THE BUZZenergycentral.fileburstcdn.com/IntelligentUtilityMagazine/2014/SeptOct14.pdfVICE PRESIDENT,...

ON MARKETSTHE BUZZ

VOL 6, ISSUE 5 » SEPTEMBER/OCTOBER 2014 Realizing the digital utility evolution

®

AN ENERGY CENTRAL PUBLICATION

» WWW.INTELLIGENTUTILITY.COM

With advanced metering for electricity generating unprecedented amounts of data, Darby and Fred can solve just about any challenge that comes along. From helping utilities conserve resources and predict usage to recognizing and reducing theft,their work is essential to Itron’s commitment to our customers.

According to Darby and Fred, there is no end to what data can do. We’re limited only by our own imagination. We fi nd that pretty exciting, and it’s the perfect way to envision a more resourceful world.

itron.com/resourceful

– Darby McKee, Analytics Manager

“The most important questions are the ones we haven’t asked yet.”

Darby McKee and Fred Behrmann, Itron Analytics

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�COVER // SEPTEMBER/OCTOBER 2014

The matrix formations of honeycomb, the dedication of worker bees and the concept of all of that coming together for a sweet final product definitely influenced our choice of cover art for this issue on markets.

FEATURES // CUSTOMER FOCUS

6 WhatyoucanlearnfromSRPaboutcustomerlove+ #1: listen

8 Architectingforconsumerization+ A new energy consumer for a new market

10 Utility2Utility+ Glendale Water & Power

13CooperoffersthepowertoChoose+ Part of the women-in-energy article series

SPECIAL REPORT // KNOWLEDGE SUMMIT

15 Knowledgecommitteememberstalkindustryevolution+ The C-suite Insider interviews

DEPARTMENTS

4 Drawing the line

22 Operational perspectives

22 Transactiveenergyops

+ Not ready for peak load

23 Operatingthe

integratedgrid

+ Ideas to ponder

28 IT insights

28 IsITeatingT&D?

+ What’s the state of data on the wires?

29 Utility2Utility

+ SVP

32 International

32 Europe’sbigthree

+ So near, but so far apart

33 Soyouwanttoenter

anewenergymarket

+ Here’s what you need to know

35 Analytics

35 Analyticschangingthe

modernutility

+ Reams of data coming in

36 Intothedatazone

+ SMUD’s analytics evolve with the smart grid

38 By the numbers

38 Entergy’sZimmereris

eyeingyourpower

+ But that’s a good thing

40 Out the door

40 Wadingthroughindustry

fearmongeringandthe

newGodzillamovie

+ Just what the heck are the facts on EMPs and the grid?

Vol.6,No.5,2014byEnergyCentral.Allrightsreserved.Permissiontoreprintorquoteexcerptsgrantedbywrittenrequestonly.Intelligent Utility®ispublishedbimonthlybyEnergyCentral,2821S.ParkerRoad,Suite1105,Aurora,CO80014.Subscriptionsareavailablebyrequest.POSTMASTER:SendaddresschangestoIntelligent Utility,2821S.ParkerRoad,Suite1105,Aurora,CO80014.Customerservice:303.782.5510.ForchangeofaddressincludeoldaddressaswellasnewaddresswithbothZIPcodes.Allowfourtosixweeksforchangeofaddresstobecomeeffective.Pleaseincludecurrentmailinglabelwhenwritingaboutyoursubscription.


CONTENTS

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29

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DRAWING THE LINE

Kathleen Wolf Davis

Editor-in-Chief, Intelligent Utility magazine [email protected]

A FEW YEARS AGO, MY FRIEND APRIL ANNOUNCED THAT

her newest hobby would be beekeeping. It stopped all conversation at the din-ner table but dead. Hobbies, to our group of friends, were things like photography or painting or, well, doing what we were all doing right then—going out to dinner.

Inevitably, the first response was, “Aren’t you afraid of being stung?”Being stung is, actually, not high on the list of beekeeper fears. I know this

because I grew up with a beekeeper: my father. We had an apiary at just about every farm we owned when I was a child. And, despite the fact that there was a hilarious cartoon-like episode where my brother decided to peek into the hive, dropped the lid and was chased by a cloud of angry honey bees across the cow pasture, it was all pretty tame. (My brother didn’t get stung, despite his stupidity.)

In all my childhood years of “working” with the bees, I never got stung either. Now, part of that was Dad was good at smoking those bees. And part of that was Mom was super good at pointing out if a bee was still clinging to the comb before she brought the frame into the house for processing. (And, honestly, part of that is bees are just pretty darn nice bugs: cute and cautious and probably only going to sting in dire emergencies—like you stepping on them.)

My personal job in this sweet production process was turning a handle over and over and over. I ran a machine I called the spinner (because it spun the frame around in a circle and separated out the honey from the comb). Technically, it’s called the extractor, I believe.

In this issue, we’ve extracted a lot of sweet details about the massive hive of the energy marketplace concept. Between the honeycomb matrix and the sweet products both bees and markets produce, we couldn’t resist the analogy. (And there are as many kinds of energy marketplaces today as there are types of bugs mistaken for sweet little honey bees in the world.) We’re spinning information from as much of that marketplace matrix as we can, from how a utility can better position itself in an open market with competition to transactive energy and the use of online market-places and analytics. We’ll look at the operational and tech requirements needed to build the comb on new markets and the security fears that come with that building.

Now, in the world of beekeepers, it takes a few years to build up a hive and start really producing local honey. Luckily, it didn’t take us nearly that long to build this collection of market-based information for you. Take a sweet read and let me know what you think. My digital door is always open at [email protected].

And be nice to the bees out there. They’re really not plotting to sting you. I promise.

What’sthebuzz?www.intel l igentut i l i ty.com

EDITOR-IN-CHIEF

Kathleen Wolf Davis

[email protected] 303.228.4731

FEATURE WRITERS

Paul De Martini, Derek Handova, John R. Johnson,

Lorenzo Kristov, Morten Lund, Naomi Manley-Casimir,

Jennifer Potter, Tim Porter, Tim Probert

COPY EDITOR

Martha Collins

LAYOUT EDITOR

Brian Gilbert

ACCOUNT EXECUTIVES

Ken Maness, Todd Hagen, Eric Swanson

[email protected] 800.459.2233

CUSTOMER SERVICE

Shelly Cotton 303.228.4755

PRODUCTION

Michele Goebel

ENERGY CENTRAL

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What you can learn from SRP about C U S T O M E R

LOVE

CUSTOMER FOCUS

ARIZONA’S SALT RIVER PROJECT (SRP) recently landed on JD Power’s 2014 list of customer champions.

They’ve also been at the top of satisfaction surveys for over fifteen years—at the very tip of the very top.

So, in an industry plagued by the notion that utilities don’t give a hoot about their customers, what is SRP doing so very right?

Well, first of all, they are focused on and passionate about their customers, according to Mike Lowe, associate general manager and chief customer executive with Salt River Project.

“I can’t emphasis enough the word passion,” he added. “We have an overriding vision to be rewarding, easy and pleasant to do business with.”

In other words, first and foremost, they are all about pro-viding value to the consumer. That’s their immediate priority. It’s not extra. It’s not a plus or a bonus. It’s front and center, and it’s imbedded in the very fabric of the company.

“It’s the culture,” added Gena Trimble, SRP’s associate

general manager and chief communications executive. Read that one again: It is the culture. Not “we added it

to the culture.” Not “we blended it into the culture.” But “it is the culture.”

And there are a bevy of programs small and wide across SRP that illustrate that culture.

Among the big ones: Every single day SRP employees share what Trimble dubbed “customer service minutes.” These are stories—both positive and negative—from inside and outside the company (and from inside and outside the industry) to give everyone a better handle on customer service conundrums.

Among the small ones: Trimble told a charming story about a 90-year-old gentleman who came in person to the utility’s lobby because he could no longer read the meter on his house. (The new smart meter was confounding him.) The customer service folks called over to metering, which was in a facility a few miles away. And the fellow who answered the phone dropped what he was doing,

+#1: Listen

By Kathleen Wolf Davis

got in his truck, drove to the lobby and sat down with the man to explain how it all worked.

“That’s how our employees treat every situation,” Trimble added.

In fact, she had a second example of this very personal service. During a meeting of senior managers one day, a customer had been accidentally routed to the phone in the conference room. The senior director of customer service, Renee Castillo, answered it and did not pass it on, did not transfer the customer to a rep. She took notes and solved the problem right there.

And then, presumably, she went back to the meeting.That last example may be indicative of both a small and

wide approach, as it’s part of what both Lowe and Trimble called “first call resolution.” Yes, that means exactly what it sounds like: They are dedicated to solving a customer’s issue the very first time the customer calls without a long wait and without a lot of rerouting and rigmarole.

“We strive, in all ways, not to keep our customer waiting,” Lowe added to the story. “Ninety percent of our calls are answered within 30 seconds, and we answer three million calls a year.”

And there are numerous other programs on the small and wide list, including a prepayment service that helps man-age power with in-home displays, a time-of-use program with nearly 275,000 customers invested that’s been around for over 30 years (and was one of the first in the country), a coordinated effort with other utilities on a home energy sav-ings concepts, and limited income programs that help with payment options.

All of those programs require not just a passion for and focus on the customer, but also deep knowledge about the customer.

SRP does a lot of research to get these programs just right, which is something Trimble doesn’t see happening a lot at other utilities—at least, not yet.

SRP does targeted marketing with tons of research. They look at preferences. They develop connections for customer engagement from those preferences (since they’ve found that the more engaged a customer is, the more satisfied they are).

On the backend, this requires a massive data warehouse that they’ve developed over many years. They’ve added a ton of research tools to that warehouse and now have the capabil-ity to do their own focus groups. (How many utilities can really say that?)

They do the major work on research in house, but they tend to outsource the fielding part of things. They also research their brand strength and have developed a tool to do just that. They check that brand strength against a baseline quarterly.

To follow in SRP’s footsteps on customer service, Lowe’s biggest chunk of advice is finding the right employees,

since getting employees to commit to the culture is the only way this level of service really works. (See that story about the elderly gentlemen and his meter reading again for an excellent example.)

“Hire people who care about the customer,” he said. “Hire for attitude and then train for skill.” (They “speed date” ap-plicants with 30 potential managers and coworkers during the employment interview.)

And, once you’ve hired the right employees, then really care about those employees. Show them love, and they’ll pass that along to the customer. It’s really that easy, Lowe advises.

He also suggests one that sounds easy but can be time-consuming—namely really listening to customers. This can involve monitoring channels, taking in feedback and making effort to ask and follow up. (Trimble notes this is where the research comes in. Plus, that should help in figuring out your brand strength as well.)

Finally, he adds not to be afraid of being a tech head, of sorts. He pointed out that SRP was one of the first to use smart meters and prepay and TOU. And they continue to in-vest on the technology front to make customers happy—well, happier, anyway—with updated website communications tools and mobility applications centered on what customers really need.

“We always look at the message of any new technology, program or software with the idea of why a customer should care,” Trimble added. “What’s in it for them? When you do that, what you build reflects customer desires.”

Trimble’s advice for other utilities hinges on that question: Always ask, “Why will customers care?”

Oh, and she can’t stress this enough, measure everything.“We can constantly modify projects and programs to make

them better. It’s the old adage: what gets measured, gets done. These metrics will send you in the right direction, as long as those metrics reveal the customer voice,” she said.

“I’m actually quite surprised at the utilities that don’t have a customer mindset,” Lowe added. “I’ve had peers tell me ‘It really doesn’t matter how fast we answer the phone.’ It does matter.”

Lowe added that, to follow the SRP path, those utilities have to shift their focus from regulators and shareholders and government regulations and compliance to a customer-first approach that starts from the CEO on down—and is not just a marketing concept. As he said before, it’s a passion.

“We actually care about the customer and the community,” he said. “That started about 20 years ago. We realized we had to change how we did business, and we never looked back. Remember, good customer service is actually good business. I think we’re a great example of that.”

Many thanks to Jeff Lane at SRP for facilitating (and doing most of the heavy lifting for) this article.

CUSTOMER FOCUS

CONSUMERS CONTINUE TO BE IMPACTED BY MARKET RESTRUCTURING AND

liberalization in a number of North American markets. Accenture’s latest research,

“The New Energy Consumer: Architecting for the Future,” underscores a common truth:

once consumers realize they have choice, they become increasingly aware, and thus,

more demanding.

Chalk it up to a surge in “consumerization”—the broad trend taking hold as con-

sumers and businesses engage with the new world of ubiquitous consumer electronic

devices and the content-rich digital services accessible through them. Consumerization

is reshaping the way people live and work—and, in many ways, transforming energy

consumers from passengers to drivers.

To thrive in the new energy ecosystem, energy retailers will have to shift their

market strategies and customer service approach. The first step is to understand how

competition, convergence and connectivity are fueling consumerization—and then to

build a foundation of agility for capturing value amid accelerating change and evolv-

ing expectations.

