A New Paradigm in Electric Industry

By Nancy Bui-Thompson, VP, SMUD Board of Directors, Sacramento Municipal Utility District

Nancy Bui-Thompson, VP, SMUD Board of Directors, Sacramento Municipal Utility District

The electric industry is rapidly changing. Across the country key stakeholders and regulators are grappling with what the future holds: how and when transformation will occur.  Our industry is facing aggressive environmental policies aimed at reducing carbon emissions, along with the emergence of disruptive technologies.

“Utilities will need to interact with customers who are making decisions to adopt distributed energy resources”

With the proliferation of distributed energy resources, such as customer owned photovoltaic systems, battery storage, demand response and electric vehicles, operating the electric distribution systems is becoming more complicated. To be able to manage energy resources, emerging technology control platforms such as distribution management systems (DMS) and distributed energy resource management systems (DERMS) that provide sophisticated forecasting and optimization of these resources to maintain reliability are necessary. It will not be enough to just have visibility and control, utilities will have to optimize, dispatch and coordinate devices at a scale far beyond what has been done previously on the bulk-electric system.

The role of the utility will change. Utilities will need to interact with customers who are making decisions to adopt distributed energy resources. Utilities will have to structure rates and provide incentives to send price signals for customers to be able to maximize resources. One thing is certain – the Utility of the Future will be shaped by big data and data analytics.  Many of the challenges utilities face today, and foresee in the future can be addressed and met with actionable analytics initiatives.

As the country’s 6th largest public utility, located in one of the most progressive State’s in the country, Sacramento Municipal Utility District (SMUD) is uniquely positioned to lead the charge in innovation and environmental responsibility. As a policy maker on SMUD’s elected Board of Directors, I understand the intricate challenges that face leaders of large utilities.

SMUD is embarking on an enterprise analytics initiative to support data driven decisions, solve complex business problems, reduce time from data to insights and drive customer experience excellence.  To effectively leverage data, SMUD began at the corporate level by reviewing the state of its data, examining data integrity, governance and ownership.  SMUD created a data governance model, established data definitions and established data ownership.

SMUD is using data driven analytics to help understand customer’s behavior and their response to incentives, technologies, price-signals and messaging. The right rate structure is critical as the industry transforms - SMUD’s Smart Pricing Options project tested customer’s responses to price signals, education and technology.  Leveraging customer load data and customer behavioral data, the pricing study resulted in a rate restructuring.  SMUD will be the first electric utility in the nation to implement mandatory time of use rates in 2017. Data analytics is being leveraged to determine rate impacts and to identify customers that will be negatively impacted by this restructuring. This data will allow SMUD to market energy efficiency programs and other solutions to help customers mitigate bill impacts.

The industry is moving towards a decentralized two-way grid and is becoming responsible for operating and optimizing renewable and distributed resources. This will increase the need to manage and analyze millions of pieces of data from the grid and customer owned devices. Preparing for this transformation, SMUD has completed a major roll out of smart meters (625,000) and grid sensing devices to ensure that necessary data is collected and available. SMUD will continue to implement technology platforms that analyze this data to provide the distribution system operators with information that is actionable.

“Our world is changing – we are experiencing the most dramatic shift in the industry to ever occur. As SMUD Board members, we are setting policies to meet the challenges and opportunities of the future. We are being environmentally responsible, exceeding our carbon goals, proactively preparing our grid for a decentralized network and distributed energy resources. Most importantly we will continue to meet the expectations of our customers and community for energy options and transparency.”