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YOUR POWER DELIVERY MEDIA SOURCE
T H E O F F I C I A L P U B L I C A T I O N O F
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16 DistribuTECH Preview
20 Silicon Valley Power Wireless Broadband Case Study
42 Networks vs. Platform
1312pg_C1 1 12/4/13 9:09 AM
AUTOMATION
®
Go to http://pgi.hotims.com for more information.
1312pg_C2 2 12/4/13 9:09 AM
PowerGrid International™: ISSN 1547-6723,
is published 12 times per year (January,
February, March, April, May, June, July, August,
September, October, November and December)
by PennWell Corp., 1421 S. Sheridan Rd., Tulsa
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2013 by PennWell Corp. (Registered in U.S.
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12CIO Roundtable:
Xcel, NV Energy, SCE and PHI Talk Customer
Engagement Editor in Chief Teresa Hansen interviews the
chief information officers of four large investor-
owned utilities about their customer engagement
programs, technologies and enhancements. The
foursome will go into a deeper discussion during
a DistribuTECH mega session in January.
From the Editor 2
Notes 4
DistribuTECH Preview 16Thinking about attending North America’s No.
1 electricity transmission and distribution show, DistribuTECH Conference & Exhibition, in January?
Find out what’s planned in San Antonio.
Silicon Valley Power Case 20Study: Wireless Broadband Benefits Smart Grid, More
Larry Owens of Silicon Valley Power shares how the California muni became the first
U.S. city to leverage its utility AMI network to provide free outdoor Wi-Fi citywide.
AMI Operations Center Benefits 24David Kreiss and Masoud Abael
of AMI Operations Consulting LLC list the benefits of a centralized AMI operations center, including: overall
lower staffing and resource costs; superior system performance; higher reliability; better security with respect
to identifying potential cyberattacks; and superior risk management.
30 The Reputation Imperative: Why North American Utilities Still Don’t Get It Reputation Institute’s John Patterson shares results from its annual syndicated quantitative research study across 34 countries in which it asks the public to rate organizations on the trust, admirations, good feeling and esteem they have for the largest companies in each market. Guess how electric utilities did?
38 Interoperability Enables Innovation Roberto Aiello of Itron compares how many devices have gone down the path of interoperability, moving from proprietary to open standards. What lessons can the utility industry learn from these devices?
42 Grid Automation & Control— Networks vs. Platform Donald Pollock of Ambient Corp. writes that key factors distinguish the traditional siloed approach to grid communications from a platform approach: flexibility, scalability and security.
45 Smart Grid Interoperability and Standards UpdateDick DeBlasio, chair of the IEEE Standards Coordinating Committee (SCC) 21, explains why the 2003 publication of IEEE 1547 “Standard for Interconnecting Distributed Resources with Electric Power Systems” was so monumental—it filled a void.
48 The Smarter Approach— Creating Reliability, Efficiency on the Grid Scott Zajkowski of IUS Technologies writes that transforming a legacy grid into a smart grid will lead to a steady stream of power with fewer interruptions to more people using fewer resources while emitting fewer carbon gases.
50 Products 51 Calendar/Ad Index
52 From the Pages of Electricity History
32 Cleat CallAuthor Tony Conroy of Ellis writes about the frequently underestimated importance of cable cleats.
December 2013 | 1 www.power-grid.com
DECEMBER 2013 VOLUME 18.12
1312pg_1 1 12/4/13 9:04 AM
EDITOR IN CHIEF Teresa Hansen
918.831.9504 [email protected]
SENIOR EDITOR Kristen Wright
918.831.9177 [email protected]
ONLINE/ASSOCIATE EDITOR Jeff Postelwait
918.831.9114 [email protected]
GRAPHIC DESIGNER Deanna Taylor
918.832.9378 [email protected]
CONTRIBUTING EDITORS TransmissionHub Chief Analyst Rosy Lum
Senior Analyst Corina Rivera-Linares Senior Editor Carl Dombek
BUSINESS ADMINISTRATOR Angie O’Dea
918.831.9431 [email protected]
VICE PRESIDENT-AUDIENCE DEVELOPMENT & MARKETING
June Griffin
AUDIENCE DEVELOPMENT MANAGER Linda Thomas
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SENIOR VICE PRESIDENT, NORTH AMERICAN POWER GENERATION GROUP
Richard Baker 918.831.9187 [email protected]
PENNWELL CORP. IN EUROPE PennWell International Limited
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CHAIRMAN Frank Lauinger
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POWERGRID International is the offcial publication of
2 | December 2013www.power-grid.com
EDITOR IN CHIEF TERESA HANSEN
FROM THE EDITOR
POWERGRID International is the official publication and partner of
DistribuTECH Conference & Exhibition, and as the magazine’s editor in chief,
I serve as chairwoman of the DistribuTECH Conference Advisory Committee.
This job allows me to review the submitted abstracts and help the committee
create the conference sessions. In doing so, I learn about the industry’s hottest
topics, greatest challenges and latest solutions. I also have an opportunity to
give readers a preview of some of the conference discussions that will take
place at DistribuTECH before those conference sessions occur—something
no other magazine can do.
Beginning on Page 12 is a roundtable interview with chief information
officers (CIOs) from four major investor-owned utilities that I conducted with
the help of Dave Elve, executive vice president and chief marketing officer at
PayGo. These utility CIOs will participate in one of DistribuTECH’s five mega
sessions Wednesday, Jan. 29. Customers’ expectations are rising and their
tolerance for silence from their electricity providers is waning. In this inter-
view, the CIOs talk about their customer engagement strategies, the channels
they use to communicate with customers and some of the biggest challenges
they’ve encountered while implementing customer engagement strategies into
their smart grid programs. The information in this article, while enlightening,
is only a taste of what will be discussed during the hour and a half panel dis-
cussion during the mega session.
Another opportunity for you to hear from some of DistribuTECH’s confer-
ence participants is available on POWERGRID International’s website. On Dec.
3, I moderated a webcast on utility cybersecurity strategies that included
three presenters who will speak at DistribuTECH. The webcast, “Practical
Approaches to Utility Cybersecurity,” covers the latest DNP User’s Group
cybersecurity updates, as well as accomplishments and activities of the Smart
Grid Interoperability Panel’s (SGIP’s) Smart Grid Cybersecurity Committee
(SGCC). Some of you might have attended the live webcast, but if you didn’t,
no worries—it’s available on demand on the magazine’s website at www.
power-grid.com/webcasts.html. The webcast is free and, like the roundtable
article, offers you a glimpse of what will be discussed in greater detail at
DistribuTECH.
The DistribuTECH preview article that begins on Page 16 provides more
information about all the activities and opportunities available at the largest
annual T&D show in North America. I hope this preview, the roundtable and
the cybersecurity webcast convince you that DistribuTECH is a must-attend
show. You may find registration information and a complete conference pro-
gram and exhibitor listing at www.distributech.com.
For those of you who cannot attend the event Jan. 28-30, 2014, I hope you
enjoy this small taste of DistribuTECH. For those of you who plan to attend,
I look forward to seeing you in San Antonio.
POWERGRID International and DistribuTECH Partnership Benefts You
1312pg_2 2 12/4/13 9:05 AM
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NOTES
4 | December 2013www.power-grid.com
© CAN STOCK PHOTO INC. / MILINZ
PEPCO EXEC: INDUSTRY DEALING WITH ‘UNINTENDED CONSEQUENCES’ FROM FERC ORDER 1000
utilities in the state to develop a package of
resiliency projects, including micgrogrids,
to help ensure that the state will be better
prepared if another event like Hurricane
Sandy occurs.
In Maryland, the governor and state reg-
ulators reached out to Pepco and Delmarva
Power, as well as the other utilities to come
up with resiliency projects to improve the
system.
Washington, D.C., Mayor Vincent Gray
has said the nation’s capital should not
have outages that last more than a couple
of days and requested a game-changer,
Maxwell said.
The mayor in August 2012 established
his Power Line Undergrounding Task
Force, which includes government offi-
cials, regulators, local utility executives,
public advocates and residents to address
power outages in the District of Columbia
as a result of the derecho thunderstorm
system that left extensive wind damage
across the region in June of that year.
An interim report accepted by Gray
in May calls for a multiyear
program estimated
No one knows how FERC Order 1000
will affect the electric industry because of
unintended consequences in how entities
work together, said Michael Maxwell, vice
president of asset management with Pepco
Holdings Inc.
“Now there’s this competitive streak that
Order 1000 has kind of laid out,” Maxwell
said during a panel on extreme weath-
er and T&D, part of TransmissionHub’s
TransForum East in Washington, D.C.
In addition, it is not only the utili-
ties identifying the projects and working
together, he said; PJM Interconnection also
must deal with evaluating those projects.
“If you think about what you have to
do now in terms of presenting a project
to PJM, you end up having to build whole
organizations to support that level of effort
moving forward,” Maxwell said. “So we’re
having to adjust to this new world order.
I’m not sure what’s going to be (on) the
other side of this rainbow … but we’re
going to have to work hard to figure it out
as we go along.”
Because utilities cannot replace every-
thing at one time, they must plan to
replace assets over a period, Maxwell said.
“The electric system … was built over
100 years,” he said. “You’re not going to
rebuild it within 10 or 12.”
Fellow panelist Consolidated Edison
Co. of New York (Con Edison)
engineer Griffin
Reilly said that building its infrastructure
is “business as usual” for Con Edison.
Electric storm hardening, he said, is
“essentially just accelerating our replace-
ment program with these investments.”
Panelist Ken Collison, vice president at
ICF International, said other factors such
as generation retirements involving coal
plants factor in transmission planning, as
does the gas-electric integration matter.
The panel also included Edison Electric
Institute (EEI) Manager of Federal
Regulatory Affairs Karen Onaran. On the
one-year anniversary of Hurricane Sandy’s
landfall on the East Coast, the panel dis-
cussed storm restoration and grid reli-
ability.
Each jurisdiction Pepco serves—the
District of Columbia and parts of Maryland,
Delaware and New Jersey—has a different
view on what is considered reliability,
resiliency and hardening efforts, as well
as its response to recent weather events,
including Hurricane Sandy, Maxwell said.
Some of the bread-and-butter proj-
ects Pepco presents to state regulators
when asked how it is improving reliability
include vegetation management, he said.
In New Jersey, Gov. Chris Christie
reached out to Pepco’s Atlantic City
Electric and all the
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NOTES
6 | December 2013www.power-grid.com
© C
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countries, certain regions, certain
states had policies that allowed for selec-
tive undergrounding,” he said. “It’s expen-
sive, but if you see how others have
addressed it, that could be a way that you
could also find ways to do that for your
system.”
Onaran said utilities need to be held
accountable to some extent, but the
approach should be from more of a learn-
ing experience and in a collaborative fash-
ion rather than just having regulators fine
utilities.
She said EEI’s report “Before and after
the storm: A compilation of recent stud-
ies, programs and policies related to storm
hardening and resiliency” helps EEI’s
member companies work with state regu-
lators and customers and pick options that
work best for them.
In working on its report, EEI reviewed
efforts in various regions including under-
grounding, microgrids, vegetation man-
agement, increased labor forces and smart
grid initiatives.
“This gave a general idea of what are the
options out there that are available and
what works best for your state, your util-
ity,” she said.
An updated EEI report will be released
in January, she said.
The national response event that occurs
when several regions become depleted
in their resources is an EEI initiative that
came directly out of Sandy, Onaran said.
A national response executive committee
of utility CEOs and senior execs overlook
the pooling of all requests for crews and
equipment, for instance, and allocating is
based on need, she said.
“We want to make sure that at this point,
we are responding as one industry and not
individual utilities,” she said.
at nearly $1
billion in a first
phase to selectively
underground up to 60
high-voltage lines that are
most affected by storms. The
task force recommended a financ-
ing arrangement through an approxi-
mately even split between the District of
Columbia and Pepco.
Reilly said five of the top 10 storms in
Con Edison’s history in terms of electric
outages happened within the past four
years, including Hurricanes Sandy and
Irene and the October 2011 snowstorm.
“We see a trend, whether or not you
want to call it climate change …,” he said.
“There’s definitely something happening in
our region, and we need to address that.”
Reilly described Sandy’s impact on Con
Edison’s system, including the damage to
its East 13th Street substation from flood-
ing and the wind damage to its overhead
system.
Con Edison has made numerous
improvements to its energy delivery sys-
tems as part of a $1 billion plan to
fortify critical infrastructure and protect
New Yorkers from major storms, includ-
ing building more than a mile of concrete
flood walls around stations and critical
equipment, Reilly said.
After Sandy, state regulators launched
investigations into utilities’ respons-
es, including the Connecticut Public
Utility Regulatory
Authority, which found
that utilities performed in
a “generally acceptable manner”
regarding that storm.
Maxwell said it is regulators’ role to hold
utilities accountable, but regulators also
react to political and public pressures.
“Despite what they had been doing
prior in terms of regulating us and look-
ing at reliability and looking at how the
utilities operate, when the heat is turned
on, the behaviors of the commission
changes, and they will launch investiga-
tions,” he said.
Regulators must balance understanding
their roles and determining the appropri-
ate cost for measures and appropriate
things to be done, Maxwell said.
Similarly, Reilly said Con Edison’s $1
billion plan to address flood risk and the
potential for wind damage likely would
have been met differently by regulators
three years ago.
“The public is now seeing that there is
the risk (and) they’ve all been impacted by
it,” he said.
Collison agreed it is easier to get invest-
ments into the system after extreme
weather events.
“Is there a way to show how those
investments have improved the system?”
he said. “If there’s a way to show that,
it may be easier to build on that in the
future.”
Some utilities have described how
installed smart grid equipment helped
them restore power faster. Another thing
that could help is looking at what other
utilities, regions and countries have done
to improve resiliency on their systems,
Collison said.
“We found examples where certain
1312pg_6 6 12/4/13 9:05 AM
EYE ON THE WORLD
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To create a modernized electrical network and equip Aruba with
secure, high-capacity and long-range wireless coverage for its com-
plete network, ELMAR—the country’s power utility company—has
turned to GE’s RF Grid IQTM point-to-multipoint (P2MP) advanced
metering infrastructure (AMI).
The installation of GE’s AMI solutions will create an all-encompassing
wireless metering network, providing ELMAR with crucial electrical
usage and power generation data to improve grid efficiency and func-
tionality while enabling grid integration of renewable energy sources.
“Part of Aruba’s energy plan for the future is to generate more
renewable energy and implement it into its electrical grid, with the
long-term goal of becoming a 100 percent green country,” said
Robert Henriquez, director of ELMAR. “GE’s Grid IQ P2MP
AMI solution provides utilities with impor-
tant information such as how much power
is generated by a country’s wind farms
and solar power facilities and when the
majority of this power is being gener-
ated, helping them to better understand
GE Helps ELMAR Modernize Aruba’s Electrical Grid
their electrical grid and what can be done
to optimize it.”
MODERNIZING THE GRID
With the RF Grid IQ AMI solution, GE introduces its first AMI prod-
uct offering specifically designed for global smart meters applica-
tions. The wireless AMI network rolled out in Aruba will encompass
170 P2MP meters interconnected via seven access points, each
of which is capable of communicating with up to 20,000 smart
meters and 64,000 distribution automation devices within a 40-mile
radius—some 1,980 square miles. Aruba’s seven new access points
enable the island’s entire installed smart meter base—48,000 to
date—to efficiently and effectively communicate crucial data back
to ELMAR to be analyzed. This infrastructure also will allow for
network expansion by as many as 140,000 meters and 448,000
distribution automation devices without additional investment. For
the first six months of the operation, ELMAR will be able to access
and use GE-hosted monitoring software to help maintain its new
wireless AMI network.
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1312pg_7 7 12/4/13 9:05 AM
8 | December 2013www.power-grid.com
EYE ON THE WORLD : CONTINUED
NOTES
Alexander Shapiro, a professor in the Stewart School of Industrial and Systems Engineering at the Georgia Institute
of Technology, is an expert on optimizing systems using stochastic programming.
For boaters, fisherman and others, a lake filled with water is an
opportunity for recreation. But for an organization such as Operador
Nacional do Sistema Eletrico (ONS) in Brazil, a full lake behind a
hydroelectric dam is also an optimization challenge that must be
addressed to provide reliable electric power at a stable cost.
Brazilian power system genera-
tion is dominated by hydroelectric
sources that use large reservoirs
that allow multiyear regulation. As
of 2010, the country’s power gen-
eration facilities included more than
200 major power plants, of which
141 were hydroelectric. The hydro
facilities account for 77 percent of
Brazil’s installed generating capac-
ity and are in 14 large river basins
with their generation interconnect-
ed to take advantage of hydrologi-
cal diversity between the basins.
Because the hydro plants use
water stored in reservoirs to gener-
ate electricity, operators must decide
when to use the water. Because the
water inflows depend on rainfall, the amount of water available for
future power generation cannot be predicted with high accuracy.
Moreover, historical records indicate the possibility of dry periods,
which place a burden on hydro generation and might require the
use of thermal power plants to meet demand.
ONS uses a complex computer algorithm that models the system
to help ensure electricity generation meets the demand at mini-
mum expected cost, planning the generation of power based on
such information as electricity demand forecast and water inflow
scenarios based on the historical data. The system also sets the
monthly price of power for the country; however, during the early
part of this century, power rationing in Brazil called into question
the validity of meeting day-to-day needs using a policy based on
minimizing the expected cost of power.
To improve the system, ONS decided to develop a methodol-
ogy for adding a risk-aversion criterion to the planning model.
Four years ago, it contacted Alexander Shapiro, a professor in the
Stewart School of Industrial and Systems Engineering at the Georgia
Institute of Technology. Shapiro is an expert on optimizing systems
using stochastic programming, a technique useful for modeling
complex systems when not all input parameters can be known.
“The usual criteria used for our planning purposes took a neutral
approach to the risk of energy supply failure,” said Joari Paulo da
Costa, a research engineer with the Methodology Development
Department of ONS in Rio de Janeiro. “During earlier energy ration-
ing, it turned out that this approach was not sufficient and that
some measure of risk aversion had to be taken into account by
the planning model. An ad-hoc procedure had been implemented,
but only with the results of the risk-averse methodology proposed
by professor Shapiro have we achieved a proper inclusion of these
concerns into the methodology and computer program.”
During the course of the project, Shapiro visited Brazil several
times to confer with ONS officials, including da Costa and Murilo
Pereira Soares, a senior engineer.
“If they don’t have enough water, they have to use more expen-
sive generation sources,” Shapiro said. “The algorithm they have
been using sometimes produces high prices for electricity that,
although fully justifiable within the mathematical framework, do
not conform to the expectations and are not intuitive.”
The system presented a classic optimization challenge concern-
ing the use of a resource whose future availability could not be
determined accurately.
“The risks in the system are very simple,” Shapiro said. “When
Optimization Modeling Helps ControlElectricity Supply Continuity in Brazil
1312pg_8 8 12/4/13 9:05 AM
December 2013 | 9 www.power-grid.com
you have water in the reservoirs, you can either use it now, which
makes electricity very cheap now, or you can hold onto it. If you
use it now, in a few months you might not have enough water to
produce the electricity you need.”
