When gas, water and electricity usage can be monitored, measured and managed collectively in one cohesive framework, publicly owned utilities can improve conservation, help their customers save money, reduce administrative costs and better prepare for increased demand from population and/or industrial growth.
Did you know that approximately 20 percent of all electricity is used in the treatment and distribution of water? Sourcing, moving and treating this precious commodity has a significant impact on our overall energy supply and usage. Yet while water and energy production are inextricably linked with consumption, the management of the associated sets of systems and resources are typically Balkanized at the utility level.
At utilities that manage multiple resources, such as gas, water, wastewater and electricity, these commodities are generally managed by separate divisions. They may each have their own infrastructure, pricing, service teams, billing, and management systems.
But customer survey results tell a different story: according to recent research by Nielsen Inc.1, 65 percent of consumers are interested in accessing daily and hourly usage data from smart meters. Far from viewing these as separate systems, consumers are actively seeking a single view of their consumption of resources. Almost 90 percent of these consumers are willing to pay for access to their energy data: 15 percent would pay as much as $10 per month; 27 percent would pay $5; and 47 percent are willing to pay at least $1.
Utilities can extend detailed energy usage
info to customers using energy data management.
Unfortunately, the fragmentation of gas, water and electricity systems makes it challenging to provide customers with a single application to view resource usage. More importantly, segmentation of data also makes it much more difficult for utilities to efficiently manage these resources cohesively or to make swift, data-driven decisions. In addition, each separate system carries its own individual overhead, management, and administrative costs, all of which hampers customer service.
Employing a platform approach to resource management can overcome these challenges. An emerging set of technologies are being deployed by leading utilities to residential and commercial customers that provide a single view of water, gas and electricity cost and usage. These solutions are designed to “glue” existing legacy systems together, streamline energy and demand-side management programs and provide customers with a single, consolidated view of their consumption. The operational cost savings alone in this unified approach is highly compelling – not to mention improvements in customer satisfaction and active engagement in managing their conservation.
Smaller rural and/or cooperatively-owned utilities are uniquely positioned to benefit from these changes. At a basic level, they are much more likely than their larger metropolitan brethren to be the sole-source provider for gas, water and electricity in their particular coverage area, thereby making this unification feasible. Since they are owned by their customers, co-op and municipalities are focused first on customer cost savings rather than profitability, which aligns well with the efficiency improvements derived from unification. This unification increases the opportunity to be more proactive in customer service, conservation programs and communication, which matches the customer responsiveness and focus found at the co-op/muni level. But before embarking on any unifying initiative, utilities need to develop and begin implementing a strategy for customer engagement as it is ultimately the customer response and adoption that will determine success (see sidebar).
Utilities can follow a proven path to integrating water, gas and electricity management systems.
From a cost perspective, unification must be able to tie existing legacy systems together, as anything that requires a wholesale “rip-and-replace” approach is likely to be too expensive and disruptive to get off the ground. Utility decision makers and planners should look for software that is standards-based as well as device-agnostic – and therefore designed to work across existing infrastructure. Beyond pure cost reductions, the benefit of this approach is four-fold; that is, utilities can 1) save money by extending previous technology investments, 2) reduce administrative and customer service workload, 3) incorporate proven new technologies as they emerge, and 4) significantly reduce roll-out time and complexity.
Of equal importance in a successful integration strategy is the people and processes that will be employed throughout a program lifecycle. In order to successfully complete a multi-resource integration and maximize the benefits of available technologies through energy management programs, a utility must have buy-in from its management team, as well as affected groups in the organization. IT, Program Management, Customer Relations, Customer Care, and Field Teams must have the capacity to handle the additional workload – or at least a committed strategy to augment them – during a program implementation lifecycle.
From a process standpoint, implementing a management platform, and integrating it with the various systems used by these groups and to unify the customer and utility view of gas, water and electrical systems, can be broken down into the phases described below.
