The smart meter is the first of many new intelligent devices that impacts utilities. The arrival of advanced connectivity, e-commerce and machine-to-machine (m2M) communications will over time encourage the utilities industry across the country to embrace new business models.
Utilities also will "get smarter," leveraging their data and bandwidth capabilities to support a slew of connected devices that will provide increased system resiliency, reliability and security, cost savings, real-time monitoring and communication for theft detection and voltage regulation, as well as improved outage management and restoration.
While the utility industry has historically tended to focus more on reliability than innovation, a few major disasters have started to change that thinking.
In October 2012, when super storm Sandy hit the East Coast of the U.S., millions of homes went dark. Falling trees pulled electrical wires to the ground and power substations filled with water. In New York City more than 700,000 citizens endured days without electricity, while in New Jersey and Pennsylvania, more than 3 million people lost power.
Sandy, 9/11, the Northeast Blackout of 2003 and Hurricane Katrina, have collectively increased awareness of the vulnerabilities of the nation's electrical infrastructure. The lack of system resilience at the time highlighted the need for investment in smart grid technology, and needed incentives for utilities to modernize the future infrastructure for grid resiliency.
Now, smart technology can increasingly help utilities be more sophisticated in taking preventive measures-like proactively addressing a power line that is about to fail by monitoring its subtly changing properties, such as worn-down insulation or damaged conductors. In addition to identifying areas of concern, smart technology also allows utilities to better control the network and route around such problem areas when and if a failure occurs.
Given how critical smart technology will become, utilities and municipalities are launching experimental pilot projects for specific smart technology initiatives. Cities such as San Diego and Jacksonville, Florida, have partnered with GE's Business Innovations Unit for local smart street lighting pilots, a program that is focused on highlighting how connected lighting will be beneficial for the energy industry and the overall infrastructure of future "smart cities."
Both cities have deployed 4,000 smart LED street lights equipped with video monitors to track parking spaces and pedestrian traffic during large events. The smart LED streetlights also provide better energy efficiency and reportedly have saved each city approximately $350,000 annually on electricity.
In Texas, a cooperative of utilities formed Pecan Street Inc., a consumer-oriented smart grid research lab to encourage the deployment of sensors and smart meters in neighborhoods. First in Austin, Pecan Street has now expanded to more than 1,300 residential participants in locations across 17 states, with more than 2,000 devices being monitored. The data collected helps improve both smart grid functionality and policy decisions about clean energy in the U.S.
To realize the advantages of smart utility technology, the interoperability of these devices is critical to their effectiveness and ability to function, and it must be addressed before being deployed for mass adoption.
Interoperability standards can encourage wider adoption of connected technologies. From a utility's point of view, it is essential to establish expectations for the compatibility of devices for wide adoption by fully understanding how the devices operate, connect to a home or city infrastructure and can be updated in the field.
In addition, interoperability standards can contribute to achieving citizen trust in smart utility technology. Thinking about not only the specific application of the device, but also how the technology could be altered if it interacts with another piece of smart technology or system is vital to successful interoperability.
For example, with smart meters, utilities help ensure that the data and information sent out to and from the meters follows a certain format and protocol. This procedure is critical, as it pertains to charging people accurately for the energy they have used, and reporting that reading in an intelligible way back to the system.
Interoperability becomes a challenge for utilities when they try to take advantage of a new technology, in which they do not have the time to fully vet and test it, to understand how well it works within their current system. Pilot projects help minimize the risk of large scale problems. They too, however, represent an expense and risk in the pilot area.
For any manufacturers looking to sell to utilities, or utilities looking to deploy new smart technologies, these risks can be mitigated when the new technology has been designed to and already been found to conform to established industry standards for devices and communication protocols. Third party testing and certifying of new smart technologies before deployment is one of the best means for manufacturers to more quickly demonstrate the new technologies will meet a utility's needs.
The opportunities for the smart utility of the future are only beginning to come to fruition. The rapid growth in smart technologies will enable utilities to rethink the customer relationship and their overall business model. As utilities update their capabilities to provide consumers with new and previously unavailable services that include dynamic pricing and real-time access to connected devices, they will also make it easier to remotely monitor, analyze and control usage, as well as enable new integrated energy services. By leveraging these smart technologies, utilities can start to position themselves more broadly as a "service provider" rather than a "utility provider," leading to supplementary revenue opportunities.
In the near future, utilities could position smart meters as a hub for interoperating with all sorts of Internet of Things (IoT) devices and sensors at a customer location. As smart utility technology becomes ubiquitous and even more sophisticated, smart meters could hypothetically provide concierge services; for instance, managing the access necessary for trades' people to do work at customer homes. Consider that the utility, with the relationship it has with all of its customers within a service area, could be a trusted enabler of authorized personnel to enter the property to remove a tree limb resting on a power line or roof or to clear a clogged septic system-a reinvention of today's utility provider model.
Until then, utilities should continue to build strong networks by installing smart, reliable devices that can communicate with one another at optimum efficiency. These networks can provide consumers with not only the services they need on a daily basis, but also with the resiliency needed in times of disaster to quickly recover and restore services. Recent natural and man-made disasters are a major driver for the new innovative smart technologies now entering the marketplace at a rapid pace. Utilities are being presented with a rare opportunity to lead the country into a connected future and reap the rewards, if they are nimble in adapting their business models.