Shapiro and former doctoral student Wajdi Tekaya worked with
ONS to understand the problem formulation and suggested modi-
fications that would reduce the risk of energy supply failures. The
changes they made rely on stochastic programming, which is often
used for modeling optimization programs that involve uncertainty.
“We developed a methodology for how to control the risk of energy
shortages while optimizing the use of water,” he said. “We also wanted
to control the risk of price spikes. It is a very complex system.”
The project also provided a computer implementation of the
proposed methodology. This prototype served as a proof of con-
cept, which played a fundamental role in validating the proposed
methodology.
The new risk-averse methodology developed in the collaboration
between Shapiro and ONS has been integrated into the computer pro-
gram being used to set operational policy and prices for the Brazilian
Interconnected Power System, da Costa said.
The methodology developed by Georgia Tech and ONS potentially
could be applied to other power generation systems, as well as to other
operations in which uncertain natural resources such as water supplies
must be used to meet the demand for electricity or other products.
“The approach to managing risk is very general and could be applied
in other areas,” Shapiro said. “The approach is a new one that could be
used to reasonably control the risk.”
In real-world optimization problems, decision-makers rarely have
all the information they want, so decisions must often be made on
incomplete data.
“We have to make the best decisions with the information that
we have,” Shapiro said. “We all know the past, but we cannot know
the future. We have forecasts, but we do not know for sure what
will happen.”
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10 | December 2013www.power-grid.com
NOTES
10 | December 2013www.power-grid.com
© CAN STOCK PHOTO INC. / RONSTIK
SABRE INDUSTRIES CELEBRATES GRAND OPENING
FOR SABRE/BRAMETAL TESTING SERVICES IN TEXAS
Sabre Industries Inc. recently celebrated
a grand opening for its new testing facility,
Sabre/Brametal Testing Services LLC.
Developed with Brametal’s extensive
testing experience, the new facility is
the result of Sabre’s joint venture with
Brametal, S.A. A subsidiary of Hollmore
Participacoes E Investimentos S.A,
Brametal is a Brazilian company with
experience in engineering, design and
testing of lattice transmission towers.
Sabre/Brametal Testing Services is
located on Sabre Industries’ 147-acre
industrial complex in Alvarado, Texas,
and is the only one of its kind in North
America. Completely automated, the
facility provides full-scale structure test-
ing on lattice towers and tubular steel
poles. Also located on Sabre Industries’
industrial complex in Alvarado is Sabre
Tubular Structures, Sabre’s steel pole
division, and Sabre Galvanizing Services,
one of the most environmentally friendly
galvanizers in the United States.
“Working with Brametal to develop
our new testing station has given Sabre
the opportunity to build a best-in-class
testing facility for our utility custom-
ers,” said Peter J. Sandore, president and
CEO of Sabre Industries Inc. “We will be
the only company in the United States
to offer this type of testing along with
engineering, design, manufacturing and
galvanizing of tubular steel structures all
on one site.”
Proprietary software allows for simu-
lated loads that automatically are applied
to provide realistic and accurate results.
The facility offers destructive and non-
destructive testing and can test towers
up to 235 feet high and 85 feet wide at
the base and poles up to 235 feet high
and 12.5 feet wide.
“Sabre/Brametal Testing Services LLC
is pleased to be able to bring full-scale
structure testing back to North America,”
said Ricardo Minatto Brandão, chairman
of the board of Brametal. “Through our
joint venture with Sabre, we can offer
our customers in the United States test-
ing without the added cost of shipping
structures overseas.”
1312pg_10 10 12/4/13 9:05 AM
December 2013 | 11 www.power-grid.com
© C
AN
ST
OC
K P
HO
TO
IN
C.
/ FA
ITH
IE
FIRSTENERGY ANNOUNCES $2.8 BILLION EXPANSION OF TRANSMISSION INITIATIVE
ongoing commit-
ment to enhance its
high-voltage transmis-
sion system. Many of the
projects, including new or rebuilt high-
voltage power lines, new substations and
the installation of specialized voltage-regu-
lating equipment, are needed to help sup-
port system reliability as coal-fired power
plants in the region are deactivated based
on the Environmental Protection Agency’s
Mercury and Air Toxics Standards and
other environmental rules. These initial
Energizing the Future projects represent
about a $1.8 billion investment in Ohio,
Pennsylvania, West Virginia, New Jersey
and Maryland over the next five years.
FirstEnergy Corp. plans to invest an
additional $2.8 billion over four years
to expand its previously announced
Energizing the Future transmission ini-
tiative. The focus of the initial construc-
tion effort will be the 69-kV transmission
power lines and substations in the Ohio
Edison, Cleveland Electric Illuminating
Co., Toledo Edison and Penn Power areas.
The program is expected to expand into
other FirstEnergy service territories.
“Our work on the backbone of our net-
work will focus on enhancing the service
reliability to the communities, businesses
and homes in our service areas,” said
Anthony J. Alexander, president and CEO
of FirstEnergy. “The average age for much
of this equipment is more than 40 years
old. Our goal is to replace outdated equip-
ment with state-of-the-art smart technol-
ogy that can be operated remotely in order
to help prevent some outages from occur-
ring. And if an outage does occur, the new
equipment can help reduce the number of
customers who are affected and shorten
the duration.”
Work on the new Energizing the Future
projects is expected to begin in 2014 and
continue through 2017. The 69-kV system
is the vital link between the high-voltage
transmission lines and the distribution
network that provides power to end-use
customers. As part of this program, some
7,200 circuit miles of 69-kV and higher
transmission lines will be evaluated and
rebuilt as needed. More than 170 substa-
tions will be inspected and upgraded,
along with 70,000 transmission structures
that will be evaluated and rebuilt as need-
ed. The scope will involve adding redun-
dancies to the network, which is designed
to enhance customer service reliability.
Work also will be done to improve security
at substations by adding fencing, thermal
imaging devices and various surveillance
options. Some of the projects will be done
by FirstEnergy, but certain work will be
completed by area electrical contractors.
Over four years, this program is expected
to put more than 1,100 contractors to
work, the majority being union workers
from northeastern Ohio.
Once operational, FirstEnergy’s invest-
ments are expected to benefit the com-
munities where the company has substa-
tions, transmission lines and equipment
by increasing tax payments, which will
support local schools and police and fire
services. Because most of the work will be
done on the company’s existing rights of
way or existing substations and other facil-
ities, the environmen-
tal impact to commu-
nities is expected to be
minimal.
Overall, the new
transmission proj-
ects are designed to
increase FirstEnergy’s
load serving capability
in areas where future
economic growth is
anticipated, particu-
larly in Ohio’s shale
gas regions; improve
reliability of service;
create more flexibil-
ity to restore service
after storms; reduce
line losses; and lower
the company’s overall
transmission mainte-
nance costs.
The Energizing the
Future initiative previ-
ously was announced
in May 2012 as
part of FirstEnergy’s Go to http://pgi.hotims.com for more information.
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12 | December 2013www.power-grid.com
BY TERESA HANSEN, EDITOR IN CHIEF
that enables residential and commercial
customers to specify preferred channels
and devices for communicating with
NV Energy. This preference center will
manage the communications for outage
communications, billing and usage
management, demand response and
other services. As part of this effort, we
are also enhancing our customer outage
communications around reporting
and receiving outage information and
mobilizing this feature set, as well. Lastly,
we are working on a prepay option to offer
our customers the ability to manage the
payment of their energy bills that correlates
to their cash flow.
Inlander: There are a few:
A. Access to individual energy usage
information through My Account
(see stats below).
B. The Budget Assistant tool has had
a very positive response (customers
sign up for alerts when nearing a
spending target, more than 332,000
enrolled).
It’s a shame not everyone can sit in
on one of the five mega sessions at
DistribuTECH Conference & Exhibition
in January, particularly IOU CIOs:
Developing Solutions to Support Customer
Engagement.
Xcel Energy Vice President and CIO
Dave Harkness, NV Energy Vice President
and CIO Kevin Judice, Southern California
Edison (SCE) Vice President and CIO Todd
Inlander, and Pepco Holdings Inc. CIO
Doug Myers will describe how they deploy
and develop smart grid applications,
infrastructure, security and networks and
how these systems are designed to support
enhanced customer engagement. What the
CIOs will share is increasingly relevant, so
I interviewed them with help from PayGo
Chief Marketing Officer Dave Elve, who
will act as their moderator Wednesday,
Jan. 29 in San Antonio. (Elve’s panel
sessions are always well-attended and get
rave reviews for the amount of audience
interaction with top utility executives and
unscripted, anything-goes nature.)
During the panel session, Harkness,
Judice, Inlander and Myers will discuss
their programs and technologies, as well as
planned enhancements. The session also
will cover lessons learned and the audience
will have plenty of time to ask questions.
We hope the following interview entices
those of you going to DistribuTECH to
attend the mega session and ask your own
questions and gives those of you unable to
leave work for a week in January a slice of
DistribuTECH’s anticipated content.
POWERGRID: What application
have you deployed that has been
the most important to customer
engagement?
Harkness: Our online account
management tool, My Account. This
application allows our customers to view
usage and pay their bills. We will be
adding additional usage comparisons
and promoting energy efficiency
programs. Utilities have been slow to
develop mobile applications, yet today our
customers are able to pay their bills via
mobile. We are focusing on expanding key
customer outage messages and improved
maps. Mother Nature brought large
customer outages with wind damage in
MPLS and flooding in Colorado.
Judice: We have an online account
management service called MyAccount
that allows for billing, account history,
bill analyzer, etc.; however, we are
working on a new program this year that
includes a Customer Preference Center
DAVE HARKNESS
1312pg_12 12 12/4/13 9:05 AM
December 2013 | 13 www.power-grid.com
important corporate messaging, such as
energy- and money-saving tips, in a more
informal, more personal way. What’s more,
it also allows us to talk with our customers
as opposed to talking at them, which,
if done successfully, will humanize our
brand. This transparent, two-way dialogue
can also quickly diffuse a potentially
contentious situation.
Beyond that, social media’s importance
as a communications tool during a crisis
is increasingly important. During a recent
significant outage affecting more than
100,000 customers, we were exceptionally
active on Twitter, proactively posting
updates and reactively responding to
customers. The result was that we were
able to turn a typically negative event for a
utility—an outage—into an opportunity to
engage our customers. Among the dozens
of complimentary tweets we received
from customers were these two: “@SCE
Nothing else was working. News stations
didn’t post anything ‘til late. Social Media
comes to the rescue,” and, “@SCE Thank
C. We are in the process of enhancing
our customers’ digital experience so
that our website and services are
more responsive to today’s customer.
This means moving to a new Web
platform, expanding mobile access,
Web chat services, evolving our
apps to be more robust, etc. All
these developments have been in
the works, and we are excited to
move forward with these customer
offerings in 2014. Mobile Web, 17
percent of visits to sce.com come
through a mobile device; that’s an
average of about 13,000 visits per
day.
D. With Edison SmartConnect, SCE
successfully completed more than
4,400 remote turn-on and turn-off
requests each day.
My Account usage reports viewed from
12/1/2011 through 9/1/2013:
1. Hourly usage reports: 4,572,419
2. Current billing reports: 4,026,228
3. Specific billing period: 2,079,859
4. 13-month trend report: 923,024
Myers: There have been many services
we have introduced that have helped us to
engage better with our customers on many
fronts. Perhaps the most valuable have
been our My Account Web portal and our
mobile apps. Through these services, we
have deployed capabilities that provide
greater flexibility and information to our
customers than ever before.
POWERGRID: How do you
leverage social media?
Harkness: Facebook and Twitter
were utilized during recent storms and
proved many customers leverage these
communication channels during outages.
Judice: NV Energy uses Facebook
and Twitter primarily to drive participation
in customer programs, publish company
news and outage information, and
promote community events.
Inlander: On a day-to-day basis,
social media provides SCE an effective
communications tool for delivering
DO
UG MYERS
TODD INLANDER
KEVIN JUDICE
1312pg_13 13 12/4/13 9:05 AM
14 | December 2013www.power-grid.com
stakeholders, business leaders,
technology teams and external
partners to the table early when
designing your implementation.
D. Implement with agility and measure
performance against needs and best
practices.
E. Look forward. Balance your design
between existing capabilities and
where you want to be in the future
with your customers and as a
business.
Myers: Collaboration is key. That begins
with ensuring there is one answer to the
question, “Who owns customer engagement
at our company?” In the context of smart
grid customer engagement, customer
care, corporate communications, smart
grid program management and regulatory-
government affairs should all have strong
opinions on the topic. Without intentional
collaboration, each independently might
craft sound approaches that are not
necessarily aligned. In addition to internal
collaboration, collaboration with external
stakeholders is also very important. Getting
input from your regulators and other key
external stakeholders helps to ensure
that your customer engagement plan
is informed by as many perspectives as
possible.
DistribuTECH Conference & Exhibition
is Jan. 28-30, 2014, at the Henry B.
Gonzalez Convention Center in San
Antonio.
In 2013, DistribuTECH and Utility
Products Conference & Exposition drew
nearly 10,000 attendees from 53 countries,
more than 400 exhibitors, more than
350 of the industry’s top speakers—more
than 180 from utilities—and featured 77
conference sessions in 14 tracks. Visit www.
distributech.com for more information and
to register.
Inlander: Regulatory requirements,
technology constraints, evolving business
and customer needs, resource constraints.
Myers: The biggest challenge has been
delivering smart grid benefits to customers
via outdated billing systems. We have
done a remarkable job at retrofitting old
technology to provide functionality that
these systems were not built to deliver,
but it has taken longer than we’d have
liked, and it presents constraints on future
releases. We are in the process of upgrading
to one modern system that will allow us to
engage our customers better and faster
going forward.
POWERGRID: What advice would
you give utilities just beginning to
plan and implement customer
engagement solutions as part of
their smart grid program?
Harkness: It is important to work
closely with your regulators and state
commissions to support a complete
program and outline the strategy and
benefits for the complete program. We
did a number of community outreach
workshops with our customers to obtain
buy in and support direction.
Judice: I would agree with Dave
on working with the regulators and
customers. I would also repeat a point
made to an earlier question that you
should ensure you have the organization
prepared to effectively manage the impact
to the operational changes that come with
such a program.
Islander:
A. Customer first. Think about your
customers, how will they benefit,
how will they use it, adoption rate
and value.
B. Compliance. Think about local and
state regulators, legislation, etc.
C. Collaboration. Bring your internal
you guys so much. Power is something we
must not take for granted.”
SCE uses Facebook (43,000), Twitter
(six handles), YouTube, Instagram,
LinkedIn, as well as Apps for Outage.
We are building a relationship with
our customers. Internally, it takes a
cross-functional team—corporate
communications, IT, the contact center,
and the business customer division—
to work together to ensure timely and
cohesive outreach and responses.
SCE utilizes social media in a variety
of ways: in crisis detection and response,
promotion of programs and services, assist
customers, promote local and community
activities, and educate customers and
businesses.
Myers: We leverage social media to
interact with customers on channels
they are already using and to provide
the information they need both on
nonstorm days and during storms. Given
the increasingly important role that social
media plays as a source of information
during emergencies, we use our channels
to provide restoration updates and respond
to customer inquiries quickly. In addition,
increasing our social media visibility
through promoted posts and videos allows
us to better reach our customers and the
public. Our online followers can also help
us amplify our message.
POWERGRID: What has been
the biggest challenge in your
smart grid-customer engagement
implementation?
Harkness: For a regulated utility,
the cost recovery has been the biggest
challenge.
Judice: Maturity of the technologies
deployed and organizational readiness
to support the new processes and
technologies.
1312pg_14 14 12/4/13 9:05 AM
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1312pg_15 15 12/4/13 9:05 AM
16 | December 2013www.power-grid.com
BY KRISTEN WRIGHT, SENIOR EDITOR
This year’s theme is Winning the
Ratepayer-to-Customer Revolution. For
the first time, the conference will feature a
closed-door session about who owns data.
Keynote speakers are energy journalist
Robert Bryce and famed high school bas-
ketball coach Ken Carter.
Other speakers include
execs from ComEd,
SDG&E, Southern
California Edison,
PSE&G, the University of
Southern California and
USAA Bank. Registration
is $595, and a full upgrade
to DistribuTECH is $790.
Visit www.elpconference.
com to register.
UTILITY PRODUCTS
CONFERENCE & EXPOSITION
Utility Products Conference &
Exposition will be co-located again with
DistribuTECH. It brings the pages of
Utility Products magazine to life and brings
together buyers and sellers of power, tele-
com, CATV and water equipment, provid-
ing them an opportunity to learn firsthand
about their industries’ latest products.
Registration is $75 and includes access
to five workshops and nine product dem-
onstrations in the Presentation Theater
on the exhibit floor with more than 450
exhibitors, the opening keynote session,
and opportunities to network with line-
men from all over the country during
The 24th annual DistribuTECH
Conference & Exhibition will return to
the Henry B. Gonzalez Convention Center
in San Antonio for the second time Jan.
28-30. There is still time to register for
North America’s No. 1 electricity trans-
mission and distribution show at www.
distributech.com.
Organizers of the 2014 show expect
some 10,000 attendees, more than 450
exhibitors and more than 350 of the
industry’s leading speakers in 79 confer-
ence sessions in 15 tracks and five mega
sessions.
DistribuTECH’s sister conferences will
be in San Antonio, as well, and there are
a few changes.
UTILITY UNIVERSITY
Utility University will begin at 8 a.m.
Sunday, Jan. 26 and run through 5 p.m.
Monday, Jan. 27. These 28 intensive class-
es—including six water-specific ones—fill
up quickly. Tracks include big data, com-
munications, customer strategies, cyber-
security, DA/DMS, demand-side manage-
ment, DER integration, grid storage, smart
grid, smart metering, system integration,
smart substations and standards. Reserve
a spot through the DistribuTECH website,
www.distributech.com.
AWARDS DINNER
For the first time, the magazine’s
Projects of the Year finalists and win-
ners will be announced live at 6:30 p.m.
Monday, Jan. 27 during the awards dinner
in the Lonesome Dove room at the con-
vention center. The cocktail dinner also
will honor Electric Light & Power’s Utility
of the Year and Large and Small Utility
CEOs of the Year. What’s more, the dinner
is now open to the public.
It’s a great way to hobnob
with the industry’s most
powerful executives and
toast to their successes.
Tickets are $45 and may
be purchased through the
registration page on the
DistribuTECH website.
ELECTRIC LIGHT &
POWER EXECUTIVE
CONFERENCE
Also new, the Electric Light & Power
Executive Conference will begin Monday,
Jan. 27 and wrap up Tuesday, Jan. 28 at
the Grand Hyatt San Antonio. This sched-
ule differs from previous years when the
conference began on a Sunday.
“Utility executives told us they were
having to leave on Saturday to make it to
the executive conference when it began on
Sunday, so it wasn’t as travel-friendly as it
could have been,” said Teresa Hansen, the
event’s program chairwoman and Electric
Light & Power editor in chief. “It was an
easy fix, and we’ve already seen our regis-
tration numbers rise. This year’s executive
conference should be the best in its five-
year history.”
Preview San Antonio
The Projects of the Year will be announced live at the Electric Light & Power and POWERGRID International Awards Dinner on Monday, Jan. 27.
