department of Homeland Security has recently been out to look at our system, evaluate it and provide us with feedback.

“Security is a key issue for us so we’ve gone through several vulnerability assessments and participated at the state level on the development of a guide for water districts here in California on how to conduct vulnerability assessments”

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As a consequence of all the work, effort and money that has been dedicated to the sector, all water and most wastewater systems have assessed their vulnerabilities and developed emergency response plans. And within this, technology has played a role in a number of respects. There is – at least experimentally – a technology that is in place in a number of water systems in the US designed to detect contamination in real-time that might be introduced downstream of the treatment process. This is still currently in the pilot-test stage, but is showing great promise, says Curtis.

“One of the vulnerabilities that utilities face of course is the possibility that disinfectant chemicals might be used against the community; that there might be an attack on let’s say a chlorine storage facility. So there’s been a hardening applied to chlorine tanks, our recapture and scrubber technologies employed to prevent a release of chlorine gas to neutralize if it were to be released from a storage tank, and recapture it inside of a contained structure to

“We’ve also just completed the Supervisory Control And Data Acquisition (SCADA) system that we use to control our aqueduct operations.

We have just completed an assessment from Homeland Security called a penetration test, which was designed to see if that system could

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prevent chlorine gas from escaping into the community.

That’s the kind of technology that is being very widely employed by US water and wastewater systems.”

But despite the obvious benefits of emerging technologies, Curtis states that the response and recovery side remain vital to the water and wastewater industry.

“There’s no question that American water and wastewater systems are much stronger, better protected, more resilient and better positioned now that they were before the events of 9/11,” says Curtis. “Obviously nothing is 100 percent secure, but we are in far stronger position to protect, defend and respond to events of all kind – natural and manmade. Part of that is the fi nancial challenge, but those challenges exist regardless of any security threats, and a part of being secure and resilient is having a strong, working sustainable infrastructure under you. There’s no doubt that we’ve made tremendous strides in the last five years, no doubt at all.”

be penetrated by an outside person and create what they call a denial of service attack that would shut us down.

“We’ve also implemented an integrated contingency plan that has been set up in compliance with our national infrastructure and allows us to have an organizational structure that is consistent with our other first responders, whether that’s at state or federal level.”

Looking forward Stapleton foresees continuing challenges for the industry. “At San Diego County we will be working on a couple of things around supply diversification over the next five to 10 years. We’re going to see restricted water supplies due to both regulatory restrictions as well as the climate impacts that we’re experiencing today and potentially in the future, combined with a reliance on new technologies to improve efficiency and reduce costs. I believe that with the ever-increasing cost of water supply in the west, our ratepayers are going to demand us to produce that water and deliver it to them in the most cost effective way possible.

The third area that will be looked at is related to water use and water ethic, which is around moving communities towards an understanding of the preciousness of water supply and to rethink the use of water, in residential, commercial and industrial uses. We are focusing in rethinking our landscape and the water use so that the next five years will be about developing a water ethic that is reflective of the scarcity of water in the west.”

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INDUSTRY INSIGHT

Smart water management Kim Stoll reveals the importance of advanced metering solutions for water conservation.

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oday, water utilities are looking for ways to be “smarter”. Market demands are changing, making it even more difficult. Utilities are faced with challenges like reducing non-revenue water loss, aging of both physical infrastructure and human capital and the reliability of both, balancing power and energy needs against improved water and carbon efficiencies, and an increasing desire by consumers for a role in water management and conservation.

In order to conserve the world’s most precious resource, you need to be able to measure it. Traditionally, metering monitored water usage data so that utilities could bill customers. Today, utilities have moved far beyond basic meter reading. Extended capabilities in data collection and management enable water management companies to become more efficient and effective when managing their businesses. Water management companies now commonly monitor, assess and control meter-reading processes, and use this information for account reporting, maintenance and customer service activities.

The future of water management will continue to be based on information, but what will become more critical is the ability to manage disparate silos of information and employ advanced analytics tools to drive smarter business decisions.

With this integrated system data, utilities will be able to make more rapid decisions and respond before a crisis hits. A complete water management system will involve the monitoring of water systems in realtime, collecting that information, analyzing it, and then extrapolating that data to detect anomalies, analyze trends, understand behavioral models and detect leaks. Utilities will be able to plan maintenance and downtimes, assuring higher customer satisfaction.

A smarter water delivery infrastructure consists of smart, connected devices, such as water meters and sensors, communicating through integrated communication networks like a backhaul network. The data being communicated is then integrated, stored and analyzed. The information is then presented to the user, for example the utility or its customer, to assist with decision-making. The consumer, for example, could see their hourly consumption and make changes to their behavior based on the information.

Smart water measurement will give utilities the ability to profi le consumption patterns. Th is information will help utilities detect theft and unbilled water usage, and they could provide consumers with personalized usage

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guidelines in their monthly bill to increase awareness and conservation.

With this level of understanding of its water system, utilities could begin to consider time-dependent water pricing by matching water production and distribution cost. They could also develop optimal pumping strategies based around the amount of water required at a given time.

Consumers want accurate billing, increased efficiency through clean electricity sources, and more information and control. Utilities need to automatically monitor and maintain the health of their systems, reduce their cost to serve, and meet or exceed their customers’ expectations.

In the end, smart water measurement will provide utilities with the ability to balance the needs of their customers with the needs of the utility itself.

Kim Stoll is the Vice President of Marketing for Badger Meter, a leading manufacturer and marketer of products incorporating liquid flow measurement and control technologies.

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ASK THE EXPERT

On the lookout Dan Kroll explains how event detection can have a major impact on the quality and security of water supplies.

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he vulnerability of our water supplies to intentional attack, not to mention accidental contamination, has been well documented. Due to its nature, the distribution system that delivers water from the treatment plant to the end-user is the primary focus of this vulnerability. The distribution system’s widespread nature and easy accessibility makes the task of physical hardening impractical. The only solution to address this weakness is the use of monitoring to rapidly detect and respond to any anomalies.

The distribution system represents the last analytical frontier in the water quality industry. Once the water reaches our aging distribution systems, our knowledge as to its continued integrity is limited. Historically, most monitoring in the distribution system has been relegated to the occasional snapshot provided by grab sampling for a few limited parameters. The development of water security monitoring based on the use of multi-parameter sensor packages coupled with interpretive algorithms in the years since 9/11 has begun to change this paradigm.

Monitoring in the distribution system is a difficult proposition. The sheer number and diversity of potential threat agents that could be utilized in an attack against the system makes monitoring for them on an individual basis an effort that is doomed to failure. To counter and detect the unprecedented number of compounds that may be encountered, what is needed is a broad-spectrum analyzer that can respond to any likely threat and even unknown or unanticipated events.

Rather than attempting to develop individual sensors to detect contaminants, the Hach Homeland Security Technologies approach was to utilize a sensor suite of commonly available off-the-shelf water quality monitors such as pH, electrolytic conductivity, turbidity, chlorine residual and total organic carbon (TOC) linked together in an intelligent network. One of the difficulties encountered when designing such a device is that the normal fluctuations in these parameters found within the water can be quite pronounced.

The problem then becomes how we differentiate between the changes that are seen as a result of the introduction of a contaminant or anomalous condition and those that are a result of normal everyday system perturbation. The secret to success, in a situation such as this, is to have a robust and workable baseline estimator to facilitate event detection.

In the system as it is designed, signals from five separate measurements of water quality (pH, Conductivity, Turbidity, Chlorine Residual, TOC) are processed from

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“The secret to success is to have a robust and workable baseline estimator to facilitate event detection” a five parameter measure into a single trigger signal that indicates if water quality has changed in a meaningful way.

Th is signal is easy for operators to interpret and recognize when an intrusion occurs.

The deviation vector that is derived from the trigger algorithm is then used for further classification of the cause of the trigger. The direction of the deviation vector relates to the agent’s characteristics. A deviation vector from the monitor can be compared to agent vectors in the threat agent library to see if there is a match within a tolerance indicating the potential cause. This system can also be very useful in developing a learning-based system for classifying normal operational events that is a useful process control tool.

Such systems have been deployed in a number of locations. These deployments include both municipal water systems and major projects at military and government facilities. While at the time of this writing no actual intentional attacks have been recorded, detected events have included pressure problems, rain events, main breaks, chlorine over and underfeeds, ammonia feed problems and other operational events. More serious problems that could have caused health effects if they had not been detected have included fluoride overfeeds, caustic soda overfeeds and a contamination of a well with jet fuel on a military base. The system’s ability to detect such events and theories of response and operation when anomalous events in the distribution system are detected will be of paramount importance as we endeavour to secure our water supplies from not only terrorist activity but also a variety of other hazards.

Dan Kroll is Chief Scientist at Hach Homeland Security Technologies and Principal Investigator for the Hach Advanced Technology Group.

Kroll has developed both advanced and simplified methods for a variety of crucial water quality parameters and is the author of Securing Our Water Supplies; Protecting a Vulnerable Resource.

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INFRASTRUCTURE PROTECTION

Cutting risk Th Department The D t t off Homeland H l dS Security it iis responsible ibl ffor protecting t ti th the infrastructure essential to the nation’s security and economic vitality.

Assistant Secretary for Infrastructure Protection Todd Keil brings more than 22 years of experience to the department’s national infrastructure protection mission.

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laiming that there is no such thing as a typical day, Keil generally starts each day with an update brief at 7:45am to get an overview of current and important issues. “The daily update brief is a chance for staff to highlight breaking issues related to critical infrastructure,” he reveals. “We focus on significant incidents and discuss what happened yesterday, what happened overnight, and what we’re potentially dealing with today.”

In order to ensure the Department of Homeland Security leads a coordinated effort to reduce risks to critical infrastructures, Keil explains that the Office of Infrastructure Protection works across a number of areas. “A top priority is to ensure our outreach efforts help our stakeholders and partners mitigate risk across the country.”

Indeed, the Office of Infrastructure Protection leads a coordinated national infrastructure protection and re-

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silience program outlined in the National Infrastructure Protection Plan (NIPP). Under the NIPP, a sector-specific agency is assigned to each of the nation’s 18 critical infrastructure sectors and leads a collaborative process involving public and private sector partners. The NIPP framework allows the department to provide the coordination and collaboration needed to set national priorities and goals for the critical infrastructure community.

To that end, the Office of Infrastructure Protection is initiating a stakeholder input project to obtain feedback from critical infrastructure owners and operators across the country. The intent of this project is to ensure resources align with the unique needs of each sector. Another priority is to elevate partnerships with critical infrastructure owners to a new level, and Keil explains the Office of Infrastructure Protection has already begun to take steps to make that happen.

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“Within the Office of Infrastructure Protection we are looking at how we do business. We want to make sure that we’re focused on the field, that we’re focused on our customers and stakeholders and that our resources are aligned with the needs of everyone. We’re taking a regional approach where we can project our efforts, programs, capabilities and tools to the people that need them most in order to put what we have available to the greatest use and keep the country safe.”

The three R’s

“The private sector and our critical infrastructure stakeholders look to the department to help them achieve a better understanding of risk”

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In addition to a risk management approach to ensure that resources are used efficiently and effectively, and a regional approach to better focus on stakeholders and customers, the department is also focusing on resilience, by working with stakeholders to build a nation that is established upon a strong foundation of partnerships and prepared for any situation that terrorism, Mother Nature, or chance leaves at the doorstep. Specifically, the department is looking to engage federal resources with those of public and private partners to ensure that those resources are maximized to help everyone involved understand the current landscape, as well as emerging and future threats.

Risk management also plays a critical role in the department’s approach to working with the private sector and other stakeholders. “The private sector and our critical infrastructure stakeholders look to the department to help them achieve a better understanding of risk and threat so they can mitigate in the best possible way.”

Across the department, offices including, infrastructure protection, are working together to ensure a more streamlined and collaborative approach to identifying and mitigating risk. The 2008 Department of Homeland Security Strategic Plan serves to focus the mission and sharpen operational effectiveness by including preparation for and response to all hazards and disasters. “It’s not just that we’re looking to keep our country safe from terrorism. The department looks at it as an all-hazards risk environment; from accidents to acts of Mother Nature,” he says.

There are 18 risk-based performance standards directly related to chemical facility security. According to Keil, risk-based performance standards specify the outcome that is required, but leave the measures to achieve the outcomes up to the discretion of the regulated entity.

The performance standards essentially set a goal and let the entity decide how to meet it.

“Previously there was little flexibility – you would have to install a certain piece of equipment or put a particular process in place – and that was supposed to achieve a goal,” says Keil. “Today, there is more flexibility and this means that [entities] can choose the most cost-effective method for achieving a satisfactory level of security on the basis of their risk profi le.

“I think the regulated entities appreciate the approach where they get to choose the method that best works for them. And the department reviews what is proposed to ensure the entities are able to meet the goal.”

Critical protection From energy systems that power our neighborhoods, to transportation networks that move us around our communities and the country, to facilities that provide our families with safe drinking water, critical infrastructure impact nearly every aspect of our daily lives.

Because this critical infrastructure provides our country with benefits, services and opportunities on which we rely, it’s important to be mindful of the risks posed to critical infrastructure by terrorists, pandemic diseases and natural disasters.

