Greater efficiency and more reliable performance are the primary goals of utilities investing in Smart Grid technology. One trend — the convergence of Operation Technology (OT) and Information Technology (IT) — is powering many grid modernization benefits. OT represents a broad category of operating gear, from oil circuit breakers and sectionalizers to solidstate relays, and many devices in between. It can include automated or semi-automated control systems.OT can be recognized by anyone in utility operations, and is often applied within mission-critical framework. IT allows machines to quickly exchange information directly with people. The utilities industry has experienced an exponential increase in both quantity and quality of IT systems. Examples include improved Enterprise Resources Planning, Geographic Information Systems, Customer Relationship Management systems, office-based productivity tools, and mobile devices.

1. FierceEnergy
FierceEnergy.com
Utilities and
IT/OT Integration
The power industry has grappled with the “smart
grid” buzzphrase for years — ever since Andres
Carvallo, the former CIO of Austin Energy, coined
it a decade ago. Today, the newest version of
this buzzphrase centers on IT/OT integration.
Traditionally, IT (information technology) business
systems and OT- (operations technology) managing
and automating plants and equipment have been
decidedly separate. However, a realization of the
advantages of bringing the two together in order to
align and integrate processes is beginning to emerge.
The smart grid brings a new level of complexity
to the breaking down of silo’d operations
as new capabilities emerge based on largescale information management, real-time data
analysis, and the move to closed-loop systems
for managing, monitoring, and controlling the
smart grid; however, the smart grid is not the
main driver of IT-OT convergence, according to
research conducted by The McDonnell Group.
Utility Priorities
According to the 2011 research of 68 utility
decision-makers at 39 North American utilities,
the majority of utility decision-makers consider
planning for future smart grid initiatives through
2014 a lower priority than improving their current
level of IT/OT integration. The higher priority of IT/
OT integration initiatives can be attributed to the
fact that such initiatives are viewed as a necessary
precondition for building the future smart grid.
Utilities in the McDonnell Group study ranked
these five priorities in order of importance:
1. Ensuring the reliability of aging assets
2. Preparing for a changing regulatory landscape
3. Coping with an aging company workforce
4. Investing in new physical infrastructure
5. Developing the company’s smart grid roadmap.
3
Industry Perspective: Juliet
Shavit, CEO, SmartMark
Communications
1
August 2 012
6
How the Convergence
of IT and OT
Enables Smart Grid
Development
*Sponsored Content*
7
IT vs. OT: Making Sense
of the Buzz
9
Conversion Challenges
and Solutions
If a utility is not aligning IT and OT and better
managing its assets, it could become increasingly
difficult to deal with the increased complexity
and stress that smart grid conditions place on
the grid. Utilities interviewed expressed the
need for improved model accuracy and realtime update capabilities to better address the
intermittency of solar, wind and future storage
resources such as electric vehicles. These improved
models will entail new monitoring capabilities for
dispatchers at the utility, as well as the possibility
of lessening the need to have traditional spinning
reserve capacity on hand to back up renewables’
intermittency using demand response resources,
again driving the need for deeper levels of IT/OT
integration, according to The McDonnell Group.
Going Forward
To maintain or improve system reliability and service
levels going forward, utilities are preparing new
IT and OT infrastructure, business intelligence
and analytics tools to optimally manage the
broader, deeper use of real-time data associated
with grid improvement and smart grid initiatives,
according to The McDonnell Group. Using IT
solutions to draw better insights from real-time
operational systems is a common thread across
smart grid initiatives, including improved fault
location, isolation and restoration capabilities
and to support reliable widespread utilization
of electric vehicles, renewable power sources
and other distributed energy resources.
The convergence of IT and OT delivers high
degrees of grid automation, sensing and visibility;
achieves greater control of distributed generation;
and provides better support of regulatory
compliance not to mention offering staff in both
areas to work together on system engineering
standards and architecture, product and supplier
11
Bridging the IT/OT Gap
standards, and business case timelines. In
addition to direct economic and reliability benefits,
within each utility service territory reductions in
the frequency and duration of outages will also
bring important customer-centric benefits.
The shift toward smarter hardware also requires
a step change improvement in software to
take full advantage of the potential benefits. To
analyze the flood of real-time data associated
with asset health and smart grid initiatives utilities
require new capabilities and processes — this is
where the convergence of IT and OT is driving a
transformation, according to the McDonnell Group.
As important as future grid improvements or smart
grid initiatives are, The McDonnell Group’s research
has shown that a utility’s first priority should be
improving their levels of IT/OT integration, which
will enable them to make significant improvements
to the efficiency and reliability of their network
operations and address smart grid initiatives.
This eBook will assist utilities in navigating the
challenges and reaping the rewards of making
the cultural, governance and organizational
transition to IT and OT system integration.
by Barbara Vergetis Lundin
Editor /// Fierceenergy
 Platinum Sponsor:
13
From Risk Comes Reward
 Sponsored by:
15
Q&A: Success in
IT/OT Convergence
sep tember 2 013
2

2. FierceEnergy
FierceEnergy.com
Industry Perspective: Juliet
Shavit, CEO, SmartMark
Communications
by Areg Bagdasarian
IT, OT and the Smart Grid
The best is yet to come for
smart grid-enabled utilities that
have embarked on the path of
creating cross-functional teams
to address the changing power
ecosystem. That is according
to Juliet Shavit, founder and
president of SmartMark
Communications, who says
that aligning information
technology (IT) with operations
technology (OT) will pay
dividends for utilities and
customers alike as providers
move from legacy systems to
FierceEnergy: What do you
think about IT/OT convergence
as an industry buzzword? Do
utilities get it?