1312pg_16 16 12/4/13 9:05 AM
Go to http://pgi.hotims.com for more information.
Go to http://pgi.hotims.com for more information.
1312pg_17 17 12/4/13 9:05 AM
18 | December 2013www.power-grid.com
Superstorm Sandy Executive Panel; IOU
CIOs: Developing Solutions to Support
Customer Engagement; Chapter 2:
What Happens to Smart Grid Initiatives
After DOE Funding?; Bring Your Own
Thermostat: Residential Demand Response
Program Field Results; and A Global Look
at Smart Grid’s Progress and Future.
Sponsors will celebrate It’s 5 O’clock
Somewhere from 4 to 5 p.m. at their
booths. And when the clock really strikes
5 p.m., POWERGRID International will
throw a Networking Party in the Grand
Ballroom. Attendees and guests are invited
to join the festivities, which will feature
food, drinks and live music.
Thursday, Jan. 30. Conference
sessions will begin at 8:30 a.m. and
conclude at noon, and the exhibit hall
will be open from 10 a.m. until 2 p.m.
PennWell’s annual drawing for a car will
be at 1:30 p.m. at Booth 100. This year’s
car is actually a truck, and you must be
present to win.
networking receptions. Visit www.utility
productsexpo.com to register.
DISTRIBUTECH CONFERENCE
& EXHIBITION
Tuesday, Jan. 28. Nearly everyone
is using social media, and utilities and
their customers are part of the trend.
Who better to kick off DistribuTECH
at 9 a.m. than keynote speaker Randi
Zuckerberg, former director of market
development for Facebook and CEO of
Zuckerberg Media? Joining her will be
NV Energy President and CEO Michael
Yackira and CPS Energy President and
CEO Doyle N. Beneby.
The exhibit hall will open at 11 a.m.
immediately after the keynote, and a
delegate lunch will be served from 11:30
a.m. to 1 p.m. in the exhibit hall.
Conference sessions will begin at 1
p.m. and run until 4:30 p.m. Tracks are:
advanced metering; big data; customer
strategies and technology; cybersecurity;
demand response and energy efficiency;
DER and renewables integration; enter-
prise information and asset management;
GIS and mobile solutions; grid commu-
nications; international projects; renew-
ables, transmission and policy; smart dis-
tribution management; smart grid opera-
tions solutions; substation integration and
automation; and water utility technology.
From 5 to 6 p.m., exhibitors can enjoy
hors d’oeuvres, drinks and networking
among the more than 450 companies’
booths during the opening reception in
the exhibit hall.
Wednesday, Jan. 29. Breakfast
roundtables will open day two from 7:30
to 9 a.m.
Conference sessions will begin at 9:30
a.m. The exhibit hall will be open from
10 a.m. to 5 p.m., with a delegate lunch
being served from 11:30 a.m. to 1 p.m. in
the exhibit hall.
Choose from five mega sessions from
2:30 to 4 p.m.: Lessons Learned From
1312pg_18 18 12/4/13 9:05 AM
PRROODDUUUCCTTSSTTSSconfererenencece & & e expxpososititioioionnn
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1312pg_19 19 12/4/13 9:06 AM
20 | December 2013www.power-grid.com
Silicon Valley PWireless Broadband
BY LARRY OWENS, SILICON VALLEY POWER
s BroadbanCommunications. After some early short-
falls, it wasn’t until 15 years later SVP
began developing its smart grid strategy
and identified advanced metering infra-
structure (AMI) as the first application.
AMI promised to improve customer ser-
vice by:
• Increasing distribution system reli-
ability;
• Reducing time to detection and pin-
pointing outage locations, speeding
service recovery;
• Increasing meter-reading accu-
racy;
• Providing more timely access
to metering data (especial-
ly important in planning for
industrial customers);
• Offering remote lock and unlock
service; and
• Reducing operational costs.
WirelesssCom
falls
beg
and
stru
AM
vice
•
•
Silicon Valley Power (SVP), a
municipal power and water utility
in Santa Clara, Calif., provides services
to 52,000 power and 27,000 water
customers. Its 19.3-square-mile ser-
vice territory in the heart of Silicon
Valley encompasses many large Fortune
500 companies, including Applied
Materials Inc., Microsoft Corp., Texas
Instruments Inc., Nvidia Corp., Owens
Corning, Oracle Corp. and Yahoo Inc.
Starting as early as the 1990s, SVP
began piloting the reading of electric
meters via a fixed 700-mega-
hertz radio network with
now-defunct Whisper
1312pg_20 20 12/4/13 9:06 AM
December 2013 | 21 www.power-grid.com
communication systems were inundated
but the SVP private communication sys-
tems remained viable and effective.
FIELD-AREA NETWORK
TECHNOLOGY
EVALUATION, FINDINGS
At the time, several companies and
technology choices were commercially
available for creating a FAN. The utility
evaluated Wi-Fi and WiMax technologies.
To evaluate Wi-Fi, it purchased an exist-
ing network that already was installed
around downtown Santa Clara from a
company that was going out of business
WIRELESS NETWORK—A CRITICAL
SMART GRID ELEMENT
Next, SVP started investigating the types
of solutions needed to build a smart grid.
The utility quickly realized that a wireless
network was critical and would serve as a
field-area network (FAN) that spanned the
entire service territory. With this goal, the
utility began looking at which technologies
might match the present-day needs.
SVP considered narrowband and
quickly determined such a solution prob-
ably would work for AMI when limited
to meter reading. The team then began
thinking about what other smart grid
applications it might want to consider
and determined narrowband would not
provide the bandwidth and performance
to future-proof the investment. In consid-
ering what smart grid applications the util-
ity might want in the future, it expanded
the list of possibilities beyond AMI to
com
but
tem
FIEL
TEC
EVA
A
tech
avai
eval
To
ing
arou
com
L
ypes
rid.
less
as a
the
the
gies
and
rob-
ited
gan
grid
der
t
include grid and asset monitoring, dis-
tribution automation, outage detection,
security, mobile work force applications
and disaster communications. The utility
determined through many discussions a
high-capacity, cost-effective wireless net-
work that provided strong security, high
reliability and scalability was needed. In
addition, SVP decided a private network
was best. High availability was key to this
decision, as was the ability to control a pri-
vate communications network. As many
remember, in 1989 the San Francisco Bay
Area was hit with a 7.1 earthquake. Over
the two days it took to recover, public
Power Case Study:ynd Benefits Smart Grid, More
Larry Owens is the division manager of customer services and marketing at Silicon Valley Power.
He has a Bachelor of Science in Environmental Studies and more than 20 years in the electric utility
industry. Owens oversees SVP’s marketing communications, key customer services, energy efficiency
and renewable energy programs, dark fiber leasing and the development of online information prod-
ucts and services for customers. He is the sponsor and manager of SVP’s MeterConnect program for
smart grid technologies.
1312pg_21 21 12/4/13 9:06 AM
22 | December 2013www.power-grid.com
• Customer service improve-
ments: increasing billing accuracy,
more up-to-date access to usage data,
allowing for early problem detec-
tion, faster awareness and response to
power outages.
• Environmental and social ben-
efits: conservation, energy efficiency,
reduced greenhouse gas emissions
and improved safety for SVP field
personnel.
SVP issued a public request for proposal
(RFP) in July 2009 for all the elements
required for SVP MeterConnect, including
the wireless FAN. The requirements for
the FAN identified based on SVP’s research
and experience were:
• Coverage: contiguous citywide
wireless network coverage;
• Peak performance: at least 95
percent of routers capable of deliv-
ering a minimum of 3 Mbps bidi-
rectional peak throughput plus 100
percent of routers capable of 1 Mbps
bidirectional simultaneous peak
throughput;
• Network availability: Greater than
99.9 percent; and
• Security: AMI-SEC system security
requirements: NERC CIP 002-009,
NIST Special Publication (SP) 800-
53, IST SP 800-82.
SVP received and evaluated five FAN
vendors that responded to the RFP. Elster
and Tropos teamed up for a combination
that fit SVP’s needs and supplied the AMI
system and Wi-Fi wireless mesh for the
FAN, respectively. Tropos (now a part of
the ABB family) stood out above the rest
of the products evaluated. As a plus, the
company had a proven record in deploy-
ing multiuse networks for utilities and
municipalities.
(its business model was an advertising-
funded network that was unsuccess-
ful). SVP used the network to conduct
testing for AMI and opened a separate
channel to provide the community with
free Wi-Fi access. The network served
its purpose as a test bed, and when
the Association of Home Appliance
Manufacturers selected Wi-Fi as its
smart appliance standard, SVP decided
that Wi-Fi would remain a persistent
standard. They were also convinced
that metro-scale Wi-Fi could be used
for smart grid applications and would
help improve operational efficiency and
customer service. SVP executives also
determined the inexpensive Wi-Fi net-
work they had purchased did not meet
all of their needs: It did not have city-
wide coverage; the network nodes did
not have battery backup; and the Wi-Fi
equipment vendor was absorbed by
another company.
SVP METERCONNECT IS BORN
SVP launched SVP MeterConnect in
2008 and funded the program as part
of the utility’s infrastructure improvement
initiative. The program encompassed:
• A citywide wireless FAN using 802.11
Wi-Fi standards;
• AMI meters that replaced 52,000
power and 27,000 water meters;
• A meter data management system
(MDMS); and
• Upgrades to the customer informa-
tion system used for billing.
SVP outlined the economic justification
and benefits for the project as:
• Operational efficiencies:
reduced operating costs over a range
of utility applications.
• Revenue protection: reduced
loss from illegal activities, improved
meter-reading accuracy, reduced cost
for lock and unlock service.
1312pg_22 22 12/4/13 9:06 AM
December 2013 | 23 www.power-grid.com
A MULTIUSE FAN
The Tropos FAN is a cost-effective
foundation for deployment of many
applications that will improve the reli-
ability and quality of services that pro-
vide power and water to customers.
In addition to using the network for
public access and AMI backhaul, the
SVP billing department field staff uses
the network to connect their iPads to a
Web-based interface to the billing sys-
tem. They can perform many services
from the field, such as:
• Lock and unlock services (move-in
and move-out), including meter
reads;
• Disconnecting for nonpayment;
• Updating billing information and
notes for meter location or iden-
tifying access issues such as “new
dog;”
• Tampering—pictures and video
records; and
• Emailing to co-workers and con-
nection to utility and city websites
when needed.
SVP is considering additional electric
utility applications that would leverage
the FAN, including distribution mon-
itoring, security monitoring, remote
fault-current indicators, capacitor bank
switching, outage detection, asset man-
agement and power-loss analytics.
Water utility applications under consid-
eration include remote meter reading,
leak detection, usage profiles by areas
of the city and supervisory control and
data acquisition. The city’s fire depart-
ment is considering using the Wi-Fi
network over its existing system to
enable download of building or patient
information while driving or commu-
nicating with other emergency service
units in the field.
from the community, SVP wanted to
deliver free Wi-Fi to residents immedi-
ately. SVP deployed the free Wi-Fi on a
separate channel and reserved the other
15 separate channels for utility appli-
cations to ensure security and tightly
managed quality of service. With the
free Wi-Fi, the goals were not to replace
home and business broadband but rather
to support light use across town. The
decision was also made to limit band-
width to 2 Mbps per user and supported
outdoor use only.
Santa Clara is the first city in the nation
to leverage its utility AMI network to
provide free outdoor Wi-Fi citywide.
Feedback from the community has been
positive, and the economic development
department highlights its availability. The
network averages some 500 users per
hour and peaks at more than 5,000 users
per day.
The FAN covers Santa Clara. More
than 600 Tropos Wi-Fi access nodes are
mounted on city-owned assets, includ-
ing light and power poles, traffic safety
lamps and buildings. This includes 58
gateways all connected to city fiber. SVP
designed the network for a maximum of
three hops from any node to a gateway.
This was done to achieve performance
and ensure redundant paths were avail-
able if a node should fail. All radios are
equipped with four to six hours of bat-
tery backup to provide communications
during widespread events. The utility
had specified the network capacity be
3 Mbps, but it delivers substantially
more capacity at 10-12 Mbps in most
areas. When AMI meters are installed in
2014, electricity and water usage infor-
mation sent across the network will be
highly encrypted. Security on this part of
the system mimics that of banking and
national defense institutions.
ROLLOUT PLANS AND RESULTS
Before the rollout, SVP communicated
its smart grid plans to customers and con-
ducted a survey, which was completed in
2010. The goal was to identify the advan-
tages customers expected to realize from
smart grid applications, such as AMI, and
to highlight areas of concern where more
education or information might be neces-
sary. The survey results showed that two-
thirds of SVP’s customers were supportive
of the smart grid ideas. However, an even
higher value to them was free outdoor
Wi-Fi access – the first test network was
more popular than SVP expected!
The SVP team continued community-
outreach efforts by using public meet-
ings and written communications about
wireless networks, AMI meters, security,
billing, and other topics. The utility also
launched a website to answer common
questions received from customers and
updated it on an ongoing basis. It learned
that a proactive public relations cam-
paign to educate customers throughout
the planning and implementation process
is critical to a successful rollout.
SVP MeterConnect is being rolled out
in three phases:
• Phase 1 (completed spring 2013):
FAN, AMI pilot, public Wi-Fi;
• Phase 2 (began fall 2013): 2,000
industrial and 15,000 commercial
and residential AMI; and
• Phase 3 (12-24 months after com-
pletion of Phase 2): completion of
residential AMI.
SVP’s smart grid team selected to
roll out the FAN first based on Tropos
Networks’ mesh product for two rea-
sons. First, the territorywide network is
a foundation for successfully operating
all the smart grid applications planned.
Second, based on the strong feedback
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BY DAVID KREISS AND MASOUD ABAEI, AMI OPERATIONS CONSULTING LLC
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December 2013 | 25 www.power-grid.com
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• Mitigating device issues to include
noncommunicating meters, failed
meters and connectivity issues;
• Provisioning and commissioning of
newly installed devices;
• Metering false positive security
alert analytics;
• Conducting over-the-air meter
reprogramming and firmware
downloads;
• Backhaul management that gener-
ally requires activation, deactiva-
tion and suspension of backhauls;
• Backhaul business management
when using a public network;
• Process updates;
• Security alert analysis; and
• No lights support (load side voltage
test).
The goal of an AMI operations center
Most utilities that have deployed
advanced metering infrastructure
(AMI) systems have not created centralized
operations centers that provide real-
time, end-to-end monitoring, analysis
and management of their systems. The
operation of an AMI system in most cases
is shared by a collection of disparate
groups often not in the same location. Each
group has management responsibilities
for a component of the AMI system to
include the meter data management
(MDM), information technology (IT),
communications, cybersecurity and
metering hardware. These groups often
work normal business hours and are not
structured to provide near-time system
monitoring and analytics.
A centralized operations center provides
many benefits, including:
• Overall lower staffing and resource
costs;
• Superior system performance (meter
read rates);
• Higher reliability;
• Better security with respect to
identifying potential cyberattacks;
and
• Superior risk management.
CENTRALIZED AMI
OPERATIONS CENTER
An AMI operations center is a formal
structure for the management of an AMI
system to allow the operator to manage
performance, security, reliability and
risk. It has many characteristics of a grid
control operations center. AMI systems are
an extension of the distribution system.
Although the primary function of an
AMI system is the reliable collection of
energy usage data, it is expected that
AMI systems will support transmission
and distribution (T&D) and smart grid
activities to include storm management,
load balancing, voltage control and home-
area network (HAN)/demand response
(DR) activities. AMI operations center
will need to be structured to address the
growing collection of activities.
The operation of an AMI system requires
many tasks that vary by utility, depending
on the organization of departments—
revenue services, meter services, etc.—
but most operations centers address the
following daily tasks:
• Identifying deviations in overall
performance and analyzing root
cause;
David Kreiss is a consultant for AMI Operations Consulting LLC. He has worked as general
manager of Southern California Edison’s AMI operations center, SCE project manager of the SCMAS
(SmartConnect monitoring and analysis system) and founder of Kreiss Johnson Technologies, a utility
smart grid software development company. Reach him at [email protected].
Masoud Abaei is a consultant for AMI Operations Consulting LLC. He has worked as the chief
architect of Southern California Edison’s SmartConnect project that included the design and
deployment of SCE’s MDM system and SCMAS. Abaei also was the chief architect for SCE’s Customer
Service System. Reach him at [email protected].
AMI OPERATIONS CENTER STRUCTURE
SCADA/EMS DMS AMI Ops
Transmission Distribution AMI HAN
1312pg_25 25 12/4/13 9:06 AM
26 | December 2013www.power-grid.com
Security. Cybersecurity attacks can
occur directly over the communications
system and via the IT system. Either
way, obtaining and using meter data is
essential to the analysis of a possible
attack. Meters record events and issue
exceptions that are associated with
possible cyberattack. Unfortunately,
a number of normal operations cause
meters to generate these events. The
result is false positive events. Their
analysis is time-consuming, which
could lead to utilities’ falling behind
in performing false positive analytics.
This would pose a risk of missing a true
security breach. A centralized operations
center would have the correlated data,
staff and tools to be the logical solution
for the rapid analysis of these events
to remove obvious
false positive and issue-
validated security alerts.
Risk management.
AMI vendors have a history
of exceptional reliability.
Although a collection of
troubling incidents have
occurred, no catastrophic
events have been reported.
Utilities have never before
deployed this quantity of mission-critical
new technology assets in their T&D
systems. Some could argue the potential
risk is not yet understood or there is a lack of
ability to identify and mitigate a cascading
catastrophic event. Such an event could
be a large-scale, remote service switch
disconnect, a collapsed communications
system or even a cascading meter hardware
failure. Whether the origination is a security
breach, an IT system bug or a firmware
bug exposed during firmware activation,
the consequences could be the same.
The AMI operations center plays the key
role in risk management, specifically to
meters that could be mitigated by the
addition of backhaul devices;
• Identifying and mitigating communi-
cation bottlenecks;
• Identifying and alerting on perfor-
mance degradation of IT compo-
nents; and
• Rapidly identifying and mitigating
backhaul devices.
Optimized read performance translates
to fewer pick-up reads and delayed bills.
Reliability. AMI system reliability can
be broken down into three categories: field
device (meter and backhaul hardware),
communications (radio frequency (RF) and
IP) and IT (server and software) reliability.
The AMI operations center is a key player
in all three areas. The meter services
organization might have
the lead role in monitoring
meter hardware issues, but
the AMI operations center
is the first line of defense
in immediately identifying
hardware incidents and
meter issues that result
from OTA programming
activities such as firmware
downloads. Utility IT
operations and maintenance typically are
responsible for the AMI IT system but
generally are only involved when a server
or service crashes. The AMI operations
center’s end-to-end monitoring philosophy
would facilitate the monitoring of IT
system loading and capacity (if not CPU
and memory usage) and allow for the early
identification and prediction of IT-related
issues. Finally, a responsibility of the AMI
operations center would be to monitor
the communications network, including
obtaining RF network statistics, backhaul
device loading and the public or private IP
communications system.
is to complete the daily tasks as defined
in the center’s processes and to ensure
system performance, maintain reliability
and minimize risk. An AMI operations
center has:
• A secure, dedicated facility;
• A single, secure and traceable point
for ad hoc over-the-air communica-
tions;
• Tools or a system to provide situ-
ational awareness and real-time sys-
tem analysis;
• Dedicated full-time staff to address
routine and daily processes and triage
incidents;
• A complete set of approved processes
and service level agreements (SLAs);
and
• Work management to ensure busi-
ness-as-usual tasks and incidents are
completed within required SLAs.
