EnergyBiz - January/February 2008 - (Page 48) The PaTh To The SmarT UTiliTy By Guerry Waters Vice President, Industry Strategy and Marketing Oracle Utilities What do you call a consumer with a smart card or a smart phone? Few of us would answer: a smart consumer. Only consumers who are smart to start with can use smart devices to reach specific goals. So why does so much of today’s discussion of smart metering and smart grids imply that they lead directly to the smart utility? One reason is our acute need for solutions to utility problems that have grown exponentially over the past ten years. The pressing need for infrastructure repair competes for attention with the departure of an entire generation of aging baby-boomer employees. Grid constraints threaten blackouts; but demand continues to rise while, simultaneously, our ability to site new wires and pipes grows ever weaker in the face of environmental and property-value concerns. Regulators demand that utilities “solve” a century’s worth of air, water, and land-use issues while customers resist both price hikes and lifestyle changes. At the same time, much of the industry continues to address regulatory and investor demands for greater efficiency and cost cutting by leaving staff vacancies unfilled. One result is that today’s depleted ranks of utility managers spend more and more time fighting fires. There’s little time to think, much less to analyze. In short, utilities could definitely use a miracle. Smart grid and smart metering technologies aren’t miracles. They do, however, address the utility industry’s growing problems with two valuable and relatively new concepts: distributed intelligence and multi-solution technologies. Distributed intelligence offers utilities an opportunity to share the burdens of energy procurement and delivery with customers. A smart grid could, for instance, automatically accommodate bi-lateral agreements between customers with on-site generation capability in excess of their needs and customers who need that power. Such arrangements could ease a utility’s supply portfolio management responsibilities while simultaneously providing an economic boost to local industries and additional incentives for renewable or co-generation. Similarly, smart metering’s distributed intelligence can facilitate demand response programs that are specifically designed to move wholesale market risks to customers. Such programs reduce the threat of regulatory recriminations that result when utilities must purchase high-priced power in supply-constrained markets. In addition to distributed intelligence, both smart grids and smart metering give utilities a second problem-fighting weapon: an opportunity to address multiple problems with a single solution. In the past, utilities have tended to apply technology to one set of closely related problems at a time. We rarely addressed customer information solutions in light of possible network solutions or field solutions. Many utilities found that one-at-a-time was the only approach that worked with regulators focused narrowly on cost-justification and unfamiliar with some of the more complex aspects of utility issues. This one-by-one approach, however, failed to assign value to such aspects of computerization as flexibility, speed, ease-of-use, off-the-shelf software packages, or integration. The result has been that utilities have been among the slowest of businesses to upgrade IT structures. Our industry is replete with legacy systems that cannot be readily modified, much less upgraded. Smart grid and smart metering technologies are a breath of fresh air for the struggling utility industry. Each addresses multiple aspects of utility business with distributed intelligence that solves multiple problems. Each is a solution, not an isolated application. And because they address current, headline-creating problems, smart grids and smart metering make it 48 E n E rgyB i z January/February 2008 ThOughT LEaDErship – spOnsOrED By Or acLE uTiLiTiEs
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