Smart technology is changing utility insiders' focus
Published In: Intelligent Utility Magazine May/June 2010
IT'S NO SECRET THAT THE UTILITY INDUSTRY is undergoing radical change. One industry executive recently summed up the changes impacting utilities as the most dramatic since the days of Edison.
That statement carries a lot of weight given that Edison's lightbulb is now well over 100 years old. However, smart grid and other invasive technologies will likely change the face of the utility as we know it forever.
Gone are the days of the utility as a stodgy, slow-to-react enterprise. In are the days utilities lead the charge into some of the coolest emerging technologies. With that, the role of the chief information officer is changing dramatically. Just the fact that utilities are turning to emerging-and often untested-technologies creates new challenges for CIOs.
Becky Blalock, senior vice president and chief information officer at Southern Co., which provides electricity to 4.4 million residential and commercial customers, says it's not enough to be a technology expert anymore. Nowadays, she says, CIOs must possess solid business knowledge to understand how new technology can drive business efficiencies.
''The great thing is that there are a lot of great products out there that can help our business to be more efficient,'' she said. ''The difficult thing is sorting through and determining the best products that truly drive value to the bottom line.''
Greater security challenges
Aside from the added time and effort required to evaluate a seemingly endless supply of new products is the emphasis on security challenges that some new products present.
''Security is such a huge issue for us now,'' said Blalock. ''In my opinion, a lot of these new products are not as well tested as they need to be. Smart grid is on the hype cycle, and these products are very immature. As an industry, we don't have a good process in place yet to rigorously test these products before we deploy them on our network. It's one thing to roll out software and then patch it on PCs. It would be impossible for us to roll out security patches for thousands of devices out on our electric grid. So we need security baked into these products.
''When it comes to electricity, if something happens and people don't have it, nothing works. Water systems don't work. We see this after hurricanes. So we have to take very seriously our fiduciary responsibility to making sure that what we put out on that network doesn't put the network at risk. Reliability is the most important part of our business.''
Patricia Graham, division vice president of information technology and CIO at CenterPoint Energy in Houston, Texas, concurs with Blalock in that it is crucial to install mature software that complies with industry standards.
''We have worked very hard collectively across operations and IT to ensure that what we implement is standard within the industry,'' said Graham. ''We don't want to install solutions that require us to be a niche player. We want to install what is going to be mainstream. It's very important we not be in a one-off environment.''
Graham also says there has been a big change when it comes to dealing with operations departments within utilities, and the fact that they are no longer just partnering with vendors of equipment that is expected to last 20 to 30 years.
"The operations side of the utility is becoming very IT-oriented, so information technology is suddenly playing a very big role in an area that until now has been mechanical and manually intensive," she said. "In terms of the CIO role, our challenge is to educate our operational peers with respect to how to interact with technology companies. Dealing with companies that provide mechanical equipment that lasts 30 years is very different from dealing with companies that provide hardware or software with an 18-month shelf-life, or three years at best."
Graham first started to see a noticeable difference in her role as CIO about three years ago, when CenterPoint Energy's smart meter program was coming into focus.
"It was when we began to look at what the architecture was going to be for all of this and to frankly lay out the vision and look at what requirements would be out there," she said. "When we determined that this was all about the customer and improving the customer experience through enhanced reliability and availability of the grid, suddenly IT becomes a very big partner in rolling out a smart grid environment."