AMI OPERATIONS CENTER BENEFITS
An AMI operations center can improve
management of performance, reliability,
security and risk all at a lower cost.
Performance. The primary objective
of an AMI operations center is to ensure the
reliable, secure collection of interval data
for billing and that daily read performance
targets are met. This requires that read
performance be monitored in real time
and tools and processes are in place to
mitigate identified issues. All aspects of
the AMI system should be monitored to
identify trends to address issues before
they affect performance. Typically for a
1-million-meter deployment, a utility can
expect 10,000 to 30,000 meters that may
not read on a given day.
The operations center can perform the
following to improve system performance:
• Intelligent scheduling of OTA daily
jobs;
• Identifying clusters of low-responding
An AMI operations center can improve performance, reliability, security and risk at a lower cost.
1312pg_26 26 12/4/13 9:06 AM
December 2013 | 27 www.power-grid.com
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external to the center.
Staffing. The operations center
should be staffed to minimize reliance
on external groups to perform their
core processes. This requires staff with
expertise in communications, meter
hardware, security, database and IT.
Change management and process staff
also are required.
Facility. The operations center
facility should facilitate efficient
communications among staff. It should
include whiteboards, meeting tables
and visualization technologies to allow
teams to triage incidents and evaluate
events. For most large AMI deployments,
a large, central visualization display
is useful to annunciate incidents
and provide situational awareness. A
single facility also allows the utility
restoration, no lights, high impedance fault
detection, load balancing and transformer
overload detection projects.
AMI OPERATIONS CENTER
COMPONENTS
Processes. An important, resource-
intensive component of an AMI
operations center, which is generally
underestimated, is the development,
implementation and tracking of
AMI-related processes. These
include monitoring, analysis and
mitigation of nonresponding meters,
firmware download and responses to
cybersecurity alerts. A typical AMI
operations center might be responsible
for more than 100 processes. A key
to an effective operations center is to
minimize swim lane activities of groups
identify the issue quickly and immediately
address the situation. The operations
center would supply management quickly
with the best information to ensure the
best decisions are made and the most
reliable, comprehensive information can
be communicated to interested parties.
O&M savings. An AMI operations
center results in lower operating costs
because a centralized focused staff requires
smaller head count. The improvement of
performance and reliability reduces pickup
reads and delayed billing issues. Improved
over-the-air analytics reduces truck rolls
and meter replacements. In addition, an
operations center is naturally structured to
provide additional services and analytics
easily, which reduce the incremental
costs of supporting T&D and smart grid
activities. These activities include storm
1312pg_27 27 12/4/13 9:06 AM
28 | December 2013www.power-grid.com
including all subsystems, the IP
communications system (public or
private) and related “data pipes,” the
RF backhaul devices, and finally the
meters. In some cases, the ZigBee
and HAN elements also should be
in view.
THE PUSH FOR AN AMI
OPERATIONS CENTER
AMI systems challenge the utility
industry. Not only is AMI a relatively
new technology; it is large and costly.
The operation of an AMI system is more
complex than anticipated. The analytics
of analyzing field device issues are much
more involved than expected, and AMI
operational activities such as firmware
download require many more steps than
initially thought.
Utilities are in the early stages of
defining the operational needs of an
AMI system and formulating structures,
processes and tools. A few utilities
recently implemented AMI operations
centers and developed the required
tools. This provides the utility industry
with working models that can be used to
develop utilities’ own operations centers
that meet their needs.
The benefits of an AMI operations
center for a larger AMI system outweigh
the costs. The benefits include optimiz-
ing system performance, operational effi-
ciencies, improved system reliability and
security, and the management of risk.
A large AMI system requires a
dedicated facility with a skilled staff
and documented processes to meet
the existing expectations and support
planned smart grid projects. Expectation
can best be met with a well-structured
AMI operations center that provides
real-time end-to-end system monitoring,
analysis and mitigation.
to manage over-the-air activities and
provide security that otherwise would
be unavailable. Finally, IT must provide
the staff within the facility with access
(firewall configurations) to data sources
used in their work.
Operations center software
tools. The operations center must have
tools to analyze the huge quantities
of meter data collected daily. Tools
provided by the vendors have proved
insufficient. Vendors generally supply
tools that consist of the head-end system
(or collection engine) that is the single
point of communications with the
meters, an operational reporting system
and a backhaul (IP device) monitoring
and reporting system. These tools are
not meant to provide an integrated
end-to-end view of the system. They
neither consider the data necessary for
monitoring and analysis of systems
beyond the AMI system nor do they
provide real-time situational awareness.
Utilities are addressing the need for AMI
operational tools in two ways: through
the acquisition of standalone application
or through an integrated approach. An
integrated system is a better approach
that is less costly long term and enhances
the benefit of the operations center. The
following describes the functionality of
an integrated set of tools—the AMI
operations center software system—
that satisfies the needs of a larger AMI
operations center:
• Rules engine for automated
incident identification. The
quantities of data are too large and
the analysis steps too complex for
incidents to be identified manually.
Many incidents are being ignored
and others are not addressed in
a timely manner, reducing read
performance and increasing risk.
• Data access to the broad
scope of data sources
required by AMI processes.
It is necessary to access from the
source system such data as meter and
backhaul RMA (returns), backhaul
(cell relay) activation status and
work orders, fieldwork orders and
HAN registrations. In addition, the
center’s meter incidents and work
management information must be
integrated.
• Real-time situational aware-
ness. Operators must be able to
identify issues in real time and have
the tools to perform basic analytics
to understand the emerging situ-
ation. Such issues include a cyber
alert, cascading communications,
field device or IT system failure,
or poor read response during a
broadcast job. In addition to issue
identification, the system must pro-
vide information that would help
mitigate the issue, as well as the
information that would be com-
municated to management to allow
escalated action to be taken. A geo-
spatial application is essential.
• Automated work manage-
ment. Work activities must
be generated for each incident
identified by the system. This
ensures the mitigation is performed
in an efficient and timely way. The
work activity would include the
tasks that must be performed to
complete the activity and record the
timing and person who completed
the task for tracking.
• End-to-end monitoring. Inci-
dents can be identified reliably only
when viewing the system from end to
end. This means operators must have
insight into the IT infrastructure,
1312pg_28 28 12/4/13 9:06 AM
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30 | December 2013www.power-grid.com
The Reputation Imperative: Why North American Utilities Still Don’t Get It
BY JOHN PATTERSON, REPUTATION INSTITUTE
the rear. Five other U.S. utilities—
Duke Energy Corp., Exelon Corp.,
Florida Power & Light Co., Xcel
Energy and Constellation Energy
Resources LLC—scored within
three points of one another in the
low- to mid-60s, and the remain-
ing three Canadian utilities—BC
Hydro, Hydro-Quebec and Fortis
Inc.—were all in the low 50s.
WHAT DRIVES CORPORATE
REPUTATION IN THE NORTH
AMERICAN INDUSTRY?
The top three reputation drivers
for the utility industry are gover-
nance, innovation and citizenship,
composing just less than half (47.4
percent) of a utility’s reputation
(see Figure 1).
Because of the nature of the products
and services they provide, utilities’
corporate reputations are influenced
more by how they are run and what
they give back to the communities
where they operate, pushing governance
and citizenship into dual prominence
as reputation drivers for the industry.
In the “2013 Global Reputation
Leaders Study,” Reputation
Institute spoke to more than 300
executives at some of the world’s
largest, most influential compa-
nies and heard variations on this
storyline: As much as reputation
leaders (a diverse group, but most
frequently the senior communica-
tor, chief marketing officer or the
head of business strategy) would
like to tell the CEO and board that
everything is under control, when
it comes to stakeholder relation-
ship management, everything is
not under control.
Most companies agree reputation
management is important, but few
know what they should do about it.
Although 79 percent agree that
we live in a reputation economy, an econ-
omy where who you are matters more
than what you produce, only 20 percent
say their company is ready to compete
in it. Unfortunately, U.S. and Canadian
utilities have not been able to store much
reputation capital in recent years, as this
is one industry that has weathered the
global financial crisis better than most
with the general public across North
America.
Each spring since 2006, Reputation
Institute conducts a syndicated quantita-
tive research study across 34 countries
and asks the general public to rate hun-
dreds of organizations on the trust, admi-
ration, good feeling and esteem they have
for the largest companies in each market.
This Reputation Pulse score between 0
and 100 is a perception and an emotional
response to a company’s ability to deliver
on seven rational dimensions of reputa-
tion: products and services, innovation,
workplace, governance, leadership, citi-
zenship and financial performance.
This article analyzes 11 utilities on both
sides of the 49th parallel and how they
have been unable to build up enough
reputation capital to get out the “sea
of sameness” and remain a reputation-
challenged industry in 2013. Southern
Co. was the only North American utility
to enjoy a strong reputation (70.32),
and Manitoba Hydro at 62.68 was the
only Canadian utility to score above 60,
signifying an average reputation. In all,
10 of the 11 utilities included in this
special report for Electric Light & Power
scored in the average/weak category,
with Hydro One at 49.80 bringing up
John Patterson is a New York-based
senior advisor at Reputation Institute. He
has worked with clients and written about
the global energy and utility industry for
20 years at Burson-Marsteller, Ernst &
Young, Capgemini and Ketchum, and is
an honors graduate of Harvard College.
Reach him at jpatterson@reputationin-
stitute.com. For more information and
a free report on your utility’s Reputation
Journey, visit www.reputationinstitute.
com/reputation-challenges/take-the-repu-
tation-diagnostic.
Products/Services
Leadership
Innovation
GovernanceCitizenship Wo
rkplace
RepTrak®
Pulse
11.8%
13.0%
13.2%
14.3%
14.9%
2
18.0%
Factor Adjusted RegressionN = 1,200AdjR = 0.746
114.8%
3
EsteemFeeling Adm
ire
Trust
12013 GENERAL PUBLIC
DRIVERS OF REPUTATION
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December 2013 | 31 www.power-grid.com
across touch points
• Sustainable ambassador/advocacy
• Transformational investments
CONCLUSION
Like re-engineering and total quality
management (1990s) and leveraging enter-
prise resource planning investments in IT
(2000s) before it, reputation management
is coming of age as a boardroom issue in
the 2010s. Coming out of the worst global
recession in 80 years, Reputation Institute’s
research shows that the companies that
are winning license to operate and ben-
efit of the doubt are the ones that under-
stand the new normal where stakeholders
rule. Customers, investors, regulators and
potential employees all want to know what
a company stands for. Making the grade is
about trusting a company to do the right
thing, and demand is at an all-time high in
2013 although only 15 percent of global
organizations are Phase 4/5 companies
(see Figure 2).
The reputation journey continues, and
North American utilities have a long way to
go to escape the industry comparisons to
big pharma and clueless telecom/wireless
carriers when it comes to reputation man-
agement. It takes far more than research;
rather, it involves taking a data-driven
approach to managing all stakeholders—
from associates to influencers to commer-
cial audiences—because a one-size-fits-all
strategy is doomed to repeat mistakes. It
takes using the intelligence gained from
stakeholder conversations in shaping strat-
egies and initiatives that clearly demon-
strate to the world who the company is
and what it stands for. It also takes more
than campaigns. It is about implementing
the company’s promises and commitments
into all touch points, and that takes a dif-
ferent kind of governance and co-creation
than most utilities are used to. Is your
organization ready to face the reputation
imperative of the 2010s?
The utility industry is one of only a
handful of global industries of the
25 studied by Reputation Institute
in 2013 where products and services
was not the No. 1 reputation driver
for consumers; governance is most
important largely because of a lingering
BP/Macondo or Tokyo Electric Power
Co. Inc./Fukushima effect, which places
consumer expectations of the ethics
and transparency of energy and utility
companies on a higher level than other
industries not tainted by recent scandal.
Each dimension alone accounts for
more than 11 percent of reputation, and
the difference between the leading driver
(governance at 18 percent) and the
lowest-rated one (financial performance
at 11.8 percent) in 2013 is just more
than 6 percentage points.
Compare today’s picture to the utility
reputation dimension weights back in
2007, when TXU Energy Retail Co. LLC
was involved in the largest leveraged
buyout in history and most North
American utilities were operating in a
macro environment of strong economic
growth and a bullish stock market.
Back then, citizenship (20.5 percent),
products and services (19 percent) and
innovation (14 percent) were the top
three drivers, followed by governance,
workplace, leadership and financial
performance.
BUILDING A STRONG UTILITY
REPUTATION THROUGH
A SYSTEMATIC APPROACH
During the past two decades of foun-
dational work with some of the world’s
most progressive companies, Reputation
Institute has observed four elements that
are core to a reputation management sys-
tem’s rise to the top: business rationale,
intelligence and strategy, management and
accountability, and integration. Companies
that manage their
reputations well are
working with these
four elements in a
structured way that
brings clarity and
focus to their efforts.
In return, that tends
to enable companies
to develop more
profitable and more
highly respected
businesses than
companies that don’t.
How does your utility measure up
when it comes to the following 16 ele-
ments of a world-class reputation man-
agement system?
Business Rationale
• Integrated company purpose
• Corporate reputation rationale
• Defined stakeholder ecosystem
• Leadership alignment
Intelligence and Strategy
• Systematic evaluation
• Priorities and success metrics
• Corporate reputation strategy
• Corporate narrative
Management and Accountability
• Collaboration and relevance
• Planning and simulation
• Cross-functional management
• Executive accountability
Integration
• Corporate narrative activation
• Corporate narrative embedded
1
2
3
4
5
3%
12%
36%
32%
17%
Full Integration IntoLong-term Strategyand Investments
Cross-functionalImplementation andAccountability
Business PlanningIntegration
Management and MeasurementFramework Development
Exploration andBusniness Rationale
%Companies
Phase
2WHERE ARE YOU ON YOURREPUTATION JOURNEY?
Sources: 2013 Reputaion Institute, Reputation Leader Study (Based on responses from
leaders at 292 of the world’s largest and most influential companies)
© C
AN
STO
CK
PH
OTO
IN
C. /
IQO
NC
EPT
1312pg_31 31 12/4/13 9:06 AM
32 | December 2013www.power-grid.com32 | December 2013www.power-grid.com
BY TONY CONROY, ELLIS
element of any cabling installation, they
are lumped in with the electrical sun-
dries and seen as fair game for cost
cutting,” Shaw said. “But for an instal-
lation to be deemed safe, cables need
to be restrained in a manner that can
arlier this year, Richard Shaw,
managing director of U.K. manu-
facturer Ellis, called on the IET to
reclassify cable cleats as protective
equipment—a move he said would
eradicate overnight, longstanding spec-
ification and installation issues that
cause health, safety and system integrity
problems.
Now he is repeating this call to the
global electrical community.
“We’ve been banging the drum about
the importance of correctly cleating
cables for what seems like years,” Shaw
said, “yet still it feels like we are light-
years away from reaching a satisfactory
conclusion. In fact, I’m still absolutely
staggered by the number of installations
I see where cleats have been incorrectly
specified and, in some cases, dispensed
with completely in favor of cable ties.”
To fully understand Shaw’s concerns
and the impact the reclassification of
cleats would have, one must under-
stand the purpose of cable cleats. Their
importance is frequently underestimat-
ed, he said.
“What this means in practice is
that instead of being treated as a vital
Tony Conroy is export director of Ellis, a
Yorkshire, England,-based manufacturer that
designs and manufactures cable cleats. It
is the only manufacturer in the electrical
industry that focuses solely on cable cleats
and its products. Visit www.ellispatents.co.uk
for more information.
National Grid’s London power tunnels.
1312pg_32 32 12/4/13 9:06 AM
December 2013 | 33 www.power-grid.com
Ellis’ Emperor
trefoil cable
cleat.
than the diameter of the
cable used in the test. If
the project in question
uses smaller cables (and
the fault level and spac-
ing is the same), then the
force between the cables
is proportionally great-
er and the certificate is
inappropriate.
“Plainly and simply
you cannot say that a
specific cable cleat has
a short circuit with-
stand without qualifying
the statement,” he said.
“So instead of claiming
a withstand of 150 kA,
you’d need to say that
the cleat has a short cir-
cuit withstand of 150 kA
when securing 43-mm cable in trefoil at
300-mm centres. To me, the only way
of rectifying this whole complex and
potentially lethal issue is through the
adoption of cable cleats as short circuit
protection devices.”
The reason, Shaw said, is simple: By
giving cable cleats the same importance
as fuses or circuit breakers, no one
would have a doubt about ensuring
their correct specification.
To support this argument, he out-
lined three key points:
1. In the event of a short circuit fault,
the maximum electromechani-
cal stress between the conduc-
tors occurs during the first-quarter
cycle, i.e., at or before 0.005 sec-
onds (based on 50 hertz).
2. Typical circuit breakers and other
protection devices don’t trip and
interrupt a fault until between
three and five cycles (0.06 to 0.1
seconds).
is add to the shrapnel.”
One reason for the confusion is that
the cable cleat market is manufacturer-
driven. Therefore, the choice of product
tends to rely on third-party certification
in the form of a short circuit testing
certificate, but
unfortunately this
can be mislead-
ing.
For example,
Shaw said, some
m a n u f a c t u r e r s
claim a given short
circuit withstand at a given cleat
spacing and legitimately provide third-
party certification to support this.
Overlooked, though, is that the quoted
short circuit withstand is valid only for
a cable diameter equal to or greater
withstand the forces they generate,
including those generated during a
short circuit, and this is exactly what
cable cleats are designed to do.”
Shaw said that without cleats, the
dangers are obvious: costly damage
to cables and cable manage-
ment systems, plus a risk to
life posed by incorrectly
or poorly restrained live
cables.
“Unfortunately, it’s
not just a question
of installing any old
cleat,” he said. “It
has to be correctly
specified for the
project in hand. If
not, the cables might as well be
secured with plastic cable ties; the rea-
son being that different cable cleats are
designed to withstand specific forces,
meaning the only thing underspecified
cleats will do in a short circuit situation
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1312pg_33 33 12/4/13 9:06 AM
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36 | December 2013www.power-grid.com
Ellis’ Centaur cable
saddle for high-voltage
cables.
circuit as opposed to just the cleat.
“Yes, the standards are only advisory,
but anyone working in the electrical
industry anywhere in the world should
pay heed to them; they have been
developed for a reason, and the reason
is that electrical cable installations have
the potential to kill,” Shaw said. “There
is no way of sugar-coating that particu-
lar message. They pose a very real dan-
ger that the various standards, whether
international, European or even British
have been developed specifically to
eradicate.
“The problem, though, is the discrep-
ancy between the prescribed course of
action and the one that the electrical
industry as a whole seems to believe
is the right course of action. Where to
point the finger of blame for what is a
complex and difficult problem is hard
to do, but how to resolve this dangerous
situation is straightforward.