The Department of Homeland Security is working to raise awareness about the importance of our nation’s critical infrastructure and to strengthen our ability to protect it, overseeing programs and resources that foster public-private partnerships, enhance protective programs, and build national resiliency to withstand natural disasters and terrorist threats. Key activities in this area include: • Assessing vulnerabilities, implementing protective programs and improving security protocols • Enhancing preparedness through training and exercises • Assisting with contingency planning, response and recovery • Implementing real-time information sharing • Implementing cybersecurity measures • Assisting with infrastructure data collection and management • Implementing regulations for high-risk chemical facilities • Developing standards for federal building security

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INFRASTRUCTURE PROTECTION

Under attack More than half the world’s critical infrastructure organizations admit to being targeted by cyber attacks, according to research commissioned by McAfee. Fifty-four percent of IT security executives at 600 critical infrastructure providers surveyed said they had been hit by large-scale attacks or infiltration, while 29 percent said they face multiple attacks every month.

The report found that organizations relied on physical security and have little or no cyber protection. The cyber attacks on Google and more than 20 other companies earlier this year could easily have been targeted at critical infrastructure, says Dave DeWalt, Chief Executive at McAfee. The attacks were the most sophisticated in years, making it a critical moment in cybersecurity because of the targeted and coordinated nature.

Critical infrastructure needs to be even more resilient against these potential attacks and look at improving every potentially weak or exposed area. The report said authentification of users and encryption of data are two key areas that need to be improved.

Source: www. computerweekly.com

“Our efforts will continually be focused on how we can keep our communities safer”

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Protection A primary mission of the department is to ensure the safety and security of the American public. However, is it difficult to fi nd the balance between making the public aware of potential infrastructure threats without instilling fear? To increase public awareness and preparedness, the Department of Homeland Security continues to expand its national ‘See Something, Say Something’ campaign in coordination with law enforcement, the private sector and community groups, integrating this effort with the National Suspicious Activity Reporting Initiative and the transportation, sports, travel and law enforcement industries.

Keil explains that the recent introduction of the See Something, Say Something initiative has played a vital role in educating the public in being vigilant: “The department wants the public to get involved. If you see something that appears out of place, just say something.”

For example, because of the vigilance of two street vendors who reported a suspicious looking car in Times

Square, New York, earlier this year and alerted the New York City Police Department, a potentially deadly firebomb was aborted.

In addition to expanding the department’s relationship with the public, one of the other areas the department is emphasizing goes back to partnerships with stakeholders. “It is the strength of partnerships that really brings this together: creating a common purpose that unites and drives us to act even in the face of threats,” Keil explains. “Leveraging those partnerships we’ve built is one of our greatest strengths.”

In his role as Assistant Secretary, Keil is working on behalf of the department to evolve the Office of Infrastructure Protection into a more transparent organization, and taking a more regional focus so that its programs, tools and resources are leveraged in communities around the country. “Our efforts will continually be focused on how we can keep our communities safer and we need to ensure that our resources are focused. At the end of the day we have to be good stewards of the public trust, and that will be our ultimate focus.”

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EXECUTIVE INTERVIEW

Connecting the anywhere, anytime enterprise Jeff Newman discusses how Enfora is focusing on a systems and solutions approach to connecting remote assets to the enterprise.

Can you outline concerns or challenges in connecting remote assets to the enterprise and explain how you are changing the way companies look at managing and monitoring their critical assets?

Jeff Newman. With over 50 billion assets in the world today, the real challenge is to determine the best and most cost effective way to connect them, turning them into smart assets designed to drive business growth, operational efficiencies and create value added services. And while there are intelligent devices of all shapes and sizes, it is the configuration, provisioning and management of those devices that poses the biggest challenge. But with the right partner, seamless connectivity to the enterprise can be achieved for deployments of all sizes.

What are the obstacles that enterprise organizations need to overcome to achieve the goal of connecting their remote assets?

JN. While intelligent edge devices have the ability to connect critical data to multinational enterprise applications, a company must always consider the challenges that must be overcome to bring that data reliably to the application for use. Overcoming the dynamic cellular infrastructures of the world, surviving and thriving in the always connected world requires a clear understand of the idiosyncrasies of diverse communications networks.

Understanding how to manage the data produced by the vast number of end-points can be a daunting task for almost any company, but with an extensible architecture, one that is dynamic yet stable, scalable and reliable is critical to the overall success of an asset management deployment.

How are advances in technologies helping accomplish ubiquitous connectivity?

JN. The anywhere, anytime experience is driving a profound technology transformation and broadband wireless users are demanding ubiquitous connectivity for a host of new applications. Delivering that ubiquitous connectivity can be a tumultuous task given the vast number of devices, their unique configurations, design parameters and a host of deployment issues. There are some things that require years of exposure and effort to refi ne and the wireless industry is one of those disciplines where experience and demonstrable results are paramount. We see through our unique solutions approach, the ability to help enterprise clients of all sizes get to an end-to-end solution

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that helps them connect with critical field based assets faster, and more reliably, helping them manage information that drives business decisions.

What are you doing differently than your competitors in this sector?

JN. With an extensible architecture designed to enhance enterprise communications, our N4A platform puts more intelligence at the edge of almost any network. From far reaching remote devices to backend enterprise applications, our solution enables real-time communications to a company’s most critical business applications delivering up-to-date asset information for timely decision making.

Our industry leading, vertically optimized architecture delivers fast wireless asset management solutions development and deployment. We do not see any other firms offering services like that and as a result a host of enterprise clients, the systems integrators and the carriers that support them are engaging like never before.

What can we expect to see from Enfora in the coming 12 to 18 months?

JN. Enfora is at the forefront of enterprise asset management connectivity solutions for the most demanding environments. We are delivering on a vision, bringing assets of all shapes and sizes into the dynamic world of IP connectivity, no matter where they may be in the world.

Our goal is a simple one, to help clients of all sizes connect their valuable assets most anywhere, anytime – globally.

Jeff Newman leads the strategic business development, market development and sales at Enfora. As CSO, he is responsible for setting corporate strategy and identifying, developing and managing new business opportunities for Enfora’s nextgeneration wireless products.

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BROADBAND INFRASTRUCTURE

CONNECTING

AMERICA

With over 100 million Americans still lacking access to broadband, the Federal Communication Commission’s national broadband plan lays out a bold roadmap for the future.

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B “It’s an action plan and action is necessary to meet the challenges of global competitiveness, and harness the power of broadband plan to help address so many vital national issues”

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roadband is the indispensable infrastructure of the digital age. Similar to railroads, electricity and telephones for prior generations, broadband is rapidly becoming a primary platform for innovation, economic growth and enduring job creation, providing a vibrant, ubiquitous high-speed internet that is vital for global competitiveness.

Phoebe Yang, Senior Advisor on Broadband for the Federal Communication Commission (FCC), has been a key player in the FCC’s creation of a national broadband plan with the key premise that it has been designed with recommendations that would encourage much needed investment in the infrastructure required; free up spectrum to foster world leading wireless broadband; and redirect government resources.

The FCC has also been endeavoring to cut red tape and remove the other obstacles to investment and innovation in order to optimize the use of broadband to achieve certain national priorities like healthcare, education, energy, public safety and economic opportunity. “The way we’ve structured our national broadband plan was to address not only deployment issues, but also adoption, so where and how broadband is currently being used,” explains Yang.

“From our standpoint, the national broadband plan was a long overdue US strategy to bring fast, affordable broadband to all Americans and we believe if followed it would promote economic growth, job creation and global leadership.”

Back in early 2009, Congress directed the FCC to develop a national broadband plan to ensure that every American has access to broadband capability. Information was gathered for the plan in 36 public workshops, nine field hearing and 31 public notices that produced 75,000 pages of public comments. The broadband debate also went online with 131 blog posts triggering 1489 comments, 181 ideas on IdeaScale garnering 6100 votes, 69,500 views on YouTube and 335,000 Twitter followers.

Yang explains that in March 2010, FCC Chairman Julius Genachowski unveiled the long-anticipated plan. At the time Genachowski said: “It’s an action plan and action is necessary to meet the challenges of global competitiveness and harness the power of broadband to help address so many vital national issues.”

Titled Connecting America: The National Broadband Plan, the report found that while broadband access and use has increased over the past decade, the nation needs to do much more to connect all individuals and the economy to broadband’s transformative benefits. “About half the plans recommendations are aimed at the FCC itself,” explains Yang. “So we haven’t been in the position of saying everybody else should do things and we would just sit on our hands.

About a quarter of the recommendations are directed at other federal government agencies and about a quarter to Congress and the states themselves.”

Th ree weeks after the broadband plan was released, the FCC then issued a broadband action agenda outlining the implementation plans for the rest of 2010 with respect to the recommendations that were made for the FCC in the national broadband plan. “There were about 64 items in that ambitious action agenda”, explains Yang, “but we wanted to let interested parties know that we were taking this very seriously and that it wasn’t simply a plan to put on the shelf and collect dust.

“So far this year the FCC has launched a reform of the around nine billion dollar universal service plan,” she says. “It has proposed certain

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LONG-TERM GOALS The FCC’s National Broadband Plan recommends that the country adopt and track the following six goals to serve as a compass over the next decade: Goal No. 1: At least 100 million US homes should have affordable access to actual download speeds of at least 100 megabits per second and actual upload speeds of at least 50 megabits per second Goal No. 2: The United States should lead the world in mobile innovation, with the fastest and most extensive wireless networks of any nation Goal No. 3: Every American should have affordable access to robust broadband service, and the means and skills to subscribe if they so choose Goal No. 4: Every American community should have affordable access to at least 1 gigabit per second broadband service to anchor institutions such as schools, hospitals and government buildings Goal No. 5: To ensure the safety of the American people, every first responder should have access to a nationwide, wireless, interoperable broadband public safety network Goal No. 6: To ensure that America leads in the clean energy economy, every American should be able to use broadband to track and manage their real-time energy consumption

rules that would reform that fund, including the parts of the fund that go to support education and rural healthcare infrastructure projects with respect to broadband.”

The FCC also unleashed around 20 MHz of spectrum for mobile broadband use and is looking into other possibilities for freeing up more spectrum consistent with the plan in order to help support mobile broadband growth.

“The FCC also launched a program to accurately measure the speed and performance of broadband that customers actually receive as opposed to what is advertised to them.

“There are certain challenges that we saw as being key in the national broadband plan to bringing down the costs of deployment,” continues Yang, “for example, expediting and making the process for access to rights of way conduits and poles that help support broadband infrastructure and speeding up the make-ready process for that infrastructure uniform.”

Indeed, there are a number of potential barriers to adoption, one of which is the lack of sufficient spectrum going forward, particularly with the current high growth rates of mobile broadband usage. FCC research found that many of the underserved communities that had access to fi xed broadband, but were not subscribing when using mobile broadband at higher rates than the average population.

Another key area is simply cost. Along with digital literacy and relevance, cost came out in the FCC’s survey work as the leading factor many of the non-adopters claim as being why they do not adopt broadband. “We’ve seen that particularly true in a down economy,” says Yang. “But in general, non-adopters have not had the experience to know what broadband can actually do for them and how it can improve their lives as well as cut the costs of other key expenses in their lives, so they’re not always well informed.

“But they often also lack key digital literacy skills, as well as lacking the ability to access, for example, particularly for immigrant populations, the internet in their

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own language and other applications that they are perhaps interested in using.”

There are also potential stumbling blocks on the deployment side. One area in particular is that the current government initiatives have been set up like the FCC’s universal service fund, which was originally established to support universal support of telephony particularly in rural and high cost areas, however, it has yet to be reformed to support the deployment of broadband infrastructure.

The national broadband plan has recommended that that happens and the FCC has already begun a series of proceedings to support the possibility of that happening in order to support infrastructure that can enable both voice and broadband service.

The poles, ducts, rights of way and conduits are the other problem area associated with deployment, suggests Yang. The key pathways for broadband deployment have not always been accessible and affordable in a timely way to companies or entities that are trying to deploy broadband infrastructure. “The poles are owned by many different entities, some are municipal and some are private sector, but what we call the make-ready process for enabling those poles to be accessible to someone who wants to use them for broadband deployment has not always been efficient.

“There are further disputes when various companies own the poles, say for example, cable versus telephone companies who pay different rates to access those poles, if there’s an application pending before municipal government, sometimes those proceedings can take quite a long time to resolve. So in May of this year the commission adopted an order and proposed rules to promote faster and more ubiquitous deployment by harmonizing the rules across the country that relate to rights-of-way and poles and trying to make consistent the pricing structures and factors such as that to contribute to lowering the cost of deployment.”

The number of Americans who have broadband at home has grown from eight million in 2000 to nearly 200 million in 2009

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Nearly 100 million Americans lack broadband at home today and 14 million Americans do not have access even if they want it

To combat these challenges, the national broadband plan has a whole series of recommendations around promoting adoption in the US specifically and how this relates to public/private partnerships to help support the use of broadband, particularly working alongside communitybased organizations, libraries and other institutions in order to provide digital literacy training to the elderly and other underserved communities.

Looking forward, Yang explains that one of the national broadband plan’s aspirational goals is for 100 million US homes to have access to broadband that can support speeds of 100 megabits per second down and 50 meg up by 2020.

“We’re going to see and continue to see a lot of investment in the 4G wireless infrastructure. Increasingly we’re seeing a proliferation and a growth in the smart phone market – much like Europe – and therefore demands on the current wireless networks continue to increase. We’ve

already seen announcements of major 4G wireless deployments coming up or underway; Clear Wire and Verizon in 2010; Cox, AT&T and Metro PCS in 2011. So we expect that we’ll see more of that and we think that’s a positive development for the American broadband ecosystem.”

