july 2011 - michigan energy forum - steve craig

www.ShepherdAdvisors.com 1

The “Smart Grid”

What is it? What can it do for utilities and their customers?

What are the big issues?


“Smart Grid” refers to a wide range of components and programs across the system

“Smart Grid” allows for better monitoring and management from generation, transmission , and distribution, and consumption.

Transmission DistributionGeneration

Today we will focus primarily on Distribution Automation and Customer Programs


Why are you supposed to call the utility when your power goes out?

• A) To ask if its the neighborhood or just my house?

• B) To ask how long it until the power is back on.

• C) To tell them the power is out because they probably do not know.


“Distribution automation” involves deploying more sensors, communication devices, and switches to allow utilities to monitor and control the flow of electricity

Screen shot from video at Duke Energy website explaining how distribution automation works


Smart Meters are like their traditional counterparts except they are digital,

programmable, and networked

Traditional Meter “Smart Meter”

“Smart Meters” can provide consumers and the utility hourly or real time data


Usage info & appliance/light scheduling may be provided using in home displays or web/tv based

home energy portals


“Controlling your lights, AC & appliances? Yep, there’s an app for that”

Lutron Home Control + is one example of a cell phone application already commercially available

Iphone screens shots from their advertising. Copyright – Lutron Electronics Co, Inc.


An informal qualitative survey of Midwestern utilities representing a range of experience with smart grid projects, ownership structures, and sizes

• Experience with smart grid projects:• Already aggressively pursuing smart grid pilots and deployments• Cautiously pursuing limited pilot programs• Waiting for now

• Size:• Large multi-state• Large single state• Small and medium sized municipal utilities

• Ownership• Investor owned utilities• Municipal government utilities

Survey of utilities: Why do you want to do this and what is holding you back?


Survey Findings: Utilities’ Strategic Benefits & Concerns

Benefits• Operational Improvements &

Cost Reductions

• Peak Load & Demand Management

• Reliability Improvements

• (Customer Engagement & Relationship)

• (Intermittent Source and Storage Integration )

Concerns• Want to avoid “Stranded

Technology Investments” • Interoperability & Standards• New technologies

• Cost Impacts & Financing

• Customer indifference


Smart Meters and Distribution Automation Provide Reliability,

Operational, Customer Service Benefits

• Improved Meter Reading & Billing • Precludes need to manual

meter reading• Eliminates need for “Key

Rooms” & appointment setting

• Reduces number of “estimated readings”

• Streamlined account openning and closing

• Outage Management• Detection and analysis• Power rerouting• Outage prevention

• Improved Trouble Call Service• Verifying power to the meter

can reduce unneeded service calls


The Smart Grid will involve significant operational and management challenges

• IT Issues • Data management :

At least 720 times more data• Systems integration

• Technology choices• Wireline or wireless

communications• Public or proprietary• Bandwidth & backhaul

frequency• Future requirements & ever

evolving technology

• Business Process Changes• Field crew & distribution

Operations • Call center• Billing statements

• Security • Wireless and network

• Privacy


Detailed meter data can facilitate new customer offerings, if they are interested

Customer Education• Detailed usage information • Appliance & plug level energy education• Customer comparisons, energy saving competitions and • Peer to peer tip sharing using Facebook and other social media

Customer Control• Smart appliances• Addressable outlets• Online or mobile control

Demand Management

(Curtailing or shifting demand during Peak Load Events)• Voluntary, permission based ability for the utility to adjust thermostats &

AC units, electric vehicle charging stations, water heaters, and other appliances

• Time of Use pricing


Thank You. Please feel free to contact us with any questions.

Steve Craig206.293.9321734.975.0333steve@shepherdadvisors.comSherpherdadvisors.com

Shepherd Advisors provides strategic market research and management consulting to utilities, private firms, governments, and non-profits to help them

better understand their customers and markets and the options and implications for improving their business.

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