How Public Utilities Can Turn
Information Silos into Information Grids
Getting More Power
from Your Data:
When the Electric Power Board (EPB)
in Chattanooga, Tenn.,started thinking about its long-range vision, the publicly owned utility quickly realized it wanted a power distribution system that was intelligent, interactive and self-healing. “We envisioned leveraging the power of connected applications, data analytics and real-time control of every device on our distribution network,” said President and COO David Wade in an interview with the Center for Digital Government (CDG).To take full advantage of the opportunities within such a system, EPB knew it would need an infrastructure that supports the sharing and analysis of high volumes of data coming from thousands of smart meters, switches, sensors and other distributed endpoints.
Welcome to the future for municipal and cooperatively owned utilities. These organizations collect mountains of data — and they’re poised to collect even more as the power grid itself becomes more instrumented and intelligent. Most utilities, however, don’t tap into the true power of this data because it’s locked up in individual systems and silos. But that’s starting to change.
EPB, which is one of the nation’s largest publicly owned providers of electric power, saw dramatic results from deploying smart grid technology and sophisticated data analytics. The utility cut outage minutes by 43.5 percent from 2011 to 2015, which equates to an annual savings of $43.5 million for the community. The smart grid initiative also helped Chattanooga become the first U.S. city to receive the U.S. Green Building Council’s Performance Excellence in Electricity Renewal (PEER) certification “based upon how reliable, efficient and sustainable an electric utility is in delivering and helping customers use power.”
New technology is helping municipal utilities like EPB easily share, combine, analyze and act upon data within a smart grid environment. Unlocking that data is imperative as utilities grapple with issues and challenges, including:
Economic uncertainties. Volatile commodity prices, uncertain carbon pricing, the still-recovering national economy and other variables create an unpredictable environment for financial planning. Without access to high-quality data that considers both external factors and internal conditions, municipal utilities must make decisions “in the dark” in the event of sudden market changes.
High “cost to serve.” To balance budgets, lower customers’ energy bills and foster economic development, municipal utilities need actionable data to help them optimize power generation, transmission, distribution and other operational costs, as well as costs associated with customer service and billing.
Energy theft. A report by the Federal Bureau of Investigation and the International Utilities Revenue Protection Association estimates the U.S. utility industry loses approximately $6 billion per year to energy thieves.1 Smart meters, when combined with the proper analytics, can help prevent energy theft; however, many utilities lack the infrastructure to handle smart meter data and then correlate it with billing and operational systems to identify and prevent theft.
Regulatory compliance. Besides meeting regulations related to setting rates, municipal utilities are under pressure to comply with mandates on environmental impact,
efficiency and security.
Customers’ changing demands. Energy customers expect transparency, innovation and personalization at every point of contact with their utility. At a minimum, residential and business customers want historical and real-time data on energy consumption so they can maximize their energy spend. They also want to identify areas of wasted energy and receive relevant information about rebates and other services. As customer options for energy consumption expand, municipal utilities are under pressure to meet these demands and demonstrate value. If they cannot, they risk losing customers.
A report by the Federal Bureau of
Investigation and the International
Utilities Revenue Protection
Association estimates the U.S.
utility industry loses approximately
$6 billion
When the Electric Power Board in
Chattanooga, Tenn.,
deployed smart grid technology and sophisticated data
analytics, it:
Cut outage
minutes by
43.5
%
Saved
annually for the community
In a recent survey by The Shelton Group, nearly 33 percent of residential customers and 52 percent of business customers reported they would like to replace their current electricity provider. Sixty-four percent of residential customers and 67 percent of commercial customers would prefer to buy from a non-utility such as SolarCity, Google or Comcast.2
This paper explores the opportunities available to municipal utilities that embrace data analytics and describes a communications backbone that allows organizations to maximize the value of data.
The Promise of Data Analytics
The answers to many municipal utility challenges already reside within the utilities themselves — in the form of data. Municipal utilities collect historical and real-time data from myriad points, including cloud-based and on-premises IT systems, smart meters, legacy billing systems and operations technology (e.g., power generation plants, transmission lines and distribution systems). Meter data
management systems alone collect hundreds of millions of events every day from meters, transformers, service points and customer accounts. The emerging Internet of Things (IoT), where wearable gadgets, home appliances with sensors, transportation-based sensors, environmental monitors and other data collection devices
capture data in real time, will further add to this ever-expanding universe of data points.
Although public utilities have a surplus of data coming from all of these sources, they’re not always able to put it to good use. Most of the data is siloed and inaccessible, and organizations don’t have an easy way of sharing it meaningfully either within the organization or externally. Without the capability to make sense of data coming from countless endpoints and then act on it at the right moment,
Aided by a
$111.6 million
federal stimulus
grant awarded
in 2009
, EPB
built one of the
most automated
smart grid power
networks in the
United States.
of residential
customers
want to replace
their current
electricity provider.
of business
customers
want to replace
their current
electricity provider.
