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S MER U S CON ate r G N e l t AGI cce ppor a ENG u to rs w e o H tom s u c AN E N E RGY C E NTR AL PU B LIC ATION
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Idea Power.
™
We’re generating electricity from a power plant 93 million miles away. Tapping into renewable sources of energy is vital to our future. Southern Company, partnering with Turner Renewable Energy, owns and manages one of the largest solar photovoltaic facilities in the nation, supplying clean electricity for some 9,000 homes. Through projects like our Cimarron Solar Facility, we’re making renewable energy technologies more affordable and viable to meet our country’s growing demand for electricity. To see how Southern Company is turning ideas into power, go to southerncompany.com.
Cimarron Solar Facility in Cimarron, New Mexico
©2011 Southern Company
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CONTENTS S PECIAL REPORT SMART GRID LEADER
40 Leaving behind a legacy Southern Company CIO Becky Blalock offers her thoughts upon retirement
DEPARTMENTS
20
FEATURES // SEPTEMBER/OCTOBER 2011
Knowledge2011 Showcase
12 Putting the customers first, always
JEA talks about challenges and successes
The data explosion Using the data to provide new efficiencies
25 Big data: threat or opportunity? W WW.INTELLIGENTUTILIT Y.COM /// SEPTEM BER/OCTOBER 2011
McKinsey report touts benefits
2
26 Managing a changing workforce
Preparing employees for technology changes
30 Smart grid workforce trends
Cross-functional skills needed for the future
6
Transmissions 6
Letters from readers
10 The big picture
10 The No. 1 utility challenge
12 40
58 Operational perspectives
66
Preparing personnel
Drawing the line
50 IT insights
58
20 Data analysis: what’s it telling us?
4
50 IT workforce of the future 54 Keeping the clouds white with cloud computing
58 Integrating automation 62 Challenging the status quo
66 Customer service
66 Rethinking smart grid: benefits vs. challenges
68 CVPS: Small utility, big mission
71 Out the door
71 Renewables rule transmission 72 FERC rule dissected
68
Engaging consumers
36 Using MDM to improve
operational efficiencies Salt River Project provides compelling ROI story
Vol. 3, No. 5, 2011 by Energy Central. All rights reserved. Permission to reprint or quote excerpts granted by written request only. Intelligent UtilityÂŽ is published bimonthly by Energy Central, 2821 S. Parker Road, Suite 1105, Aurora, CO 80014. Subscriptions are AN E N E RGY C E NTR AL PU B LIC ATION available by request. POSTMASTER: Send address changes to Intelligent Utility, 2821 S. Parker Road, Suite 1105, Aurora, CO 80014. Customer service: 303.782.5510. For change of address include old address as well as new address with both ZIP codes. Allow four to six weeks for change of address to become effective. Please include current mailing label when writing about your subscription.
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Honing in on success
W WW.INTELLIGENTUTILIT Y.COM /// SEPTEM BER/OCTOBER 2011
I REALLY APPRECIATE IT WHEN READERS TAKE THE TIME TO SEND ME AN E-MAIL,
4
or to comment online about the stories we’ve published within the pages of this magazine. Back in our May/June issue, we published a selection of comments from six electric utility executives who joined Sierra Energy vice president Christopher Perdue for a roundtable discussion at the EnergyBiz Leadership Forum. In response, one reader wrote to tell us, “What the industry needs (and Intelligent Utility can enable) is a status check on the benefits utilities and consumers can expect to achieve. This is the year when this technology really takes off or when projects begin to dribble to an end. Early smart grid projects should be achieving benefits now and others who have completed a significant portion of their projects should be able to project benefits with much more certainty now.” Our reader went on to say, “No executive or utility commission who has waited until some success has been demonstrated by smart grid projects and missed the opportunity for ARRA funding is going to initiate a project or approve a comprehensive implementation project after a pilot until utilities demonstrate real benefits for the utility and its customers. “It’s time to begin to promote successful projects or define the changes in requirements that will make the next project a success.” With this issue, you will see some major changes in our magazine “departments” to reflect the interests of our audience of readers. Beyond our scheduled feature stories and utility profiles, we will continue to present utility success stories, discussing the challenges to be overcome, the changes that were made possible, and the lessons learned in project deployment, under three different umbrellas: IT, Operations and Customer Service. As our corresponding reader suggested, we will hone our focus in the coming months on those more mature utility projects that have demonstrated success, and talking in clear terms about the hows and the whys. In early November, we will be discussing the emerging issues of import to executives in each of those three utility areas at our 6th annual Knowledge Executive Summit, and updating our readers in the January/February 2012 issue of Intelligent Utility on the thoughts and ideas coming out of that summit. Oh, and I have a confession to make. I spent the summer talking to many industry professionals, and I learned a lot about new efforts industry-wide. You’ll notice my byline on an inordinate number of stories in this issue, as I wanted to share with you some of what I’d learned along the way.
Kate Rowland Editor-in-Chief, Intelligent Utility magazine krowland@energycentral.com
sue? Then Enjoy the is for free at subscribe .com/ igentutility www.intell subscribe
DAAMI THE CONVERGENCE OF DA AND AMI Through the convergence of DA and AMI with Elster’s EnergyAxis Smart Grid platform, utilities can obtain the benefits of Voltage Conservation across the Smart Grid distribution system.
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TRANSMISSIONS
Letters from readers www.intelligentutility.com EDITOR-IN-CHIEF Kate Rowland
2020 Smart Grid
krowland@energycentral.com 720.331.3555 SENIOR CONTRIBUTORS
Phil Carson Editor-in-chief, Intelligent Utility Daily pcarson@energycentral.com 303.228.4757 Christopher Perdue Vice President, Sierra Energy Group
Where are we going?
Gazing into the future of the new utility more hazy than others By Kate Rowland It’S generally agreed that the comIng
data analytics on the rise In early January, Pike Research released data indicating that the software and services that will enable smart grid data analytics will represent one of the largest growth opportunities in the utility sector over the next few years, increasing from a relatively small market of $356 million last year to nearly $4.2 billion in annual revenue by 2015. And there are clear indicators this trend will continue into 2020. “Data analysis is the area which is just emerging as a need: ‘Okay, I now have the systems in place and have lots of data, but what do I do with it?’” said John Wambaugh, a vice president of Utility Integration Solutions (UISOL). “My favorite quote is, ‘I have 100 times more data, and I still can’t tell where the problem is.’” In my own conversations with utilities and vendors alike, especially over the past year, the subject of structured and unstructured data analytics has crept into the discussions more and more often. As Craig Johnston, OGE Energy Corp.’s vice president, corporate strategy and marketing, told us recently about his utility’s data
Elizabeth McGowan, Cate Meredith COPY EDITORS: Martha Collins, J. Ian Tennant ACCOUNT EXECUTIVES
Jean Micketti, Ken Maness, Todd Hagen sales@energycentral.com 800.459.2233
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w w w. i n t e ll ig e n t u t i l i t y.co m
decade will bring more change to our industry than we’ve seen in the previous century. Industry researchers have clearly indicated they see a massive increase in smart grid spending between now and 2015. Late last year, SBI Energy was definitive in its expection that “The next five years will be a pivotal period for the global smart grid market, with grid component companies expected to leverage their sales prowess to capture long-term contracts throughout the electric grid supply chain.” But what about 2020?
FEATURE WRITERS
Mike Breslin, John Johnson, Phil Johnson, Laurel Lundstrom,
We decided to plumb the depths of our own crystal ball, and asked analysts, researchers and national laboratory leaders where they think the industry is headed in the coming decade, and what we can expect come 2020.
IlluStratIon by dana lechtenberg
w w w.intelligentutilit y.com /// may/June 2011
++Some elements are
cperdue@energycentral.com 310.471.7396
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Cindy Witwer, 800.459.2233 ENERGY CENTRAL
Weighing the impact and keeping it simple May/June 2011
I wore a marketing hat for an AMI vendor, and I also managed an ERP deployment for a utility. My current focus is on business process change management for a smart grid initiative. In all of my roles, I realized that strategic consumer engagement is crucial to smart metering and overall smart grid success. Now that I am managing a plug-in electric vehicle initiative, consumer adoption strategies have proven to be extremely important. Market segmentation and leveraging various communication medium are more important than ever for utilities. Name withheld
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Meter data management shows promise
6
May/June 2011
If I’m not mistaken, most residential outages are due to fouled overhead lines or a failed transformer. You don’t need MDMS to troubleshoot, and restoration requires the physical attention of line crews. I can’t help wonder if all this data collection business isn’t about getting more “stuff” into the rate base, which of course is marked up to become utility profit. Note that the result to the utility is positive no matter the benefit (or lack thereof) to the ratepayer. Having provided multiple industrial users with the means to collect and track demand and consumption data, my experience is that the operation of their core business supersedes all else. If you can’t tie data collection and analysis to operations and maintenance in a way that clearly benefits industrials, you may as well stop fiddling now. Name withheld
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TRANSMISSIONS Snohomish County PUD: distribution automation is key
W WW.INTELLIGENTUTILIT Y.COM /// SEPTEM BER/OCTOBER 2011
Intelligent Utility Daily, Aug. 2
8
This is one of the more interesting excerpts I’ve read. As someone who is not technology-oriented, but who tries to keep up with smart grid developments, I have often wondered how, if at all, AMI and smart meters are to be integrated with the rest of the smart grid. I have stared in bemusement at futuristic diagrams of comprehensive smart grid architectures. Are the meters basically a customer interface device, designed to enable customers to have access to more information and choices about their own usage, energy efficiency, demand response, and time-sensitive pricing? Or is there a larger connection with system operations? How, if at all, is AMI integrated with the other smart grid technologies to be embedded in transmission and distribution systems that aim to optimize overall system operations by making them more reliable, more efficient, more responsive to contingencies, and more interlinked? Or, are these really two separate sets of solutions that address separate problems, one for customer empowerment, the other for improving system efficiency and reliability in ways that are largely invisible to individual customers? This distinction, if it is in fact real, has not been obvious to me (even if it is to the engineers and the technology experts). But the article on SNOPUD’s plans seems to confirm it—SNOPUD is apparently choosing one, but not the other, in light of its perceived needs and its goals. To contribute to the Transmissions department, please e-mail your submission to intelligentutility.editor@energycentral. com. Provide your name, address and daytime phone number. Letters may be edited for style and space.
where smart grid meets business—and reality.
Vol 3, issue 4 » July/August 2011
regulAtory intel ©©
FERC vs NERC: A grid control showdown over cyber security
DistriButeD generAtion reDuX see how one utility proves the end-to-end smart grid concept in a “microgrid laboratory” utility moBility How to integrate new mobile workforce management across the enterprise
communicAtions networks Public, Private or combo
» www.intelligentutility.com
It is important for laymen to understand that the bifurcation exists because the term “smart grid” is used, loose-handedly, to refer to both types of projects. But the business case for making investments in essentially customer interface devices should be completely different from that for utility T&D modernization, as would be the cost/benefit assumptions and the regulatory considerations that drive rate recovery. Smart meters call into question whether residential consumers want them, would use them, are willing to pay for them, or would actively resist them. T&D system improvements could be justified by the usual considerations that drive utility investment in equipment and facilities. Ken Roth East Lansing, Michigan
This is one of the most refreshing AMI stories I’ve heard in a long time. I tip my hat to Snohomish County PUD for understanding their business and taking bold steps to better their service delivery. They are demonstrating the leadership that will make them one of the successful utilities we’ll hear from in the future. Their holistic approach is one that many utilities only dream about. I was especially impressed with their efforts in bettering their most important
resource, the human resource. Reaching out to local resources, the universities, and then also taking ownership as stated by Mr. Beberness: “The onus is on us to educate, and to be able to attract the right people.” That is a very bold statement that is very rarely heard at any of the corporate management levels today. I agree 100 percent with their perspective and believe a company is only as good as the people within the organization. Congratuations for a fresh look and a bold step! Richard G. Pate Pate & Associates
Smart grid: utility threat or opportunity? Intelligent Utility Daily, July 26
Every electric consumer that wants to go off grid or at least be largely self-sufficient has to face the cost issue. Grid power is based on historical costs and includes the utility’s return on shareholder capital. Distributed generation is based on current cost and debt service payments with no return to shareholders. Even so, the cost calculation typically favors grid power over distributed generation. Except here in California, where a nutty combination of legislated subsidies to low-income customers, tiered rates and the falling cost of solar PV could turn everything upside down. Once summertime use for a residential customer exceeds around 500 kWh per month, solar looks pretty darned attractive, at least for the amount you consume in excess of 500 kWh. At that point, revenue losses to the utilities are way out of proportion to the loss of sales volumes so that a 5 percent reduction in consumer use from those upper tiers leads to a 10 percent or more loss of revenue from that same group. All that gets in the way is an equally bad policy of decoupling utility profits from sales, supposedly to incentivize utilities to promote energy efficiency and demand response. Jack Ellis Tahoe City, CA
THE BIG PICTURE health, safety, precaution, and any remnants of law.
The No. 1 utility challenge
“There has been no public discussion on the known biological hazards, both to humans and our pets, with these new meters. There has been no testing of these meters for any kind of safety. However, utility Public Relations ‘spin’ includes that: they will cut power
++Facing 2012, this hurdle must be mastered
costs to consumers, thus lowering
By Kate Rowland
your monthly bills; help customers reduce power consumption during
THIS MONTH, THE TOP 11 HAVE COALESCED INTO A BIG TOP 1.
peak times; and the meters can be read anytime, via a planned new ‘grid’
There are numerous challenges facing electric utilities in the comin the works for the entire country that ing year, not the least of them being a federal election in which the outcome is will use these meters. Utility compaanything but certain. nies insist these meters are safe.” In discussions with utility executives, consultants and vendor partners over Or this doozie, in the same article: the course of 2011, it has become clear to me that there are certain “sophomoric” challenges ahead for even the most technologically forward-facing electric utili“The EMR Policy Institute further notes ties. The race to deployment fuelled by American Recovery and Reinvestment that ‘components of Smart Meters are Act funding has slowed, deployments have begun or are being completed, and out of compliance with the National new hurdles are being encountered along the way. The wave of excitement that Electric Code (NEC) because they washed over the industry with federal funding and the ability for some utilities trip the Ground Fault Interrupters, to move forward more quickly with new and needed technology has waned creating a fire hazard ... Un-intentional somewhat in the face of small but vocal pockets re-radiation of RF/MW of consumer resistance. signal (with its higher Effective communication And this challenge—that of effectively energy) on the electricommunicating with consumers—is the No. 1 cal wires may overload with customers about hurdle electric utilities must clear in 2012, or wires, particularly in their consumer-facing intelligent utility efforts poorly grounded or the changing utility is a will be all for naught.
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ungrounded homes,
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or homes with older In fearmongers we trust new arena in which both wiring or faulty wiring.’” Try as we might to fight fiction with fact, we have in many ways gotten off to a stumbling utilities and fearmongers Fighting back start in terms of communicating effectively with Say what??? This is the customers. Unfortunately, the fearmongers have are playing. stuff that’s going viral taken advantage of the industry’s somewhat on the Internet, folks, spotty communication/education history to backed up by YouTube videos getting spread their own creeds to fill the void. Let’s face it—effective communication hundreds of thousands of hits. Put with customers about the changing utility is a new arena in which both utilities “Dr.” in front of a person’s name, and and fearmongers are playing, and the fearmongers have been the first to put the general populace is more likely to serious points on the board. believe it to be true, despite what their It should be easy, right? Combat fiction such as this (and I’m quoting directly utility tells them in response. Because, from a recent article posted on Global Research.ca by an author and environyou see, they’re also being told not mental writer with a PhD who has fought the battle on everything from toxic to trust anything their utility’s public metals and chemical aerosols to women’s feminine products, and has now relations spin doctors tell them. turned her focus to radiofrequency radiation and the invisible hazards of “smart” It’s virulent, and it’s hitting your meters). To wit, she wrote, in a piece published on the Web site on August 19: customers directly in their sweet “Smart-grid projects are supposed to ‘meet strict cyberspace guidelines’; spots. You’re the bad guys, you’re going but that has not happened, because greed trumped everything else: our to give them cancer and burn down
”
Proactive, not reactive Fearmongers are experts in the use of social media. It’s time for electric utilities to become experts, as well. First, monitor what’s being tweeted about you, and what’s being said in other social media arenas, too. Then, you need to fight fire with fire, but be responsive, rather than reactive, in doing so. Put the PhDs on your side out there in the media, and give your consumers the facts in a straightforward, easily understandable fashion. Groups such as the Smart Grid Consumer Coalition and the Smart Meter Manufacturers Coalition are working diligently to provide the industry with information to combat the misinformation. Armed with the facts, you then have to work on the trust issue, which is more specific one utility to the next.