Juliet Shavit: I’m not
sure utilities know what
IT / OT convergence truly
means yet — there’s IT, and
network convergence, and
technology. OT though, is
very much a telecomm term
to me— it’s not about shoving
new technologies down a
customer’s throat though,
as you do have to introduce
things gradually.
There have been some
cases where if you don’t
test meters enough and
3
more agile hardware and software
that better meets end-user needs.
For utilities skeptical about IT/OT
investment, Shavit says dollars
spent on mesh networks and
greater IT integration will translate
into flexible platforms that can
provide municipal WiFi, cable and
other services. Utilities and end
users stand to gain from these
innovations and the future is looking
bright for those willing to capitalize
on change.
Shavit has spent more than
a decade providing strategic
communications for the utility
industry and acts as a strategic
don’t inform your customers about
them they could go haywire and
in some cases have ended up
charging customers too much.
When things like that happen,
regulators get involved and it can
bring the technology to a halt. The
industry has seen what happens
when IT doesn’t converge with
OT in the right way. Utilities have
to go through appropriate effort to
integrate a customer education plan
along with a deployment plan. In
fact, in Maryland it’s a requirement.
You can’t have an AMI roll-out
without both plans, so from a
regulatory experience utilities
must do this and prove there’s a
business case.
sep tember 2 013
advisor to utilities globally, helping
them develop effective programs
and messaging at different stages
of smart grid deployment. Shavit is
also the founder of the Homeland
Security for Networked Industries
(HSNI) Conference, the Smart Grid
Customer Education Symposiums,
the Smart EV Executive Leadership
Forum, and GridComms.
Utilities understand convergence
is taking place between IT and
communications, but may not
understand where OT fits in. For
example, the VP of customer care
may not understand it, as it’s a
language thing and it can be techspeak; it’s simply something
that’s not quite in the lexicon for
a lot of utilities.
FE: Successful IT/OT convergence
requires a fundamental change in
how utilities are run and how they
communicate internally. What are
the challenges in getting different
departments within a utility to work
together more closely?
JS: Metering within the utility
industry has traditionally been
the responsibility of technology
deployment teams installing
and activating the monitoring
infrastructure. Meters are installed
and billing collects payments from
customers. There hasn’t been a
need for operations teams to be a
part of that process.
But with AMI and the smart
grid, we’re reading about people
aggressively guarding their meters
and protesting in the streets, or
refusing to adopt the technology
outright. So there’s a new need
for a communications for utilities
where IT, and strategic/customer
communications, deployment,
and OT teams work together.
Deployment teams can sometimes
take on the role of customer
education, but it should be in the
marketing team’s hands — there
needs to be people with customer
facing skills involved.
In the history of utilities, this need
has never existed before; they’ve
never setup internal infrastructure
to work together on these things.
While these operations have been
traditionally built into silos, the need
for communications now exists
between these different areas. The
smart grid is about breaking down
those walls. It’s about operational
efficiency but also about what’s in
it for customers.
are looking toward communications
teams for help. Some will work
with management consultants
or outside counsel, since many
utilities don’t have communications
departments internally.
If you’re in a regulated
environment, you’re the monolithic
provider — like the telco world
with incumbent providers. But in
more competitive environments,
when there’s choice, customers
want more from their utilities.
Sure, in many major areas we still
have regulated markets, and when
there’s NO choice, there’s no need
for a communication strategy.
Customer care in those instances
is based on call centers and bill
complaints — but I promise you
the minute a utility wants to put
a smart meter on your house and
there’s increased competition,
they’ll be nicer to you so you’ll be
more engaged with your provider
If customers don’t adopt
part of AMI, then the whole
business case collapses.
If you look at the new
ecosystem, customers
are huge part of it and
it’s a huge risk for utilities
if they don’t buy-in.
and they’ll be more ways to
regulate your bill. In the advanced
metering infrastructure (AMI) world,
customers have a huge role in the
success of the smart grid. In fact,
if customers don’t adopt part of
AMI, then the whole business case
collapses. If you look at the new
ecosystem, customers are huge
part of it and it’s a huge risk for
utilities if they don’t buy-in.
FE: Since IT and OT have been in
silos for so long with such different
processes and goals, how do the
two teams view each other?
JS: Deployment teams have
never been challenged before
with regulatory requirements for
customer education, never had to
deal with advocacy with metering
or stakeholder groups; this is all
very much a new issue. Utilities
sep tember 2 013
4

3. FierceEnergy
FierceEnergy.com
you don’t throw the whole kitchen
sink at it.
Utilities need to be adaptable
if smart grid or IT/OT work goes
over budget, and they need to do
what’s right for their customer
base. You need to articulate what
you’re doing to the regulators and
stakeholders, and then you’ll be
fine. Don’t get too caught up in
details and technicalities and lose
sight of the big picture; you need to
build toward your customer goals.
It also helps to bring in seasoned
experts — everybody thinks they
can do smart grid implementations
— but it’s hard unless they’ve done
it before.
