Asset Management


Published on

1 Like
  • Be the first to comment

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Asset Management

  1. 1. ReaD RegULaRLY UPDateD InFORmatIOn aBOUt Asset MAnAgeMent: www.eneRgYcentRaL.cOm/am.cFm Asset Management Don’t Forget the Past PG&E Looks to Curb DEmanD Asset management is very much on the mind of Mark Alexander, manager of Pacific Gas & Electric’s demand response department. Alexander reports on how he daily wrestles with new challenges to run utility assets at peak efficiency to help meet new state mandates. asset management ENERGYBIZ What are the newest, most exciting trends in asset management at PG&E? alexander “Don’t throw the past away. You might need it some rainy day. Dreams can come true again when everything old is new again.” Those Peter Allen song lyrics ring true today when it comes to everything from high fashion to retro car design including “new” trends in utility asset management. Demand-side management (DSM) has been around since the 1970s. In the ’70s, the emphasis was on energy conservation. In the early ’80s when capacity was in short supply, load-management programs were implemented. In the early ’80s, integrated resource planning was the hot topic; however, as capacity became available by mid-decade, many load-management programs were shut down. In the early ’90s, PG&E experimented with DSM as an asset-management tool in an innova- tive pilot project called the Delta Project where the concept of concentrated DSM could enhance utility distribution system assets. The latter ’90s were spent preparing for deregulation and customer choice. DSM chugged along at a slow simmer until the energy crisis, which rekindled a strong desire for demand-side programs that helped customers control rising bills and protected customers from possible rotating outages.  EnErgyBiz magazinE  43
  2. 2. Today, there is universal recognition that DSM has a significant portfolio of voluntary demand response programs offered to custom- role to play in managing utility assets. Utility management and ers and is a simple, highly effective way to manage the widespread regulators at the state and federal levels recognize the value of being demand for energy in the summer. SmartAC is a direct control, demand able to deploy customer DSM programs that better utilize existing response program targeted at residential and small commercial cus- infrastructure rather than building new, large-scale infrastructure that tomers’ air-conditioning equipment. In a program we are launching this is only required to meet peak demands for only a few hours annually. year, 5,000 devices will be installed by July, with the ultimate objective Another exciting trend is PG&E’s deployment of an advanced of having 300 megawatts of load control in place by 2010. metering infrastructure, which offers great potential to enable The control-device technologies utilized are Cannon customers to receive more detailed and timely information about Technologies switches or programmable communicating thermo- energy usage and energy pricing. This knowledge will enable cus- stats. PG&E offers customers a choice between switches and tomers to better manage their own energy usage and participate in thermostats. Switches will follow a cycling strategy up to a level as grid-friendly programs that help asset utilization. high as 50 percent; thermostat set points will be raised as much as Finally, the advancements in technology and automation 4 degrees during events. Events will be initiated during periods of beyond the revenue meter available to customers will help them grid distress or high prices initiated by the California Independent manage energy use as well as participate in voluntary demand System Operator or in case of local emergency. Events will take response programs. PG&E’s technical assistance program offers place May through October and will be limited to no longer than 6 engineering assistance to identify demand response potential, and hours per day and as long as 100 hours per season. the technology incentive program offers cash incentives for instal- Participating customers will remain comfortable during events lation of recommended enabling technologies. These technologies because SmartAC technology adjusts air conditioners intermit- are capable of receiving program or pricing signals from PG&E tently over several hours during the day and only when necessary. and automatically triggering predetermined load-management This small adjustment, multiplied by hundreds of thousands of air strategies without further human intervention. conditioners, can make a huge difference in energy consumption for the state and provide a healthier environment for everyone. ENERGYBIZ How helpful are vendors in helping PG&E achieve its asset management goals? ENERGYBIZ I understand that peak savings will grow to 300 alexander Vendors play an integral role in helping PG&E megawatts by 2010. What is the long-term potential of such achieve its asset management goals where technology — and technology? automation-based solutions are required. alexander The long-term outlook for the technology is excel- lent because the hardware PG&E has chosen is at the forefront ENERGYBIZ Where is asset management headed at utilities? of demand response technology, and it has proven to be reliable alexander A trend toward the use of customer-side solutions with deployments by utilities across North America. The system with traditional utility asset management continues. In California, state that we are deploying offers operational flexibility, including energy policy as defined in the Energy Action Plan sets a “loading the ability to work in conjunction with our advanced metering order” where all cost-effective, customer-side solutions are utilized infrastructure as well as provide under-voltage and under-fre- prior to procuring traditional supply alternatives. Dependence on quency protection to the grid. We expect that the system we technology and automation to support customer programs also will are deploying will provide many years of benefits to PG&E and increase, such as building-control software and energy-management our customers. PG&E will continue to survey and evaluate the asset management systems that receive program or pricing signals and that adjust marketplace for technologies that best meet our needs and customer loads according to predetermined strategies. those of our customers. ENERGYBIZ PG&E is hoping to better utilize its assets by ENERGYBIZ What would you like to see the vendor community controlling peak demand. One new program is expected to cut provide in products and services not currently available? demand by 5 megawatts starting this July. How will it work? alexander We would like to see a move to more open alexander PG&E’s new SmartAC program is part of our rich architecture in end-use control devices. ESRI: The Geographic Advantage for Utilities Asset Management • Environmental Studies • Right-of-Way Management • Site Selection Log on today for a free subscription to Energy Currents newsletter at 1-888-333-2938 44  EnErgyBiz magazinE  July/August 2007
  3. 3. Ensuring a reliable power grid is where we really shine. Ad Place Holder © 2007 ABB Inc. Providing breakthroughs in power transmission and distribution for the 21st century. Visit us at Power and productivity for a better world TM  EnErgyBiz magazinE  45