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their houses, and charge them more money for the privilege while you’re doing it. Period. So what do you do to combat this virulent spread of misinformation? Unfortunately, there’s no silver bullet, no magic potion, to immediately set aside what your consumers have already heard. You’re in a position of playing catch-up now, whereas you really want to be out in front with good, solid truth.
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KNOWLEDGE 2011
Putting the customers first, always ++JEA talks about challenges and successes By Kate Rowland TO GAUGE HOW FAR A COMPANY HAS COME, IT IS IMPORTANT
W WW.INTELLIGENTUTILIT Y.COM /// SEPTEM BER/OCTOBER 2011
to look at its beginnings. For JEA (formerly the Jacksonville Electric Authority), those beginnings hail back to 1895, when the city of Jacksonville, Florida, established an electric system. On March 7 of that year, the switch was thrown at the original Main Street Power Plant, providing nighttime-only service for lighting. By 1932, the utility was already receiving kudos for its service, this time earning national recognition from the New York World Telegram and 25 other Scripps-Howard newspapers for the success of its electric plant during the Depression. While this may be the first national-level laurel the communityowned utility received, it’s hardly the last.
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Humble beginnings JEA is the utility Today, JEA has grown into a consolidated host for the electric, water and sewer utility with more than Knowledge2011 Intelligent $1.8 billion in annual revenue. Florida’s largest Utility Executive Summit. municipally owned electric utility, and the Here, we offer a glimpse eighth largest municipal utility in the United into JEA’s longstanding States, JEA serves more than 417 electric focus on both utility customers in Jacksonville, and parts of three intelligence and “customers first.” adjacent counties. JEA’s water system serves more than 305,000 water customers and 230,000 sewer customers in Northeast Florida. On the electric side of the house, approximately 42 percent of JEA’s electric revenues come from 368,000 residential customers, 45 percent from 46,000 commercial and industrial customers, and 3 percent from one wholesale customer. The commercial and industrial market segment also accounts for about one-third of the water and wastewater revenue. It’s a far cry from the utility’s early electric customer base, which had risen by 1938 to 30,000 residential accounts, 6,500 commercial accounts and 110 industrial accounts. Early challenges JEA hasn’t only had wars and the Great Depression to deal with over the years of its service, it also faces yearly challenges from Mother Nature with which it must contend. And sometimes, those natural challenges can be devastating. The most destructive blow to JEA came on September 9, 1964, when Hurricane Dora destroyed almost 95 percent of Jacksonville’s electric transmission and distribution systems, causing the utility to have to rebuild nearly from scratch. And yet it bounced back, as it always has. By the end of 1966, it had even grown to become the second-largest municipally owned utility in the United States.
Early “firsts” JEA has never been one to sit back on its laurels and coast. Instead, especially in recent decades, the utility has built a history of looking at different ways of adding to its customers’ options, and decreasing its customers’ costs. For example, while JEA’s electric rates were among the highest in the nation in the 1970s, under the leadership of a new managing director, Royce Lyles, hired in 1979, the utility began diversifying its fuel mix, dropping its rates as it did so, to the point where JEA’s electric rates became the lowest in the state of Florida, and near the bottom of all rates across the Southeast. Lyles’ replacement, upon his retirement in 1995, was Walt Bussells, who wasted little time continuing to move the utility forward by embracing new technology. By 2002, JEA had introduced online bill payment. Almost 10 years ago, the utility also embarked upon its first automated meter reading (AMR) deployment, long before the term “smart grid” came into existence. All of JEA’s 740,000 meters are now on the AMR network today, with both electric and water meters being read daily, remotely and without any manual intervention. Transmision and distribution are high on JEA’s list of early innovative
JEA and the smart grid ++If it’s all in a name, this utility would rather just get on with the work By Kate Rowland FROM THE OUTSET, LET’S SET THE RECORD STRAIGHT. JEA
doesn’t like using the term “smart grid” with regard to its continuing evolution as a utility. “We are trying to stay away from using the term ‘smart grid’,” said Marlene Murphy-Roach, JEA’s vice president of customer relations. “There is so much information and ambiguity about what the smart grid is. “Our mission is to improve the quality of life in communities we serve by being the best electric, water and sewer utility on the nation. That transcends the focus of why we are in the ‘smart grid’,” she explained. Victor Monfort, JEA’s director of smart grid programs, echoed Murphy-Roach’s sentiment clearly in an Intelligent Utility Reality webcast, “The Consumer Side of Smart Grid: Challenges, Opportunities and Concerns,” in late August. He Marlene Murphy-Roach said, of JEA’s current efforts: “Our marketing puts terms like ‘smart grid’ in the background. We’re focusing on the customer who says, ‘Hey, I want you to help me manage my energy consumption today.’” Focusing on a smart energy strategy That’s not to say, however, that JEA has stepped away from the playing field, just because it has stepped away from the use of an overused industry phrase.
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concepts, as well. In 1974-1975, JEA became one of the first electric utilities in the U.S. to establish a computerized distribution control center to make power transmission more efficient. (The utility now has more then 6,000 miles of distribution and 730 miles of transmission lines.) And in 1982, the second of two 500 kV transmission lines was completed to allow the utility to increase its purchase of power from utilities outside the state, a concept then known as “coal-by-wire. In 2003, JEA began providing chilled water for air conditioning in downtown buildings. Its first two customers were the downtown library and the U.S. Courthouse, for whom the provision of chilled water eliminated the need for costly (and space-intensive) chillers and cooling towers on site. The utility also launched a solar incentive program in 2002, and installed 35 solar photovoltaic arrays around Jacksonville, including all of its high schools. By 2005, JEA was already earning early acknowledgements for its efforts, including a Sierra Club Celebration of Energy Independence Award for its voluntary commitment to increasing the use of solar, wind and other green power sources and promoting energy and water conservation.
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KNOWLEDGE 2011
JEA’s current fuel mix comes The utility’s Smart Energy Project was one of the big ARRA winners, receiving primarily from solid fuels (45 percent $13 million in Smart Grid Investment Grant funding from the federal governof JEA’s electricity is produced from ment (or just under 50 percent of the project’s total budget). The project, which coal and pet coke) and natural gas. involves the installation of 3,000 smart meters, a supporting communication structure (including a meter communications network and backhaul communi- Florida as a whole uses natural gas for cations), a meter data management system, customer Web portal access for those nearly 40 percent of electric genera3,000 customers and voluntary time-of-use rate programs, is broad in scope, and tion, and, in JEA’s case, approximately 1500 MW of its power extremely focused in its goals. comes from natural gas. “About 10 years ago, JEA started down the path, We’re focusing on The utility also includes changing out our manual system and moving to a some biogas and diesel one-way system (AMR),” Murphy-Roach said. “Our the customer who in its fuel mix, and a little entire system has been one-way for the past 10 years.” bit of solar power. And now, with that experience under their belts, says, ‘Hey, I want that’s changing, thanks to the portfolio group of Fuel mix challenges projects mentioned above. “We’re changing our you to help me “The challenge we have in entire system, and upgrading to a two-way backour business today is the bone, as well as strategic deployment of two-way manage my energy questions on the horizon,” endpoints,” she added. said Mike Brost, JEA’s consumption today.’ vice president of electric Fundamental differences in approach systems. Is nuclear here With some utilities, Murphy-Roach said, the primary to stay, in terms of being able to reason for pursuing smart grid efforts is in an effort to reduce and offset load comfortably invest in it? Brost noted peaks. “In our view of smart grid, and our focus in our deployments, while that it takes approximately 10 years, other utilities may look at the ‘what’s good for the utility is good for customers’ from the decision to build to the approach, JEA is primarily looking for benefits that can benefit our customers,” first MW to add new generation she said. plants. “Nuclear is an even longer Monfort agreed. “The days of saying, ‘Hey, we just deliver electricity to you,’ process,” he said. are pretty much over,” he said. “We have to play catch-up.” By the end of the 2012 fiscal year end, JEA will have roughly a third of its Solar and other renewables new communcations infrastructure backbone built out, and will have begun So is the answer renewables? So far, deploying endpoints. Florida does not have a mandated It is also aiming to have its customer Web portal and its time-based rate Renewable Portfolio Standard (RPS), program both launched by the end of that year. also commonly referred to as an RES, or Renewable Electricity Standard, so Targeted benefits JEA is not therefore mandated, as yet, The Smart Energy Project has a number of key targeted benefits, including to add a certain percentage of renwable reduced meter reading costs, reduced operating and maintenance costs, generation to its mix. reduced truck fleet fuel usage, and reduced greenhouse gas and criteria “Unfortunately, our area is not pollutant emissions. good for solar, and not good for wind,” The final benefit in the above list is especially important in today’s utility Brost explained. So, for JEA to get efforts across the board. In JEA’s case, the company strives to keep its generation heavily involved in either is a matter fleet as diversified as possible, but diversification (especially with regard of economics: one size doesn’t fit all in to renewables) truly depends upon the fuels available.
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Is it possible to meet the increasing demand for energy without impacting our environment?
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KNOWLEDGE 2011
this case, and it’s been proven wind and solar are better off in certain areas of the with more information to better country than in others. manage their bills. The planned time“We are very aggressive with landfill gas, with three different landfills,” Brost based rate programs (optional for noted, and added that JEA hasn’t entirely neglected solar, despite the area’s customers) will allow JEA’s customers inconduciveness to massive solar energy input. “Our Jacksonville solar project to shift their consumption from gets about 12 MW of power,” he said. As well, the company has purchased peak- to off-peak periods. 10 MW of wind from Nebraska to add to its portfolio. Putting choices JEA has recently initiated some net metering with customers who have added in customers’ hands solar panels of their own to their homes. “The problem “We will finally be able to put in the with all of this is that it’s not cost-effective today without hands of customers choices about government support,” Brost said. (In California, for their energy usage,” Murphy-Roach example, residents of the three large investor-owned utilities said. “(This system) will help us are encouraged to install rooftop solar panels by means of a trigger alerts to our customers, and residential rebate. Unfortunately, recent news indicates that the funding available for that program may be running out.) they can set average daily or weekly usage or consumption thresholds, “The big drivers for us are cost, reliability and environmental stewardship,” Brost said of JEA’s focus on renewables. and see weekly estimates of what their bills will be. “If it were cost-effective doing biomass, we’d be doing it. “We are excited Mike Brost We just recently completed a test. But for about our custombiomass fuel in quantity, where do you We will finally ers no longer ‘shopget the feedstock from?” He pointed, too, to the ups and downs of ping in the dark,’” the Gainesville Biomass Project, a 100 MW plant being constructed be able to put she added. “They by Gainesville Regional Utilities. As recently as July of this year, can be informed on critics were still crying foul, saying the deal between the City in the hands a daily and weekly of Gainesville and the biomass plant is neither financially nor basis what their environmentally sound. of customers charges are (in terms “The problem,” Brost said, “is running a utility reliably and costof consumption effectively. It collides from time to time with matters of public policy.” choices about costs). It’s truly a Reliability and cost-effectiveness front and center win-win situation.” their energy With its Smart Energy Project, the focus is front and center on both There is a ‘fear reliability and cost-effectiveness. The new communications infrafactor’ in all of this usage. structure and meter data management system will allow for realfor the utility, and time, remote monitoring of power disturbances using an upgraded one they want to software platform for JEA’s outage management system. This will allow for a more make sure they get right at the outset. rapid response to outages and will also enhance overall distribution reliability. “The fear factor in all of this is that it The smart meters themselves will provide the ability to remotely connect and truly takes us to a higher level of transdisconnect customer accounts, and remote meter reading and outage detection parency with our customer than we’ve will lower both operational costs and emissions currently incurred through ever had before,” Murphy-Roach said. truck visits for meter reading and grid maintenance. “We really want to do this. And customer-focused advanced electricity service options, such as the Web “It’s really about the customer, and portal for electric customers to access their consumption data, will provide them we want to get it right.”
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KNOWLEDGE 2011
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first digital computerized SCADA implemented in 1976
JEA’s evolution is not something new ++But the technologies they’re adding are By Kate Rowland
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implemented in 1980 ??
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Just a term “One of the problems with ‘smart grid’ is that it’s just a term, and it means different things to different people,” explained Mike Brost, JEA’s vice president of electrical systems. “We take pride in the delivery of safe, reliable, effective service.” Customer service and reliability, in fact, are of prime importance in JEA’s approach to its “smart grid” programs. Its mission also speaks to a continued path, rather than a newly launched one, in Victor Monfort that it says, “Continue to use technology to improve customer service and liability.” “Our smart grid focus is on enhancing the relationship with our residential customers and being foundationally ready to address the technology opportunities of the future,” Victor Monfort, JEA’s director of smart grid programs, told a webcast audience in late August. A technology-based history Today’s modern technologies, Brost said, are “a huge engine for growth of the modern electric system.” “The transmission system is already smart,” he pointed out. “One of the problems is that people criticize the bulk electric system. It’s really very sophisticated.” JEA monitors its system 24/7 through its computers, something the utility, like others, has been doing for quite a while. In fact, JEA has been leveraging technology throughout its systems for many years. For example:
fiber optic fully redundant communications with all plants/ substations by 1985
??
digital protective relaying on fiber optics implemented in 1987
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automated outage management system (OMS) deployed in 1991
JEA HAS BEEN PURSUING THE EVOLUTION OF ITS ELECTRIC
grid and generation systems almost forever, it seems. The 116-year-old electric utility has always maintained a leading edge, not only in its technology deployment, but also in the way its employees think, and approach their jobs. That’s one of the reasons why the term “smart grid” is so confining for JEA.
microwave protective relaying
??
automated meter reading (AMR) deployed in 2005
Even with the continued addition of new technology, though, the control room—from a user’s perspective— hasn’t changed that much over recent years, Brost said. “The tools and software, however, are a lot smarter and more sophisticated,” he added. Securing the assets Securing those new assets, both inside the utility and out in the field, has brought about a lot of changes in recent years to JEA, though, and connected IT and Operations departments more firmly at the hip than before in the process. “NERC CIP [North American Electric Reliability Corporation Critical Infrastructure Protection] has brought about huge changes to processes and procedures,” Brost pointed out. NERC CIP changes the landscape “In the past, the operations group on the electricity side of the house had an independent IT department,” explained Wanyonyi Kendrick, JEA’s CIO. “When FERC [Federal Energy Regulatory Commission] Order 706
came in, which required NERC to start focusing on critical assets regarding cyber security, we knew we needed a senior manager responsible for certifying we were in compliance.” NERC CIP regulations, as they came into force, “required Mike and I to work closely together,” she said. FERC Order 706, issued on Jan. 18, 2008, approved eight mandatory critical infrastructure reliability standards proposed by NERC, which required certain users, owners and operators of the bulk power system to comply with specific requirements to safeguard critical cyber assets. The penalties for non-compliance are steep, and the paperwork and documentation requirements prior to each utility’s first NERC CIP audit presented, in some utilities, some governance challenges.
