Kathleen Davis, Associate Editor
“What would you do in advance–along the lines of technology–if you knew that the future would be very different from today?” asked Walter Higgins, chairman of the board, president and CEO of Sierra Pacific Resources, in his keynote address to DistribuTECH attendees in early February.
All three of DistribuTECH’s keynote speakers shared the common theme of learning from the past and applying those lessons to the future of the power industry. Higgins went on to talk about the lessons that came out of the 2000-2001 power crisis in the West.
Admitting that his company had “particularly suffered” during the crisis, Higgins traced the explosive combination of warmer than normal weather, maintenance cycles, less power available and price increases.
“We had been lulled into believing that the excessive load of the 1990s would continue,” Higgins stated. And, unfortunately, these blinders made the crisis of 2000-2001 hit with more impact. Hence, the major lesson from this incident: In the end, it’s all about the rates, and you should keep an eye on how your present culture could impact that consumer toehold.
“If we forgot something, it’s the rates,” he added. “We got too comfortable in a seemingly non-volatile energy market.”
The future’s so bright?
Higgins laid out a simple outline to keep history from repeating: He told attendees that they must start their thinking with the customer, not with the utility and what would make life easier for them. This means asking three simple questions about future technology. First, what can the industry do to make the products cost less? How can those products be made more reliable? And, additionally, how can vendors and utilities give customers what they really want?
Wanda Reder, vice president of engineering and planning at Commonwealth Edison, traces ComEd’s return to the top.
According to Higgins, these three tenets could carry the industry well into that unknown future. In the end, he sees a growing power industry that’s more proactive–very different from the old school industry of today.
“[Ours is] an antiquated system–relying on the customer to call us and tell us that there is a problem with our own product,” he added.
Wanda Reder, vice president of engineering and planning with Commonwealth Edison Company (ComEd), illustrated Higgins’ need for customer focus by detailing the problems that ComEd has had in the last few years related to power outages–mostly in the areas of community reaction and public relations.
To pull themselves out of the negative arena of the 1999 outage, ComEd implemented storm response drills, created new switching policies, utilized planning support, expanded their SCADA system, among other technology and planning upgrades. However, they also reached out to the community by interfacing with the 911 center and moving the media attitude from the negative slant of 1999 to a more balanced and neutral position about the company.
“There was a lot of improvement in not much time,” Reder stated, pointing out that, in 1999, customer satisfaction was at an all-time low for the company. By 2002, however, it was at an all-time high.
Reder told the DistribuTECH audience that ComEd had– like Higgins and Sierra Pacific Resources–learned a number of lessons from their recent crisis. Among them, the most important was the need to learn how to break away from assumptions about how the process should work. For Reder, those days are gone.
“We need to learn how to do change faster. That’s a cultural and leadership challenge,” she added.
Power and paleontology
Kurt Yeager, president and CEO of the Electric Power Research Institute (EPRI), agreed completely. In the final speech of the keynote, he made it clear to all the attendees present that the future for this industry cannot be assumed. It is, indeed, unknown, and today’s technologies just aren’t going to be enough.
“We are trying to run an increasingly digital world with an analog power system,” he stated. “This community has to stand up and raise the awareness.”
Yeager also looked to the history of the power industry to glean his lessons, discussing how “innovation and transformation tend to be very disruptive.” He urged the audience not to be too afraid of that chaos, of that disruption–certainly not too afraid to participate, even lead.
Yeager believes that we are embroiled in a time of change, although a few from the old school system may be dragging their feet about the transformation. He pointed to the rise of a universal digital economy, heightened productivity growth through networked intelligence, market evolution, distributed generation, and environmental concerns as today’s trends affecting the power infrastructure.
DTECH attendees appreciate the quality of speakers at the keynote session.
Yeager pointed out two major differences between today’s power industry and that of its 20th century ancestor. First, he believes that 21st century electricity is a consumer service-based enterprise and no longer the declining cost commodity of old. Additionally, he sees opportunities for technology to relieve commodity cost pressures today through “elevating and differentiating the service value of electricity.”
Wrapping up the morning’s keynote, Yeager cut to the bone about the importance of seeing power from the consumer’s point of view.
“If you don’t believe this, you will become a dinosaur,” he warned. “Every other industry has already learned this.”