COMPETITION: THE RIGHT TO CHOOSE

Millions of North American consumers live in states and provinces that allow “shop-

ping around” for electricity or gas. According to the Distributed Energy Financial Group

(DEFT LLC), to date, about 17 million households have exercised the right to choose and

are selecting from a growing number of retail electricity products. Yet competition for

the consumer is occurring in other, traditional regulated markets as well. The growth

of distributed generation and other home-energy-related technologies is ushering new

players and new business models into the North American power industry, and challeng-

ing the old ones.

So what do the latest findings from Accenture’s annual New Energy Consumer re-

search program tell us about consumer preferences and the changing ecosystem?

A majority of consumers express interest in receiving next-generation home energy

solutions from their energy provider. Providers that fail to offer such solutions risk erod-

ing their customer base. However, consumer trust in energy providers remains low, at 26

percent, in 2014. As such, ‘shoppers’ are gravitating toward retailers offering simplified

services and interactions for a discount, more service personalization, and novel reward

programs. With more customer-centric services and dynamic offerings, innovative

brands are likely to lure a significant number of residential customers.

CONVERGENCE: NEW PLAYERS IN THE GAME

More than half of global energy consumers would consider installing connected-home

solutions or solar panels in the next five years or purchasing an electric vehicle in the next

decade. As new products and services tempt consumers, energy providers face increasing

competition from non-traditional players—from traditional retailers and service providers

to new entrants in distributed generation installation. The news is not all bad: while

specialized providers are consumers’ default choice for solar panels and connected-home

+A new energy consumer for a new market By Tim Porter and Naomi Manley-Casimir

ArchitectingF O R C O N S U M E R I Z AT I O N

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solutions, energy providers rank a very close second. As the energy market continues to

converge with other home services, utilities need to do more than keep a watchful eye

on new threats to traditional core commodity revenues. They also need to take the lead—

seizing targeted opportunities around new products and solutions.

CONNECTIVITY: ‘ALWAYS-ON’ CONSUMERS

With the pervasive adoption of digital and mobile technologies, consumers expect to

be able to interact anytime, anywhere, on their terms. More than 80 percent of consum-

ers expect energy providers’ digital service to be on par with, or better than, digital

service from online retailers, banks, phone and cable companies, and government

agencies. As distributed generation, storage and connected home technologies become

more affordable and more widely adopted, retail and regulated utilities must find ways

to adapt. Leading energy providers will be those who apply digital capabilities to new

and existing processes in order to rapidly bring to market and support increasingly

complex products and services as well as to reduce customer acquisition and ongoing

service costs.

ARCHITECTING FOR AGILITY

No matter how the forces of consumerization are affecting an energy provider, the

first step is the same: create the right conditions for addressing and adapting to market

and consumer change. As retail energy providers craft their strategies and portfolios

for the future, agile, cost-effective technology solutions are increasingly important. In

architecting for agility, providers need to:

SIMPLIFY AND ELIMINATE. Aggressively drive operational excellence in the front of-

fice, back office, IT and operations with a goal of simplifying processes and procedures

and eliminating customer dissatisfiers.

AIM FOR IMMEDIATE ACCURACY. Reduce customer effort by developing next best

action capabilities and implementing a channel preference center platform.

ADOPT A CUSTOMER MINDSET. Start from an outside-in customer perspective, by

aligning all customer touch points and experiences, including digital, and establishing a

continuous model of relationship building with the customer.

DEPLOY RESILIENT TECHNOLOGY ALTERNATIVES. Adapt IT deployment advance-

ments that have been successful in other industries, such as embedded and automated

analytics, managed service structures, and value-based partnerships, to establish a

platform for real-time insight development, customer engagement and service delivery,

new product and solution innovation, and targeted offer execution.

By building the right capabilities now, energy providers will be better positioned to

scale quickly, seize new opportunities, tap into unconventional markets and architect a

future-proof foundation of simplicity and flexibility.

Tim Porter is a managing director in Accenture Strategy focused on North American

retail energy providers. Naomi Manley-Casimir is the director of Accenture’s Innovation

Centre for Utilities and leads the New Energy Consumer research program.

“The New Energy Consumer: Architecting for the Future” draws upon five consecutive years of end-consumer research, analysis of consumer and technology trends, insights from leading energy providers, cross-industry experience and knowledge of managing utility customer operations.

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CUSTOMER FOCUS

GLENDALE WATER & POWER IS A MUNICIPAL

utility that serves the citizens and community of Glendale, California including over 33,744 water and 85,358 electric customers. Glendale Water & Power’s vision is to provide its customers with reliable and sustainable water and power services that are cost effective and innovative.

For this installment of the utility2utility article series, we spoke with Steve Zurn, general manager, about home energy management systems, customer surveys and other plans the utility has to grow better tech and, therefore, better customer programs.

INTELLIGENT UTILITY: EARLIER THIS YEAR, YOU COM-PLETED A SURVEY OF SOME OF YOUR CONSUMERS WITH CEIVA ENERGY, WHICH PROVIDES HOME ENERGY MANAGE-MENT SYSTEMS. WHAT WAS THE IMPETUS FOR THIS SURVEY? (IN OTHER WORDS, WHY DO YOU THINK IT WAS NECESSARY?)

ZURN: In late 2010, Glendale Water & Power (GWP) made an investment to deploy digital electric and water meters with our customers. One of the advantages of digital meters is that they provide energy data every 8 sec-onds. Previously, our customers only got this information every two months in their bill. We realized that we had a huge opportunity to leverage our digital meter investment

and to get customers information faster than they had ever had it before—fast enough to allow them to see the impact of their usage, giving them the power to make decisions that impact their energy bill. Additionally, we’re always looking for better ways to reduce energy demand and improve our relationship with our customers, which are key goals for GWP.

In 2012, we deployed CEIVA Energy’s Homeview home energy management platform to assist us in best utiliz-ing our digital meters to better meet our goals. As part of the initial deployment, we gave our customers CEIVA’s Homeview in home display (IHD), which is essentially a turbocharged digital picture frame. The IHD integrates with CEIVA’s Homeview platform that includes mobile phone and tablet apps that present Glendale customers with real-time data from their digital meter, weekly and monthy views of their usage, and electricity and water conservation messages.

Zurn: “The survey

validated that our

deployment has been a

good investment.”

Utility 2Utility

Glendale Water & Power+

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11

What really impressed us was how it blended real-time energy and water data with customer photos synced from sources like Facebook and Instagram. Customers enjoy seeing their personal photos, and stick around for infor-mation about their energy and water use. We think of the frame as our “Trojan pony” that captures attention and reroutes it to energy and water use. With regular engage-ment with utility information, we expected to see notable utility savings.

We love the platform, but in order to expand we needed a true sense of our customers’ take on the program. Developing a customer survey was the natural next step.

INTELLIGENT UTILITY: WHAT WERE THE TOP FINDINGS OF THE SURVEY?

ZURN: The survey validated that our deployment has been a good investment. We’ve seen strong initial results around helping customers improve energy knowledge and driving behavior changes to reduce their bills.

The Homeview deployment assisted in a nine-fold im-provement in respondents’ understanding of their energy consumption. Awareness of hourly electricity costs among the respondents grew by 85 percent after the deployment.

Also, 95 percent of participants reported that install-ing the Homeview was easy. That’s actually very impor-tant, as customers have to install the Homeview for the program to work.

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CUSTOMER FOCUS

INTELLIGENT UTILITY: WERE THERE ANY SURPRISES IN THE SURVEY RESULTS FOR YOU?

ZURN: We were confident that this deployment would be an effective way to open up the lines of communication between us and our customers, but we were pleasantly surprised to learn that 83 percent of the participants actu-ally changed their behavior to reduce their energy and water use. That draws a direct con-nection between real-time informa-tion and action.

Customers seemed pleased by how easy it is to use, and even uploaded their own pictures to their Homeview frame. Eighty-eight percent of the respondents liked the messaging they received through the frame, reinforcing that the platform is an effective channel for us to communicate with our customers. Messaging includes conservation information such as tips and suggestions, points customers to our GWP website, and also provides notifications and citywide alerts.

INTELLIGENT UTILITY: I SAW THAT YOU RECENTLY EXPAND-ED THE PROGRAM. WHAT PROMPTED THAT DECISION?

ZURN: With strong survey results and a long waiting list of GWP customers who wanted to join the program, it was an easy decision to expand the program and engage more cus-tomers to see how they used Homeview and how it will help them conserve and engage with the utility. The expansion means the program will reach more than six times as many customers, helping GWP more quickly reach our energy ef-ficiency, demand response and customer engagement goals.

The expanded program will give more homeowners ac-cess to the frame and services, while expanding to include a programmable communicating thermostat. These fea-tures will tie in with our new demand response program that will enable customers to dramatically save on energy costs during times of peak demand.

INTELLIGENT UTILITY: HOW DOES PROVIDING A HOME ENERGY MANAGEMENT SYSTEM FIT INTO YOUR CONSUMER SERVICE PLANNING?

ZURN: Adopting a home energy management system gives us an inside look at the energy being used in the home. As a result, we can target the most relevant pro-grams to our customers, improving customer service.

For example, our new demand response capabilities

mean we can target energy reduction programs at custom-ers who are using the most energy, giving us the biggest bang for the buck. That means that customers who hear from us will save a substantial amount of money, while customers who don’t hear from us aren’t disturbed for a minor payout. It all adds up to superior customer service.

We’ve always felt that a superlative experience is the best customer service. This proj-ect is clearly helping us deliver a better experience to customers and driving engagement across Glendale.

INTELLIGENT UTILITY: HOW DOES IT TIE TOGETHER WITH YOUR SMART GRID PLANNING?

ZURN: Deploying demand response programs is critical for us. Peak time power use is a major cost center for us, and we are focused on many paths to reduce that cost—and avoid the need for additional energy procurement.

The digital meters are in place. And now we have the platform in place to not just deploy a demand response program, but also deploy a smart demand response program. That means limited disrup-tion to our customers, all in service of delivering the most compelling returns.

INTELLIGENT UTILITY: WHAT ADVICE WOULD YOU GIVE OTHER UTILITIES PUTTING TOGETHER RESIDENTIAL-CUS-TOMER-BASED ENERGY MANAGEMENT PROGRAMS?

ZURN: Make engaging with energy use easy and fun. Stay away from old, dull graphs, and instead provide instant views and real-time usage of electricity with relevant comparisons that give information context. Providing digestible and visually interesting information at a glance makes it a lot easier to engage customers. A sense of humor is key, too.

Put customers first. Give customers the power to join your program easily, and let them opt-out without any hassle. Many reports show that demand response is a fail-ure when it’s a surprise; instead, keep customers informed at every step. No surprises means better results.

Build out capabilities with expert help. As a utility, our expertise lies in keeping the lights on. Partnering with a company like CEIVA Energy that is dedicated to customer engagement and home energy management makes it easier for us to do our jobs, while helping us meet energy goals.

Zurn: “Providing

digestible and visually

interesting information

at a glance makes it

a lot easier to engage

customers. A sense of

humor is key, too.”

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13

“AS KAYAK IS TO TRAVEL, CHOOSE ENERGY IS

to electricity,” said Kerry Cooper, CEO of Choose Energy when I asked how she described her gig to people outside of the industry. But even people inside of the industry might be a little confused at what Cooper does. An “energy marketplace” really isn’t the norm in most states, as Cooper noted. In fact, most customers still live in areas dominated by regulation.

Still, the number of deregulated states (which allow

+Part of the women-in-energy article seriesBy Kathleen Wolf Davis

customers to decide what company is going to supply their power) is growing, and marketplaces like Choose Energy help a customer grapple with the questions involved in that choice: Can I get fully renewable power? Can I get any money off my bill a month? Can I get something free (say, a smart thermostat)?

Still, while Cooper loves her gig, it’s not where she’d pictured herself. As a kid, she dreamed of being a pedia-trician. She went to college and studied engineering on

Cooper: “As Kayak is to

travel, Choose Energy is

to electricity.”

COOPER OFFERS THE POWERTOCHOOSE

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CUSTOMER FOCUS

her way to pre-med. Then, her mother ran some reverse psych on her, and that medical idea took a backseat to engineering entirely.

“At the end of my first semester, I told my mom that I thought I’d drop out of engineering, and she told me she’d never seen me as an engineer,” Cooper said. “Well, that sealed my drive to get an engineering degree.”

So much for helping sick kids, though engineering did lead to her helping people in a fashion, as it led, eventually, to running Choose Energy, after a career that included high tech, oil & gas and even paper. Now here she is in utilities. And, with each new industry, she grew.

For Cooper, that’s the secret.“I think

ultimately be-ing curious and always want-ing to learn has driven me more than any-thing else,” she revealed.

Being curi-ous has now led

her into a curious new world in our industry—namely, the energy startup. But she loves the variety that brings to her day. Choose Energy is a very small team. So, most days, she talks with team members about business and upcoming innovations. She also makes it a point to touch base with her network in Silicon Valley and with customers and partners. There are a lot of what market-ing calls “touch points” in Cooper’s day.