“We now have two full-time CIP compliance staff members” Kendrick said. “We just completed our first audit, which took six months of preparation work, three weeks to complete and, I would estimate, probably eight weeks in follow-up work.” There are additional regulations on the horizon for electric and water SCADA systems, as well as JEA’s e-business financial system, she added. “Ten years ago, IT security was not on the horizon. Five years ago, it was ancillary on projects,” Kendrick said. “Our goal is to make IT security built into our systems from the beginning.” Looking for the silver lining “I always try to look at the positives,” Kendrick added. (People who know her within the utility industry would call that an understatement, if there ever was one.) “I had the privilege—and obligation—to oversee the work involved in the audit. My team alone was averaging 80 hours a week for three weeks. NERC CIP provided us with a plus—it really allowed us to accelerate our maturity regarding IT security,” she said. What’s ahead for JEA As JEA looks to the future, Kendrick cautions that there’s always work to do, and always room to grow. “Our 12 essential systems are really state of the art, but our integration is not,” she said. “We have to continue to focus on IT security, and focus on the interface between systems—that’s our priority.”
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E H T
DATA N O I S O L P X E
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++Using the data to provide new efficiencies By Kate Rowland THANKS TO THE INFORMATION SMART METERS
and other smart grid technology is bring in, utilities are beginning to face an explosion of new data. Now the question becomes: what can this data tell us, and how can we use it to better our services, understand our customer better, and make our utility operations more efficient. Aligning business intelligence, or BI, with an analytics strategy, provides a more complete picture. The electric utility industry has begun turning its eye to data analytics in order to best mine the new information that is now coming in in droves.
ILLUSTRATION BY KERRY MEYER
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Data analysis: what’s it telling us?
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Looking at data differently Strategies differ, depending upon the data and the need. For example, OGE Energy Corp.’s “Information Factory” is adopting data analytics tools to determine how best to use the new data it has available. “If you can capture and analyze that data, and use it in a predictive fashion, what can we do with it to improve our operations and enhance our customer experience?” Craig Johnston, the utility’s vice president, corporate strategy and marketing, told Intelligent Utility earlier this year. OGE looked to its internal teams with an initial focus: “What information do you want, and how would you use that data?” Beyond that initial focus, it is also looking at how to start applying statistics on top of data, and use that to improve its forecasting. And then, Johnston said, “we can take that and do some ‘what ifs,’ or predictive analysis.”
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Trend analysis and asset management Detailed data analysis can also provide the structure for looking at trends, as well as at asset management based upon the history of the asset. More broadly, it can become a key strategic differentiator for the utility with the ability to apply quantifiable metrics (supplied by better data analysis) to a business case. As another example, energy efficiency and demand response programs can also benefit from a more detailed analysis of the new data being provided by smart meters. The ability to leverage detailed energy consumption data to segment and target customers, and to provide them with valuable electricity usage feedback, is the basis of true energy efficiency, on a granular, customer-by-customer level. San Diego Gas & Electric (SDG&E) is now leveraging the new data brought in from its Smart Meter Program to put more energy usage information into the hands of their customers, in a plan both to educate its customers about the role of the new technology and to better target energy efficiency, demand response, sustainability, and energy reliability. “We are looking at several initiatives to help maximize the value of (the new) data,” said Brendan Blockowicz, SDG&E’s
smart meter IT program manager. “As every utility before has confirmed, once you get in there and start to work with the data, you learn a lot more about how to use it. We are looking to centralize some of this capability.” For customers, the utility plans in the near term to provide online tool capability enhancement such as calculations for bill-to-date, bill forecast and alerts. As well, SDG&E will be expanding its home area network (HAN) pilots to a customer-wide base and integrating that data. “Data analysis and business intelligence are foundational to putting more energy usage in the hands of our customers. Good data in a timely fashion allows both customers and operations to make good decisions that save energy, time and money, preOnce you get in vent losses and increase service levels. It’s what the business case benefits rely there and start on to deliver the long-term results,” Blockowicz said.
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to work with the
Predicting asset health data, you learn SDG&E also uses real-time data to power its condition-based maintelot more about nance solution. The ultimate objective, of course, is to avoid potential how to use it. catastropic asset failures by being able to better predict any asset’s current health. Real-time data availability provides the potential for learning more about the asset, the ability to provide more timely identification of potential asset issues, and greater O&M cost savings. Of course, all of this requires taking the new real-time data available, deciding which data is most valuable for the task at hand, and then “layering” or “factoring” that data for further analysis. In effect, it’s deciding what to add and what to subtract for the most effective final solution. “The objective of SDG&E’s condition-based maintenance (CBM) project is to extend the useful life of and make greater utilization of transmission and distribution substation transformers. We use technology to measure the perfor-
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THE DATA EXPLOSION
mance and condition of equipment to make better mainte- limit; and enhance the ability to determine the optimum time to replace an asset. nance decisions,” Blockowicz explained. In essence, this means cost savings and workforce The streaming data is monitored in real-time for any irregularities by the CBM system. Data irregularities trigger efficiences across the board, as manpower requirements can alerts, ranging from levels one to four: “one” is business as also be managed more effectively, and just-in-time delivery of new assets can better be managed, rather than wareusual, and “four” is the most critical. “In creating the system subject matter experts from our housing “spare parts” within the utility on a more ad hoc construction and maintenance, asset management, engi- basis, as has happened in the past. “This is not just another technology project—it’s an neering and operations departments worked together to define the elements that needed to be monitored, the alert overall change of how we do business internally, and is levels and who should be notified in each instance,” he said. the foundation of a new relationship with our customers,” “These alerts are disbursed via email and/or text, notify- Blockowicz said. “The technology changes are large and impact many other departments at the ing the appropriate parties to review company—therefore we are integrating the data and make informed decisions. It’s an overall vertically like never before. Engineers are able to analyze the moni“Daily operations are more complex tor data in conjunction with data from change of how than ever before. We are creating new our SCADA, Work Management and organizational structures to best adTOA4 (Dissolved Gas Analysis) systems. we do business dress the changes we are implementing. “Earlier this year, the CBM system We are identifying new skills needed by sent an alert notifying us that the gas internally, and is our workforce for the future to support levels inside one of our transformers these new operations.” had begun rapidly increasing. Based the foundation of on some follow-up data analysis, it was Real-time and future predictions decided to schedule an outage to pera new relationship In many ways, data analytics is all form an inspection of the transformer. about prediction, about clearing the Upon inspection, evidence of heating with our customers. fog within each utility’s crystal ball. was found and some parts replaced. Or, to adopt another analogy, it’s about The alert from the CBM system and the using the whole brain, with all of its intricate interconnectimely follow-up helped avoid further damage to the transtions, rather than a sum of the information coming from its former,” Blockowicz explained. separate neurons. Analytics-based utility applications can include superior Managing manpower requirements effectively With real-time data and analytics, the utility is able to quick- customer service (because customer usage information can ly spot situations that require immediate attention; perform be tooled to provide better customer-focused solutions), asset maintenance in a better-planned fashion, when and operational efficiency (including real-time maintenancewhere it is needed; operate assets closer to their operating based solutions), optimized delivery of power, smart
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energy procurement (based on known and anticipated energy needs on a day-ahead basis), demand response and dynamic pricing, and using pattern recognition to better detect energy theft, to name but a few. And that’s just structured analysis. Imagine, taking it one step further, the amount of new insight more unstructured analytics can provide. Or, more simply put, what happens when a lot of unstructured data is pulled into a database and exposed to new queries? New connections of previously unconnected data can be made, and utilities will, over time, be able to even more clearly understand its system as a whole... rather than a sum of its parts. Asking new questions It’s also about asking new questions, as Boreas Group co-founder Robert Sarfi pointed out, and the ability to use
all the new data to define an integrated resource plan, for example. “If I have demand response and renewables, how can I better leverage those to gain operational efficiencies at a distribution level?” he asked. It’s all about the data. And it’s about innovation, as well. As Southern Company CIO Becky Blalock noted (see “A legacy left behind,” page 40): “I think that there are going to be incredibly innovative ideas that come out about how you mine this data so that you can make the best possible decisions for how you run your business.” Data analytics is going to play a powerful role in how electric utilities move their businesses forward. In future issues of Intelligent Utility, Energy Central’s new Utility Analytics Institute will explore the boundaries of the often complex world of utility data analytics here in a regular new column.
The McKinsey report also identified five broadly applicable ways to leverage big data:
Big data: threat or opportunity?
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Make big data more accessible and timely. Transparency, enabled by big data, can unlock value.
??
Use data and experiments to expose variability and raise performance. As organizations create and store more transactional data in digital form, they
++McKinsey report touts benefits
can collect more accurate and detailed performance
By Christopher Perdue
information on everything from product inventories to sick days.
WE
HAVE
OFTEN
WRITTEN
ABOUT
THE
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Segment populations to customize. More data allows organizations to create ever-narrowing segmentations and to tailor services precisely to meet customer needs.
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Use automated algorithms to replace and support human decision-making. Sophisticated analytics can substantially improve decision-making, minimize risks and unearth valuable insights that would otherwise remain hidden.
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Innovate with new business models, products and services. To improve the development of future offerings to customers, leverage data to better understand the use of current products and services.
The McKinsey report should prove quite useful to utilities looking to manage the flood of information resulting from smart grid endeavors. One thing for our industry to keep in mind is that with an increase in data, there is also a large increase in noise. The challenge is to extract the insights or wisdom from the data that will lead to greater success. Christopher Perdue is vice president of Sierra Energy Group. This article first appeared in Intelligent Utility Daily.
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importance of data management and analytics, especially given the proliferation of data that often results from utility smart grid investments. A recent report from the McKinsey Global Institute shows that our industry is not alone. With computers and cell phones continuing to pervade our daily activities and as millions of networked sensors are being embedded in numerous devices (such as automobiles, smart meters and other machines), the amount of data available for analysis is exploding across all sectors. McKinsey’s report, “Big data: the next frontier for innovation, competition and productivity,” looks at the vast amount of enterprise information that exists, and the challenges that organizations will face in trying to manage it. The report explores topics such as the state of digital data and how organizations can use large data sets to create value. McKinsey’s analysis suggests that companies and policy makers must tackle significant hurdles to fully capture data’s potential. The United States alone faces a shortage of 140,000 to 190,000 people with analytical and managerial experience and 1.5 million managers and analysts with the skills to understand and make decisions based on the study of data.
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Preparing Personnel Managing a changing workforce ++Preparing employees for technology changes By Kate Rowland THE GROWING CONVERGENCE OF TECHNOL-
Crunch ahead A report by the United States Power and Engineering Workforce Collaborative estimates that there are about 800 to 1,000 undergraduate students graduating each year with an interest in electric power engineering jobs, and that the U.S. enrollment for masters and doctoral degree students
Learning curve not easy In fact, “mind-boggling” is precisely the term used by Becky Blalock, Southern Company’s retiring CIO (see “A legacy left behind” on page 40). “This is a very old industry. The average worker is way up there, and they’re going to retire. I’m a great example of that,” Blalock said. And it’s an industry in which the learning tends to be lifelong, not hatched right out of school. “You don’t just walk into this industry and understand it Day One. It’s very, very complicated, and I think it takes years,” Blalock said. “Kids come out of school and they’re really bright, but it’s going to take years before they really understand and can grasp all the concepts of what happens in the power industry.
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ILLUSTRATION BY DARREN MOORE
ogy, communications, computing and energy systems in the intelligent electric utility is casting a new light on the optimimum skill sets needed for the new utility employee. Add to that the complicating factor of an aging and retiring workforce, with approximately 50 percent of the engineering workforce eligible for retirement in 2015, according to studies published by the U.S. Bureau of Labor Statistics, the Center for Energy Workforce Development and the IEEE Power and Engineering Society, and a mega employment storm is brewing on the near horizon for the electric utility industry.
in power engineering is approximately 550, according to information provided by the Illinois Institute of Technology’s new Robert W. Galvin Center for Electricity Innovation (GCEI). Approximately 60 percent of graduate students are international students who may not seek employment in the United States, according to the report. “Electric utilities are predicted to require an estimated 7,000 new hires in power engineering over the next five years. After factoring in the workforce needs of other industries, the power engineering workforce requirement could easily be doubled to 14,000 over the same time frame,” the GCEI reports. And this, as noted above, is further complicated by the fact that nearly 50 percent of the engineers currently working in electric utilities will soon be eligible for retirement. Add in the changing needs of the new electric utility market, and the numbers are mind-boggling.
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PREPARING PERSONNEL
“I think about what I’ve learned in the past 33 years, and it’s mindboggling to me.”
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Dealing with the silver tsunami The issue Blalock highlights is of concern to a growing number of utilities facing impending retirements of senior employees, including but not limited to engineers. Highly specialized jobs require highly specialized talent, and while some utilities have dealt in the short term with the issue by hiring away from other utilities, the talent deficit overall cannot be dealt with by “rearranging the chairs,” so to speak. While operational efficiencies and outsourcing of specific tasks can deal with some of the problem, they won’t cover the entire impending deficit of skilled employees. Generational silos within utilities have to some extent compounded the problem, as has a lack of knowledge-sharing problems within the utility, and especially across the “siloed” departments. During a recent webcast presented by Energy Central’s Employment Services Division, the topic of mentoring within the utility was highlighted. Mentoring that harvests change within the utility—change that develops, improves, grows, and reinvents people— can assist a utility immeasurably when effectively utilized and monitored. A recent report completed by LifeMoxie Consulting on “The ROI of Mentoring” says that 67 percent of employees say they learn more about their jobs from coworkers than from their bosses. Further, 75 percent of executives credit mentoring with playign a key role in their careers.
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SCE embraces mentoring Case in point: Southern California Edison (SCE) instituted a mentorship program within the utility, and now leverages mentoring to drive organizational strategies including diversity and inclusion as well as retention, according to Ed Robinson, SCE’s senior manager of community involvement. “I was always told that the most important door to watch in a company is the back door,” Robinson told webcast attendees. “We wanted to make sure employees felt valued, felt a part of something.” As well, he said, the utility focused on moving the needle so that SCE doesn’t lose valuable institutional knowledge. The mentor program at SCE focuses on the following issues important to the utility: succession planning and knowledge transfer, talent/career development, leadership identify and development, and morale, engagement and enthusiasm. The pilot mentoring program was launched
at the utility in June 2010, with a full rollout slated for November of this year. Looking to the future workforce While retaining institutional knowledge is imperative, changes in training on the entry end are necessary, as well. Last year, the U.S. Department of Energy announced awards supporting two types of workforce training initiatives. The first type, focused on developing and enhancing workforce training programs for the electric power sector, provided funding to the tune of $41.6 million total to 33 projects at universities, community colleges and technical schools across the country. These schools are in the process of developing new training programs, strategies and curricula related to the electric power sector and the smart grid. Additionally, the awards in this category are supporting the Strategic Training and Education in Power Systems initiative, which is developing cross-disciplinary electric power system programs at both the university and college level. A further $57.7 million total was awarded to 21 smart grid workforce training projects for new hires (including displaced workers and military veterans), as well as retraining programs for electric utility workers and electrical Nearly 50 percent equipment manufacturers, focusing in smart grid technologies and of the engineers their implementation.
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currently working Illinois trains on numerous levels in electric The GCEI was one of the recipients of DOE funding, and in 2010 utilities will initiated a $12.6 million project also supported by the State of Illinois soon be eligible to “educate and train the nation’s workforce to meet the global for retirement. challenges and opportunities of the smart grid.” The ribbon-cutting for the IIT SmartGrid Education and Workforce Training Center was held in October. The center will focus both on education at the university level, as well as early (kindergarten to Grade 12) and public smart grid education. According to the center, early education is especially important. It notes: “With more than 400,000 students in more than 600 elementary and high schools, Chicago Public Schools (CPS) is the third largest school district in the country. The CPS student population is 91 percent minority and over 75 percent live at or below the poverty threshold. “IIT has established a partnership with the CPS to train high school teachers via down-to-earth courses, workshops and webinars on smart grid, plug-in hybrid cars and sustainable energy topics.”
