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The Changing Utility
Business Model
June 4, 2015
Today’s Presenters
Rob CaielloVice President, Marketing
Allconnect
Gary HighSenior Vice President of Smart
Grid Solutions
Landis+Gyr
Joe BarraSenior Consultant – Business
Model Development
Portland General
Electric
Snapshot: Who We Are
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501(c)(3) nonprofit formed in March 2010
Membership organization comprised of utilities, technology companies, and nonprofit affiliates
Driven by the mission to advance a consumer-friendly, consumer-safe smart grid
We work by listening, educating, and collaborating
SGCC 2015 Research
The Changing Utility Business Model
How utilities are thriving in the new order of business?
How other stakeholders are empowering consumers?
Who benefits and who loses?
Speaker #1
Name Background
Gary High Senior Vice President of Smart Grid Solutions at Landis+Gyr
• Sets strategy and leads the team responsible for business development, product development and market presence for smart grid related solutions including: analytics, battery energy storage, load management, data management and more
• More than 20 years’ experience marketing to electric, gas and water utilities
• Previously worked for LogicaCMG, a global provider of IT and business services where he focused on work and asset management systems and system integration
• Held various positions with Schlumberger over a 14-year span with company’s metering and utilities segments
• Graduate of Texas A&M
© Landis+Gyr | June 4, 2015 |
Industry Trends: Adapting to a Changing Model
Gary HighSenior Vice President, Smart Grid Solutions
© Landis+Gyr | June 4, 2015 |
Global leader in smart grid
About Landis+Gyr
AMI market share leader
Grid, load and data management solutions
5,500 employees serving 3500 utilities
Managed services for more than 10 percent of U.S. meter population.
© Landis+Gyr | June 4, 2015 |
Flat demand is driving change
“Business models designed around steady and predictable growth will need to be revised to deal with slower and less quantifiable electricity usage patterns.” – Fitch Ratings
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Contributing factors:• Improved efficiency• Conservation• Demand response• Distributed generation
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US Energy Demand Growth
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© Landis+Gyr | June 4, 2015 |
Three trends that impact utilities and consumers
The way we pay for and use electric energy is evolving
Circuit-level management of distribution systems increasing
Distributed generation on the rise
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© Landis+Gyr | June 4, 2015 |
Changes in how energy is purchased and used
Transactive Energy
Prepayment
Variable Rates
Net Metering
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EV Charging
Storage
Smart Appliances
PCT/HVAC
Consumer side Load side
© Landis+Gyr | June 4, 2015 |
Circuit-level demand management
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Demand response for infrastructure management
Predictive analytics for outage prevention
© Landis+Gyr | June 4, 2015 |
Distributed Generation: rooftops to microgrids
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Energy ManagementStoragePV Installation
© Landis+Gyr | June 4, 2015 |
Conclusion
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Trending down: Distributed generation
Value-added consumer services
Fixed rates for cost recovery
Grid analytics to plan and manage operations
Trending up:
Large-scale, centralized generation
Cost recovery from kilowatt sales
Model-based utility planning
Speaker #2
Name Background
Joe Barra Senior Consultant – Business Model Development at Portland General Electric
• Develops business opportunities in the areas of Smart Grid, electric vehicles, demand response, energy efficiency, renewable energy integration, energy storage and distributed resources
• Joined PGE in 1994 as Manager of New Products & Services
• Previously Director of Energy Services at PacifiCorp where he directed the development of the Energy FinAnswer
• Bachelors degree from William Paterson University and has completed post-graduate courses in management, strategic planning, finance and statistics
• Serves on the Oregon Museum of Science and Industry board of directors
© 2015 Portland General Electric. All rights reserved.