FE: Many utilities are already
bringing IT and OT together in the
name of the smart grid while others
are still deciding whether to even
enter the game. Of those that have
made progress, do any utilities
stand out in terms of how they
overcame IT/OT challenges?
JS: PEPCO Holdings has done
an excellent job integrating and
developing a team to oversee
deployments. That team is made
up of IT and OT people, marketing
communications and customer care
specialists combined. You need
to work with deployment teams,
but you need those marketing
communications teams or
consultants there to help.
For PEPCO, it’s about market
research. They wanted to
understand their customers so
they built a research program on
baseline awareness on how people
felt before the meter, then tested,
then continued to monitor during
and after installation to augment
their program based on market
5
sep tember 2 013
conditions. They’ve adjusted things
as they’ve gone along — tailoring
their message to customer needs
and conducting strong research,
while building flexibility and agility
into their program. This is important
because often smart meter roll-outs
can take two years so you have to
listen to your customers. Direct
load control, smart thermostats,
etc., when it comes to the smart
grid, some utilities and customers
want every part of it — but there
are problems along the way. You
can still achieve success, even if
PEPCO Holdings has done an
excellent job integrating and
developing a team to oversee
deployments. That team is
made up of IT and OT people,
marketing communications
and customer care
specialists combined.
FE: When it comes to data
presentment and CRM systems,
many of the existing legacy systems
are not ready for IT/OT integration.
What are the biggest challenges
facing utilities as they decide how
to upgrade their CRM systems?
JS: Email doesn’t exist. The fact
that older CIS and CRM systems
don’t have a field for it is a huge
problem. These are legacy systems
that don’t have modern customerfacing information. Many of these
systems haven’t been touched in
many years and aren’t agile. Think
about how customers want to be
communicated with today: social
media, Facebook, mobile phones
— you wonder with CRM printouts
that are difficult to read from some
of these older systems, how these
utilities will market to customers
and have them understand.
Often CRM systems don’t
distinguish between small
commercial and residential
customers. If you’re a mom and
pop coffee shop, you’re on the
continued on page 17
How the Convergence of IT and OT
Enables Smart Grid Development
By Jeff Me yers, P.E., Schneider Electric
Greater efficiency and more
reliable performance are the primary
goals of utilities investing in Smart
Grid technology. One trend —
the convergence of Operation
Technology (OT) and Information
Technology (IT) — is powering many
grid modernization benefits.
OT represents a broad category
of operating gear, from oil circuit
breakers and sectionalizers to solidstate relays, and many devices in
between. It can include automated
or semi-automated control systems.
OT can be recognized by anyone in
utility operations, and is often applied
within mission-critical framework.
IT allows machines to quickly
exchange information directly with
people. The utilities industry has
experienced an exponential increase
in both quantity and quality of IT
systems. Examples include improved
Enterprise Resources Planning,
Geographic Information Systems,
Customer Relationship Management
systems, office-based productivity
tools, and mobile devices.
Redefining technology norms
The distinction between the two
technologies is being blurred by rapid
Smart Grid transformation. Individual
grid elements are becoming both
more intelligent and integrated,
which is driving changes in
smarter equipment and automation
deployment, including:
• ontinuous growth in OT
C
deployment
• ontinuous implementation of IT
C
to monitor and manage distribution
systems
• rgent requirements for utilities to
U
integrate IT and OT networks
New OT devices for
the network
Expanding OT deployment has lead
to the development of a smarter
grid in many ways. Technologies
introduced in recent years offer
benefits from superior monitoring
and supply control to more efficient
generation and consumption to more
innovative energy storage. Smart
meters and home area networks
are also blurring the lines between
energy supply and distribution
domains.
Many improvements to existing
devices are also being deployed,
such as smarter solid-state relays
and controllers for reclosers
and sectionalizers and improved
regulators and capacitor controllers.
IT redefines roles
Operational IT is undergoing a
steady transformation. Distribution
Supervisory Control and Data
Acquisition and Distribution
Management Systems were once
completely isolated and exclusively
controlled limited assets. Now they
serve far broader application and
integration requirements.
Meanwhile, Outage Management
Systems have migrated from
the enterprise to the operations
domain. Once an extension of a
call center application, modern
deployments embed network
intelligence to support restoration
and switching. It might seem
obvious, but convergence has farreaching implications for operational
applications that model, monitor, and
manage the distribution network.
Sponsored Content
Integration on a
massive scale
Convergence unites applications
and devices in new ways, and ties
systems that have primarily operated
in isolation. Along with the growth in
numbers of devices and functionality,
convergence introduces integration
on a new scale. Addressing the
needs of the IT/OT-integrated
distribution grid requires advances
in communications, adherence to
expanded standards, and a focus on
architecture and security.