Just about every morning, Cooper gets up very early and enjoys some quiet time. For her, that usually in-volves running or hiking. As she’s in the San Francisco area, that could involve a spin around the Presidio or simply a neighborhood jog. While she’s running, she thinks.

Recently, we asked her to think about something very specific on her morning run: what advice she’d give other women in the power industry.

Now, we don’t know if she ran around the Presidio for these results, but we do know the results reveal great advice. It seems running and thinking are a lovely com-bination.

Cooper has five tidbits for success. The first is simple:

work hard. “I know it’s basic, but success isn’t luck,” she said.

Instead, it’s about proving your value. It’s about exceed-ing expectations, not just meeting them. It’s about mak-ing “doing great work” the baseline.

“This doesn’t mean you have to be the first one in and the last one out, but it does mean producing great results and truly investing in what you’re delivering. Have well-founded opinions and don’t shrink from sharing them,” she added.

Cooper also advises paving your own way. (That’s tidbit #2.)

“We must each be our own CEO—carve out our place in the work world,” she noted. And, with that gig, comes knowing when to keep on course or when to veer—and knowing how to engage your own mind, heart and soul to be productive over a single day or over a whole career.

Along with working hard and paving your own way, Cooper suggests women be curious, network and develop a thick skin (tidbits 3, 4 & 5). And curiosity is simple: Ask questions. Want to know more. Read a lot. Think a lot and talk to people, which leads us into the networking concept.

“The verb network bothers me, as it reminds me of a transactional experience: I want to meet you so you can help me,” she said. “But it’s not like that in reality. I enjoy meeting new people and learning from them. Sometimes I give; sometimes I receive. And that’s an important bal-ance to maintain. But asking for help can be the thing that kicks off a lifetime relationship, even if, at first, it feels a bit transactional.”

Finally, there’s that thick skin concept, which may be great advice for anyone—inside or outside the industry, male or female. Cooper admits that this may be the hard-est tidbit in her collection here—and it’s one she’s still working on as well—but being able to separate you from your work is crucial. She adds that “feedback is not an in-sult.” In fact, if you can take it well and be resilient in your thinking, you’ll succeed in any field, not just energy.

It’s all good advice for wherever you may land in your career. And, so far, no one in this article series had a clue they’d end up where they are now. It’s all a mystery—even to Cooper.

“I’m pretty sure I would have never predicted I’d be in this role even 10 years ago, but here I am, and I love it,” she added.

Cooper: “We must each

be our own CEO—carve

out our place in the

work world.”

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Knowledge committee members talk industry evolution

SPECIAL REPORT

+TheC-suiteInsiderinterviews

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KNOWLEDGE SUMMIT

HERE AT INTELLIGENT UTILITY, WE’VE begun a new article series focused on interviews with util-

ity executives. Since our upcoming Knowledge Executive Summit is the perfect place to gather insiders for this series, we’ve started with select committee members and their viewpoints of the industry.

We spoke with Val Jensen, senior vice president (SVP) with ComEd; Randy Senn, CIO of SCANA Corporation; and Bob Geneczko just days after his retirement from PPL as their VP of customer services.

INTELLIGENT UTILITY: FROM YOUR VANTAGE POINT, WHAT’S THE INDUSTRY DOING RIGHT THESE DAYS?

JENSEN: I am not unique in wanting to hold a picture of our customers in my head every day. Just about everyone I know in my position is doing the same thing and that is leading, I think, to a rebirth of a commitment to customers. I guess it’s easy to be cynical about utility customer service, and I will be the first to admit that we have a long way to go. But from providing rapid and transparent outage informa-tion, to the expansion of digital channels, to more conve-nient billing options and expanded services, I think the industry is doing a lot right. The challenge is not in starting the journey; it’s in seeing it through.

SENN: I think our industry is probably taking advantage of new technologies as well as or better than any other industry. Smart grid technologies and strategies have had a big impact on our industry. We have probably leveraged GIS technology in our business processes as well as any other industry. Our industry has probably addressed cybersecurity issues as well as anyone. Big data is having a big influence on us and data analytics are providing some great opportunities for us. I really believe that in the last few years, our industry has been a leader in leveraging technology, which is significant for the historically conservative utility industry.

GENECZKO: There seems to be more focus on the “cus-tomer experience.” Once again, technology is making a difference for those who choose to adopt that approach.

INTELLIGENT UTILITY: NOW THE HARD QUESTION. WHAT’S IT DOING WRONG?

JENSEN: I think we could, as an industry, be more transparent. There can sometimes be a tendency to want to circle the wagons when we’re faced with challenge. When we do that, it is really hard to understand how others might be seeing the issue and that makes getting to a resolution that much harder. It also has contributed to the perception that some have of our industry as being slow to change, lacking vision or somehow out of step with customers.

SENN: In my opinion, the biggest issue that utilities face is how regulatory compliance requirements drive many of the things we do. While I am a firm believer that many of the compliance requirements have driven a lot of good in our industry, I am concerned that regulatory compli-ance requirements sometimes are more important than best practices and often drive us away from them. I know NERC CIP, for example, has required us to make changes in our operations that sometimes translate into less-efficient practices while not creating a better cybersecurity position for us. Sometimes FERC standards of conduct requirements are inhibiters to deploying technology that encourages and facilitates collaboration within our company.

GENECZKO: It’s funny, but every now and then you read articles in trade magazines talking about industry changes and the concept that our business will erode with the onset of competitors who are better at employing technology (both at the generation and the wires levels with distributed generation, microgrids, etc). What concerns me is that some of these articles allow for write-in comments, and there are many that indicate that individuals are in denial. So is that thinking typical of utility management? It’s not clear, but, at a minimum, all should stay vigilant.

INTELLIGENT UTILITY: HOW WILL THIS INDUSTRY EVOLVE OVER THE NEXT DECADE?

JENSEN: The thing about evolution is that—as the product of random change and natural selection—we can’t really know how something will evolve. If I straight-line the trends I see today, ten years from now, we’ll have more distributed generation (DG), we’ll have customers exercis-ing much more control of how and when they use electric-ity, we will be on a path to a much more resilient system by virtue of utility and customer investment, DG and microgrids, and we will be figuring out how to manage this more transactive system. Customer service will be increas-ingly smart, using segmentation, transaction history and analytics to create a more seamless and anxiety-reducing experience for customers across channels. And I’m sure something completely unexpected will happen.

GENECZKO: Again, it’s all about technology. Let’s look at

AMEETINGOFTHEINDUSTRYMINDS

Knowledge Executive SummitNov.10-12,2014NewportBeach,California

http://knowledgesummits.com

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the southwest U.S. Solar, especially rooftop, is redefining the generation market—and, furthermore, causing a heck of a problem for grid operators. Who’d ever have thought that utility generators would have to back down during the day and crank up at night? So either we embrace technol-ogy, or it will eat us up.

But take that a step further. The industry must embrace the customer experience because, believe it or not, this may distinguish us from newcomers. Even if you’re not expect-ing direct competition, customers have so many ways that they can affect the utility. Just read a few customer posts on Facebook or Twitter and then watch the reactions of legislators and the pressure they then place on their utility commissions and directly on the utility. The world really has changed.

INTELLIGENT UTILITY: WHAT ADVICE WOULD YOU GIVE NEW HIRES AND MILLENNIALS JUST COMING INTO THE INDUSTRY?

JENSEN: You have the opportunity to help redefine and perhaps recreate what is arguably our most strategic industry. As hard as it might be on both you and me at times, this indus-try needs your disruptive creativity, innovation and passion. Come help me make this a business that delivers for every customer what you would want it to deliver to you.

SENN: I get the opportunity to speak to all of our new hires when they join our department. I tell them that they are bringing new ideas and new skills into our workforce and that we need to leverage them to be successful. I ask them to raise their hands if something doesn’t seem right and question why we do things the way we do. We have made a lot of changes over the last couple years based on suggestions from new employees. I talk about the impor-tance of building relationships, and I talk about the impor-tance of being flexible to take on new roles. I have served in many different roles in my career, and I believe that has been a big benefit for me. I finally tell them to make sure they keep a proper balance between their home and work lives and try to have fun.

Geneczko: Help to educate management in the thinking of the newer generations.

INTELLIGENT UTILITY: WHAT ONE PIECE OF ADVICE WAS THE BEST YOU EVER GOT? ARE YOU WILLING TO SHARE THAT WITH US?

JENSEN: “Trust your gut,” followed in close second by “know your numbers.”

SENN: The most important piece of advice I have ever been given is about the importance of listening to others. Leaders not only have to make sure they are listening to their employees, they have to convince their employees that they have heard what they are saying and convince them that their comments are truly being considered. If an

employee starts to believe their comments and suggestions are not being considered, they start to lose respect for their leaders. This also applies to peer-to-peer communications as well. In meetings, I often see when one employee is making a comment, another employee has already stopped listening and is already crafting his response in his mind. I believe great leaders are willing to take a stance on an issue only after listening to and considering feedback from the key employees involved.

Geneczko: Actually, I have a few. First, listen first to hear, not just to argue. So many opportunities are lost when we assume that we know all and then fail to recognize the value that others bring to the table. So, listening is number one.

The second is simply to refresh yourself periodically, which may mean a job change. You can bring new per-spectives and, likewise, learn from others to keep yourself stimulated—even inside the job.

Finally—and maybe most importantly—you spend so much of your life at work. So, pursue something that will provide a rewarding experience. Yes, it should be fun. If it’s not, consider finding something else to do if you can afford to do so. It may require tradeoffs, but the change will be rewarding in the long run.

We’re so much cooler online: This special report has been edited from longer interviews. To read the full interviews with each insider—including their favorite parts of the job and how their jobs will evolve with changing industry needs—visit our intelligentutility.com website and type “C-suite Insider” into the search box.

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SPECIAL REPORT

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Register Todaysmartcities.energycentral.com

Shaping a Smart Energy Future

Need a Smarter City? We Have the Conference For You!

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Smart Cities 2014 is the only event focused on collaboration strategies for utilities needing to lead Smart Cities initiatives.

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Michael Jansen Chairman & CEO, Cityzenith

Jason Anderson President, CleanTECH San Diego

Laura McDonald Director Public Aff airs & Project Communications, SDG&E

Jacques Chirazi Program Manager - Clean TECH, City of San Diego

Byron Washom Director of Strategic Energy Initiatives, UC San Diego

Dian Grueneich Commissioner Emeritus CPUC and Research ScholarStanford University Precourt Energy Effi ciency Center (PEEC)

Greg Johnson Program Director, Envision Charlotte

Lisa Lewis Vice President of Corporate Communications & Media Relations, CPS Energy

Richard Morgan Green Building and Sustainability Manager - Customer Energy Solutions, Austin Energy

Val Jensen Senior Vice President, Customer Operations, ComEd

Lee Anne Nance Executive Vice President, Research Triangle Regional Partnership (RTRP)

Kim Zentz CEO, Innovate Washington

Terry Mohn CEO, Microgrid Alliance

Drew Johnston Director, Central Texas Fuel Independence Project, Austin Energy

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Ashley Horvat Chief EV Offi cer – Offi ce of Innovative Partnerships, State of Oregon

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SPEAKERS

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Monday, November 3

7:30am-6:30pm Registration & Information

7:30am-8:30am Breakfast & Networking

8:30am-9:30amKeynote Presentation:Energy as the Foundation of the Smart City

9:30am-10:15amKeynote Presentation:Host City Case Study: Cooperation and Smart City San Diego

10:15am-10:45am Morning Beverage Break

10:45am-11:45amKeynote Presentation:Regulatory Hurdles and Opportunities for the Smart Cities

11:45am-12:30pmPanel Discussion: Financing the Smart City: Private, Public, and Partnership Options

12:30pm-2:00pm Lunch & Networking

2:00pm-3:00pm Session 101 - City Case Study: Envision Charlotte – Building Energy Effi ciencySession 102 - Utility Case Study: BPA and Port Angeles Demand Response

3:15pm-4:15pm Session 201 - Utility Case Study: Austin Energy Green Building ProgramSession 202 - Real-Time Visualization and Advanced Distribution Management Systems

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8:30am-9:30am Panel Discussion:Securing the Smart City

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11:00am-12:00pm Session 401 - Advanced Sensing Applications and the Internet of the GridSession 402 - The Water/Energy Nexus

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OPERATIONAL PERSPECTIVES

OVER THE LAST DECADE AND A HALF, FEDERAL AND STATE

demands for a more reliable and economically responsive electrical grid have grown immensely. Possible solutions to this demand include transac-

tive energy (TE), the combination of economic and control techniques intended to improve grid reliability and efficiency. TE is supposed to take the concept of distributed energy resources (DER) to the next level. If all goes according to plan, it could supplant the current power transmission model by the year 2020.

