The procurement and supply-chain functions of today’s utility are the Rodney Dangerfield of the utility cost-cutting paradigm: They don’t get any respect. Supply chains in most industries extend...
Maximizing Customer Benefits
Performance measurement and action steps for smart grid investments.
• Resources will need to be reduced in some functions and increased in others.
• New applications and systems integration will be needed to help employees and functions maximize the value of smart grid data.
• Organizational realignments, operating process changes, and incentive modifications will be required to maximize the value of smart grid capabilities.
• Regulatory administration will need to identify and pursue the rule and incentive modifications necessary to enable and encourage maximization of smart grid benefits.
A comprehensive and formal change management plan should be part of every utility’s post-deployment optimization strategy and include organizational, operational, systems, capabilities, and customer program enhancement components (see Figure 4) .
Regulators are currently pre-occupied with a great number of critical issues, namely FERC transmission orders, new and proposed EPA regulations, and associated jurisdictional issues. IOUs face their own challenges, including flat or declining usage, capital constraints, and regulatory uncertainty. However utility customers will be served well if both parties focus some of their resources on maximizing the value of smart grid benefits through regulatory and operational changes. This focus likely will be rewarded with both improved smart grid economics and enhanced services for customers.
1. The results of independent evaluations of two smart grid deployments led by the author for MetaVu Inc. are available on Colorado and Ohio PUC websites.
2. Ahmad Faruqui and Sergici, Sanem, “Dynamic pricing of electricity in the mid-Atlantic region: econometric results from the Baltimore gas and electric company experiment,” Journal of Regulatory Economics , 2011, vol. 40, issue 1, pp. 82-109.
3. SAIDI = system average interruption duration index; SAIFI = system average interruption frequency index; MAIFI = momentary average interruption frequency index.
5. EPRI, report #1020342.