1: Assessment
The first step in assessing the needs and requirements for an energy and resource management platform is to assemble a team who can identify the relevant business drivers, objectives, and priorities. Often, these objectives span multiple lines of business and/or departments in the organization, so taking the time to include all of the relevant stakeholders dramatically improves the business case and total value. Without such an assessment, it is difficult to prioritize implementation or ensure that the scope of the project will be appropriate to address current and future needs. Consider hiring a consulting firm with a track record in managing successful utility deployments and technology selection.
2: Technical Gap Analysis
Once an organization’s energy/water data management objectives and requirements are clearly understood, the assessment team needs to survey existing systems and conduct a thorough gap analysis to identify additional technical components and capabilities that are needed to meet the business objectives. This gap analysis should map all current and required data sources – both internal and external. This will also help clarify which systems, users, and customers will be affected by the new management platform, aiding preparation and outreach.
Then, based on the gap analysis, the team can utilize the functional and business requirements documents it creates to identify available management platforms, and fully understand the benefits that these technologies can provide. This can be done either through an RFI process, or by hiring an industry expert who can serve as a strategic advisor to the team. The key to success with either strategy is to be as specific as possible about the utility’s needs, and to leverage lessons learned from previous utility projects.
3: Building the Business Case
Once relevant technology options have been identified, the team should determine organization-specific benefits that can be realized by unifying utility data and enabling better decision-making based on analysis of that data. What new services and applications could be enabled by the management platform?
What conservation programs could optimize the consumption and management of energy by aligning energy use? What administrative burdens could be eliminated? What regulatory requirements could more easily be met? What risks and costs could be avoided?
For example, progressive utilities like the Cucamonga Valley Water District in Southern California are working with major water consumers (e.g., agricultural irrigation) to shift the time of day during which they consume water away from peak electricity usage periods. Since the pumping and distribution of water requires a great deal of electricity, and the production of electricity requires water, these relatively simple programs create a virtuous cycle of conservation.
In addition, a unified resource management platform typically requires 60-70 percent less staff time for management, which fits well with lean staffing requirements at smaller utilities and allows for resources to focus on other priorities. Combining a unified data management system with advanced metering infrastructure (AMI) systems also helps administrators unlock and utilize the vast flow of data that these devices provide, and take action to better manage energy. This can result in fewer truck rolls (resource savings), and give immediate and granular insight into gas or water leakage, power outages, etc., thus, allowing utilities to pinpoint problems before customers call, and thereby improving service.
The biggest change value in smart grid data transformation occurs when disparate and disjointed technologies and systems are integrated, empowering the utility to conduct a broad variety of analytics about usage and offer advanced management and conservation programs that benefit both the consumer and the utility.
Selecting the Right Technologies
Generally, the largest set of customer and utility benefits are realized by deploying a unified energy services, data management, and command and control platform that is flexible by design, and easily connects to the Smart Grid, back-end systems, and applications. It should have the ability to bridge multiple data systems, broker communications between legacy systems and hardware, and extract, analyze, and display meaningful and actionable usage information.
Such a platform needs to be able to adroitly handle any combination of commercial and residential gas, water and electricity data and metering devices. Just as importantly, it can’t be limited to proprietary hardware devices and protocols, as these significantly limit future flexibility.
As utilities with recent smart meter deployments are quick to point out, having access to data is not helpful without the ability to analyze and react to it. For this reason, a key component of any successful platform is a robust and flexible analytics and reporting engine, which provides both regular, ongoing reporting – as well as ad-hoc reports for different departments throughout the utility enterprise.
Additional Unified Management Platform Benefits
Few utility management initiatives that involve consumers will succeed without a well-executed customer engagement strategy. In order to ensure that any unification and management platform implementations are successful, utilities should begin to engage customers before technologies have been selected or implemented. In addition, hiring a consulting firm that specializes in customer engagement will help a utility to learn from the industry’s previous mistakes, rather than repeating the hard earned lessons of those that have come before.
Today, residential customers take water and energy for granted, and have limited awareness of how to conserve it. This makes it difficult for utilities to drive customer awareness and adoption, which limits their ability to effectively control demand. In many respects, the key to residential customer engagement lies in providing a compelling reason for the consumer to care. In three minutes or less, can the customer identify how much money they can save? How their usage compares to their neighbors? How to automate savings so they don’t have to think about it?
