Assuming Ladders

Steven Brown, Editor in Chief

During the Wednesday morning session of GridWeek (which took place this past April 23-26 in Washington D.C.), PNM Resources CEO Jeff Sterba framed his keynote presentation with a joke:

An engineer and an economist were walking across a college campus at night when both suddenly fell into a deep hole. The engineer immediately pulls out his Texas Instruments calculator and begins computing the space of the hole and the wall angles in an attempt to find a way out. After much studying, he throws up his hands and tells the economist the only way they’re going to get out is if someone on the surface finds them and drops them a rope.

The economist won’t accept the answer. He surveys the situation for a few moments before saying, “I’ve got it!”

“Assume a ladder.”

The point of Sterba’s joke, and the discussion that followed, was that we have two distinct personality types (at least) working toward the power grid’s betterment: engineers, who deal in concrete reality, and economists, who often deal in assumptions and what-ifs. Sterba’s exhortation to those gathered at GridWeek was that, as an industry, we must deal in reality as we come up with solutions to the challenges that face the industry. We shouldn’t “assume ladders.”

Sterba outlined numerous challenges facing today’s power industry, among them rising demand, the effect of increasing material costs on the coming build cycle, and climate change, which he pegged as the most pressing issue not just for the power industry, but for the entire economy.

Sterba sees the evolution of the “smart grid” as one solution to this perfect storm of challenges. He said we need smart electrical devices and open architecture communication systems to interconnect those devices. Vendors must eschew proprietary systems to make the smart grid work. Sterba also said we need innovative markets with innovative regulation and rates to foster the smart grid’s development.

Sterba’s message was right on, in my opinion. I agreed with pretty much everything he said. However, the message had one large failing. Sterba, along with just about everyone else in the power industry-many engineers included-is still “assuming ladders.”

The power industry has at its disposal, right now, the types of smart devices Sterba called for. What’s missing is the integration of those devices, at least on a wide scale. Device integration is one “ladder” the power industry is still assuming.

The innovative markets, regulation and rates Sterba mentioned are not fully developed either. Provisions for smart metering and demand response in the Energy Policy Act of 2005 are a step in the right direction, but the regulatory ladder that will enable a national “smart grid” still has some rungs missing.

Sterba also acknowledged, during the Q&A session after his speech, that company cultures at power companies need to change. Operations and IT are often at odds, and they need to be in better cooperation. Much like we need integration of smart devices, we also need integration of our smart people. Operations and IT need to put any cultural differences aside and understand they’re working toward a common goal of grid efficiency and reliability.

There are still a number of assumed ladders between where the power industry is now and where it wants to be with the smart grid. The important thing is, we have the tools and the people in place to get those ladders built.

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