Yang goes on to explain that there are a number of other things that are really important for the future of the broadband plan. First, the integration of broadband into the smart grid over the next decade and a half, which would be a significant leap forward and is something that the FCC has recommended in terms of moving broadband properly into the 21st century.

“In short, investing in broadband infrastructure is absolutely critical to our national competitiveness and leaders from the public, private and non-profit sectors are increasingly recognizing that fact as well, but as a country, there’s no question we’ve still got work to do.”

Not forgetting the little guys As President and CEO of the American Cable Association, representing almost 900 small and medium-sized independent operators in the telecom space, Matthew Polka is concerned that as the FCC implements its national broadband plan, it has the potential to be a little “heavy handed” in its approach.

“The problem I foresee is that the FCC is not in touch with the smaller companies and doesn’t understand the impact that these regulations have on them,” he says. “If they don’t take these things into account then what can ultimately happen is the opposite effect, meaning these smaller rural companies will be less likely to deploy new services rather than more likely to deploy new services.”

Every regulation has a cost component to it, which is essentially an unfunded mandate meaning the government requires a company to comply with regulation with no subsidy help. This cost component will have a huge impact on small and medium businesses, says Polka, with a further key concern over universal service. “As part of the national broadband plan, the FCC wants to revise and reform the current universal service, which currently provides funds to help deploy telecom services in rural and smaller markets. A key component is revising universal service from telecom to broadband so that funds collected under universal service would be used to deploy broadband.”

Current universal service fund rules focus on eligibility for telecom companies, but if it is going to transition to broadband it must be wider and more inclusive to include all providers of broadband service, regardless of whether they are small or large organizations.

“This universal service goal is fine, but what I want to know is that the commission will be doing this fairly, meaning that all companies that are providing broadband service are eligible to use those funds to deploy broadband? Or, as based on

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pre-existing rules under the fund, are only those previous users going to have access to those funds? In my view, if we don’t have a plan that allows for all users, there’s going to be a problem.”

The FCC’s ultimate plan for a national broadband plan is good, continues Polka, however, it will take a lot of work and effort in the regulatory process to ensure regulations are provided fairly for all providers in the market. Nobody wishes to see the plan fail, but it is going to take a lot of work to make sure it is right for everyone involved.

Unfortunately, due to the ongoing processes involved in the broadband plan it will literally take years and dozens of rule makings to ensure that all businesses are considered. “As a result of the approval of the plan by the commission, the plan itself will spawn some separate rule makings on individual issues,” says Polka.

And in terms of the future, he explains that the huge debate over the FCC’s decision to reclassify broadband service as a Title II common carrier service as opposed to an information service has the potential to completely change the way that broadband is regulated. “Julius Genachowski at the FCC wants to accomplish this because he wants to regulate the internet and needs legal authority to do so,” he says. “He thinks he has authority under Title II, which is a completely different ballgame to the way broadband has been regulated previously.

“There needs to be a plan, and the FCC has a clear role in administering that and ensuring that all users take part in that plan, but at the same time, what the FCC has to be understanding of is the fact that broadband has been widely and successfully deployed in our country largely because the government has not been significantly involved in the regulation of the broadband service.

“The FCC needs to be more of a coach and a guide,” advises Polka, “because my fear is that the FCC will impose regulations that are in fact too heavy handed, that dictate marketplace rates and fails to take into account the unique needs of providers.”

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RETURN TO It’s rail or fail time for the US railroad. Will it be returned to its former glory days through the advent of high-speed technology and a cash injection, or is it destined to grind to a halt? US Infrastructure asks Joseph Szabo of the Federal Railroad Administration for his opinion.

T

here is no doubt that the US railroad has suffered over the past few decades. Indeed, after 60 years starved of investment, is it any wonder that America’s dilapidated railroads have slowly been sinking out of sight?

However, in an interesting turnaround, the current administration has expressed a strong commitment to developing a variable high-speed rail network

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across the country, which will have huge implications for the current railroad system. In less than a year the Federal Rail Administration (FRA) has moved from a concept to the development of a high-speed rail vision document, a strategy for implementation and initial brand guidance.

Why is it moving so quickly? Well, in a study recently presented by the Millennium Institute, the likely benefits of an expenditure of $250 to $500 billion on improved

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RAIL? “We need to offer genuine transportation alternatives to the traveling public”

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rail infrastructure found that 83 percent of all long-haul trucks would be eliminated from the nation’s highways by 2030, while also delivering ample capacity for high-speed passenger rail.

And if high-traffic rail lines were also electrified and powered in part by renewable energy sources, that investment would reduce the nation’s carbon emission by 39 percent and oil consumption by 15 percent. There is also potential for the economy to be 10 percent larger by 2030 than it would otherwise be by moderating the growing cost of logistics.

Joseph Szabo, Administrator of the Federal Railroad Administration, says there’s been nothing but a high-level of enthusiasm for the new program. “First of all, we saw it with the tremendous outpouring of application from various states around the country. We’ve also seen it on

a bipartisan basis from the members of Congress. And equally important is that the public opinion polls show tremendously strong support from the traveling public.”

So, why is there now such interest in developing a high-speed railroad for the US, after it has lagged behind equivalents in Europe, China and Japan for so long? Szabo explains that while he can’t speak for previous administrations making the decisions that they did, there is no question that the development of the interstate highway and aviation systems were national priorities, which had a devastating impact on the fate of the railroad over the past half a decade.

“We have done outstanding work in the automobile and aviation transport sectors,” he says. “But now there’s a realization that we need to better balance our transportation network. We need to offer genuine transportation

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1862: President Abraham Lincoln signed the Pacific Railway Bill into law designating the new Union Pacific Railroad and Central Pacific Railroad to complete the transcontinental railroad

alternatives to the traveling public because of congestion, because of environmental impact and because of the need to reduce our consumption of oil. We need to ensure people are able to travel using the mode that is most efficient for a particular journey. In many, many cases rail is that mode.”

Indeed, the inherent efficiencies of passenger rail are fi nally being recognized once again. The lifeblood of America’s early development, the railroad saw unprecedented use and popularity in the 19th and 20th centuries, reaching an all-time peak in 1920 with 1.2 million passengers boarding 9000 inter-city trains and racking up 47 million passenger miles every day.

Will it be possible to force that decline to an incline and see railroads back in favor with the public? Without question, answers Szabo. “For far too long now too many generations have forgotten the transport opportunities that rail offers – and there is no question of the role that rail can and must play in the movements of people and goods. In hauling people within 100 to 500 mile radiuses, rail is usually considerably more efficient than automotive or air, whereas air is superior for distances greater than 500 miles. It’s simply a matter of understanding where each mode is most efficient and cultivating it in that aspect.”

1900: 193,346 miles of railroad were in operation

A balancing act

1920: Passenger rail travel reaches its all-time high with 1.2 million passengers boarding 9000 inter-city trains and racking up 47 million passenger miles every day

Szabo reiterates that rail is not about competing with air or auto transportation options, it is about providing a balance for what becomes a seamlessly flowing transportation network, allowing for the efficiencies of each mode to come forward. Indeed, a seamless transportation net-

History of the American railroads

1815: Colonel John Stevens gains the first railroad charter in North America, the New Jersey Railroad Company 1826: Stevens tests the first steam locomotive in the country, showcasing his ‘Steam Waggon’ design – basically a steam-powered horse carriage 1829: Horatio Allen tested an early English steam locomotive design on a 16-mile stretch of track owned by the Delaware & Hudson Canal Company in Pennsylvania 1830: The three-year-old Baltimore & Ohio Railroad tested its famous Tom Thumb, designed by Peter Cooper 1830: South Carolina Canal & Railroad Company carried a trainload of passengers – the first railroad to haul a revenue train with an Americanbuilt steam locomotive

1932: Ralph Budd commissions a streamlined train, the Burlington Zephyr, hoping to revive interest in passenger travel 1933: Congress passes the Emergency Railroad Transportation Act, freezing railroad employment for three years 1934: Railroads introduce diesel locomotives for passenger service

“One of the key criteria is that we look at how well high speed rail will link up with mass transit and with commuter rail ”

1940: Railroad mileage drops to 233,000 miles 1942: Heavy reliance on railroads during the war reverses the railroads’ situation, but by the war’s end the railroads are left in poor shape physically 1957: For the first time, air travel boasts more passengers than rail travel 1970: Under the Rail Passenger Service Act, Congress creates the National Railroad Passenger Corporation, also known as Amtrak, to subsidize and oversee the operation of intercity passenger trains 1980: The Staggers Rail Act signed into law by President Jimmy Carter deregulates the railroad industry 2000: Amtrak introduces the Acela Express, which operates at a maximum speed of 160 mph between Washington DC and Boston

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work should surely be the core consideration at the heart of the matter. That said, there are a number of challenges in ensuring that the railroad fits with the other transport options and infrastructure already available.

“As we review applications for funding these types of interconnections, one of the key criteria is that we look at is how well high speed rail will link up with mass transit and with commuter rail to ensure that people are delivered that final mile – how will it connect with airports, for example, so that the first 100 miles of the journey can take place by rail and the next 1000 by air,” explains Szabo.

“It’s about ensuring that seamless flow between the modes. Europe does an outstanding job with that and these are some of the lessons that we’ve learned from our visits to Europe and Asia.”

When President Dwight Eisenhower signed the Interstate and Defense Highways Act in 1956, little did he know

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France into Belgium, Germany, Holland, Italy, Switzerland and Spain in Europe, and China, South Korea and Taiwan in Asia.

The competition What the US is up against around the rest of the world

Playing catch up

Passengers disembark from a newly arrived Shinkansen ‘bullet train’ in Tokyo Station

A TGV travels at high speed through fields of sunflowers and vineyards in France

The Saspan, which will transport passengers from Moscow to St Petersburg in three hours and 45 minutes at a top speed of 250 kmph

that he was effectively sealing the fate of America’s railroads and handing over its technological advances overseas, welcomed by a visionary group of railroaders. In 1955, Louis Armand, head of the French national railway, had proved the capacity of an all-electric test train with record speeds of 208 mph.

Inspired, Japan’s Minister of Transport, Shinhi Sogo, began planning a rail line without sharp curves or steep gradients, permitting streamlined, all-electric trains to run at even higher speeds safely. Sogo actively imported technology from America to do so, including the two-axle trucks, dynamic braking innovation and advanced computers to operate the line’s signal and dispatching systems. And Japan wasn’t alone; high-speed trains expanded beyond

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Spending $250$500 million on rail could take 83% of long-haul off the roads

Back to today. After the 2008 fi nancial crisis, many countries were searching for speedy economic solutions to help ease them out of the worst world economic downturn since the 1929 depression. The American Recovery and Reinvestment Act of 2009 (ARRA) was an unprecedented effort to jumpstart the economy and create or save millions of jobs across the country, putting a down payment on addressing long-neglected challenges – like the railroad. In April 2009, the administration released a long-term plan for high-speed rail, called the High-Speed Intercity Passenger Rail program (HSIPR), including $1 billion a year for the next five years to help the program get underway.

And in January 2010, President Barack Obama’s state of the union speech unleashed plans for pushing America’s fast train deployment ahead, with an additional $8 billion load guarantee from the ARRA to develop the country’s fi rst nationwide program of high-speed intercity passenger rail service. Obama’s vision for highspeed rail in America is built upon a series of strategic transportation goals, including: building a foundation for economic competitiveness; ensuring safe and efficient transport choices; promoting energy efficiency and environmental quality; and supporting interconnected livable communities.

At the time, Obama said: “Th rough the Recovery Act, we are making the largest investment in infrastructure since the Interstate Highway System was created, putting Americans to work rebuilding our roads, bridges and waterways for the future. That investment is how we can break ground across the country, putting people to work building high-speed rail lines, because there’s no reason why Europe or China should have the fastest trains when we can build them right here in America.”

The HSIPR program generated enormous excitement across the country, with the FRA receiving 259 grant applications from 37 states, requesting nearly $57 billion in funding – far exceeding the initial $8 billion available.

For now, the majority of the $8 billion will go towards developing new, large-scale high-speed rail programs, including projects in Florida, which is receiving up to $1.25 billion to develop a high-speed rail corridor between Tampa and Orlando and California, which is receiving up to $2.25 billion for its planned project to connect Los Angeles to San Francisco with trains running up to 220 miles per hour.

Szabo believes that the $8 billion serves as a very important down payment to what will be a decades-long build-out. “Our interstate highway took more than four decades to build and if you take a look at Europe and Asia the build-out of their high-speed networks in most cases took 30 years,” he says. “The important thing is that the railroads have lit the spark in the imagination of Con-

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THE FAST TRACKS Five areas of the country currently have the population and georgaphy to support high-speed rail

North East

Mid West

California

Texas

Florida

gress and the traveling public to now allow both to realize what this transportation option can mean to them.”

Looking forward Technology is – and will remain – at the heart of ensuring more efficient and safety-led advancements for the future of the railroad in the US. Szabo explains that the FRA is continuing to look at new technologies and is even proposing to fund a greater share of research and development as it relates to the advancement of high-speed rail. “Technology is the wave of the future and so understanding, researching and advancing that technology is a critical part of the long-term development of a program depending on market needs,” he says.

And of course, those needs may bring some challenges in terms of co-utilizing existing freight infrastructure with planned passenger infrastructure, because there is no question that in many cases passenger and freight trains will utilize capacity differently. Szabo claims that balance is the key to ensuring that America’s world-class freight system is preserved and improved, while there is also investment and capacity improvement that allows

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for the operation of high-speed rail on that freight infrastructure.

