by Kristen Wright, senior editor
Utilities typically are slow to change and adopt trends, but conferences and trade shows provide evidence that utilities still want to know what the other guys are doing. CS Week in Dallas exposed many of the trends. In 2012, hipper, trendier types might say it like this: Psst! This season there are some new blacks in the utility industry—50 shades of gray, if you like.
Notable topics making big names for themselves among utility circles include customer engagement, big data, storage and satellite communication.
Customer Engagement and Data
“Customer engagement is becoming increasingly important to the utility sector as companies move from a traditional service model to one more focused on fostering conversations and relationships with customers over time, rather than just a one-way push of information,” said Jarrid Hall, CSG Systems director of business development for utilities.
He mentioned many drivers: favorable regulatory treatment, changing customer expectations, evolution of the smart grid, third parties’ entering the market and supply restraints.
“Broadly speaking, there is a growing awareness that the customer—the demand side—is becoming core to the utility’s business model as a resource, an agent to mitigate risk and adopt change, and a source of future revenue opportunities,” Hall said.
Utilities need better ways to manage data so they can improve customer service, drive efficiencies and reduce costs. And consumers want more control of and visibility into their energy usage. Utilities are looking for systems that can support the right-time domain, or put another way, the right information to the right customer at the right time over the right channel, Hall said.
Take, for example, the smart grid. Customers can receive a message or request from a utility to reduce their energy consumption. With data analytics, the utility can tell whether the message worked.
“Did the customer respond to the request? Did they take action?” Hall said. “If not, the utility can begin to improve the message, its delivery and try again.”
V. Rory Jones is co-founder and CEO of Planet Ecosystems, a company that works with utilities to craft engaging outreach campaigns. Engaging consumers is about effective targeting and arresting messaging, Jones said.
Rodger Smith, Oracle Utilities senior vice president and general manager, also was at CS Week. He said utilities follow two key tenants: reliability and customer service.
“And the challenge utilities face is how to move their relationship with their customers from passive to active and their asset maintenance and asset replacement strategies from reactive to proactive,” Smith said. “The key to these changes is with opportunities coming from smart grid deployments, which are creating a massive data onslaught for utilities worldwide. These deployments provide utilities with unprecedented data granularity, which can be extremely helpful as they look to drive greater efficiency, improve customer service, and support stronger decision-making across their organizations.”
But accessing, analyzing and managing the data, in addition to putting the right information in the right hands, is daunting, Smith said.
“On top of that, continuous pressures to reduce costs in capital budgets, maintenance, operations and overhead are forcing utilities to look for better operational analytics and related investment-planning tools to better control costs and optimize limited budgets,” he said.
Utilities must tackle big hurdles to capture big data’s potential, Smith said.
First, they must gather and store massive volumes of information. Then they must integrate new types of information from mobile devices, social media feeds or sensors with traditional corporate data and fit those insights into existing business processes and operations. Smith said the insights could help reduce costs of capital budgets, maintenance, operations and overheads.
“Utilities need integrated systems such as data warehousing and analytics solutions to help them leverage and gain visibility into the vast data influx, ultimately enabling them to operate more efficiently and give customers additional information and better service,” Smith said. “And with this better service, utilities are focused on providing customers with a more enhanced customer service experience.”
Christian Bergan, director of energy and utility markets at iDirect, said that automating the nation’s power grid is a priority for utilities.
“But as they embrace the realities of grid automation, they face many challenges,” Bergan said. “How do you extend your communications network to remote locations at the farthest edges of your service territory? How can you ensure reliable connectivity at an affordable cost in hard-to-reach locations? Will your communications infrastructure stand up against harsh terrain and inclement weather at remote sites?”
He said utilities are coming to the same conclusion: satellite communications.
According to a Utilities Telecom Council study sponsored by iDirect, 60 percent of utilities use some form of satellite communications, and an additional 22 percent plan to integrate satellite in the next two years. The study revealed that satellite’s main appeal is its ubiquitous coverage and portability.
“Traditionally, satellite has been used in the utility industry as a backup communications tool,” Bergan said. “Although it was useful in certain circumstances, it was considered too expensive, insecure, unreliable and not latency-sensitive enough for primary communications applications. What many utilities are beginning to understand now is that these are misconceptions and that modern IP (Internet Protocol)-based satellite communications systems offer reliable, affordable and secure connectivity that has sufficient latency for virtually every core utility application.”
Satellite meets latency requirements for most utility applications, Bergan said. Satellite latency is 600 milliseconds roundtrip, and it supports broadband data rates when required. Bergan said it’s ideal for monitoring supervisory control and data acquisition (SCADA) information. It also supports on-site video surveillance and IP voice, data and video connectivity inside substations and is valuable for AMI backhaul.
“Utilities can mount a VSAT remote and a satellite antenna on a utility pole to backhaul smart meter data from smart metering aggregators,” he said. “As a result, utilities can collect data from thousands of households onto a common in-route to achieve an economy of scale.”
Satellite also can be used to maintain connectivity after a natural disaster through vehicle-based and fly-away satellite communications systems. And as more utilities invest in renewable energy, satellite can support cogeneration by linking communications networking from a utility to solar and wind farms, Bergan said.
The Top 5
Chris Lewis, director of market development at Cognera Corp., shared his top five list of the industry’s hot topics and trends:
Storage technology. Advancements in new battery technologies such lithium-ion applications and nanotechnology could make their way to residential markets soon, Lewis said. Virtual power plants are on the horizon, and there is ample opportunity for innovation. He said he expects the microgeneration and storage trend to get bigger during the next decade.
Information security, privacy. Regardless of the industry, information technology security is a priority; however, the importance of information technology security is heightened as more time-of-use (TOU) smart meters are installed. Utilities must determine how to improve grid intelligence without sacrificing privacy because customers might resist utilities’ access to detailed consumption patterns, Lewis said.
“If the smart grid is going to last, customers must be reassured that their information is safe and will not be exploited,” he said.
Data analytics. Meter data analytics (MDA) help manage distribution and transmission systems and grid traffic and help utilities build better relationships with end customers and test new, complex rates based on TOU profiles. Long-term MDA impacts likely will enhance utilities’ ability to forecast demand, allow for better outage and restoration analysis and increase demand response support.
Customer education, engagement. In the past year or so, utilities have moved from an internal, operational focus to a more external, customer education focus.
Lewis said he expects continued customer engagement and education in 2012 and beyond. End customers must be engaged early and communicated with regularly, he said.
Social media. Lewis cited the Pike Research report “Social Media in the Utility Industry.” It estimates that some 57 million people engaged their utilities via social media in 2011, with that number expected to increase to 624 million people worldwide by 2017.