Q & A with Guerry Waters

Phil Carson | May 03, 2010

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I had a chance to pepper Guerry Waters, vice president for industry strategy at Oracle Utilities, with a few questions last week. He's a level-headed chap, so I thought I'd share the results. 

I've been hearing alot about data analytics, so I asked Waters how that drives business transformation at an electric utility. 

"Data analytics is a broad topic that begs for definition," Waters replied. "In my view, it has three levels." 

There's data that drives traditional utility applications such as billing, applications that need to morph to leverage, for instance, the amount and speed of data coming from smart meters. A second level is analytics specific to a particular industry. The third level is where a utility wants to create its own analytics. 

How does a data source and an analytical tool drive change in the business case?

A rash of momentary outages in a specific area of your grid could lead a utility to marry data from smart meters to data from the operating environment to weather data to determine the probable cause, Waters said. That process typically would yield more precision in setting priorities in vegetation management. That's a big ticket item in the overall operating costs for a utility, Waters reminded me. 

Another question on my mind: how can the electric utility industry communicate the smart grid value proposition to the public without creating unrealistic expectations?

"Multiple surveys point out that consumers want to be 'green' or environmentally aware, but they also want their energy bill reduced," Waters said. "That's a recurring theme."

"There are a number of pilots out there right now that indicate you can give customers tools - rate structures, refunds, usage information - that can be effective [in changing their behavior and lowering their usage]," Waters said. "You've got to provide a portfolio of options." 

What would be an example of an unrealistic expectation to be avoided?

"There has to be some kind of behavioral change on the part of the consumer," Waters said. "And consumers will have to be aware of their usage pattern in order to better manage it. That's probably not great news - most consumers have not had to do that before. But it's unrealistic to think that energy costs [per kilowatt hour] are not going to rise." 

The upshot, to me, is that while consumers may develop strategies to manage their own electricity use, perhaps aided by technology and energy efficiency measures, those steps may only forestall the harsher effects of rising prices. In other words, those who learn to manage their use will reduce their financial exposure to rising prices; those who don't learn to manage their use will be hardest hit. But selling the smart grid based on actual lowering of one's current bill in dollar terms isn't likely to hold up.

Waters seemed to agree, because I pressed him on whether developing smarter grids simply wrings efficiencies from the current system, essentially only buying time before more, centralized, baseload generation must be built. 

On a macro-economic level, we're asking the current consumer to pay for the future benefits our grandchildren will enjoy, Waters replied. The environmental and efficiency benefits are inarguable, he said. But this is a "future return" story, and that story has to be sold to current ratepayers in a recession, which is a "tough sell," he said.

But whether more centralized baseload generation is inevitable? Waters emphasized the possible role of microgrids, renewable energy and "the mix." 

"Future generation can come from many different sources," Waters said. "The idea that supply can come from many different sources besides big central power plants is quite intriguing. A microgrid, properly managed, can be a source of meeting future demand, and make use of a portfolio of local options." 

"I think we can moderate overall demand over time, but you're still going to need big, central generation - which in the scheme of things is probably the least expensive of any types of generation available today," he concluded. 

Agree or disagree, readers?

Phil Carson
Editor-in-chief
Intelligent Utility Daily
pcarson@energycentral.com
303-228-4757

 

  

 

   
 

  

 

 

 

   

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Comments

Agree or disagree

The price of electricity is going to continue to rise, and the rate of increase is roughly going to follow the rate at which individual states go green - shorter time lines to develop larger amounts of renewable energy will cause prices to rise faster.  There are things consumers can do to reduce the impact, and one of those is being smarter about when they use energy, assuming regulators and utilities develop rate structures that incentivize off-peak use (dynamic pricing).  I don't think regulators or utilities have grasped the import of pricing that is simple and reflects system conditions yet, but eventually they will.

It's not a given that all central station generation is cheaper than some forms of distributed generation - there aren't enough definitive studies to say one way or the other.  We do know that under certain conditions, distributed generation is cheaper than utility service, so by extension, in those limited numbers of cases distributed generation is much cheaper than central station plants.

Thanks for your comment

Reading your comment, it occurred to me: perhaps microgrids and distributed generation will be the cure for NIMBY. Should organizations and/or neighborhoods have the option of distribuuted generation that meets their needs and that's cheaper and/or more reliable than utility power, centralized power will be one play among many. How democratic. Many possibilities here...

Phil Carson