This article first appeared in Utility Dive.
In Back to the Future Part II, the 1980’s movie predicted a variety of new and interesting technologies and products that would hit the scene in 2015 such as flying drones, fingerprint recognition, self-lacing shoes and wireless video games. From the moment this beloved movie hit theatres, it was seen as a bellwether for technologies to come.
Like the movie, the annual DistribuTECH Conference is also seen as a bellwether for helping global utilities and power companies to identify, define, and often influence the major technologies and trends in the industry. This year, the 15-track conference, which was held in January in San Antonio, Texas, brought industry thought leaders into Doc Brown’s DeLorean time machine to cover a wide variety of relevant and timely topics, answering both the current and future calls of the market.
Transition from utilities and power companies to energy services companies
One noticeable shift from past years at DistribuTECH was hearing a variety of panel speakers talk about the need for utilities and power companies to transform into energy services companies. The industry is at a pivotal point of transformation, with the modern day customer now situated at the center of the utility universe, surrounded by flexible energy and renewables, next generation technologies, regulatory reforms, and an ever-changing political landscape.
In fact, PA Consulting Group recently refreshed its thought leadership insights series, Next Generation Energy (NGE), and debuted the change during this year’s DistribuTECH conference, along with a NGE 2018 Perspectives e-book, which features global industry insights. At PA, we see the role of the utility moving toward that of an energy services provider, anticipating and meeting the energy needs of government, industries and customers, as they develop and transform in their own right.
Social media discussed frequently
The topic of social media was a huge head turner for DistribuTECH attendees, as it was woven through a number of presentations and one-off discussions with utilities seeking to gain more knowledge and become subject matter experts in the area. Never before had social media been discussed so frequently during past DistribuTECH conferences.
Underscoring the unexpected prominence of the topic, Tamara McCleary, a social influencer at Thulium, presented on the impact of social media in her keynote address. She talked about the importance of utilities educating customers on what it takes to deliver energy to customers. “Nobody thinks about their utility, or their energy, until they don’t have it anymore – educate your customers,” McCleary said.
Looking into the future, McCleary said that the energy industry is ripe for disruption and the best way to harness this disruption is through social media.
While McCleary told the audience to constantly engage with customers and not just focus on outages, outages are – for better or worse – indeed a key part of the utility business and an area where social media can be truly impactful.
During a panel discussion on how the grid responded to a hurricane season for the ages, Frank Espinoza, Director of Communications at AEP Texas, discussed how prior to Hurricane Harvey, the company had not used social media as extensively to communicate with customers. He said the company found that communicating real-time with customers – particularly showing photos of the horrible conditions restoration workers faced in the field – helped to alleviate frustrations and concerns. He even shared a poignant post from a customer who commended AEP Texas for working at a “miraculous” pace to restore power and for “providing such constant communication.”
Hurricane season for the ages
The hurricane session was not originally on the DistribuTECH schedule, but it was added because the 2017 Atlantic hurricane season is considered to be one of the most challenging hurricane seasons ever. While Hurricanes Harvey, Irma and Maria struck different regions, they echoed similar devastations: many lives lost, widespread power outages, and substations and transmission and distribution (T&D) lines down for hundreds of square miles.
Gregg Edeson, an energy and utilities expert at PA Consulting Group, led a panel discussion of executives from Florida Power & Light, CenterPoint Energy, AES, and AEP Texas – utilities that faced the brunt of the storms. The standing room only session addressed how the grid responded to the hurricanes, grid modernization, the role of AMI and AMS meters in pinpointing customer locations, the use of drones, people and safety, vegetation management, and customer communications.
Utilities face a great challenge ahead, as much of the T&D infrastructure in the U.S. is more than a hundred years old, and yet utilities are seeing their assets further strained by the mechanical stress of major storm events that exceed originally designed standards, Edeson said. They are actively working to harden their systems against damage to prevent and decrease the number and duration of power outages. In addition to the existing system, utilities also need to deal with grid modernization demands and requirements, he said.
Become an end-to-end digital utility
During the keynote, Gil Quiniones, the CEO of NYPA, talked about the utility’s bold goal of becoming the first end-to-end digital utility, which he said completely digitizes the utility, places the customer firmly in the center, innovates, and creates new business models.
Quiniones said the industry is being reshaped by decentralization, electrification, and digitization, with the last force as the one that makes the other two – decentralization and electrification – connect.
“Our goal as we transform the industry is to increase capacity utilization of the grid and decrease capacity intensity,” said Quiniones. “Energy must be affordable to all.”
In PA’s NGE 2018 Perspectives e-book, we discuss the opportunities created by a digital utility transformation: utilities can redesign how they interact with their customers, how their employees work, and fundamental aspects of how the grid is operated and monitored. In the year ahead, it will be important for utilities to spend time assessing their strategic goals and organizing themselves to meet the changing needs of the market and customers.
Be more innovative
The digital transformation that is underway at many utilities is tempered by the significant challenge of a corporate culture that does not necessarily foster innovation. Utilities tend to be risk averse (safety, reliability, etc.), and they are typically governed by regulatory bodies that are also risk averse. This is where a lot of utilities struggle with their transformation efforts, as digital transformation is about more than technology. It is important for organizations to embed innovation as part of their cultures to encourage calculated risk-taking and to inspire an attitude of innovation.
In recognition of this challenge, in December 2017 PA Consulting Group talked with Southern Company’s Michael Britt, who leads the company’s Energy Innovation Center, to discuss the success he achieved in leading the effort to grow the company’s culture of innovation, influencing the business and delivering new products and services to customers.
To other companies looking to go down the innovation path, Britt said it was important to keep an eye on technology as changes are occurring at a rapid pace. Equally important is addressing the tactical, near-term needs of the business and not just focusing on the big transformational endeavors, he said.
Empower women in energy
The Women in Energy DistribuTECH session is in high demand and always sold out, garnering a great deal of interest from seasoned professionals, utility novices, and even graduate students looking to pursue careers in energy – this year was no exception. A marked difference from past years, however, was the heightened level of commentary on female empowerment.
Speaking about advancement, Nancy Bui-Thompson, who sits on the on the board of the Sacramento Municipal Utility District, talked about the importance of hiring women, promoting women, and mentoring women. “It’s just that simple,” she said. She also urged women in the audience to “raise your flag and let people know your achievements.”
Innovation in asset management
Like other areas of utility functions, asset management is experiencing a surge in creative solutions, with innovative efforts being used to assess asset performance and replace/repair decisions. PA energy and utilities expert Scott Sidney facilitated sessions on asset management and using innovative efforts to integrate utilities’ asset management systems.
Regarding this shift, Sidney said the use of sophisticated predictive analytics capabilities is resulting in the ability to detect potential future asset failures and address the problems proactively. Also, the use of Augmented Reality technology to find and report asset condition anomalies in the field is making a comeback due to significant technology improvements.
This year’s DistribuTECH Conference was representative of today’s changes in the industry and the changes predicted for the future. The customer continues to be in the center of the universe, surrounded by flexible energy and renewables, a dynamic business environment, changing energy needs, next generation technologies, and regulatory reforms – all against the backdrop of an ever-changing political landscape.
While we do not know what is exactly in store for the power and utilities industry this year, it is safe to say that we won’t need Doc Brown’s DeLorean time machine to find out – change is already upon us.
Amanda Levin and Gregg Edeson are energy and utilities experts at PA Consulting Group
Learn how to navigate the uncertain future of the electricity sector