  4. 4. Next-generation Asset Management LEaDErs WiLL nEED rEaL-timE Data by WarrEn b. CausEy Tracking and accounting for assets has been a complex issue as long as there have been utilities. Utili- ties are asset-intensive organizations, and those assets are widely dispersed geographically. Traditionally, lists, maps and the memo- follow suit after the energy act of 2005 put pressure on state ries of highly experienced workers accomplished the tracking of regulators to show why their utilities should develop AMI/MDM those assets. The system that evolved over the years wasn’t espe- and offer time-of-use electric rates. AMI envisions two-way cially accurate, but it was “close enough for government work.” communications beyond the meter into homes and a massive scale to enable demand response and other techniques to Modern computer systems with enterprise resource plan- reduce electric demand. The problem is that real-time commu- ning, enterprise asset management, supply chain management, nications with millions of homes and devices within those geographic information system and other software have enabled homes will generate quantities of data and asset-intensive many – but not all – utilities to begin to get a more structured and investment that have only begun to be defined, much less organized handle on the issue. However, just as they thought they accounted for and analyzed. were about to solve the problem, it suddenly has become more complex than ever. In fact, it has become “real-time” with all the » The intelligent grid and intelligent utility enterprise idea is massive data collection, storage and analysis that entails. Real- under development at a number of utilities and envisioned by time data collection and analysis requires the development of the many others. This idea will continue to increase the number of next generation of utility asset management systems. Despite an sophisticated control devices placed on the grid, requiring real- immediate need for the next-generation systems, they are only time monitoring, control and tracking and generating massive beginning to be deployed. amounts of data. The reasons why asset tracking and management at utilities must evolve rapidly are clear, and the writing is already engraved » Distributed generation will continue to grow in importance on the wall. and complexity. Already, according to surveys by Sierra Energy The reasons include the following: Group, the research and analysis division of Energy Central, 82 percent of investor-owned utilities, 69 percent of municipal » North American Reliability Corp. (NERC) Critical Infrastructure utilities and 50 percent of cooperative utilities report having Protection (CIP) standards have been given the force of law by non-utility-owned generation connected to their distribution asset management the Federal Energy Regulatory Commission. They require the – not transmission – grids. Even though utilities don’t own close tracking and monitoring of critical cyber-assets at a level many of these assets, which range from wind and solar power that never has been attempted before. These assets include not to micro-turbines, trash-burning facilities and tidal power, their only traditional information technology assets, but also super- connections and interactions with the grid still must be tracked visory control and data acquisition, and intelligent electronic and accounted for. devices on the grid. These new regulations are extensive and are backed by audits that threaten fines as high as $1 million per » Demand response is a revival of the old demand-side manage- day for utilities found to be out of complaince. Tracking all these ment idea in which reduced demand and consumption is treated assets and monitoring them in real time will be required, begin- as an “asset” to the system financially and otherwise. This ning this year, despite the fact that the tools and procedures to esoteric idea of avoided generation as an “asset” also must be do so remain under development. monitored and tracked in real time. » Automated metering infrastructure/meter data management » Green energy is being promoted as a result of tremendous (AMI/MDM) is required in California. Other states are likely to regulatory and legislative pressure. At present, only about 46  EnErgyBiz magazinE  July/August 2007
  5. 5. “ ...up-time, down-time, capacity name it, we 2.3 percent of all U.S. electric power is generated by nontradi- track it. ” switches and substation devices. These early asset-management tional sources, other than hydroelectric dams. However, despite systems then were linked to supply-chain systems for the purpose very real scientific and technological limitations on how fast of ordering and replacing assets as they were expended or placed that percentage can grow, many states and localities already into service from inventory. Later, the idea of showing the location are making demands that utilities meet artificially developed of these devices in the field – through GIS systems – came along, standards for much higher percentages. No one is aware at and asset management was linked to GIS. Asset management also the moment of where all this increased green power is going to was linked to customer-information systems to show what assets come from, but the effort must be tracked and accounted for as were located at which customer premises. Such systems gradually an “asset,” albeit a highly expensive one. replaced the old paper maps, lists, and memories of experienced field crew members who could tell you which pole they attached a » Carbon caps are just around the corner. Once trading in carbon device to, even if the list and map didn’t exactly show that place- caps begins, it would have to be tracked in real time. Coal-fired ment. But none of this was “real-time.” As the systems evolved, plants – still representing 50 percent of U.S. electric generation some utilities were months and even years behind in updating – will become much more expensive assets, and all this must be systems and accurately tracking and accounting for assets. balanced, in real time. However, with all the demands being placed on utilities today, such a haphazard, gradual process no longer will suffice. Utilities As one prominent chief information officer said recently, must track everything in real time if they are to have any hope of everything seems to be reaching a “tipping point” at about the meeting the new demands. same time. This does not mean that science and technology have Austin Energy is heavily into AMI/MDM and other aspects caught up with all these demands. In fact, most careful observers of the intelligent grid. Austin’s chief information officer, Andres believe many of these regulatory and legislative requirements to be Carvallo, is active in promoting the idea of utilities moving to the impossible to meet within the next 10 to 20 years, or even longer. next generation of asset tracking. “We publish KPIs (key perfor- asset management However, the tipping point is that regulators, legislators and politi- mance indicators) to our customers every quarter, and we track cians are going to require them whether or not it is realistic to do those KPIs on a daily basis from number of incidents and calls and so. The tipping point is political, not economic, scientific or tech- problems solved to up-time, down-time, capacity projects, code nological. In other words, the political movement has tipped over written — you name it, we track it,” he said. to “irresistible,” and utilities are going to have to deal with it one While Austin Energy is beginning to get a handle on the integra- way or another. tion of the grid with the enterprise and tracking real-time assets, Asset-management computer systems originally were devel- this process remains under development at other utilities. oped to track “hard” devices, such as meters, transformers, The real-time world of the future will require extensive ESRI: The Geographic Advantage for Utilities Asset Management • Environmental Studies • Right-of-Way Management • Site Selection Log on today for a free subscription to Energy Currents newsletter at 1-888-333-2938  EnErgyBiz magazinE  47