Conclusion
There is no need to fear the
prospect of an IT/OT converged
world. Change begins with the
simple awareness of the significant
influence of IT on operational
equipment. Although almost every
facet of traditional utility operations
will change, the deployment of
Smart Grid technology will allow
utilities to better serve their
customers, and ultimately do so at
lower cost. The Smart Grid is an
evolution, not a revolution. l
About the author
Jeff Meyers, P.E., supports Smart
Grid technology for Schneider
Electric’s Smart Infrastructure
division with expertise gained during
his 30-year utility career. Currently,
he focuses on helping Schneider
Electric customers apply integrated
technology to realize energy
efficiency. He is a member of the
IEEE, IEC, GITA, and International
Who’s Who of Professionals —
and a five-time recipient of GITA’s
Speaker of The Year award.
sep tember 2 013
6

4. FierceEnergy
FierceEnergy.com
IT vs. OT: Making
Sense of the Buzz
by Areg Bagdasarian
The days of wondering
whether a smarter, more
interconnected electric grid
will better serve the needs of
end users and utilities alike are
behind us. Countless utilities
are already seeing the benefits
of upgrading to a more holistic
and responsive smart grid.
While each power company
may be in a different stage
along that modernization path,
there are many commonalities
driving the transformation.
These include forecasting
future power needs more
accurately, generating power
more reliably, maintaining
assets in the field, integrating
renewable energy sources,
and leveraging big data to
understand end user behavior.
Not to mention the cost and
time savings inherent to
running a more efficient and
intelligent operation.
A Merging of Silos
As strategy and resources
more closely align, utilities
are uniting two other key
pieces of their business where
information technology (IT)
and operations technology
(OT) converge. Two sets of
systems that have operated
in parallel yet separated by
functional silos are finally
coming together. Integrating
IT and OT into a cohesive
system will provide a more
adaptable platform for power
7
sep tember 2 013
companies to attain
their modernization
goals in a rapidly
changing power
ecosystem.
In the context of the
smart grid, operations
technology includes the hardware
and control systems from the point
of generation to the “last mile” of
power delivery to the end user.
“OT is about computers
interacting with machines, whereas
IT is focused on computers
interacting with people,” said Ashok
Sundaram of Accenture’s Smart Grid
Operations Technology practice.
If OT is about the management
and operation of “production-side”
physical assets, IT is about the
other side of technology, including
internal company data networks and
customer retention management
(CRM) systems. Both IT and OT
have been critical to reliable power
generation but have operated
As utilities look to engage their customers by managing the
demand side of the equation more than just building out
more capacity, IT and OT will need to work more closely.
somewhat separately. This has
been due to differences in strategy,
processes, underlying platforms
and even the speed with which
technology in the industry changes.
Until recently, the overall strategy
and process for OT systems was
to enable reliable and consistent
power to end users. Less emphasis
was placed on how efficiently that
power was being supplied and
overall usage patterns. That power
has usually been supplied through
proprietary software systems
that didn’t interact much with IT
systems. Overall architecture and
protocols for IT and OT systems
have also been disparate, although
this hasn’t impeded overall day-today operations.
But as utilities look to engage their
customers by managing the demand
side of the equation more than just
building out more capacity, IT and
OT will need to work more closely.
Mixing Business IT with
Plant Operations
Today, there is a greater push
to merge hardware and plant
operations from the OT side into
business-oriented IT systems. In
order to accomplish this, utilities
need to first establish their business
goals and strategy so they can lay
out a plan to determine what level
of technology convergence works
for them. With both the IT and
OT side of the house operating in
relative silos for so long, this change
has taken some time to gather
momentum.
“For a while there’s been outright
distrust between OT and IT, but
that’s changing,” said Bob Lockhart,
senior research analyst at Navigant.
“Since I began researching this,
I’ve seen big changes. At the
beginning when I would ask about
IT-OT convergence, people would
laugh, but not anymore. They admit
the planning and meetings can be
difficult, but still very doable.”
There’s certainly little doubt that
OT systems have been entrenched
for a very long time.
“Electrical infrastructure is 100
years old and, in some cases,
not much has changed since the
light bulb was invented,” said
Juliet Shavit, CEO of SmartMark
Communications, a utility
consultancy. “As the world of
communication has exploded,
the grid has remained a one-way
device.”
While many aspects of power
generation and distribution have
stayed the same, some things have,
in fact, changed. Utilities that have
invested in newer power generation
hardware and smart meters are
looking to get the best return on
their investment. A large part of that
comes from end users engaging
more closely with their utility so
the grid no longer remains a “oneway device.” That relationship is
only possible through smart twoway communication where a utility
understands its customer usage
patterns and can incentivize them to
use power more efficiently.
For those that have made the
investment in advanced metering
infrastructure (AMI), it’s vital to
process to act upon the vast
amounts of “big data” that end
users transmit back to the grid
courtesy of these recent upgrades.
That includes time-interval data on
customer usage patterns of their
highest consumption appliances
to data on transformer loads. The
creation of appropriate platforms
for analyzing this information will
lead to improved efficiency across
the ecosystem. Analytics are so
important that McKinsey Co.
believes the analysis of interval
data from end users could save
the nation one-third of their
annual electric bill or $130 billion
per year. l
Analytics are so important that McKinsey Co. believes the
analysis of interval data from end users could save the nation
one-third of their annual electric bill or $130 billion per year.
sep tember 2 013
8

5. FierceEnergy
FierceEnergy.com
Conversion Challenges
and Solutions
by Areg Bagdasarian
Successfully overcoming
convergence challenges
begins with determining your
goals. More accurate power
generation and forecasting,
centralized distribution
management, and better
maintenance of hardware and
software assets are all worthy
end goals that can be attained
through OT-IT convergence.
