Technology takes the grid, utilities in new directions, electric CEOs say
Electric companies continue making progress in building smarter energy infrastructure to meet the needs of their customers, while at the same time successfully use new technologies to improve energy grid reliability and resiliency and integrate more distributed energy resources (DERs).
“Technology has already been so impactful to our industry and this is only going to accelerate,” said Scott M. Prochazka, president and CEO of CenterPoint Energy, during a session at last week’s Edison Electric Institute’s annual convention in Boston.
Prochazka said CenterPoint’s technology investments started about seven or eight years ago in smart meters and a distributed management system, which have generated tremendous benefits to the tune of roughly $100 million in savings and a 25 percent increase in reliability.
The Houston-based electric and natural gas utility also invested in predictive analytics in customer care, he said, which basically can tell staff why someone is calling before the person says anything. “The technology has helped us get to a 50-percent retainment rate,” said Prochazka.
“Our philosophy is that we want to know more about the system than the customer so that we can tell them about it,” Prochazka said.
For utilities interested in making tech investments, he advises:
· Have a vision of what you want the investment to accomplish—better customer service, for instance, or enhanced offerings? What’s the goal of the technology investment?
· Start smart and invest in what you know. Talk with stakeholders about the journey and what it will take to get to the end goal.
· Take note of early wins and share them with investors and stakeholders.
· When it comes time to execute the project, just do it—but keep the pace slow and steady.
· Put a change management plan in place that presupposes changes.
Geisha Williams, president and CEO of San Francisco-based PG&E Co., added another: Know how to stack value.
For instance, PG&E a few years ago went to the California Public Utilities Commission (PUC) and asked for $2 billion for its Cornerstone Improvement Project, a three-year plan designed to improve reliability of its distribution system.
“We didn’t get it,” said Williams, adding that if you approach regulators with anything weird, different or unnecessary, you’re unlikely to get financial support. Instead, she said, suggest you need new technology that would benefit public safety, for instance.
“Start small and maybe don’t name [the project]. Don’t draw attention to it,” she said. And be able to explain it to the regulators, she said.
Tech resources
California, which is trying to optimize the grid, is the epicenter of DERs, Williams said, systems that may include various technologies and/or devices like electric vehicles (EVs), hybrid power systems, behind-the-meter batteries, rooftop solar, among others. “You name it, we’ve got it and we’re learning from it,” she said.
“We’re also excited about a pilot we launched in San Jose with Tesla and a few others…” Williams said.
Specifically, the project with Tesla’s SolarCity was launched in July 2016 and provided about 150 residential customers in San Jose with smart inverters and/or residential battery storage systems, which the utility is coordinating to optimize electric distribution planning and operations.
Using some of SolarCity’s Grid Services products, which leverage aggregated DERs—including solar PV with smart inverters, battery storage and controllable loads—the pilot is supposed to demonstrate any benefits grid operators might see, such as voltage and reactive power support, dynamic capacity and peak shaving.
“We’re going to learn a lot from this pilot as the operator,” Williams said. “We’ve never tested so many things at once at scale.”
The pilot is slated to end in December. Once completed, the next step is to head to the PUC and “ask how do we get paid for it,” she said.
In fact, as utilities move forward into advanced technologies, Williams said, “We’ve got to be really concerned about costs” and whether they will rise, what structure pricing will take, how utilities will be paid for services and if services will end up being something only rich people can afford.
The best way to manage costs, suggested panelist Philip Mezey, president and CEO of Itron, is to use a lot of different technology tools. The Liberty Lake, Wash.-based public technology firm manufactures products and services that provide tech solutions for the grid, gas and water.
Williams agreed and added: “It’s about using the resources you have such that it has the least impact on the cost to the customer.”
Coming full circle, Naimish Patel, founder and CEO of Gridco Systems, suggested utilities use an overlay approach that calls for making “organic investments” in technology, meaning only where and when it’s needed.
“You don’t want to disrupt too much,” Patel said during the discussion. “The electricity industry has a reliable and stable base already.”
