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What will the utility of tomorrow look like?

05112015-utc-exec During the UTC Telecom & Technology 2015 conference, we had a chance to sit in on UTC’s Utility Modernization Executive Summit. This summit is designed to bring out individual perspectives on industry trends that, hopefully, will spark discussion and lead to a greater understanding of the challenges the industry faces.

Connie Durcsak; President and CEO, Utilities Telecom Council
Connie got us started with a brief summary of consumer expectations that are driving the modernization of our energy, water and street light infrastructure. Then we had an overview of the converging common drivers of this modernization, including policy, expanding consumer services and improving operational efficiency.

Michael Oldak; VP Strategic Initiatives and General Counsel, Utilities Telecom Council

Not only did Mike pull together the agenda and speakers for the summit, but also facilitated the initial session. He began by acknowledging the need for balance between regulatory policies, emerging trends, and utility needs, as well as the integration of new technologies. Mike then lead the discussion with the panel of executives from across the industry. They each shared from their different perspective the requirements of the mid-21st century utility, and the capabilities and resources that will be required to meet the customer demands.

Mike has extensive experience in electric rates and regulation, especially smart grid related telecom, technology and business case issues. He’s been in the forefront of the changes we face, leading policy debates, managing complex litigation, and establishing outstanding relationships with key policy makers and thought leaders. Mike has a comprehensive understanding of legal, regulatory and technology issues affecting critical infrastructure industries.

Into the discussion
Once we covered the big picture, we dove into a discussion of what some industry leaders believe are the resources that will be needed for utilities in the next few decades, as well as the capabilities and resources that will be required to meet customer demands. I’ve put down a few highlights that seem especially intriguing.

John Jimison; Managing Director, Energy Future Coalition
John offered a global view, talking about how consumer expectations are being driven by their need for energy. He said that the expanding expectations of consumers have transitioned from nice to have, to too much to have, specifically in the direct delivery of energy wherever it is consumed. He said the future’s focus will be on electric utilities moving from industry upgrades to improving the effectiveness of energy delivery.

Christopher G. Irwin; Smart Grid Standards & Interoperability, Department of Energy

There is strong interdependency between broadband communications infrastructure and the delivery of electricity. Chris summarized that without power, communications infrastructure fails, and without communications, power will fail. Two challenges Chris highlighted is the effect of various agencies staying in their own silos, and the dependency of utilities on federal infusion of funds. That leads to another fundamental challenge that state and federal regulators have: unwinding funding once it’s been put into place.

Critical-infrastructure-sectorsPhilip Jones; Commissioner, Washington Utilities and Transportation Commission
Phil talked about the importance of technology development in the Pacific Northwest. He focused on the importance of maintaining oversight of the electric utility industry, along with the role state regulators play in maintaining reasonable returns even in a flat or declining market. With the lack of Congressional involvement, Phil said federal agencies such as the EPA are stepping up enforcement of existing laws like the Clean Air Act.

Phil stressed the need to update and modernize the electric industry, because without managed electric delivery, everyone in every industry will feel the negative effects. Also, without managed regulations, the delivery of electricity will be hugely impacted. The lack of general understanding requires legislators to spend time educating themselves on the real impact reliable and cost-effective electricity have on people and businesses. If we lose access to reliable power, the haves will find a way to produce their own, and the have-nots will suffer.

Kamal Ballout; Global VP SI Solutions and R&D, Alcatel-Lucent
Thirty-five years ago, Southern Company started the transformation of modernization of transmission infrastructure, but also included the modernization of the distribution grid at the same time. Kamal said this included centralized and decentralized systems, and subsystems to improve the ability to deliver and restore electricity at the speeds customers required.

Kamal also shared the importance for utilities to earn and keep customer trust by providing the services they want and need, not only for today, but tomorrow as well. In response to a question about the transformation of the power grid into a two-way delivery system, Kamal said it also required that utilities improve two-way communications with consumers.

Jeff Nichols; Director of Information Security and Information Management, Sempra Energy Utilities
Jeff said that Sempra has completed its first wave of modernization and is now ready for the second wave. To evaluate the future grid drivers, Sempra has collected a significant amount of data and is reviewing it to improve the delivery of electricity. The data review process and applying analytics to the data is a critical step for the industry to effectively improve the offering of next generation services to consumers.

What’s the takeaway?
This panel provided a very diverse group with a broad range of thought. Some approached from the regulatory perspective, while utilities offered up their view of the industry’s future. Technology and service providers provided insight into their view of the challenges and solutions being offered and developed for the critical infrastructure community.

All of the presenters talked about the historic pace of change due to rapid changes and advancements being introduced into the electric power grid. This pace is requiring utilities to develop new processes and procedures that ensure these changes don’t negatively impact the delivery of safe and cost-effective electricity.

One of my main takeaways is the need to educate. Educate not only legislators, but consumers as well. This way, each of the individual stakeholders can understand the impact the loss of access to electricity, not only to major energy consuming devices like our heating and cooling systems, but to the smallest devices, such as our cell phones.

About the author

Dan is our account executive in the Critical Infrastructure market and has more than 35 years of providing customer-driven technology and energy solutions to critical infrastructure operators in the United States and Canada. He focuses on critical intelligent infrastructure, from smart grids to communications connections, and how they are used as consumers become energy portfolio managers.