A change in corporate
governance can play a large
role. Specifically, this includes
altering the reporting structure
of the organization so that
formerly separate OT and IT
departments can be pulled
out of silos
and built into
cross-functional
teams. While
it may be
daunting at
first, IT and OT
can begin to make other decisions
as one unit. From handling internal
and external (end user) analytics to
making joint purchasing decisions
from fewer vendors, a unified
structure has its benefits.
Finding a Change Agent
But how do utilities find a change
agent to head up the effort? In
an OT-heavy industry, how does
IT mesh with OT in the long
term? Finding someone who has
experience on both sides of the
operation to take the reigns would
be ideal.
“You need to adopt the hero
approach, with someone leading
who came up through the
engineering side and then went
to IT. Someone who can speak
both languages and act as a
bridge,” said Bob Lockhart, senior
research analyst at Navigant. “For
the convergence to work, both
sides should be involved from the
get-go.”
More accurate power generation and forecasting, centralized
distribution management, and better maintenance of
hardware and software assets are all worthy end goals
that can be attained through OT-IT convergence.
A unified strategy leading to
more centralized systems is
certainly a good thing. However,
understanding how to deal with
more readily accessible data calls
for the right analytics. A centralized
OT-IT operations platform can
easily tell you a lot more about
customer usage patterns as well as
internal data on the state of various
endpoints in the system.
Good analytics can help you sort
through the data stream to find
patterns that can lead to direct
enhancements in operations. This
could include detecting when a
particular neighborhood on the grid
is consuming power heavily due to
electric vehicle charging and creating
a time of use billing program to more
closely match customer needs.
Investing in analytics can also help
as more data comes in through
various renewable sources through
distributed systems. Without IT and
OT closely linked, analytics packages
will have difficulty sorting through
patterns to find insight.
More Data, More Challenges
When IT and OT come together,
more data can flow between
systems but it’s important to
keep data secure and in the right
place. Bob Lockhart stresses the
importance of isolating control
networks (OT) from enterprise
networks (IT).
“You need strong barriers between
networks so only the right data
passes between them and there
isn’t free access,” he said.
As more systems are linked,
sensitive customer financial and
usage data should only be shared
with teams on a need to know basis.
Protecting incoming data from end
users and the different links in the
communication chain becomes more
9
sep tember 2 013
“You need to adopt the hero approach, with
someone leading who came up through the
engineering side and then went to IT.
Someone who can speak both languages
and act as a bridge.”
Bob Lockhart, senior research analyst at Navigant
relevant when IT and OT become
one.
“Now that decision making is
automated, and decision making
is done differently, it’s based on
customer data coming back that
hasn’t been altered, and is coming
back from a known device. There’s
even fear that with more access
points on the IT side into the OT
side, people can hack into the grid
and shut it down, so security is
important to prevent this,” said
Lockhart.
These challenges do not have to
be taken on alone. Utilities can look
to outside vendors for partnerships.
In the last several years, many
grid hardware manufacturers have
themselves acquired software and
analytics firms.
Juliet Shavit, CEO of SmartMark
Communications advocates just
this. “Look at your neighbors and at
technology that’s proven in mesh
networks and other areas for your
communications needs,” she said.
“There may be off the shelf systems
that would fit your needs. Find
partners with experience in
the right areas, see their successes
and failures.” l
sep tember 2 013
10

6. FierceEnergy
FierceEnergy.com
Bridging the IT/OT Gap
by Areg Bagdasarian
Merging any system
between OT and IT requires
a far-reaching company
initiative where two sides of
the aisle agree that bringing
the two closer will lead to
the fulfillment of company
objectives.
Strategy
A strategic plan for
bridging the OT-IT divide
includes deciding how the
silos between OT and IT
departments will gradually
be removed. Strategy should
also address a governance
model for how the
departments will unify with
greater cooperation between
teams.
Research from Accenture
Consulting shows that only
50 percent of utility clients
have developed a strategic IT
plan in the context of smart
grid modernization. Many
of these plans have also not
considered the employee skill
sets needed to maintain a
joint OT-IT operation. But the
right strategic approach may
indeed be to see what can
be accomplished in the short
term first before moving onto
larger goals.
“Create a small quick
win early, think big but
start small” said Jeremy
Oosthuizen of Origin
Consulting.
This is particularly relevant
for utilities trying to cultivate
11 sep tember 2 013
a business
sponsor or
an executive
within the
organization
to help
promote strategic change. Once
a new strategy is agreed upon
and relevant departments join the
cause, managing convergence
becomes all the more viable.
Workforce/Teams
For years, utilities have had a solid
core team of operations technology
experts and engineers. The IT
department has often played a
smaller role and has been staffed
with fewer people. Organizations
heavy on operations expertise
but light on IT should decide how
to integrate both departments.
Depending on strategy, hiring
additional IT personnel or even
bringing in outside vendors for
Merging any system
between OT and IT requires
a far-reaching company
initiative where two sides
of the aisle agree that
bringing the two closer
will lead to the fulfillment
of company objectives.
Technology and Systems
The IT department has often
played a smaller role and
has been staffed with fewer
people. Organizations heavy
on operations expertise
but light on IT should
decide how to integrate
both departments.
support could make sense and
utilities of all sizes can benefit.