For some within the electrical industry, enthusiasm for TE is broad. For exam-ple, PhD energy researchers Stephen Barrager and Ed Cazalet write in the preface to their book Transactive Energy: A Sustainable Business and Regulatory Model for Electricity, “Transactive Energy scales well. It can coordinate decisions across the full spectrum of size and technology. It works equally well for central power-plant planning and for smart home-appliance operation.”

However, an anecdotal survey of other experts in the energy market on the pros-pects for TE reveal that while the concept has helped focus attention on the need to upgrade the power transmission grid for variable power sources and transaction systems for all electrical resources, TE is far from being ready for implementation on a operational basis.

According to Allan McHale, director, Memoori Business Intelligence Ltd., a leading research firm in power markets, smart buildings and related areas, has identified a significant number of barriers that need to be surmounted if TE is to get off the ground.

“In Europe, (the barriers) become more difficult to overcome because of the different structures for central generation systems in the 28 countries in the EU,” he said.

Because TE is so far from coming online, Memoori has begun to deemphasize current research in this area in favor of other more current concerns. “We have for the last six months turned our attention to energy conservation in buildings and the many ways in which a satisfactory ROI can be realized for building owners,” McHale added. “No doubt we shall return to smart grid (and TE) when the politi-cians and governments start seriously backing it again in Europe.”

EARLY HYPE FOR THE GRIDWISE FRAMEWORK Much of the early hype for TE comes by way of the GridWise Architecture Council when it published its GridWise Transactive Energy Framework in October 2013. While the GridWise TE framework has been useful as a discussion guide on the issues, it was never intended as the final word on TE for the power transmission industry. According to Paul De Martini, managing director of NorthPoint Energy Advisors, the GridWise TE framework is not a recipe for how to achieve TE. At the end of the day, the different jurisdictions will decide how TE will be accomplished in the various states, he said.

This sentiment about the GridWise TE framework is shared by Ron Melton, director of the Pacific Northwest Smart Grid Demonstration Project and administrator of the GridWise Architecture Council. “The GridWise Architecture Council has written the Transactive Energy Framework document for the purpose of bringing together the community of stakeholders by providing an opportu-nity for a common understanding of the changing nature of the electric pow-er system,” he said. “In other words, the need for new approaches and definition of terms, challenges and so forth.”

TRANSACTIONS SYSTEMS FOR RELIABLE, TIMELY DELIVERY OF POWER Some of the most important operational developments to properly enable TE at scale will be the actual transactions systems. A thought leader in this area, Rick Geiger, executive director for Utilities and Smart Grid at Cisco Systems, thinks that it will be just as important to have safeguards in place so that fraudulent orders for power can be prevented, as it is to have systems to match buyers and sellers of power on the transmission grid.

“TE will need authentication because these are financial transactions,” Geiger said. “Those have to be real. We can-not have phony transactions. No one can tamper with transactions. No one can ask for energy to be delivered that wasn’t required. That could cause dis-ruption and potentially damage to the grid systems.”

At the heart of the matter, power transactions are business deals, ac-cording to Geiger. And while there are similar systems for achieving real-time purchases such as the apparatus in use by the NASDAQ stock market, there is no chance that these will be adapted for use in TE, he added.

WHEN WILL TE BE READY? With many in the field cooling their ardor for TE and transaction systems

Transactiveenergyops

+Not ready for peak loadBy Derek Handova

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still in need of development, it begs the question, “When will transactive energy will be ready?” There is no consensus answer for when TE will be ready for prime time. However, some experts see the timeframe for TE going much further out than others do. For example, one analyst feels that there will need to be a complete integra-tion of the variable, renewable power resources into the distribution and transmission system before TE can begin to be put into place. This will ne-cessitate new technologies for transmit-ting renewable power to the grid when there is demand and for storing power when there is not enough demand.

One of the hurdles that needs to be cleared is that nobody wants to be the first to go all in on TE. “Nobody wants to be the guinea pig. Everyone is hesitant to spend money on new technologies,” said Anu Cherian, Frost & Sullivan, senior industry analyst, Energy and Environment Business Unit. “You must understand how renewables will fit into the grid. It will be necessary to set up the grid to ac-commodate successful energy storage schemes such as flywheels and sodium batteries. The grid must be flexible to accept different energy storage tech-nologies.” In addition, energy storage techniques, including compressed air, have been postulated by Barrager and Cazalet as part of the solution of fully integrating variable power into the grid.

According to Cherian, a more con-servative timeline should be contem-plated for when TE goes to scale. She sees the possibility that TE could take up to 20 years to come to fruition as the grid grapples with all the renew-able power source issues that need resolution.

“The more I talk about it, the more TE becomes complicated in my head,” Cherian says.

HOPE FOR THE FUTURE: SAN DIEGO SHOWS TE WORKS AT SMALL SCALE NOW Even though it appears that TE remains

an image on the horizon, one can see it is working on a small scale already today. Two current examples come to us from San Diego.

“TE is generally associated with bringing customer resources into the grid and making sure they are paid for them,” De Martini said. “TE talks about having solar and an intelligent inverter and converting AC into DC and selling it back (to the grid). For example, San Diego Gas & Electric is testing this with SolarCity.”

And as Barrager and Cazalet describe in their book, San Diego State University has taken the step to peel off from the public network by planning and operating its own microgrid. “These standalone ‘grids’ capture the efficiencies of integrating and optimizing various sources and uses of energy,” they write. “They can plan investments and operate their systems independent of the grid.”

So with some more positive examples and time, TE could be operational before we know it.

Derek Handova is sometime journalist, part-time blogger and full-time marketer in the telecommunications industry. He can be reached at [email protected].

THE RAPID GROWTH AND DIVERSITY OF DISTRIBUTED

resources is driving changes to the traditional electric system operating model. This emerging hybrid system, comprised of a complementary mix of cen-tralized and distributed energy resources, has created multidirectional power flows while also expanding the number of transactions. Additionally, these resources are increasingly owned and controlled by various parties, including utilities, merchant distributed generators, merchant energy storage, demand aggregators, energy ser-vices like solar PV firms, and customers. Operating such an electric system safely and reliably requires an evolution of the distribution system operator (DSO) role and responsibilities. This also necessitates changes in the coordination and duties between transmission system operators (TSOs) and DSOs.

Traditionally, the distribution system delivers power from the transmission grid to customers. Utility distribution companies are responsible for maintaining safety and reliability of the system. As such, a primary focus for distribution operators is outage restoration and system reconfiguration (“switching”) for maintenance and construction. A more distributed system with multidirectional power flows adds new engineering and operating conditions to consider.

The power system will continue to rely on centralized resources and leverage regional diversity of resources to maintain overall efficiency and system reliability. However, the evolution to a hybrid system also creates operational interdepen-dencies that require rethinking the traditional centralized operating paradigm. Currently, industry attention has largely focused on value determination, system planning and infrastructure design. However, it is necessary to expand the scope of industry discussion to include system operations. This more holistic approach is

Operatingtheintegratedgrid

+ Ideas to ponder By Paul De Martini & Lorenzo Kristov

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OPERATIONAL PERSPECTIVES

what EPRI calls the integrated grid. In this broader context, DSOs will be required to coordinate the operation of

distributed resources and microgrids to maintain safety and reliability. So, in addi-tion to the functions performed by the traditional distribution operator, the DSO role will be expanded by a new set of minimal responsibilities:

\ Distributed reliability coordination\ T-D interface reliability coordination\ Energy transaction coordination

The distributed reliability coordination function refers to a federated reliability system in which DSOs coordinate with distributed energy resources, independent microgrids and self-optimizing customers to maintain reliable, real-time opera-tion of the distribution grid. In order for the system to maintain reliability, it will require new integrated operational processes and distributed control systems. This system will also include differentiated services provided by distributed resources to support grid operations. The types of participating distributed energy resources will vary based on their performance characteristics and operational need. The DSO’s ability to use locally provided reliability services will also enable it to main-tain a more stable and predictable interchange with the TSO at the T-D interface.

The TSO’s role will remain to provide open-access transmission services, a duty which includes maintaining supply-demand balance, transmission reliability by scheduling and dispatching resources, along with interchange transactions with other balancing authorities. The DSO’s responsibility would then need to include T-D interface reliability coordination. This function would ensure distributed resource-provided services to distribution operations, transmission operations or power markets are properly coordinated, scheduled and managed in real-time. The TSO needs predictability and assurance that distributed resources commit-ted to provide transmission services will actually deliver those services across the distribution system to the T-D interface. The DSO would address this need by also being responsible for forecasting net load in each local distribution area and net power flows across each T-D interface.

The growth of merchant distributed resources and excess energy available for resale by customer-side resources owned by energy services firms will create distribution-to-transmission transactions, as well as transactions within each local distribution area. This creates a need for energy transaction coordination across the T-D interface. Only the physical aspects of these energy and capacity transac-tions need to be coordinated by the DSO in order to ensure operational integrity of the distribution system. System-wide supply-demand balancing will remain the sole responsibility of the TSO.

It is important to clarify that these minimal DSO functions do not require the DSO to be inserted into the economic transactions between distributed resources and wholesale markets. Rather, the core operational safety- and reliability-based DSO activities confine it to managing real and reactive power flows across the dis-tribution system. These activities require tight integration of the people, resources, processes and technology used to operate the distribution system. This is due to the highly dynamic and multidirectional nature of power flows in a distributed electric system along with the constantly changing local distribution feeder con-figurations due to routine and emergency switching.

Beyond these minimal functions, however, it is conceivable that a DSO could take on additional roles, such as dispatch coordinator. The dispatch coordi-nator function provides a single point of interface on the distribution side of a

T-D interface in order to coordinate the operational dispatch of flexible distributed resources in the local area that participates in wholesale energy and ancillary services markets. Such participation may extend beyond TSO managed areas to include broader regional markets as are increasingly available through arrangements such as dynamic scheduling across multiple TSOs. In this role, the DSO acts as the dispatch coordinator providing a consolidated offer to the TSO at each T-D interface. Thus, the DSO provides an efficient interface with the TSO along with an organized wholesale market to ensure alignment between distributed energy transactions and grid reliability.

It is increasingly clear that the indus-try must begin to specify the opera-tional functions of the “minimal DSO” as described earlier in order to achieve large-scale integration of distributed resources. Rome wasn’t built in a day and neither will we wake up tomorrow to a new fully functioning integrated distributed energy system. However, the efforts underway in California, Hawaii and New York, as well as EPRI’s integrated grid initiative, are developing useful frameworks to realize the vision of a distributed and customer-centric electric system at scale.

The ideas presented in this article are for discussion purposes only and do not reflect the views or policies of the California ISO. This article also draws on a recently released white paper by the authors available on Caltech’s Resnick Sustainability Institute website.

Paul De Martini is a visiting scholar at the Resnick Sustainability Institute at Caltech focusing on issues related to large-scale distributed resource integration. He is a former vice president at Southern California Edison. Dr. Lorenzo Kristov is presently the principal market design architect in the Market and Infrastructure Development Division of the California ISO.

THOUGHT LEADERSHIP • SPONSORED BY ELSTER

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WE’VE ALL HEARD THE NEWS: THE UTILITY

business model is rapidly evolving—not just at the edges where the business intersects with the outside world in financial and consumer arenas, but deep down in the recesses—the junctions of architecture and hardware—that make the technology itself function.

“Utilities face a lot of changes today,” said Dimitri Degraeve, head of product management software and services at Elster. “So, adapting fast is key; but adapting fast is also a challenge in itself.”

Degraeve pointed out the enormous pressure that utili-ties are now under to move quickly, to integrate disparate systems and to continuously adapt in areas of technology, hardware, standards and bandwidth.

“Some of those things are moving targets. Some are not mature yet. Some never will be. But utilities don’t know

those things up front,” he added. “They’ve got to be able to take, test and pilot technology fast in order to keep up with this new environment.”

The name of the game is flexibility

For a utility to have that evolving advantage, they’ve got to be more flexible right down to the “bones”—not just with company culture and mobile apps for consumers that seem to be all the rage these days, but with software architecture that can adapt to unstructured data, that can collect large data volumes and use analytics to sort that data and make those apps work correctly. Without that flexibility at the core of the utility’s software “soul,” keeping up with the rapidly changing models—let alone those mobile consumer apps—will be nigh impossible.

So, how does a utility become pliable in this way? How can it have the dream team Degraeve spoke of that rolls with the

How to plan for, find and grab your perfect flexible architecture


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WE’VE ALL HEARD THE NEWS: THE UTILITY

business model is rapidly evolving—not just at the edges where the business intersects with the outside world in financial and consumer arenas, but deep down in the recesses—the junctions of architecture and hardware—that make the technology itself function.

“Utilities face a lot of changes today,” said Dimitri Degraeve, head of product management software and services at Elster. “So, adapting fast is key; but adapting fast is also a challenge in itself.”

Degraeve pointed out the enormous pressure that utili-ties are now under to move quickly, to integrate disparate systems and to continuously adapt in areas of technology, hardware, standards and bandwidth.