33
%
67
%
52
%
of residential
customers
would prefer
to buy from a
non-utility such
as SolarCity,
Google or
Comcast.
of business
customers
would prefer
to buy from a
non-utility such
as SolarCity,
Google or
Comcast.
64
%
public utilities miss the opportunity to address some of their most urgent challenges.
Many public utilities are developing digital business platforms that unite disparate infrastructures and management tools so they can apply data analytics to data coming from numerous endpoints. Data analytics can expose patterns that improve decision-making and add value for both utilities and their customers. With data analytics and a digital business platform, public utilities can evolve from an approach that revolves around poorly leveraged information silos to a strategy that expands and capitalizes on the rich, dynamic information that is available within a smart grid.
Aided by a $111.6 million federal stimulus grant awarded in 2009, EPB built one of the most automated smart grid power networks in the United States. Using a 100 percent fiber optic network as its backbone, the smart grid allows EPB to integrate and analyze data from across the utility to minimize the occurrence and duration of power outages, reroute power around problem areas, adjust supply and distribution as needed, give customers more control over their energy usage, automatically update and more.
Since its deployment, the smart grid has continued to meet and exceed expectations. In a report filed with the Department of Energy in 2014,3 EPB cited the following key
benefits of its smart grid:
9 Reduced operating, maintenance costs and meter reading costs
9 Reduced costs from equipment failures and thefts
9 Improved distribution system reliability
9 Improved electric service reliability
9 Reduced truck fleet fuel usage
9 Reduced greenhouse gas and criteria pollutant emissions
These benefits translate into better service and millions of dollars in savings. More importantly, EPB’s smart grid capabilities ultimately help improve quality of life for the community. When homes, businesses and emergency services can keep the lights on during severe weather, the core value of the EPB smart grid really shines through.
“One of the things we struggle with as an industry is the invisible nature of our product. How do you maintain
An Array of Analytics
Through integration, public utilities can unite disparate data and analyze multiple sources at one time to improve customer service, enhance public safety, optimize operations, meet environmental goals, streamline billing (i.e., the meter-to-cash process), save money and more. There are three basic types of data analytics:
Descriptive analytics summarize raw data and provide insight into recent and past performance. They allow public utilities to answer questions about what is happening or has happened within their systems and help inform decision-making. This type of analytics provides information about things such as grid status, energy usage and its costs, so utilities and their customers can respond appropriately. For example, using historical customer billing data, a utility can tailor its rate plans and services to individual customers.
“When we implemented smart meters and sensors on the distribution system a few years ago, we knew there would be abundant potential; now it seems exponential,” said Lora Anguay, director of distribution system operations at the Sacramento Municipal Utility District (SMUD).4 “Currently, within our operations, smart meter data is leveraged to assist with outage reporting and understanding segment loads on the distribution system.”
Predictive analytics combine historical data from various systems to look at past patterns and help identify something that could happen or is about to happen in the future. As the adoption of smart meters grows, predictive analytics become especially useful for detecting and preventing energy theft, predicting demand, identifying customer segments, improving resource usage, and forecasting operational costs and outages. Prescriptive analytics identify possible courses of action
and help public utilities and their customers decide what they want to do about a particular opportunity or challenge — often in real time. Prescriptive analytics are a relatively new field and have significant potential to help public utilities optimize operations, improve customer service and meet many of their other ongoing challenges. One emerging component of prescriptive analytics is real-time streaming data, which provides what Forrester Research calls “perishable insights.” As Forrester explains, perishable insights “occur at a moment’s notice and you must act on
frequently invisible?” said Danna Bailey, vice president of corporate communications for EPB in an interview with CDG. “The smart technology that we have deployed helps us give customers better service, and higher quality and more reliable power. And that gives us more opportunities to be visible, which allows us to build deeper relationships.”
Turning Data into Power – From Silo to Grid
Although data analytics can present compelling use cases, many public utilities are missing out on the opportunities that a well-integrated smart grid offers because they do not have the platform to handle and compare large volumes of distributed data.
To unleash the power of data, utilities need a common digital business platform that interacts with existing systems and allows different departments to capture, share and analyze a high throughput of data from disparate endpoints (e.g., smart meters, sensors, the energy grid, remote systems and Web-based applications) — meaningfully and in real time. Using a common platform, utilities can combine information technology with static and streaming data, analysis tools, automated processes, management applications and more to develop an intelligent, interactive and self-healing grid. When properly designed and implemented, this smart grid gives municipal utilities, their customers and the community the insight needed to meet daily and long-term challenges and opportunities. Using a smart grid, municipal utilities can manage power and power demand, uncover operational inefficiencies, thwart energy theft and improve meter-to-cash processes.
Because the platform is at the heart of a complex system and may remain in place for many years, it’s important to carefully assess potential solutions based on current and anticipated needs.
Key requirements of the platform include:
Scalability. A scalable
platform allows public utilities to adjust to short- and long-term changes more quickly and cost effectively. Scalability becomes increasingly important as public utilities expand smart meter programs, increase the use of
streaming or real-time data, enable workforce connectivity and adopt IoT technology.
