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Information Technology: It's Not Just Business Anymore

Fortnightly Magazine - March 15 1996

modeling at the distribution and transmission level, and power system control. But these systems were developed to meet the discrete and insular needs of each aspect of a utility's operation, and rarely integrated into the decision-support systems utility executive teams will need to position the utility for a competitive future.

The surviving utilities in the new competitive regime will not only need to provide different services and products, but to conduct business differently. Utilities face the challenge of developing a better understanding of their customers' individual wants and needs. To meet that challenge they will need to comprehensively integrate disparate information sets, add business geographic applications software and data sets, and incorporate creative subjective judgment from the executive team. The wider understanding utilities gain from integrated information technology will help them segment market opportunities (em to determine which segments to pursue and to price their services and products appropriately.

Regulators have protected utility executives from such challenges. Regulators have a conscience; the market does not. The competitive marketplace will require a more flexible regulatory approach. Regulators will oversee broad market directions, act in a consumer protection role, and focus on antitrust issues. The era of full-blown prudence reviews and oversight that can stifle competitive markets from working efficiently is over.

Regulators can use information technologies to help evaluate siting and interconnection requests, to help identify and analyze "stranded" assets claimed by jurisdictional utilities, to help analyze a utility's response to a service interruption, to enhance performance-based regulation initiatives by benchmarking utilities against minimum service standards and then monitoring and reviewing the utility's actual performance.

The transition to this type of environment at regulatory commissions is already underway. Texas makes dockets, rules, and other information available to the public on the worldwide web. New York runs a pilot program that uses geographic systems technology to handle siting/distribution and transmission certification issues. And regional quality of service oversight committees, such as the 14-state regulatory committee that monitors U S WEST, may find considerable benefit in using information technology to monitor service standards and coordinate regulatory initiatives.

Technology is reshaping the utilities industry in ways that were unimaginable only a few years ago. If I were still a regulator, I would aggressively deploy information technology to avoid becoming what some jokingly refer to as a "stranded regulator" in the competitive future. Without information technology, utility executives as well as regulators could become "stranded." Think about it! t

Karl Rábago is deputy assistant secretary for utility technologies at the U.S. Department of Energy. He served on the Texas Public Utility Commission from 1992 to 1994.

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