“Some of those things are moving targets. Some are not mature yet. Some never will be. But utilities don’t know

those things up front,” he added. “They’ve got to be able to take, test and pilot technology fast in order to keep up with this new environment.”

The name of the game is flexibility

For a utility to have that evolving advantage, they’ve got to be more flexible right down to the “bones”—not just with company culture and mobile apps for consumers that seem to be all the rage these days, but with software architecture that can adapt to unstructured data, that can collect large data volumes and use analytics to sort that data and make those apps work correctly. Without that flexibility at the core of the utility’s software “soul,” keeping up with the rapidly changing models—let alone those mobile consumer apps—will be nigh impossible.

So, how does a utility become pliable in this way? How can it have the dream team Degraeve spoke of that rolls with the

How to plan for, find and grab your perfect flexible architecture


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rollicking flow of the utility business today (that’s only going to rollick more loudly and more frequently tomorrow)?

Degraeve’s colleague Ron Pate, Elster’s head of solutions and product management for its electricity business unit, suggests digging up your architecture and giving it a good, hard once-over.

“Today’s utility architecture is often not flexible enough. It may be too monolithic, and, as we’ve discussed, utilities are now at the point where they must change to survive the coming decades,” Pate noted.

To survive, Pate believes you should go modular, not monolithic. Give yourself the ability to deploy parts of the architecture now, parts in the future—without having to buy an entire package up front.

So, you start with the question: Is my architecture flexible enough? If you go off and study it and come back with an answer akin to “no,” what then?

Don’t worry. Degraeve and Pate have more sage advice.

• Argument 1: Sell that flexible architecture as cost effective.

• Argument 2: Reveal all that the architecture can truly support.

• Argument 3: Plan for the changes that are still coming and be ready beforehand.

Yes, at this point, they suggest you bring up money—that item you’re supposed to never talk about in polite company. But the more polite parts of your company may use the cost of building (or buying) more flexible architecture against you. So get ahead of that argument with your own.

Argument 1: What’s the bottom line?

The reality of our traditional, rigid utility business mod-els don’t hinge on a fear of new technology, no matter what many analysts may write. It hinges on a fear of spending money. Each new idea, widget, concept or standard costs cash to incorporate or comply with, and that makes utilities understandably uncomfortable.

So, if you come in saying, “Hey, for all this new stuff we need to do, like those consumer mobile apps that customer service wants, we need more flexible architecture,” what your company CFO hears is “We need more money.”

There’s no arguing that new systems will cost some money. So don’t bother. Instead give them a view of what will cost them the most money.

Shunning flexibility and adaptability can be the ultimate in costly a few years down the road, according to Pate.

“With a more monolithic system, integrators have to come in and consult. Customization occurs. These things are a huge constraint on a tight utility budget, which they, frankly, can’t af-ford,” he said.

So while investing in more flexible architec-ture is an upfront cost, Pate and Degraeve were adamant that, in the end, flexibility and adaptability in architecture results in more simplicity. And simpler, flexible systems are cost effective to install and affordable to main-tain—much more so than the old school monoliths.

Modular has an additional bonus on the financial end as well: No one says you have to buy it all right now. Start small. Build out. Buy what you can afford. Prepare for the future of flexibility in a flexible and financially savvy way.

“The ability to put together those pieces and components modularly—but seamlessly and simplified—that’s ultimate-ly less expensive, in the end,” Pate said.

Argument 2: What am I getting out of this?

Once you’ve got the colleagues and coworkers think-ing about long-term cost savings for flexible, modular architecture, it’s time to talk about all the applications of the new utility business model everyone’s predicting—from smart grid coming to fruition to the possibilities of transactive energy.

With all of those applications, you’ve got lots of data, lots of features and lots of complexity—all of it relatively new. And what do old monoliths not do too well? They don’t adapt to new complexities.

Flexible architecture, besides being cost effective in the long run, sets up your long run. Your future applica-tions—like those consumer mobile apps we’ve been talking about—are feature-rich. They live on info—and info in a real-time manner.

“This can be a big challenge,” Pate commented. “And the less sophisticated a utility, the more monolithic the system, the more difficult this all becomes.”

Despite these growing pains—and no matter how much you hope for less data—the reality is the opposite

“Moving from

monolithic to modular

means moving out of

that safety zone of

architecture that you’re

comfortable with.”


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(which you can easily see by comparing data volumes now to five years ago). Bottom line: You’re going to be getting more and more data from smart grid applica-tions—massive amounts that will present all sorts of crazy data flow challenges.

You can have simple, flexible, adaptable architecture that can handle that smoothly and grow with your data. Or you can be left with a lake of data and no real way to incorpo-rate it into your processes and business flows.

It all depends on the future you want for your utility. And planning for that future starts right now—even if it’s just a single modular piece to build on, a cornerstone.

Argument 3: What about the future?

Selecting the perfect architecture cornerstone for a more flexible future may seem like a daunting task, but it doesn’t have to be. What it takes is just a bit of meditation on what your future utility business model will have to endure.

Degraeve advises planning for three things: future inte-grations, a growing data flow and an evolving sense of the consumer in this industry.

Planning for integrations in the future—and leaving some bandwidth on both the tech and personnel side to do so—will help utilities ease into a more complicated model. While incremental and modular approaches can be good, Degraeve warns that those approaches must incorporate a realistic view that data and system issues will continue to grow more complex in connections and information—after all, there’s no history that this industry has ever gone “back-ward” on data. So, planning for larger integrations down the road is simply logical.

Along with that future integration planning, managing the data flow across processes will be key—and will require that flexible architecture. So, that should be included in the planning upfront (and is inextricably tied to those poten-tially large integrations he cautioned about).

“This business will become more and more about data—managing it, collecting it, sorting it. New systems will be introduced to make sense of this data; an army of analysts will come on board to dissect it. A flexible architecture can help with all of that growth and planning and change that will be a consistent part of the utility future from now on,” Degraeve added.

And one area that will change significantly is how much your consumer will be involved in their data—making it imperative to push actionable information out faster to the very end of your value chain. That’s a tough call with a

vast, rigid system that thinks in months, not minutes. But remember: Consumers are not about to expect less of a util-ity anytime soon.

Avoiding the hype

So now you know you need more flexible architecture, and you’re armed with arguments to sell that modularity to your colleagues and coworkers (and the people with the purse strings). But you’re still left with one fear: How do you tell the marketing hype from the real thing?

Moving from monolithic to modular means moving out of that safety zone of architecture that you’re comfortable with. And that can lead to decisions from the gut rather than choices made from experience.

Degraeve and Pate have sage advice here as well.Degraeve suggests looking for systems with open stan-

dards that can be used for your current needs without any serious development efforts. He adds that you need to ask questions about customization, control environment, scale, operation, troubleshooting and estimated costs. And then he suggests putting a company through its paces with a use case very specific to your utility.

“Don’t be sideswiped by the glitz,” Pate added to Degraeve’s practical suggestions. “Applications today are marketed with very polished presentations. They are high level and slick looking. But, as Dimitri suggested, dig deeper. Ask questions.”

As you’re shopping for that better, more flexible system architecture, “don’t pick tech for tech’s sake,” Pate com-mented. Look to the business drivers and select applica-tions that can support those needs. Then find a company with a proven track record to help you. And—just as you would with a new employee—get references. Ask to see what else they’ve done. Ask to talk to other clients, espe-cially other utilities.

And start now so the utility business model of the future doesn’t surprise you.

“Some utilities are still sitting on the sidelines, and there’s no time for that now,” Pate said.

And, Degraeve added, don’t forget to “choose a flexible platform that integrates easily, manages the data flow accu-rately, simplifies decision-making and enables fast changes.”

Now, armed with all this great insight from Elster, go find that architecture of your future.

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IT INSIGHTS

ing—if the reliability of the overall IT support is less than the reliability of the system without IT—then it could be destructive at best, or worse, it could be responsible for taking the system down, and producing a blackout or degraded performance.

For example, if the monitoring and communication infrastructure is exposed to elements such as hurricanes or tornadoes, instead of protecting the system, it will be wiped out along with the power grid that it is protecting. So, that is one situation where utilities have a legitimate concern that an additional layer of expensive and highly capable information technology would not be of much use. But such situations can be overcome by designing systems that are highly reliable, that will not use the same information pathways as energy pathways, and, in general, it is possible to deal with those concerns successfully.

INTELLIGENT UTILITY: WHAT BENEFITS DOES ADDING AN IT SOURCE TO THE TRANSMISSION POWER PROCESS BRING?

BEGOVIC: At the transmission level, it transmits a lot of useful information about the system, and it enables system operators to recognize conditions that may degrade its ability to function. System monitoring, operation, protec-tion and control are not only about knowing what is the state of the system, but also being able to quickly predict the threats and possible paths to deg-radation and cope with them quickly using all available resources.

INTELLIGENT UTILITY: WHAT DRAW-BACKS ARE WE LOOKING AT?

BEGOVIC: Big data is certainly some-thing to watch. For 30 years, synchro-phasors have been used as an example of the new generation of system sup-port at the transmission level (and even at the distribution level). However, for a long time, they have been just a potentially useful technology because it generated considerable amount of data (by devices produced by different

RIGHT AFTER THE FLURRY OVER SMART GRID BEGAN TO DIE

down, there came an uptick in chats about the blending of information tech and operations tech. That’s now the current debate at every industry conference. But, is it hype or is it really happening?

We asked Miroslav Begovic, president of IEEE Power & Energy Society (PES) and professor of electric energy research at the School of Electrical and Computer Engineering at Georgia Institute of Technology.

His answers may surprise you.

INTELLIGENT UTILITY: IS THERE AN IT TAKEOVER OF T&D, AND IS THAT A BAD THING?BEGOVIC: I wouldn’t call it a takeover. IT is a great tool among many others that

the power and energy industry is using to support its operation. It has been part of our system monitoring and control infrastructure for a long time. Initially, the technology was so limited in its capabilities to assist power systems that there was no concern about it “taking over.” Thirty years ago, the IT revolution began, and large amounts of measured data were obtained and distributed across the system. It took a long time for utilities and their engineers to become comfortable with it. Today, IT is assisting the system, but power systems are designed with many layers of autonomy. The power grid started as a system of completely autonomous de-vices being interconnected, each protecting itself, and that protection and control still exists. So, if you take out the layer of IT, you wouldn’t reach the point when a system is completely helpless if system-wide monitoring and communication fails, and that’s important for the system integrity and resilience.

The time scales at which responses are needed, in some cases, are measured in milliseconds, and such assistance cannot come from a human operator, nor from relatively simple apparatus that was used a couple of decades ago. So information technology is here to last, but there is also a concern about its limitations—reli-ability of data collection and communication, and accuracy and security of the data, among other things. If the data is accurately and correctly processed and quickly communicated across the system, then it is a great addition to system operators’ situational awareness tools. If circumstances prevent that from happen-

IsITeatingT&D? +What’s the state of data on the wires?By Kathleen Wolf Davis

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manufacturers that were not enabled to communicate effectively with each other), and it was overwhelming for the computers of the time. Developing applications that know how to extract useful information from the big data and how to use it effectively is a very important part in that process. We are only now, 30 years later, beginning to see the outlook for a wide cast network of synchrophasors across the U.S. and many other power grids—and applica-tions developed to support them.

INTELLIGENT UTILITY: IS IT WORTH THE RISK THAT WE’RE OPENING UP THE DISTRIBUTION PROCESS TO HACKERS AND FOREIGN STATES?

BEGOVIC: Our society is greatly con-cerned about privacy, cyber and physical security of energy and other critical infra-structures. These are legitimate concerns within the power and energy sector and among consumers, and IEEE PES mem-bers and their employers, the utilities, are addressing them very seriously by developing standards and technologies to proactively deal with these issues.

Utilities are paying considerable at-tention to this area, as the technologies being implemented are very expensive, and such disruptive changes in opera-tional practice usually don’t happen without policy assistance. That has been one of the reasons why we see such a major revolution in the structure, design and operation of energy systems today, after sustained support of many governments in developed countries to modernize and enhance the aging energy infrastructure.

[Editor’s note: IEEE Power & Energy Society (www.ieee-pes.org) and other IEEE organizations have been invited by the U.S. government to evaluate the effects of energy policy that the current administration put in place four years ago, including the White House’s Quadrennial Energy Review (QER). Additionally, they’ve been involved in meetings organized by the European Union High Commissioner of Energy.]

SILICON VALLEY POWER IS THE MUNICIPAL UTILITY FOR THE

City of Santa Clara, California. The utility covers around 60,000 custom-ers in the area. Recently, the municipality announced a project to expand free outdoor wi-fi across the city.

In this installment of our Utility2Utility series, we spoke with Larry Owens, manager of customer services, about that massive wi-fi project.

INTELLIGENT UTILITY: AS A POWER UTILITY, WHY ADD FREE OUTDOOR WI-FI TO A METER PROJECT, AS YOU DID WITH SANTA CLARA?