  6. 6. analytics to determine exactly what happening and how these without semiconductors, but a lot of the electronic components dynamic forces can be dealt with to ensure utility survivability, already have sensors and programmable logic embedded in the much less profitability – in the case of those that must show a operation of the equipment. profit to shareholders – or at least break-even financial results for “What SAP is doing,” Bailey continued, “is working on our municipals and co-ops. enterprise systems through our service oriented architecture. The Linking information technology assets to grid assets and enterprise is where the real-time or near-real-time comes into play. providing the analytics to deal with massive amounts of real-time We’ve been seeing this need in all the industries we serve and espe- data so that all assets can be “tuned” to meet the regulatory, legis- cially utilities.” lative and business demands remains in the future, even though At Oracle’s utilities global business unit, which absorbed decision-makers recognize the immediate need. SPL WorldGroup in an acquisition last year, Guerry Waters, vice Success will require new levels of leadership, and the new president for industry strategy and marketing, said, “We see two leaders must be enabled by comprehensive analytics – including primary drivers for more real-time asset management. One is asset analysis – and decision-support systems. AMI, which certainly gives more granular information about the In the future, an asset-management system that tracks performance and operation of assets, coming from the customer “things,” generates reports and issues work orders will not be base, and then tied back into the distribution network. You can sufficient. A future system must be able to apply analytics to get very detailed information about where loads are occurring massive amounts data on a real-time or a near-real-time basis to and fluctuations in voltages. The other is distribution manage- assist leadership in making critical decisions in an environment that ment – there are very many more communicating grid manage- already has “tipped over” to a totally different world. ment devices. Asset management has a very important play in all Executives at major asset-management vendors say they this. It now has details on the devices themselves, how they are see the same issues and are working to develop systems that can performing, when they are close to failure and when they need handle the problem. Henry Bailey, the utility industry principal at scheduled maintenance. All this can be rolled up if you have the SAP America, Newtown Square, Pa., said, “It is a constantly moving necessary connectivity and communications model, which most target. The analytics are never going to be complete. What will be utilities do today. asset management necessary in the future is the ability to modify the tools to adjust “Software vendors who have the ability to analyze and to new operating conditions. As you start learning information perform or suggest actions, will be an important element of asset about your utility, you start asking more questions, and you begin management in the future,” Waters said. to realize what you didn’t know, and you ask more questions. Real- Putting all this together to deal with the “tipping point” envi- time information is going to be key to better asset management, ronment in which utilities and vendors find themselves will lead to especially when you consider you’re installing small computers the next generation of asset management systems. almost in every kind of component going into the grid, power plants or any part of their business. They’ll still have the wires and poles ESRI: The Geographic Advantage for Utilities Asset Management • Environmental Studies • Right-of-Way Management • Site Selection Log on today for a free subscription to Energy Currents newsletter at 1-888-333-2938 48  EnErgyBiz magazinE  July/August 2007
  7. 7. [case study] Progress energy’s accelerated aMr deployment: Commitment and Communication In the fall of 2006, utility vehicles loaded with new solid-state Lessons Learned electric meters left warehouses across Florida and North Caro- The lessons learned from such a rapid deployment are transferable lina, and returned with an assortment of old electromechanical to other projects. The most notable contributors to the success of meters and a record: more than 20,000 meters exchanged in a Progress Energy’s Mobile Meter Reading project included: single day. • Careful upfront planning That record was set by Progress Energy during one of the • An experience project team fastest deployments in North American history. By the time the • A turnkey contract meter project was completed, more than 2.7 million meters were • Communication, flexibility and attention to operational details installed in only 18 months. • Close monitoring of business case metrics Progress Energy, based in Raleigh, N.C., is one of the nation’s “Speed, without attention to customer service, safety and cost 10 largest investor-owned electric utilities. In 2005, Progress is of limited value,” Donaldson said. “Throughout the deployment, Energy signed a contract with Itron to replace traditional elec- Progress Energy maintained its core values of safety, customer tromechanical residential meters with Itron’s CENTRON™ solid- service and financial responsibility.” state electricity meters, equipped with automated meter reading technology. The intent, says Luis Ordaz, project manager for Current Benefits of MoBiLe aMr Progress Energy, was to reduce meter costs, not set records. Progress Energy is on track to save about $21 million per year with the “We had an aggressive schedule to deploy several million use of AMR technology due to reduced operating and maintenance meters in Florida, North Carolina and South Carolina in only 20 costs. Staff reductions include eliminating 200 contract positions in months,” Ordaz said. “Obviously, to make this work, communica- the Carolinas and 160 positions in Florida. With the increased accu- tion was critical to gaining acceptance of this change in technol- racy of solid-state meters, a 50 percent reduction in meter related ogy — internal with our staff and partners, and external with our billing exceptions, such as work order errors, also has been realized. customers.” Ordaz said Progress Energy was able to reduce its meter Don Welte, vice president of Itron field operations, said the reading fleet, saving vehicle costs and insurance. Employee company shipped, on average, 60,000 to 70,000 meters per safety increased as meter readers were no longer entering week to Progress Energy. In 2006, Itron shipped six million private property. In addition, improved meter accuracy resulted meters for the year to customers. in an increase of revenue and tamper and theft cases have been “Two million of those meters went to one utility — Progress reduced. Energy — so that one out of every three meters we shipped last Progress Energy recently completed the second phase of year went to the Progress project,” said Welte. “That is some- the project, identifying accounts where a demand meter was in thing that has never happened in the history of our company.” place, but the usage did not warrant it. The utility replaced about Three shifts were operating at the Itron factor in West Union, 34,000 meters in the Carolinas and 15,000 meters in Florida S.C. to meet the demand. The manufacturing plant worked during this second phase of the project. Optimization of meter around the clock to make it happen. reading routes is currently underway. To get an idea of how many meters were installed, imagine 775 Sears Towers stacked on top of each other reaching skyward ContaCt — that is what 2.7 million meters would look like. Christina Kelly Louis Santilli, former project manager for the Progress Energy Marketing/Communications metering deployment, says the success of the project was in (509) 891-3268 picking a good partner who can act rapidly and help coordinate project management, meter manufacturing and installation. In addition, both the utility and vendor need to have strong organi- zational support and autonomy. Each partner needs to expect the unexpected and be prepared with contingency plans. Santilli said only three days of productiv- ity were lost due to poor weather, and the project successfully completed 99.75 percent of the planned installations. a D v e R t I s e m e n t To ensure quality of meters and mobile data collectors to meet the accelerated deployment, constant meter testing, production audits and quality control measures were executed throughout the project. Shared data and weekly project status updates kept the deployment team informed and on track, said Bob Donaldson, who managed the Carolinas deployment for Progress Energy.  EnErgyBiz magazinE  49