“Small utilities stand to gain as
much as large utilities, but they
may only have one IT person so
they have to use cloud services
for analytics and outside vendors,”
said Bob Lockhart, senior research
analyst at Navigant.
Utilities shouldn’t hesitate to
partner up or acquire outside
resources as needed to fill in their
skills gaps.
One of the biggest challenges in
the industry remains the isolation
between OT and IT platforms.
These sub-silos have been
especially pronounced in data
storage and operating systems.
Traditionally, data on internal
operations and whatever limited
end-user data has been available
has been stored on proprietary
databases. These databases have
operated in silos away from CRM
systems, where valuable end-user
information was not analyzed in
real-time, and opportunities to fine
tune operations were missed.
Bringing OT databases into more
flexible IT platforms such as SQL or
Oracle is key. The advantage is that
these platforms can more easily
link to CRM, customer service,
and other systems, and in many
cases, are the same systems that
are currently used for storing other
customer data. Results include
more centralized control over IT and
OT as well as lower operating and
maintenance costs.
Operating systems themselves
have been separate for years.
OT-exclusive systems have often
had little in common with their
IT Windows-based counterparts.
Bringing entire software platforms
into a Windows environment
may take some effort but the
advantages include centralized
control, unified maintenance and
support for one system instead
of many. l
A strategic plan for
bridging the OT-IT divide
includes deciding how
the silos between OT
and IT departments will
gradually be removed.
sep tember 2 013
12

7. FierceEnergy
FierceEnergy.com
From Risk Comes Reward
by Areg Bagdasarian
Utilities should build a
business case for OT-IT
convergence based on their
most important goals while
taking known risks into
account. Return on investment
should be a big part of the
discussion, and the case must
be made to leadership that the
benefits of this change will
outweigh the cost. The most
pressing of these challenges
are found within operations,
technology, and data
management (data analytics
IT, the priorities of both areas must
also begin to merge.
Demand Response
and security). There is risk inherent
to overcoming these hurdles but
the biggest risk can indeed be
not seeing the value of IT-OT
convergence. When OT-IT changes
do begin to coalesce, the rewards
are more than worthwhile.
As utilities pursue convergence,
there’s work to be done in
combining the separate “islands”
of technology that have developed.
These islands can make integrating
new technologies and systems
difficult. To make the requisite
technology changes to unify OT and
The good news is that many utilities have already
invested in distribution management by virtue of the
advanced metering infrastructure they’ve rolled out.
An OT priority may be to keep
systems up and running through
consistent power generation. The
IT department, though, may place
emphasis on accurately billing end
users for their consumption.
If a technology goal is incentivizing
commercial and residential
customers to use power more
efficiently through a time-of-use
(TOU) program, then OT and IT
personnel and systems must work
closely to achieve that. If teams
don’t begin merging at least some of
their systems, then cross-functional
initiatives such as TOU billing will be
at risk.
But the rewards for building
a technology bridge between
departments can make it
worthwhile. Cross-departmental
initiatives can save both end users
and utilities a great deal of time
and allow them to operate more
efficiently without needing to
build out more capacity to cope
with changing customer needs.
Streamlining energy use is all the
more important given that, global
demand for energy could increase
by as much as 35 percent by 2035,
according to the International Energy
Agency.
Distribution Management
Distribution management is all
about the applications and hardware
that monitor the grid and attached
networks. Integrating applications
and hardware downstream and
upstream can pose a challenge,
but not doing so risks greater
inefficiency by obstructing
operations’ view of power needs
throughout the system.
13 sep tember 2 013
The good news is that many
utilities have already invested
in distribution management by
virtue of the advanced metering
infrastructure they’ve rolled out.
Granular usage data from end
users combined with precise
measurement on how energy
is flowing through the network
can help OT and IT personnel
understand what’s happening
and how to make changes. A
well-thought out distribution
management system can rewards
its users by providing efficiency in
operations through initiatives such
as voltage reduction.
Voltage reduction is a win-win for
end-users and utilities, according
to Bob Lockhart, senior research
analyst at Navigant.
“You’re able to provide the same
level of service but you’re running
the system at a lower voltage,” said
Lockhart. “This results in using
less energy and better control of
the power band that your circuit is
running in.”
Smart distribution management
can help with managing the everlooming risk of outages as well. The
more a utility knows about what
their customers are doing through
bi-directional communication, the
more easily they can restore power
during interruptions or weather
related events. First class outage
management is when a utility can
pinpoint trouble in the system before
their end users have to report it.
Juliet Shavit, CEO of SmartMark
Communications cites Tennessee’s
Electric Power Board (EPB) for their
success in this area.
“Many utilities are waiting to see
the benefits before they actively
pursue IT-OT convergence, but the
evidence is there. Look at Electric
Power Board in Tennessee,” Shavit
Granular usage data from end users combined with
precise measurement on how energy is flowing through
the network can help OT and IT personnel understand
what’s happening and how to make changes.
said. “They’re already seeing better
outage management after a recent
tornado along with cost savings
from operational changes.”
Renewable Energy
Integration
The move toward renewable energy
sources is being driven by regulatory
change as well as growing
consumer and business desire for
more sustainable energy choices. If
utilities don’t prepare their systems
for the growth of renewable energy
sources, they risk being unable to
cope with the increased load on
their systems. Solar panel usage
and electric vehicle charging are two
examples of this. Consumers that
install solar panels on their home
will need a way to be accurately
charged not just for the energy they
use, but for the energy they store
and feed back into the grid. The
steady growth of electric vehicles is
placing a growing strain on the grid
as well. Utilities will need to create
steady power during nighttime
charging hours and change pricing
structures.