OWENS: During SVP’s advanced metering infrastructure (AMI) investigation phase, we began to see two concepts coming together regarding the backhaul of meter data. The first concept arose out of the uncertainty on just how far

Utility2Utility +SVP

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this first AMI deployment would take us into the future and what functional elements that future might demand. With both wireless connectivity and the Internet of things exploding, we knew that, although a narrow band solution would work for bringing back meter reads, it was not going to be future proof.

The second concept was more serendipity than planning. An existing mu-nicipal wi-fi company called MetroFi provided free outdoor wi-fi to residents in Santa Clara under a business model similar to commercial radio and TV (where the advertisers provided revenue for a service that was otherwise free for con-sumers). That business model failed in Santa Clara and across the nation. The city’s residents who used that service pleaded with our leaders to do something to save it. That got us thinking about how we might utilize such a system for AMI. SVP purchased the hardware already installed over half the city for pennies on the dollar, resurrected the free Internet connection for the community and began to test the system as an AMI backhaul on a separate secure channel (or SSID) of the system.

Still, we were hesitant to think of wi-fi as future proof with WiMax and LTE technologies coming down the pike. In 2010, the American Appliance Manufacturers Association selected wi-fi as the communication standard for smart appliances. It was then we knew wi-fi was going to be around for a quite a while. From that day on, a city-wide wi-fi system for AMI backhaul with one open channel (or SSID) for free city-wide public wi-fi was part of our plan. That plan also included mobile workforce support, distribution system monitor and control and supporting the Internet of utility things.

A key ingredient for the system’s success was our close coordination and part-nership with our vendors, led by Elster Group, with Tropos (which became ABB/Tropos) providing the Wi-Fi equipment for the wide-area network and Linkpath Communications providing outdoor system design and ongoing public access and utility application field support. Additionally, Milton Security Group has supported SVP in many areas of network security and provides those essential services for the wi-fi system as well.

And finally, we also asked our customers to prioritize a list of benefits associ-ated with advanced metering in Santa Clara. Customers sought the benefit of free outdoor wi-fi over all other perceived benefits.

INTELLIGENT UTILITY: WHAT HURDLES DID YOU ENCOUNTER DURING THE LARGER SVP METERCONNECT PROJECT? HOW DID YOU OVERCOME THOSE?

OWENS: Thankfully, SVP was not among the first utilities to pursue advanced metering and managed to avoid some of the more difficult challenges with customer perception and technology shortcomings. Even so, the technology is changing rapidly with new versions of AMI and meter data management software releases almost yearly. Between product selection and implementation, we have seen at least two major upgrade releases by our vendors. In one case, we even reworked our project plan and upgraded during the development phase.

Probably the biggest challenge is integrating the AMI system with the bill-ing system. This new world is complex and requires a great deal of attention to detail. Adding to the complexity is the fact that for some period of time utili-ties must operate a manual-reading system right alongside an AMI system. In our case, we bill both water and electricity services, which are on two different budgets and timelines for meter deployment. That is a lot for one billing system to command and control—and get right with every change, every transaction, every day.

Finally, we were acutely aware of the public relations challenges associated with

introducing AMI to our customers. We were confident in our customers’ ability to comprehend the benefits if we took a methodical approach to not only testing and deploying meters in the community but also to providing education and anticipating customer concerns. A proactive communications strategy involving both customer communications channels and local media outreach resulted in positive coverage of SVP MeterConnect and contributed, we believe, to continued high satisfaction ratings in surveys of our business and residential customers.

INTELLIGENT UTILITY: WHAT BEN-EFITS DO YOU EXPECT FOR YOU AND FOR YOUR CUSTOMERS—WITH BOTH THE METER UPGRADE PROGRAM AND THE WI-FI?

OWENS: Although most utilities see a multitude of benefits coming from the residential sector, SVP is different. At SVP over 90 percent of our electricity sales go to businesses and, due to many factors includ-ing a mild climate, we have a very minimal system peak. With some very large electric accounts, one energy efficiency measure executed by a large customer could, and often does, produce more savings than all residential efficiency measures in a program year. For our business customers, the cost of electricity hits their bottom line directly. While residential markets have their effi-ciency and advanced meter champi-ons, our business sector is con-tinually pushing us to deliver more energy information and products to help their businesses run more efficiently and profitably. Launching a meter data portal with threshold-based notifications for our business customers will be highly regarded—as we are regularly reminded as we get ready to go live with system integrations and deploy meters to our businesses later this year.

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The wi-fi system, on the other hand, has over 6,000 daily users—a com-bination of residents, employees and visitors. The system covers the entire city, which goes a long way to closing the digital divide in Santa Clara. Without Internet connectivity, our low-income customers would not be able to view their web-based meter data portal. This is a group where saving even a little through a better understanding of their daily energy use goes a long way. The combination of AMI and free wi-fi makes this possible for everyone in Santa Clara.

In another situation, a resident involved in a widespread outage came out to show our field crews the SVP outage status webpage. He had connected to the Internet and navigated to our web page via the SVP MeterConnect wi-fi system, which failed over to the 4-6 hour battery backup. This is a live demonstration of one of our use cases—maintaining Internet connectivity during a disaster. Fortunately, this was only an out-age, but, as a demonstration, it worked as designed.

INTELLIGENT UTILITY: WHAT UNIQUE CONSIDERATIONS FOR THE AREA DID YOU ENCOUNTER?

OWENS: Perhaps the most difficult part of this wonderful idea lies in the fact that outdoor wi-fi coverage will never be perfect for low-power devic-es like smartphones and tablets. We’ve learned that increasing the concen-tration of access points to increase the signal strength doesn’t always work. Too many access points in an area can create self-interference, which, in turn, works against providing a better user experience. As you can imagine, there is a great deal of RF noise in Silicon Valley already. Until the wi-fi capabilities of low-power devices improve, there will be frustration by users who are not in reasonable proximity to an access point.

INTELLIGENT UTILITY: WHAT ADVICE WOULD YOU GIVE OTHER UTILITIES TACKLING A METER UPGRADE PROGRAM?

OWENS: If I had the decision to make over again, I would definitely include the option of using a wi-fi network as a dynamic opportunity to expand communication capabilities beyond the support of simple meter reads. Although not perfect for every situation, wi-fi is a ubiquitous stan-dard, it is one of the most actively examined and secured standards, most equipment suppliers have a wi-fi communication option and the band-width capability is future proof. Because of its flexibility and security, we will use it for distribution monitoring and to support workers in the field via a secure channel.

A funny story: I was presenting the system to a local chapter of IEEE whose focus is wireless technology. The question of security came up and started a rousing conversation. One side of the conversation was about how wi-fi is one of the most attacked wireless protocols. Yet wi-fi is also the most studied and secured standard at the same time. I asked them, “Would you trust a non-standard proprietary system by company X that was not constantly tested, or the wi-fi standard that is tested by thousands and improved constantly?” Their trust was with wi-fi. To which I said, “And I have faith that you Silicon Valley wireless engineers will keep it that way!”

[Editor’s note: This is a shortened version of the Owens interview. To read the full interview, visit intelligentutility.com and type “utility2utility SVP” in the search box.]

Take a tour of smart cities

The term “smart city” always makes

me think of Amsterdam: quiet bikes

gliding by, lovely architecture—no

jarring visual sense of the technology

behind it all. Plus, Amsterdam is

actually working some delightful

smart city angles in the areas of

residential and small commercial

power, electric vehicles and transport,

and citizen involvement in planning.

But, Amsterdam is no smart city—at

least, not yet.

No single city has really reached

that goal yet. Amsterdam is further

along than many. Rio is, too, along

with Vienna. And, of course, there are

made-from-scratch smart city ideas

like Masdar.

As the smart city concept evolves,

utilities will—by necessity—be

taking the lead on many projects,

as SVP did here with metering and

pubic wi-fi. Keeping that evolution

in mind, Intelligent Utility has been

quietly building you a smart cities

library where you can access ideas,

insights and project details on what’s

happening within the smart city

space. And we’re also creating a

smart cities conference to make that

learning more interactive.

Whether you’re more concerned

with sustainable power, regulatory

issues in the renewables space, water

concepts, efficiency and DR, the

Internet of Things revolution or even

general ideas of how the entirety

of smart cities will blend together,

Intelligent Utility has you covered.

Start by visiting intelligentutility.

com and typing “smart city” or any

single topic area—maybe DR or EE

or even augmented reality—into the

search box.

Our library holds a ton of information

on smart cities—all at your fingertips

anytime of the day or night. Even at

3 a.m., our library is always open at

intelligentutility.com.

And get some skin in this game in

person. We have a brand new Smart

Cities conference with case studies

galore happening Nov. 3-5 in San

Diego. Join us.

Get more information on the show at

http://smartcities.energycentral.com

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INTERNATIONAL

EUROPE’S THREE LARGEST ECONOMIES—GERMANY, BRITAIN AND

France—are geographically close, but their electricity markets are worlds apart. France is dominated by a single utility, while Germany has thousands. Somewhere in the middle between these two almost diametrically opposed markets, sits Britain.

Britain’s electricity sector was the one of the leaders of the global push toward liberalization and privatization of utilities that started in the 1980s, but the jour-ney to a free market utopia has taken a wrong turn, some say. Consolidation in the late 1990s and early 2000s saw the dozens of energy suppliers consolidate and the market has come to be dominated by six large, deregulated, vertically-inte-grated (generation and supply) utilities widely known as the Big Six (British Gas, EDF, E.ON, RWE Npower, Scottish Power and SSE) who comprise 98 percent of the retail supply market, according to state regulator Ofgem.

Transmission is the concern of National Grid, a privatized but regulated monopoly. At a distribution level, there are fourteen privately owned, regulated district network operators (DNOs) for the fourteen distribution areas—four of which are also controlled by the Big Six utilities.

Although the British government talks about community energy and small utili-ties, stating publicly it wants to see the “Big Six become the Big 60,000,” it passed into law in August 2014 electricity market reform that is widely viewed as support-ing the incumbent generators by way of capacity payments and a highly complex feed-in tariff system for renewables deemed impractical for small generators.

Whereas the electricity market reform is unlikely to deliver many new

utilities—in generation, transmission and distribution, or supply—in July 2014, the energy market was referred to the UK government’s anti-trust regulator, the Competition and Markets Authority. The aim of this 18-month review is to determine the competitiveness of the sector, with a focus on how vertical integration may preclude new entrants.

In contrast to Britain’s central-ized, concentrated market structure, Germany is wedded to a municipal approach. Almost half of all electric-ity supply companies in the country are owned by local governments or communities or are small businesses—with many increasingly out competing privately owned utilities and pushing them out of the market.

Germany has more than 900 distribution grid operators, many of which belong to a Stadtwerke (municipal utility), of which there are approximately 1,400. The Stadtwerke are restricted under the principal of territoriality (Örtlichkeit) to cater only to those in their respective local areas. The Stadtwerke are also tradi-tionally responsible for operating the local grid networks and distributing energy to local consumers, and there-fore have a greater and more central role in the governance of their local energy market.

The number of renewable energy cooperatives in Germany has also grown significantly in recent years; at the end of 2013, according to the German Renewable Energies Agency, there were 888. Since 2009, well over 100 new cooperatives have been founded each year, driven by a focus on energy efficiency, renewables and distributed cogeneration.

Apart from the Stadtwerke and a few independent businesses, there are four major national suppliers in Germany (E.ON, RWE, EnBW and Vattenfall), which, according to the Bundesverband der Energie-und Wasserwirtschaf, hold a 43.8 percent

+So near, but so far apartBy Tim Probert

Europe’sbigthree

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share of the energy retail market, as well as a major share of generation, mostly thermal.

The German Big Four have, not surprisingly, been hammered by the rise in renewable generation. To make matters worse, their commercial and industrial customers are increasingly trying to separate themselves from the grid to avoid government fees levied to pay for renewable energy expan-sion. According to the Association of German Chambers of Industry and Commerce, some 16 percent of German companies are now energy self-sufficient, a 50 percent increase from 2013; another 23 percent of businesses plan to become energy self-sufficient in the near future.

One of the Big Four, EnBW, has stated publicly it will cut its electricity generation and trading business by 80 percent by 2020 and will try to make up for the decline by investing in wind power, transmission and distribution projects to connect renewables, and implement energy services like home automation.

At the other extreme is France, with an electricity system utterly dominated by one, state-owned company: EDF, the world’s largest utility with a market value of $75.5 billion.

The European Commission notes EDF accounts for 91 percent of France’s total generation capacity, with GDF-Suez at 5.5 percent and E.On-France at 3 percent. Legal unbundling was required of the transmission system operator RTE by the European Commission in 2004 (and the distribution companies in 2007), but it remains a wholly owned subsidiary of EDF.

France still regulates household electricity (and gas) prices and, in part, wholesale prices. One of the roles of the electricity regulatory body, the Commission de Régulation de l’Energie (CRE), is to recommend sales prices, but the final decision is left to the government.

