Urban Legend

Utilities are Part of Smart City Journey, no Matter how They’re Defined

Forrest Gump should have had it the other way around. Smart is as smart does.

“Smart city” is a term that gets a lot of play these days, but is hard to define. Wikipedia (yes, it is often discounted as an unreliable information source but it works here) defines smart city as an urban development vision to integrate information and communication technologies (ICT) and Internet of Things (IoT) solutions in a secure fashion to manage a city’s assets, including, but not limited to, local departments’ information systems, schools, libraries, transportation systems, hospitals, power plants, water supply networks, waste management, law enforcement and other community services.

Wikipedia goes on to say that the goal of building a smart city is to improve quality of life by using urban informatics and technology to improve the efficiency of services and meet residents’ needs. Using sensors integrated with real-time monitoring systems, data are collected from citizens and devices and then processed and analyzed. The information and knowledge gathered are keys to tackling inefficiency, according to Wikipedia’s definition.

Some experts in the industry believe the term is simply a buzzword that is over used and has outlived that usefulness.

Lawrence Jones, Edison Electric Institute’s vice president of International Programs and a participant on a recent panel discussion called “Optimizing Smart Networks: The Role of Utilities in Smart Cities Efforts,” declined to define smart city when asked to do so.

“It means different things to different people,” Jones said. “I try not to define smart city because the definition must be put into context and the location must be considered.

“I can, however, tell you the underlying principles of what makes a city smart,” he said. “You must have information and data. You must have customers; not just your typical utility customers, but customers from all ecosystems of stakeholders in the city, including city government. Also, the right economics is a must. Utilities own a lot of infrastructure that is important for smart cities, but integration of the right technology into that infrastructure is key. You must understand how to make the systems work together. And, finally, you must have the right policy and regulation around smart cities to make them work.”

Jones, along with Manny Cancel, Con Edison’s vice president of information technology and chief information officer, spoke with Bradley Williams, vice president of Oracle Utilities Product Management and session moderator, during Oracle’s Industry Connect event held in late March.

Cancel agreed with Jones.

“Smart cities are ecosystems of not only customers and utilities, but other stakeholders, such as real estate developers and city government,” he said.

Con Edison is involved in several smart city initiatives where various stakeholders have collaborated successfully. Manny said one of those is the Brooklyn-Queens Demand Management program in New York City. The initiative involves Con Edison, the New York Public Service Commission (NYPSC), customers and various vendors.

In a separate interview with POWERGRID International, Matthew Ketschke, Con Edison’s vice president of distributed resource integration, spoke in more detail about the Brooklyn-Queens initiative.

When load outgrew the substation in an area of the city, the utility’s executives first considered building a new substation, which was going to cost about $1.2 billion. Con Edison explored other, less expensive options and discovered that utility-customer non-wire alternative solutions would be considerably cheaper. The utility worked with the NYPSC to help create regulatory policy that would make it feasible for Con Edison to implement demand response and energy management programs. The NYPSC allowed Con Edison to earn a rate of return on the non-wire alternative programs just as it would on a pipes-and-wires investment, said Ketschke.

This new type of regulatory model could be a game changer for Con Edison, as well as other utilities’ if their regulators follow suit.

“This opens the toolbox to utility planners and gives them all options, including incentivizing CHP (central heat and power) or demand response,” he said.

Ketschke said Con Edison has identified other non-wire alternative programs that it could implement to delay or even dismiss the need for costly infrastructure investment.

Cancel also talked about an initiative occurring in Manhattan called Hudson Yards in which Con Edison and many other stakeholders are involved. The self-sustaining smart community, which is under construction, considers traffic, energy and water use, integration of many systems and more.

It is the largest private real estate development in the history of the United States and the largest development in New York City since Rockefeller Center, according to its website. The site will include more than 18 million square feet of commercial and residential space, state-of-the-art office towers, more than 100 shops, a collection of restaurants, planned green space and more. In addition, it will include approximately 4,000 residences.

While neither of these New York City initiatives are all-encompassing smart cities, both are good examples of ways in which various city stakeholders are working together to create positive results and solutions for their communities.

When asked why utilities need to lead smart city initiatives, Jones said sometimes it makes sense and sometimes it doesn’t. Again, it depends on the context and the location, he said.

“I’ve heard the concept of smart city come down to one community within a city,” said Jones. “A utility can play a lead in, for example, a net zero community that lies within a city. This makes sense if the community is considering distributed generation, energy efficiency and other things to make it net zero.

“But, leading the initiative for an entire city is different. In that case, the utility’s role is different than in a smart community within a city,” he said. “Smart city is in the eye of the beholder. Who is to say what makes a smart city? Maybe it’s smart traffic lights or adequate trash collection. You have to look at the context.”

“Utilities don’t have to lead the initiative to influence its development,” said Cancel. “Utilities can influence city governments as well as other industries that have a stake in smart city development, such as real estate developers, home security companies, appliance manufacturers and cybersecurity companies.

“In addition to influencing these types of entities, utilities should be willing to partner with them, too,” added Cancel. “It (creating smart cities) will require a shift in mindset for utilities and regulators. Utilities must adjust to selling less instead of more. If you look at Brooklyn-Queens, you can see a mindset change.”

Many smart city initiatives are being developed through grants and other public funding, but Cancel and Jones stressed that private investment and a business case must be part of any initiative, no matter which entity takes the lead.

Jones suggested that utilities also simplify the conversation. City managers, leaders and mayors are being inundated with people pitching smart cities, he said.

“These people should first determine what problems a city needs to solve and then provide specifics about how to solve those problems. Sometimes these programs are just a technology experiment and no one has defined what is being accomplished. First, (those involved) should identify what needs to be fixed and then determine what technology is needed, rather than push technology with no idea of what is needed.”

While it might be impossible to clearly define smart city, it might not matter. No matter what it’s called or how it’s defined, the pursuit of improving a city’s efficiency and operations, as well as the quality of life for its residents, is not a new concept. Cities will continue to evolve. Whether they lead or follow, utilities will be part of the “smart city” movement.

“We are all collectively on this journey,” said Cancel.

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