  8. 8. Making Wind Fit brEakthrouGhs PossibLE by WiLLiam oPaLka With increasing public demand for green energy and favorable tax policies in place at least through the end of next year, wind energy’s upward draft shows no sign of abating. In fact, in its first-quarter 2007 market report, the Amer- ican Wind Energy Association projected another 3,000 megawatts of capacity would be built this year, and thousands of megawatts remain on the drawing board in the ensuing years. Solutions to the traditional impediments to wind development – intermittency and lack of transmission access – will continue to be challenges, operationally and logistically. Some of the largest players in wind-driven power generation – and smaller ones, too – are creating ways to alleviate these concerns through a range of efforts, An 11-state utility, AEP is a large purchaser of wind energy, and from technical advances to massive capital expenditures. to a lesser extent an owner and operator of some facilities. It has The fact that wind doesn’t always blow when it’s needed, or 2,200 megawatts of wind power on its transmission system in Texas it blows at times when customers are using less electricity, has and Oklahoma. Mike Heycek, senior vice president for transmission impeded acceptance of wind-driven power generation for many for the Columbus, Ohio-based utility, said one technical challenge has years. The variable output that accompanies strong gusts followed been overcome. “Voltage support is required, and that is a problem by light breezes would create challenges for grid stability if wind that is certainly solvable now,” he said. In fact, a 765-kilovolt line can were to occupy a larger share of the electric generators’ portfolio, now sustain transmission into the hundreds of miles with significant and it will hamper its acceptance in many quarters. But with state leakage. AEP even envisions wind generation from the central plains mandates to increase the amount of clean energy in the mix, inte- as cost-effective and available as far east as Chicago. grating wind is not merely desirable, it’s a requirement. Operationally, the integration of wind power is the subject of Proponents say the apparent shortcomings are not enough to ongoing efforts in the Pacific Northwest. The federal Bonneville stifle continued growth. Managing the output plays a role, and so Power Administration (BPA) is participating in a “Northwest Wind does setting realistic expectations of what wind-driven generators Integration Action Plan” along with many other stakeholders. can provide to the electric grid. The collaborative process includes BPA, investor-owned utilities, Suitable transmission planning and operations will lead to greater municipals, co-ops, environmental groups and others. This spring, acceptance. That part of managing this asset is well under way in it released a framework to integrate wind power into the overall many regions of the United States where wind energy is most abun- power generation and distribution mix in the northwestern states. asset management dant. The common challenge is to move generation from areas where A prolific hydropower generation capacity has been used to it is most prolific, through the Great Plains and Midwest regions, to advantage to smooth out the ups-and-downs of wind variability in load centers in large cities, often hundreds of miles distant. the Pacific Northwest. But hydropower generation in that region is In fact, the Holy Grail of the wind-power industry in America, at its limit, and peaking generation is often produced in the same tapping the vast resource from North Dakota to Texas and effi- way it is in the rest of the country: through expensive gas-fired ciently sending the energy to the load centers closer to the coasts generation. The cost advantage of hydro is therefore lost. or to population centers in the nation’s midsection, already is tech- The value of wind-drive power generation is not realized as nically feasible and is approaching economic viability. a capacity resource. Elliott Mainzer, manager of transmission To that end, AEP embarked on a decade-long, $7 billion build-out strategy and planning, said, “The primary value is displacing fossil unveiled in April before the Public Utility Commission of Texas in which fuel generation and reducing the carbon footprint.” Wind power wind-driven power generation will play a significant part. Texas has fits into the generation portfolio when it helps to avoid the opera- a well-known transmission-line bottleneck west of McCamey such tion of expensive natural gas plants. that power generated by wind in west Texas cannot always reach load Meanwhile, associated operational costs may increase with a centers in the eastern sections of Texas – and this, in a state that is higher degree of wind penetration into the overall portfolio mix. “In becoming a leader in wind-driven power generation capacity. general, the studies have found that wind integration costs are a 50  EnErgyBiz magazinE  July/August 2007
  9. 9. REGISTER NOW Be part of the MUST ATTEND peer-to-peer interactive forum built for CIOs, CTOs and technology leaders from the power industry. Register before Sept. 15, 2007 and save $150! Quote code KP01 to enjoy your discount. Visit or call Jimina Schmidt at 888.559.8017 (USA) Ad Place Holder  EnErgyBiz magazinE  51
  10. 10. significant, but not dominating portion of total wind resource costs, stability, the report concluded. Similarly, a GE study for the Ontario up to wind nameplate penetration levels of 20 to 30 percent of peak Power Authority found that there were minimal system operation load.” BPA and the investor-owned utilities estimated the costs for impacts for levels of wind capacity as high as 5,000 megawatts. various service territories in the Northwest. In extreme cases, such The system has no operational or physical constraints to as the Avista and Idaho Power service territories, the costs can range prevent 6,000 megawatts from being generated by wind in the from $8 to $16 per megawatt-hour, on an hour-to-hour basis. Northwest, according to a study conducted by a consortium of A remaining challenge is the size of the control area in which investor-owned utilities, publicly owned utilities, environmental the resources are located: the larger the area, the more readily groups, the BPA and others. wind generation from geographically distant plants is integrated. Policy initiatives at state and federal levels are proceeding With 16 control areas served by BPA, coordination is essential to apace to obtain greater acceptance for wind power among grid lessen the costs associated with integrating wind. “Short of actual operators. Under guidelines currently being formulated, wind control-area consolidation, the two most significant steps toward generators are expected to contribute to grid stability as their realizing this benefit are the development of expanded wholesale traditional generation-source counterparts have. Cost recovery markets for control-area services and greater operating-area is being more adequately addressed after a failure to maintain asset management revenue sharing.” adequate construction schedules during the past decade. Studies in the United States and Canada have demonstrated Forecasting has become a tool in the integration of wind power that thousands of megawatts of wind power can be accommodated in a way that did not exist a few years ago. Minnesota studies for into the power grid with minimal disruption. GE Energy performed a Xcel Energy conducted by Enernex and forecasting firm WindLogics study in New York that showed the state could accommodate 3,300 showed wind power’s viability as a capacity resource under certain megawatts of wind generation. “Wind farms would include state- conditions. Precise forecasting has the potential to be so reliable of-the art technology, with reactive power, voltage regulation and that wind-driven generators may be able to confidently bid into the low-voltage ride-through capabilities” that would maintain grid day-ahead markets for spot power generation. ESRI: The Geographic Advantage for Utilities Asset Management • Environmental Studies • Right-of-Way Management • Site Selection Log on today for a free subscription to Energy Currents newsletter at 1-888-333-2938 52  EnErgyBiz magazinE  July/August 2007