The Changing Utility
Business Model
SGCC Peer Connect Webinar
Joe Barra
June 4, 2015
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Portland General Electric
844,000 customers
2,603 employees
Service territory population 1.7 million, 45% of state’s population
52 cities served
4,000-square-mile service area
3,414 MW of generation
Summer peak load of 3,950 MW (2009)
Winter peak load of 4,073 MW (1998)
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Full deployment of AMI
Interval data collection on all meters
~ 850,000 meters
Watt-hour resolution for C&I customers (residential moving that direction)
Salem Smart Power Demonstration Project
Centerpiece of NW Smart Grid Project
Battelle (PNNL), BPA, 10 other utilities
Laying the Foundation for a Smarter Grid
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PGE uses the AMI system every day, to read meters and communicate with distribution sensors. The system is also supports:
Demand-side management Customer segmentation
Dynamic pricing
Energy Tracker
Distribution asset utilization Avoided service (e.g. transformer failures)
Proper transformer sizing
Feeder conductor work
Outage management Avoided trouble calls
Faster on-premise outage response
Improved storm management
Faster fault location identification
Leveraging AMI
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Using AMI Data for Customer Segmentation
Developed load-based segmentation
Disaggregated customers based on summer and winter peak usage
Coupled with attitudinal segmentation to target residential demand response
programs
Useful findings
Summer peaking customers often distinct from winter peaking customers
High degree of correlation between socioeconomic factors and usage
patterns
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Summer Usage Winter Usage
Using AMI Data for Customer Segmentation (cont.)
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Using AMI Data for Asset Optimization
Developing plans to couple AMI and strategic asset management data to
deploy targeted DSM/DER to defer system upgrades
Map customer-specific peak contribution to overloaded assets
Strategically deploy DSM and/or incentives for DER
Multiple value propositions:
Improved reliability/power quality
Reduced cost to all customers through more efficient asset utilization
Lower bill for customers hosting DSM/DER
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AMI as an Enabler of Dynamic Pricing
Make participation easy by offering
customers programs that match their lifestyle
Critical peak pricing (CPP) pilot
(completed)
Peak time rebate pilot (under development)
o Targeted at critical load segments
Direct load control thermostat program
using programmable connected
thermostats (PCT)
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5 Summer Load Segments
2 segments are 59 % of summer peaks
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Available on PortlandGeneral.com
Provides customers access to:
o Daily/hourly energy usage charts
o Ways to save
• Energy Trust incentives
o Bill comparisons
o Alerts
Energy Tracker
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Daily/Hourly Usage Charts Bill Comparison
How Customers Use Energy Tracker
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Text Alert Email Alert
Alert – Weekly Usage
Customers can enroll online for text or email alerts.
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State-of-the-art smart grid demonstration highlights:
5 MW battery storage (firming and shaping)
High-reliability zone whencoupled with PGE’s Dispatchable Standby Generation system
Demand response
Detection & automated switching for advanced protection
Transactive control – automated economic dispatch via locational pricing
Solar/wind integration
Salem Smart Power Project
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Completed use cases Respond to transactive node/transactive signal
5 MW load response to under-voltage load shedding event
Distribution automation using advanced, intelligent relays
Up/Down frequency regulation
Real-time solar integration utilizing solar output signal
Use cases in progress 400 kW of demand response benefit
1.3 MWh of energy shift from on-peak to off-peak
2 to 4 MW of real-time voltage & frequency for system OPS
kVAr support and control on the distribution feeder
1.3 MWh of off-peak ability to absorb excess wind power
Adaptive Conservation Voltage Reduction (ACVR)
2014 – 2015 Valuation / Use Tests
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Net Effects Integrates real PV output through the feeder load
Feeder load is “conformed” to a desired load shape
Reduces fluctuation the feeder load
Benefits and Outlook Should be able to do same with a wind signal
Addresses the “duck curve”
Battery “firming” uses less energy than from a load-following plant
Less feeder load variability yields fewer load tap changes
o Less wear and tear on load tap changer
o Likely increase in transformer life (durability)
o Improved transformer reliability = greater customer system reliability
Solar & Wind Integration Use Case
Speaker #3
Name Background
Rob Caiello Vice President, Marketing at Allconnect
• Responsible for designing, developing and executing Allconnect’smarketing and communication strategies to expand brand presence and to increase consumer interactions from partner channels
• Previously focused on direct-to-consumer marketing through various senior-level marketing roles with DIRECTV and Home Shopping Network
• Began career in marketing in the utility industry with Niagara Mohawk Energy (now National Grid) for 8 years
• Master of Business Administration in Marketing and Quantitative Methods from Syracuse University
• Bachelor of Science in Industrial Engineering from the Rochester Institute of Technology
PROPRIETARY & CONFIDENTIAL INFORMATION OF ALLCONNECT, INC.
Going from Point B to Point A –
Connecting with customers in the new utility world
June 4, 2015
SGCC Webinar - Changing Utility Business Model
PROPRIETARY & CONFIDENTIAL INFORMATION OF ALLCONNECT, INC. 32
Our vision is to
shape the future
of connections,
one experience
at a time.