Availability. Given the mission-critical nature of
the smart grid, availability of the underlying platform is essential. Key contributors to availability include a fiber optic network that supports high-bandwidth throughput with minimal latency, physical and digital security, and ongoing monitoring and management of platform performance and security.
This was a critical point for Chattanooga EPB. “We felt that the fiber optic network would be a major investment but that it would help us future proof our investment,” said Wade. “As one example, we started off with an optical network terminal that was capable of 100 megs of throughput. A couple years later, we installed the next version, which was capable of 2 gigs of throughput and was cheaper than the first. Now we have a version that is capable of 10 gigs of throughput. The investment in fiber optics is allowing us to continue to migrate and leverage more and more data.”
Open, standards-based technology. The platform that
supports a smart grid must be based on open standards to interact with the full spectrum of sensors, Web-based applications, systems and services within the utility’s infrastructure. This includes the utility’s energy generation system, advanced metering infrastructure (AMI), outage management system (OMS), meter data management (MDM) and other operational systems, as well as mobile workforce management and customer service systems.
Management and monitoring tools. These tools allow
municipal utilities to define business rules and processes for operational and business-related activities such as automatically notifying customers or executing recovery efforts when sensors detect anomalies in usage.
Dashboards and other tools. These tools help utilities
identify and respond to patterns. For example, to address energy theft, a municipal utility could use a dashboard to
Using a smart grid,
municipal utilities
can manage power
and power demand,
uncover operational
inefficiencies, thwart
energy theft and
improve
meter-to-cash processes.
“How do you maintain and build
customer satisfaction when your
product is so frequently invisible?”
— Danna Bailey, Vice President of Corporate Communications, EPB
Endnotes
1. Utility Analytics, Building a Case to Expose Energy Theft Through Descriptive Analytics, May 2015, www.utilityanalytics.com/resources/insights/ building-case-expose-energy-theft-through-descriptive-analytics
2. Solar Electric Power Association, What Market Research Is Telling Utilities About Consumers and Solar, Part 2, June 2015, www.solarelectricpower.org/ utility-solar-blog/2015/june/what-market-research-is-telling-utilities-about-consumers-and-solar,-part-2.aspx
3. U.S. Department of Energy, Electric Power Board of Chattanooga (EPB), March 2014, https://www.smartgrid.gov/files/EPB_Final_Project_ Description_-_20140422.pdf
4. Utility Analytics Week, How has big data changed your utility? Part 1, October 2015, www.utilityanalyticsweek.com/big-data-changed-utility/
The Path to a Fully Integrated Smart Grid
9 Build a business case. Develop an evidence-based business case that clearly expresses the vision and objectives of the undertaking and takes into account potential use cases, existing technology, the skill level of personnel, costs, return of value, and overall economic impact on customers and the community. “We developed a business case that we could save $20 million over seven years,” Elizabeth Fletcher, deputy director of the smart metering and infrastructure program at BC Hydro, told TechTarget. “From that, we developed a theory of how to do it, and then [chose] technology partners that could help us make that theory into a reality.”
9 Use existing data. Look for opportunities to use historical and real-time information that currently resides in silos. This includes customer billing and profile data, historical operational data, third-party data and more. 9 Focus on business outcomes. Know what answers you want from information so you design analytic tools that
ask the right questions and provide information that is relevant to the needs of internal and external customers. 9 Seek input and buy-in from the community. EPB leaders met extensively with leaders and business groups in
Chattanooga to hear their ideas and find out what the community needed. “We built a team that met with different groups in our community; it was a very face-to-face thing,” explained Wade. “The message was always ‘here’s what we’re thinking’ and how it would impact them. We always ended by asking for their feedback.”
understand the overall state of a particular system, identify energy use that indicates energy theft, prioritize recovery efforts that potentially yield the highest return and then manage the incident.
Getting Started
As smart devices proliferate and municipal utilities increasingly integrate parts of their business into the smart grid, the potential to innovate with data analytics
will continue to grow. Using these tools, municipal utilities can address their most complex challenges and discover new opportunities. The key to these rewards is having an integration and reporting platform that supports the smart grid over time.
This piece was developed and written by the Center for Digital Government custom media division, with information and input from Software AG.
Underwritten by:
Software AG offers the world’s first Digital Business Platform for Government. Recognized as a leader by the industry’s top analyst firms, Software AG helps you combine existing systems on premises and in the cloud into a single platform to optimize your environment and delight your citizens. With Software AG, you can rapidly build and deploy digital government applications to improve citizen services delivery. Get maximum value from big data, make better decisions with streaming analytics, achieve more with the Internet of Things, and respond faster to shifting regulations and threats with intelligent governance, risk and compliance.
The Center for Digital Government, a division of e.Republic, is a national research and advisory institute on information technology policies and best practices in state and local government. Through its diverse and dynamic programs and services, the Center provides public and private sector leaders with decision support, knowledge and opportunities to help them effectively incorporate new technologies in the 21st century.
