Electric Utilities Adopt New Technologies, Use Old Business Processes

by Kristen Wright, senior editor

The electric utility industry’s adoption of new technologies such as smart metering is faster than its adoption of new business processes. That combination means some of the expensive technology utilities are buying isn’t meeting the expected ROI-at least for now.

“A lot of companies are using this stuff, but they’re still doing things the old way,” said Forrest Small, vice president of grid reliability at Bridge Energy Group, a systems integration consulting firm for utilities.

The company released in April its 2015 Utility Industry Survey on outage restoration management. More than 20,000 North American utility employees participated in the survey, 54 percent of whom worked for investor-owned utilities at the time. The other respondents worked for cooperatives (20 percent) and municipal utilities (26 percent). Nearly half of respondents worked in distribution (45 percent), 33 percent cited transmission and 21 percent cited generation.

Small said North American electric utilities are investing in new technologies, but they’re playing catch up with the business processes and slowly adjusting accordingly.

UTILITIES THAT HAVE DEPLOYED SMART METERS

“This is actually pretty consistent with what we see when we work with clients,” he said.

Water and gas utilities lag substantially behind electric utilities in their number of smart meter deployments, with only 12 percent of water utilities’ and 10 percent of gas utilities’ having deployed the technology (see Figure 1). What’s more, smart meter adoption rates for both water and gas utilities have remained flat since 2013, according to the survey.

More than 50 million electric smart meters are deployed throughout the U.S; the problem is that many utilities are not taking full advantage of them, Small said.

More than 80 percent of electric utility respondents said their utilities have deployed smart meters in their service territories, representing a 6 percent jump in two years. Yet despite all those deployed advanced meters with two-way communication capabilities between the utilities and their customers, 58 percent of respondents said their primary source of outage notifications on blue sky days was customers (see Figure 2). For outage notifications during storms, that percentage dropped only 4 points.

“And there’s probably a lot of good reasons for it,” Small said.

An obvious problem, he said, is that utilities need to ensure their smart meters are tightly integrated with their other systems. Small frequently encounters utility clients who are new smart meter adopters, and initially they are technology-timid. They use smart meters as a “check” within trouble centers while they get comfortable with the technology change, he said.

“They still rely pretty heavily on customer calls,” Small said. “As they get comfortable, they’ll modify their business processes.”

Proceeding with caution often is good business. Studies show customer satisfaction with their utilities is growing, but customer dissatisfaction is being voiced more loudly, clearly and instantly through social media channels. Even a minor technology glitch could send frustrated utility customers to social megaphones such as Twitter, Facebook and Instagram.

“The customers are not going to be patient while the utilities figure out how that technology is going to work,” Small said. “I think you’re going to see that improve significantly over the next few years.”

PRIMARY BLUE SKY OUTAGE NOTIFICATIONS

Another Standout Stat

The 2015 Utility Industry Survey also asked respondents about the importance of service reliability. Five percent of respondents said reliability is not one of their top five priorities.

Again, Small said there could be multiple reasons; the most likely being the range of roles respondents filled at their utilities. Another reason might be that a respondent’s utility has reached and sustained its reliability goals.

“When a utility gets to a spot where they’re doing a great job with reliability, they don’t really talk about it as much because they’ve got a handle on it,” Small said. “I think that might be why you see that.”

Meanwhile, reliability was the top priority for 30 percent of respondents; among the top two priorities for 38 percent of respondents; and one of the top five priorities for 26 percent of respondents.

To put some perspective on those numbers: In 2015, 68 percent of respondents ranked reliability as their No. 1 or 2 priority. That’s down from 75 percent in 2013, according to the study.

“Reliability takes a real, concerted effort over years,” Small said.

A utility’s reliability numbers could be great right now, but numbers go up and down.

“Doesn’t mean that you’ve got it licked,” Small said. “You’ve got to stay focused on it.”

If Small is correct, utilities will find a suitable comfort level with smart meters, too, and the business processes will come later.

The 2015 Utility Industry Survey is available for free download at www.bridgeenergygroup.com/bridge-utility-industry-survey.

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