IEEE Power & Energy Magazine - September/October 2016 - 92

in my view

Ralph Masiello

learn from the past
it's better than repeating it

T

The arTicles in This issue of
IEEE Power & Energy Magazine present a contrast in the outlook for the grid
of the future. on one hand, serious efforts are underway to define the distribution system operator (Dso) and plan
the transition from today's distribution
utility to tomorrow's distribution market
operator. on the other hand, a grim assessment of the cyber insecurity of the
grid operating-system infrastructure is,
if anything, understating the risks and
challenges in addressing them.
The 1965 blackouts in north america, in particular, drove a number of
changes in the industry: ePri was
formed in time; money was allocated
to r&D in grid operations, economics,
and reliability; and the industry rushed
to take advantage of the promise of ever
more and cheaper computer power. real
advances in network analytics, such as
load flow, state estimation, contingency
analysis, optimal power flow, stability analysis, were made and in operations
economics, particularly unit commitment.
The 1970s and early 1980s were a
golden era in power systems planning,
operations, and control. utilities and
vendors recruited and applied the best
and brightest and were as proud of their
new control centers as they were of a
new power plant, even more so, as the
control center represented the new age
of high technology.
But then the financial impacts of nuclear plant overruns hit, and many utiliDigital Object Identifier 10.1109/MPE.2016.2577898
Date of publication: 17 August 2016

92

ieee power & energy magazine

ties were unable to continue financing
investments in modern control centers
or even the staff to keep up the new and
sophisticated tools. That era took over a
decade to work itself out, and no sooner
was that behind us than deregulation and
restructuring hit. The more ambitious
experiments in restructuring and market
design occasionally became lessons in
the law of unintended consequences.
Today, we seem on an inflection
point-where there is opportunity, there
is danger. The transactive energy crowd
sees a smartphone-like future for the energy industry. a grumpy old man might
also see the real possibility of repeating
the history of passenger rail-unable
to compete with new modes of transportation, tied down by fixed infrastructure and rigid regulation, doomed
to nationalization.
Two problems from the past are still
with us and pose the danger in this opportunity. one is lack of will and/or ability to adequately finance the development
and ongoing upkeep of the information
technology (iT) infrastructure required.
operational technology (oT) has always
lagged behind back-office iT in spending because it was not part of the revenue
chain and was seen as process control/
engineering. a utility Dso that is a "utility" function and not a profit center in itself will easily fall into the same pattern.
Just as the wholesale market infrastructure ended up more complex and costing
more than originally envisioned, so will
the distribution counterpart.
The second problem is regulatory
risk. regulators need to embrace the

new world and allow utilities to invest
in it. The evolution to the Dso model
poses challenges to regulators (and utilities) that they have never had to face
before: the customer has a say. customer investment decisions and operational
decisions will be what dictates the success or failure of the utility of the future,
especially in a fully restructured and
market-oriented environment. on one
hand, the industry really needs customers to buy in, invest in distributed
energy resources, and participate. on
the other hand, forcing customers to
participate will result in push back and
political loss of will. The difficulties
that smart metering encountered, such
as fear of exploding meters, "cancercausing" radio waves, and resistance to
time of use or dynamic pricing, are just
the tip of the iceberg.
The fear of customer resistance and
political push back, plus the very long
oT life cycles in the industry, lead to
compromise decisions that attempt to
carry forward legacy tariffs, business
models, and technologies in parallel with
the newest developments. on the technology side, this greatly increases costs
and can make robust, secure solutions
impossible to achieve. on the regulatory
side, it makes it difficult to avoid crosssubsidies and unexpected outcomes.
What can we expect? We won't have
a quick, easy transition to a Pollyannaish future; nor (fingers crossed) will
we see technology disasters and large
scale market experiments run amuck.
But we will find interesting times.
p&e

september/october 2016



Table of Contents for the Digital Edition of IEEE Power & Energy Magazine - September/October 2016

IEEE Power & Energy Magazine - September/October 2016 - Cover1
IEEE Power & Energy Magazine - September/October 2016 - Cover2
IEEE Power & Energy Magazine - September/October 2016 - 1
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IEEE Power & Energy Magazine - September/October 2016 - 91
IEEE Power & Energy Magazine - September/October 2016 - 92
IEEE Power & Energy Magazine - September/October 2016 - Cover3
IEEE Power & Energy Magazine - September/October 2016 - Cover4
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