9 issues utilities fret about the most
At the annual DistribuTECH conference, I moderate panels where I hear from dozens of utility professionals, both panelists and audience members. I also have private meetings with dozens of vendor executives, who themselves have talked with hundreds of utility professionals.
This year, virtually every utility is grappling with multiple problems. While the precise mix of issues depends on which part of the country the utility is in, these nine worries were brought up most frequently.
1. Policy pressure to be more reliable and resilient. Many states are up in arms about storm resiliency, demanding major improvements. But few are willing to help utilities pay for the necessary upgrades.
2. Aging infrastructure. Much utility equipment is beyond its design life. But how can utilities afford to upgrade and modernize at a time when most regulators are loath to allow rate increases?
3. Flat load growth. Many utilities are seeing only modest growth or none at all. How can they keep shareholders happy? And how can they pay for expansion and upgrades?
4. Fuel switching. Utilities with coal-fired and nuclear plants are looking hard at replacing some of them with natural gas plants instead. Figuring out whether and when is an extremely complex decision.
5. Distributed energy resources. Distributed rooftop solar already is making a major impact in several sunny states, creating major challenges to grid operation and balance. At the same time, distributed storage is on the horizon from companies such as Tesla and Solar City. How can utilities manage this, especially as most net metering programs force lower-income families to subsidize the costs of supporting the higher-income families who can afford rooftop solar?
6. IT/OT integration. Operational technology increasing has a big IT component in the form of embedded systems, sensors and the software to manage them. Likewise, utility IT departments are increasingly charged with getting value from all the operational data flowing in. Clearly, these two sides of the business need to collaborate closely or even merge. But how do utilities smoothly integrate two silos that have been separated for decades?
7. How can utilities get more value from smart grid investments? Okay, they've got the Advanced Metering Infrastructure (AMI) system up and running. And they're making progress on substation and distribution automation. But now regulators want them to prove that those investments are creating value for the electric power system, but especially for the ratepayers.
8. How the &#!! can I manage Big Data? Most utilities think data analytics is one key to unlocking value. But where should they start? And how can they possibly afford a giant server farm and a staff of data scientists? Yet for privacy and regulatory reasons, utilities don't feel comfortable sending customer data to cloud-based systems.
9. Is it time to move to an advanced distribution management system? In the last six months (and culminating at DistribuTECH), virtually every major player has offered up an advanced distribution management system (ADMS) that integrates supervisory control and data acquisition (SCADA), outage management and many other functions. But can utilities afford the price, retraining costs and disruption to operations?
These and other important questions remain to be answered.