“It is vital that you do very good modeling of the proposed operations and then from there you do your planning and your engineering to make sure that the appropriate investments are made that allow both users to operate at a high level of performance,” says Szabo.

Looking forward, Szabo points to the clear vision the FRA are looking to achieve, both from a passenger rail and freight rail standpoint. “In a perfect world I would like to see 80 percent of America connected by a strong, high-performing passenger rail network. In addition, I would like to see freight rail perform at a high level, while growing market share, particularly when we’re talking about inter-modal shipments. These all help us achieve reduced congestion, reduced consumption of fuel and improved air quality – and that’s important to the quality of life for Americans.”

Hopefully, with a little love and attention – plus the projected $13 billion being spent on railroad infrastructure development over the next five years – the sector will get back on track and start speeding ahead to success.

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Ticket to

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Houston Metro’s George Greanias tells US Infrastructure about his plans to keep the city moving.

W

hen George Greanias stepped into his current role of Acting President and CEO of Houston Metro, he was inheriting responsibility for an organization with more than its fair share of problems. Building programs had stalled, public trust was at an all-time low and the previous chief executive had departed in a swirl of misconduct allegations, jeopardizing $900 million in federal grant money. Given the circumstances, the fact that his new job was a seemingly temporary appointment might have come as some relief. Or perhaps not.

“When the board asked me to take this job on an acting basis they told me not to do it unless I was willing to do it on a permanent basis,” Greanias says when we speak with him roughly three months into his tenure. “That’s the understanding: that I very much want to continue.” Whether or not he remains in the big chair indefi nitely, it’s hard to imagine the Metro board fi nding many better candidates.

With an obvious love for his city and an unshakeable belief in public transit’s power to transform the urban environment, Greanias certainly seems to fit the bill. Houston’s residents should have little cause for complaint if this temporary arrangement becomes permanent.

You’ve been a long time advocate for light rail in Houston. Why do you think it’s a good fit for the city?

George Greanias. It’s a piece of the larger puzzle. I think that the controversy about rail in Houston has gone on for so long and has been so contentious that it’s overshadowed the fact that rail is not the solution. It’s a part of a total package and an essential distributor network. It’s the spine of the distribution within the inner part of the city, which in Houston’s case is some 600 square miles. It facilitates us doing a better job of distributing our bus routes. It becomes critical for distributing people in any commuter rail program that’s built and it allows us to provide more public transportation at a more cost efficient price.

But it is again, part of a total package. People who say we’re going to build rail at the expense of bus or at the expense of other forms of transit are missing the point. Rail is a part of that system. It’s just as essential to have a good bus system, just as essential to have a good para-transit, van and HOV lanes and park and ride lots. It’s all part of the operating system. If we don’t do it what we’re going to miss is a major opportunity to create a more efficient distribution network within the community.

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Making sure these systems interlock and fit together must be of paramount importance. What kind of challenges are involved in making sure that happens?

GG. One big change I’m looking to effect at Metro is to make it more of a partner with other governments and agencies in this region that are taking up responsibility for transit issues. The Metro service area is not coextensive with the whole of the greater Houston region, so for us to be successful in our mission we need to help others, for example those who are looking to build commuter rail lines outside our service areas but which will connect up within our service areas. We need to help them become successful.

What I’ve been saying is that we don’t need to be at the head of the table on every discussion, on every issue but we do need to be at the table and we need to make sure that other folks who need to be there are also in attendance.

I’ve been here a grand total of three months, so it’s very early on but I will tell you that just in the preliminary conversations that I’ve had with people there’s been a very positive response. I think that we’re at an interesting point in the history of the region. I think the realization of the need for transit is probably stronger now than I’ve ever remembered it. I think the willingness to explore various ways not only to provide the transit, but also to develop the funding sources to pay for those efforts is further along than it’s been in a long, long time.

You mention that you’ve only been in position for three months. How have those first few months been for you?

GG. It’s certainly been interesting. Number one, we obviously had a series of issues that needed to be addressed. I think that the board and the new management have been going after those questions pretty aggressively. We’ve made a lot of progress.

I also think that based on getting to know the people in the organization, meeting with virtually everybody in the company there’s a great deal of strength here. I’ve likened it to being a six-cylinder engine that was only allowed to operate on two of its cylinders. We have a great deal of horsepower in this company that we need to unleash. One of my goals going forward is to make sure that the talent that’s here gets the chance to perform up to what they’re capable of.

You’ve touched on the controversy around Metro in recent years. For this kind of system to really work you have to have the support of the people that are ultimately going to use it. Do you think there is that kind of local enthusiasm or does more work need to be done to win people over?

GG. There are three things that we’re focused on, all of which I think speak to that question. Number one, we’re working to restore trust in the authority inside as well as outside. I think that’s essential to your point that Metro cannot be effective if it doesn’t have the community’s trust and support. Number two, we need to keep our commitments. Those commitments include the agreements that

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were made in 2003 in the referendum that approved the current rail program but it also includes providing absolutely superior bus service, para-transit services for the disabled, park and ride services, the whole package of transit that Metro is responsible for. That’s part of building that trust.

The third thing is to make sure that when it comes to customer service the day in/day out delivery of the services we offer are second to none. Bit by bit, people in the authority, many of whom already believe this, are getting the message that we really are serious about it. We’re going to deliver superior customer service. That’s going to be our focus on a daily basis and all those things contribute to a better relationship with the community, which is essential for us to accomplish our mission.

The Houston Metro is waiting for

$900 MILLION in funding

The past couple of years have been pretty difficult no matter what kind of business you’re in. Has the downturn had any impact on the development of transit systems in and around Houston?

GG. In terms of the infrastructure construction it really hasn’t. Where it has affected us, of course, is in our ability to maybe go as aggressively as we wanted to in some of the other service development areas. Part of that has been because of the delays in the construction program.

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The Metro has been in development since

2001

Where it has affected us, of course, is because of the drops in employment where we’ve experienced reductions in ridership and our sales tax revenues have dropped because of the overall economy. That’s no different than any other government in this area.

I will say though in comparison to other parts of the country we are still in substantially better shape fi nancially and most importantly, unlike many other transit agencies, Metro has preserved service. We have not been significantly reducing service, the kinds of things you’ve seen at other transit agencies. It’s been pretty much business as usual which I think is a real tribute to the fi nancial management of the operation and the commitment to saying that the first priority is to maintain the service levels that are essential for the community.

You’re still waiting on confirmation of $900 million in federal funding. How is that progressing?

GG. We’re in communication with the Federal Transit Administration who makes the decision on that. They’ve indicated that they’re going to be giving us a response fairly soon. So we continue to be optimistic that sooner, rather than later we will get this grant approved. If you’re familiar with the ways of Washington, while we’re waiting on the full funding grant agreement Congress has actually gone

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ahead and appropriated funds to support that agreement.

So we have $150 million approved for Houston in the current federal fiscal year and the budget that’s moving through the House and the Senate right now contains another $150 million for the fiscal year that starts 1 October.

The answer is actually that the money’s already there. Now we just need the agreement.

It’s a very long and complicated process. Something every transit agency in every region is going to have to think about is how much they want to build their fi nancial and infrastructure plans around federal grants. The landscape has changed a lot since this debate started in the 1980s. Back then the split was the federal government would give you 80 percent of the money, while 20 percent of the investment would come locally. Today it’s more like 50/50 and I would bet that that split will change even more, placing a heavier burden on the localities.

The other part of it is, depending on how urgent you feel the need is, do you really want to wait for the length of time it takes to go through the federal process. It’s a very lengthy, very complicated process and there is tremendous competition for limited dollars. There’s a whole separate question here about how localities are going to fund their programs that I think everybody, not just Houston, is going to have to address.

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Does the fact that you have to find more funding locally mean that you have to make a stronger business case for this kind of development?

GG. I think the business case is very strong. Maybe sometimes the authorities have not made it as well as they could.

I think that part of it is that public transit’s held to a different, higher standard than other forms of transit infrastructure. The fact is the Metropolitan Transit Authority is probably the only operation in this region that gives you an honest accounting of what it costs to provide what they deliver. In other words when we tell you what the cost of transit is, we tell you the cost of building the infrastructure, of the equipment and of the operating costs. It’s all there.

You build a freeway and you never capture the total cost. You know what it costs to build it but think about all the people that have to buy cars in order to make that road useful. Th ink about the insurance they have to pay. Th ink about the police that various communities have to provide to support the roadway. Th ink about the maintenance cost.

So when we ask what a freeway costs, we actually think about a very small portion of its actual operating cost.

In terms of getting an apple to apples comparison of what’s the most efficient way to move people around, we are a long way from getting that kind of analysis out there in the public discourse. Going back to your question, making the business case for transit is made more difficult because we don’t have a ready and agreed upon comparison with other forms of transportation infrastructure. If we did my guess is that public transit would be far more supported because we realize that, as a solution, it is extremely cost effective.

Is it a particular challenge to change public attitudes to transit in the US, which has traditionally had such a strong relationship with the private car?

GG. I don’t think it’s a major attitude change because back a couple of years ago when the price of gasoline ran up to an atrocious $4.00 a gallon, our ridership numbers went up.

Right now $4.00 is the magic trigger figure for changing people’s behaviors. My point is that I think that the attitude is already there, it’s just a matter of the incentives being appropriate. I don’t believe that it’s a case of lowering fares to encourage more people to ride.

My argument is that you’ve actually got to increase the cost and the inconvenience of the alternatives. So when Mayor Bloomberg in New York City, for example, tried to follow the example of the mayor in London of putting in congestion pricing what he was really trying to do was to say, “I’m going to make it more expensive and less convenient for you to use your vehicle. We want you to get out of that and get into a public transportation.” Back then it was not terribly popular and he couldn’t get it through. I suggest that as time goes on and the price of energy inevitably goes up the trend towards public transit is going to look more and more attractive to people. Our challenge will be to be have the system in place that can support that increased demand when it comes. ■

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Travel benefits Greanias tackles the question of whether or not investment in public transit brings wider economic rewards.

It’s not a matter of opinion, it’s an unquestionable fact. We already have seven-and-a-half miles of rail down the main street corridor running from basically the south end of Reliant Stadium, the football stadium north of the University of Houston Downtown. If you look about five or six blocks at either side of that seven-and-a-half miles of rail, which is pretty much walking distance to the stations, you’ll see something pretty striking. The estimates run from one billion to maybe as high as two or three billion dollars worth of new investment, investment that came since the rail program was announced and the construction began. It’s a very clear correlation between the decisions on the placement of rail and the decisions on development.

You see it now on the north line, which is an extension of the current line. You see property values already going up. You already see decisions being made about bringing in new businesses based on the fact that we’re putting a rail infrastructure in. To my mind, development follows infrastructure decisions. You don’t want to start on a barren plain.

We route based on where ridership demands justify it, but it’s sort of a chicken and egg situation. We look for areas where there’s ridership. We start construction there and then people decide that because we’re building rail there they are going to make investment decisions around that decision.

It’s a constant cycle of us evaluating where the opportunities are, moving forward in infrastructure and then the private sector coming and seeing investment opportunities based on what the public sector is doing. It’s a virtuous circle once it gets going.

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EXECUTIVE INTERVIEW

How enterprise content management is making a difference Philip Cleghorn reveals how enterprise content management addresses some of the current challenges for the utilities industry.

What is the most common issue that you see impacting the utilities industry that enterprise content management (ECM) is addressing?

Philip Cleghorn. Environmental awareness has changed significantly over the last decade. Concerns about the environmental impact to land, air and water quality have been growing and that has led to further legislation and regulation in the utilities industry. Emphasis on employee health and safety has never been more stringent, and to complement that the rules governing quality and service levels to customers have also increased creating a combined impact that drives up costs significantly. The resulting impact in a business environment today is that businesses are required to have a much greater and broader emphasis on legislative and regulatory compliance in order to be sustainable. Open Text has continued to develop its solutions like document management, records management, email management, web content management and digital asset management to meet these ever increasing compliance demands, not only by adding flexible features but by also expanding the variety and volume of content that can be managed, everything electronic and all physical records. The ever-changing requirements demand that the solutions be both flexible and configurable. By addressing all the different business issue driven content that a utility company must deal with, we are truly an enterprise solution enabling our utility customers to reduce the cost of compliance and position themselves for long-term sustainable market growth.

What about changes to the technical environment facing utility companies?

PC. Utility organizations are implementing smart grid and smart meters as part of the worldwide move in this direction.

We often get asked about where we fit in that solution puzzle.

We see our solutions for asset management: engineering records, contracts and transmittals management help tackle the additional complexity that smart grid infrastructure requires. By keeping a better track of CAD drawing revisions, construction documentation and by logging communications on-line via transmittals management we see customers taking away the pain from sharing out of date information or from an inability to find a critical piece of content.

With respect to smart meters, we see different challenges there. Consumers can have an impact on their consumption and costs but in order to do so they need information that they can utilize. Our customer relationship manage-

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ment (CRM) solutions include web content solutions that can help consumers digest the information coming from their smart meter to help them make informed decisions as to how to change their consumption patterns and save money. Call costs can be impacted through both delivering more information via the web and by providing operators an identical copy of the customers billing record to speed up the time to resolve inquiries. Open Text social media solutions can give utility companies the edge to leverage new ways to communicate with customers to drive up customer satisfaction and reduce costs.

Philip Cleghorn is the Industry Manager for Energy at Open Text. With over 20 years experience in the Energy business, he has worked for Suncor Energy, Syncrude Canada and Petro-Canada. Cleghorn has a Bachelors Degree of Science in Computing Science and a Masters Degree in Business from the University of Alberta.