“The reclassification of cable cleats
as protective equipment would imme-
diately see electrical cable installations
being specified and installed that deliv-
ered the necessary level of protection
both in terms of excessive temperatures
and electromechanical stresses,” Shaw
said, “and, of course, eradicate the
risk to life posed by incorrectly cleated
cables.”
3. In contrast, correctly specified
cable cleats earn their crust dur-
ing the first-quarter cycle, ensur-
ing the cables remain intact and
operational.
“What these three points demon-
strate is that without properly speci-
fied cable cleats, the time, effort and
expense spent assembling a circuit
breaking system will go to waste as any
electrical installation will be irrevocably
damaged by electromechanical stresses
long before the short circuit protection
devices are put to the test,” Shaw said.
To date, this argument, despite its
seemingly unbreakable logic, hasn’t
gathered the support needed to influ-
ence industry regulators to make the
change. But rather than admitting
defeat, Shaw and his team continue to
focus attention on changing attitudes
wherever and whenever
they can.
“Things are chang-
ing slowly but surely,”
he said. “There are
European and interna-
tional standards relat-
ing to cleats where once
there were none. More
and more specifiers and
contractors are ensur-
ing cleats are correctly specified, most
notably in HV and EHV cable instal-
lations where ensuring the integrity of
the system is absolutely vital.
“And what’s more, this process is
being replicated in our key markets.
We are enjoying ongoing success in the
USA, Australia, Latin America, China,
Russia and closer to home in main-
land Europe and the U.K., and in
every instance contracts are
won after we
highlight the
reasons why
cable cleats
need to be cor-
rectly specified for
each and every project. Yet for every
success, I am sure there are others
where corners are cut, cleats are under-
specified and lives and systems are put
at unnecessary risk. It’s very much an
ongoing battle, and it
really shouldn’t be.”
Shaw said interna-
tional and European
standards safeguard
against incorrect speci-
fication. For example,
levels of cable protec-
tion can be enhanced
by selecting only prod-
ucts classified in section
6.4.4 of the International Standard. In
other words, the cable is guaranteed
to be intact and operable after a short
Cleats being put through their short circuit paces.
Where cleats are underspecified, lives and systems are put at unnecessary risk.
1312pg_36 36 12/4/13 9:07 AM
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38 | December 2013www.power-grid.com38 | December 2013www.power-grid.com
Interoperability Enables InnovationBY ROBERTO AIELLO, ITRON
OFDM (Orthogonal Frequency Division
Multiplexing) signaling used by the
cellular network. Nor did they create
the file system used by the servers. Most
of the added value is the user interface
design and ease of use. The app delivers
a great social value to the teen using
existing, interoperable technologies.
Another example is music streaming.
Some new vehicles stream the owner’s
ost products consumers use in their
daily lives are based on standard
components manufactured by different
companies that interoperate with one
other. From watching the morning
news to driving to and from work, most
daily activities depend on collaborating
tools and technologies that afford more
convenient and connected lifestyles. Rarely
does someone wonder what his or her life
would be like without this interoperability-
driven world.
Meanwhile, the power grid historically
has been characterized by specifically
designed proprietary technologies, with
few companies’ providing true end-to-
end solutions. As the smart grid industry
moves to a new phase in which consumers
affect the behavior of the grid and utilities
apply automatic optimization processes,
interoperability becomes critical in opening
the door for new applications.
Many devices have gone down the path
of interoperability, moving from proprietary
to open standards. What lessons can the
utility industry learn from these devices?
Let’s start with a couple of examples of true
interoperability.
INTEROPERABILITY TODAY
Consider a teen’s sharing a picture
on a social network. The teen holds the
phone in front of her, takes a picture,
logs onto the social network using an
app on her phone and posts the photo.
After a few seconds, the image becomes
visible to her friends. The following
steps break this process to see the chain
of interoperability.
In reality, there is much more involved,
and there are many more granular steps,
but these simplified steps are sufficient
to make the point.
The app that allows sharing the picture
doesn’t contribute to any of the steps
described in the table. The engineers
who developed the app didn’t have
to develop the JPG image-compression
scheme or specify the Internet Protocol
packets used by the Internet or the
Roberto Aiello is technology advisor at
Itron, where he is responsible for emerging
technologies and new business initiatives.
During his career he has managed
wireless research at Interval Research,
Paul Allen’s technology incubator in the
Bay Area and technology transfer at
Disney Research. Aiello is a Lean Startup
expert and serves as a mentor at startup
accelerators such as Cleantech Open and
Startup Weekend.
ACTION INTEROPERABLE COMPONENT
Phone stores image. Image Compression
Phone sends image to cellular network. 3G Protocol
Cellular network sends image to server. Internet Protocol
Server stores image. File System
1312pg_38 38 12/4/13 9:07 AM
December 2013 | 39 www.power-grid.com
USB was developed in the mid-
1990s. The intent of the design was to
standardize connections for computers
but since has evolved into an essential
tool to back up documents or charge
smart phones. In this case Compaq,
DEC, IBM, Intel, Microsoft, NEC
and Nortel not only developed the
technology and made it available free
to anyone but also created the USB
Implementer Forum to guarantee
interoperability among devices.
Another good example is Ethernet.
Originally developed by Xerox PARC
in 1974, it later was promoted as a
standard by Xerox, Intel and DEC and
eventually was approved as a standard
as IEEE 802.3 (Institute of Electrical
and Electronics Engineers) in 1984. The
technology improved in speed, cost and
availability, and it is now one of the most
successful networking technologies.
Many companies have been successful
delivering products based on standard,
interoperable components, so why
wouldn’t we assume the smart grid
would be the same?
SMART GRID
One of the best examples in the smart
grid industry is given by advanced
FROM PROPRIETARY
TO STANDARDS-BASED
TECHNOLOGIES
Companies often introduce new prod-
ucts into the market based on proprietary
technologies. As the industry matures,
those companies might see the introduc-
tion of standard and interoperable tech-
nologies as a threat to their existing market
share. Others see that as an opportunity to
increase the breadth of products.
An example of proprietary technology
is FireWire. Developed by Apple in
the late 1980s, FireWire was a serial
bus interface. It was one of the first
technologies designed to provide high-
performance links. Apple and a few
others who owned intellectual property
wanted to maintain their rights, making
it a mostly proprietary technology.
FireWire did not become ubiquitous.
USB (Universal Serial Bus) had larger
market share.
selected favorite music from his or her
smart phone through the car’s speakers.
These apps have made music available to
consumers anywhere, anytime, but the
distribution channel to these consumers
has nothing to do with them and
everything to do with interoperability.
The chain of interoperable components
is shown in the following figure.
In this example, there are standards
related to music compression,
networking and wireless components.
In both cases, the infrastructure used
by these apps is made of standard,
interoperable components developed
by other companies specialized in
specific domains. Without this existing
infrastructure, it would be impossible
to offer these products to consumers.
From lightbulbs and power plugs to
coffeemaker filters, doorknobs, train
tracks and bicycle pumps, examples of
interoperability are everywhere.
ACTION INTEROPERABLE COMPONENT
Server accesses music file. File System
Server sends music file to network. Internet Protocol
Phone receives music file. 3G Protocol
Phone sends music file to car system. Bluetooth
Car systems play music. MP3 Decoder
1312pg_39 39 12/4/13 9:07 AM
40 | December 2013www.power-grid.com
technologies meet their specific needs,
regardless what they’re trying to accom-
plish.
This is similar to the changes that
have happened in the telecommunica-
tions industry during the past 10 years,
where network operators used to specify
which components should be included
in a specific phone. Now phone manu-
facturers offer phones made of standard
components, and network operators can
focus on network reliability and services.
Standard components will find their
way in the industry, AMI manufacturers
will specify and include those compo-
nents in their systems, and utilities will
drive use cases and metrics—not which
components to be included in an AMI
system.
If the industry can accelerate this
transition, it will benefit from interop-
erability. Standard and interoperable
systems are important to the develop-
ment of new, innovative applications and
business models that otherwise would
be impossible. Standards also will free
utilities from having to specify every
system component so they can focus on
the desired high-level functionalities of
the system. AMI vendors should move
toward standard components, resisting
the temptation to hang on to proprietary
solutions. The industry will gain much
more by working together to achieve
true interoperability.
metering infrastructure (AMI), which fea-
tures two-way communications down to
the electricity, gas, heat or water meter.
AMI enables utilities to measure, collect
and analyze energy and water usage either
by request or on a schedule.
From hardware to software and appli-
cations, most systems are not com-
pletely built on interoperable and stan-
dard components. When AMI system
providers began designing products, the
technologies were created without con-
sideration of standards and interoper-
ability and were made to accommodate
the needs of a specific utility. Solutions
for energy and water utilities have been
traditionally vendor-specific.
The utility industry is becoming more
advanced, expansive and interoper-
able. For example, a typical system
enables utilities to monitor electricity
consumption based on interoperable
and standardized products from the
electric meter socket to the data format
in the meter, followed by encryption,
wireless signaling and mesh protocol to
network protocol, then to the file format
in the database to the analysis software.
Electric meters also allow connectivity to
consumer electronics devices using in-
home wireless interoperable standards.
The changes happening in this indus-
try allow innovators to develop new
applications and business models that
would be impossible without standard
and interoperable systems. This will
create more value for utilities and con-
sumers.
Utilities also will be able to focus on
their core expertise of energy manage-
ment instead of having to be experts in
every system component. In this new
scenario, utilities won’t have to specify
the meter data format, type of mesh net-
work or type of in-home network. They
can specify high-level functionalities,
such as the frequency at which the data
needs to be viewed, the level of security
or the parameters related to energy use
prediction while letting interoperable
ACTION INTEROPERABLE COMPONENT
Meter stores metrology data. Meter Data Format
Data is encrypted. Encryption Protocol
Network interface sends data. Internet Protocol
Data is relayed to collector. Mesh Network Protocol
Collector sends data to server. 3G Protocol
Data is unencrypted. Encryption Protocol
Data is stored to server. Database File Format
1312pg_40 40 12/4/13 9:07 AM
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42 | December 2013www.power-grid.com
BY DONALD POLLOCK, AMBIENT CORP.
suggests an approach that emphasizes
systemwide common architectures
capable of pushing data collection,
analysis and application to the edge
of the utility network while leveraging
multiple communications technologies.
This approach can maximize value by:
• Reducing the cost of implementa-
tion, communications and opera-
tions;
• Delivering network visibility and
control;
• Providing for new applications and
technology through a flexible foun-
dation; and
• Incorporating and extending the
value of legacy assets.
The approach goes against the tradi-
tional norm for grid modernization of
deploying disparate systems indepen-
dent of one another and, in most cases,
managed independently of one another.
Key factors distinguish the traditional
siloed approach to grid communications
from a platform approach: flexibility,
scalability and security.
he telecommunication industry and
the electricity industry are both
more than a century old. Advances
in information technology and
communications have transformed the
telecommunications industry, but the
electric grid has not changed much
during the past 100 years. One often
hears that were Thomas Edison to
return today, he probably still would
recognize the electric grid. But change is
underway. During the past decade, the
utility industry has embraced the smart
grid, using two-way communication
technology and computer processing
to add intelligence to devices and
processes on the grid.
According to “Smart Grid
Networking and Communications,”
a September report by Navigant
Research, spending on
communications for grid
automation and control is
accelerating as utilities
demand more robust
networks to support a growing range of
applications such as advanced metering
infrastructure (AMI), demand-side
management (DSM), distribution
monitoring and automation, direct load
control and more.
Building the communications
platform for increasingly diverse
applications is challenging. Keeping
pace with advances in technology can
be overwhelming. The dilemma for
many utilities is to make the right
technology investments to guarantee
long-term economic, operational and
environmental benefits. In addition,
there is the need to ensure effective
integration with existing assets.
Avoiding fragmented, isolated and
unconnected systems is paramount
to achieve the cost and operational
benefits that new technologies promise.
Early smart grid adopters identified
challenges and gained significant
insights into best practices in deploying
smart grid communications systems,
according to a June white paper by
Ambient Corp. called “The Smart Grid
Communications Node in a Distributed
Intelligence Grid Architecture.” It
Donald Pollock is global vice presi-
dent of sales and marketing at Ambient
Corp. He has a Bachelor of Science from
Edinburgh University.
app
1312pg_42 42 12/4/13 9:08 AM
December 2013 | 43 www.power-grid.com
prerequisite to building
a smarter grid, but it
also potentially creates
a problem: lots of data.
As technology advances,
more devices will add to the volume
of data generated.
To improve business outcomes,
managing the data deluge will be
vital. A network infrastructure that
incorporates local computing to
empower decision-making at the
edge of the network, in addition to
centralized control, will save time and
cost and will enable the network to
scale to support the addition of future
applications. A distributed architecture
allows utilities to understand their
operations at a more granular level,
which enables more targeted operational
decisions and more efficient operation.
Incorporating local computing to
FLEXIBILITY
Flexibility defines the ability of the
grid to deliver safe, reliable service in
an increasingly dynamic environment:
from generation through distribution
to consumption. It was identified in
the Energy Independence and Security
Act (EISA) of 2007 as an important
characteristic of a smart grid. The EISA
called for a grid that:
• Is “flexible, uniform and technol-
ogy neutral, includ-
ing but not limited
to technologies for
managing smart grid
information;”
• “Accommodates tra-
ditional, centralized
generation and trans-
mission resources
and consumer dis-
tributed resources;”
and
• Is “flexible to incorporate regional
and organizational differences, and
technological innovations.”
These principles are vital to ensure
the emergence of an efficient grid in
a dynamic context. In practice, that
means a smart
grid should
be a system of
interoperable systems—not siloed net-
works.
Interoperability starts at the com-
munications layer. The development of
a robust, Internet Protocol (IP)-based
communications architecture facilitates
end-to-end, two-way
flow of information. IP
provides a common com-
munication protocol that
enables utilities to deploy
different technologies
on different parts of the
grid while being able to
control and manage data
through a unified system.
The use of a common
IP-based communications architecture
or “platform” provides the foundation
for a robust, flexible and scalable smart
grid.
SCALABILITY
Flexible gridwide connectivity is a
NODE-BASED SMART GRID COMMUNICATIONS PLATFORM 1
Flexibility defines the ability of the grid to deliver safe, reliable service in an increasingly dynamic environment.
1312pg_43 43 12/4/13 9:08 AM
44 | December 2013www.power-grid.com
SECURITY
Information technologies
enable a smarter grid but
the networked technolo-
gies required to realize the
potential benefits of a mod-
ern grid also add complexi-
ty and introduce interdependencies and
vulnerabilities. Approaches to secure
these technologies and protect privacy
must be integral to the design and
implementation of smart grid programs
and devices.
Three fundamental design principles
are incorporated in the definition,
design and development of the platform
approach to grid communications and
the devices and software deployed:
• Availability: to prevent
disruptions and loss, providing
reliable operation.
• Integrity: to stop unauthorized
modifications through proper and
secure access controls.
• Confidentiality: to protect data
delivery and prevent unwanted
disclosure.
Adopting an open and standards-
based platform approach reduces
reliance on proprietary solutions and
avoids vendor lock-in. It also provides
the opportunity to develop a single
schema to secure data from multiple
devices, strengthening the overall
security approach.
empower decision-making at the edge
of the network offers faster response to
changing grid or market requirements.
A grid architecture that enables
distributed intelligence provides:
• Real-time monitoring and analysis
on data collected at the edge;
• Reduction of large volumes of
raw data to smaller amounts of
manageable and usable data;
• The ability to select specific types
or subsets of data to be backhauled
to central systems;
• The collection of data only on
exceptions determined by utility-
configured thresholds;
• The reduction in communication
costs associated with transporting
data back to a central data
warehouse; and
• The optimization of data warehouse
storage costs.
The Node: key enabler of a
platform approach. A purpose-
built, modular, IP-based network
device—the smart grid node—
installed at various points on the
grid to perform data collection,
aggregation and management is the
key enabler of a platform approach
to grid communications. This node,
(see figure) specifically designed to
support utility communications, can
be configured to serve different roles
simultaneously within a network.
Other benefits of using a node-based
architecture include:
• Multiple communications,
applications. The node delivers
upstream and downstream high-
speed data communications using
wired and wireless technologies,
including cellular, power line com-
munications (PLC), Wi-Fi, radio
frequency (RF) or combinations of
these protocols. It allows utilities to
mix and match connections to grid
endpoints such as electric meters,
gas meters and sensors by leverag-
ing the modularity of a single piece
of hardware.
• Distributed intelligence. Data
collection, aggregation, analysis,
monitoring and communication
between endpoints and their
appropriate central systems can be
enabled locally at the node.
• Flexibi l i ty. Third-party
applications and devices can be
integrated into the node easily.
This means the utility does not
require a separate, single-purpose
communication network to serve
each new application.
• Future-proofing. The node can be
upgraded remotely to incorporate
new applications and analytics
and to integrate other smart grid
devices and functions as they are
deployed on the grid. In addition,
endpoint devices can be upgraded
using the communications and
applications platform.
A node-based communications and
applications platform incorporates the
best principles of security, scalability
and flexibility to support the integration
of multiple technologies and multiple
applications.
1312pg_44 44 12/4/13 9:08 AM
December 2013 | 45 www.power-grid.com
STANDARDS DEVELOPMENT
SPURS MARKET ACTIVITY
In the United States, with industry
deregulation in the late 1990s, indepen-
dent power producers sought to level
the business and technical barriers to
distributed generation. The problem was
that no widely adopted industry standards
were in place to define the intercon-
nections between indepen-
dent power producers and
the power grid. Rather, thou-
sands of complex interconnec-
tion agreements existed across
the global utility landscape, and
this hindered technology devel-
opment because it was costly for
vendors to develop solutions that
might have to be tailored for so
many disparate applications and
inconsistent agreements from utili-
ty jurisdiction to utility jurisdiction.
This is where the Department of Energy
(DOE) comes into the story. Hoping to
relieve the market stagnation and spur
manufacturing, implementation and
interconnection of distributed generation
technologies, the DOE engaged IEEE in
When the electric power systems
(EPS) that so many utilities
around the world rely on were initially
engineered, the challenge of linking with
active, distribution-level generation and
storage technologies still loomed years
away. That is why the 2003 publica-
tion of IEEE 1547 “Standard
for Interconnecting Distributed
Resources with Electric Power
Systems” was so monumen-
tal—it established for the
market an unprecedented
foundation of credible,
shared engineering practic-
es on how to do something
it wanted to do. IEEE 1547
filled a void.
After that standard’s
release, technologies and
techniques for interconnection technolo-
gies have evolved quickly; largely, inter-
connection has grown more digital and
more controllable. And innovation has
intensified in the most recent years, with
the gathering, global drive for grid mod-
ernization. Development of IEEE P1547a
“Draft Standard for Interconnecting
Distributed Resources with Electric Power
Systems—Amendment 1” is underway
to help the market as it confronts new
challenges in grid interconnection with
the worldwide proliferation of distrib-
uted generation and applications such as
microgrids.
Now, an even longer leap forward
is being undertaken. Utilities, vendors,
independent power producers, regulators
and other stakeholders are being
marshaled to consider the scope and
intentions of a full revision of IEEE 1547
to be completed by 2018.