Engaging customers in reducing and/ or shifting consumption requires a systematic, strategic approach – as well as mature, user-friendly technologies that automate conservation while allowing customers to choose their level of participation in relevant programs. While this is something utilities have struggled to do effectively in the past, there are consulting firms that have successfully helped utilities accomplish this goal.
If correctly chosen and implemented, unified management platforms can enable utilities to tap data from disparate systems to provide actionable, engaging information to customers – while creating a single point of control for the utility. Technology systems that leverage strong usability, in-context help, visual displays, predictive cost savings calculators, and the ability to obtain relevant energy efficiency tips are particularly powerful in engaging customers for the long-term.
Besides the data that a unified management platform can pull from other systems, it should also be able to “push” control signals, pricing data, and a variety of other outputs to external devices, web portals, and displays in order to fully optimize the utility’s ability to manage delivery. This two-way communications network will also provide a great deal of flexibility for monitoring, measuring, and controlling distributed generation, storage, and renewables as they come online in the future.
A unified management and analytics package will also support valuable new initiatives for the utility, including:
The ability to drive automated Demand Side Management decisions. Advanced management platforms can utilize analysis of prior usage patterns, weather predictions, pricing feeds, and a variety of other attributes to automate savings for the customer and alleviate shortages in supply.
Analysis and optimization of micro-grids. With a strong platform in place, utilities can analyze specific segments of their service territory based on existing infrastructure, demand, and supply. They can also deploy specific programs and strategies to optimize localized usage patterns, reduce bottlenecks, and improve quality using distributed generation or pumping, renewables, storage, and other assets.
Targeted demand response and price response programs. Utilities can drive Demand Response programs at the customer, transformer, substation, or feeder level in response to isolated spikes in demand or intermittent supply from renewable energy sources.
Intelligent efficiency. Using comparative analytics and device-level usage patterns, utilities can proactively notify customers when their appliances exceed an average usage level, and provide an incentive for the customer to replace that device. In addition, efficiency programs can be better targeted to each customer based on a detailed analysis of their consumption patterns, device types, etc.
Validation of optimal rate and customer program combinations. Based on the data and customers within a service territory, utilities can validate which combination of rates, incentives, and programs can best enable both customer savings and managed supply and demand.
Optimized support for electrical vehicle adoption. Unified energy management programs can dramatically help utilities shift electrical vehicle demand to off-peak hours, ensure system reliability, and offer compelling rate programs. Customers thereby gain the ability to choose when, where, and how fast to charge their vehicles.
Conclusion
In short, combining water, gas and electrical systems under a unified data management platform – one with both an open architecture and modular components – facilitates the ability of utilities to meet existing service requirements and future Smart Grid deployments. It can save money for the utility and its owners, and improve resource utilization and efficiency programs. And ultimately, the new platform provides a unified set of utility services, including: rates and rate modeling, pricing and billing services, demand response, analytics, device management, efficiency or conservation programs, and customer support.
Moreover, this combination of openness and modularity makes integration with existing meters, data streams, and applications straightforward and cost-effective. The end result is a powerful, unified view of water and energy data, and dynamic reporting that helps utilities and their customers make the most informed usage and conservation decisions.
About the Authors
Matthew Burkmier currently serves as Chief Technology Officer for Calico Energy Corporation. In this role, he drives the overall technology strategy for the company with a core focus on technology solutions that help enhance the efficiency of the energy grid and improve the services that utilities provide to their customers.
Thomas Hulsebosch is responsible for developing and leading West Monroe Partners Energy & Utilities practice. He is a 20-year veteran of the wireless telecommunication industry with extensive experience creating and delivering solutions for enterprises, public safety agencies, and service providers.
1 ESource and Nielsen Energy. Customers Want Smart Meter Data and Are Willing to Pay For It. June 2011.
http://www.esource.com/esource/getpub/public/pdf/press_releases/ESource-PR-SmartMeterData-6-11.pdf