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PREPARING PERSONNEL
Smart grid workforce trends ++Cross-functional skills needed for the future By Kate Rowland JUST AS CONGRESSIONAL FOCUS RETURNS TO
job creation, a KEMA report released recently for the GridWise Alliance argues that smart grid “presents an opportunity for the United States to develop a strong native industry around development, deployment, maintenance and servicing smart grid infrastructure and technology.” But it won’t be a slam-dunk, by any means. The KEMA report “The U.S. Smart Grid Revolution: Smart Grid Workforce Trends 2011” also said that “(p)reparing a new workforce that can make smart grid work well from the moment it is deployed will be the electric industry’s central challenge in the next decade.” In short, new technology requires new training and education for both industry newcomers as well as current employees, and this is no small feat. Aging workforce drives need The urgency that drives the need for new training and education is well documented: ??
In 2008, approximately 53 percent of the electric industry workforce emmployed by utilities was at least 45 years old.
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More recent survey results, KEMA pointed out, “suggest that utilities will need to replace 46 percent of skilled technician positions by 2015 because of retirement or attrition.”
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Approximately 50 percent of the engineering workforce will be eligible for retirement that same year, according to a number of recent studies, including the Center for Energy Workforce Development, IEEE Power and Engineering Society and the U.S. Bureau of Labor Statistics.
Many utilities large and small, including the Snohomish County Public Utilities District and Toronto Hydro, are taking action to ensure the new training is available (whether working through educational institutions or in-house apprenticeships) and the transition is as smooth as possible. The GridWise Alliance report suggests, however, that moving forward, “it is unlikely, in the world of smart grid,
that utilities will structure new hiring by using legacy position openings as the only guidepost. New positions to deal with the new reality and technological change of smart grid will emerge ... In short, smart grid is likely to change the job mix within a utility, reduce the overall number of utility jobs, change the skill requirements of utility jobs and, at the same time, create significant numbers of jobs in the electric energy industry overall.” Cross-functional skills in our future Here are some of the other trends and recommendations the report suggests: ??
In the near term, it is likely that smart grid-related skill requirements will manifest as additional responsibilities for existing positions within utilities rather than in new smart grid-specific positions.
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Engineering and IT-related skills, such as those that relate to a geographic information system, a supervisory control and data acquisition system, distribution engineering and design, conservation, energy efficiency and advanced metering infrastructure, must be integrated as much as possible with non-engineering skills. (The report goes on to say that universities must increase emphasis on crossdisciplinary work, such as requiring engineering students to take business classes.)
The GridWise Alliance believes that smart grid will expand opportunities in the electric grid as a whole, the report notes, and presents an opportunity for the United States to develop a strong native industry around development, deployment, maintenance and servicing smart grid infrastructure and technology. Training, training, training Training is repeatedly emphasized. “The importance of education initiatives for training and retraining the smart grid workforce cannot be overemphasized,” the report said. “Existing and future employees alike, and therefore the smart grid effort itself, benefits from active, direct and productive engagement of the industry at every level of education. “The evolution and effectiveness of the smart grid workforce depends on matching the needs of the industry and the curricula that support students throughout their academic career and into their working life with retraining and continuing education programs. The development of new technology and the implementation of effective organizational processes and change related to smart grid rest on this foundation of strong education.” Portions of this article previously appeared in Intelligent Utility Daily.
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THE IMPORTANCE OF NETWORK MANAGEMENT SYSTEMS FOR THE SMART GRID Tom Wilson, Itron Senior Product Manager
A RECURRING THEME in conversations with utility
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operations managers that have smart grid network responsibilities is the growing emphasis on network management systems (NMS) as a critical component of successful solutions. NMS systems are a combination of hardware and software used to monitor or administer a network and the health and status of devices, as well as provide alerts to conditions that impact system performance.
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Increasingly, utilities are recognizing that selecting technologies that are accompanied by a robust, integrated NMS can have a significant impact on the success of both the initial integration and deployment, as well as the ongoing sustainability of a smart grid network solution. A fundamental driver for applying smart grid technology is providing a safe, reliable power delivery system that is more secure and less costly to maintain. To help achieve these goals, utility network operations centers want to enhance their ability to monitor and control emerging smart grid networks that support applications such as AMI and distribution automation. An integrated NMS with broad capabilities to proactively manage multiple communications network links and a diverse array of endpoint devices becomes a core platform for the network operations center. For most utilities, initial smart grid network implementations are not made in a so-called “green field� environment. Rather, they are complex integration undertakings, typically architected to ultimately cross traditional silos, including field operations, distribution and transmission. As well, these networks must interface with, and support, potentially a wide range of legacy and emerging application services, including EMS, OMS, DMS and MDM systems. An NMS solution that has the flexibility to effectively manage the underlying network complexity can substantially reduce ongoing operation expense and therefore total cost of ownership of the smart grid infrastructure.
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The Fundamentals An integrated network management system for smart grid networks will, at a minimum, effectively deliver on each of the fundamentals described in the industry-standard FCAPS (Fault, Configuration, Accounting, Performance and Security Management) administration model. Some important general considerations when evaluating NMS solutions as a component of a smart grid technology deployment include: • Does the network management system provide a true end-to-end view of
the communications network? • Can an operator visualize the status of all assets, at the appropriate network
level, in a context-sensitive and useful manner? • Are there robust, flexible, standards-based application program interfaces
which allow for cost-effective integration to existing systems and/or future planned systems such as Asset Management, Distribution Management System (DMS), Outage Management System (OMS) and Meter Data Management (MDM)? • Will the solution allow for seamless management over multiple network and
diverse device types supplied from multiple vendors? Is the provider likely to implement timely, ongoing support for rapidly evolving technologies?
End-to-End Network Management There are significant benefits and efficiencies with being able to effectively manage solutions end-to-end. It has been historically challenging to achieve this capability, in part because utility applications have been rolled out as vertical, purpose-built solutions. For example, a field data collection system might use a communications technology built on proprietary, monolithic protocol. The solution may work well, but the options for network and endpoint management are likely to be inherently very limited or non-existent. End-to-end management includes the ability to monitor bandwidth utilization and latency throughout the network, in order for operations to gain a clear understanding of what is happening at all layers of the network, from physical infrastructure on up. This includes the ability to easily customize many aspects of the management system, such as threshold alarm settings to address utilityspecific concerns and objectives.
Large Scale Implementations
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One characteristic that differentiates smart grid networks from most other enterprise networks is their massive scale. These are machine-to-machine networks of networks involving not the typical thousands of elements commonly seen in a typical enterprise, but rather many millions of endpoints that need the ability to be scaled. The future potential for even more devices beyond the current endpoints (for example, various in-building sensors and controls) greatly increase the total number of devices that could participate in a smart grid network.
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An axiom of effective solution deployment at this scale is that endpoint devices need to be essentially “plug and play.” This means newly deployed intelligent endpoint devices of many types are able to come online, connect and self-configure in a highly secure manner with minimal operations center and field personnel involvement. A properly designed, integrated NMS plays a critical, orchestrating role in this process. NMS solutions need to incorporate architectural and messaging approaches most appropriate to smart grid needs at this scale. For example, on a day-to-day basis, networks at this scale must allow for continuous, automatic reconfiguration in response to changing environments and external events. The NMS monitors the health, keeps track of topology and network element configuration in a highly efficient manner, using algorithms and messaging techniques that are optimized for the scale. When anomalies occur, the NMS must facilitate quick or real-time identification and isolation of problems, allowing an operator to use robust visualization methods to readily drill down to specific segments and elements for analysis and resolution.
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to consider include: • Is the application modular enough to
allow many different configurations to be supported in the future and/or on a region-by-region basis? • Is the NMS platform compliant with a
broad array of the relevant standards and is the provider expressly committed to future support of most widely embraced standards? • Does the provider have a broad and
deep experience delivering secure communications networks? Do they have a track record of supporting continuous innovation in the vendor ecosystem, such that they can deliver ongoing technology refresh over the lifecycle of the smart grid implementation?
The Need for Flexibility Utilities are concerned about assuring that they have preserved their options in ongoing technology selection, and have created a foundation upon which to build and smoothly evolve to future states. For smart grid networks, considerations for NMS future-proofing include the extent to which the network management system is architected in a layered and modular fashion to specifically support the needed flexibility. Best practice is to assure that the management of supporting networks is effectively decoupled from function-specific applications. Requirements
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Another important aspect of flexibility is the ability to effectively interface, where required, with a wide variety of existing legacy systems. For example, a utility may already have deployed a generalized network management system, a “manager of managers”, supporting enterprise IT across many business functions. A properly architected smart grid NMS will provide a robust choice of standards-based, application interface options to upstream
systems. This allows a utility to leverage certain existing system investments where it makes sense, and integrate optimally with enterprise operations, while not compromising on comprehensive management features specific to the smart grid network.
Security Compliance Network, device and overall system security are primary concerns for mission critical networks. NMS performs an important coordinating function in the overall security of smart grid networks, and is a key component of implementing the enterprise security policy. It typically provides a platform for authentication for users and devices and performs a key role in assuring NERC CIP compliance by providing interfaces to support utility-specific security and reporting requirements. Security considerations for NMS selection include, in general, the specific security protocols supported and emphasis on open standards, as well as incorporation of best practice methods. Some specific functional areas to think about include availability of secure, robust firmware update services for network elements and flexible VPN connection management.
A Future-Proof Evolution Path Utilities want to make the right decisions when it comes to network management systems. They want to know how they can effectively manage the network, supporting initial use cases while assuring that they have a platform that is sustainable and adaptable to meet future requirements. Utilities must consider the following: • Can this system adapt to support future
use cases and business cases?
• How effectively can the system provide
information to other critical systems (EMS, DMS, etc.) currently deployed or potentially employed in the future? • Can I have the ability to manage all of
the aspects of the network I choose? • Do I have the resource capacity and skill
sets to manage the system? • Does the NMS have the kinds of interfaces
and customizable solutions that I need? Another aspect of future proofing utility operations that managers discuss is the challenge of hiring people who understand the various proprietary systems that a utility might be using. For NMS in the operations center, an important advantage of using widely adopted standards and approaches is that center personnel are far more likely to be familiar with the associated tools and know how to operate them.
When looking at ways to creatively address the increasingly complex challenges facing the utility industry for network management systems and smart grid network solutions in general, it is clear that collaboration will be key. The smart grid is bigger than
implementations. Utilities need to consider NMS options carefully, deploying systems that offer robust, integrated NMS solutions that will be sustainable for many years, over the full lifecycle of the solution. Tom Wilson has more than twenty years experience developing, implementing and managing large scale wireline and wireless network solutions for telecommunications carriers and electric utilities, and their enterprise end customers. In his current role with Itron, he has product responsibility for Cisco and Itron joint development of smart grid network solutions.
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Delivering Value Through Partnerships
any one company or any one technology. In order to support wide-spread cooperation with some of the world‘s leading technology partners, Itron has always been a proponent of open standards and interoperability. Forward-thinking utilities are seeking a smart grid communications architecture that will utilize standardized network management tools, support multiple applications and ultimately connect millions of devices that go far beyond just smart meters. Equally important, utilities are asking for an architecture that will enable them to run multiple applications atop a common, secure, enterprise-class network infrastructure instead of through a meter-centric AMI head-end. Just as Ethernet enables interoperability of devices and applications in an IT network, smart grid architecture must do the same. To turn this open standards vision into a reality, Itron has teamed up with Cisco to deliver the first fully open standardsbased, multi-service IPv6 network architecture to market. The Itron and Cisco network approach, which both companies plan to make available to third parties in the form of reference architecture, provides the flexibility to readily support new use cases, adopt new applications or increase the number and type of networked devices while assuring the reliability and security of the smart grid solution. Network management systems are a key component of successful smart grid
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engaging consumers
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++Salt River Project provides compelling ROI story By John R. Johnson WITH ALL NEW TECHNOLOGIES, RETURN ON
investment (ROI) is always a crucial component to determining a business case for deployment. When it comes to smart meters, AMI and meter data management technology, you need look no further than the Salt River Project Agricultural Improvement and Power District (SRP) for a compelling ROI story. The third largest public power utility in the U.S. has been on the cutting edge of adopting new smart grid technology, conducting its first smart meter pilot in 2004. This June, SRP rolled out a meter data management (MDM) system that is
An effective financial motivator SRP was the recipient of a $57-million smart grid improvement grant from the U.S. Department of Energy in 2009 that helped it to greatly accelerate its smart meter rollSRP’s smart meter out. Phoenix, Ariz.-based SRP has deployed nearly 700,000 smart network has saved meters, and will reach about 930,000 within 18 months. more than 400,000 SRP’s conversion to smart meters has allowed it to complete more labor hours and than 1.2 million field orders via its smart meter network, as opposed reduced driving to deploying a crew and rolling a truck to handle those requests. miles by more “When you think about 1.2 million orders and how many truck than two million. rolls and labor hours you save, as well as the fuel that you don’t have to buy and the carbon emissions you avoid by not rolling those trucks—that becomes a pretty effective financial motivator,” said Amy Erwin, manager of the program office at SRP. “Those savings effectively help us to keep our rates down for our customers.”
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ILLUSTRATION BY PATRICK SULLIVAN
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Using MDM to improve operational efficiencies
expected to help the utility increase efficiencies by capturing AMI data and providing timely, reliable and consistent information to SRP’s back-end enterprise systems.
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The numbers are dramatic. Through mid-2011, SRP’s smart meter network has saved more than 400,000 labor hours and reduced driving miles by more than two million, resulting in a fuel savings of almost 200,000 gallons. Calculated at a conservative $3.50 per gallon, total fuel savings are rapidly approaching $1 million. “The more smart meters we deploy, the better it gets,” says Erwin. “We’ve also seen a 39-percent decrease in personal injuries and a 10-percent decrease in vehicular accidents because we don’t have as much personnel on the road, and you are avoiding the dog bites and some of the other things that our reps in the field experience.”
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Time-of-use successes The utility has also witnessed a 20-percent increase in customer use of time-of-use (TOU) rates since smart meters have been installed, as consumers gain access to TOU data via the SRP Web portal or through email notifications. As a leader in the deployment of TOU rates, SRP has strong incentive for pursuing smart meter and MDM technologies. The utility has been offering time-of-use rates for 30 years. SRP operates the third-largest TOU program in the nation, with about 235,000 residential and commercial customers taking advantage of numerous TOU rate plans. Before the smart meter rollout, that meant that every time a customer called for a new rate plan, SRP had to send a team to the address to perform a meter exchange, which was a very expensive process each and every time. That’s been the biggest advantage of the new smart grid technologies put into place over the last several years. “We’ve been pretty aggressive when it comes to time-ofuse rates and offering opportunities to our customers that are economically beneficial for them, or have an opportunity to offer energy efficiencies,” said Erwin. “We started looking at the smart meter opportunities to see what it would do for us from a point of lowering operational costs. So this is pretty vital to our strategy.” Next steps The next phase for SRP involves looking more in depth at how its MDM system can spur improvements in the billing process, as well as potentially some automation improvements of AMI events—things like rate changes and re-programs where SRP can leverage the MDM to improve operational efficiencies. For example, when a customer chooses to switch from a standard rate package to a TOU program, the utility
is required to capture and record different rate registers by communicating with the meter, and informing it to report back with the new data. MDM can automatically confirm that the rate change actually happened. Generally, enterprises think about the uses of MDM in context to billing first, and then consider the newfound ability to analyze data for use when it comes to pricing and forecasting. But Erwin says that there is the opportunity to go much further in terms of distribution planning and engineering benefits. “The benefits are innumerable in terms of what you can do with the data once you have it,” she said. “So the challenge may be turning more to how do we manage and prioritize the demand integration as an enterprise potential. Some of those business opportunities will be smaller business process improveSRP uses realments like reporting, but some of those are going to be more involved time capabilities projects in terms of tight integration and how we bring data and share it to perform across systems.”