Might the scope of the standard be
expanded to address transmission, in
addition to distribution? And what
emerging, advanced
technologies and applications—
microgrids, islanding, inverter
communications, ride-through
frequencies/voltages, higher renewable
penetrations, synchrophasors, etc.—
should be addressed in more depth in a
revised standard?
These and other questions must
be addressed before the hard work of
consensus building around and writing
an updated IEEE 1547 begins in earnest.
The unfolding story of distributed gen-
eration rollout and IEEE 1547 is emblem-
atic of the larger relationship of grid mod-
ernization and standards development.
One feeds the other, and smart grid
innovation and deployment are fueled.
Smart Grid Interoperability and Standards Update
BY DICK DeBlasio, CHAIR, IEEE STANDARDS COORDINATING COMMITTEE (SCC) 21
Dick DeBlasio, in addition to his role as
chair of IEEE SCC21 Standards Coordinating
Committee on Fuel Cells, Photovoltaics,
Dispersed Generation, and Energy Storage,
which sponsors and leads the family of
standards for IEEE 1547 and IEEE 2030,
is a member of the IEEE Standards Board
and past member of the IEEE Standards
Association board of governors and chief
engineer with the National Renewable Energy
Laboratory.
1312pg_45 45 12/4/13 9:08 AM
46 | December 2013www.power-grid.com
developing a national standard for this
area.
The IEEE 1547 development project
was launched. Upon its approval by the
IEEE Standards Association (IEEE-SA) in
2003, the standard set forth the indus-
try’s first performance, operation, test-
ing, safety and maintenance criteria and
requirements for distributed resources
with aggregate capacity of 10 megavolt
ampere (MVA) or less at the point of com-
mon coupling.
Since IEEE 1547’s publication, the
standard has been leveraged in federal
legislation and rule making, the delibera-
tions of state regulatory bodies and key
utility engineering and business practic-
es—not only in the United States but also
other markets including Germany, Japan
and Korea. Eighty percent of the United
States’ public utility commissions (PUCs)
have adopted IEEE 1547, and the stan-
dard was referenced in the U.S. Energy
Policy Act of 2005 as the model for inter-
connection services. In other markets,
while it might not have been formally
adopted in whole, IEEE 1547’s material
requirements for how distributed genera-
tors can be linked or disconnected with
the grid have been leveraged in various
documents. IEEE 1547, furthermore, has
been used by utilities in developing tech-
nical requirements and informing inter-
connection agreements with independent
power producers.
NEW MARKET NEEDS DRIVE NEW
STANDARDS DEVELOPMENT
Increased reliance on distributed gen-
eration, as supported by IEEE 1547, is at
the core of some of the smart grid’s most
revolutionary possible benefits, such as
improving grid reliability, reducing the
number and impact of service outages,
bolstering national energy strategies and
slashing environmental impact and utility
and consumer costs. So, it is no surprise
that, in the wake of the standard’s publi-
cation, implementation of solar, wind and
other distributed generation technologies
such as electric vehicle batteries and
associated interconnection methods have
matured.
Moreover, an entire suite of IEEE 1547
interconnection standards
has developed as new mar-
ket needs have arisen in
tandem with the real-world
deployment of distributed
generation. Publication
of the base IEEE 1547
spurred market implemen-
tation, implementation
revealed new challenges,
and new challenges neces-
sitated development of a
gradually expanding range of IEEE 1547
extension standards:
• IEEE 1547.1-2005 “Standard
Conformance Test Procedures
for Equipment Interconnecting
Distributed Resources with Electric
Power Systems;”
• IEEE 1547.2-2008 “Application
Guide for IEEE Std 1547, IEEE
Standard for Interconnecting
Distributed Resources with Electric
Power Systems;”
• IEEE 1547.3-2007 “Guide for
Monitoring, Information Exchange,
and Control of Distributed Resources
Interconnected with Electric Power
Systems;”
• IEEE 1547.4-2011 “Guide for
Design, Operation, and Integration of
Distributed Resource Island Systems
with Electric Power Systems,” and
• IEEE 1547.6-2007 “Recommended
Practice for Interconnecting
Distributed Resources with Electric
Power Systems Distribution
Secondary Networks.”
Development is ongoing, too. IEEE
P1547.7 “Draft Guide to Conducting
Distribution Impact Studies for
Distributed Resource Interconnection” is
underway, as is IEEE P1547.8 “Draft
Recommended Practice for Establishing
Methods and Procedures that Provide
Supplemental Support for
Implementation Strategies
for Expanded Use of IEEE
Standard 1547.” IEEE
P1547.8’s initiation is the
result of market uptake
of energy storage, hybrid
generation storage sys-
tems, intermittent renew-
ables, plug-in electric
vehicles, inverters used in
home solar-power systems
and other technologies in the global smart
grid effort.
Also, there’s the previously discussed
IEEE P1547a, which, when completed,
is designed to help enable greater reliance
on renewable resources.
IEEE P1547a is being created to
address renewables’ intermittency. When
the wind is going to blow and when the
sun is going to shine are not precisely pre-
dictable, and utility EPS demand preci-
sion in terms of interconnection of power
sources if grid reliability, stability, power
quality and worker and consumer safety
are to be preserved. Consequently, the
penetration of renewable sources has had
to be limited to not jeopardize utilities’
traditionally strong profiles in these areas.
Smart inverters comprise a technology
innovation designed to offset the impact
of the intermittency, thus paving the way
for reliance on greater numbers of solar,
wind and other renewable sources. IEEE
1547a, then, addresses the new market
Since IEEE 1547’s publication, the standard has been used by the feds, states and utilities in the U.S. and abroad.
1312pg_46 46 12/4/13 9:08 AM
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Recommendations.” Developing a proj-
ect authorization request is the first
step toward launching a formal IEEE
standard-development project. Once
such a request is approved, a working
group develops a draft standard that
then goes through a series of ballots. All
comments received must be considered.
A 75 percent response from the draft
standard’s ballot group is required—
with 75 percent voting to approve—for
approval.
When executed effectively, the IEEE
process is proven for producing stan-
dards that expand global markets, con-
tribute to interoperability and innova-
tion and accelerate the pace of technical
evolution. These dynamics are evident
in the story of the ever-growing IEEE
1547 family of standards.
need revealed by the proliferation of the
new power electronics: to revisit the
existing limitations on penetration and
operations of distributed resources and
potentially reset guidelines for voltage
regulation and response to abnormal
conditions of voltage and frequency.
Does the amendment need to define
interconnection beyond 10 MVA?
Penetration ceilings vary around the
world (higher in Denmark and Germany,
for example, than in the United States),
and some nations including China seek
to significantly boost reliance on wind
and solar sources. Participants in the
development of IEEE P1547a include
utilities, manufacturers, system integra-
tors, regulators, test laboratories and
academia globally.
After more than 10 years of successful
use in the field (and the grassroots
development of new interconnection
lessons learned and engineering practic-
es in the real world of implementation),
IEEE 1547 is ready for a comprehensive
refresh. PUC commissioners, utilities,
manufacturers and independent power
producers each have a unique per-
spective to offer in helping shape the
direction of the revised standard, and
the coming months will present their
opportunity to weigh in.
IEEE standards are created within a for-
mal, time-tested process that is rooted in
consensus, due process, openness, right
to appeal and balance and is adherent to
the principles and requirements of the
World Trade Organization’s “Decision
on Principles for the Development of
International Standards, Guides and
1312pg_47 47 12/4/13 9:08 AM
48 | December 2013www.power-grid.com
© CAN STOCK PHOTO INC. / KENTOH
BY SCOTT ZAJKOWSKI, IUS TECHNOLOGIES
climates where electric heating is com-
mon might experience peak demand
during the coldest days. A properly
implemented volt/VAR optimization
strategy can reduce the generation capa-
bility needed to satisfy peak demand,
but this requires enough data from the
grid to predict it.
Volt/VAR programs provide utilities
the ability to improve grid reliability
and efficiency significantly, but to imple-
ment volt/VAR optimization (VVO)
or volt/VAR control (VVC) programs,
utilities need real-time data measure-
ment and monitoring throughout the
distribution line. IUS Technologies’ VS
series of sensor products, the VS1000,
he U.S. demand for power is continu-
ing to move along an upward trajecto-
ry that is unlikely to be curbed soon. And
utilities are facing government regulation
to be cleaner and more efficient while still
relying on their aging infrastructure. The
challenge to deliver enough electricity to
an increasing volume of customers while
reducing emissions and keeping neces-
sary generation in check must be met by
smart grid technologies.
The main objectives of transforming
a legacy grid into a smart grid are to
increase efficiency and distribution reli-
ability. Achieving these goals will lead
to a steady stream of power with fewer
interruptions to more people using fewer
resources while emitting fewer carbon
gases. This upgrade is necessary based
on customer demand, both from an
efficiency and cost standpoint, but also
for today’s modern customers who use
increasingly more electronic devices and
adopt new power-hungry technologies
such as electric cars.
EFFICIENCY
When power grid efficiency is spoken
of, it equates to optimization of existing
infrastructure. Grid efficiency is impos-
sible without high-quality, real-time
information, which can be achieved
only through the full integration of
capacitor banks, changers and voltage-
sensing equipment at the midline and
end of line.
Once complete information is avail-
able, utilities are equipped to control
volt/VAR levels, minimizing losses while
increasing efficiency. The largest effi-
ciency gains are obtained here because
when volt/VAR is optimized voltage
can be reduced. The benefits include
reduced demand on power generation
and increased life spans on plugged-in
consumer electronics and utility-owned
assets. This is largely made possible by
managing peak demand. In legacy situ-
ations, the greatest inefficiencies occur
when additional generating power is
needed to satisfy relatively brief periods
of peak demand, which can be difficult
to predict. These periods vary depend-
ing on geography. In warm regions,
they are typically during summer when
air conditioners are running, but cooler
Scott Zajkowski is part of the North
American Business Development group with
IUS Technologies, which develops end-of-line
devices for the smart grid, including the Born
Smart series of sensors. He has an MBA from
Indiana University Kelley School of Business
and an undergraduate degree in packaging
engineering from Michigan State University.
Previously Zajkowski worked at International
Truck & Burger King in packaging engineer-
ing and management.
1312pg_48 48 12/4/13 9:08 AM
December 2013 | 49 www.power-grid.com
OH
communication technology—a prob-
lem because communication more fre-
quent than 15-minute intervals is rare.
THE DYNAMIC MODERN GRID
Power use is changing quickly. As
more alternative energy resources come
online, it adds a layer of complication
to maintaining optimal voltage levels.
Many utilities also allow customers to
generate their own power and push it
back into the grid when they are not
using it.
Smart meters relay this informa-
tion back to the utility
about how much power
is being fed back into
the grid, but workers on
the line also need this
information. For exam-
ple, imagine a worker
is conducting mainte-
nance, thinking a line is
not live because power
has been disrupted from
the generation end. If a
customer generating his
own power is feeding
the line, this can create unknown live
wires and present real danger to util-
ity workers. Smart line sensors build a
much more complete picture of what
is occurring on the line at any time,
improving safety for anyone who comes
into contact with it.
Utilities across the nation are imple-
menting many innovative programs to
improve efficiency and distribution reli-
ability: Demand response, smart meters
and secondary transformer monitor-
ing are all steps in the right direction.
Voltage optimization and a self-healing
grid, however, can be realized only
through the integration of a fully smart
grid.
VS2000 and VS3000, play a significant
role in this distribution automation
application. To implement grid opti-
mization, utilities need to know what
is happening on their distribution or
feeder lines, and currently utilities lack
this knowledge. They are unaware of
voltage, VAR, harmonics and other vital
power measurement levels on their
feeder lines. The condition and load
on these feeder lines vary by day and
require real-time intelligence through-
out the distribution system.
Voltage sensors can provide utilities
with powerful, flexible and economi-
cal solutions for single-or three-phase
measurement, monitoring, alarming
and recording. The VS products allow
electric utilities to monitor voltage and
current anywhere along the distribution
line, providing real-time data to make
decisions at the edge of the electric grid.
When lowering the voltage levels on
the distribution line, accuracy is para-
mount. Implementing sensor points
and VVO or VVC software allows the
utility to be more responsive to changes
in the distribution line.
Linked sensing equipment and con-
trols that monitor and report power
usage in real time can provide utili-
ties with the necessary information to
reduce voltage without risking a drop
in the amount of electricity provided to
customers. Even a 3 to 5 percent drop
yields significant results that lead to
measurably lower costs, the prolonged
life spans of assets and reduced main-
tenance expenses. In addition, lowered
voltage levels enable utilities to meet
government regulations for generation
and emissions. When voltage levels are
dropped without instant demand data,
however, service disruptions might
occur.
DISTRIBUTION RELIABILITY
One of the most troublesome power
distribution issues for customers and
utilities is outage notification. On a
traditional grid, customers who experi-
ence service disruptions must notify
their utilities, which must dispatch line
workers to locate and correct the prob-
lems. Each with his or her own thresh-
old and requirements, a line work-
er—after the quota is met—then must
search and find disruptions. This takes
time and money and causes frustration.
Sensing technologies that construct
the smart grid can detect
problems as they occur
and, if robust enough,
can solve problems
without human inter-
vention, thus a “self–
healing” smart grid.
When smart sensors
detect problems, they
notify reclosers, which
isolate locations of the
issues and often reroute
power and avoid dis-
ruption. If a worker is
required to correct a physical problem,
the exact location is provided so no
time is wasted investigating and trou-
bleshooting the line, leading to shorter
outages and happier customers.
In a fully self-healing scenario, sen-
sors report the problem and confirm
the system has corrected itself. Voltage
levels automatically optimize and this
information is reported to the utility
so it knows no further action is neces-
sary. Retrofitting legacy equipment has
made parts of this process possible on
traditional grids, but full self-healing
requires integration of equipment that
can communicate in real time. Most
retrofitted equipment relies on cellular
As more alternative energy resources come online, it adds a layer of complication to maintaining optimal voltage levels.
1312pg_49 49 12/4/13 9:08 AM
PRODUCTS
50 | December 2013www.power-grid.com
Load Control Module
The Sensus FlexNet LCM for use in residential and com-
mercial applications enables electric utilities to shed load
by controlling power to energy-intensive appliances with-
out a ZigBee-enabled meter. The DR application allows
utilities to create, monitor, schedule and manage load
shedding programs and events using the Sensus FlexNet
multi-application, wireless communications system, which
is based on open standards, interoperability and FCC-
licensed spectrum. The FlexNet system enables utilities to
gather data that confirms which devices are participating
in the load shedding event and to know if the device is or
has been tampered with. The Sensus TC240RAC-S load
control module includes a powerful, 2-watt FlexNet radio
that allows direct, two-way communication between the
LCM and the tower with no need for pairing to a meter
or other devices. Direct communication facilitates tamper
alarm monitoring and over-the-air configuration, which
enables LCM capabilities to be upgraded as needed. The
Sensus LCM is compatible with any demand response
management application.
Sensus
GO TO HTTP://PGI.HOTIMS.COM FOR MORE INFORMATION
Dual-hinge Diagonal Cutter
The Knipex Tools LP patented, dual-hinge designed
high-leverage diagonal cutter, TwinForce, achieves
impressive cutting performance with two, welded,
forged-in axles and
prec is ion-mi l led
functional surfaces.
This 7-inch tool cuts
like a 10-inch tool. With its compact size, it can fit into
tight areas that a 10-inch tool cannot. The dual-hinged
design enables a high transmission of force, permit-
ting cutting performance with considerably less strain,
which is beneficial for cutting for long periods and for
repetitive use. It requires approximately half of the
strength to cut medium to hard wire when compared
with other high-leverage diagonal cutters of the same
size, even at the cutting tip.
Knipex Tools
GO TO HTTP://PGI.HOTIMS.COM FOR MORE INFORMATION
Power Distribution
Planning Software
The Siemens Low and
Medium Voltage Division has
extended and updated the software tools Simaris design,
Simaris project and Simaris curves. The new versions sup-
port electrical designers even better in planning electric
power distribution systems for industrial applications and
infrastructure projects. Designers can directly factor in
the functional endurance of plants in the event of fire as
legally stipulated in certain application cases, for instance.
Separate protection of parallel cables in feed-in circuits
can be determined right in the planning stage. This
enables an even more realistic mapping of the network
and installations as planned. All product data kept in the
tools was adapted to the current Siemens product portfo-
lio. Owing to the extension of the country-specific systems
data stock, in particular the integration of more medium-
voltage switchgear, transformers and distribution boards,
Simaris project can be used for planning projects in Brazil,
Turkey and Russia besides Germany, Austria, Switzerland
and Poland.
Siemens
GO TO HTTP://PGI.HOTIMS.COM FOR MORE INFORMATION
Smart Communications Technologies
A Harris Utilities SmartWorks and Tantalus strategic
partnership will enable both organizations to better serve
public power and mid-market utilities. Through its new
partnership with SmartWorks, Tantalus will supplement
its communications technology offering with smart appli-
cation solutions including utility decision management
(UDM), customer engagement (CES) and meter data
management (MDM) solutions, including: SmartWorks
Compass, a UDM solution composed of robust analytics,
metrics, visualization and automation tools; MeterSense,
an advanced MDM solution that enables utilities to
improve business processes and enhance customer ser-
vice; and CustomerConnect, a CES and Web-based data
presentment tool that enables consumers to access and
interpret their consumption patterns.
SmartWorks and Tantalus
GO TO HTTP://PGI.HOTIMS.COM FOR MORE INFORMATION
1312pg_50 50 12/4/13 9:08 AM
CALENDAR
December 2013 | 51 www.power-grid.com
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1312pg_51 51 12/4/13 9:08 AM
52 | December 2013www.power-grid.com
1980Fiber-optic Link is Better
A test installation at Pennsylvania Power & Light
shows that a fiber-optic entrance link for transmission
line protective relaying will prove superior in
dependability and security to a regular leased line.
1999Yikes! Y2K Prompts Fear
As fears of hacker threats intensify, the
Nuclear Regulatory Commission and the
U.S. General Accouting Office are at odds
over Y2K nuclear plant preparedness.
1930Mountain States Power Co.
Line Truck With Live Line Tools
O F E L E C T R I C I T Y H I S T O R Y — D E C E M B E R
1960AEP workmen perform live-line maintenance
barehanded or with ordinary work gloves.
As long as the workmen are insulated from the
ground and working at the same potential as the
energized conductor, they can work safely, saving
significant man-hours over conventional methods.
1312pg_52 52 12/4/13 9:08 AM
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1312pg_C3 3 12/4/13 9:09 AM
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Fo r t he i ndu s t r y ’ s c a r e e r - m ind e d p r o f e s s i ona l s WINTER 2013
A sup p l emen t t o P ennWe l l pub l i c a t i on s | w w w. P ennEne r g yJ O B S . c om
Key Considerations for U.S. Energy Policy
Reexamining U.S. Energy Policy Through Alternative Fuels
TRAINING INSIGHTS
Millennials Take On Our Increasingly Complex World
REGIONAL INSIGHTS
Electricity Diversity Takes Shape in the Middle East
New Policies Develop Asia-Pacifc Energy Future
1311PEJEW_C1 1 11/6/13 1:08 PM
1311PEJEW_C2 2 11/6/13 1:08 PM
2 EDITOR’S LETTER
The Policy Issue
Dorothy Davis Ballard, PennWell
3 Key Considerations for U.S. Energy Policy
Charles Dewhurst, BDO USA, LLP
5 Reexamining Outdated U.S. Energy
Policy Through Alternative Fuels
Robert Johnsen, Primus Green Energy
7 TRAINING INSIGHTS
Millennials Take On Our Increasingly Complex World
Dr. Scott M. Shemwell, Knowledge Ops
10 ORGANIZATIONAL INSIGHTS
Integrated Management Systems meet
policy and regulation demands
Brad Kamp, Interliance Consulting, Inc.