  11. 11. Who advances America’s power without leaving the environment behind? We do. Ad Place Holder Innovations from Siemens can be found everywhere. From the underground substation in California to the advanced clean coal technology used for generating power. And as a leading supplier of power and energy solutions, our focus is on developing technology that is more powerful, more efficient, more competitive and more environmentally compatible. We are constantly investing in research and development to meet the country’s ever-changing energy demands and push our technology to the highest possible limits. At Siemens, our innovations have the power to make a difference in our planet’s future. automation & control • building technologies • energy & power • financial services • hearing solutions industrial solutions • information & communication • lighting • medical solutions • transportation • water technologies  EnErgyBiz magazinE  53
  12. 12. The Challenge Bob Gilligan Photo Courtesy of Ge enerGy. of Managing Distributed Assets by bob GiLLiGan Increasing concerns about declining need to rely on data generated from a variety of sources and loca- assets and aging personnel combined with a focus on improved tions before converting the data into actionable information through reliability and cost containment have given rise to many utilities’ analytics and visualization. Solving the AMI challenge is a step accelerated use of asset management. Progressive utilities have forward in the process. Having the right set of data, correlated and taken steps to define and assess the potential impact of asset analyzed in the right way, delivered to the right individuals and in the management for their utilities, but few system-wide deployments right format is what asset management is all about. Most utility asset have been initiated. Why is this the case? managers and AMI champions would agree that the cross-functional The evolution of automated meter reading to advanced meter nature of their activities requires careful technology road-mapping. infrastructure (AMI) parallels the evolution of asset management in More importantly, the cross-functional aspect also requires a change the electric transmission and distribution industry. The data commu- in the way a utility does business. That is a true challenge. nication dilemma is to AMI as the data management and analytics Instead of waiting for the ultimate solution, utility asset are to asset management. To cost-justify automated meter reading, managers ought to first establish priorities and address the asset utilities realized the need to leverage the data communication infra- class or classes that most impact reliability, the bottom line or structure across multiple business applications – giving rise to AMI. both, while their IT counterparts resolve the equally complex issue AMI deployment triggered the enormous challenge of managing of the data management infrastructure. massive amounts of data generated by smart devices and the integra- For example, pole inspection and maintenance, a proportion- tion of the data into business applications such as geospatial infor- ally large annual expenditure for an investor-owned utility, is an mation systems, outage management software, supervisory control activity that can be addressed by leveraging readily available infor- and data acquisition and enterprise resource planning, all of which are mation to reap great rewards. needed for asset management. Utilities have turned to their informa- Transformer maintenance represents another opportunity. Using tion technology community to resolve the data communications and relatively inexpensive smart sensors, an asset manager can monitor asset management management issues. They can no longer afford to manage growing and diagnose incipient problems while using geospatial-based tools to numbers of isolated applications based on proprietary technologies. deploy resources based on the priority and severity of the problem. One possible solution to this challenge of moving and managing Although many sources and types of data combined with data is the implementation of an open infrastructure based on sophisticated analytics are necessary to advance asset manage- Internet protocol, agnostic to the transport layer. This would enable ment, leveraging geospatial information as a first step can lead to data of all sources to be managed in a consistent manner. Service- an immediate initial success for asset management. oriented architecture and common information model are also key As utility data communication and management strategy align standards that will be required for successful implementation and with open industry standards, utilities will be able to fully realize broad rollouts of AMI and asset management programs. Although the power of the data across their enterprise, which can lead them much work remains to validate the performance of those standards, to cost-effectively manage their distributed assets and improve the success other industries have seen indicates that the probability their overall business performance. of success for transmission and distribution utilities is high. Bob Gilligan is general manager of GE Energy’s transmission and To cost-effectively manage distributed assets, asset managers distribution business. 54  EnErgyBiz magazinE  July/August 2007
  13. 13. True or False: are commercial carriers viable alternatives for private land mobile radio (lMR) ownership for utilities? Drivers point to many cases much more rapidly than con- outsourcing the utility ventional utilities have. This rapid evolution communications of commercial telecommunications carriers infrastructure. has, in many cases, rendered the three In a previous Thought Leadership piece in statements listed previously no longer true. this series, it was pointed out that because This is especially true in voice communica- of the increasing difficulty utilities have tions, one of the traditional mainstays of in maintaining communications technol- how utilities do business. ogy currency amid the demands of the First, to illustrate the volatility and volatile utility business environment, difficulty that utilities face in maintaining outsourcing telecommunications may communications currency in the current become a growing trend in the industry. business environment, consider the follow- Rapidly changing state and local In this document, we look not only at the ing market forces and issues: legislation and regulation — more of depth and breadth of commercial solutions the same. and their applicability to utilities but also Regulatory at some of the common misperceptions Rapid Technology Migration in the utility industry about the use of Narrowbanding and rebanding commercial providers for mission-critical of the spectrum by the Federal Aged/obsolete equipment — many communications. Communications Commission. utility systems were installed many years ago and have been made obsolete Some of these common NERC Critical Infrastructure Protection by new telecommunications technology. misperceptions include the requirements, which put increasing following: demands on communications security. Analog to digital — the rapid spread of software into the field has led to 1. Commercial providers don’t provide Rapidly changing federal legislation a demand for digital capabilities. the necessary utility geographic and regulation — nothing new, Converting old analog voice systems coverage. but something that distracts utility to digital is a very expensive attention from critical tasks. proposition. 2. Use of a commercial carrier inhibits utilities’ control of their Advance Mobile Phone System communications networks. PRePaReD foR sunsetting. SPRinT ne x Tel 3. Commercial providers are unwilling IP-based solutions. to write service-level agreements to By WaRRen B. CauSe y ensure communications reliability. ViCe PReSiDenT Increased demand for integrated SieRRa eneRgy gRouP solutions. Just as electric, natural gas and water a DiViSion of utilities have been undergoing tremendous Social/Workforce Changes eneRgy CenTRal changes in the last 10 to 15 years, telecom- munications also has evolved rapidly — in Aging workforce. ThoughT lEadErship — sponsorEd by sprinT nExTEl  EnErgyBiz magazinE  55
