Automation Technologies Featured at Record-setting Symposium

Automation Technologies Featured at Record-setting Symposium

By Wayne Beaty, Electric Light & Power

The Sixth International DA/DSM(TM) DistribuTECH(TM) Symposium continued the tradition of increased attendance, more exhibitors and excellent program sessions. The 3,500 attendees from all over the world learned about the “Keys to Success in the Market-Driven Future”–the primary focus of the symposium. Sessions were available on utility information technology, system strategies and customer satisfaction.

There were more than 180 exhibitors at this years` conference with about 77 new exhibitors. The emphasis at this years` exhibits seemed to be on telecommunications technology.

Guaranteed Service

Commissioner Bill Tucker, in his opening remarks to this year`s conference, called on utilities to make a mindset switch from guaranteed customers and profits to “guaranteed service.”

Tucker said, “My challenge to you and my answer to how you can guarantee your competitiveness and therefore your personal future is simple: Guarantee your product and service! Begin it today.”

Tucker challenged the attendees to listen to what the speakers at the conference had to say and to check out the myriad of hardware, software and services in the exhibit hall with a view to what they needed to provide a Guaranteed Service offering. He encouraged the attendees to start making it part of the way business is done as soon as they returned to the office.

He further encouraged them to look at the role they play as the monopoly provider and make a commitment to Guaranteed Service. “It`s a very big switch from the current mindset of being the beneficiary of Guaranteed Customers and Guaranteed Profits,” he said. “But, I contend, it is the key to success in a future that is market-driven. And it`s not as hard as you think. Get the accountants to work the numbers. Get marketing to run it up the flagpole. Put a task force together to determine how to package and price your guaranteed services. Benchmark yourself against other utilities. Look at the experiences, here and outside the United States and Canada. Determine what is achievable and then set improvement goals along a timeline. Do a business plan for Guaranteed Services as though it was a new product. Budget for it. Train for it. Reward for it. Select it, and select the equipment that can support it. Make Guaranteed Service a priority!”

Why Guarantee Products and Service?

Tucker answered this question by saying, “Because regardless of the current level of retail wheeling or competition, your distribution company/business unit/REA/City Department, whatever, will be affected by competition. This could be a very indirect effect, and it could be a few years away. But it is coming. Provide service today that builds customer loyalty and you will retain market share.”

He added, “Because only leaders in product and service quality become and stay market leaders. Look around you. Being the low-cost producer, by itself, is no longer a viable long-term strategy for success. Even today`s discount businesses have learned they must provide a consistent, dependable level of service. Just look at the prices and customer orientation of Southwest Airlines–it is the ONLY post-regulation airline to ever make any money. And look at Wal-Mart–prices couldn`t be lower, and people swear by their service level.”

“There are many more examples,” said Tucker. “On the higher-price end of the scale is Nordstroms with both highest quality service and highest quality commodity, at premium prices. How about L.L. Bean for quality, service and `just in time` inventory control of commodity. You can see that you and your company have plenty of models to look at if you are willing to get out of the old, narrow, rut-like approach to providing service and commodity to your customers.”

Tucker said products and service should be guaranteed because quality programs are all fine and dandy, but they need teeth. Teeth that will force companies to seriously and continuously pursue service to their customers. Teeth that leave marks that can be tracked to determine efficiency and effectiveness, such as changes in profits; changes in number of new customers; marks on the books, like too much money paid out in guarantees because service wasn`t up to promised levels. Teeth in this context means accountability to the customer. A guarantee with money attached. You cannot become market driven without instituting internal changes that are driven by the market.

What Do Customers Want?

Tucker said, “Customers want dependability. Institute programs in your marketing plan that provide customers with what they want, and do it now. If you don`t know what they want, hold focus group sessions. They`ll soon tell you.”

“Remember when you last picked up the phone and didn`t find a dial tone?,” Tucker asked. “When was the last time there was a momentary outage while you were making a long distance call? It used to happen. Now think of when you last had to reset the clock on your microwave, or your thermostat, or your VCR, or your pool pump, and you`ll see where I am going with this comparison. I can`t wait for a new power supplier to come along with a better offering!”

Tucker pointed out that most utilities may not have an accurate view of their customers. Some view their customers as captive. But, he reminded the audience, “These managers and owners of utilities live in houses themselves. They are human beings too. They`re the ones making the big competitive choices today or in the near future, and they`re the ones with the really big houses. You know, right at the end of the distribution circuits, with smart appliances, with home theaters, with electronic phone systems and security systems, with remote controlled everything.”

Service quality at the end of the line is usually the worst. “And,” Tucker concluded, “if you are like most utilities, you probably justify that based on cost. Do you think these folks are loyal to you? Chances are pretty good that they don`t really think about it, don`t really care about you. But, if they have a septic system that needs a pump, I can guarantee they will hate you when the sewage is backing up after a day-long power outage!”

Tucker`s point is that competition will affect everyone, however indirectly. Residential service will affect commercial customers` loyalty, so enhancing customer service is a critically important adaptive skill.