12 REGIONAL INSIGHTS
MIDDLE EAST
Electricity Diversity Takes Shape in the Middle East
PennEnergy.com
15 ASIA–PACIFIC
New Policies Develop Asia-Pacifc Energy Future
PennEnergy.com
w w w . P e n n E n e r g y J O B S . c o m
WINTER 2013
A PENNWELL PUBL ICAT ION
Stacey Schmidt, Publisher
Dorothy Davis Ballard, Content Director
Hilton Price, Editor
Cindy Chamberlin, Art Director
Daniel Greene, Production Manager
Tommie Grigg,
Audience Development Manager
PennWell Corporation
1421 South Sheridan Road
Tulsa, Oklahoma 74112
918 835 3161
PennWell.com
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1311PEJEW_1 1 11/6/13 1:10 PM
2 Winter 2013 | FOR JOB OPPORTUNITIES, VISIT www.PennEnergyJOBS.com | EnergyWorkforce
Ed i to r ’ s
Le t t e r
IN researching and gathering together resources for the last issue of 2013, there
emerged a theme we had not originally considered – policy. While examining
industry milestones and their infuence on the energy workforce, what continued to
stand out are the existing and evolving policies behind these developments.
We open the fnal issue of 2013 with two timely examinations of U.S. energy policy
from industry leaders at BDO and Primus Green Energy. Our frst editorial feature
presents key considerations for the U.S. on page 3, highlighting the need for a cohesive
national energy policy in ensuring continued progress.
Explored next are the outdated U.S. energy policies as they apply to alternative fuel
resources on page 5. At the center of this editorial is an examination of the current
Renewable Fuel Standard and the limitations it imposes on the energy industry through
its outmoded structure.
PennEnergy then offers
international insights on the
infuence of policy in an
examination of emerging
energy diversity in the
Middle East on page 12 and
developments in the Asia-
Pacifc region on page 15.
Our winter edition is
rounded out by a look at the
policies that shape the business of energy through its workforce. Learn the challenges
and advantages for emerging Millennials in the industry on page 7 as they navigate a
corporate culture still working to catch up with more stringent modern policies.
Finally, we are offered a look at how integrated management systems can help meet
the demands of policy and regulation on page 10. Find out how companies are using
IMS to stay compliant and save money.
What we have put together for this issue offers a lot of insight, but in truth, just
brushes the surface. Our goal is to encourage new dialogue on the impact of policy on
the energy industry. We want to hear more from you. Who else could paint the most
honest picture of what the evolving shifts in global policy have meant and may mean
for us going forward?
So be certain to join the conversation at PennEnergy.com and connect with us on
Google +, LinkedIn, Facebook, and Twitter. You will also fnd us at POWER-GEN
International November 12-14 at the Orange County Convention Center in Orlando, FL.
Carpe diem!
—Dorothy Davis Ballard
The Policy Issue
“Our goal is to encourage new
dialogue on the impact of policy
for the energy industry.”
1311PEJEW_2 2 11/6/13 1:10 PM
Cover STORY
EnergyWorkforce | FOR JOB OPPORTUNITIES, VISIT www.PennEnergyJOBS.com | Winter 2013 3
Key Considerations for U.S. Energy PolicyBy Charles Dewhurst, leader of the Natural
Resources practice at BDO USA, LLP
IN March 2012, when President
Obama addressed Prince George’s
Community College in Maryland, he
stated that the United States “need[s] an
energy strategy for the future – an all-
of-the-above strategy for the 21st century
that develops every source of Ameri-
can-made energy.” Later, in June 2013,
Obama delivered a speech on climate
change at Georgetown University, ap-
plauding the United States’ progress in
the clean energy sector and its strides to-
ward energy independence. Since 2012,
the U.S. energy industry has certainly
made much progress toward boosting
its production and exportation of energy
resources, but regulatory and political
uncertainties persist and could threaten
future growth. Developing a compre-
hensive and cohesive national energy
policy now will help us capitalize on
the momentum of the U.S. energy sec-
tor and ensure its future growth. This
policy should be forward-looking, aim-
ing to secure U.S. energy resources and
capabilities for years to come.
While renewable energy often seems
to be at odds with more traditional sources
like oil and gas, this dynamic is counter-
productive. The United States requires
regulations and policies that allow these
energy sources to complement, rather
than contradict, each other. There are
benefts and drawbacks to every form of
energy, yet each has an important role to
play in the United States’ energy industry
and economy overall. Between now and
2040, the Energy Information Adminis-
tration (EIA) predicts that 31 percent of
new U.S. electricity-generating capac-
ity will come from renewables, while
natural gas will account for 63 percent.
While renewable energy may be more
environmentally friendly, its infrastruc-
ture can be relatively costly to build and
operate, and is usually located in geo-
graphically remote areas that cannot ser-
vice large, urban areas easily. Moreover,
many forms of alternative energy are, by
their very nature, intermittent and sub-
ject to occasional interruptions. At the
same time, traditional sources like oil
and gas are much less expensive to pro-
duce and excellent at providing a con-
sistent supply of energy, but also have
a greater environmental impact. U.S.
energy policy should refect the need for
a variety of energy sources to operate and
fourish concurrently in order to support
the country’s overall needs.
Coal also has a role to play in bolster-
ing the United States’ energy economy.
While the coal industry has been criti-
cized for its greenhouse gas emissions, it
is still a dominant player in the energy
sector. According to the EIA, U.S. esti-
mated recoverable coal reserves are the
largest in the world, and our exports are
rising as other countries, such as China,
struggle to meet their growing energy
needs. The EIA reports that from 2000-
2010, an average of fve percent of U.S.-
produced coal was exported each year. In
2011, that number doubled to 10 percent,
and it has been growing since. The EIA
notes that, despite coal serving as the
largest source of power generation for the
United States for more than six decades,
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its annual share of total net generation for
the country was only 37 percent last year,
down 26 percent since 2007. This decline
is partially due to some power producers
now favoring less expensive, more envi-
ronmentally friendly natural gas. Yet as
long as coal remains plentiful, exportable
and relatively inexpensive to produce, its
future should be considered in any com-
prehensive energy policy.
Our energy policy must also grap-
ple with ensuring that the United States
has the right infrastructure to deliver its
energy products to market. The approval
of the Keystone XL pipeline would be
a step toward alleviating a shortage in
infrastructure capacity that limits the
industry’s ability to take full advantage of
the U.S. oil and natural gas renaissance.
While the United States and Canada
wait for Obama to sign off on the cross-
border segment of the massive project,
both have begun tentatively outlining
and planning the logistics for the domes-
tic portions of the pipeline. The energy
industry continues to move projects for-
ward, but uncertainty remains around
whether policy decisions will ultimately
permit these projects to come online.
As the industry waits for further clarity
on energy policy at the national level, it
continues to keep an eye on state-level reg-
ulatory changes. These do not supplant the
need for a national policy regime; however,
this decentralized regulation allows states
to individually determine how to most
effectively and effciently exploit their own
resources. Each state faces unique oppor-
tunities, as well as unique policy pressures
from its residents, suggesting that in some
cases, policy is best determined on a local,
specifc basis.
Overall, a comprehensive national
energy policy is essential to positioning
the United States as a leader in the global
energy market. As the international energy
landscape continues to evolve, the United
States is poised to become a net energy
exporter and to fulfll burgeoning global
demand. However, in order to take advan-
tage of this opportunity, the United States
requires a policy with a clear-eyed vision of
what the energy industry needs now, and
what it will need in the future. ⊗
1311PEJEW_4 4 11/6/13 1:10 PM
EnergyWorkforce | FOR JOB OPPORTUNITIES, VISIT www.PennEnergyJOBS.com | Winter 2013 5
Reexamining Outdated U.S. Energy Policy Through Alternative FuelsBy Robert Johnsen, CEO, Primus Green Energy
THE abundance of natural gas
brought about by new drilling
techniques has led to a profound
shift in the North American energy mix,
enabling a new era of energy indepen-
dence by reducing reliance on petro-
leum and coal.
The natural gas boom has been em-
braced by the governments of both the
United States and Canada, with the
United States in particular positioning
natural gas as the centerpiece of an “all
of the above” energy strategy that pro-
motes a balanced mix of energy sources.
While this strategy has been welcomed
by the oil and gas industry, it has led to
some unease in the renewable energy
sector, which fears that support for nat-
ural gas could stunt the administration’s
focus on the adoption of clean energy
technologies.
In reality, however, the administration
has continued to support both tradition-
al and renewable energies, believing that
natural gas can serve as a “bridge” to
renewable energy that enables a reduc-
tion in carbon emissions while buying
time for the renewable energy sector
to improve economics and effciencies.
This all-of-the-above strategy is personi-
fed by Energy Secretary Ernest Moniz,
a staunch believer in renewable energy
who has also promoted the use of natu-
ral gas to curb carbon emissions.
Unfortunately, however, some ar-
eas of U.S. energy policy are lagging
behind this all-of-the-above strategy.
One sector in which this phenomenon
is very apparent is alternative fuels.
Alternative fuel technologies pro-
duce fuels from any non-petroleum
source, such as biomass, natural gas,
municipal solid waste, coal or other
carbon-based feedstocks. The main
policy related to alternative fuels is the
Renewable Fuel Standard (RFS), a pol-
icy dating back to 2005 that mandates
minimum requirements for how much
alternative fuel must be blended into
commercial transportation fuels. The
amount of alternative fuel to be blended
increases each year, with an end goal of
36 billion gallons by 2022.
In its frst few years, the RFS success-
fully encouraged the development of al-
ternative fuel technologies, leading to a
cleaner transportation fuel mix. For ex-
ample, ethanol comprises 10 percent
of most fuels sold in gas stations today.
But, the RFS was created in the context
of the alternative fuel technologies that
were available in the mid- to late-2000s,
which were primarily frst-generation bio-
fuels that used corn as the feedstock and
produced ethanol as the end product.
In recent years, advanced alternative
fuel technologies have been introduced
that open up new feedstock and end prod-
uct opportunities, but the RFS has not
been modifed since 2007 to accommo-
date them. An example is Primus Green
Energy’s STG+ technology, which can
convert a variety of feedstocks, includ-
ing biomass and natural gas, into drop-
in transportation fuels that can be used
directly in vehicle engines without the
“blend wall” that is required for the use of
frst-generation biofuels such as ethanol.
The limitations of the current RFS
are apparent in the biofuel industry’s fail-
ure to meet minimum mandates. The in-
dustry’s continued inability to produce
1311PEJEW_5 5 11/6/13 1:10 PM
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6 Winter 2013 | FOR JOB OPPORTUNITIES, VISIT www.PennEnergyJOBS.com | EnergyWorkforce
enough biofuel to meet federal mandates
has prompted the American Petroleum
Institute (API) to fle a lawsuit against the
U.S. Environmental Protection Agency
arguing that the RFS is an unrealistic
mandate that unfairly penalizes oil and
gas companies for failing to incorporate
the mandated amount of biofuels into
their transportation fuels.
There is a way, however, to bring RFS
policy into line with the government’s all-
of-the-above stance on the energy mix –
and that is to include fuels produced from
natural gas in the RFS standard.
One of the most recent developments
in advanced alternative fuel technology is
the ability to use natural gas as a feedstock
to produce transportation fuels. There are
several companies, including Primus, Cel-
anese and Coskata, who originally set out
to commercialize biomass-based alterna-
tive fuel technologies, but who recognized
that using natural gas as a feedstock repre-
sented a rare opportunity to bring these
advanced technologies to market more
quickly while simultaneously moving clos-
er toward energy independence.
Despite the fact that natural gas is
cleaner burning than petroleum, the
RFS does not currently include fuels
derived from natural gas, meaning that
the cleaner-burning fuels being produced
by Primus and other companies cannot
be used to fulfll the optimistic alterna-
tive fuel mandates that are not current-
ly being met. Although there have been
attempts in Congress to expand the RFS
to include natural gas-derived fuels —
most recently by U.S. Rep. Pete Olsen
(R-Texas) — so far, this legislation has
come to naught.
If the administration is truly commit-
ted to an all-of-the-above energy policy,
and if it truly does see natural gas as a
bridge, it should revise its fagship ener-
gy policies to refect the latest develop-
ments in the alternative energy sector.
The goal of such policies should be to
support technologies that hold the great-
est potential to make the administration’s
energy strategy a reality, rather than those
whose limitations have been highlighted
by their failure to produce enough fuel to
satisfy federal mandates. ⊗
1311PEJEW_6 6 11/6/13 1:10 PM
EnergyWorkforce | FOR JOB OPPORTUNITIES, VISIT www.PennEnergyJOBS.com | Winter 2013 7
Millennials Take On Our Increasingly Complex WorldBy Dr. Scott M. Shemwell, CEO of Knowledge Ops
ON January 1st at 0348 hours a
young engineer employed by
a service company is trying
to address a problem she has encoun-
tered with a compressor on a drilling
rig in the deepwater Gulf of Mexico.
She graduated from college three years
ago and went to work for a large energy
services company. However, several
months ago she changed jobs and is
now on her frst offshore hitch as team
leader with her new company, a similar
size global energy services company.
She is a competent engineer but is
uncertain what the company policy
is regarding a piece of rotating equip-
ment that while seemingly malfunction-
ing does not appear to jeopardize safe-
ty, the environment or production at the
present time. But she worries that the sit-
uation could get worse.
A quick call to the “graveyard” shift
at the company onshore Operations
Center is not reassuring. Staffed by
those who are too junior to be on vaca-
tion during the holiday season, the en-
gineer she talked with had only been
with company three years and actually
had less feld experience than she did.
His supervisor was not encouraging ei-
ther. Should he call and wake experts
at this early hour?
Adding to the problem, the com-
pressor’s data plate was mostly unread-
able. And of course, a famous Texas blue
northern was blowing through. High
winds, rain and cold temperatures fur-
ther impaired proper equipment identi-
fcation, much less working conditions.
Both the feld engineer and the oper-
ations engineer are aware that their com-
pany signed a Bridging Document with
their customer as part of the new Safety
and Environmental Management Sys-
tem (SEMS) regulatory requirements
and both had attended the appropriate
training for this project. Both are knowl-
edgeable that the Stop Work Authority
(SWA) gives them the right and even
the obligation to dramatically intervene
with operations if they feel it necessary.
As a new mom, the feld engineer
is concerned that she might develop a
reputation in the company as “fakey”
if her next decision turned out to be
a mistake. The engineer at the opera-
tions center was receiving real time data
feeds from the rotating equipment but
he could not “feel” the vibrations as the
on-site individual could and the equip-
ment was still within tolerances.
Horns of a Dilemma
The engineers in our story are compe-
tent, qualifed individuals doing a great
job. Early in their careers, they are the
vanguard of feld operations. Millennials
by label, they are technologically savvy
and among the best and the brightest
in their felds.
Things never go “bump in the night”
TRAINING Insights
1311PEJEW_7 7 11/6/13 1:10 PM
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EnergyWorkforce | FOR JOB OPPORTUNITIES, VISIT www.PennEnergyJOBS.com | Winter 2013 9
during daylight hours in perfect weath-
er, hence the colloquial term. Moreover,
the personal stress of a new mother con-
cerned about her reputation and oppor-
tunities for promotion resulting from just
another day at the “offce” should not be
underestimated by those desk bound or
later and more secure in their careers.
The real world of feld operations can
be very unforgiving even when the results
turn out OK. All of the individuals in our
story have signifcant “skin in this game.”
It is fne to “empower” people in the
team building sessions. It is an entirely dif-
ferent story in the middle of the preverbal
stormy night when one’s career and reputa-
tion are on the line. Field personnel must
believe they company will stand behind
their decisions, right or maybe less so.
Enablement
These best and brightest can only be as
good as their supporting infrastructure.
These individuals not only face engineer-
ing issues, any actions they take must be
in accordance with company policy, the
Bridging Document and various regu-
latory compliance requirements as well.
This is a lot to put on the plate of an en-
gineering team.
However, since their childhood these
individuals have been online. Our feld
engineer mother looks in on her infant
son at day care from her smart phone from
a hundred miles offshore. The operations
center engineer routinely Skype’s with his
girlfriend, a physician, who is in east Afri-
ca serving with Doctors Without Borders.
These individuals are at the top of
their technological game. However, they
lack the feld engineering experience of
their more seasoned colleagues. This rep-
resents a demographic challenge for orga-
nizations in the middle of the Big Crew
Change. How do these young people
come up to speed—quickly?
Organizations not only depend on the
individuals depicted in our story for their
bottom line, shareholder value is at risk if
they cannot prevent the next major me-
ga-disaster. And what if they can prevent
a minor incident?
Loss time, loss production, loss any-
thing has economic consequences. Most
organizations run on margins that are
thinner than they would like. Oil com-
panies are included in this group. More
importantly, energy service provider
margins can be even lower. This busi-
ness model pushes our engineers to low-
er costs, reduce downtime and in some
cases push the envelope.
Millennial Transformation
Out engineers appear to have the deck
stacked against them. Normal Accident
Theory (NAT) with its roots in the Three
Mile Island nuclear power plant incident
suggests that tightly coupled technologies
with invariant sequences and limited slack
such as deepwater drilling operations will
have accidents in the normal course of
events. In other words there is a certain
inevitability of a major incident on their
watch. Maybe not during this rotation but
a certain possibility during their careers.
However, these Millennials have a safe-
ty arsenal their parents did not—a new
business model that capitalizes on their
technology prowess. The emerging feld
of High Reliability Theory (HRT) “empha-
sizes are a strategic prioritization of safety,
careful attention to design and procedures,
a limited degree of trial-and-error learning,
redundancy, decentralized decision-mak-
ing, continuous training often through
simulation, and strong cultures that cre-
ate a broad vigilance for and responsiveness
to potential accidents.”
Arm feld engineers and graveyard op-
erations watch colleagues with HRT driv-
en policy and associated tools and then
get out of their way. A strategic or system-
ic safety model with a holistic perspective
of the life cycle the process coupled with
truly empowered key personnel trained
with the latest learning tools in a strong
Culture of Safety offer a new perspective
for a new workforce.
Aircraft pilots routinely retain and up-
grade their skills in sophisticated fight
simulators. “What If” scenarios, where-
by the team can learn by trial and error
environment where the worst result is a
computer animated “do-over.” Other in-
dustry sectors train using this well docu-
mented successful approach.
In a true Culture of Safety a mom
would not worry about her job or career
if she erred on the side of safe operations.
She would not be labeled nor would her
co-worker in the Operations Center hesi-
tate to wake up the experts New Year’s Eve.
