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The (old) power industry king is dead

San Diego is a place to see and be seen. Personally, I saw black-and-white panda bears and pink beach sunsets and orange-ish mai tais. And a lot of people saw me (through lots of meetings and lunches and drinks at one of the largest industry conferences in the U.S.).

So, my time in San Diego last week taught me a lot about where this industry has been and where it is going. I’m approaching almost 20 years in the power biz, and I have to say this is the most active (and interactive) time of its life—at least since I’ve been in the mix. 

I went specifically to ask what the industry saw the modern utility evolving into. I expected a couple of generic answers: We expect it to be more flexible and more customer-centric. Those were the answers I had planned on. 

And I got them, but I also got a whole lot more—from utilities telling me they may just become aggregators of microgrids in the future to insights into utilities returning to a basics approach that many long considered dead. We’re everywhere and nowhere consistently on our views of the utility of the future.

And that seems about right for where we are as an industry these days: still thinking, still planning, still building the concepts.

Your major takeways if you read no farther: using data for infrastructure efficiency, massive innovation, changes in culture, new (and old) thoughts about customers. 

Dave DuCharme with Capgemini broke the utility of the future down into three options: a retail utility, a traditional utility and a diversifying utility, with retail utilities grabbing the untapped market around the house (including security, DR and the like), traditional utilities hunkering down behind regulations and structures and diversifying utilities knowing generation and looking to enhance asset values from the outside in. But knowing which kind of utility will survive and thrive in the future really depends on how the market plays out. So, for right now, it could be anyone’s game (or all three may come out winners in the end with the right environment).

The guys at Trimble—who have lots of experience in the European market—focused on finance—specifically on network models that help take money out of the equation by increasing the efficiency of outsourcing.

And the concept of outsourcing, which has always been a rather “hands-off” game for utilities, is now exploding. At least six sources discussed it. Efficiency was even more popular, with nearly every chat seeing that word pop up repeatedly. 

What’s interesting is where that efficiency is tied to—namely substations and infrastructure tech. And it’s all swirling around the big data and analytics game that was once so focused on customers. Now, it’s focused on hardware and making all that industry hardware work a bit better, which is an interesting perspective I found from many sources—making sense of data, the ease of data, using data to help lift a burden off utilities. Data is circling back from customer to infrastructure.

As Bitstew pointed out to me, the future of the utility is all about making data lakes positive and utilities learning to trust the data.

Elster built on this idea by discussing how data, open standards, flexibility and interoperability can help simplify a utility’s journey into that unknown future.

At an Energy Central-sponsored breakfast during the show, Lee Krevat with SDG&E also picked up on the data and analytics chatter with efficiency and condition-based maintenance as one of their areas of focus for innovation (along with microgrids and weather analytics).  His co-panelist, Karen Lefkowitz with Pepco Holdings, brought that convergence of data and hardware down to the basic question of the morning.

“The question is: How do you organize your company to use this great smart grid technology available?” she told the audience. “It’s an easy path to use data how we’ve always been using data. Using it in news way, in different ways, in innovative ways—that’s hard.”

Lefkowitz and Krevat admitted innovation at their utilities is taking large amounts of restructuring, re-culturing and rethinking. Erik Krause at SMUD brought up that his utility has an innovation generator, a concept that I heard a lot about across the board in San Diego last week, which is new and interesting. (Innovation was one of the major keywords of my talks.)

From all my discussions at the conference, I could take away that utilities are very much moving on how data, analytics and efficiency can improve how a utility works, its reliability and its longevity. The other large topic area with the most chatter was still the customer. But that chatter wasn’t consistent.

There was a lot of talk about educating customers, about explaining the importance of utilities to them, about helping customers understand the utility place in their everyday lives. And there was discussion about how utilities are now compared to the Apples, Amazons and retail outlets of the world. But there was little discussion about what that comparison means—namely moving past “educating” the consumer to really working inside the consumer space, which may explain a growing disconnect that customers are feeling in Itron’s recent resourcefulness index, which we also discussed in San Diego with the always insightful Sharelynn Moore. 

The index talks about the customer problem this way: “This year, 66 percent of utility executives believe they have been successful in consumer engagement, an increase from 55 percent last year, yet consumers feel less informed about the utility industry and are less satisfied with the information they are receiving.”

So, utilities think they are doing an awesome job talking to their customers, but their customers don’t agree. Is that the next step in modernizing utilities? Do we need to shift the mindset from “educating” the consumer to truly marketing to them and helping from a service perspective? 

Perhaps that’s a discussion for the next major industry conference where I will once again leave with more questions than answers. But that makes it all so much more interesting these days.

 

For all their good info while chatting at the show last week—and for helping with this article that came from all those discussions—thanks to Dave DuCharme and Dawnell Larsen at Capgemini; George Karayannis, Matti Syyrakki and Tom Casey with Trimble; Ed Thomas (and his lovely wife Tiger) with PLMA; Kristen Brewitt (and her fabulous cohorts) with EnerNOC; Lee Kravat at SDG&E; Karen Lefkowitz with Pepco Holdings; Erik Krause at SMUD; Terri Howe, David Suszko, Damien Polansky and Brent Richardson at Dow; Karen Dosanjh and Franco Castaldini with Bitstew; Nancy Talley and company with Aclara; Bert Williams with ABB Wireless; Laurine Jue at Avista; Ginger Juhl, Ron Pate and Jeff Tolnar with Elster; Dave Twichell at esri (though I missed you greatly Bill Meehan); Steve Ehrlich at Space-time Insight; Annie Haas with EPRI; Bill Rose at ABB; Liz deCastro and Andy Bennett at Schneider Electric; Spencer Zirkelbach and the whole S&C Electric gang who came for a chat; Sally Vandershaf with PlanetEcosystems; Fallon and the whole Alstom gang from their informative breakfast; Rodger Smith and Samantha Thai at Oracle; Sharelynn Moore and Alison Mallahan with Itron; Annie Seiple with Siemens; Gabrielle Puccio and Stuart McCafferty with SGIP; Jason Cigarran with Comverge; Tom Ayers with N-dimension; Linda Lea with Black & Veatch; and Guy Cantwell and Bill Ernzen at Accenture. 

Kathleen Wolf Davis's picture

Thank Kathleen for the Post!

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