Further excerpts from Tucker`s talk include: “A colleague recently remarked to me that he could not think of a single supplier to whom he paid so many thousands of dollars over the years and with whom he had less personal contact than the electric company–except of course the IRS. What an indictment! This is in very marked contrast to his local bell operating company, another regulated monopoly until a year ago. He knows his account representative. He knows they understand his business. He believes the phone company strives to keep him happy. They offer him choices. And when local calling was opened up to competition last year, he said, `No thanks, I`ll stick with the guys who have been serving me. The guys I know and like.`”

Understanding the Customer

A competitively motivated company will develop an understanding of a customer`s processes and operations. They will find out where strategic utility interruptions would not disrupt the customer`s business, what the costs are and what drives the customer`s needs. They will explore ways in which the utility or the customer might change its operations to meet the customer`s needs more cheaply and efficiently. This fosters an understanding of how the utility might achieve savings through change and interruptability and share those savings with the customer. This is adaptation to competition at its best, with the customer and the utility working together to provide better service at lower cost, to each others` benefit.

Tucker says a utility should also take a look at the world through the eyes of others by working with organizations which cater to the needs of customers. When you attend a meeting, remember that you are not just there to learn but also to teach. Every time you share your vision with a regional or national trade or professional association, you are opening your customers` minds to the new service and technology possibilities. The important thing to do is to show, as well as to find out, what your customers need to succeed, and then show them how you can help them to excel.

A better utility service company will help customers become wiser consumers. Those companies which are viewed by their customers as reliable sources of information and offer assistance in becoming smarter consumers will have the loyalty edge in a competitive world. Their customers will understand that there is more to competition than just price.

“Outreach of this kind has not been the norm in the utility business in the past, but it is the smart thing to do,” said Tucker.

Competition in the electric and natural gas industries is already here in some sectors, and it is coming to others. Customers must be cultivated and shown how technology can make a difference by making them better utility customers. By helping them solve problems in their own businesses, you will have a leg up on the competition. If you are viewed not as just another boring old-fashioned utility company but as a source of new ideas and “work smart” solutions, you will be building a new and very valuable type of customer loyalty. “Flip the switch” and “turn up the thermostat” reliability have given good utility companies a basically positive image; but loyalty based solely on this image can be overcome by others who are adept at marketing solutions. The coming of competition has made the industry more dynamic and has made your jobs more complicated. However, it has not made them impossible.

Tucker adds, “The last matter that you must resolve is the question of how long you can comfortably afford to wait before you begin to act. How long can you continue in the `guaranteed customers,` `guaranteed profits` mode before you must change to the `guaranteed service` mode? When, in other words, is the future going to get here? The answer is simple. You don`t have to wait; you can`t afford to wait. The future is here right now. The signs are all around. All types of firms are changing to meet competitive forces. The lesson of the future is that no thing and no one is sacred and nothing can be taken off the table until it has been scrutinized and justified. Nearly every segment of the economy is downsizing, rightsizing and re-engineering, going through a sometimes painful process of belt tightening and rethinking everything they do. One of the benefits of this process is that there is a large pool of talent, both in-house and on the street, which you can put to work to assist you in making the transition. As you tighten up your operations and build your teams for working smart in the future that is now upon us, the pool of hungry, skilled and eager consultants who can help you has never been larger.”

“Rapid technological evolution is not another way of describing chaos. Our national business environment is not in a state of turmoil, but of development. Our economy is sound, and the competitive phenomena which Tucker has discussed are part of that healthy economy. Low inflation levels and stable interest rates allow you to make realistic financial plans in a relatively stable environment. Now is the time to build teams, to bring players together to extract all of the possible efficiencies and dollars from technology. There have never been better tools at your disposal, and there has never been a better time to step into the future,” Tucker said.

The new utility markets cannot be expected to become immediately or perfectly competitive. Therefore, regulators must participate in the transition of the industry. Regulators must be cooperative and informed and must help to maximize the benefit of emerging competition. They must simplify the regulatory process.

Remember, the experiences of the natural gas and telephone industries have taught us that a competitive marketplace is not itself a catastrophe. It poses new challenges and contains some serious pitfalls, but there is much reason for optimism. Companies which adapt positively and vigorously to the new paradigm can not only survive, but prosper. The steps to success are not mysterious. Companies which institutionally commit to excellence in service will do well. Those which merely concentrate on running a utility or make only a token commitment to service will not.

In the new market-based utility industry, we must be willing to relinquish lifetime customer and profit guarantees and move on. The skill that will serve all of us best in the new world is the skill of creative adaptation. It will require constant serious attention and lots of hard work. It will make us take a larger and less insular view of our roles in the industry and a more caring look at the interests of the customer.

It is a creative and exciting future, for just as there are more chances to fail, there are also many more opportunities to excel. Now is the time to begin offering more and better services. Now is the time to begin creating customer loyalty. Now is the time to “Just Do It!”

Tucker concluded with some of the keys to a successful future.

The key to increasing efficiency and profit is technology. The way to do more with less is to use better, more effective tools. Many effective technologies currently exist. Many effective applications of those technologies currently exist. They don`t have to be thought up or prototyped or trialed. There is no need or reason to wait any longer. The future is here, now. The time to become more efficient and make more profit is now. The time to implement change is now!

