Exceptional Mission.  Employees in the land-line phone company had an obligation to deliver dial tone – even when the lights went out, and they had their own banks of batteries for back-up power so people could call to report electricity outages.  Failure was not an option.  And telecom resources were ignored and taken for granted– until you picked up a phone and didn’t have dial tone.  This same sense of mission is expressed by utility resources too – no one thinks about electricity until an outage, and electric utilities have an obligation to deliver power regardless of circumstances.  Utility resources have done an excellent job managing today’s electrical grid.   I sometimes see and hear bewilderment, frustration, and defensiveness in utility resources when talking about the traditional grid and the changes the Smart Grid will bring.  Lesson #1 – Change is not a criticism of past performance.  Be excited that electricity is something that will no longer be taken for granted.     

Monopoly Skills.  In 1980 you had no choice for local phone service except Ma Bell.  Phone company practices, policies, and processes were heavily influenced by state Public Utility Commissions and the Federal Communications Commission (FCC).  The price of monopoly is regulation, and utilities are very good at interacting with regulators.  Another price of monopoly is the lack of utility skills in working in any other type of market.  Phone company resources had a steep learning curve to build knowledge about how to effectively communicate with customers and how to successfully introduce and manage a growing deluge of new technologies and services to customers while satisfying regulatory requirements.  It will be a painful climb for some utilities, but it can be accomplished faster and at less cost to ratepayers by learning from telecom industry experiences.  Lesson #2 – Hire outside talent to build corporate readiness for a transitioning marketplace.  Develop and deploy corporate-wide change management plans that address concerns of existing employees.

I’ll continue my observations about similarities next week after attending the ITExpo East Smart Grid Summit.

Let’s give a standing ovation to the Department of Energy.   The DOE’s new energy efficiency enforcement is producing positive results.  The DOE entered into a Consent Decree with Haier America, about a parts defect that caused certain freezers to consume more energy than reported to consumers.  The Consent Decree obligates Haier to notify affected consumers, repair defective units, add one year to warranties, and contribute $150,000 to the U.S. Treasury.  The manufacturer cooperated with the DOE investigation, and I hope that other manufacturers will do likewise, just like I hope that the Consumer Electronics Association (CEA) takes some notes in case it contemplates fighting California Energy Commission energy efficiency standards again.  

The DOE had a huge response to its call for efficiency certification documentation – 600,000 residential appliances in 15 different product categories from 160 manufacturers submitted their data so far. The DOE will review compliance with minimum energy efficiency standards, and those products found lacking will be required to deliver the energy and cost savings required by law. 

It’s a tough job – and the Commissioners are asking good questions such as “What should they do to encourage utilities to deploy Smart Grid solutions in absence of firm standards for interoperability and security?”  “What are the benefits that new technologies bring to consumers, and what are the costs to consumers?”  How do they prioritize all the many efforts that can be deployed in the Smart Grid arena to maximize beneficial impacts?  Here are three topics that are getting lots of time in their sessions. 

Smart meters – interoperability

Everyone is concerned about standards for interoperability for meters – ensuring that meters from different manufacturers deliver common data that can be managed by Home Energy Management Systems (HEMS).  Consider the implications of interoperability decisions.  The right decisions mean that consumers get more information and control of their energy consumption at the right price points.  The wrong decisions can mean increased consumer costs for energy and services that are not as information-rich as they could be.  No commission wants to structure regulatory policies that influence utility choices of technologies that are proprietary and unable to connect to the larger regional grid.  Commissioners are careful to want to avoid picking winners and losers in technology solutions, but understand that they need to help utilities make smart decisions that reflect not only the regional interests but national grid interests as well. 

Smart Grid – security

Critical infrastructure – ranging from transmission lines and distribution substations to the internal computer networks and software that manages customer information and billing – is the focus of many discussions about secure protection.  As the Smart Grid will use more networked applications for demand response and energy efficiency programs as well as more automation and optimization of transmission and distribution systems on a greater interconnected scale, it is vitally important that networks are secure and architected to provide layers of authorized access to private virtual networks.  There are a lot of potential threats to overall grid reliability and stability out there, and the public utility commissions and staff are well aware that their policies can have national security implications.

Smart energy devices – registration

The Smart Grid will have smart energy devices – specifically meters and energy storage devices, such as electric vehicles or home batteries.  Some Commission staff members are talking about numbering plans for these devices, because whether these are IP addresses or phone numbers, it entails literally millions of new addresses or numbers to be allocated for their use.  In addition to fixed devices like meters, electric vehicles (EVs) and plug-in hybrid electric vehicles (PHEVs) will also require addresses or phone numbers to support roaming charges – so no matter where your electric car is charging or discharging, the debit or credit is posted to your utility account. 

Fascinating stuff, and there are no easy answers out there.  What are the implications for you, dear readers?  You need to be aware of the decisions that your Public Utility Commissions are making since they can impact your energy bills, and give you a bigger role  and better tools in consuming energy in smart and sustainable ways.  The Commissioners and their staffs want your educated feedback to help them ensure that your regulated utilities are effective and active participants in building the Smart Grid and giving you the energy services you want and need.