Tyrone Bowman, Industry Manager - Power, Pulp & Paper, Field Services, MAVERICK
As a CIO, you may be wondering what trends the utility industry should be looking at as we plan or the next two decades. The large, obvious trends are Smart Grid technologies, greenhouse gas emissions, fuel costs, domestic and international demands, and sales of our current generation capacity. We also can’t ignore the trends that utilities have some control over like operating costs, aging equipment, legacy control systems, clean fuel technology, consumer needs, etc.
So who should be leading these strategic plans? CIOs have historically been uninvolved in managing the operational side of the business, but who better to drive the critical initiative for accurate, real-time data to set market pricing and manage costs? A sustainable model to accurately forecast demand and costs will be critical to success and growth, as the business focuses on reducing operation costs, juggling the never-ending changes in governmental regulations, lowering the carbon footprint and managing volatile fuel prices.
If we look at the fundamental goals of customer retention, cost reduction, and competitive positioning, there are several practical technology solutions that can be put in place today to help achieve those goals.
At the local utility, there is a wealth of real time data available from Supervisory Control and Data Acquisition (SCADA) systems and Distribution Automation Systems. Getting this data out of these systems and into a Data Warehouse (DW) and Business Intelligence (BI) environment allows the right data to be provided to the right people at the right time to improve reliability, increase efficiency, and reduce operating costs.
The investor owned utility market has nearly pushed all public owned or broadband monopoly type utility into extinction. This makes it more critical than ever to understand the cost and availability of assets across an expansive landscape in order to use those assets efficiently. It is only a matter of time before it is standard practice to connect and network these assets for the ability to monitor and remotely control them. We are fortunate that the technologies to make this a reality are readily available.
The investor owned utility market has nearly pushed all public owned or broadband monopoly type utility into extinction. This makes it more critical than ever to understand the cost and availability of assets across an expansive landscape in order to use those assets efficiently. It is only a matter of time before it is standard practice to connect and network these assets for the ability to monitor and remotely control them. We are fortunate that the technologies to make this a reality are readily available. Smart Grid technologies, which combine current distribution systems with Information Technology, will provide data to home owners, small businesses, schools, hospitals, and other consumers. This data will help them control their costs and schedule high demand activities during off-peak hours. The data will also helps the utilities sustain their competitive position by helping them recognize trends in demand, trouble shoot power quality issues, and reduce blackouts. It won't be long before Smart Grid technology has becoming standard utility practice.
As electric utilities expand their Smart Grid technologies, the industry must be able to forecast the areas that have highest demand, enabling the utilities to properly focus their assets. With ten-year trends in natural gas prices reaching an all-time low, forecasting domestic and international demand for natural gas will be critical. For the past decade, the trend for the individual consumer has been to reduce their usage by 10 percent, with some reduction goals as high as 60 percent for industries with high energy consumption. Knowing current generating capacities and real time dispatch capabilities will be significant as demand trends continue to change.
As you can see, today’s CIO role is rapidly changing. In the past, the CIO's job was mostly behind the scenes, but now the CIO is at the forefront of many of the trends that will define the industry for the next couple of decades. Information Technology is quickly becoming as much a part of the products and services as the energy itself. The CIO now is tasked with using Information Technology to provide strategic solutions that help the business increase market share, respond to consumer demands, increase shareholder value, reduce operating costs, and respond to very rapidly changing markets.Although challenging, the CIOs that are able to do this will help build their companies into the next generation of industry leaders while their competitors fall by the wayside.