What about service reliability and security?

PC. System security, reliability and redundancy have become a frequent conversation with utility operators. Regulatory service demands have increased and new sources of environmentally conscious energy are entering the grid. Open Text has always been concerned about providing a secure platform with built in redundancy to ensure that services are secure, steady, predictable and scalable. When the latest release of Content Server comes out later this year, customers will appreciate our next leap forward in providing reliable soft ware that can meet the tremendous growth in data and information that has exploded in organizations.

Our archiving solutions have a track record of taking historical data from on-line systems and placing it in our secure repository. Th is not only improves system performance but it also decreases the time to recover in the event of an upset. Many of our utility customers have benefited from moving information into the archive and applying the appropriate records retention schedule to meet regulatory and legislative needs.

“You can expect to see Open Text continue to address the needs of utility organizations as regulations tighten, new technologies are deployed and the downward pressure on operations costs continues” So, what are the new ways in which you are meeting the needs of utility customers?

PC. Recently we have responded to our customers needs to achieve better management of the information surrounding their fi xed assets; engineering data such as controlled engineering records – CAD drawings, spreadsheets, and other documentation. More than ever, our customers want to continue to improve the environmental, safety and production of their assets. They are often faced with millions of pieces of content and they want more efficient methods of storing and maintaining this content. We have risen to the challenge by supplementing our transmittals management and CAD manager solutions with controlled revision tracking and advanced state management. Solutions that complement Content Server capabilities of security and information management by providing features specifically designed for engineering content. New features that give additional business controls tuned to the individual needs of the utility

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organization, providing consistency in the business process of adding new assets through capital projects or changing existing assets in the operations and maintenance phase.

What other demands do you see coming from the utilities industry?

PC. We see more and more customers looking to us to solve the challenge of connecting their ERP and ECM platforms.

Organizations no longer want to see a silo based approach to their structured and transactional data from their unstructured and document centric information. They desire an integrated environment where their supply chain, human resources, projects and operations staff can easily find the relevant content related to activities in the business unit. Open Text has built solutions for both SAP and Oracle ERP’s. As a result ERP and ECM are no longer standalone. Contracts can be found with the supplier or customer master data.

OEM manuals can be found with the equipment master, procedures can be stored at the functional location where they belong. It’s quite revolutionary and amazing to see ERP users contributing to ECM and ECM users supplementing the structured data available in the ERP. We are often asked to help organizations deal with the glut of content that is an ever-increasing problem.

Several companies have seen their cost of litigation steadily increase as the amount of content grows in their organization. When an organization realizes that each significant case requires tens or hundreds of thousands of dollars in discovery and legal review and the cost of defence can exceed a quick settlement, they become motivated to address the issue. Our customers use our records management and retention schedule capabilities for content that comes from email or from other desktop applications to classify information and retain it for its period of relevance. The records retention schedule is often dictated by legislative and regulatory requirements or by company policy. Much of what we receive in email is not a corporate record and this content can be disposed of in 30-180 days.

Other email needs to be retained for a few years while other key email records need to be kept for the contract duration, employment term, etc. The result is that once an RM program is in place, irrelevant information is disposed as per the schedule, overall content is reduced significantly. Th is not only reduces legal review costs when litigation arises but it significantly impacts the overall IT management costs for storage, backup and recovery of information.

What can we expect to see from Open Text in the next 12 to 24 months?

PC. Without doubt you will continue to see new releases of the Open Text products, for web content management, email management, engineering records, digital assets, electronic and physical records. You will also see improved integrated solutions for SAP and Oracle, a new release of our Open Text Everywhere solution for mobility. You can expect to see Open Text continue to address the needs of utility organizations as regulations tighten, new technologies are deployed and the downward pressure on operations costs continues.

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Deadly skies With ash clouds, terrorist threats, environmental concerns and recession, it’s been a tough year for the airline industry. Gunther Matschnigg, Senior Vice President of Safety, Operations and Infrastructure at IATA, speaks with Ian Clover about the industry’s security aims, regulations and operational future.

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W

hen the ‘Fasten Seatbelt’ light dings into action toward the tail end of your fl ight as you begin to descend to your chosen destination, what do you do? Most normal folk will close their laptops, remove the earphones, wake their traveling partner or maybe make a daring last minute dash to the toilet. However, for Umar Farouk Abdul Mutallab – a 23-year-old Nigerian student aboard a Northwest Airlines transatlantic fl ight coming into land at Detroit on December 26 last year – this fi nal ding was his cue to embark upon a fiendish plan to bring down the plane.

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Attempting to ignite a device comprised of small fi recracker-type explosives hidden in his underpants, Mutallab’s plan failed thanks to the diligence of crew members and passengers, and his own ineptitude. Frogmarched to the front of the plane, his trousers in tatters and his legs burnt and black with soot, Mutallab’s attempt at martyrdom and an eternity spent immersed among virginal bliss instead ended in the unedifying sight of being bundled into a security van on Detroit airport runway and whisked off to await trial. If Mutallab’s actions are seen to have been in any way as serious as 2001’s Richard ‘shoe bomber’ Reid, then a life sentence awaits.

The airline industry has always had to be tough on terrorist threats, even before 9/11.

Airplanes are obvious terrorist targets, and so the security measures and processes passengers have to adhere to in order to fly are willingly accepted as overly heavy handed, time-consuming and thorough. The subconscious removal of jackets, belts, shoes and jewelry as we are herded through full body scanners has become second nature, as has the more recent procedure of gathering together miniature liquid bottles in clear plastic bags for our hand luggage – all thanks to 2006’s foiled Heathrow attempt to bring down six planes with the use of liquid explosives.

Earlier this year, the aviation industry faced yet another threat to its ability to safely, conveniently and efficiently transport travelers to their desired destination – the now-infamous

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Icelandic ash cloud. This time, however, the threat was all natural (we are, as yet, to hear Al Qaeda claim responsibility for billowing millions of tonnes of ash into the air from their base camp deep in the bowels of Eyjafjallajokull) and totally alien to travelers. Aircraft all over the continent were grounded for weeks; timetable chaos ensued and exasperated passengers ranted, raved, pleaded and then, eventually, accepted their lot. The planes were going nowhere. Safety came first. Punctuality came second. Passenger comfort trailed a distant third.

This brief period of plane-free skies was latched upon by environmental groups keen to highlight just how damaging the aviation industry is to the environment, decrying the imminent demise of airlines as we knew it. Far more injurious, though, was the financial damage this downtime did to the industry. With recession still barely shaken off, the airline industries and travel operators could ill-afford to be grounded.

Businesses in Europe alone lost an estimated $3.2 billion during those trying few weeks in May. Unsurprisingly, airlines were some of the biggest victims, with losses totalling something in the region of $1 billion in revenue.

Such a challenging start to the year proved wearisome for figureheads throughout the industry, yet Gunther Matschnigg, Senior Vice President of Safety, Operations and Infrastructure at IATA – the International Air Transport

Association – has watched the last 12 months unfold from his Montreal headquarters with a mixture of pride, frustration and excitement at what the future holds.

“There have been numerous challenges for IATA over the past 12 months, particularly the economic environment and the volatility of the industry,” begins Matschnigg. “We are only now beginning to see an upswing in the fortunes of the industry and may, by the end of the year, start to see parts of the industry making money after year on year losses.”

“What we haven’t yet done as an industry is place more focus back on to passenger travel – some security regulatory bodies have lost sight that it is actual people going through their security processes” The past 12 months have, reveals Matschnigg, been wholly characterized and defi ned by terrorist threat, ash clouds and the ongoing drive for increased passenger security. “The terrorist attempt at the end of December last year and the volcanic ash cloud are the two issues that are

still very fresh. Both of these unforeseen events shaved quite a bit of money off the industry – $1.8 billion is a lot to lose, especially when our profit margins are slim to begin with, so an unforeseen eruption like the Icelandic ash cloud wiped away any buffer we had in place.

“Then there was the event of December 26.

In that instance we were lucky that the terrorist attempt didn’t bring down an aircraft, but we have to be prudent and continue to work extremely hard together with the governments to ensure that these things won’t happen again.

It is so challenging, because on the one hand we have got to tighten security and implement measures to ensure that our passengers are safe, yet we have also to try to enhance the travel experience for passengers, particularly in the current economic climate.”

The unforgettable events of 9/11 changed the aviation industry forever. Transatlantic business flights – previously the realm of perhaps the most relaxed form of airline security – suddenly became an arduous journey of long queues, intense scrutiny and often-invasive procedures infl icted upon innocent passengers. Suspicion reigned and security was tightened to levels never before seen. “Th is was nine years ago now and I think it’s fair to say that flying is much more secure today than it was then,” says Matschnigg. “There are a number of measures that have been introduced since then that have

THE HISTORY OF AVIATION SECURITY

1972

1989

2001

After decades of hijackings throughout the world, the USA’s Nixon administration hit upon the idea of installing metal detectors at airports throughout the country in an attempt to prevent guns and knives being brought on board. Early metal detectors were sometimes two meters long, and were known to spread a sense of mild panic among those first through. Consumer worries about radiation were soon alleviated when a study by the Federal Aviation Administration (FAA) confirmed that a typical metal detector gave off less radiation than the luminous dial on a wristwatch.

The Lockerbie bomb disaster of late 1988 forced the FAA to re-visit their screening policy, more carefully checking portable computers, bags and radios with the use of X-ray machines that were able to verify the contents of all carry-ons. A new ruling was introduced in early 1989 that meant only bags which were accompanied by a passenger could board the cabin.

The attacks of 9/11 dramatically altered the atmosphere of airport security. Where previously passengers were afforded the benefit of the doubt, the actions of the hijackers on that fateful day were unprecedented. Not only was security tightened worldwide at the screening stage (such as a restriction on the types of items passengers could bring on board), but cabin crew were retrained in order to deal more effectively and forcefully with hijack attempts.

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greatly improved security, including the data transmission that goes to the airports; the information that reaches the cockpit, and the information that is generally submitted to staff at every level of the flying procedure.

“But on the other hand what we haven’t yet done as an industry is place more focus back on to passenger travel – some security regulatory bodies have lost sight that it is actual people going through their security processes. Although security is presently heightened, I think we can still make travel convenient and enjoyable, which is why we have decided, with the support of the Department of Homeland Security and the International Civil Aviation Organization (ICAO), to develop a checkpoint for the future, to really focus on making the passenger experience as enjoyable as possible.

“We have to utilize the same dedication we have shown with our security measures on passenger comfort and ask ourselves: ‘Is it really necessary that we implement this or that security measure?’ While I cannot fully reveal exactly what is in the pipeline at the moment because we are still at the development stage, I can safely say that we are working toward fewer queues, less waiting time, more technology and the eradication of this two, three hour waiting that still prevails in some airports across the world.”

Even the most exhausting and frustrating delays are tolerated by the masses if there is a

legitimate reason for the hold up. But May’s ash cloud deposited not just very fi ne particles on to the wings of planes, but also a collective volcanic funk throughout the moods of travelers at most airports across the world. If this seemingly unprecedented occurrence was hard for pending passengers to comprehend, then the airlines’ collective response was even more arcane for Matschnigg to grasp. “From an airline point of view we followed the instructions given by the service provider and regulatory bodies. On the fi rst day of the ash cloud they closed the airspace in Europe and nobody knew exactly what was going on, although it was only the fi rst day so we were willing to accept this.

“But as the second, third, fourth and fift h day came along and we [IATA] knew that there was no threat to airlines, there was still nobody with the courage or authority to instruct airspace to be opened up fully. I can clearly say today that it was a wrong decision not to open the airspace quicker, and the whole debacle was all handled based upon incorrect information – many test flights were undertaken by airlines and governments that proved there was no risk to engines or aircraft in that part of the world. But still, the newsreels showed maps and charts with ash cloud cover. This was totally wrong. It was an overreaction; Europe was completely uncoordinated.”

While an individual with Matschnigg’s expertise might have been able to challenge the

folly of the prevailing attitude toward the ash cloud as it was happening, the issue of safety hung heavy over the industry. Surely it was better to ground flights wholesale than run the potential risk of even one fatality or injury? “If that were the case, then why did France open up but Germany and Belgium did not? The ash cloud, rather peculiarly, stopped at the political border. Nobody can explain that. This was a very uncoordinated event for Europe. Our strong recommendation to the governments of Europe was to implement a crisis management team that could have dealt with this better.

“Volcanoes and volcanic ash occur right across the entire globe. There are more than 500 active volcanoes and nearly every week there is an eruption somewhere, so this ash cloud was nothing new for the international fl ight community. Europe handled it totally differently, closing airspace that would have remained open elsewhere in the world, all to the detriment of passengers, the airlines and the economy. A lack of knowledge, a lack of experience and a reluctance to look at other parts of the world for guidance made the problem worse. But Europe’s aviation industry has learnt a lot from this experience.”

Aviation in general has much to learn as the industry continues to mature. Consumer demand is at its highest ever levels, while environmental and safety pressures continue to be the catalyst for better technologies and more

2002

2006

THE FUTURE

Richard Reid’s failed December 2001 attempt to blow up a transatlantic flight with a bomb concealed in his shoe prompted the authorities to again make changes. From the beginning of 2002, all passengers boarding a flight to or from the US now had to remove their shoes and socks when passing through the scanner.