“Renewable energy is intermittent
by nature,” said Hanan Eisenman,
communications manager at San
Diego Gas and Electric. “If you
have a lot of solar on the grid, you
need technology to accommodate
that and sense changes to continue
accommodating it. We’re looking for
smart inverters to be placed on solar
panels to regulate voltage. It’s clear
continued on page 18
sep tember 2 013
14

8. FierceEnergy
FierceEnergy.com
QA: Success in IT/OT Convergence
by Areg Bagdasarian
San Diego Gas and Electric
(SDGE), a Sempra Energy
company, has several initiatives
underway to align OT and IT
operations for its smart grid
conversion plan.
On the strategy side, SDGE
has removed silos between
departments to form an Analytics
FierceEnergy: Tell us about
your smart grid initiatives,
especially your efforts to
bring operations technology
and information technology
together strategically.
Jeff Nichols: For operations
and IT, we’re actually letting it
happen naturally at SDGE,
and not necessarily forcing
the issue. We’re letting
information technology,
electric transmission, and the
distribution side work on this
together on several fronts.
They’re using new work
processes and governance to
make it work, and our smart
grid team is lead by one of our
company directors who has a
strong background in IT. We
started by putting together a
smart grid deployment plan
detailing the areas where
IT and OT groups can work
closely together. Really, the
smart grid is about applying
new digital IT to existing
the grid and integrating it
over time. We’ve formed an
Analytics Center of Excellence
15 sep tember 2 013
Center of Excellence to handle
OT and IT changes. Customer
engagement has strengthened
as result of their initiatives,
giving end users more choice
and allowing SDGE to be more
responsive to future energy
demand.
Finally, data analytics and
--involving OT and IT and our parent
company Sempra. We share best
practices, optimizing approaches to
predictive analytics, across silos; we
don’t want to solve this five different
ways, we want to solve it once.
FierceEnergy: Can you describe
some of the factors driving the
transition to the smart grid and
OT-IT convergence for SDGE?
JN: I think it is both internal factors
and regulatory, too. NERC CIP
(North American Electric Reliability
Corporation – Critical Infrastructure
Protection) would be an example
from the regulatory side. This level
of compliance and regulation is
really a tough set of regulations
that are broad and prescriptive. It
requires regulatory, transmission,
distribution and IT groups to work
For operations and IT, we’re
actually letting it happen
naturally at SDGE, and not
necessarily forcing the issue.
cyber security are of paramount
concern. SDGE has made
great progress in keeping new
data flows secure and acting
on insights from the data. Jeff
Nichols, SDGE’s director
of Information Security and
Information Management, offers
more insight about these efforts.
together towards the single goal
of being compliant, so really the
barriers are coming across from the
regulatory side as well as the need
to make our internal operations
more efficient and connecting more
with our customer base.
We had our smart grid plan
approved by the California PUC
(Public Utilities Commission) -- it’s
a multi-year roadmap on how to
integrate communication and control
systems and sensors into the grid.
FierceEnergy: Can you describe
how you’re specifically integrating
your OT and IT systems?
JN: We’re seeing a blending of
the supplier base for IT technology
suppliers and OT suppliers. We’re
seeing IT personnel needing to get
a lot more familiar with dependable
suppliers of OT.
On the OT side, we have to
decide which IT supplier best
fits requirements for smart grid
suppliers. It’s one thing to buy
software for desktops and data
centers, but another to do it for
computing systems for field
environments. You have to pay
attention to data, communications
and integration. It’s something
we’ve had to become better and
better at, and a characteristic we
look at in our supplier partners.
It does us no good when it’s too
hard to interface with a proprietary
system and that creates a bigger
problem. We have to become better
and more integrated as a result of
the smart grid.
FierceEnergy: How are you
managing and protecting all the
additional data coming in from your
end users?
JN: With this flow of new data, first
you have to detect it. It’s a new data
set on a very large scale.
Make sure you think about how
you’re going to install controls to
protect the data. One thing we’ve
done that’s different is that we do
information security and information
management --protecting data
and managing it well downstream.
Once you make sure you have data
protected, the rest is an efficiency
and integration play. There are a
hundred different approaches to
large scale analytics. The advice I
would give is to make small bets
on new technology and processing
platforms as the space is changing
very rapidly.
There are a hundred
different approaches to
large scale analytics.
Make small bets on new
technology and processing
platforms as the space is
changing very rapidly.
usage data, and our customer group
and IT team to work together to
build value for our customers. With
the Green Button Connect, the next
phase of smart meters, customers
can manage and view their data
utilizing mobile devices on the go.
FierceEnergy: How do you
manage the risk involved with OT-IT
convergence and balance that with
your day-to-day operations?
JN: It starts with a plan or several
interlocking plans.
A smart grid deployment plan that
we have is a great example, but
we have other plans that lay on
top of each other and we work to
coordinate them with IT capacity
management and analytics. When
you don’t have a good plan, there’s
the risk of big inefficiencies when
bringing IT and OT together. You
really don’t want to solve analytics
or other issues multiple ways with
multiple solutions and platforms.
