For the last eight years of my 27-year career in the military, I was responsible for merging the Air Force's computer business with its communications business. This undertaking was similar in at least one significant way to current efforts to expand the role of computers in the regulated utility environment (em education is paramount.
Utilities typically employ computer technology either by creating internal information management divisions/subsidiaries or by outsourcing the work to a company that specializes in computer information technology. The primary impact of computer information systems is their cost: money spent for equipment, facilities, personnel, overhead, and operation and maintenance. These systems are expected to exert a positive impact on operating costs and shareholder earnings. Public utility regulators see a parallel impact on rate bases, incentive regulation initiatives, and competition. I would assign a $50-billion price tag to these combined impacts, and I think I am not far from the mark.
The magnitude of this $50-billion impact poses a dilemma of sorts for regulators. On the one hand, many want utilities to deploy computer information systems because they produce greater efficiencies and cost reductions. At the same time, however, the large expense may require that they decide what is an appropriate and prudent course of action for their jurisdictional utilities; buy, lease, or outsource? Commission staff also must fully understand the overall benefits of computer information systems and not consider bottom-line dollar value alone.