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Evaluating new turn-on, turnopportunities Despite the tremendous future off, disconnect potential that SRP’s AMI and MDM systems present, the company is or reconnect making sure that it doesn’t get too far ahead of itself when it comes to requests for rushing to implement new improvements. In fact, SRP moved very slowcustomers. ly when it came to evaluating MDM vendors and available technology. During the evaluation process, the company took a 90-day break to examine the enterprise implications for the MDM, conducting about 70 meetings with more than 160 project participants. The company studied more than 130 business processes and discovered more than 300 opportunities for process improvements across the enterprise. “That was a pretty intensive effort. Those opportunities have been categorized as things we’ll do over the next year or two during our partnership with the DOE, and things that we’ll do afterwards,” Erwin said. “But we garnered a lot more interest and a lot more opportunities compared to when we started the project.”
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SRP’s M-Power repayment system SALT RIVER PROJECT (SRP) FOCUSES ON
unique customer needs in a variety of ways. In 1993, it initiated M-Power, now the largest electricity prepayment program in the United States. In an EPRI technical update on the project, published in October 2010, EPRI program manager Bernard Neenan wrote: “The customer population has grown to about 100,000 (approximately 12 percent of all residences served by SRP), and it has expanded from the initial target population—consumers with arrears facing service terminations and lowincome customers—to include consumers with different expectations from M-Power service.” There are two components to the M-Power system. The inhome portion consists of a user display terminal that communicates with the customer’s meter. The other component, as Neenan explains it, is the “selfservice kiosk, known as a PayCenter, accessed via a Smart Card, which is also the conduit through which electricity consumption information is transferred back to SRP.” Of import, both to utilities considering prepayment systems and those looking at using Web portal-tech-
ity. However, SRP is taking advantage of some on-demand capabilities, such as conducting an on-demand read when a customer wants a rate change and SRP needs to know what the rate is in real time. SRP also uses real-time capabilities to perform turn-on, turn-off, disconnect or re-connect requests for customers. “Our ability to respond and reconnect service has gone up dramatically because it’s a back office activity now and we don’t have to deploy a truck,” said Erwin. “We have not yet integrated to the real-time outage management capabilities that we see longer term in our road map, such as being able to see that a meter is going down, and knowing when its last gasp will be.” As SRP continues to travel down the smart grid path, look for even greater gains as the company tackles the hundreds of use cases it has identified. John R. Johnson is a Boston-based freelancer writer specializing in alternative energy and technology topics.
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Not yet for real time Just the same, Erwin stressed the need to resist biting off more than SRP can digest when it comes to deploying new technologies and solving the hundreds of business opportunities identified. “Part of the path for utilities is that you need to start doing some of this and measuring the impact on the network,” she said. “There is a certain amount of learning in terms of the real-time data and what it means. So you really need to build before you go too far down the path. We are in that learning process right now. “Our biggest concern with real-time data is obviously the impact to the network and making sure that the activity of sending and receiving real-time data is successful and isn’t impacting our communications at all. So far we’ve been very successful at that.” While SRP is capable of some real-time activity right now, the utility doesn’t yet use real time to its fullest capac-
nology for assisting customers in managing their usage post-smart meter deployment, Neenan concluded: “The constant aspects of the M-Power experience have been a high level of customer satisfaction and an overall conservation effect reported by SRP of approximately 12 percent. SRP attributes the conservation effect to a variety of factors, noting that M-Power requires consumers to pay attention to when and how they use electricity, allowing them to make immediate adjustments in usage to lower their bills. “The scale of M-Power participation, along with the magnitude of the change in consumer behavior (the conservation effect) that SRP attributes to the M-Power program warrant attention,” Neenan concluded. “This is especially so given that the M-Power delivery technology, while effective, is quaint compared to what can be accomplished with a smart meter system combined with a web portal-based information delivery and payment system. Removing the inconvenience of going to a PayCenter may make prepaid service attractive to a larger number of consumers. Moreover, it may reduce attrition among those that enroll initially due to one factor or circumstance (e.g., arrears payback, avoidance of a service initiation deposit), but whose situation changes.”
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» SMART GRID LEADER
Leaving a legacy behind ++Southern Company CIO
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offers her thoughts upon retirement
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On the industry’s biggest changes in recent years I’ve seen two really major changes. The first is environmental regulations—that’s not something that you heard about when I came to work for the company 33 years ago. I think that’s been a huge change, just the whole fact that, with climate change and people’s awareness around the environment, there’s been tremendous pressure put on us to be very sensitive about how we use things to Becky Blalock, Southern Company’s CIO for the make the product. past nine years, retires this The second is the emergence of renewmonth, ending a 33-year career ables, which are not competitive today, but in the electric utility industry. I am beginning now to see us look at alterIntelligent Utility asked her to native ways of generating the product from reflect on industry changes, what we saw in the past. Those are two big challenges, and some of the game changers. highlights of her career. Here The other thing is the advent of the are her comments, edited for style and length. Internet. When I came to work for the company in 1978, the Internet was out there, but it wasn’t being used in corporations. We didn’t actually even have Web pages in our company until 1995, which was not that long ago. It’s just been a huge sea of change ever since the Internet rolled out. I think that we still are only scratching the surface of what that technology is going to do to revolutionize the way we interact with our customers, the way we interact with our vendors, and the information we have to be able to run our company more efficiently. It’s also the mobility that has now surfaced, because you’ve got these customers now who have access to the Internet. Even five years ago, we didn’t have the numbers of customers who had access to the Internet that we do today. The latest research says that about 77 percent of our customers have access to the Internet, either through a computer or through a mobile device. So that means that we’re going to have a different kind of relationship with the customer. Rather than the information being one-way, with our telling them what’s going on, they’re going
to be able to interact with us, and with each other about us. And with all of that good, there’s bad, too. There are people who would love to use it against us to impact the grid. So it’s a sea of change in that regard. I guess it’s a change, too, in the way that we manufacture the product, because we have so much more intelligence about how to operate more efficiently. But with all the data analytics that are coming, it’s going to change our business even further. I think technology is going to allow us to run these businesses even better than we ever have, because of the predictive nature of the data analytics. You’ll be able to predict an outage that might occur on your system before it ever occurs. And the fact that you can also have better relationships with your vendors, too— just-in-time delivery, instead of having to store stuff on site all the time. On breaking down historic silos ‘The brain power in collaboration’ is the way I put it. I was talking to someone the other day, and they asked, ‘Do you think Moore’s Law will run out on us?’ I don’t see how it possibly can, because we keep reinventing the way things are done. What’s happening with collaboration is, instead of one mind trying to solve a problem, people now collaborate on problems. So you’ve got so much brain power focused on problems that they solve a lot quicker, with a lot more innovation. IT has typically been run in silos in our major corporations. But now that data needs to be shared across the enterprise. One of the first places where I saw that is when we rolled out smart meters. The metering people certainly want access to that, and the people that do the billing, and the marketing. But our load people also want access to that data, about how customers are using the product, because if they can get just
“We still are only scratching the surface of what that technology is going to do to revolutionize the way we interact
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with our customers.
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What really concerns me is when I hear people compare us to the telecom industry, because we’re very different. Telecom is not a manufactured product. And it’s something that, if need be, can be distributed through the air. Today, electricity cannot be distribOn next steps uted through the air. The only way I think that there are going to be incredibly innovative you’re going to get it there is through ideas that come out about how you mine this data so electrical lines. that you make the best possible decisions for how you But it’s also a product that is very run your business. We’ll be able to become more pre- subject to Mother Nature. I mean, dictive about things, even in terms of how we predict nobody can predict where lightning’s consumer behavior; because we’ll have more insights going to hit. We can’t predict when into our customers than we’ve ever had before. We’ve squirrels are going to crawl up in the typically classified our customers as residential, com- trees. To me, knowing everything I mercial and industrial. Now, we’ll actually be able to know about what it takes to manugo in and look at our customers and we’ll be able to say, facture the product, I am amazed that ‘these are the people that are highly energy efficient, this industry is able to do what it’s these are the people that respond when we raise prices. able to do. And maybe these are the people who, it doesn’t matter what the price is, they’re I was on a panel at an EEI meeting, not going to change their thermostats.’ So, we’ll have new insights into our and I asked some of the regulators customers and how they use our products. who were on the panel, ‘Tell me another country that does it better On biggest technology lessons learned as an industry One of the big lessons you always see with technology is that there’s a maturity than we do in this country, that has a lifecycle curve. Those people that go really early are going to suffer the conse- better, more reliable, more sophisticatquences of those lessons learned. I think you’re better off once you do go and get ed electric grid than we do.’ Of course, the lessons learned. It prepares you to better move forward with the technology. nobody could answer. Nobody could But vendors are always very quick to sell their product, and the product doesn’t respond to that. And they said, ‘Well, but always do exactly what they promised that it will, we just need to stay ahead and so you’ve got to work through those things. We just get so of the curve.’ And I do agree I think the other thing, too, is just the cultural we need to stay ahead of the shift. One thing I think we always underestimate focused on the curve, but I’ve got to say, in IT—we underestimate it when we roll out techthis industry has invested nology inside our companies, with our own emtechnology and heavily in the technology ployees, and we underestimate it when we roll it and how it gets delivered. I out externally with our customers—is that you’ve making it work that would take issue with peogot to educate and communicate and train people ple who would say that it’s and make them comfortable with that. we forget about an antiquated and unreliThat’s why I think you’ve seen such a backlash able system. It’s extremely in California. I don’t know that they did a good that important affordable and it’s extremeenough job in explaining to customers and talkly reliable. ing to customers about what it was they were gohuman aspect. But I do think thy’re going to do. In the absence of communication, mising to see a lot more distribcommunication happens. uted generation in the future. I think We just get so focused on the technology and making it work that we forget about that important human aspect, and the culture of helping people accept the there’s so much money going into innovation around renewables and solar change, and to embrace it. that there are going to be some breakOn consumer education throughs. It’s continuing to get much It’s the greatest machine on earth, and most people just really don’t have a clue more efficient. But still I think we are about electricity. They don’t understand. years away. one more percentage point of accuracy in the load forecast for the next day, it saves the company a tremendous amount of money. That data’s got to get shared, and get across the organization, for that to happen. But then you have all those governance issues about who owns the data, who controls changes to it. A lot of those issues I think have yet to be worked through in our industry.
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On future challenges of signficance to the industry I think, number one, environmental (issues) are going to continue to be challenges for us, but also workforce. This is a very old industry. The average worker is way up there, and they’re going to retire. I’m a great example of that. You don’t just walk into this industry and understand it Day One. It’s very, very complicated, and I think it takes years. Kids come out of school and they’re really bright, but it’s going to take years before they really understand and can grasp all the concepts of what happens in the power industry. I think about what I’ve learned in the last 33 years, and it’s mind-boggling to me. So I think that’s huge, and I do think that the environment is going to continue to challenge us, and I think we’ve got to stay on top of this technology and figure out what are the best ways to interact with our customers. Because the one thing we don’t want is to become disintermediated from our customers. But it is a very smart industry, with lots of smart people, and they’ll figure it out. I feel very good about where this industry’s headed. On new opportunities and excitement within the industry There’s never been a better time. Particularly, that’s how I feel about being in IT in the utility industry. I’ve always kind of envied CIOs who’ve worked in banking and insurance, where IT is the product, because in our industry, the product has always been about the power plants and the power poles. Knowing everything Well, today all of that is fully embedded with IT infrastructure, and it’s I know about what it IT that’s going to help make those items more efficient and more effectakes to manufacture tive, and I think they’re beginning to understand that in the industry.
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the product, I am
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On career highlights Oh my goodness, there have been a amazed that this lot! One highlight was when Energy Central named me the CIO of the industry is able to do Year in the industry—that was definitely a highlight. what it’s able to do. But I’d say that one of the things that I look back on and I am most proud of is that for the last five consecutive years, Southern Company IT has been recognized by Computerworld magazine as one of the best 100 places to work in IT in America. That might not seem like such a great thing, except that I will tell you that nine years ago, when I came into my job, I think it was probably one of the most demoralized groups in the company. IT is not something to be taken lightly, and it’s not a call center. We’ve worked very hard to try to build morale in the organization. We’ve created an intellectual property program where our employees can get recognized for ideas. We held no patents; today we have eight patents in hand, and 58 items that have cleared the hurdles to receive a patent. And it’s bringing in money to the company: we have commercialized those patents. It’s not a huge amount of money, it’s not a large number of patents, but you’ve got to start somewhere.
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So to say that program really got launched under my tenure, I’m very proud of that. Of course, none of this happens if you don’t have an incredible team of people around you. And the other thing is that a lot of folks that have come onto our team have been promoted to go on and do other things. The CIO of Tennessee Valley Authority, Dan Traynor, came from our team. We’re very proud of Dan. I think there’s probably nothing greater that can happen then for people on your team to get opportunities to grow and do other things in their careers. The truth of the matter is, it’s the legacy you leave behind with people that really counts when you’re gone. I’ve really loved it, and it’s really hard to know when the right time is to go, you know? The other thing that I’m really proud of is my family, and the fact that I have a very successful 30-year marriage, and I have a daughter who is in pharmacy school at the University of Georgia and is just a great kid. It’s hard to work and balance it all. And today, it’s not just women who have to do that. There are many men who do it, as well. My husband has made tremendous sacrifices so that I could be successful in my career. So just keeping it all in balance, and making sure that you keep that focus on your family too, is very important. I will be able to look back and say that I did that. — As told to Kate Rowland.
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SMART DATA: THE FOUNDATION OF THE SMART GRID + Xtensible Solutions
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Everyone talks about standards and the Smart
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Grid, but few utilities today actually make a concerted effort to live them. A large utility on the eastern seaboard that recently made the commitment to implement standards-based information technology (IT) solutions in its energy-trading services is an exception. Although the utility owns its utility assets, in the past critical IT systems and infrastructure were operated by a service provider who also managed most business processes, including energy trading. The utility took a fresh look at information systems when it awarded energytrading services to two new providers while keeping other critical transmission and distribution services with the original service provider. The utility used what it had learned in a multi-year effort to establish standards-based integration and data management to build a system for energy-trading services that offered near plug-and-play flexibility for data and IT systems. A core component of its strategy was an enterprise semantic model (ESM) that simplified integration between business systems and processes, turning bits and bytes into smart data that could be consistently used across applications and processes without additional, costly manual manipulation and translation. THOUGHT LEADERSHIP - SPONSORED BY ACLARA
Why Smart Data Is Important In the future, the need for standards-based integration and data management will become more common. With more datadriven information being required to make decisions, the utility landscape has become more complex. Utilities are demanding that various operational systems, which typically act as silos of information, share data with the enterprise to improve financial performance and productivity. At the same time, there has been exponential growth in the number of field and customer devices providing data to the utility. All this data, from both systems and devices, must be stored, managed, analyzed, and more importantly, transferred between different applications. What’s more, utilities need the ability to process and react to events in real time, as well as present information to people in formats that help them understand its meaning. Presenting realtime data through portals and websites, for example, helps thirdparty suppliers as well as customers make timely decisions in a timely manner about issues like pricing and usage. As a result, utilities are demanding systems that are open and interoperable. This means solutions that follow standards,
specifically those promoted by the National Institute of Standards and Technology (NIST) interoperability framework. Utilities also want systems that reduce duplication and translation of data, which can negatively affect performance. Ultimately, utilities are looking for smart-data-driven solutions that provide a consistent view of customers, work, assets, and business performance.
