14 Jan [ETS16 Primer] Transformation: Three Themes Utilities Must Embrace
by Jon Arnold, ETS16 Community Advocate and Zpryme Advisor
Transforming the Chaos is the core theme of the 2016 Energy Thought Summit, and our approach for doing so is expressed by the acronym TECH. Each letter represents one of four elements we believe is essential for bringing order out of chaos as the energy sector continues down the path of modernization.
While these elements are individually important—Transformation, Emergence, Convergence and Humans—they all have a connection to technology. Our vision for ETS16 is to show how these ingredients come together to create a powerful roadmap for utilities.
Over the next four articles, I’m going to examine each element in greater detail, with specific references to what our speakers will be sharing during the summit. Our focus at ETS16 is to lead by example, showing actual steps being taken today by utilities rather than just talking about what’s coming down the road.
To launch this series, I’m going to focus on Transformation, and the ways utilities are proactively responding to an environment that is creating the chaos we’re all trying to understand. There are three types of transformation you’ll be hearing about at ETS16, and this article features perspectives from two of our speakers; Harold DePriest, CEO of EPB, and Michael Legatt, Principal Human Factors Engineer of ERCOT.
Transformation theme #1 – the Utility
Technology touches everything, and its transformational impact will be ongoing. Equally important, however, is the business itself, and in 2016 every utility needs to be thinking about what this means. Energy is no longer a commodity business, utilities are no longer pure monopolies, and customers are no longer passive consumers of power. Technology is definitely having an impact on what customers expect from utilities, and this is transforming the fundamental relationship between them.
EPB is a prime example of this, and at ETS16, they’ll be talking about what this means. Rather than viewing energy consumers as ratepayers, they now think in terms of customers and community. Harold DePriest explains:
“I believe that most electric companies are going to have to provide more than energy and provide it in different ways than we have in the past. If you look at what’s happening with distributed generation, that’s a perfect example of how utilities will have to adapt. We can sit back and watch as customers add their own distributed generation to the mix, or we can be involved, build relationships and find ways to maximize the new energy sources for the whole community. We think it’s important to continue recognizing our responsibility and the reason we’re here: to positively impact the community we serve.”
Utilities must also become more customer-centric, and that requires a culture change from the top down. Again, Harold shares how EPB took a hard look at how they were doing business and recognized this was out of step with today’s market environment. Not only did things need to change for the present, but also for the future to ensure EPB remained relevant to their community.
“We were a typical utility. We had a lot of good people but there were too many of them and we were bureaucratic. Our efforts were not focused and there was no overall strategy. We were inwardly focused and thus difficult to do business with, focusing on what was easy for us, not what was easy for our customers. Initially, we were created to improve the lives of the people in our service territory, and that’s what we should be up to for today and tomorrow. That’s a dynamic activity, not a static activity.”
Finally, utilities must also transform in terms of being more technology-based – not just to manage the grid, but to understand customers and meet their evolving needs. Again, Harold explains:
“We think our customers are expecting much more from us than in the past and that isn’t stopping. In the future, I think we’ll be more of a technology company than an energy and communications company. We’re continuing to evolve now and much of that evolution is coming from the massive amount of data we’re able to get from our smart grid. A good deal of our work will be driven by statistical analysis of all the data we’re collecting.”
Transformation theme #2 – the Grid
With technology being so pervasive in our lives, it plays a fundamental role in how utilities are undergoing a transformation into the digital age. Consider what ERCOT is doing with the Macomber Map to transform the management of their grid. Michael Legatt explains what brought them to this breakthrough:
“Back in 2007, I was brought on board to help look at situation awareness in the control room. It was understood at that time that the job of a control room operator was getting more complex: there was much more granular data, and it was coming faster. There were new protocols and ways of doing business, and the beginning of a major growth in intermittent renewables.
To try and understand what a solution could look like, I created a simple visualization that showed the Texas grid and pulled real-time information to show flows on transmission lines and alarms. Once that capability was there, it turned out to work well to solve many different kinds of problems. Having recognized the need for a situation awareness tool, and having looked at several commercially-available options, ERCOT turned this prototype into a production tool, and that became the Macomber Map.”
What makes this transformative was ERCOT’s approach for adopting new technology. By making this an open-source project, the solution could be built from the ground up by people who both understood the problems and had to interface daily with the software to do their jobs. In this regard, the Macomber Map strikes a rare balance between taking the best of today’s technology and making the solution human-centric where end-users become stakeholders in its ongoing success.
“The Macomber Map really is just creating a better interface between the technology and the human being, empowering the human being to better perceive information, understand the situation they’re in and where it’s going, and to make better decisions to achieve their goals. Our focus is to build tools that help them to do their work, as opposed to them needing to change our work to use our new tools.”
Transformation theme #3 – the Customer
At ETS16, we’ll also be looking deeply at how the culture of utilities is changing, not just in how they function operationally, but in redefining their relationship with customers. ERCOT in particular will share with us how they needed a culture that was more customer-centric, and that’s a challenging transformation for all utilities. As with the other themes, technology plays a central role, especially in creating new expectations from customers.
Energy is a prime example where the “prosumer” brings a new level of engagement that utilities haven’t seen before. Smart grid technology is empowering customers to use energy not just efficiently, but responsibly. Conversely, with two-ways flow of real-time data, utilities have an incredible opportunity before them to leverage this same technology to truly understand customer needs.
This transformation will be quite profound, and today’s technology is enabling customers in ways that most utilities aren’t yet ready for yet. As renewables become more demand-driven, customers will have more market power, and this is exactly the kind of chaos we intend to help utilities deal with at ETS16.
We’d love to have you participate in the discussions taking place at ETS16, March 29-31 in Austin, Texas. Learn more about the event here.
We’d also love your participation in the first Chaos Index survey. We want to hear from you about how all this industry change looks from your perspective. Take the survey here.