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VERGE Executive Series: Q&A With PG&E's Saul Zambrano

In the second installation of our series, PwC's Don Reed spoke with Saul Zambrano, Senior Director of the Products Organization for PG&E. Zambrano leads energy- and cost-saving customer programs including pricing and energy efficiency, demand response, and distributed generation. Increasingly at the heart of his work is the smart grid, which is enabling a new revenue and product opportunities for the utility. He spoke with us about how big data and advanced analytics are playing a major role in creating the utility of the future.

Don Reed: How should the average person be thinking about smart energy: is it something still for the future, or is it happening right now? What's your assessment?

Saul Zambrano: It's happening in localized pockets. In North America, there are 3,000 utilities, and those 3,000 utilities all are effectively governed by 50 different regulatory bodies. Outside of North America you tend to have national utilities (depending on which region you look at). The speed of deployment is highly dictated by that fragmentation.

Reed: What are the other issues affecting the pace of full smart grid deployment?

saul zambranoZambrano: The first hurdle is that it's a big, physical upgrade exercise. It's not a software upgrade where you're just writing code. But, once they get through the deployment phase, then they get to the question of, what do I do with all this data?

That big data represents a lot. You can leverage it in a lot of different ways: for transforming customer relationships, creating operational efficiencies within the utility, innovating around smart grid initiatives, and for smarter buildings, providing automated facility benchmarking or deploying different integration strategies into building management systems.

Reed: How do you see innovation happening?

Zambrano: Effectively, now that you have the large amounts of interval data for gas and electric meters, you can really start to show customers, through the power of information and presentation, different ways that they can become stewards of energy, whether it's as a residential customer or a commercial customer. So, there's going to be a tremendous amount of innovation done at the utility level, as well as by the third parties.

One of the big policy pushes at the regulatory level is to create platforms where third parties can -- assuming all privacy guidelines are met -- access this data to build business models they can drive into the marketplace. So there will be a new chapter of grid management and energy management that's going to be supplied by both the utilities and third parties.

So this is just the first wave. Once these common data platforms and common data access platforms are enabled, once utilities learn to leverage how to use their data to service their customers better, once everyone starts to see those benchmarks established, that's what I would call the second wave of smart grid.

Reed: What kinds of products are we going to see emerging from smart grid deployments?

Zambrano: Obviously, anytime you create new capabilities for your customers, it's a roadmap, so it will change over time, but we're effectively creating the capability for our residential customers to do progressive energy audits. We're already doing that with our large commercial industrial customers. We've made those big investments; it's really just the finalization of the project implementation. Now we're looking at what we're going to do for small/medium business customers.

Reed: When you look a little further down the road, will this application of data coming from smart buildings and smart grids enable entirely new, unexpected products and offerings?

Zambrano: Yes. I'll give you a simple example: building energy dashboards. That's a relatively new business construct; they look at a building, and you can monitor how a building is performing in a manner that doesn't require a PhD in mechanical engineering. And so how you capture the data, how you report, can create behavioral modifications as to how you manage that facility.

If you take the actual load that a facility is utilizing, then you can generate smart algorithms that break down that load and can tell you how the different portions of the system within a facility are performing. That's a relatively new construct, too.

Or, you can look at multiple facilities to benchmark them against each other using different normalization metrics that give you an enterprise view. So, you can look at the energy and carbon footprint across 50 or 5,000 offices and support the development of enterprise applications that effectively allow you to manage that and report on it and effect behavioral change on it.

Reed: Is PG&E doing a lot of external collaboration with third parties?

Zambrano: Yes. As utilities, our focus is to keep the lights on and gas flowing safely and then ensuring that the bills go out and that we can respond to customer inquiries. It's not our sweetspot to develop cutting-edge software capability. Now, that doesn't mean that we don't have data analytics teams. We do. But a lot of these new capabilities are going to come from third parties. They have the expertise.

Reed: It sounds like there's quite a bit of organizational change going on inside PG&E around these issues.

Zambrano: Any utility that's started down this path is effectively creating the utility of the future, which will have to be good at data analytics. The data that's coming in is going to require a shift in capability around horizontal management, and so it's part of the business change. It's part of the change management exercise and the transformation exercise. The utilities will have to become good at this.

Reed: You've been mostly focused on efficiency and demand response, but does the integration of electric vehicles present a new set of opportunities that will lead to new products, too?

Zambrano: It does. Everyone's still trying to gauge how many of these vehicles are actually going to get deployed, and how quickly so it's one of those -- there's a lot of interest, but this is really something that's going to evolve over the next 10 years versus the next one or two.

Be sure to register for an exclusive webcast, "On the VERGE of Innovation: Accelerating Your Business," Wednesday, April 25, 12:30pm ET. The hour-long webcast, produced in partnership with PwC, includes Mark Vachon, VP of ecomaginiation at GE, and Mary Beth Stanek, director of federal environmental and energy regulatory affairs at GM, discussing the business implications of convergence.

Power tower photo via Shutterstock.

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