Smart Data Strategy Breaking down data silos is the first step toward developing an enterprise that operates on smart data. This requires an Enterprise Information Management (EIM) strategy that incorporates best practices for agile and adaptable information management and facilitates data sharing between people, processes, and technologies. The business drivers for EIM are statutory, regulatory, and utility-process related. The federal government has made EIM a cornerstone of policy with the Energy Policy Act of 2005, the Energy Independence and Security Act of 2007, and its stimulus-funding measures. In response, utilities also are evolving to models that require the flexibility provided by an EIM strategy for systems development. For example, utilities can employ EIM strategy to develop solutions that are more easily integrated to third-party applications. Continued pressure to reduce costs and increase revenue also drives utilities to look for ways to operate more efficiently. Even deregulation has an effect, as utilities look to become more agile in the marketplace. Employing an EIM strategy provides a number of benefits for utilities. It establishes a sustained approach for data
management and standards support, resulting in overall lower costs of ownership. Utilities do not get locked into proprietary technologies that precipitate stranded assets and leave no room for system enhancement as standards evolve. The interoperability offered by an EIM approach makes utilities more flexible – they can decide when and how fast Smart Grid projects proceed. In addition, an EIM strategy positions the utility to manage regulatory requirements to support Smart Grid standards.
Why Implement EIM Typically, a utility’s data reside in a number of repositories within the organization. These repositories maintain the data in specific, proprietary formats that differ from application to application. Each individual application recognizes the structure, or language, of its data, but does not understand the structure of any other application’s data. An integration to translate data is typically required for one application to use data from another. However, it is difficult to ensure data quality, integrity, security, accuracy, and consistency as data are exchanged and duplicated between applications through integrations. Plus, as repositories grow due to implementation of data-generating applications such as advanced metering infrastructure and geographic information systems, more data silos form and problems related to data quality worsen. A good EIM strategy can reduce the number of silos in an organization and provide a consistent view of customers, work, assets, and business processes. EIM reduces data duplication in the organization and provides for real-time data
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An enterprise semantic model based on standards acts as the platform for integration across the enterprise. Instead of data silos employing differing formats and repositories, the utility ends up with a uniform approach to data. This approach facilitates Smart Grid development and makes it easier and less expensive for business-information, third-party, and customer-facing applications to access and use data.
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Since enterprise information management projects must be approached in a centralized and organized way, executive sponsorship is critical to success. The steps above illustrate the initial groundwork that should be completed to make the case for EIM and achieve executive-level buy-in.
exchange. Plus, an EIM approach to standards-based development can be implemented in an incremental manner and does not require wholesale replacement of legacy systems or a bigbang approach. By planning upfront, EIM provides the perfect platform for semantic integration on future projects.
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EIM and Smart Data
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EIM strategy requires utilities to think differently about data and how it is shared by processes and applications. Instead of relying on integrations that duplicate data from one application to the next, good EIM strategies take a holistic approach to resolving the semantic differences that make data difficult to exchange, analyze, and understand. In other words, EIM makes data smarter. Xtensible Solutions, with its Model–Driven Information, Integration, and Intelligence (MD3i™) methodology, provides a framework for deploying an EIM strategy throughout the utility enterprise. At the core of the MD3i approach is an ESM that serves as the logical representation of the information assets used by an enterprise to manage and facilitate business processes. The ESM provides a common language recognized by all applications in the utility ecosystem. Developing an ESM within the MD3i framework consists of three steps. First, a common vocabulary that will be employed in the model is established. This vocabulary comprises the basic THOUGHT LEADERSHIP - SPONSORED BY ACLARA
building blocks by which applications will communicate with each other. Next, a standards-based common model of the utility’s data is built around the vocabulary. Finally, the common model is implemented through a series of semantically consistent design artifacts, or business models. Artifacts include business processes, use cases, services, schemas, mappings, and design documents. In the MD3i framework these artifacts are created and maintained in Unified Modeling Language (UML) notation, a standard, general-purpose modeling language used in object-oriented software engineering. The utility stores artifacts in a separate library. MD3i is unique in that artifacts are developed and extended (as appropriate) by leveraging rapidly maturing, standardinformation models from a number of NIST-specified standards, such as the International Electrotechnical Commission’s Common Information Model (CIM), National Rural Electric Cooperative Association’s MultiSpeak, Lawrence Berkeley National Laboratory’s OpenADR (Open Automated Demand Response), and ZigBee Alliance’s SEP 2.0 (Smart Energy Profile). Employing a standards-based ESM through the MD3i framework allows developers to write software once and implement it many times without rewriting or losing the integrity of the data and content. When compared with traditional integration methods, the standards-based approach personified by MD3i reduces the cost of integration between applications because developers can continuously reuse artifacts.
Secrets To Success A top-down approach is absolutely critical to the success of standards-based EIM strategy and the development of smart data. The point of semantic integration through an ESM is to allow loose coupling of applications to the enterprise. Therefore, data modeling as well as model maintenance must be centrally managed to ensure system flexibility. In addition, standards are constantly evolving, so utilities should manage implementation of EIM strategy to ensure that it is consistently applied as standards evolve. This approach gives the utility flexibility and options for upgrading in the future. It also is important in today’s utility environment to be prepared to use data effectively in ways that are not easily anticipated, so using open and interoperable solutions is crucial. The skill sets and technology required to develop consistent data models and deploy them effectively throughout the enterprise are not core to the utility’s primary business, which is to deliver energy to businesses and individual consumers. Utilities may find that the costs of procuring and developing the specialized skills needed to effectively deploy EIM to an enterprise may undermine the cost benefits achieved by having flexible, open, standards-based solutions in place. Therefore, utilities may find it advantageous to develop strategic partnerships, or centers of excellence, that engage experts who can deliver a total information-management solution that evolves as business requirements and standards change. For example, Xtensible deploys its MD3i framework in strategic partnership with utility clients to provide architecture and design, end-to-end implementation, and managed services unique to the utility’s requirements. The utility benefits from Xtensible’s expertise, from the competitive advantage of access to repeatable methods and tools, and from reusable artifacts.
Frameworks
Business Models
Runtime Accelerator
Designer Studio
• Adaptive Grid Reference Engine • Runtime Reference Implementations
• Utility and Smart Grid Related Models, Design Artifacts, and Standards
• Integrated Design Tools for Process, Service, Data, and Information
Xtensible Solutions’ MD3i methodology provides the frameworks for defining a reference library of reusable business models or artifacts, and the tools necessary to produce new artifacts and efficiently build an enterprise information model.
Standards Are Essential It is imperative for utilities to replace data silos with processes that allow ready sharing of data across applications. Standards-based EIM strategy allows the utility to establish a single version of data that is used by all business processes and applications, enabling the utility to take advantage of improved data quality, information accuracy, and consistency. By controlling unnecessary data duplication and proliferation, EIM enables flexible and scalable process integration. Standards-based EIM also maximizes the return on any investment in SOA-related technologies by establishing a single vocabulary for defining data, and mitigates risks by providing a single version of the truth accessible by all applications. This makes it easier to integrate new applications into the enterprise, maximizes the value of commercial applications, and improves the efficiency and effectiveness of operations and business processes.
Aclara and Xtensible Solutions are partnering to provide solutions that allow utility applications to more easily exchange data. The methodology provided by Xtensible is an integral part of the comprehensive, standards-based approach Aclara promotes to utilities. Working together, Aclara and Xtensible help utilities get the most from the data they collect from meters and other devices.
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Partnerships personified by centers of excellence provide advantages to utilities, shifting some risk of development from utilities to vendors. In addition, utilities avoid being locked into certain technologies because it is up to the partner to maintain an open and sustained approach to data management and standards support. Utilities that implement EIM in this way also end up in a better position to deploy Smart Grid plans because the interoperability provided by the ESM leads to flexibility and scalability. This approach also positions utilities perfectly for managing regulatory requirements to support Smart Grid standards. All these benefits add up to lower total costs of ownership.
• Methodology • Architecture • Best Practices
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IT INSIGHTS that. Yet we cannot just walk into these new technologies blindly. As we lose seasoned IT people, that concerns those of us in charge of the integrity of systems. We need to find a happy medium. It’s really up to leadership to lead the charge. INTELLIGENT UTILITY
The world has
changed tremendously since seasoned IT folks learned their craft. KELLEY This new generation coming up is all about instant communications, texting, Facebook. To them, problems are solved with a reset button. The “dream team” for me is a happy mix—you want new ideas, yet you also want sophistication and maturity. INTELLIGENT UTILITY
IT workforce of the future ++Q&A with American Municipal Power’s Branndon Kelley By Phil Carson
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BRANNDON KELLEY, CIO AT AMERICAN MUNICIPAL POWER,
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based in Columbus, Ohio, is well-known for articulating the issues faced by CIOs in an era of change. Kelley says that CIOs need to be “champions of change,” one of the themes of the upcoming Knowledge2011 Utility Executive Summit, Nov. 7-9. In this Q&A, Kelley talks about generational issues in the workforce, the qualities he looks for in an IT recruit and preserving institutional knowledge as industry veterans retire. INTELLIGENT UTILITY
What are the workplace and personnel issues you deal
with as a CIO? KELLEY IT in general is experiencing a generation gap between the so-called “Millennials” who are just starting in the workforce, really gung ho and very optimistic about the technology, and the more seasoned workforce that wants to be sure that things work and are thorough in testing. You need new ideas as much as you need the discipline. Yet when you bring those two mindsets together at the table it can create real conflict. To be competitive, in my department, we have to embrace new technology such as hosted services, software-as-a-service and “the cloud,” potentially. Even when the right security measures are in place, seasoned IT people may be against
Workers, their
tools and the work environment have all changed. The IT department has to support a mobile workforce, sometimes with 24/7 responsibilities. KELLEY That’s right. People want to bring their own devices to the organization—smartphones, tablets, every gadget possible in order to do their job—and their work day may be eight hours, but it’s strung out across various locations. So it’s up to CIO leadership to respond and provide secure support. That’s driving what I call the “consumerization of IT.” INTELLIGENT UTILITY
Personal
computing and personal communications have certainly changed expectations, haven’t they? KELLEY When I got into IT in 1999, they had better technology at work than I had at home—the computers were newer, the Internet was faster. Today, the technology at work is struggling to keep pace with the technology at home. For the generation just entering the workforce, they’ve been completely surrounded by that technology. If they need new software they’re accustomed to just double-click and
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IT INSIGHTS it’s downloaded to their system. No bureaucracy. They come in here and say, “I can do better if you just give me the control.” The more seasoned IT people will say, “We need to control security—the reputation of IT lies in the integrity of the systems and data.” They’re both right. Again, I go back to leadership to bring the two sides together. We cannot always say “No,” but we can’t always say “Yes.” I have to ensure that what we’re doing will ensure the security of our systems first, benefit the company second and satisfy our workforce third. INTELLIGENT UTILITY
What sort of candidate are you looking to recruit and
how do you retain them?
First, they have to know the technology. At the end of the day, they can have all the other skills, but they must have the technical skills, the certifications, the education. But the “soft skills” are important, too. I need people who are leaders, who can rally the troops for the cause. Folks on the help desk may not actually lead, but they are the ambassadors for IT. Some people’s only interaction with my department will be through a help desk representative. I need people who are sharp business people first, technologists second. That could mean finding cost-based alternative solutions. I want people who understand there are always options. I need people who are customer-focused and not consumed with our technology: people who get out and network, talk to folks in our industry and build relationships. I want people who are lifelong learners and keep up with their craft. I put money aside each year to make sure that my folks who need training get training. To be effective in my organization, you need to continue your education and stay up with the latest technology. One qualification goes right to this discussion of generational differences. I need change agents, not just people who themselves embrace change. (I need) someone who can communicate change, get out into our business and talk about changes in IT and champion change. The last qualification is project managers. Even if you’re not a project manager, you work on a team and you should think like a project manager. Does what I’m doing align with the company goals? When I’m finished, will this project serve the business’s needs? Will it be on time, at or under budget? Will it deliver the intended results? Keeping those folks is a challenge. I’m only hiring the absolute best. Everyone wants those people. So I have to make sure they’re compensated fairly, have training opportunities, that there’s a work/life balance and that this is a fun place to work. They need to know they’ll have opportunities to learn and grow with the organization. I addressed a college group the other day and I told them, “IT is unlike any other department.” In our company, IT serves every other department in the company. So we learn something about accounting, about SCADA, about engineering, about generation. We have to be involved in every department because we own the systems and we have to understand, to a certain level, how those other departments get their work done.
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KELLEY
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INTELLIGENT UTILITY
What’s the value of peer-to-peer networking when
everyone’s challenges and solutions are different? KELLEY A lot of my peers are implementing advanced metering infrastructure. We don’t have a distribution system, so we’re not doing AMI. But we all face
aging infrastructure. We have to stop throwing good money after bad; it’s time to replace things—not just hardware but systems and applications that have exceeded their useful life. Often these are back office systems and that’s where I find commonalities with my peers, even if we’re on vastly different scales. INTELLIGENT UTILITY
As seasoned
IT people retire, what concrete steps can a utility take to retain its institutional knowledge? KELLEY It’s just good practice to make sure that your systems and applications are fully documented, especially if they’re custom built. You need source code control. If you have people in charge of a critical system or application that are going to retire in the next three to five years, you need to be on top of that, getting people cross-trained. You can ensure that you’re ready to take over that system or you can scramble. And scrambling and critical infrastructure is not a good place to be. We’ve done business impact analyses to identify our critical systems, who knows them and where the The technology documentation is. The biggest at work is challenge with retirements and struggling to other workforce changes is that you keep pace with could lose expertise and domain the technology knowledge about running your at home. business. If you don’t have the bandwidth to do a business impact analysis, there are third parties who can help you. That’s what we’ve done. Sometimes someone else’s eyes can more easily spot a problem.
“
”
Phil Carson is editor-in-chief of Intelligent Utility Daily.
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IT INSIGHTS
Keeping the clouds white with cloud computing ++AEP uses SaaS to improve environmental compliance By Mike Breslin WHEN ORVILLE AND WILBUR WRIGHT FIRST FLEW OFF INTO
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the clouds, they knew their newly invented infrastructure needed improvement. Even though they trusted that the underlying aeronautical principle was sound, they gambled on a long-term return on their pioneering investment. The same may be said today of cloud computing, or SaaS (Software-as-a-Service), a versatile tool utilities can use to better manage environmental compliance.
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Coping with the intricacies of compliance This fuzzy new world is slowly coming into focus at some electric utilities. Perhaps not immediately, but the long view shows a path leading to better control of IT expenses over the coming decades, especially to manage heavier data loads emanating from the more digitally driven grid. Other utilities are already seeing big value coping with the intricacies of compliance. Cloud computing, of course, offers unlimited potential to help customers and utilities work together to better manage load by communicating and controlling consumption via a common platform, the ubiquitous Internet. SaaS can also level the playing field for smaller players such as rural co-ops—giving them big time enterprise software capability without burden of capital outlay, rather a renter’s route to high technology. Call it synergistic savings, shared services, operational efficiency or just plain outsourcing, SaaS promises to fulfill the insatiable need to continually increase computing capacity, “as needed,” without capital expenditures for new systems, or hiring new talent to tinker with them. In theory and in practice It’s an intriguing sales pitch—an enterprise-wide Web browser can provide a quick implementation of desktop and mobile access to a shared data pools, ones specially configured by SaaS vendors with hierarchies and ready-made formats designed to handle discrete applications, such as enterprise resource planning (ERP), environmental health and safety (EHS) reporting and home energy management (HEM) programs. Software is stored on servers at a remote location, managed by a private SaaS contractor who takes care of all those messy little details like system maintenance and software upgrades for a subscription fee (usually on an annual basis once initial development and testing is complete). As long as security is as bullet-
proof as the best IT professionals can make it, why develop, build or pay for computing infrastructure? In theory, it’s a winner. In practice, SaaS has already made great strides at many utilities for EHS. A leading North America SaaS provider reported that the number of utilities deploying cloud-based and/ or SaaS solutions to manage environmental reporting continues to grow and includes two of the largest U.S. energy providers: PG&E and Southern California Edison. Other utilities now using cloud for EHS include Entergy, FirstEnergy, Georgia Power, PPL and American Electric Power (AEP). AEP and environmental compliance AEP, one of the country’s largest generators of electricity (owning nearly 38,000 MW of capacity) has highly sensitive environmental issues since the majority of its generation is coal-fired. “Being largely coal-fired our exposure on compliance is extremely high and so our management is very progressive and proactive on environmental matters,” said Greg McCall, AEP’s senior engineer for environmental strategy and planning. It is interesting to note that cloud computing began to emerge at about the same time EPA reporting began to become a more onerous operational task. Perhaps they were destined for each other. As we know, the consequences of non-compliance can be horrific—large fines, legal liabilities and bad public and investor perceptions. To manage and ensure strict environmental compliance, AEP began looking for a strong software solution in 1995.