Formally, independent and foreign companies may compete on the French market, but the discrepancy between higher European wholesale market prices and low national regulated prices makes it practically impossible to enter or stay in the business. Furthermore, France restricts exports of electricity by protecting EDF’s monopoly over them.

There is only one realistic alternative to EDF: GDF, the state-controlled gas company. Market share of the three largest electricity suppliers in France is 96 percent, compared to 59 percent in Britain and 48 percent in Germany, accord-ing to the UK Department of Energy & Climate Change.

France faces major challenges. Big questions loom over the viability of its centralized energy system as nuclear maintenance costs rise, renewables create new problems, oil prices remain high, and the CRE says electricity prices need to rise 30 percent by 2017.

In the longer term, one wonders how long EDF and the state can retain its grip on France’s electricity sector, and how long before its consumers have to pay the true cost for what are widely perceived to be undervalued power prices.

Tim Probert is a London-based freelance writer with a focus on European power markets and new smart grid technology. He helms Millicent Media and can be reached at [email protected].

NEW MARKETS FOR ENERGY PROJECTS ARE ALL THE RAGE

these days. Barely a day goes by that we don’t hear about new projects being developed in Latin America, MENA, Asia or some other exciting place that isn’t here. Renewable energy projects in particular are popular, but gas plants are also getting significant attention. And, quite often, these projects

Soyouwanttoenteranewenergymarket

+Here’s what you need to knowBy Morten Lund

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INTERNATIONAL

are developed by foreign companies, which might make you wonder if your company also should look for project opportunities outside of the U.S. After all, all the other kids are doing it, and you don’t want to be left behind.

The first question to ask yourself is “why?” Why do you want to enter a new market? This question is not just corporate existentialism, or to challenge a possible fad-motivated herd-joining, but also an important first step toward plotting a course for success. If, for instance, your “why” is that your company excels at incentive-mining and there are new incentives available in certain coun-tries, then that automatically shapes and limits your target countries and project type. If, on the other hand, you are looking abroad because you are running out of opportunities domestically, then you will need to spend some time researching oppor-tunities and limitations in a variety of locations.

After all, “overseas” is not a single country, and doing business in China and Chile are two quite different things. Just because “everyone” is look-ing for projects in Mexico and Brazil does not mean that either of these countries is a fit for you.

Once you have made it that far, the next step is obvious, yet essential and all too frequently ignored: Get connected locally. Get connected well locally.

This means several things: first, get local boots on the ground. It is a common arrogance to believe that you, an experienced devel-oper of projects, will simply show up anywhere and successfully develop projects in short order. Sure, all development is local; everyone knows that. But you are a fast learner. After all, you didn’t have trouble switching from Texas to California—how hard could it be to figure out India? You’ll just send some guys over there, and

in a few months they will be on top of things. Best get going on the financing right away.

Don’t be that guy. Make a local connection—a real local connection. Hire experienced local developers. Buy a local outfit. Do a JV with an established local company. But do something. India is not California. Uruguay is not New Jersey, and Costa Rica is not Arizona. Your guys will not simply “figure it out.” They won’t have the local know-how. They won’t have the local connections. You need local development expertise.

Second, learn the local order of business. At the end of the day, you will be faced with the same fundamental development issues you face at home—you will need a site, you will need an offtaker, you will need permits/licenses/entitle-ments, you will need interconnection and transmission, you will need construc-tion and equipment supply, and you will need financing.

But even though these are the same categories of challenges you face in the U.S., they will be different. Not just different individually but different together. For instance, all aspects of renewable energy projects in the U.S. are driven entirely by tax-equity financing. This is a non-issue everywhere else. If you are in a feed-in tariff environment, then the offtaker is mostly taken care of. But this will change the requirements for each of the other categories. If you have grid stability problems, then this will change your offtake and financing requirements. There is almost always a primary local linchpin, and you ought to know what it is.

Third, consider your financing options. It is quite possible that your familiar sources of financing will not be available to you, and local financing may very well be your best option. This is particularly true if you are building a renewable energy project, because the “standard” big international project finance banks are not yet fully engaged in renewables around the world. On the other hand, you may now also have access to financing from ExIm Bank, World Bank, and similar institutions.

Sure, there are many other things to consider as well when going to other countries. Beware the FCPA (Foreign Corrupt Practices Act) and don’t bribe foreign officials—no matter how much your local partner says it is OK. Currency risk, political risk—those are all extra challenge layers that come with working abroad. But, in the end, your main challenge and your most impor-tant step will be to make good local connections.

It should not be surprising that “get connected locally” is exactly the same ad-vice I have for foreign energy companies entering the U.S. for the first time, since they are facing the exact same challenges as Americans in Romania. This should be a hint to you as to the seriousness of the matter. If you have ever had the opportunity to deal with a developer from Italy or China or Germany (or anywhere else) that had decided they did not need a local U.S. connection, you may recall how they exuded a strange mix of arrogance and naïveté—and how you were torn between mirth and pity during the conversation. Don’t let that be you. Get local.

Morten Lund ([email protected]) is a partner in the San Diego office of Stoel Rives. You can follow him on Twitter @MortenLundStoel.

“The first question to

ask yourself is “why?”

Why do you want to

enter a new market?”

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FOR DECADES, UTILITIES IN GENERAL WERE KNOWN AS STODGY outfits that were slow to adapt to change.

How things have changed. In perhaps the biggest shift in the history of the industry, utilities are embracing the burgeoning data analytics industry to gain better efficiencies and provide better customer service.

According to ABI Research, spending on big data and analytics in the energy industry will amount to $7 billion in 2014, representing over 15 percent of the overall cross-industry spending. In 2019, spending on energy analytics will grow to more than $21 billion.

“Greater shareholder pressure is pushing many energy groups to improve their returns after having it easy in the past,” said Aapo Markkanen, the chief analyst on the ABI Research study.

“In such a highly asset-intensive field, huge cost savings are possible by mak-ing the operations more driven by data. Analytics allow the early movers to gain a critical competitive advantage over laggards, in a field where competing by the end product is seldom an option.”

For those reasons and more, utilities big and small are rushing to analyze the reams of data that are now available to them. Utilities are putting numbers to work for them in a wide variety of use cases across the entire enterprise.

“Big data and our ability to apply it is fundamental to meeting a number of strategic objectives, including customer and employee safety, improving the overall customer experience, improved customer communications, understand-ing, meeting, and where possible exceeding customer expectations, outage prediction and resolution, and optimal operations of the distribution grid,” said Steve Pratt, corporate technology officer at CenterPoint Energy.

“Changes to operations include installation and implementation of supporting technologies and restructuring of the processes and organizations that support them. Visualization of field forces and need have provided the opportunity to allow increased operational effectiveness,” he added.

At San Diego Gas & Electric, data analytics are being put to work in sev-eral departments across the utility, including operations, IT and security and customer-facing solutions, where the combination of social media data, custom-er contact data and customer energy usage data should allow SDG&E to serve customers much more effectively.

“We expect that analytics will play a role in most or all of our business op-erations,” said Hanan Eisenman, communications manager for San Diego Gas & Electric.

Eisenman elaborated that, using smart meters as the foundation, SDG&E has already launched a “Reduce Your Use” program that provides incentives to cus-tomers who save during critical peak events, helping to ensure reliability during the high-use summer months.

SDG&E is making the biggest use of analytics for customer service and weather tracking. On the customer side, the utility is deploying its “next best option” service for its contact centers, which provides agents with analytics-based recommendations for customers in real time.

“The recommendation is based on everything we’re able to assemble on that specific customer and their context and needs, so SDG&E can act as a trusted energy advisor for our customers,” said Eisenman.

SDG&E has expanded its weather sensor network to approximately 150 state-of-the-art weather stations throughout its service territory in an effort to track adverse weather conditions during the dangerous Santa Ana fire season. Already the largest and most sophisticated utility system in the nation, the weather network measures everything from tempera-ture and humidity to wind speed and solar radiation, all of which provides a greater awareness of the state of the electric grid and provides valuable information to prevent wildfires and promote public safety.

SDG&E’s weather analytics generate more than 30 TB per day. That data allows SDG&E to model the wind and temperature across

Analyticschangingthemodernutility

+Reams of data coming inBy John R. Johnson

ANALYTICS

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ANALYTICS

ANALYSTS IN THE UTILITY INDUSTRY HAVE MUCH WORK to do these days. With the deluge of data that has accompanied the smart grid

evolution, analysts are leveraging the billions of rows of data and working to transform it into actionable insight. Analytics that utilizes data from the smart meters, coupled with data from a smart distribution system, has empowered—and will continue to empower—utilities to answer operational questions and solve problems with greater speed and accuracy.

At SMUD, there are three categories of analytics that we are pursuing in our evolving smart grid world, including consumer analytics, operational analytics and enterprise analytics. Business intelligence and enterprise analytics include revenue protection and theft detection—or energy trading with a live look at the energy grid. Examples from the operational analytics include fault detection and outage management, which are typically employed in the grid planning and operations department.

At SMUD, as part of our Smart Sacramento initiative, we deployed a situation-al awareness and visual intelligence software solution that correlates, analyzes and visualizes data in smart grid, distribution and outage systems to improve the decision making across our grid planning and operations department. The real-time data provides SMUD with the ability to collaborate as one team to respond rapidly to emergency situations and outages, and more readily understand the real-time impact of weather, fires and emergencies on our daily operations.

Consumer analytics in the utility realm is another area of analytics that SMUD is making great strides in. Consumer analytics includes the broad realm of behavior

+SMUD’s analytics evolve with the smart gridBy Jennifer Potter

Intothedatazone

its region at very high accuracy, enhancing the utility’s situational awareness of the state of the grid.

“We use the inputs from approxi-mately 150 stations to do fine-grained weather forecasting, and we use those forecasts to proactively deploy crews to areas with upcoming high winds and with higher fire potential,” said Eisenman.

Sila Kiliccote, the lead for grid integration at the Lawrence Berkeley National Laboratory in California, added that while good progress has been made on the demand response side, there is room for improvement when it comes to capturing and analyzing data from distribution and transmission systems.

“The integration of these sensing and analytics capabilities into distri-bution and transmission systems has been slow,” she said. “Transmission systems in particular have been more involved in dealing with centralized controls and with large generators as opposed to many distributed assets, which is why the demand side has been more creative about using these technologies.”

She continued, “We don’t really see these demand side capabilities going up to the distribution level, so we’ve got this last mile where there is a lack of sensors, lack of visibility and lack of incorporating these real-time capabili-ties into operations.”

Kiliccote noted that the Lawrence Berkeley National Laboratory is conducting research that will allow it to develop low-cost sensors for the distribution system so that distribu-tion operators and planners can use data analytics to plan distribution sys-tem upgrades. In the future, she hopes that the new data will go a step further and help to optimize the operations of distribution systems.

John R. Johnson is a Boston-based freelance writer specializing in alternative energy and technology topics.

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analytics, demand response and time-of-use pricing, DG/EV/microgrid analytics, and market research. For SMUD, analytics in this area combine meter data, demographic data and utility program data to inform program design, rate design and marketing that improve the customer experience and utility initiatives.

An example of customer analytics at SMUD includes a segmentation study our project team conducted in 2013 with the load profile data collected from the smart meters. The customers that were included in the analysis were either participants in our time variant pricing pilot, SmartPricing Options (SPO), or were in the study control group. The goal of the analysis was to determine if there were demographic similarities among customers with similar load shapes when on the rates. What could we learn from different customers’ load shapes when on time variant rates? Were there patterns we could identify?

We conducted a cluster analysis on the load data to normalized load shapes for customers participating in the SPO pilot. We then attached the results from a demographic survey to

each cluster of load shapes. From each of the rate groups—time-of-use (TOU), critical peak pricing (CPP), and TOU/CPP—we began identifying distinct groups based on load shapes and similar demographics. Within each rate treat-ment, we were able to identify load shapes that followed very distinct usage patterns, such as dramatic load reductions during peak hours or load shifting. When looking at the demographic attributes of each cluster group, we were able to categorize large similarities for each cluster. For example, for custom-ers on the CPP rate, the customer cluster with the largest peak time reductions

was comprised of 81 percent single family homes, 93 percent English speaking, higher income households, with 80 percent of the households reporting some college educa-tion or higher.

The segmentation study allowed us to un-derstand the characteristics of our pilot cus-tomers in relation to their load shapes. This allows us to identify opportunities to reach customers in new ways, such as providing educational materials in other languages or information that specifically addresses mul-tifamily households. In addition, we are able

to identify the characteristics and similarities of participants that are engaged with SMUD and participating in programs and pilots. We can leverage this information to tailor our programs and educational materials to better serve our customers and provide them with tools and information to better manage their energy use.