  14. 14. All of these issues are prompting Rapid changes in utilities to adopt different paradigms from telecommunications have what they have been accustomed to in the eliminated the perceived barriers past. These changes already are taking place at many utilities and eventually Telecommunications providers like Sprint will permeate the entire industry. Among Nextel now provide comprehensive offer- the trends that already are in evidence ings to utilities that include, among many nationwide are the following: other things, the following: Utilities are demonstrating an Rapid build-out of necessary coverage increasing acceptance of outsourcing in utility service territories. Carriers of certain functions, albeit very like Sprint Nextel, facing intense selectively and at a slower rate than in competition themselves, are eager to some other industries. work with utilities to place additional towers where necessary to ensure full Gradually the total cost of ownership coverage. In most cases, the utility’s of certain utility assets has been share of these costs is less than matched and bettered by outsourced upgrading or replacing an existing, solutions. obsolete land mobile radio (LMR) system. Sprint Nextel currently is Maintaining legacy assets in working with FirstEnergy Corp. in information technology and closely Akron, Ohio, on such a build-out. linked telecommunications technology is increasingly expensive. Control of a network specific to an individual utility now is being provided It will continue to be increasingly through several protocols that are difficult to cost justify private available from commercial carriers. telecommunications networks when These include Priority Connect, which commercial systems now are virtually provides priority onto Sprint Nextel’s ubiquitous in metropolitan areas and nationwide trunked radio iDEN system spreading rapidly in more rural areas. and Wireless Priority Service for cellular services, which is administered by Lack of skilled workers-U.S. colleges Many utilities recognize that National Communications Service. are not graduating enough engineers telecommunications is not a core These are excellent examples of how a to fill the demand, nor do high schools business function and no longer have commercial carrier can offer network and technical colleges prepare enough the resources or the desire to maintain control to customers with priority young people for technical trades like expertise in a non-core area. designation. Restoration agreements those at utilities. guarantee the utility’s priority in Utilities are rapidly adopting tower repair or replacement in times Mobile worker environment. technology standardization as the of disaster. These agreements also traditional silos of operations/back delineate the utility’s responsibility Homeland Security office/front office and other artificial for restoring power to towers that barriers break down. carry their own communications. Business continuity and emergency Increasingly important are agreements preparedness. Many technologies, such as global that direct the carrier to build telecom positioning systems are readily redundancies like T1 lines for backhaul Cyber security. integrated in commercial offerings, diversity and backup generation for but are more difficult to handle in increased reliability. IT standards. private systems. Finally, communications carriers like Sprint Nextel have converted their software operating systems to 56  EnErgyBiz magazinE  July/August 2007 ThoughT lEadErship — sponsorEd by sprinT nExTEl 
  15. 15. service-oriented architecture, which is also becoming an internal standard at most utilities and their other vendors. Thus, telecommunications can be rapidly integrated with mobile worker devices and any other necessary internal utility systems. Despite changes in the way utilities do business, voice still is critical One of the important things to remember is that — despite the evolution of technol- ogy, the delivery of many work orders to the field via digital communications and the updating of mobile devices via digital service-voice communications is still vitally important to utilities. There are some critical circumstances in which sending a text message digitally just will not do. This is particularly true in emer- gency situations, when directions and responses have to be rapid, in the field and often away from computers. prioritizing calls. Also, like the radio systems The idea is catching on It is possible to replicate the traditional that utilities are accustomed to, Direct voice communications of utilities, in some Connect can also be offered with a “man As utilities face the reality of all the demands ways, with cell phones, but this also is not as down” emergency feature on selected hand- for communications in the new environment effective as having a radio, especially a radio sets, something that cannot be provided by in which they find themselves, an increasing that can be taken anywhere. The problem cellular service alone. number of them are outsourcing a variety with depending on cell phones as a primary Putting voice together with cellular of services. However, this is an evolutionary form of communications is that during times service and wireless transport for transmis- process. Few utilities — with their traditional of network congestion and emergencies, the sion and distribution devices — supervisory cultural backgrounds — are eager to turn cellular calls can be blocked, connections control and data acquisition (SCADA) as well over vital processes all at once. Thus, as dropped or not connected at all as was seen as digital communications with field devices it has developed, utilities have opted for during 9/11 and the recent London subway — has, for the first time, allowed companies various stages of outsourcing telecom- bombings. Sprint Nextel’s iDEN network like Sprint Nextel to offer the complete wire- munications. Carriers such as Sprint Nextel provides digital communications, cell phone less telecommunications services that are are enabling this process by offering options voice coverage, and mobile radio — all on the required by utilities. such as the following: same handheld device. Sprint Nextel, together with various The Sprint Nextel Direct Connect LMR partners, provides all three of the critical 1. Providing sole, primary system provides voice communications types of communications required by utilities communications. with the push of a button anywhere within today: mission-critical, mobile wireless; their iDEN system across the United States. digital enablement; and remote automation. 2. Providing primary service and using As shown in the chart, it is unique in that Remote automation is becoming increasingly an older system as a redundant it represents a nationwide Direct Connect important as utilities move toward intelligent backup system. environment that does not rely on the grids and intelligent enterprises in which public switched telephone network (PSTN). distribution networks become increasingly 3. Providing backup redundancy to The system supports pairing or grouping self-reporting and self-healing. High-speed, private systems (cellular, messaging, of different individual devices so that work reliable communications networks will be data and GPS location services). groups or emergency response groups can required in order to enable such distribution be on the same “talk group” at the same networks. These three critical communica- With most commercial carriers, all of time. It also provides various methods for tions types are now available commercially. these options now are on the table when ThoughT lEadErship — sponsorEd by sprinT nExTEl  EnErgyBiz magazinE  57
