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S&C Electric: Smart cities drive adoption of the smart grid

Michael Edmonds is a smooth and articulate spokesman for S&C Electric Co., the Chicago-based provider of electric power equipment and services for utilities. The British accent certainly doesn't hurt, but he also can lean on many years in the sector in senior positions. In the '90s, he ran a firm called Power Technology Incorporated that Siemens eventually purchased. For the next three years he ran Siemens' energy management business.

Today Edmonds oversees all of S&C Electric's product management as well as its brand management and messaging. More than any other single company, S&C is known for its ability to build a "self-healing grid." It is also active in other cutting-edge technologies, such as grid-scale energy storage (batteries). Edmonds leads the employee-owned company's new technology decisions, including whether to build or buy. When he's not talking with forward-thinking technologists, he's often talking with forward-thinking clients, giving him a great view of where things are headed.

Below is an edited version of our conversation:

Jesse Berst: When did S&C start to realize that the smart grid had great relevance to the smart city?

Michael Edmonds: We started connecting the dots about three years ago. First internally and then for customers. And the focus around smart cities is continuing to grow. It's the same dots, but a different approach, a different deployment. So the smart city is something you need to think of as its own ecosystem.

Berst: Why the increasing attention to smart cities?

Edmonds: We are seeing it especially in cities that own their own utility. They answer directly to their residents for benefits. They can make decisions more quickly and they can consider societal benefits in doing so. The situation is more difficult for investor-owned utilities, which have to get regulatory approval.

Image by Kevin Dooley via Flickr.

Berst: Why should the city care about the smart grid?

Edmonds: You need maximum availability of your power grid just to keep your basic functions going, the things that allow society to work -- alarms, pumps, freezers, traffic lights. In one city they are putting backup generators for the traffic lights near big intersections because power outages were creating gridlock. But another way to do it is to have a robust, self-healing grid that minimizes outages.

Cities have to compete for jobs to provide a better lifestyle for residents. For instance, Chattanooga, Tenn., used its upgraded grid to attract business. A big call center moved there because they have good fiber optic conductivity and a very reliable grid.

It used to be when Chattanooga was competing for a factory, the factory would ask for a two-source power supply to avoid downtime. That is very expensive to build for one customer. But now the city can say, "How would you like a seven-source power supply?" because the city's smart grid can reroute power from different sources if an outage occurs.

Berst: What stands in the way of rapid adoption of smart cities technologies?

Edmonds: In North America, one factor is a regulatory framework for investor-owned utilities. There is a disconnect. Some regulators don't seem to realize the cost of outages to society and to business. In Illinois, for example, they are busy upgrading roads and railways, but they don't want to pay to upgrade the grid infrastructure.

As an industry, we have to do a better job of building the business case and quantifying the benefits. Once they been educated, the regulators often agree with the need for modernization.

Berst: Have you seen any creative ways to solve the financing challenge?

Edmonds: We are in discussions with a partner to provide financing to customers so they can lease or rent it from us. Over the past few years we've made a big switch to stop talking just about product features and start talking about solutions. And part of a total solution is the financing.

Berst: Has a smart cities market hit the tipping point?

Edmonds: We still have a few years to go. For instance, in Brazil they are still grappling with smart meters, they are still mired in that first step. In Europe, the market is driven by the mandate to integrate renewables. They do not have the proper controls and safeguards in their distribution grids. So cities will have to solve that technical problem in order to bring in renewables.

But I think North America is getting near the tipping point. We need to gather success stories and start to infect other cities with that knowledge. If we do that we can definitely get traction, but we need a roadmap to help them.

Berst: How important is the smart cities market to S&C Electric?

Edmonds: It is a major theme and a long-term intention. Right now we are updating our five-year strategy and we are realizing that we have a two-speed business, utilities and non-utilities. They have different influences and different sales cycles. So we are building out separate branding channels and web pages.

Berst: What are some favorite smart city projects you have seen so far?

Edmonds: I am impressed with Enmax in Calgary. It has been a slow burn, but they are steadily improving their grid one step at a time. And they are tracking how much they are saving for their customers with those improvements and letting customers know about it. They started back in 2003 and got the regulator to agree to let them increase their capital expenditure a little if they could improve reliability by 30 percent. Now that they have dramatically improved their longer outages, they are shifting their attention to reducing or eliminating momentary outages.

Likewise in Naperville, Ill., they have a steady, gradual program of moving power lines underground and making other improvements.

And of course Chattanooga, Tenn., where their smart grid has already saved them millions due to reduced outage times during major storms -- and where it has made it easier for them to attract business.

Berst: What is the single most important thing city leaders should do today to position their cities for leadership and success?

Edmonds: A group hug. The mayor or the head of the municipal utility needs to develop cohesion between city leaders and get widespread support. They need to become champions of economic development and promoted to the city.

Next is to develop a strategy. Once you've got a strategy, you can decide whether to do it alone or to bring in a consulting firm to help you manage the project.

This article originally appeared at the Smart Cities Council and is reprinted with permission.

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