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An evolution for AEP McCall told us how AEP evolved to SaaS: “Back then it was all client-based servers. You bought a server and installed software on individual PCs or on the corporate server. Because this was a smaller project by comparison to what our IT department is used to handling, we didn’t feel that IT would give us the attention we needed to get our smallish project in place. “Besides, in the late 1990s, software was very modular-based. You could find a module for doing air quality, water or waste, but that route was very restrictive for a large operation like AEP with our diversity of facilities.” AEP continued to monitor the development if integrated EHS systems until 2003 when it found a promising SaaS solution. “We looked at the tool, which was one platform and not a series of modules — more of an integrated tool to build a compliance system on, rather than a more restrictive model that did one specific thing,” McCall said. “This gave us a lot of flexibility, which we really wanted due to the size of our corporation. We needed a tool that was highly configurable, but configurable by us, compliance and environmental specialists, not by hiring IT programmers.”
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Building slowly and carefully After building a few test systems on the SaaS platform, AEP finally implemented Title IV of the 1990 Clean Air Act Amendments on it in 2005 for a few of its facilities. It’s a very detailed compliance program at AEP. Each of more than 40 power plants is permitted with hundreds of requirements that each has to meet on air quality issues. “We were so pleased with the results we decided to roll it out for general compliance on all the different emission programs we have to meet,” McCall said. By the end of 2009, AEP’s EHS system was fully implemented and operational at all generating facilities. Today it has 1,450 authorized users, all those concerned with compliance issues. “Our IT department has insisted on high standards for security and managing our user community. We get a daily email from HR regarding employees who have left the company so we can make sure that our list of users is updated. Anyone leaving immediately loses access to the system,” McCall explained. What McCall likes about SaaS is what all users like—the vendor handles all the infrastructure work, software upgrades, data backup and updates the tool with the latest technology. “My gut feeling is IT has so much work to do with big corporate systems they are not sad at all to have lost our business. Part of the reason we went with our SaaS vendor is because our project is not very big and it’s hard to get resources dedicated to it,” he said. “Implementing outside IT worked well because we hired environmental consultants to help us get it all set up with their full attention on our project. Since we are now operational we’ve been shifting away from consultants.” An environmental thumbs-up From an environmental point of view AEP is “very pleased” with the system, McCall said: “It has certainly raised our internal bar for managing our environmental compliance. We have dashboards here at headquarters where we can see the status of all compliance activities around our system. It gives us a much higher comfort level that all the things necessary to meet compliance are being done.” One struggle endemic to any maturing system is keeping up enhancements and adding capabilities as it becomes more complex. “We want to use it more
for data entry at the plants and manage daily workflows at the plant level. Any requirement that a permit dictates for compliance has an assigned task that needs to be done and signed-off as completed,” he said. “A permit may have several hundred requirements of what must be done, monitored, reported on a schedule, or notifications that must be made if this or that happens. All those tasks can be built-in and we want to make sure they happen.” McCall explained how the system has improved compliance training and task continuity: “Typically each plant had a sharp person who has been with the company a long time and understands all the permit conditions and tasks to keep the plant compliant. We had that person explain all the things he did and we built out tasks and explanations so it could be clearly passed on to others. “They often had a hard time understanding why we wanted all this information because the way were doing everything was just fine. It took a long time to work this out, but a year-and-a-half ago we had a downsizing and a number of our key environmental people at the plants took a nice retirement package. That’s where the value of the system really came shinning through. A new person coming in could just go into the system and look and see what needed to be done at the pant. It made that transition extremely smooth,” he said. “We’ve always presented this system in terms of being good environmental stewards. It’s in place to manage our compliance and do it as well or better than anybody. We know we avoid penalties with this system, but have not tried to quantify savings and justify the system from that point of view,” McCall explained. “It’s more of the right thing to do.” Mike Breslin is a freelance writer and novelist based in New Jersey.
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Integrating automation ++EnergyUnited’s work management system crosses silos
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By Brian Dacaret
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WHEN ENERGYUNITED SET OUT TO FIND AN AUTOMATED
staking (or work management) package, we knew we also wanted to be able to integrate all of our current systems and applications, in order to save time and money. Because we are a cooperative, it is imperative that we keep costs as low as possible for our membership and establish processes that maximize the return on all investments we make. Additionally, our members enjoy one of the highest reliability rates in the industry, so it was important for us to keep that stability of service for our members as we added technology that would be utilized in the field. EnergyUnited is located in North Carolina, and is the 15th largest rural electric cooperative in the United States. Our service territory covers 19 counties and encompasses the suburbs of three of the state’s largest cities: Charlotte, Winston-Salem and Greensboro. There are approximately 12,000 miles of line and 120,000 customers in our region. Our strategic technology plan provided for tight integration of all of our systems, so this became central to our requirements when we reviewed the market for our automated work management package.
Project planning When we began this project in 2008, we had just completed the installation of our outage management system (OMS), and felt that an automated design system would be a complementary fit in our overall system architecture, integrating our customer information system (CIS), our financials and work order system, and our geographical information system (GIS). To maximize integration and return for all departments, we assembled a cross-functional team of employees from our information technology, mapping, operations, staking, accounting and customer care departments to define the system requirements, including workflow management, streamlined data entry and secured system access across the company. Throughout the life of the project, we took an approach of considering and incorporating feedback from our stakeholders throughout the cooperative. This was done informally as well as through a series of regular team meetings. Employee satisfaction increased, mostly because staff could see their suggestions at work firsthand in the software. Our primary project goals were to increase the visibility of member requests, strengthen service by giving members instant order status, and reduce the lifecycle for a job from planning to completion. It was also important that the new system fully integrate with our existing technology to eliminate redundant efforts required to update multiple systems. Coordinating processes Efficiency is particularly important in work order automation. With most staking packages, the staking crew has to start the job in the CIS before designing. However, that’s not the case for EnergyUnited. For us, it was important that the staking team be able to initiate jobs out in the field, allowing them to respond to new requests quickly.
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O P E R AT I O N A L P E R S P E C T I V E With our vendors, we implemented a business process in which the staking Benefits realized team can create the work order first in one program and then send it through Implementing this total system archianother process to generate the job. Although our business process is somewhat tecture took between seven and eight months, but because we had put in the unique, we use interfaces modeled on standard transfer schemas. This approach allows the staking system to serve as a data repository for our CIS and financials, effort up front to clearly define goals and processes, it went according to updating service orders and jobs in real time. plan and the benefits appeared quickly. Integration helps save time in a couple of ways. Prior to this project, when The work order process is more EnergyUnited’s staking sheets were hand drawn, everything for each job had to efficient because data has to be input be entered into the work order system unit by unit, quantity by quantity. Now, only once, reducing duplication of when units are staked in the field using a pen tablet and later synched at the data, errors and eliminating misplaced office, one keystroke sends all the entered data to the financial system. All work orders. Staking-to-construction construction unit data in that system is mirrored in the staking software. Units time was cut in half. And because of the and materials are generated in a pick list from two processes, so the units don’t workforce management tools, we have have to be selected one at a time. the ability to create contingency plans To estimate work order costs, EnergyUnited has one large master set of units for employees who are unavailable. As with different pricing structures for utility labor versus contract crew labor, long as the replacement employee has a requiring a lot of behind-the-scenes computations to generate an estimate. tablet, he can see all the data for a given Previously, providing accurate estimates with different labor resources proved to site and pick up exactly where the first be quite challenging and time-consuming, as only one labor value could be used employee has left off. at a time when construction units were staked. Now, One of the biggest unexbecause our project team clearly defined and prioritized Any employee can pected advantages to having this requirement, we have the ability to define unit by an integrated mobile workunit, job by job, or any combination of the two, the view the status force management system labour resources in order to provide an accurate is having a wealth of data estimate in half the time. of any job at any for reporting, which helps Job status visibility has greatly increased, as any determine workload and employee can view the status of any job at any given given time. productivity. This is espetime. For our customer care team, it was important cially useful in light of the to have work order data available in their CIS web changing economy because application, which was already in place and works well for that team. So all it allows us to ensure that employees relevant data about a job is relayed to the CIS from the staking system as soon are working where our members need as it comes back from the field, allowing the employee to see the job status, them most. We now have the ability to the owner of the order and the staking sheet in the web-based application. see all of our resources in action and This enhancement provides a great value to the member, as our customer care the data to make smart decisions when department can now give immediate status of service orders. This used to be an shifting them accordingly. inefficient, multi-step process that involved calling multiple employees prior to Looking to the future finding the status of the member’s service order request. On the horizon is the capability Improving data quality and consistency to do mobile data exchange so that Another element of our project was to improve the quality and consistency employees can be more productive in of data going into the GIS, which is reflected as well in the CIS and OMS. the field. Optical fiber cable is being In one small example, let’s say we’re staking a fuse on a tap, and that fuse run between substations and offices as somehow was missed when manually entered in the GIS. If an outage did occur we make preparations for building the in the OMS, which automaticaly predicts the possible device out, the system necessary infrastructure. Until then, would not predict the fuse as the cause of the outage because it did not exist there’s the satisfaction of having met on the map. our primary goals of increasing the Instead, it will incorrectly predict a different device upstream as the cause of visibility of member requests, giving members instant order status and the outage. In that case, the OMS would show more members without service reducing the lifecycle for a job from than there actually were. planning to completion. The updated IT infrastructure improved and streamlined the work order process by integrating applications between departments. This is invaluable for Brian Dacaret is EnergyUnited’s communicating changes to work orders and helps reduce errors and losses. construction manager.
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O P E R AT I O N A L P E R S P E C T I V E
Challenging the status quo ++Knowledge Summit co-chair Robert Sarfi examines the issues of an intelligent utility AS AN ENGINEER AND A UTILITY MANAGEMENT CONSULTANT,
Boreas Group co-founder Robert Sarfi is widely recognized for his experience in delivering business vision and technology solutions to electric utilities. This year, Energy Central asked Sarfi to lead the Operations committee for the Knowledge2011 Utility Executive Summit, bring his experience to bear on the issues affecting electric utility operations this year, and in years to come. In advance of the Knowledge Summit, to take place in early November, Intelligent Utility asked Sarfi to shed some light on the issues intelligent utilities are facing as they advance new technology and new services. His comments, edited for style and length, follow. INTELLIGENT UTILITY
Robert, from your experience, what do you see as the
biggest issues facing utility operations heading into 2012?
To me, there are a series of factors that are converging together. I won’t say they’re almost creating the perfect storm, but they definitely have the makings to transform the entire paradigm in which utilities run their operations. From a regulatory perspective, there’s a lot of uncertainty as to what’s going to happen with renewables, with the integration of renewables, storage, and certain aspects of energy conservation. To me, demand response is well understood— everybody gets demand response right now. I think a lot of people are saying, ‘I think I need to address renewables,’ because renewables will definitely change the way they operate. But it’s unclear, with the economy heading the way it’s heading, with the elections in 2012 in the United States, where that’s going to go. There’s no money for subsidies. It’s unclear what kind of appetite the politicians have for it. The price of natural gas is still pretty low, as well, and commodity prices are bouncing up and down. But we haven’t seen that consistent upward trend that people anticipated seeing, so it’s just making that situation very volatile. At the same time, we have seen some really large, ambitious projects to integrate renewables throughout North America, and I’m not sure if they’ve gained as much momentum, or as much support, as the politicians or the utilities anticipated they would. But what they did demonstrate to us was that we don’t really have the technology offerings to assist the operators in managing those resources. And, quite frankly, a lot of the operators don’t necessarily have the skill set to be able to manage all of these data points coming in, to make the most effective decisions for the utility.
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SARFI
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INTELLIGENT UTILITY
What about new technologies and technology integra-
tion? What challenges, if any, are you seeing there? SARFI Quite frankly, it’s the first time in my career I’ve seen the utilities wanting more in terms of technology than the vendors actually have to offer, which to
me is downright scary. What’s kind of curious about that is there are a lot of companies that received an incredible amount of clean tech funding to more efficiently run the grid. And I think the investors simply haven’t seen the kind of momentum that they anticipated from it. They haven’t gotten the returns, and we’ve seen a few of them exit. So, with utilities chomping at the bit for more technologies, you also have a vendor market space where, quite frankly, they don’t have an offering to entirely meet the needs of the market, and they’re also tapped out in terms of funding to go out on the edge to give the utilities what they want. So it’s almost a Catch 22 situation. I think we’re going to get there, but it’s taking a lot longer. INTELLIGENT UTILITY
You mentioned
new skill sets needed.
When it comes to resources, and this is interesting, you go to some of the European countries, you even look at some of the Canadian utilities, and the distribution system operator or distribution dispatcher has more of the skill set of a transmission system operator. Whereas here, it’s a different skill set, maybe one that’s focused more on qualitative measures and qualitative decisions as opposed to analytics and more of an engineering background. I think the fear that’s coming in, especially in emerging technologies for managing renewables, storage, and self-healing, as they’re coming on, and they aren’t really mature, you actually need quite a high skill set of person to be able to interpret the data to make sure the software is doing what it’s supposed to be doing. And you can’t all of a sudden snap your fingers and say, “Okay, workforce, all of a sudden, your electrical engineers with 15 years’ SARFI
operations experience can understand this data.” So how you transition the workforce, I think, is going to be a real problem. That’s the challenge I think these utilities are going to face. It all comes down to the load flow and understanding the behavior of the system. Just by sending people on courses, or hiring engineers, you aren’t necessarily going to get that level of understanding so that in a situation with a sense of some urgency, they’re going to be able to make the right decisions. The problem is, if people think transmission’s complicated, if they look at the smart grid and the number of data points, distribution is going to make transmission look like child’s play. INTELLIGENT UTILITY
Where do you
feel the electric utility is headed with smart grid? SARFI There is a proliferation of distributed renewables, storage, electric
vehicles, all of these new technologies that are coming in, and there are three possible scenarios. One is mass adoption, in which case we’re going to have to figure it out very quickly by necessity. Two is complete rejection, which, quite frankly, is actually not a bad scenario, because we don’t have to deal with these problems. I don’t mean to sound negative, but there’s some comfort in status quo. What I think is the worst possible scenario is restrained adoption and deployment of the new technologies, simply for the fact that we won’t have enough data to really understand the true behavior of the system. And the vendors won’t have enough momentum to truly invest in technologies that meet the needs of the marketplace. So that middle-ground scenario, which is kind of a happy medium, that is the scenario that I fear and, with the economic environment, it’s probably going to be the most likely scenario. You look at some of the Canadian jurisdictions that have gone towards a larger portfolio of green energy and increased the rates. Now their ratepayers are syaing, “Hey! Uncle! We can’t afford it!” And rightfully so. They truly can’t. So I think, overall, there’s a lot of uncertainty. But when you look a the solutions that people are cobbling together, it somewhat concerns me. In order to bridge the gaps in the marketplace, decisions are being made to solve specific problems, so these are point solutions to issues and problems. And I don’t think people have a long-term, holistic view of how to make everything work together. The Knowledge2001 Summit, sponsored by Energy Central, will be held on Amelia Island, Florida, from November 7-9.