In the immediate aftermath of the foiled Heathrow liquid bomb attempts, all airports in the US, the European Union and Australia restricted passengers from taking any liquids on board as hand luggage. This ruling was relaxed after a few weeks, but passengers are still not permitted to take on board any liquids over 100 ml (although liquid purchased in the airside safe area are pre-screened and safe to take on board), and all liquids under 100 ml must be placed in a transparent, re-sealable plastic bag that is not more than one liter in capacity.

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Aviation bodies around the world are constantly seeking new methods to further improve airport and airline security, including biometric scanning, retina scanning, advanced X-ray machines, combined shoe and iris scanners, RFID tracking and even more subtle passenger screening techniques, such as interviewing passengers, tracking their movements through the concourse and analysing body language.

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streamlined collaboration between the various entities that ensure passengers get through check-in, on to the plane, on to the runway, into the air, then safely on to their destination. Th is patchwork of professionals has proven to something of a logistical nightmare in the past, which is why Matschnigg devised the internationallyrecognized IATA Operational Safety Audit, which aims to make the entire regulatory process of aviation smoother, more accurate and, by default, safer for the passenger.

“Th is audit came about when I was working for Austrian Airlines and we would be audited 13 times a year,” says Matschnigg. “I was thinking ‘what the heck? Why do we have to go through theses audits?’ I didn’t see where they added any value. Other airlines thought the same – they saw it as a redundant process that wasted a lot of time and money because there was no unified standard. So when I came to IATA I brought this up with the operations group and they fully endorsed a concept for a global safety audit. Then between 2000-02 we developed the standards to cover the industry and the regulators, and launched the audit program in 2003.

“Since then we have completed 860 audits on 330 airlines on the register, where before there would have been thousands of disconnected audits on the go, because under the previous system the IOSA (IATA Operational Safety Audit) recognized some but not others. So one goal – to reduce the number of redundant audits – was achieved. The second goal was to enhance overall safety, and I think the fact that ground operation units and airlines use this same audit process has led to a standard that is known by everybody. It is a very thorough and methodical audit of safety procedures, fl ight operations, engineering departments and every aspect of the airline process. If a company passes the audit then I think it’s fair to say that they have an extremely robust set of practices in place.”

Tallying audit procedures with overall operational safety is a very quantifiable goal, and one that – while ongoing – is progressing satisfactorily. Less tangible, but equally important for the industry, is the measure of human error. Complete eradication of manmade mistakes is universally recognized as impossible, but Matschnigg is confident that improved staff screening, staff training and technology can help minimize the impact humans play when things go wrong. “We always need people who have the right mindset to work in aviation and this is one issue where personally I am a little concerned,” reveals Matschnigg. “This is why IATA and ICAO launched a program three years ago called the ITQI – the IATA Training Qualification

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Initiative – to find the right people because this business cannot survive without professional human beings. We know this. However, our needs can be supported by the right technology, and this is where we need to work hand-in-hand with airlines’ development departments.”

Striking the right balance between welltrained staff and optimum technology is something that Matschnigg is continuously working

we have to make best use of the technology that we have at our disposal but, of course, human error will always be a factor. To address it, several programs are on the way for the cockpit, for the engineer, on the dispatch side of things and also for air traffic control.”

Flying anywhere these days is cheaper and more fi lled with choice than ever before. The proliferation of budget airlines has opened up a

“Increased security needn’t be more expensive to implement, even if it has to be to the detriment of some measures of comfort because ultimately, safety is paramount”

toward. “The optimum varies in each discipline.

Flight operation is different to engineer maintenance for instance; the need for training for each technology differs drastically. For example, flying an Airbus 380 today compared to flying a 727 30 years ago – the difference is day and night.

The technology has advanced immeasurably, so

whole new world of weekend-tripping opportunities, business ventures and stag and hen party destinations. We are all much more frequent flyers than we were 10 years ago, yet for every two-hour fl ight to the sun, there’s that immeasurable period of misery awaiting us at airports, in baggage claim and even online, where hidden

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taxes and extortionate baggage costs are making the experience of flying more stressful by the day. Profiteering, driving down overheads and the old ‘sell ‘em cheap, stack ‘em high’ mentality pervades throughout, all because the entire aviation network is comprised of a number of disparate entities competing for your business.

Th is is a situation that Matschnigg is looking to change. “I’m not satisfied with the cooperation between airlines, ground operations and travel companies. I think we need to do better with the regulatory bodies; there are situations that can be improved if only the industry had the chance to comment. Th is is only my opinion but I can speak from both sides, having been a regulator in the past. Aviation is built on trust and working together. It is the responsibility of the regulators, of the manufacturers, of the service providers. It is the responsibility of the airlines and the airports and the pilots and the ground staff to work together. Sometimes this coordination and cooperation is lacking because people are all pulling in different directions based on their constituency, and this is something we should do better on.”

Better cooperation would no doubt lead to

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increased security and a more enjoyable and efficient flying experience, but with the skies open to all and sundry, Matschnigg is unlikely to ever get his wish. Besides, passengers are willing to go through the rigmarole of being corralled in like cattle, treated like criminals and subjected to stealth taxes as it is, so why should the industry change? “Our first and foremost priority in this industry is safety and security,” concludes Matschnigg. “I do think that increased security needn’t be more expensive to implement, even if it has to be to the detriment of some measures of comfort because ultimately, safety is paramount.

However, the two issues of comfort and safety are not mutually exclusive – you can have both.

“As an industry we need to improve how we operate. The long waiting lines, this being treated like you’re a criminal – these are things that can be avoided so long as we do things more intelligently. There is still lots to improve upon, but air travel can become the pleasant luxury it used to be.”

Matschnigg stops short of saying that lower costs are in any way correlated to poorer security, but his passion for his fi nal point hints that that may indeed be the case. “Why

are governments not picking up security costs in aviation? Why is the government picking up security costs when it comes to soccer games, when it comes to traveling with the rail companies, when it comes to making sure people are safe when they visit theaters and festivals?

Why not aviation? Th is is still an unanswered question. Why does the aviation community – the airports and the airlines, but also the passengers – pick up all of the cost of security?

Th is is still not clear. Th is is something we have got to emphasize – responsibility. The government has a responsibility to create a safe and secure political environment, so why not in aviation?”

Governments and aviation authorities have worked hard in the past to foil and thwart would-be bombers and terrorists. Their collaboration has averted disaster numerous times when armed with tip-offs, intelligence and a sense of urgency. Th is desire to protect the public should not begin and end with each tangible terrorist threat. Increased government collaboration in aviation can help to make the entire flying experience safer, cheaper and more comfortable for all. ■

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Bay of plenty A landmark mega-project on the north coast, Bahrain Bay is setting the standard for development in the Gulf’s smallest nation. US Infrastructure speaks to CEO Bob Vincent to find out how the project is set to boost Bahrain’s economy, and how it managed to survive the crash in the Middle East’s property market.

I

t’s fair to say that Bahrain is having a moment.

While perhaps not enjoying the same booming success as neighboring Qatar, the GCC’s smallest nation is flourishing in the recovery, playing on its reputation as the ‘gateway to the Gulf ’ in order to develop its tiny oil and fi nance dependent economy into a diverse and sustainable country with booming sectors in business, tourism and infrastructure. Largescale mega-projects are shooting up across the country, providing attractive business and residential stations for international investors looking to tap the region’s emerging economies.

Among them, reaching out into the crystalline seas of the Persian Gulf north of Manama, lies the reclaimed

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peninsular of Bahrain Bay, a $2.5 billion master-planned, mixed-use, super development projected to serve as one of Bahrain’s forefront residential and commercial communities. Cited as a paramount factor in the country’s Economic Vision 2030 development plan, Bahrain Bay is estimated to play host to around 30,000 residents and workers upon completion. In addition to providing the premium accommodation popular in the country, Bahrain Bay will include prime corporate buildings, commercial and retail space, as well as a comprehensive infrastructure to support all the construction and communities within the project.

As a development, its sheer size and budget echo the extravagant mega-projects that pushed neighboring UAE onto the world stage over the last decade, but more impor-

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tantly, in its tiny 1.5 million populous country, Bahrain Bay is set to stimulate significant yet sustainable economic growth. Already the project has welcomed anchor developments from Arcapita investment bank, which has chosen the site for its new corporate headquarters; global hotel brand Four Seasons; and luxury residential accommodation Raffles City Bahrain, as well as investment from high profi le companies across the world.

“The project is still on program and on budget,” explains Bob Vincent, CEO of Bahrain Bay, speaking back in June. Following the initial conception and masterplanning of the idea in 2005, the project began to take form in 2006, beginning with the 430,000 square meter land reclamation process. To stay on track with a development

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“It’s much more important for us in terms of the long-term to demonstrate that we do have the holding power and the flexibility to give surety to these investors that they will be successful in the long term”

such as this is in itself no mean feat considering the scale of the project, the number of third parties involved and of course the economic maelstrom that brought a significant proportion of the GCC’s booming construction sector to a grinding halt. Bahrain Bay is made up of more than 40 buildings, with each individual project taking up to two years to plan and design, and costing anywhere from $100 million to $700 million. With this in mind, the chance of a default somewhere along the line is not unlikely. And indeed, a number of Bahrain Bay’s project did slow down considerably when the market crashed in 2008. Still, the development remains on track and has managed to keep all of its third party investors on board, facts that are down to a flexible business strategy and a little bit of luck, as Vincent explains.

“We are very fortunate in terms of the timing for the civil contract for the main infrastructure of the site,” he says, “because it was locked in prior to the fi nancial downturn and provided a forward projection of works for a two and a half year period, which we are still completing.”

The nature of that contract allowed works to continue on the project, and all of the utilities and services found within it that are necessary for a development of that size.

Similarly, Vincent reveals, the contracts with the third party investors and developers required a certain level of upfront payment for the land in Bahrain Bay, and a subsequent program for ongoing payments. “That’s been very fortunate for us because we’ve locked in a commitment of a significant portion of the project in terms of the fi nancial returns,” he explains. “It’s also been significant because it’s allowed us to negotiate fairly and openly with our third party developers to keep their programs on track. By that I mean we have been willing over the last 12 to 24 months, during the fi nancially difficult period, to show flexibility with the third party developers in terms of their payment because we’ve had significant funds already collected.

“By providing that flexibility we’ve enabled them to revise their plans in terms of the program and the design intent and the product within the project, and we’ve allowed them some opportunities to revisit the program in terms of construction start dates for their developments.”

Th is approach is now paying dividends as the development begins to mature and the market moves into recovery.

Stabilizing revenue collections, as well as development of the civil works and infrastructure, have left Bahrain Bay in a comfortable position to offer its third party developers the opportunity to commence their programs in a time frame that best suits their business plans – and has therefore been able to keep every one of its developers on board with the project.

“We have progressed significantly with the majority of our 13 co-investors or third party developers for the project,” says Vincent, “and all of them are progressing with their development program design submissions. We have approvals for seven of the 13 developers for their schematic designs and we have building permits for four of the third party developers, two of which have already started construction onsite.”

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New beginnings Last October, the Bahrain Bay project reached

5 MILLION accident free man hours

While Bahrain Bay is very much a cutting edge and stylish mega-project for the country, it is still intended to maintain Manama’s character, as well as provide a boost to the country’s economic growth. Closely linked with old downtown Manama, both geographically and in design terms, Vincent describes the Bay as revitalizing the country’s capital, situated “in a prime corridor of development”.

“The corridor of new development is seen as the future expansion of economic development within the kingdom,” explains Vincent. “As an important part of that corridor, Bahrain Bay’s objective was to ensure that we were sustainable and that we brought investors into the project that had the ability to perform.”

Indeed, Bahrain has long been seen as a gateway to the Gulf region; its relatively liberal culture has tradition-

At a glance: Bahrain Bay Start date: Masterplan 2005, construction 2006 Target completion date: 5-7 years (Phased completion) Total floor area: 1.450 million square meters Total land area: 450,000 square meters Total number of buildings: 40

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Anchor developments: Arcapita Bank Headquarters Raffles City Bahrain Four Seasons Hotel International investors: Al Baraka Banking Group Ajmera Mayfair Group Arjaan Rotana Coopertation Investment House DAMAC Kanoo Tower KhaleejCapita Koheeji Salhia Real Estate Company

ally made it an attractive destination for western businesses looking to establish operations in the region. Over the last decade or two however, the advancing economy and flourishing property sector in the UAE, and in Dubai in particular, have made it an attractive prospect in the region, usurping Bahrain’s popularity. Still, today the stability of Bahrain’s economy is beginning to regenerate interest in the country, and the Economic Vision 2030 aims to turn that spark of interest into a fully-fledged firework, capturing foreign investment back into Bahrain – a goal that the Bahrain Bay is paving the way to achieve.

Vincent reveals that a significant proportion of investment for the development has come from overseas. “We wanted to ensure that the third party developers who came into the project had the financial experience and the development experience to deliver on their projects,” he highlights, “and to add value to Bahrain Bay and to Bahrain’s economy in general. We specifically went out and tried to attract international investors in Asia, in Europe, in India and in the broader region of the Gulf in particular.” Th is was a successful venture; the targeted approach from Vincent and his team resulted in attracting significant investment from India, Europe and within the GCC, as well as Bahrain’s own major developers. And this was all part of the long term strategy to establish Bahrain as a major player on the world stage.

“We feel that by bringing that diversity of investors into the project we’ve been able to fi rst of all demonstrate that there is an interest in investing into Bahrain,” offers Vincent. “We’ve been able to demonstrate that these investors are knowledgeable and capable and are prepared to commit to a market that is in some respects new, but also where they see tremendous expansion opportunities within the Gulf region. They’ve done that in the context of knowing that Bahrain Bay is not a short-term development.”

