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Middle Mile Moxie

Fortnightly Magazine - January 2010

a generation for it to happen.

But Boulder is proving that utilities are willing to rethink their traditional business models. They’re willing and able to take risks and be innovative.

And it’s showed how vendors and utility departments can come together and drive innovation. By focusing on their customers, utilities can start tying together different silos. They can work together and create something new. In fact, if people go naively into the smart grid and don’t think about how they will manage across silos, they’ll inevitably fail.

 

Fortnightly: Xcel is known for managing successful collaborations, with things like its Utility Innovations initiative and now the Boulder project. How is that accomplished?

Gogel: You create strategic advisory boards, with not only technical people but also CEOs of different companies. That’s what we did at Boulder, going back to 2002. The selection process focused on functionality, and also on each entity’s ability to partner with other players.

The tricky part is handling the creation of new intellectual property. It requires discipline on everybody’s part.

 

Fortnightly: What do you see as the biggest questions now as the smart grid emerges in the context of changing energy policies?

Gogel: We’re at the beginning of a journey, and so far it’s been successful in that a dialogue is taking place among stakeholders. However, by injecting real innovation into the space, you’re going to change the paradigms. We’ve got to find ways to keep utilities whole in that process.

Sometimes in policy debates we forget the fact that in this industry people go out and climb poles in the middle of ice storms and hurricanes, to keep consistently delivering power to customers. This is a job of a higher order. Utilities are maintaining their franchises and their charters, and we’re making their lives significantly more complicated. We’re tapping into the fifth fuel. Renewable power producers are entering the market, and there’s a movement toward cap-and-trade, with a lot of unanswered questions.

A key question is how we drive this concept of virtual power, of conjoining supply and demand and managing them at the distribution level. How do you make virtual power a reality, not just to serve the 40 to 80 hours of critical peak each year, but for the other 8,700 hours as well? It’s in the consumer’s interest, but how are regulators going to treat the hard work and innovation utilities are doing? Utilities should be compensated for doing that work and managing those risks—with multiples—but charters have to be reinvented one step at a time.

There’s a lot of hard work to be done, and there’s a lot of opportunity. I’m looking forward to the best and brightest companies showing what the grid can be.

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