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CUSTOMER SERVICE
Rethinking smart grid ++Utility leaders discuss the benefits versus the challenges By Kate Rowland AS SOME OF THE UTILITIES EARLY OFF THE POST ARE NOW
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completing their smart meter deployments, others are looking for a status check on the benefits utilities and consumers can expect to achieve from technology implementation. “If you think about a smart grid, the term ‘smart grid’ at its roots, I think we all need to be very cautious about how we use the term, because it means so many different things to so many different people,” Michael Lamb, managing director, business systems and assistant chief information officer for Xcel Energy, told an EnergyBiz Leadership Series Webcast audience in late July. Lamb provided a macro focus to the challenges of smart grid implementation.
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Clear definition important “What’s really important to Xcel Energy is to develop strategies and objectives that are clear and understandable. And, as a result of that, the term ‘smart grid’ or any sort of modernization effort needs to have a clear and understandable definition,” he said. He argued that utilities have been modernizing the electric system and gas system for decades: “I don’t think this is new, and I think, at its heart, that’s what smart grid means.” Xcel, which Lamb noted is the No. 1 wind provider in North America and the No. 5 provider of solar power, started deploying smarter meters in the early to mid-1990s, and now have smart meters implemented for roughly half of the utility’s electric population of roughly 3.5 million customers in eight midwestern states. As well, it started implementing self-healing grid components on the distribution system specifically at the same time. “So the fact that we’re trying to modernize the grid and improve reliability in the case of self-healing components is not new,” he said. What’s new, Lamb added, is the pace of change specific to technology deployments. “The pace of change has really picked up with respect to technology implementations and we need to take that into consideration as we continue our pursuit of improving performance by modernizing our electric and gas system. “One thing that we have learned and we have very much focused on is to drive any modernization investment, and any technology investment, based on a very disciplined business case method,” he added. “It’s tempting to implement technology for technology’s sake, to be somewhat flippant, but what we’ve found is if you stay focused on the business case and let the benefits drive the investment, you’ll be in a much better situation than if you don’t do that. “As part of that, you need to also consider the expectations of customers and regulators are changing, and in some cases even driving the technological investments.” Benefits already seen in Texas Jeff Myerson, CenterPoint Energy’s director of smart integration, explained the Texas market is unique compared to other markets in the U.S. When the market
was deregulated in the state about a decade ago, CenterPoint sold off its generating businesses and its retail businesses, and became a transmission and distribution (T&D) utility. “We own and maintain all the power lines, we deliver the power to the consumers in a safe and relaible manner,” he said. “We read the meters and, of course, we’re responsible for the reliability. So we take the power from the substation at the generating stations through to the residential and commercial/industrial meters.” CenterPoint began its smart meter deployment in the center of Houston in 2009. “To date, we have installed about 1.4 million smart meters out of the 2.2 million that we have total to deploy,” Myerson said. As well, along with other utilities in the state including Oncor, American Electric Power and Texas New Mexico Power, CenterPoint has implemented a Smart Meter Texas portal. There, consumers can access their 15-minute interval usage data, at no additional cost. As for benefits, Myerson said the utility is already seeing them. “Some of the consumer benefits we’re seeing associated with the smart meters are really critical to us, and the real reason why we’re doing this,” he said.
“First of all, remote meter reading is a benefit, the support for faster move-in and move-out switching. Also, this 15-minute interval data provides the ability to do prepaid service and time-of-use rates. In addition, because we’re posting all this data out there to the Smart Meter Texas portal, we have provided information to consumers that allows them to take advantage of that and conserve energy, should they decide that they want to go down that path,” he explained. Smart meters just the beginning From CenterPoint Energy’s perspective, Myerson said, “smart meters are just the beginning of an evolution of allowing the consumer to become more involved in their electricity market. Phase One of that is really providing the customer insights. It’s giving the customer information into their consumption and giving them some tools with which to measure that consumption and to see how they can change behavior, and see what the resulting impact is on their consumption. “The second phase is really getting the customer engaged, and having them participate in things like price control, load control, and changing their consumption.” He pointed out that electric vehicles (considered a form of rolling storage) and other storage and customer-owned generation capabilities like solar and wind generation offer the customer the opportunity to become more engaged in the overall electricity delivery process.
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Smart grid pull from customers On June 6, San Diego Gas & Electric (SDG&E) filed its smart grid deployment plan with the California Public Utilities Commission, covering 64 different smart-grid specific projects the utility will roll out over the next decade. “(One) part of our vision is that we did not want the plan, or our smart grid projects’ efforts, to be just focused on SDG&E, the company,” said Lee Krevat, director of smart grid for SDG&E. “We wanted it to be focused on the region, and on our customers, who are really forcing our hand with regard to implementing smart grid projects, versus the other way around. “I think a lot of utilities are trying to justify why do a smart grid, and there really isn’t a lot of pull from customers,” Krevat added. “And while our customers might not know the term ‘smart grid’ and might not say, ‘Man, I really wish the
grid were smarter,’ they are installing an incredible amount of photovoltaics on their rooftops” In fact, in May of this year, SDG&E passed one percent of its customers having photovoltaics and being on net metering. So, one of the important steps the utility needs to take, according to Krevat, is to “ensure that we can integrate those renewables, continuing to have a sound and reliable grid.” In addition, SDG&E customers are avid early adopters of electric vehicles. “We are estimating we have about 10 percent of all the electric vehicles in the country here in San Diego right now, about 600 Leafs, Volts and a few others,” he said. The utility’s mass smart meter deployment is now complete. “The next question on our customers’ minds is ‘What’s next? What are you going to do with these meters?’” Krevat said. What’s next is spelled out in the new smart grid deployment plan, with projects falling under nine different programs, from reliability programs to security, from operational efficiency to RD&D, from integrated and cross-cutting systems to workforce development and more. “So, in summary for us, we virtually finished our smart meter deployment, we’ve been doing substation automation for quite a long time now, so that stuff is done, and now it’s really building all the other stuff to leverage that and to really continue the journey— hence our 64 projects there,” he said. “We’re driven by the customers. It’s really the fact that they’re using in the grid in many new ways—producing their own energy, electric vehicles— that is driving the significance of the projects we’re doing. And we want to ensure that we’re constantly communicating with our customers and other key stakeholders about what we’re doing, and get their input, and be sure that our plan maps to what our customers and key stakeholders want,” Krevat explained.
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CUSTOMER SERVICE
CVPS: Small utility, big mission ++Central Vermont Public Service tackles AMI, automation, dynamic pricing By Phil Carson
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CENTRAL VERMONT PUBLIC SERVICE (CVPS) IS A RELATIVELY
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small, investor-owned utility (yet the largest in Vermont) that is undertaking a big task: modernize the grid with technologies and programs familiar to Intelligent Utility readers. I thought it would be insightful to share a converation our editors had with CVPS on how they’re getting this done, leveraging internal resources and communicating with external stakeholders, given the utility has only 500 employees and a multi-year project schedule. Rolling out smart meters and more CVPS will roll out smart meters this year and next, in conjunction with advanced metering infrastructure, a meter data management system and a fiber optic network supported by a public telecommunications network. The utility is implementing distribution automation and expanding SCADA systems at substations. It will conduct pilot programs for Volt/VAR control as well as dynamic pricing for customers, with various notification channels. “We have a full complement of things going on this year,” explained Todd Kowalczyk, program manager for CVPS’s smart grid power program.
Laying the groundwork The utility’s current approach began several years ago as it joined a score of other Vermont utilities in an open docket before the two relevant regulatory agencies, the Vermont Department of Public Service, which represents consumers’ concerns, and the Public Service Board, a quasijudicial body that sets rates. Utility transparency led to regulators’ probing questions on cost-effectiveness and impacts on rates. “They asked good questions about whether it’s cost-effective and what it meant to rates,” Kowalcyzk said. “We were able to show them quantifiable benefits that make this a positive business case as well as qualitative, societal benefits that we can’t measure but that are there to be harvested.” Gauging perceptions and expectations Meanwhile, according to Amanda Beraldi, of the utility’s market research group, CVPS reached out to its customers via focus groups and phone surveys to gauge perceptions and expectations of smart grid technology.
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CUSTOMER SERVICE Small works wonders “We benefit from having a small organization, because we can have the conversations that we need to have on how our various plans affect each other,” said CIO Jeff Monder. “But we’re adding a lot of structure to that because we’re going into a very rigorous period of business process review to understand the impacts of various aspects of these smart grid applications on business processes, work teams and work flows. “We want impacts to be understood among our stakeholders,”Monder continued. “And we’re discussing them in real-time as we go through this process. In that way, hopefully, we’re better prepared for the changes that (This is the listening phase that seems to work well in communities with a are coming. We have a good program low noise-to-worthy-discussion ratio.) The resulting outreach plan combined for communicating with our employhigh-touch visits to community groups and a low-touch Web site with simple, ees, so people understand, as the clear messages. The utility also uses newspaper and radio advertising, as well program evolves, what impacts it’s as Facebook. The utility’s microsite for smart grid, “CVPS.smartpower,” defines the program having and what it means to them.” Strong executive buy-in and internal in terms of traditional utility value propositions such as outage restoration and collaboration have been crucial, service reliability. It adds the new element of customer knowledge and control according to Kowalczyk. over energy usage, as well as the environmental benefits of smart grid and its “The problem we have is that we’re ability to integrate local renewable resources. To reassure customers about small,” he said. “People have to wear concerns they’ve expressed, the site addresses privacy and security. The microsite also explains that forthcoming many hats. They have to rate plans and programs will provide options to balance their ‘day job’ and The problem we have address customers’ specific consumption patterns. this project work.” For example, CVPS explains that time-of-use rates, These principles apply is that we’re small. for instance, “lower [utility] energy expenses, to security work as well. as we are able to better balance the electricity “We’re a small organizaPeople have to wear use throughout the day and lessen the need for tion and we can’t pretend additional generation sources.” to have expertise in every many hats. They area of security or even The facts, and more to be able to keep up with have to balance The site offers “The Facts,” “The Benefits” and the constant evolution of the “Implementation Plan.” The latter informs the threats and vulnertheir ‘day job’ and residential customers how they’ll be informed abilities,” said Monder. “So of impending meter swap outs, which begin we’re working on an interthis project work. this fall, and it provides a map of active nal coordination capabilimplementation plans. ity and a good set of external resources As meters roll out, a Web portal with energy use data will become accessible we can call on to ensue that our initial to customers. Next year, a pilot project will test customer response to peak time deployments are made in a secure rebates, critical peak pricing and price signal notificatino channels. manner, and maintain that security Obviously, the implementation of the programs described here will require a as our program evolves.” multi-year (2010 to 2013) effort for CVPS, which won a Smart Grid Investment This article originally appeared in Grant in 2009 for the project. What approach does the utility take to internal Intelligent Utility Daily. resources to accomplish all of this?
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OUT THE DOOR
Renewables rule transmission ++FERC finalizes regional cost allocation By Bill Opalka FEDERAL REGULATORS HAVE APPROVED A LONG-ANTICIPATED
rule for transmission that gives “public policy requirements” important status in determining planning requirements and cost allocation. Renewable energy integration is the policy requirement most widely understood as the beneficiary of the policy, which has been controversial since the rule was proposed 13 months ago. The Federal Energy Regulatory Commission (FERC) said its Order 1000 will eliminate barriers to transmission development. Opponents have maintained the policy will saddle customers who do not directly benefit from the expanded facilities with excess costs. Transmission planning requirements The rule establishes three requirements for transmission planning: ??
Each public utility transmission provider must participate in a regional transmission planning process that satisfies the transmission planning principles of Order No. 890 and produces a regional transmission plan.
??
Local and regional transmission planning processes must consider transmission needs driven by public policy requirements established by state or federal laws or regulations. Each public utility transmission provider must establish procedures to identify transmission needs driven by public policy requirements and evaluate proposed solutions to those transmission needs.
??
Public utility transmission providers in each pair of neighboring transmission planning regions must coordinate to determine if there are more efficient or cost-effective solutions to their mutual transmission needs.
Transmission cost allocation requirements The rule establishes three requirements for transmission cost allocation: ??
Each public utility transmission provider must participate in a regional transmission planning process that has a regional cost allocation sion plan for purposes of cost allocation. The method must satisfy six regional cost allocation principles.
??
Public utility transmission providers in neighboring transmission planning regions must have a common interregional cost allocation method for new interregional transmission facilities that the regions determine to be efficient or cost-effective. The method must satisfy six similar interregional principles.
Bill Opalka is editor-in-chief of RenewablesBiz Daily. This article first appeared there.
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method for new transmission facilities selected in the regional transmis-
Reactions mixed “This rule is an important step forward, building on FERC’s successful market reforms over the past 15 years,” FERC Chairman Jon Wellinghoff said. “Our action today promotes efficient and cost-effective transmission planning and the fair allocation of costs for new transmission facilities. These changes will provide consumers with greater access to efficient, low-cost electricity.” The renewable energy industry and some transmision advocates have endorsed the policy from the outset. “AWEA applauds FERC for its leadership in finalizing reforms that could serve to cut the Gordian knot that is blocking investment in our aging power grid,” said American Wind Energy Association (AWEA) CEO Denise Bode. “This is an important step toward removing the main hurdle: how to make sure all users pay their fair share of new lines. Preventing free-riding will help improve grid reliability, and reduce electricity bills by facilitating access to lower cost resources, including wind energy.” Policy opponents are ready. In a recent commentary, Bruce Edelston, executive director of the Coalition for Fair Transmission Policy, said the transmision proposal burdens consumers with the costs of new electric facilities from which they receive little or no benefits. “FERC action on cost allocation for new transmission should ensure the lowest reasonable cost to consumers, not the largest possible subsidies to clean energy developers and transmission companies,” Edelston wrote in The Hill newspaper. Order No. 1000 takes effect within 60 days of publication. Some members of the U.S. Senate Energy and Natural Resources Committee that share the coalition’s view have requested hearings.
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OUT THE DOOR ??
describe how public policy requirements will be considered
FERC rule dissected
in local and regional transmission planning processes.
Final rule issued On July 21, the Federal Energy Regulatory Commission (FERC) issued Order No. 1000, the Final Rule on Transmission Planning and Cost Allocation, amending the transmission planning and cost allocation requirements established in Order No. 890. In short, the main parts of the rule require providers to:
The law firm Troutman Sanders held a recent webinar on the order. “As FERC indicates all throughout the rule, Order 1000 is all about process. It’s going to be extensive,” one commentator said. “Transmission providers must evaluate alternative transmission solutions that may be cost-effective. On that point FERC seems to be pushing the concept of larger regional projects instead of incremental upgrades.” In breaking new ground, FERC has moved beyond reliability to “public policy requirements” in the determination of need for transmission projects. That could mean adherence to any stature or regulation that impacts the electricity markets.
participate in a regional transmission planning process and produce
This is excerpted from an article originally
a regional transmission plan;
appearing in RenewablesBiz Daily.
++Transmission planning overhaul By Bill Opalka TRANSMISSION REGULATORS ARE THINKING BIG.
A federal commission has delivered a 650-page blueprint for transmission planners that emphasizes regional coordination and gives public policy added weight in determinations for the expected build-out. We’ve been discussing it here [in RenewablesBiz] for some time because the implications are pretty serious for widespread renewable energy integration— intentionally so. During the year-long consideration of the rules, questions have been raised about this federal commission’s cost allocation segments that many deem unfair.
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