A long-term strategy of conducting customer segmentation and customer analytics that combines load profile data with demographic and end-use infor-mation can help SMUD design time-based rates that empower the customers on an individual level, rather than providing mass pricing plans that fit the average customer. Through this type of analysis, we are able to identify similarities among customers based on their responses to price signals. Eventually, as the data we collect becomes more dynamic and instantaneous, we can use this information to understand which groups of customers are more capable of producing large or small load reductions based on demographic and housing characteristics, which can help SMUD implement real-time pricing programs that benefit the utility and customer. In essence, customer analytics that combine individual load profiles, time variant pricing and demographic information help SMUD to create pricing and energy resource management that is responsible to SMUD’s customer-owners.

Engaging the customer has never been as important—or as possible—than in the smart grid era, and tapping into the oftentimes disparate data sources to integrate that information into actionable information for decision making is one of the larger challenges for utilities. Analytics requires utilities to break down organizational silos that hinder data sharing, integrate information systems, and improve data platforms for handling unstructured data. All of these tasks require utilities to rethink their data management architecture and capabilities so that we can become better equipped to provide solutions and tools to our customers that empower them to manage their energy use.

Jennifer Potter is a principal market analyst in the pricing and resource planning department at Sacramento Municipal Utility District. Potter has spent the last three years as the project manager for the Department of Energy ARRA grant-funded consumer behavior study, currently known as SmartPricing Options pricing pilot.

“Consumer analytics

in the utility realm

is another area of

analytics that SMUD is

making great strides in.”

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BY THE NUMBERS

“I’M ALWAYS LOOKING AT POWERLINES WHEREVER I GO,”

said Erica Zimmerer, manager of asset management program design, distribution for Entergy. “My husband thinks it’s funny. He says, ‘I don’t even see them.’”

“Seeing” powerlines, however, is such a big part of Zimmerer’s daily work life, it’s no surprise she takes a peek even when she’s off the clock.

But, she does admit that explaining her job—and that long, long title—to people outside of the power business (when they catch her giving those power-lines a second glance) is sometimes difficult.

“I tell folks that I work to keep the lights on,” she added, and she tells them just how lucky they are that their local utility—be it Entergy or another—is so reli-

able. And, she does that telling with an awful lot of passion and gusto.

“The power industry has done such a good job focusing on reliability most people don’t even think about the work that goes into making that light go on,” she said.

Zimmerer has been working to keep Entergy customers’ lights on through eight positions at the utility. (She landed the asset management program design role in late 2011).

And she can still rattle off all eight positions faster than most social stud-ies students can name the first U.S. presidents:

\ engineering intern in substa-tion operations in Baton Rouge/Entergy Gulf States Louisiana grid

\ transmission line maintenance engineer

\ distribution asset planning engineer

\ Entergy Mississippi design engineer

\ project manager doing work man-agement of distribution service/short cycle work

\ project manager for the transmis-sion biz/joining the Midcontinent Independent System Operator Inc.

\ supervisor of asset management for distribution line

\ manager of asset management program design, distribution

And those are, yes, in order. It’s got to be easier to name the first eight presidents. Try it by comparison:

\ George Washington\ John Adams\ Thomas Jefferson\ James Madison\ James Monroe\ John Q. Adams\ Andrew Jackson\ Martin Van Buren

Entergy’sZimmereriseyeingyourpower

+But that’s a good thingBy Kathleen Wolf Davis

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“Being the counseling

ear to a team of distri-

bution folks wasn’t what

she thought her work

life would be like.”

And, yes, those are also in order.

But, one thing all of those eight presidents probably had in common with Zimmerer today is a job that centers around convincing everyone in the room to work together.

Van Buren’s room was filled with Whigs, and Zimmerer’s room is filled with reps from all of Entergy’s terri-tory: four states and six utility operat-ing companies.

Neither seems like an easy room to win over.

“It’s a very interesting role,”

Zimmerer said. “Each area has made the decision to be more consistent, work together and share best practices. We have a lot of differences: urban areas and rural, swamps to mountains. It’s a diverse footprint.”

It isn’t always easy, but Zimmerer said the keys to winning over those rooms are listening well, fostering partnerships and understanding that

everyone—and everyone’s voice—is a vital part of the process.But, certainly being the counseling ear to a team of distribution folks wasn’t

what she thought her work life would be like when she became an engineer. Still, she’s happy to be there.

“I really love meeting people,” she said. “There’s so much work being done with so much love. There’s a lot of love put into this job, which is mostly hidden from the public. But, I get to hear all the good stories.”

“Of course, it’s a real compliment to all our efforts that the public doesn’t have to hear those stories, but I enjoy every word,” she added.

And, beyond those consensus-building skills, there’s something else Zimmerer has in common with Martin Van Buren: a born place at the table. Van Buren was the first U.S. prez to be born a citizen, and Zimmerer was born into Entergy.

“I’m a second-generation employee,” she admitted. “My father worked for Entergy. I grew up around it. As a kid, I went out with him and held a flashlight to help sometimes.”

Zimmerer’s father was an engineer who started on the nuclear side of the business before moving to distribution operations—where she is now. But, she honestly never thought she’d follow in his footsteps as a kid.

“I was terrible in math in high school. I struggled,” she admitted. “I excelled in English and art and literary stuff.”

But, she reached an age where she needed to choose a career path and her dad challenged her to become an engineer.

“He joked, ‘You probably can’t do it. You’re just a girl.’ And, I took that chal-lenge. So, here I am, an engineer just like Dad,” she said.

What she found, though, was that engineering, too, had a creative side—one where she got to solve mysteries, craft new paths and make solutions appear where there were none before—although, certainly, the artistic element may not be the same. But, she still finds a way.

“Today, my pure creative outlet is PowerPoint,” she joked.And, yes, she does subject her people to a few creative PowerPoints now and

again, but her main job is facilitating communication up and down the Entergy value chain. She views it all as if she’s creating a very large team, and, even if some people were cool to her ideas when she first came into the room, she knows they’ll all be friends when it’s time for her to leave—because they’re all in it together.

“We’re a team,” she said. “As soon as we become an ‘us’ and a ‘them,’ we’ve all lost. That’s not happening on my watch.”

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OUT THE DOOR

EMPS ARE FLIPPIN’ EVERYWHERE THESE DAYS.

Seriously. From fire-and-brimstone articles on the number of Americans who could die from a pulse attack to popular films in the theater over the summer, you just can’t escape those electromagnetic pulses, it seems.

Three hours after I spoke with Mark McGranaghan at the Electric Power Research Institute (EPRI) about the science behind all those angry EMP headlines, I went to see the new “Godzilla,” not realizing that Godzilla would only do a cameo in his own movie and that most of the flick is about giant, apparently very peeved bugs with one superpower: They can EMP themselves from the inside and knock your electronics silly.

It was an interesting coincidence. And, although I didn’t know to ask Mark at the time, I’d say that those bugs’ power wouldn’t actually be labeled EMP by McGranaghan and company. Instead, dear filmmakers, that’s an IEMI—an inten-tional electromagnetic interference.

Granted, the intentions are from bugs rather than a terrorist cell or, say, the gang from the first remake of “Ocean’s 11,” but I think I grasped the conversation enough to make that call. Those bugs aren’t EMPing. They’re IEMIing—to coin a phrase.

So, what is EMP then? Think bigger and badder than any big, bad giant bug can

produce. Think not just impacting a city but impacting, say, half the country.

According to McGranaghan, vice president of power delivery & utiliza-tion at EPRI, most of those “the sky is falling” articles discussing EMPs are picturing a scenario where a bomb is detonated in the atmosphere that would impact a wide area. That would create two major issues: a transient event (that is similar to lightning, but with lower energy) and a longer electromagnetic signal similar to a solar flare.

That transient event impacts ev-eryone, not just the power industry. It would run on a very fast “wavefront” and take out circuit boards and elec-tronic equipment from Disneyland to your local substation. Electronics are your weak link here, and that’s not re-stricted—no matter what some articles may tell you—to the power system.

Here’s the good news, straight from McGranaghan: “Transient voltages from EMPs are not big enough to im-pact transmission equipment.”

What that means is, while, yes, control systems and electronics con-nected to the system are vulnerable—as is everything from your iPhone to the giant electronic billboard in Times Square—we, as an industry, are not more vulnerable than others when it comes to EMPs.

The second part of the event—that long electromagnetic signal—would be unique to impacting the power system because it can saturate transformers and the like in a manner quite similar to solar flares. (For our discussion with EPRI on the impact of solar flares on the grid, click this link. http://www.intelligentutility.com/magazine/article/350235/nervous-about-space-weather-and-your-grid)

But, even in the case of solar flares, there has been little hard evidence on those signals having a huge impact. (They are still studying these events.)

With the lack of serious evidence on the long-term impact of the electro-

WadingthroughindustryfearmongeringandthenewGodzillamovie

+ Just what the heck are the facts on EMPs and the grid? By Kathleen Wolf Davis

OUT THE DOOR

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magnetic signal and the ability of most electronics to recover from a pulse—at least a localized one—in a fairly short period, why would someone—anyone—utilize an EMP attack over a traditional explosion? (In other words, why detonate a bomb in the atmosphere creating an EMP and not just blow things up on ground level?)

The argument—despite recent screaming headlines to the contrary—is that an EMP event wouldn’t kill people and wouldn’t massively destroy infrastruc-ture. There’s little likelihood people would die from the blast, and radiation impacts are minimal.

Where we all get a little crazy is in the speculation of what would happen when we lose our electronics. Will we pull together and weather it or freak out and riot? Will it all depend on how long the power is out? It’s the human factor that’s at question here—not grid equipment.

“Those worst-case scenarios are all just speculation as to how society would re-act,” McGranaghan said. “Those scenarios would involve the grid not coming back up for a long time, which would not necessarily be the case. The basic elements of the grid would not be impacted, just the control equipment.”

So, in the great fear of EMP attacks, it’s not really the grid you need to worry about. It’s “normal human reaction”—to quote Peter O’Toole’s character in the classic “How to Steal a Million.”

Preventing an EMP attack from a foreign power or a terrorist cell should cer-tainly be a national imperative. But, singling out the power industry as particularly impacted over transportation, communications or other notable bits of infrastruc-ture is erroneous. With a big EMP attack, every industry is in this together, really.

Now, if we go down the scale to the IEMI—localized attacks like the Godzilla bugs or the Ocean’s 11 gang—and look at that: McGranaghan notes that a single substation hit by an IEMI could be “reconfigured in just a matter of days” with the modular options at work in today’s system.

“We had tornadoes in the Southeast recently that took out whole substations. We still reconfigured those in a matter of weeks,” he added.

But, in case you’re wondering, utilities are studying the impacts of IEMI and EMP attacks and how to mitigate issues, as they also study other high-risk sce-narios such as cyber hackers, massive storms, major floods and even direct physi-cal attacks.

The question is: Where do you put EMPs on the scale? Preparing for all of those issues takes money, and a utility has to weigh impact vs. risk.

“When you talk about looking at design considerations for events very unlikely like this, you look at what assets are the most critical where you could change the design based on that risk,” he said.

So, where does a utility start if they are concerned about IEMI and EMPs?Just to be clear here, McGranaghan noted that a physical attack, such as the one

in the Metcalf substation that got such press earlier this year, would likely be more dangerous than a targeted IEMI.

But, there are preparations going on, and he does have a list of things for you to consider which are similar to how you’d deal with a physical security issue (and may help in both areas):

\ An honest look at assets across the board assessing exposure and impacts\ A critical ranking of those assets\ A studied plan to upgrade asset hardening\ An investment in control center shielding (at regional control centers,

perhaps, rather than localized ones)

\ A look at smaller investments, like new fencing that could block the lines of sight for physical attacks as well have attenuation for EMP/IEMI or monitoring equipment that can detect intrusions

As McGranaghan pointed out in our chat, it’s still unrealistic to invest in the military-level specifications required to make a control center immune to EMP. It would be very difficult (and very expensive) to meet those standards for a risk event not particularly high on the event level equation.

But, don’t you think that means EMPs and IEMIs are totally off the util-ity radar, because they aren’t. There are workshops and confidential meetings to share information, along with coor-dination and test protocols. Assessment is ongoing, too, and no utility has to face these issues “in a vacuum,” as McGranaghan noted. There are people out there to talk to.

Beyond peers, though, the other group you really need to talk to about all of this is your customers, though we know that’s a sensitive topic. But, consumers need to know that utilities are examining these things, are thinking about them. No one is turning a blind eye to this sensitive issue, despite what some reporters may be writing.

“We are all concerned, and we are continually evaluating the resiliency of the infrastructure. EMP is another con-sideration that is in the risk mix. This is not something utilities are ignoring,” he added.

But, for now, EMPs remain the stuff of pop culture and active imaginations. And while we all want to make sure we can bounce back from nightmare scenarios (without having to call on mythical help like Godzilla), first we have to figure out which nightmares could become reality and which are most likely to remain trapped in celluloid and sleeping brain cells.

October 22 - 24, 2014Newport Beach, CA

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THE BUZZenergycentral.fileburstcdn.com/IntelligentUtilityMagazine/2014/SeptOct14.pdfVICE PRESIDENT,...

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