Vincent is firm in reiterating the merits of Bahrain as a business destination in the Gulf region. “While [it] may be a smaller economy than some of its surrounding neighbors,” he says, “it’s able to focus on making the initial investments from these overseas entities successful and in doing so providing further opportunity for the incoming investor – not only in Bahrain, but more importantly in the Gulf region.

“Irrespective of the difficulties of the financial market, Bahrain has continued to take that role and has continued to push forward to make sure that it’s seen as a valid way of going about introducing investment into the Gulf.”

Bumpy road Of course developing a project such as this is not going to be plain sailing, a fact that Vincent is well aware of.

“There are a series of significant risks in any major development,” he points out. “The initial risks are in undertaking the market assessment of whether or not a development of this scale is viable and sustainable and will be commercially successful; that risk was assessed in 2005.”

Indeed, that risk was assessed when the MENA property market was booming and the future for such devel-

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opments across the region looked bright; but in 2008, thee economic downturn hit, bringing the sector to its knees.

“I think initially the Middle East in general and Bah-rain in particular was not as immediately effected as Europee and North America,” offers Vincent, “but it very quickly gott caught up in the outcomes of overleveraging, cheap debtt and rapid overinvestment in real estate and infrastructure.”

Still, Bahrain’s relatively diminutive size meant the recession had a less crippling impact upon the economy, and with his contracts already tied up, Vincent has been able to remain pragmatic about the situation. “We’re having to face – as all real estate projects have had to face over the last two years – a reality check in terms of what the investment criteria might be, what the lending criteria might be and what the market absorption has projected to be in the start-up phases of the project. That’s a major commercial issue we’ve had to manage, but as I said, we’ve been able to manage it because we have a very stable, well funded project with no debt and with significant revenue already collected to support the project going forward.”

Indeed, Vincent is positive about operating in Bahrain, adding that the size of the economic market in Bahrain has allowed the value of property under construction to remain stable, as the country has not seen the level of overbuilding that has occurred in a number of other countries in the region.

Following the market assessment, the next major challenge posed by a project of this size is the planning approval, which Vincent explains is becoming increasingly difficult over time as expectations from government and planning authorities become more demanding. Ensuring that the best practices are being introduced, that environmental and sustainability issues are being addressed, and social equity contributions are being addressed are all factors that, Vincent says, became critical to the success of the master plan and also to securing sales for the project. However, he continues, “it’s also been fair to say that the government has enthusiastically examined what large master plan developments are and how they can benefit the economy.

“We’ve been a fore runner of major master planning in Bahrain and we’ve demonstrated good practice, and the government is being supportive of that.”

Looking to the future, Vincent upholds the same down-to-earth attitude. Well versed in the real estate sector, he knows that what goes up must come down, and then inevitably go back up again. “There’s no doubt that lenders, developers, purchasers are more cautious, but that’s a normal part of a real estate cycle,” he explains. “Real estate works on cycles of five to seven years. Bahrain is no different to anywhere else in the world in this respect.” He is positive that, as the market moves into recovery, sales of units on the development will continue to flow, although emerging from the downturn it may well be slow and steady that wins the race. His ambitious claim that $70 million worth of sales would be tied up by March did not materialize, and he is prudent in his belief that the next year is likely to throw up as many challenges as it does opportunities. Still, with contracted sales completed on 65 percent of the land so far and

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Bahrain’s development landscape andscape Durrat Al Bahrain At the opposite end of the country to the Bay, the Durrat Al Bahrain is a multipurpose island development not dissimilar to it’s northern counterpart. The project will consist of luxury beach-front residential accommodation, office and retail space, premium hotels and a marina.

Status: Under construction Completion: 2015 Cost: $6 billion

Water Garden City A commercial district within convenient proximity of Manama and the country’s transport hubs, including Bahrain International Airport. The project consists of high quality office space, residential tower blocks and hotels, and the marina area aims to provide a platform for Bahrain’s cultural water-related festivities and events.

Status: Under construction Completion: 2020 Cost: $7 billion

Marsa Al Seef Development A waterfront project that is set to cover an area of approximately 2.6 million square meters, the Marsa Al Seef will be another luxurious megadevelopment to add to Bahrain’s portfolio.

Status: Design Completion: 2020 Cost: $2.5 billion

Bahrain Monorail – Green Line The initial part of the massive $7.9 billion public transport network that will grow across Bahrain over the next 20 years, the Green Line of the Monorail is a 23 kilometer long section linking Juffair with the Seef district through Manama. Designed to ease traffic and ultimately boost the economy by attracting more foreign investment into the country, the network will, when completed, include monorail, a light rail link and bus rapid transport system, covering a total of 184.2 kilometers.

Status: Tender for consultancy contract Completion: 2016 (Full network completed 2030) Cost: $1 billion (Total network cost $7.9 billion)

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no debts to speak of, he can afford some confidence in the way Bahrain Bay has operated, and its position as it moves towards completion.

“There’s no point in forcing developers into situations where they fail. It’s much more important for us in terms of the long-term outcomes for the project, and for Bahrain in general, to demonstrate that we do have the holding power and the flexibility in our management and development of the overall project to give surety to these investors that they will be successful in the long term.

“We as a development company were at no time in any danger of not proceeding or having any hold up on the project. We have returned significant revenues on the project … and we’re in a position where we can work with our third party developers to ensure that when they do start they will be successful as well.”

Green Bahrain Bahrain currently has an energy consumption rate 10 times higher than that of Japan, a fact that the government is looking to turn around as part of the Economic Vision 2030.

“Sustainability issues are at the forefront of good urban design and development,” says Bob Vincent. “We have addressed those sorts of issues preliminarily by having our environmental criteria properly assessed by the government, in relation to the possible impacts of reclamation, circulation and water quality assurance.”

In addition to this, the master-plan guidelines for the development indicate that all buildings should be at LEED gold certification standard. In addition the utilities and services within the site have been designed such that all grey and wastewater within the project is recycled and reused for district cooling or for landscaping in the development.

“We are participating with the Bahrain government in instituting new building guidelines for energy efficient buildings,” adds Vincent. “That legislation is currently being drafted; the guidelines are being examined in consultation with overseas experts and we will participate wherever possible to ensure those guidelines are adopted by our third party developers.

“It is a very important emerging field and I think it’s fair to say that the developers within the real estate community in Bahrain are starting to understand the significance and cost savings associated with green energy and will fully embrace these as they move forward in consultation with government.”

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SAFETY

SAFETY FIRST Hundreds of drilling incidents happen every year, yet most go unreported, despite the fact that the cumulative effect of these events has the potential for a devastating impact on human life. US Infrastructure takes at look at the importance of offshore health and safety.

B

ack in July 1988, when condensed gas aboard the Piper Alpha oil platform in the North Sea ignited and exploded, it ultimately resulting in the deaths of 167 people, remaining the world’s worst offshore oil rig accident in terms of lives lost.

Since then there has been a dramatic overhaul in health and safety aboard rigs and platforms across the world, yet the threat to workers – and the environment – continues. The dangers highlighted by the Deepwater Horizon oil spill and more recently, the explosion on a Mariner Energy, Inc. rig 100 miles south of Louisiana’s Vermilion Bay, serve as a stark reminder of the dangers of the offshore drilling industry.

And statistics show that while offshore oil facilities have improved health and safety facilities, it remains one of the most hazardous occupations, along with construction, logging, fishing and agriculture. According to the Occupational Safety and Health Administration, 4340 workers across all industries died on the job in 2009.

According to the US Minerals Management Service (MMS), 858 fi res and explosions have broken out on oil and gas industry facilities in the Gulf of Mexico alone since 2001, killing more than 55 workers. And as the exploration and production industry pushes further into challenging locations, health and safety needs to stay at the top of the agenda.

The subsequent report on the Deepwater Horizon incident has opened up the usually secretive oil and gas industry to the public, which means it can no longer hide under the mantra that “safety always comes first”.

BP and Transocean, the rig operator, are currently playing a blame game where each refuses to admit they were totally at fault in the incident, with human judgements, engineering design and operational implementation all apparently at fault.

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There is no question that there were problems. What is worrying, however, is that these mistakes were made by what is considered as being the “royalty” of the industry: BP is the largest operator in the Gulf, Transocean the biggest rig operator. Whoever is to blame there is no doubt that something needs to change.

After the Gulf disaster, executives from other companies around the world have argued that the accident was preventable and that in fact their own safety systems were robust enough to need no significant reform.

Chevron Chairman and Chief Executive John Watson for example, testified before US Congress that after the BP incident he ordered a complete review of the offshore operations across Chevron and found operations “Are safe and environmentally sound”.

At Shell, spokesman Jaryl Strong explains that management at the organization is reviewing information from the investigation of the incident and plans to incorporate relevant insights and learnings into its guidelines and standards. “Shell will also participate in any industry committees or task forces resulting from this incident that look to form recommendations on improvements or precautions that will help prevent such an incident from occurring again in the future.”

Around the rest of the world, the oil industry has seen the same pattern. In the UK, the government revealed that it has conducted an initial review showing the regulatory system to be robust and is set to double inspection in order to ensure compliance when the deepest well ever drilled in the country’s water comes online.

But while the US ordered a deepwater drilling moratorium, other countries have not followed suit, including Greenland, Norway, Canada, Libya, China, Brazil and Angola. And Australia, for example, despite suffering it’s

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own major blow-out and spill recently, did nothing. Martin Ferguson, the country’s Resources Minister said: “Shutting down the industry and putting the nation’s energy security, jobs and economy at risk, does nothing.”

And so it seems that the US – which has resisted tougher rules on safety for years – has a number of big changes in store for the industry. An idea for a second emergency relief well drilled for every deep offshore well – like one that was drilled by BP in the wake of the disaster, just in case of a blow out – has been hailed as a waste of time. Oil giant chief Rex Tillerson said in response to the idea: “I would say you just doubled your risk.”

But while this idea remains out, companies are aware that they will in fact be required to submit more comprehensive and rigorous rules regarding offshore drilling in the US – including the provision of more thorough and in-depth information of their drilling programs, the way the project will be developed and how they plan to minimize a blow out – which bears more than a passing resemblance to the regulations imposed after the Piper Alpha explosion back in 1988. At the time the US dismissed the idea after being heavily lobbied by various oil companies, but this recent turn around just shows that safety should always come fi rst.

OIL INDUSTRY SAFETY: THE RESPONSE TO BP’S SPILL US

Canda

UK

Norway

A National Commission backed by the president is investigating the disaster, and about 40 bills affecting offshore oil drilling have been circulated.

A moratorium on deep-water drilling remains in force

The National Energy board has launched a review of Arctic safety and environments, to inform decisions about future applications for permits. The review will look at safety regulations and spill response

The government has increased environmental inspections and has asked a new oil industry group to report on the UK’s ability to prevnt and respond to oil spills

“It is not appropriate for me to allow drilling in any new licences in deep-water areas untill we have good knowledge of what has happened [with] the Deepwater Horizon” Terje Riis-Johansen, Energy Minister

Brazil

European Union

Australia

“It is very important to complete a deeply technical investigation before deciding on regulatory changes... we only have a preliminary vision” ANP, The National Oil Regulator

“Given the current circumstances, any responsible government would at present practically freeze new permits for drilling with extreme parameters and conditions” Gunther Oettinger, Energy Commissioner

“Shutting down the industry and putting the nation’s energy sercurity, jobs and the economy at risk dose nothing to ensure safe oil exploration” Martin Ferguson, Resources Minister

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HEADING 12

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Share of power fueled by renewable energy other than large hydropower, 2009

NO DATA

Iceland 29.8 U.S. 3.3

Denmark 28.7

0

5

10

30% of power

RUSSIA 0.7

Portugal 21.6

CANADA 3.3

20

CHINA 3.1 INDIA 3.6 NO DATA

BRAZIL 7.9 AUSTRALIA 2.8

a base of fossil fuels to be fired up at will, Portugal is building highly efficient natural gas plants.

Such a drastic reorganization of power supply may prove much more difficult which is why here in the US where individual states decide whether to promote renewable energy and power companies hold strong political sway. Colorado for instance, recently legislated that 30 percent of its energy must come from renewable sources by 2020, but neighboring Utah has weak voluntary goals and coal states like Kentucky and West Virginia have few policies to encourage alternative energy.

Land-based wind power has expanded sevenfold in the last five years And if we are to catch up to countries like Portugal, we need to overcome obstacles such as a fragmented and outdated energy grid poorly suited to renewable energy; a historic reliance on plentiful and cheap supplies of fossil fuels like coal; powerful oil and coal industries that often oppose incentives for renewable development; and energy policy that is heavily influenced by individual states.

The relative costs of an energy transition would undoubtedly be higher in the US than Portugal, but, says Alex Klein, Research Director of Clean and Renewable Power Generation at IHS Emerging Energy Research, as the expense of renewable power drops, an

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increasing number of countries could see such a shift as worthwhile. “The cost gap will close in the next decade, but what you get right away is an energy supply that is domestically controlled and safer,” he says.

Last year, President Obama offered billions of dollars in grants to modernize the energy grid in the US, but it is not clear that such a half-hearted effort will rejuvenate the renewable energy sector, particularly with the various procedures in different states. The American Society of Civil engineers gave the US grid a D+, stating that it is “in urgent need of modernization”.

John Juech, VP for Policy Analysis at Garten Rothkopf adds: “A real smart national grid would radically change our technology profile. But it will be very costly, and the political will may not be there.”

