Utilities: The 9 things to worry about most
Quick Take: At the annual DistribuTECH conference, I moderate panels where I hear from dozens of utility professionals, both panelists and audience members. I also have private meetings with dozens of vendor executives, who themselves have talked with hundreds of utility professionals over the past year.
As the conversations wear on, themes begin emerge. It's a helpful way to get the pulse of our industry. This year, I discovered, virtually every utility is grappling with multiple problems. The precise mix of issues depends on the part of the country. But here are the nine worries I heard most often this year. - Jesse Berst
1. Policy pressure to be more reliable and resilient. Many states are up in arms about storm resiliency, demanding major improvements. But few of them are willing to help us pay for the necessary upgrades.
2. Aging infrastructure. Much of our equipment is beyond its design life. But how can we afford to upgrade and modernize at a time when most regulators are loathe to allow rate increases?
3. Flat load growth. Many of us are seeing only modest growth or none at all. How can we keep our shareholders happy? And how can we pay for expansion and upgrades?
4. Fuel switching. Utilities with coal-fired and nuclear plants are looking hard at replacing some of them with natural gas plants instead. Figuring out whether and when is an extremely complex decision.
5. Distributed energy resources. Distributed rooftop solar is already making a major impact in several sunny states, creating major challenges to grid operation and balance. At the same time, distributed storage is on the horizon from companies such as Tesla and Solar City. How can we manage this, especially since most net metering programs force lower-income families to subsidize the costs of supporting the higher-income families who can afford rooftop solar?
6. IT/OT integration. Our operational technology increasing has a big IT component in the form of embedded systems, sensors and the software to manage them. Likewise, our IT department is increasing charged with getting value from all the operational data flowing in. Clearly, these two sides of the business need to collaborate closely or even merge. But how do we smoothly integrate two silos that have been separated for decades?
7. How can we get more value from our smart grid investments? Okay, we've got the AMI system up and running. And we're making progress on substation and distribution automation. But now our regulators want us to prove that those investments are creating value. For the electric power system. But especially for the ratepayers.
8. How the &#!! can I manage Big Data? Most utilities think data analytics is one key to unlocking value. But where should we start? And how can we possibly afford a giant server farm and a staff of data scientists? Yet for privacy and regulatory reasons, we don't feel comfortable sending customer data to cloud-based systems.
9. Is it time to move to an advanced distribution management system? In the last six months (and culminating at DistribuTECH), virtually every major player has offered up an ADMS that integrates SCADA, outage management and many other functions. But can we afford the price? And the retraining costs? And the disruption to operations?
Jesse Berst is the founder and Chief Analyst of SGN and Chairman of the Smart Cities Council, an industry coalition.