Take the issues with renewable
energy -- when it comes to
integrating renewable technology,
and electric vehicles, our customers
are driving this. They’re forwardlooking because they put a premium
on sustainability. We already have
26,000 solar panels installed
throughout our system, 5,000
electric vehicles, and we’re working
on integrating that into our grid.
We need charging rates that shift
rates to non-peak hours to deal with
this. We need new technology to
deal with sustainable solutions that
are coming onto the scene. It’s a
necessity because if you don’t do it
well, you can’t have renewables on
your system or an automated the
grid -- you run the risk of service
availability problems.
At the end of the day, our mission
is to provide an efficient and reliable
energy source. Even though we
have to build a smart grid, we
can’t sacrifice reliability -- that’s
our core business. l
FierceEnergy: Describe a benefit
that’s come out of SDGE
leveraging big data.
JN: As a direct benefit of the smart
meter roll-out, we’re seeing people
able to more conveniently manage
their energy -- and conserving
energy and saving money in the
process. The Energy Management
Tool we have is a great example
of that. The specific data coming
out of that tool shows how we
took operational data, metering and
sep tember 2 013
16

9. FierceEnergy
FierceEnergy.com
continued from page 5
same rate as a residence, meaning
that mailings to that business and
residence are the same and there’s
no program targeted to commercial
services. CRM systems are often
not segmented the right way,
making it hard to market easily to
residences and businesses — you
have people manually plucking
names out of a list to do that. The
other big challenge is the installation
of new CRM systems, without
messing up your current system,
and migrating data over. You
can’t lose customer info or have
interruptions.
From a security standpoint, old
CRM systems are cumbersome
and not secure. So many things
and safeguards form the last few
years don’t apply to these systems.
They’re simply not up to the same
security standards.
17 sep tember 2 013
Federal grant money is
drying up for this type of
work, so what does that
mean for the smart grid and
convergence going forward?
There’s no doubt that
convergence will continue,
but in different ways.
FE: There’s so much happening in
the world of OT and IT and the smart
grid. What changes do you see on
the horizon?
JS: As more utilities participate in
smart grid rollouts, they’re going to
decide what do we roll out and in
what order? Do we want to be in the
energy management space? Do we
enter that world too?
Around the country, utilities are
providing other things over their
smart grid networks — we’ve seen
wireless mesh networks utilized
as municipal WiFi, and innovators
thinking about how smart grid could
be a platform for doing more than
just energy related work. Electric
Power Board (EPB) invested heavily
in their smart grid infrastructure and
today they offer an array of new
services including cable. They are a
good example of leveraging smart
grid as a platform for the future.
We’ll find as people look at the
ROI of these hardware rollouts, the
economic benefits take longer to
realize. So utilities that haven’t gotten
grants from federal funds are looking
to see how they can maximize their
investments.
I spoke with another municipal
utility about their smart grid
initiatives. Right now, they’re
focusing on where they can make
money and offer additional value
added services to customers.
In regulated environments they
don’t have that flexibility, but in a
municipal environment, where the
city owns the utilities for example,
or in a co-op environment, there
are other possibilities. A strong
focus now, for example, is home
energy management and services
and technologies around that. As
an industry, we’ve been focused on
the smart grid and the conventional
benefits, but newer players are
looking at how they can take that
infrastructure and use it in
different ways.
The next wave is really what are
the business benefits of the smart
grid? Are they more than operational
efficiency? Federal grant money is
drying up for this type of work, so
what does that mean for the smart
grid and convergence going forward?
There’s no doubt that convergence
will continue, but in different ways. l
continued from page 14
that the traditional one way flow is
now two way and coming to our
customers.”
Data Management
(Analytics and Security)
So much of the potential of OT-IT
convergence is in the flow of data
that can be unlocked through a
more responsive grid. For those
who’ve taken the time to install
new hardware and mesh networks,
understanding new informational
patterns in the systems is the next
step; and there’s definitely a large
quantity of information to dissect.
A smarter grid can “collect meter
data from users at 5 to 15-minute
intervals” instead of monthly
intervals from the past, according to
Arun Vyas, a consultant with
Infosys Limited.
But before the data can be
A well-thought out distribution management system can
rewards its users by providing efficiency in operations
through initiatives such as voltage reduction.
understood, it has to be secure.
As there are more endpoints on
the system, there are more places
where data is susceptible to being
tampered with or reported back
inaccurately due to a device failure.
The risks of overlooking usage
patterns in data, or not protecting
data to begin with, can be severe.
But the rewards for proper data
management and analytics are
nothing short of the ability to answer
the biggest problems a power
company can face. Answers about
when to upgrade equipment, how
to understand customer preferences
and forecasting future power needs
are all within reach.
Data is most valuable when it
is understood and taking the time
to integrate analytics packages
and systems that can unearth
meaningful patterns is the right way
to go. To do so, utilities can either
create internal analytics teams that
report to a CIO, or bring in outside
consultants to implement a system
which can then be maintained by
internal staff. If current trends are
any indication of future growth,
utility spending on data analytics
— less than half a billion dollars
in North America in 2011 — is
expected to swell 29 percent a year
to $2 billion in 2016, according to the
Utility Analytics Institute. l
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