2010 UtiliQ rankings

 

A lot has happened in the industry since we published our 2009 UtiliQ rankings a year ago. Jill Feblowitz takes a second look at utilities' intelligent initiatives. In the next article, Phil Johnson discusses Bonneville Power Administration's outside-the-box thinking with regard to transmission planning.

WELCOME TO THE SECOND ANNUAL UTILIQ RANKING OF U.S. electric utilities-a list of the top 25 intelligent utilities based on a detailed analysis by IDC Energy Insights and Intelligent Utility magazine. We developed this ranking last year in response to a number of issues and challenges in the rapidly evolving electric utility industry. First, we wanted to separate the smart grid hype from reality. As we have learned over the years, press releases alone do not make a company more intelligent. This magazine defines an intelligent utility as a company that applies information to energy, maximizing its reliability, affordability and sustainability from generation to end users. Becoming a more intelligent utility requires more than just technology investments; it requires a real investment in people and processes, too.

Second, we wanted to provide a way for utilities to benchmark their intelligence and measure progress against their stated goals and objectives. We view the UtiliQ ranking as an ongoing effort that will evolve over time. For example, should we add Knowledge Center participation as an additional metric? We welcome your input. Please give us your ideas for improving next year's ranking at krowland@energycentral.com.

The influx of $11 billion in American Recovery and Reinvestment Act funding for smart grid activities, with awards announced last fall, ramped up utilities' plans for adding new intelligence to their operations. Although the physical results of that funding have, in most cases, not yet come to fruition, it also required significant utility investment, and has also been factored into the mix.

The current ranking is based on a company's performance using five quantifiable intelligence metrics:

• Productivity An intelligent utility is an efficient utility (measured by revenue per employee).
• Renewable energy An intelligent utility has a commitment to renewable energy as part of its resource portfolio (measured by renewable energy sales, renewable energy customers and renewable capacity defined as wind, solar, geothermal and biomass).
• Smart initiatives An intelligent utility makes investments in developing smarter grids (measured by smart meter deployments and smart grid projects involving the T&D network).
• Demand response/energy efficiency (DR/EE) An intelligent utility allows consumers to manage their energy usage and costs (measured by the availability of energy efficiency, demand response and load management programs as well as percent of customers enrolled).
• IT investment An intelligent utility invests in information technology to enable business process improvement (measured by IT spending as a percent of revenue and on a per-employee basis).

We also gave extra marks for utility companies that regularly report on sustainability or corporate social responsibility, including carbon disclosure.

With the popularity of smart and intelligent themes, we couldn't resist providing the ranking in terms of a utility intelligence quotient (IQ). Taken together, the metrics are used to create a company's intelligence quotient. Companies with IQs over 120, in our analysis, exhibit very superior intelligence compared with other U.S. electric utilities. We believe that the few companies with IQs over 140 are at near genius level compared with the rest of the industry.

This year, we had the benefit of more comprehensive sources of data than we had to draw on last year. We relied on data from SNL Energy, FERC, AWEA, NREL and EEI. We were able this year to get a better handle on renewable generation, as well as energy efficiency, demand response and load management programs. In addition, IDC Energy Insights research-in particular an intelligent grid study conducted last fall-helped to round out our knowledge.

There were some changes since last year besides having richer data to draw on. It is clear that some utilities rose in the ranks based on being awarded American Recovery and Reinvestment Act funding. We also noticed that many companies that received awards are planning on contributing more than the 50/50 match.

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Looking ahead

Companies that want to make the list or improve their position should focus on these strategies and investments:

• Drive company cultural change Becoming a more intelligent utility has a lot to do with people. Your employees need to understand your company's vision, your strategy for getting there, why it's important to all major stakeholders-including customers and regulators-and what this all means to your employees on a day-to-day basis.

• Improve processes for both ''lean'' and ''green'' Efficient processes drive down the cost of maintaining the current environment and free up resources for innovation and growth.

• Make intelligent technology investments Find ways to get the best return from your technology investments by ensuring that your spending on information, communications and energy technologies lines up with your enterprise strategies, enables process improvement, supports regulatory compliance and creates value for your customers.

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