Indeed a 2009 report commissioned by the Pew Center estimates that the US would need to spend $3 billion to $4 billion a year for the next two decades to create a grid that could accommodate a potential 20 percent of electricity through wind power by 2030, which is a 40-50 percent increase over current spending.

Portugal is currently on track to reach its goal of using domestically produced renewable energy, including large-scale hydropower, for 60 percent of its electricity and 31 percent of its total energy needs by 2020. Will the US follow suit? A recent report by IHS, thinks not, predicting that by 2025, Portugal, Ireland, Denmark and the UK will get 40 percent or more of their electricity from renewable sources, while the US will lag behind at 16 percent. A poor effort, but a prediction that may not come true if some of the nation’s green energy supporters have their way.

“Portugal expects to become the first country to inaugurate a national network of charging stations for electric cars”

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Travel | Gadgets | Books | Leisure | Money Travel 36 hours in Los Angeles p138

Agenda Our pick of the councry’s top events p140

Gadgets A look into the executive toybox p142

137

Books The best business reads of Q4 p143

Details.

California dreaming An insider’s guide to LA’s hotspots

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138

TRAVEL

36 hours in... Los Angeles Time: PST (UTC-8) | Population: 3.8 million (city) | Area: 498 square miles | Elevation: 77 yards ds

LAheadquartered firms AECOM Capital Group CB Richard Ellis DeviantArt Dunn & Crutcher Fox Sports Net Guess?

Health Net Northrop Grumman Occidental Petroleum Paramount Pictures Premier America Sunkist Growers Tutor Perini

In the know

Eat

The second largest city in the US after New York, Los Angeles, often called by its initials or nickname of the City of Angels, is a world center of business, international trade, entertainment, culture, media and technology. Sprawling along the pacific coast of Southern California, its coastline stretches 122 kilometers from Malibu to Long Beach. Los Angeles is also the largest manufacturing center in the western US and the contiguous ports of LA and Long Beach together comprise the fifth busiest port in the world.

LA is often billed as the Creative Capital of the World, due to the fact that one in every six of its residents works in a creative industry. And according to the USC Stevens Institute for Innovation, “There are more artists, writers, filmmakers, actors, dancers and musicians living and working in Los Angeles than any other city at any time in the history of civilization.”

Ca’Brea is a charming restaurant known for Italian food that looks as good as it tastes. The starters, bread, risottos and pasta dishes, such as homemade agnolotti stuffed with veal and prosciutto in a mushroom sauce, are particularly recommended. A great spot, with lots of wonderful-looking carved wood, polished granite, high ceilings and sand-blasted glass. Popular with young lawyers and film industry people, the restaurant gets very crowded in the evening, so reservations are essential.

Housed in a remarkable building, commissioned in 1928 by Charlie Chaplin, Campanile is composed of elegant dining rooms and an atrium courtyard, central to the sky-lit room. The menu is modern Mediterranean with robust flavors, such as beet with pomegranate and cod with eggplant puree. A superb place to do business or relax with attentive, yet unhurried service and delicious food.

Saddle Peak Lodge is a real hunting lodge, high in the hills above Malibu, a fantastic place to escape the madness of LA. Think real wood, fireplaces and no cell phone reception, with plenty of game on the menu along with seafood. All in all a unique menu, attentive service and cozy atmosphere.

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Time off If you like to work out in your down time then the best place to head is Runyon Canyon Park. The 134-acre park’s main drag snakes along the canyon floor, gradually ascending to the scenic point called Cloud’s Rest. Fitness buffs can choose to proceed downward via a steep dirt fire trail while the rest of us can retrace the path for a gradual, paved return to the bottom.

You have to head to the beach during your stay, and like everything else in LA, there’s one to suit everyone: Zuma beach in Malibu is typical LA with hot mums and surfer dudes; Venice beach is great for people-watching and Manhattan beach is the home of beach volleyball and a great place for a walk.

If you are into shopping, Third Street Promenade is an outdoor mall just three blocks from the beach, and just as good is The Grove in the Fairfax District. The Grove’s trolley travels the one block between the mall and the amazing Farmer’s Market where every single booth sells delicious food.

LA is the second largest city in the US LA was founded on September 4, 1781,

by Spanish governor Felipe de Neve LA has hosted the 1932 and 1984 Summer Olympics LA enjoys a subtropical climate, with an average of 35 days of precipitation annually

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Drink

Sleep

LA offers a mix of live bands, cabaret, jazz, rock and blues as well as being home to some of the most vibrant comedy clubs in the US. Sunset Boulevard still boasts some of the most famous clubs, but other good spots are Santa Monica, Hollywood and West Hollywood, Pine Avenue in Long Beach and Pasadena’s Old Town.

Some of the finest views of LA are found at Skybar, an open air, ivy-covered pavilion perched between the Pool and Outdoor Living Room at the Mondrian Hotel in West Hollywood.

The Beverly Hills Hotel is pure old-style Hollywood glamour. Behind the famous façade lies the star-studded haven, and following a $100 million restoration a few years back, the hotel’s grand lobby and impeccably landscaped grounds retain their over-the-top glory, while lavish guest rooms boast every luxury.

Petit Ermitage is a quaint boutique hotel located right in the center of West Hollywood with fantastic views and great rooms.

Nestled on a quiet street, eclectic European antiques grace every space in the hotel and details include customcrafted mattresses, 618-count sheets, water works fixtures, in-suite fireplaces with handcrafted mantels and hand-woven Turkish carpets. While it’s budget friendly, the Petit Ermitage is not a budget experience.

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AGENDA

Coming up‌ Oct. 24 Coarsegold Tarantula Awareness Festival The annual Coarsegold Tarantula Festival is a favorite event among locals and visitors alike, as they take part in numerous events all honoring this eight-legged denizen of the region. Numerous events take place as part of the festival, from a cheesecake contest, to a hairiest leg contest. The highlight, however, is the Tarantula races, which consist of heats of 10 tarantulas making their way through a dryer tube, with a handler at each end.

Oct. 2-10 Albuquerque International Balloon Fiesta The Albuquerque International Balloon Fiesta is a yearly event that takes place during early October.

A nine-day event with around 750 balloons, this is the largest hot air balloon festival in the world. On any given day during the festival, up to 100,000 spectators may be on the launch ďŹ eld, where they are provided the rare opportunity to observe ination and take-off procedures. Countless more people gather at landing sites all over the city to watch incoming balloons.

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Nov. 6 Ironman Florida Since it began as a challenge between a group of Navy Seals, the Ironman has grown to become one of the most recognized endurance events in the world.

Originally a combination of the Waikiki Rough Water swim, the Around Oahu Bike Race and the Honolulu Marathon, the Ironman consists of a 2.4-mile swim, a 112-mile bike ride and a 26.2-mile run.

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Nov. 07 New York City Marathon One of the largest marathons in the world, the New York City Marathon had over 43,000 finishers in 2009. The race attracts many world-class professional athletes, not only for the $600,000 in prize money, but also for the chance to run the race before two million cheering spectators and 315 million worldwide television viewers.

Nov. 25 Macy’s Thanksgiving Day Parade An annual Thanksgiving Day Parade presented

by Macy’s, the tradition started in 1924. The parade is held in New York City starting at 9am EST on Thanksgiving Day. In addition to the well-known balloons and floats, the parade also features live music and other performances, such as those from college and high school marching bands from across the country. More than 44 million people watch the parade on television each year.

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Dec. 2-11 National Finals Rodeo Organized by the Professional Rodeo Cowboys Association, the National Finals Rodeo, held at the Thomas & Mack Center at the University of Nevada in Las Vegas, is the grand finale of the modern professional rodeo circuit. It has been held in Las Vegas since 1984.

Known as the Super Bowl of Rodeo, this 10-day event puts the talents of the nation’s top 15 money-winners to the test as they compete for championship titles.

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142

GADGETS

Technology for today’s executive Polaroid 300 Instant Camera After being dropped for a few years, Polaroid instant cameras have been rejuvenated by a new creative director, Lady Gaga, and a new flagship instant snapper in the shape of a Polaroid 300 Instant Camera. While pretty chunky, the Polaroid 300 is also surprisingly lightweight. An instant flash is now built in and there are four scene-settings to get the most out of the straight-to-shot prints.

Sony DR-GA500 gaming headphones Sony has officially unleashed their brand new gaming headphones, with 7.1ch 3D surround sound effects. With a separate signal-processing unit, which decodes and delivers Dolby Pro Logic llx audio, Sony has also ensured that the headphones themselves are created with ‘triple enfolding’ padding, so they’ll sit on your ears for hours without the least bit of irritation. While they’re primarily designed for gaming, they’ll also be great for watching movies or listening to music too, and the built in mic will be handy for Skype conversations or other VoIP services.

Apple 12-core Mac Pro Packing a punch, the 12-core Mac pro desktop beast is now available from Apple, with prices starting at a whopping $4999. But for that price tag you get a lot of machine. Entry models feature two 2.66GHz six-core Intel Xeon Westmere processors, a 1TB hard drive and 6GB of RAM with an ATI Radeon HD 5770 in charge of graphics duties.

Splash the cash further and the 12-core Mac Pro offers even more.

Sanyo Xacti VPC-PD2 Sanyo have finally delivered what we’ve all been waiting for: a high-def pocket camcorder with optical zoom lens. The VPc-PD2 offers a 3X optical zoom lens that ranges from 38mm wide angle to a 114mm telephoto, along with stereo microphones on the sides of the camera. The price fits the rest of the market at only $170 and it measures a slinky 2.48 x 0.87 x 4.36, weighing 3.7 ounces – that’s positively pocketable. Good work Sanyo.

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BOOK REVIEWS 143

1

Seven Keys to Imagination: Creating the Future by Imagining the Unthinkable and Delivering it

By Piero Morosini

12 Steps to Power Presence: How to Assert Your Authority to Lead

By John Baldoni

2 Change: Bring it on!

By Keely Nugent

Change is a tricky concept in business. It invariably happens and yet somehow, when it does, we are often reluctant to get on board. Author and strategic thinker, Keely Nugent, has recognized the same resistance to change in international racing horses and in her book she applies the tried and tested techniques of the equestrian world to business. Using a fictional company as an example, Change: Bring it on! clearly and concisely explains how to establish a winning team by managing change and the challenges it brings.

US Infrastructure says: Simplicity is key with this book, broken down into sections of no more than two pages, it’s manageable even for the busiest among us. A light and refreshing read while still insightful.

Good Boss, Bad Boss: How to be the Best…and Learn from the Worst

By Robert I. Sutton

Good Boss, Bad Boss was inspired by the thousands of emails, calls and conversations 3 that Robert Sutton received after publishing his bestseller The No Asshole Rule. Sutton’s subsequent research showed that the success of every boss depended heavily on how well (or badly) they managed those they worked with and in Good Boss, Bad Boss he demonstrates this by weaving together the best psychological and management secrets with true stories, to reveal the mindset and moves of the best bosses, and contrasts them with the behavior of the worst.

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Morosini’s book examines the power of the imagination as taught throughout history, and how that can be applied to generate a successful future. An intelligent and complex book, Seven Keys to Imagination unravels the various elements of an innovative and creative mind, and applies them to real world, industry-leading examples. This book offers an alternative way of thinking about how to develop your own future, however the parallels that Morosini draws between magic and business become somewhat gratuitous and irksome.

US Infrastructure says: Lengthy and dense and most likely futile to anyone who currently holds a creative position. However those who do not consider themselves natural innovators would benefit from this book’s insight.

Employees First, Customers Second: Turning Conventional Management Upside Down

By Vineet Nayar

In this book, Nayar argues that the best 4 way for companies to meet their customers’ needs is to stop making customers their top priority and instead shift focus to empowering employees to solve customer problems, by making management accountable to employees who are the real creators of value. Only by turning the organization upside down will companies be able to unleash their employees’ creativity, energy and passion.

Philosophers and management theorists have endlessly debated the single most important quality a real leader should posses.

Enter John Baldoni’s 12 Steps. Over 68 pages, Baldoni claims that leadership presence is a form of communication that can be learned, and then provides the hows and whys of learning it. Along the way he adds some provocative comments on the importance of ethical actions in tough times, as well as good, including why merely thinking good thoughts and voicing good intentions is never enough.

US Infrastructure says: A succinct guide, punctuated with real-life examples, this book is a good and easy read for new leaders or managers who are looking to visit the fundamentals of leadership.

US Infrastructure says: An honest and practical account, Employees First, Customers Second, offers valuable insights for managers seeking to realize their aspirations to grow faster and become self-propelled engines of change.

US Infrastructure says: If you want to learn how the best bosses think and act, read this book. An interesting look at how to become a better boss to work for.

5

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PHOTO FINISH

With global warming and the idea of more efficient, carbon-friendly buildings beginning to ingrain themselves into our psyche, a three-vaulted prototype that has been in development since the mid-1980s is seemingly spearheading the move to next generation ‘green’ housing – so much so, that NASA scientists are considering using the design on the moon and Mars.

Deriving from a pattern of three offset vaults, the system can be combined with domes and apses, or repeated back-to-back to form a variety of efficiently planned house designs. But it’s more than just cutting-edge architecture and interior design. The three-vaulted house has been tested and approved to withstand California’s severe earthquake codes and natural elements – specifically important as it stands slap-bang in the middle of the Mojave Desert. Combine that with the universality of the materials used and the simplicity of the design, and it’s no wonder that NASA believes this ‘future pod’ looks attractive for the “in-situ utilization of planetary resources”.

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