• Dedicated to energy industry
since 1998
• Engage with energy customers
regarding product and service
choices
• Trusted by energy companies
representing >50M homes
• Over 20M interactions annually
via phone, web, mobile
PROPRIETARY & CONFIDENTIAL INFORMATION OF ALLCONNECT, INC. 33
Your customer's journey is more complex than ever.
Multichannel
World
+
Multiple Devices
=
MULTIPLE PATHS
of
ENGAGEMENT
VS
PROPRIETARY & CONFIDENTIAL INFORMATION OF ALLCONNECT, INC. 34
Even technology does not always make for a smooth
journey from point A to point B
Google Inrix Nokia Apple
“The first peculiarity of driving with so much high-tech assistance came up right away. My
phone is telling me to ‘turn right’ but my car here is telling me to ‘turn left’. After almost 30
years of turning left out of my road, I followed the three apps that told me to ‘turn right’.”
Robert Siegel, NPR
Source: NPR, By NPR Staff – “The Tech Behind Traffic Apps: How (Well) Do They Work?” 5/18/2015
PROPRIETARY & CONFIDENTIAL INFORMATION OF ALLCONNECT, INC. 35
Gaps and Opportunities in the Energy Industry Today
Awareness Interest Motivation Action
Over 50% of
consumers never
heard of the term
“Smart Grid”
and fewer are
knowledgeable
about connected
home products 1,2
80+% of
consumers
believe benefits
of Smart Grid
technology highly
important 1
Over 80%
evaluate
energy
programs at
least annually 3
BUT,
Over 40%
don’t believe
utility acts in
their best
interest 1
Product and
service
penetrations
[mostly] in the
single digits 1
1 – Smart Grid Consumer Collaborative Consumer Pulse and Market Segmentation Wave 5, 2015
2 – Accenture – The New Energy Consumer, Architecting for the Future 2014
3 – Allconnect Proprietary Market Research Study 2014
PROPRIETARY & CONFIDENTIAL INFORMATION OF ALLCONNECT, INC. 36
Start with understanding the customer first through
segmentation…
▸ Current behavior data
▸ Demographic and
geographic overlays
▸ Historical behavior data
Connect consumers with the right products, at the right time
Typical Data Elements
▸ Customer-specific data
unique to customer/location
PROPRIETARY & CONFIDENTIAL INFORMATION OF ALLCONNECT, INC. 37
Educate, consult, and enroll in their channel(s) of choice
Target Movers and
shoppers
Highly targeted -
Homeowners
Single Family
Homes
Green- Minded
Untapped Market
Renters and
Homeowners
Income Qualified
Value
Proposition
Understand
complex choices
and save money
Save Money
/Environment
Reduce energy bill Easy/low cost way for
customer to
“contribute”
Convenience and
assurance
How to apply for
reduced energy
rates
Take Rates Ranges
…then, connect and engage with customers to achieve
desired outcomes
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30%
40%
50%
60%
70%
80%
EnergyChoice
DemandResponse
EnergyEfficiency
GreenProducts
Protection(e.g. Surge)
EnergyAssistance
Energy
Choice
Demand
Response
Energy
Efficiency
Green Protection
Energy
Assistance
PROPRIETARY & CONFIDENTIAL INFORMATION OF ALLCONNECT, INC. 38
Point B to Point A thinking to keep in mind
Point A to B Point B to A
Sell most profitable product Offer choices, build lifetime value
Get customer off phone as quick
as possibleEngage, educate, personalize
One way engagement – company
to customer
Build brand ambassadors
among customers
Communicate in multiple
channels
Communicate
across channels and devices
#areallysmartmove
Use data to make decisionsLeverage data to inform and
develop new solutions
ENGAGEMENT AND
CONNECTIONS
TECHNOLOGY
AND
ANALYTICS
ENGINE
ENERGY
SOLUTIONS
DIGITAL
SOLUTIONS
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END TO END
EXPERIENCE
Allconnect is the gateway
to the connected world.
For our consumers, we
make complex choices
simple and ordering easy.
And with our partners,
we create incremental
value through solutions
that are innovative and
customer-centric.
Thank you! You will receive a copy of the slides to the email
address you used to register.
Rob CaielloVice President, Marketing
Allconnect
Joe BarraSenior Consultant – Business
Model Development
Portland General
Electric
Gary HighSenior Vice President of Smart
Grid Solutions
Landis+Gyr