The economy has put state commissioners and regulated utilities in precarious positions. Seven state chairmen explain how they’re applying fair rate treatment.
Fostering Smart Grid Evolution
A deliberate approach to infrastructure advancement.
the corner—once it buys their product. Only with time or good foresight does it become clear that this incidental approach to smart grid evolution will all too often produce a cumulative chaos within and among a utility’s key resources and processes, eating away at its performance and productivity while increasingly hindering the utility’s ability to realize the range and value of smart grid benefits that would otherwise be possible.
Each piecemeal solution, no matter how elegant and efficient, can significantly compound the size, difficulty, and cost of the overall challenge. Worse yet, in the absence of managed smart grid evolution, a utility will often react spontaneously to forces and circumstances, both internal and external, that are poorly understood by the utility and its stakeholders. As a consequence, the utility organization can morph in unexpected, and often undesirable, ways.
Consider the emergence of electric vehicles (EV). Any significant shift to EVs will require many sizable, complex, and sometimes rapid changes to electric infrastructure, as well as utility operations and customer experience. Implementing the necessary changes will expose the presence or absence of timely, coordinated, strategic planning and action. Will the transformation that’s necessary for EVs be successfully facilitated by an organized framework of resources and practices? Or, to put it bluntly, will the transformation spawn a confused scrum of projects and activities that result in a procession of costly surprises and missteps?
Each electric utility’s vision and mission are somewhat distinct from those of other electric utilities. Nonetheless, a handful of elements typically overlap. First, most strive to be the preferred energy provider in their market by providing energy when, where, and how it’s needed; by effectively responding to customer service requests; by providing quality power— i.e., high availability and consistent technical compliance; by committing to environmental innovation and stewardship; and by charging a fair and competitive price for services rendered. Electric utilities also strive to achieve sustainable performance, which is measured with metrics like customer satisfaction, profitability, cash flow, efficiency, return on investment, agility, and resilience. These are the high-level drivers that must be understood and accommodated when managing smart grid evolution.
Meanwhile, an electric utility operates and evolves within its own local ecosystem that fits uniquely into the global scheme of things. Some elements of the local ecosystem are very similar for most utilities. For example, new technologies, federal laws and regulations, global and national economic conditions, and trends like the aging of our workforce. Other elements of the local ecosystem might differ significantly from one utility to the next. This list is much longer and includes things like customers’ attitudes and expectations, geography, weather, demographics, regional and local regulation, local economic conditions, size of the utility, financial performance and resources, staff capabilities and limitations, ownership, governance, organization, culture, operating practices, physical plant, information and control assets, energy supply, load profile, utilization of outside resources, quality of service, cost of service, environmental compliance, etc. These are just some of the notable factors that can either help or hinder smart grid evolution at any given utility.
Some of the