  16. 16. utility personnel sit down to discuss emergency response teams provide upgrading or supplementing existing LMR the backup that utilities demand systems. Commercial carriers also provide products that operate exactly like the Probably the most serious concern that trunked radio systems they are familiar with. utilities have had in the past about relying Commercial carriers now provide end-to- on commercial carriers for their primary end services, from handheld devices in the communications system has been the issue field through the network to software and of restoration of service during emergencies. back-end systems that can be integrated Voice communications are critical during res- with existing utility IT architectures for full torations from relatively minor thunderstorms integration throughout the enterprise. to major catastrophes such as hurricanes. Another advantage of commercial A utility that has partnered with Sprint carriers for utilities is the cost of the hand- Nextel will find that it has instantaneous held hardware itself. Mobile radios for LMR connection with all of the major emergency systems can range from $1,000 to $3,000 operations centers in the United States. In or more each. Handheld iDEN devices from addition to this widespread connectivity, Sprint Nextel can be acquired in quantity for a utility that outsources communications $50 to a few hundred dollars each. to Sprint Nextel has three backups for Utilities that already have outsourced emergencies: communications include ConEdison of New York, which now uses a mix of private 1. Sprint Nextel negotiates service- and commercial communications systems restoration agreements that provide throughout its highly populated service the necessary guarantees during territory. ConEdison has a multiyear profes- emergencies. sional services contract with Sprint Nextel to manage their existing LMR system, along 2. Sprint Nextel has emergency response with heavily relying on the iDEN system for crews with specialized restoration day-to-day dispatching. Other utilities that equipment pre-positioned throughout In addition, pressures from all directions- rely on Sprint Nextel’s iDEN system include the United States. including new environmental regulation, SM&P Utilities, Tennessee Valley Authority, aging workforces and changing business Pacific Gas and Electric, Peoples Gas, Los 3. Sprint Nextel also has a large number environments-make it difficult for utilities Angeles Department of Water and Power and of Cells on Wheels (COWs) positioned to update or expand their current telecom- Potomac Electric, to name a few. throughout the United States. These munications systems. Commercial carriers Cullman Electric Cooperative of Cullman, self-contained vehicles can be set up like Sprint Nextel, however, have communica- Alabama, has partnered with Sprint Nextel almost immediately in any remote tions as their primary core competency and to provide GPS-based vehicle tracking and area, and they include cell towers and function. They can bring the latest technology communications for outage management. portable power systems to provide to the table. And, in a fiercely competitive The solution provided by Sprint Nextel is the immediate coverage in any area. environment themselves, commercial carriers Air-Trak system, which also has a satellite now are prepared to negotiate partnerships data backhaul, so field crews are always in While utility executives have been with utilities to expand coverage, guar- communication. traditionally slow to outsource many of what antee reliability and security and meet the FirstEnergy, which was mentioned previ- they consider to be core functions, the one other important needs of utilities. Thus, the ously and which was covered in the first area in which they are increasingly likely common misperceptions about commercial article of this series, is partnering with Sprint to be forced to consider partnership with carriers no longer apply. Nextel to build out complete voice and data services is in telecommunications. Regula- services to 95% of its service territory, which tory demands for better security, rapidly includes seven subsidiary operating utilities. changing telecommunications regulation and technology and the evolving communica- tions needs of intelligent utility enterprises and intelligent grids make it very difficult for utilities to continue to rely upon their traditional, outdated LMR voice systems. 58  EnErgyBiz magazinE  July/August 2007 ThoughT lEadErship — sponsorEd by sprinT nExTEl 
  17. 17. ASSET MANAGEMENT With annual sales of more than $660 million, ESRI remains the world leader in the geographic SOURCEBOOK information system (GIS) software industry. Our business involves the development and support of GIS software for all types of organizations — from the one-person office to multinational corporations to innovative Internet GIS solutions. As the leader in GIS technology, ESRI offers innovative solutions that will help you create, visualize, analyze, and present information better and more clearly. For more information, please visit our Web sites,, or or call 1-877-CPS-INFO. ABB Inc. Power Technologies Division 2945 Harding St., Suite 207 Carlsbad, CA 92008 IFS (760) 720-6198 10 N. Martingale Road, Suite 600 Fax (760) 720-2861 Schaumburg, IL 60173 Enspiria Solutions, Inc. (888) 437-4968 Contact 6560 S. Greenwood Plaza Blvd., Suite 500 John Barnick Greenwood Village, CO 80111 (760) 720-6198 (303) 741-8400 Fax (303) 799-6766 Throughout the world, IFS provides industry- Now more than ever, Utility companies are focused software solutions that help leading looking for ways to apply intelligent, comprehensive Contact companies — and some of the largest utilities in solutions to manage their networks. ABB offers Cindy Menon, PMP Marketing Manager the world — to maximize uptime, meet regulatory an array of tools to support these activities. With (303) 520-2513 requirements, and take advantage of new busi- sophisticated planning and analysis tools such ness opportunities. Because it is built on open as network asset documentation, load forecast Mehrdod Mohseni, Vice President, standards, IFS Applications makes it easier to stay modelling, reliability assessment and optimization Business Development up-to-date with technology and to integrate with studies, ABB’s solutions delivers the capabilities (303) 521-5395 legacy systems. IFS Enterprise Asset Management needed to optimize network asset performance. delivers best-of-class EAM functionality that lets ABB also offers specialized training and project you maximize uptime and efficiency. The application support services to help Utility companies to realize Enspiria Solutions, Inc.TM provides T&D con- provides valuable support for the company’s stra- their goals. sulting, solution development, and systems integra- tegic and operative processes, as well as being an tion services, specializing in Asset Management, efficient tool for increased availability, productivity, Metering and Demand Response, Distribution/ and lower Life Cycle Cost. Substation Automation, Field Force Automation, GIS, Outage, and Mobile and Work Management. Enspiria’s Enterprise Asset Management (EAM) approach optimizes investment and work