Like a physician with her stethoscope at the outset of a check-up, astute shareholders and directors should use the level and trend of a utility’s market-to-book ratio (MtB) as one of the first...
Business Case Tradeoffs
Shaping long-term smart-grid strategy.
several key ingredients to successful expansion of smart-grid systems in the United States. Ensuring that the projects are well considered and scoped, without a lot of pre-formed biases, will help utilities get better alignment of the business case with core company objectives. It also should help companies quantify explicit value in the business case for benefits tied to these objectives. Ultimately, doing so will enable utilities to get a dialogue going between those responsible for long-term strategy and those responsible for discrete project evaluation. This will be increasingly valuable as the pace of change in the market accelerates.
1. While business case techniques might appear self-evident, an excellent resource for the basics around business case design is The Business Case Guide , 2nd edition, by Marty Schmidt. The conceptual framework described here is borrowed from this guide.
2. Department of Energy, Smart Grid Systems Report , July 2009. Page 51
3. See California’ s Electricity Restructuring: The Challenge to Providing Service and Grid Reliability , EPRI, Palo Alto, CA, California Energy Commission, Sacramento, CA: 2002. 1007388. Chapter 6.
4. Utility Best Practices Guidance for Providing Business Customers with Energy Use and Cost Data , A Resource of the National Action Plan for Energy Efficiency, July 2008. Page 3-1.
5. See Coordination of Energy Efficiency and Demand Response , A Resource of the National Action Plan for Energy Efficiency, January 2010. The authors make an argument for the need for research to better determine the relationship between energy efficiency and demand response. The authors explain the important continuum that both programs occupy, and the need to integrate planning across them.
6. The Business Case Guide , 2nd edition, by Marty Schmidt. Page 9.
7. Available under copyright at: http://www.gridwise.org/resources_gwaresources.asp.
8. EISA, Section 1301.