The key to company survival is change, diversity and enhanced revenue streams. Think outside your company. Think joint ventures. Indulge in inter-utility cooperation. Read meters and bill for more than just your commodity. Install, maintain and lease distribution facilities for more than just your commodity. Connect, bill and collect for all utility commodities. Supply all utility commodities. Be a “one stop utility shop!”

The key to institutionalizing a competitive service-oriented mindset in your company is Guaranteed Service. Force yourself and your company to adopt this concept.

Innovation Awards

It was once said that great discoveries and improvements invariably involve the cooperation of many minds. That was certainly true as evidenced by the 1996 Innovation Awards presented by Utility Automation, Jan. 16 at the DA/DSM symposium. The awards were presented not only to a company with a team of employees behind the conception and execution of its project/product, but to join efforts between companies and utilities.

The award categories and winners include:

1. Best Electric Utility Project: Detroit Edison

2. Best Water Utility Project: Anne Arundel County

3. Most Valuable DA Product: Long Island Lighting Co.

4. Most Valuable DSM Product: Telog Instruments/Rochester Gas & Electric

5. Most Valuable Int. Auto/Management System: CellNet Services

6. Utility Customer Care Award (Sponsored by AT&T): Grundy Electric Cooperative

7. Utility Marketing Award (Sponsored by Itron Inc.): Energas Co.

8. Most Valuable Metering Product: Hunt Technologies

The winners were judged by a panel of six industry experts, the endeavors of these companies and utilities were chosen for their innovative, solution-oriented approach to their project/product. Utility Automation recognizes and thanks all those involved for their teamwork and insight.

New Projects Announced at Meeting

Itron, a leading supplier of energy information and communications solutions to the utility industry, announced at the DA/DSM DistribuTECH symposium that it has received an order from Western Resources Inc., the parent company of Gas Service, KPL and KG&E, to provide a Genesis Fixed Network automatic meter reading system that will read approximately 32,000 electric meters in the city of Lawrence, Kan.

Western Resources is a diversified energy company with utilities operating in Kansas and Oklahoma that provides service to approximately 650,000 natural gas and 600,000 electric customers.

The Fixed Network will provide the utility with a wide variety of advanced meter reading capabilities, including daily scheduled consumption meter reading, real-time, on-demand readings, start-and-end of service readings, time-of-use readings, outage detection and the ability to monitor inactive accounts for unauthorized usage. The Lawrence system is scheduled to be fully installed by the fourth quarter of 1996. Upon successful installation and operation of the Lawrence system, Western Resources plans to expand the scope of the project to include approximately 250,000 gas and electric meters in Wichita, Kan.

“Itron`s Fixed Network system is an integral part of our corporate strategy of providing our customers with better service and a wider array of choices,” said John Hayes, Western Resources president and CEO. “The Itron solution allows us to contain our operating expenses while positioning us to provide more service offerings and products in the future. We particularly like the fact that the Itron Fixed Network supports applications that go well beyond meter reading, such as distribution automation, and security and end-use monitoring.”

Energy Oasys

Energy Oasys is a newly formed company of Ameritech Corp. and Wisconsin Energy Corp. It unveiled its new utility automation and advanced home services system at the DA/DSM DistribuTECH symposium. It features a real system operating in a replica of a neighborhood.

The following people were available at the conference to discuss the new venture: Barry Allen, senior vice president/Communication & Information Products Sector, Ameritech Corp.; Richard A. Abdoo, chairman, president and CEO, Wisconsin Energy Corp.; Neil E. Cox, president, Ameritech Information Industry Services; Fran Brzozinski, vice president, Wisconsin Energy Corp.; and Richard Taylor, president, Energy Oasys, who spoke on the topic Customer Service Options and Revenue Generating Opportunities Using Existing Technologies.

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Some 3,500 attendees from all over the world visited the 182 exhibits at the Sixth International DA/DSM DistribuTECH held in Tampa, Fla., in January. A significant increase in telecommunications exhibitors was evident.

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Two keynote speakers, Philip R. O`Conner, managing director of Palmer Bellevue, a division of Coopers & Lybrand and Bill Tucker, commissioner and past chair of the Wyoming Public Service Commission, spoke to an enthusiastic crowd about “Keys to Success in the Market-Driven Future.”

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Frank Magnotti, AT&T general manager-utility solutions, presents a plaque to the Utility Customer Care Award winner David Swank of Grundy Electric Cooperative during the Innovation Award ceremony.

Author

  • The Clarion Energy Content Team is made up of editors from various publications, including POWERGRID International, Power Engineering, Renewable Energy World, Hydro Review, Smart Energy International, and Power Engineering International. Contact the content lead for this publication at Jennifer.Runyon@ClarionEvents.com.

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The Clarion Energy Content Team is made up of editors from various publications, including POWERGRID International, Power Engineering, Renewable Energy World, Hydro Review, Smart Energy International, and Power Engineering International. Contact the content lead for this publication at Jennifer.Runyon@ClarionEvents.com.

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