planning through the asset lifecycle – to reduce capital Cooper Power Systems project requirements and O&M budgets while Itron Energy Automation Solutions maintaining or improving system reliability, safety 2111 N. Molter Road 505 Highway 169 N., Suite 1200 and risks, and asset utilization. Enspiria is backed Liberty Lake, WA 99019 Minneapolis, MN 55441 by parent company Osmose Holdings, Inc., with (800) 635-5461 (800) 827-7966 $596M annual revenue. Enspiria’s subsidiar- Fax (509) 891-3932 Fax: (763) 543-7777 ies include Convergent Group Corporation and Convergent Group LTD (Canada). Contact Tim Wolf, Marketing Communications Manager The Cooper Power Systems Energy Automa- (800) 635-5461 tion Solutions group offers comprehensive automa- tion solutions that extend from the meter to the Itron is a leading technology provider and criti- control room, enabling the smart grid today. The cal source of knowledge to the global energy and portfolio includes intelligent products tied together ESRI water industries. Nearly 3,000 utilities worldwide asset management with Cooper’s recent acquisitions of Cannon 380 New York St. rely on Itron’s award-winning technology to pro- Technologies’ Yukon® Advanced Energy Services Redlands, CA 92373 vide the knowledge they require to optimize the Platform and Cybectec’s Enterprise Gateway. (909) 793-2853 delivery and use of energy and water. Itron creates The solutions offered include automated meter Fax (909) 307-3039 value for its clients by providing industry-leading reading/advanced metering infrastructure, demand solutions for electricity metering; meter data col- response, centralized capacitor bank monitoring, Contact lection; energy information management; demand substation integration and monitoring, feeder auto- Roxanne Cox-Drake, Electric & Gas response; load forecasting, analysis and consult- mation, asset monitoring for high voltage breakers Utility Manager ing services; distribution system design and opti- and power transformers, recloser and regulator (909) 793-2853 x1-2689 mization; web-based workforce automation; and controls, protective relays and NERC-compliant enterprise and residential energy management. To enterprise-wide substation data solutions. know more, start here: ESRI: The Geographic Advantage for Utilities Asset Management • Environmental Studies • Right-of-Way Management • Site Selection Log on today for a free subscription to Energy Currents newsletter at 1-888-333-2938  EnErgyBiz magazinE  59
  18. 18. Siemens Power Generation develops and delivers technology-based solutions for power plants, including gas, steam and wind turbine generator technology; process control and power management systems; operations and mainte- KEMA Inc. OSIsoft nance support; power plant modernization and 67 S. Bedford St., Suite 201E 777 Davis St., Suite 250 upgrades; and environmental care solutions. Burlington, MA 01803 San Leandro, CA 94577 (781) 273-5700 (510) 297-5800 Siemens Power Transmission & Distribution Fax (781) 229-4867 Contact 7000 Siemens Road Ron Kolz, VP Sales, North America Wendell, NC 27591 Contact (440) 720-3670 (919) 365-2200 Susan Erwin, Director, Corporate Marketing (510) 891-0446 OSIsoft ( delivers the PI System as the core of its powerful operational Siemens Power Transmission & Distribu- KEMA provides energy consulting, tech- data management framework. The world’s leading tion, Inc., creates innovative product, system nology implementation, testing services and process manufacturing, life sciences, and utility and service solutions for its customers — electric market knowledge expertise to more than 500 companies rely on OSIsoft’s Platform wherever utilities, transmission organizations, Independent energy and utility clients in over 70 countries. real-time data fuels performance. With more System Operators, and large energy consumers. KEMA’s multi-dimensional approach bridges the than 11,000 installations worldwide, OSIsoft’s It is a leading supplier of high and medium voltage gap between the strategists and the implement- Real-time Data Platform crosses IT and process power delivery equipment, energy management ers, and the engineers and the accountants to boundaries to incorporate and display operational systems, network planning and power system effect lasting change. Founded in 1927, KEMA information. Founded in 1980, OSIsoft, Inc. is engineering software for regulated and deregu- serves the complete spectrum of participants in headquartered in San Leandro, Calif., with opera- lated generation, transmission, and distribution the energy marketplace, offering a full comple- tions worldwide and is privately held. markets. The company’s products and systems ment of services supporting generation through are used to increase power system capacity and the consumer side of the meter. improve the reliability, stability and flexibility of power delivery and network control systems. SAP Americas, Inc. Oracle l SPL 3999 W. Chester Pike 525 Market St. Newtown Square, PA 19073 San Francisco, CA 94105 (610) 661-1000 (415) 963-5600 Fax (415) 963-5601 Contact Chris Camino, Senior Vice President and Contact General Manager Utilities UMS Group Inc. Quentin Grady, Sr. Vice President, Lisa Dalesandro, Vice President Utilities; 5 Sylvan Way, Suite 120 Oracle Utilities Global Business Unit US Eastern Region Parsippany, NJ 07054 (415) 963-5661 Trent Brown, Vice President Utilities; (973) 335-3555 Linda Jackman, Vice President – Product US Central Region Fax (973) 335-7738 Management, Utilities Global Business Unit Lance Charlish, Vice President Utilities; (415) 963-5769 US Western Region Contact Mike Scholtens, Vice President-Global Oracle l SPL delivers the proven software Gain greater agility and control across your Asset Management Practice applications that help utilities around the world “asset-intensive” organization. Managing asset (253) 241-1705 achieve competitive advantage and excellence – defined broadly to include human, financial and in business performance, while ensuring a lower physical assets – is vital to utilities in the new and UMS Group is an international Management total cost of technology ownership. Available rapidly changing environment. To meet regulatory Consulting firm specializing in the practice of utility stand-alone or as a pre-integrated suite, Oracle compliance and customer satisfaction goals, you asset management, performance assessment l SPL solutions in customer care and billing, need a holistic view of your enterprise, provided and performance improvement. We combine enterprise work and asset management, mobile in real time. SAP software delivers a compre- experienced consultants and seasoned industry workforce management, network manage- hensive enterprise asset and work management professionals with world class tools and intellectual ment, meter data management and business solution, so managing assets is easier, more fully capital to assist clients in diagnosing problems, intelligence are specifically designed for energy, automated, and timely. designing pragmatic solutions, and implementing asset management water, and service companies. Our solutions change. UMS consultants are Asset Management focus on clients’ return on investment and foster strategy, process and solutions thought leaders long-term relationships based on confidence and who serve our clients with a knowledge of global trust. For more information visit or best practices, a proprietary database of perfor- call +1-800-275-4775. mance metrics and pragmatic process solutions Siemens Power Generation and tools. UMS solutions have been utilized by 4400 Alafaya Trail over 300 electric, gas, and water clients on four Orlando, FL 32826 continents to build world-class operations. (407) 736- 2000 Fax (407) 736-5008 ESRI: The Geographic Advantage for Utilities Asset Management • Environmental Studies • Right-of-Way Management • Site Selection Log on today for a free subscription to Energy Currents newsletter at 1-888-333-2938 60  EnErgyBiz magazinE  July/August 2007