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Traffic Signal Ahead

Smart grid evolution requires two-way communication—with meters and with customers themselves.

Fortnightly Magazine - September 2011

for large capital expenditures for power generation and grid improvement projects. Many utilities also expressed concern about potential punitive actions of politicians and regulators.

Thirty-six percent said that making prudent business decisions that will improve shareholder value was most critical, and 28 percent said that maintaining or improving an investment grade financial rating in an uncertain political environment is pertinent over the next five years.

Forty-one percent of utilities believe carbon taxes will be the top political issue for the industry in the years ahead. Other critical political issues that will most impact utility organizations over the next five years include renewable portfolio standards and U.S. Environmental Protection Agency (EPA) air emissions rules (30 percent).

When asked what the utility of the future would look like, executives expressed hopes of increased reliability, greater collaboration with their customers, and more advanced technologies.

Defining Priorities

Smart grid is one piece of the puzzle for the next-generation utility and will help spur organizational transformation. Utilities continue to place a strong focus on the basics—reliability, affordability, and customer satisfaction—and are in the early stages of defining smart grid priorities through the lens of overarching organizational objectives. In order to succeed, they must start small, work with trusted industry partners and vendors, and drive toward a clearly defined end goal.

Consumer communication is paramount. Providing clear, consistent, and actionable information to customers is critical to smart grid success. Open communication, transparent processes, and standards-based IT tools will help utilities extract and derive value from the data they need to effectively communicate with their customers.

True communication is a two-way street. Leading utilities are developing plans to engage consumers in a collaborative discussion on smart grid and energy conservation by opening up new channels including instant chat, text messaging, and social media.

In addition, smart grid technologies and increased consumer communication will flood utilities with data. It’s imperative that utilities partner with key technology providers that can help define information management strategies and architectures to capture, protect, analyze, use, and share data effectively and in real-time across their organizations.

Though utilities are taking cautious steps forward, smart grid is a reality. It isn’t something that might happen; it is happening and will continue to evolve. But will it evolve with or without utilities’ customers on board? Utilities cannot afford to continue with the same old communication methods. They must engage in new, two-way communication channels—including but not limited to text, social media, interactive websites, and mobile apps—to provide as much current, usable information as possible—while clearly outlining smart grid benefits to engage customers and ensure success.



1. The President’s Proposal for a Clean Energy Standard