Finally, if the maintenance history
and all updated equipment manuals were
available on a Smart Tablet with training
videos and animation support, trepida-
tion by those new to the company/pro-
cess would lessen. Organizational poli-
cy, its Operations Management System
and bridging documentation built into
the workfow will enable better decision
making in the High Reliability Organi-
zation of the near future.
A decade ago the digital oilfeld was
labeled the Digital Oilfeld of the Future.
Integrated Operations is a common mod-
el today.
The Millennial’s World-of-the-
Future will mirror the concepts of an
HRO. Will she be working for you or
your competitor? ⊗
1311PEJEW_9 9 11/6/13 1:10 PM
10 Winter 2013 | FOR JOB OPPORTUNITIES, VISIT www.PennEnergyJOBS.com | EnergyWorkforce
Integrated Management Systems meet policy and regulation demandsBy Brad Kamph, President, Interliance Consulting, Inc.
ECONOMICS, technology, and gov-
ernment policy are transforming
the energy feld and challenging
the business-as-usual approach to com-
pany governance. The rise of “can’t
fail” functions—safety, environmental
management, regulatory compliance,
system integrity, and others—are now
forcing pipeline, gas, and power utility
companies to consistently deliver high-
level performance in all aspects of their
operations.
The stakes are high, and the um-
pires—energy regulators, legislators,
watchdog groups, and the general pub-
lic—are watching. The umpires are
looking for guidelines that show a com-
pany runs its everyday operations with
the best interests of employees, the pub-
lic and the environment in mind.
It’s a must-win match.
How are companies playing to win?
Companies can efficiently comply
with policies and regulations through
implementing an integrated manage-
ment system (IMS)—a method for as-
suring that everyone works together in
the most effective manner possible. An
IMS is accomplished by re-engineering
business functions and processes so ev-
ery employee—from CEO to feld tech-
nician—understands and executes the
company plan.
The bottom line: Companies using
an IMS can more easily adhere to regu-
lations, perform well in audits and save
money by implementing operational
effciencies.
A beginning with the end in mind
Implementing an IMS begins with the
evaluation of a single area or an entire
company. Either way, the frst assess-
ment is of the current management sys-
tem’s effectiveness.
Starting at the highest level of the
company, a well-designed management
system incorporates the priorities and
objectives of the organization into ev-
eryday activities in a manner that is log-
ical, measurable, and self-reinforcing.
Authority is aligned with responsibility,
so each employee knows what to do and
has the tools to do it. Targets are estab-
lished that are tied to measurable out-
comes. An objective process is put in
place to determine progress and identi-
fy gaps. There is also a built-in mecha-
nism to correct problems and improve
performance over time.
Interliance client Wild Well Control,
the world’s No. 1 oil and gas well emer-
gency response company, implement-
ed a safety management system that
lowered its underwriting costs and re-
duced its equipment and personnel loss-
es to zero. Casey Davis, Wild Well Con-
trol’s vice president of Health, Safety and
Environment, says, “It’s very unusual to
have a safety management system that
is compliant to multiple regulatory re-
gimes and is also an effective manage-
ment tool. That’s how thorough our
management system is. We save over $2
million per year in underwriting costs
and operating expenses.”
A results-oriented management system
Along with energy-sector companies,
Interliance has also helped utility com-
panies to create an IMS. One in particu-
lar also included implementing custom-
ized training and knowledge transfer.
With 17,000 employees, First-
Energy is one of the nation’s largest
ORGANIZATIONAL Insights
1311PEJEW_10 10 11/6/13 1:10 PM
EnergyWorkforce | FOR JOB OPPORTUNITIES, VISIT www.PennEnergyJOBS.com | Winter 2013 11
investor-owned electric systems, serving
six million people with 23,000 megawatts
of capacity and managing distribution
lines spanning 194,000 miles.
When FirstEnergy realized that 90
percent of its senior workforce was going
to retire within fve to seven years—and
that it took that long to train new employ-
ees, they faced the potentially devastating
results of a retirement exodus of this size.
Brian Wilkins, a long-time staff member
at First Energy, was tasked with capturing
workforce knowledge and transferring it
to new employees. He turned to Interli-
ance for help.
First, he developed, with several
professors at local universities, a fully-
accredited, two-year college program to
train future employees in critical skill
sets. Then, FirstEnergy worked with In-
terliance to reduce on-the-job training
from a two- to three-year process down
to just 18 months.
Other aspects of the management sys-
tem included compliance and internal
and external audits, which were required
every six months. Another element was
linking on-the-job-training to perfor-
mance reviews and pay. The compli-
ance of the people executing the on-the-
job-training and management system was
tied to their performance review, which
was tied to their pay.
The management system helped save
the company about $5 million annually,
says Wilkins.
Improvements that pay for themselves
To put it simply, when it comes to com-
pany management, everything is con-
nected. For example, problem solving
can involve multiple departments across
a company and have a high potential for
conficting interests. How do you man-
age this process, effectively handle tough
decisions and mitigate business risk? By
creating a system that defnes a compa-
ny’s core functions and processes, shows
how they overlap and interact with each
other, integrates all inputs, and is easily
used throughout the entire organization.
Companies using integrated manage-
ment systems experience fewer failures,
respond more effectively to challeng-
es, and deliver consistently better safety
and compliance performance over time.
These systems become a great solution to
regulatory worries, reduce operating risk
and improve profts, creating the perfect
outcome: better safety and compliance
improvements that pay for themselves. ⊗
Interliance Consulting, Inc., is a world leader in architecture and implementation of integrated management systems for “can’t fail” business functions such as Health, Safety and Environment, Emergency and Crisis Response, Regulatory Compliance, and Risk Management. For further information, contact Brad Kamph. Interliance Consulting, Inc. 200 E. Sandpointe Ave., Suite 510 Santa Ana, CA 92707 Phone: 855.540.8889 Web site: www.interliance.com Email: [email protected]
1311PEJEW_11 11 11/6/13 1:10 PM
12 Winter 2013 | FOR JOB OPPORTUNITIES, VISIT www.PennEnergyJOBS.com | EnergyWorkforce
Electricity Diversity Takes Shape in the Middle EastBy PennEnergy.com
IN the last year, a number of coun-
tries in the Middle East have revised
their energy policies to diversify
their electricity generation and increase
the use of cleaner, renewable power.
Though the Middle East is home to
some of the largest oil and natural gas
producers on the planet, countries
within the region are investing more
money in solar, geothermal and other
renewable sources and encouraging en-
ergy effcient projects.
Saudi Arabia aims to expand
renewable energy market
In July, Saudi Arabia invested $109 bil-
lion in renewable energy development.
The investment will help the country
reach its goal of generating a third of its
energy from solar, wind and other re-
newable sources of power, Arab News
reported earlier this year.
Also in July, the King Abdullah City
for Atomic and Renewable Energy (KA-
CARE) released details of its new Na-
tional Energy Plan, which details just
how much renewable energy it aims to
generate. According to the plan, Sau-
di Arabia will add 41 gigawatts of solar
power, 1 GW of geothermal and 9 GW
of wind power. The country also plans
to add 18 GW of nuclear power and 3
GW of waste-to -energy, according to the
Arab News.
In December 2012, Saudi Arabia
announced its first large-scale solar
project would be complete by the end
of the year. The installation produces
100 megawatts at full capacity - enough
to power 20,000 homes. The project will
also help Saudi Arabia meet its goal of
having renewable energy account for 7
percent of its total power supply by 2020.
“We truly believe solar will be a ma-
jor contributor to meeting our own re-
quirements,” said Sultan Ahmed Al-Ja-
ber, the UAE’s special envoy for Energy
and Climate Change, the Saudi Gazette
reported. “We are not like many oth-
er countries today that have a desper-
ate need for complementary sources of
power. We are looking at it from a stra-
tegic point of view ... we want to become
a technology player, rather than an en-
ergy player.”
UAE energy diversifcation
The United Arab Emirates has also
made major investments in energy gen-
eration in the past year. In July, Ministry
of Energy Suhail Al Mazrouie said the
country would invest $25 billion over
the next fve years to explore new natu-
ral gas felds and increase its gas output,
the Arabian Gazette reported.
Months later, in October, UAE gov-
ernment officials made another an-
nouncement regarding energy policy.
UAE’s Undersecretary of Energy Dr.
Matar Al Niyadi said the country would
be diversifying its energy mix, with new
energy policy focusing on “diversifca-
tion, conservation and effciency” as
well as securing an energy supply and
managing talent in the industry, the
Khaleej Times reported.
“Diversifying our energy mix is the
frst pillar of our energy policy,” Al Niya-
di said. “To meet immediate demands,
we are using more natural gas to gener-
ate electricity, because of its clean and
effcient burning properties.”
The country was the frst in the Mid-
dle East to establish renewable energy
targets, Al Niyadi said. In March, the
country approved the largest concen-
trated solar power plant in the world,
the Shams 1 project. This, along with
other projects, will help UAE reach its
goal of generating 2.5 gigawatts of new
renewable energy capacity by 2030, the
Khaleej Times reported.
Niyada also spoke of other UAE proj-
ects in the pipeline that will help the
country meet its energy diversifcation
policy, including energy effciency and
conservation efforts.
“In the UAE, we have the region’s
frst mandatory green building codes,
REGIONAL Insights
1311PEJEW_12 12 11/6/13 1:10 PM
EnergyWorkforce | FOR JOB OPPORTUNITIES, VISIT www.PennEnergyJOBS.com | Winter 2013 13
leading to cuts in energy and
water consumption by more
than 33 percent in new build-
ings,” Niyada said in October.
Kuwait sets renewable
energy goals
Earlier this year, Kuwait revised
its renewable energy policy, in-
creasing the amount of energy
it hopes to generate from solar
and other alternative sources.
The country previously aimed
to generate 10 percent of its en-
ergy from renewable sources by
2020. In May of this year, the country
pushed that target up, saying it now will
aim to generate 15 percent of its energy
from renewable sources by 2030.
Kuwait, which has one of the highest
energy consumption rates per capita in
the world, hopes to decrease its depen-
dence on oil for power, Gulf Business re-
ported. In four years, the country believes
it can cut oil consumption signifcantly
in just four years, using just 20 percent of
its oil production capacity.
Kuwait already has a major renewable
energy project in the works - a 280 mega-
watt solar thermal power plant in Kuwait.
The plant, located in Al-Abdaliya, will be
Kuwait’s frst solar facility. It is also the
frst project in which a private company
has been involved with a government en-
ergy development strategy, Clean Tech-
nica reported.
MoU established between
Cyprus, Greece and Israel
In early September, the three nations
signed a memorandum of understand-
ing which covers cooperation between
the countries regarding energy and water
resources, New Europe reported.
“The MoU is a framework through
which it will determine the number of
activities that the countries have agreed
to jointly pursue such as [energy securi-
ty and supply], environmental issues and
a number of other issues which are com-
mon for the three,” said Cypriot Energy
Minister George Lakkotrypis.
Lakkotrypis expressed interest in Cy-
prus, Greece and Israel being connect-
ed through an underwater electric cable,
linking electric grids and making it pos-
sible to supply other nations with power,
New Europe reported.
Greek Energy Minister Yannis Mani-
atis also said the MoU and future ener-
gy projects developed through the agree-
ment will help stabilize energy supplies
in the three countries and beyond.
“[T]he electric conduit can easily be-
come a cable which will supply and ex-
port electricity to the European energy
market, and provide us with energy se-
curity,” said Israel’s Energy Minister Sil-
van Shalom.
The MoU also states that the three na-
tions will jointly work to protect the nat-
ural gas felds in the Mediterranean Sea.
Pakistan’s move to renewable,
geothermal energy
Pakistan, like other countries in the
Middle East, has made commitments to
transition to using more renewable en-
ergy. Chairman of the Energy Founda-
tion Pakistan Javed Ahmad announced
in late September it would aim to gen-
erate thousands of megawatts of elec-
tricity from geothermal energy projects
and other renewable sources, Pakistan
Today reported. Ahmad said renewable
energy was sustainable, could be gen-
erated at low costs and would reduce
the country’s dependence on import-
ed fuel.
Pakistan imports about one-third of its
energy requirements, costing the coun-
try $15 billion during the fscal year end-
ing June 2013, The Diplomat reported. In
2012, oil and gas accounted for 65 per-
cent of Pakistan’s energy mix. Energy
demand in the country is only expected
to increase, growing to around 40,000
MW by 2020. Yet, the government aims
to meet its energy shortfalls by increas-
ing its investments in renewable energy
projects.
Ahmad said he would work to attract
investment in 10,000 MW of geothermal
power projects and start producing elec-
tricity at lower prices within just three
years, the source said.
Existing geothermal power plants in
Pakistan have proven successful, Ahmad
said, according to the Associated Press of
Pakistan. The move to more clean, re-
newable sources would also reduce the
country’s air pollution created from its
coal-fred power plants, he added. Ex-
panding geothermal and renewable ener-
gy in the country would also trigger eco-
nomic growth, Ahmad said. ⊗
“…we want to become a technology player, rather
than an energy player.” —Sultan Ahmed Al-Jaber
1311PEJEW_13 13 11/6/13 1:10 PM
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1311PEJEW_14 14 11/6/13 1:10 PM
EnergyWorkforce | FOR JOB OPPORTUNITIES, VISIT www.PennEnergyJOBS.com | Winter 2013 15
New Policies Develop Asia-Pacific Energy FutureBy PennEnergy.com
THE Asia-Pacifc region has had a
number of new energy policies
enacted in the last year - from
new solar feed-in tariff rates to interna-
tional agreements on fossil fuel devel-
opment. The new policies have impact-
ed numerous forms of energy genera-
tion, including renewable sources and
natural gas.
China solar tax rebates aim to curb
declining profts of industry
A number of Asian countries are encour-
aging renewable energy development as
a way to reduce pollution levels. Chi-
na, a major supplier of solar panels, is
offering tax rebates to solar pan-
el and solar product manufactur-
ers. The goal of the rebates is to
help the sector that has taken a
hit in recent years among weak de-
mand and to cut pollution levels,
the BBC reported.
Manufacturers will be grant-
ed a 50 percent value-added tax
rebate from Oct. 1, 2013 to Dec.
2015. The Ministry of Finance
announced the new tax re-
bate policy Sept. 29, Bloom-
berg reported. The announce-
ment sparked interest in the
country’s solar sector almost immedi-
ately, according to the source. Shares
for LDK Solar Co. and Suntech Pow-
er Holdings Co., two Chinese solar
manufacturers, rose to their high-
est level in two months following the
tax rebate plan announcement. LDK
gained 30 percent, for example.
The tax rebate plan may have also
improved the future outlook of Chi-
na’s solar industry. In late Septem-
ber, analysts said they expected so-
lar installations in China to increase
as much as 15 gigawatts in 2014 - up
from about 7 GW this year, Bloom-
berg reported.
The government also enacted a new
policy in late August. The National De-
velopment and Reform Commission
said Aug. 30 it would offer a $0.07 per
kilowatt-hour subsidy to solar power sta-
tions in the country, according to the
Want China Times.
China LNG expansion project to
meet rising energy demand
Along with solar and other renewable
energy development, China also com-
mitted to increasing its use of natural
gas. The government-owned National
Offshore Oil Corp said in September
it plans to add fve liquefed natural gas
receiving terminals by 2015 and double
its capacity to as much as 40 million
tonnes per year, reuters reported. The
project means China will be able to sig-
nifcant boost the amount of LNG it im-
ports to meet strong energy demands in
the country.
The move will also help China in-
crease its use of natural gas
to 8 percent of its energy mix
by 2015. Natural gas currently
accounts for 5 percent of Chi-
na’s energy use. More natural
gas also means China can cut
air emissions from coal and
reduce oil imports, Reuters
reported.
The U.S. Energy Informa-
tion Administration expects
Chinese LNG demand will
increase 5 percent annually
through 2035. The increase of
LNG in the Asian country is
expected to have global implications.
“China is already infuencing the
underlying mid-term LNG market and
will likely continue to,” said Stephen
REGIONAL Insights
1311PEJEW_15 15 11/6/13 1:10 PM
16 Winter 2013 | FOR JOB OPPORTUNITIES, VISIT www.PennEnergyJOBS.com | EnergyWorkforce
Cornish, Geneva-based director of glob-
al gas and LNG at Koch Supply & Trad-
ing, a subsidiary of Kansas-based indus-
trial company Koch Industries, Risk.net
reported
Thailand also looks to expand LNG market
Thailand, too, will be expanding its
LNG imports to meet increasing ener-
gy demands and to avoid power outages
in the country. PTT LNG, a subsidiary
of the state-owned oil and gas company
PTT, said it will double capacity at its 5
million megatons per year LNG import
terminal, Platts reported.
The expansion, being referred to as
Phase II, includes building a new jet-
ty, storage tanks and new processing
and regasifcation facilities at the import
terminal.
“The government has a clear poli-
cy to ensure stable supply of natural gas
for industry, especially for power genera-
tion and this includes going ahead with
Phase II on schedule,” an offcial with
PTT LNG said in June.
The project is expected to be complete
by late 2016, with new capacity being op-
erational in the frst three months of 2017,
Platts reported.
The project announcement comes af-
ter PTT came close to experiencing pow-
er outages due to a lack of energy sup-
plies. In March, PTT said it would need
to double LNG imports in April to avert
power outages. The state-owned com-
pany imported two LNG shipments of
70,000 tonnes each that month - about
70,000 more than it normally receives,
Bangkok Post reported.
Japan’s feed in tariff regime boosts
renewable energy investments
Japan began offering feed-in tariffs in
July 2012 through its Act on Purchase
of Renewable Energy Sourced Electric-
ity by Electric Utilities to encourage in-
vestments in renewable energy sources,
including wind and solar power. The act
requires utilities operating in the coun-
try to purchase renewable energy for pric-
es and durations set by the Minister of
Economy, Trade and Industry (METI).
The new policy was expected to spur de-
velopment in renewable energy in Japan.
It worked. In 2012 alone, the tariffs
boosted investment in renewable energy
by 75 percent, resulting in $16.3 billion
spent on solar, wind and other clean en-
ergy developments in Japan, a report on
the tariff system by DLA Piper said.
The government revised this tariff
scheme this year at the end of March,
and the new surcharge rates took effect in
April of this year. The 2013 revised feed-
in tariff rate by METI remain among the
“most generous” rates in the world, the
report said.
In February, Hitachi, a Japanese en-
gineering and electronics company, an-
nounced it would invest about $10.5
million in a 8-megawatt solar plant sched-
uled to be complete by the end of the
year. Months later, in May, Goldman
Sachs announced plans to invest approx-
imately $487 million in renewable en-
ergy projects in Japan over the next fve
years. Goldman Sachs formed the Japan
Renewable Energy Company to develop
a range of clean energy projects as well.
In September, The Japan News report-
ed, the feed-in tariff system has drawn a
number of solar power companies to in-
vest in new projects. For instance, Hok-
kaido Electric plans to build a battery
system for solar generation at a substa-
tion in Abira. Advanced projects like this
will allow utilities to buy 10 percent more
electricity from renewable projects, the
METI believes.
In the second quarter of 2013, Ja-
pan added 1.7 gigawatts of solar capaci-
ty, mainly through commercial installa-
tions. Much of this new renewable power
generation is thanks to the country’s feed-
in tariff scheme, Clean Technica recent-
ly reported.
Vietnam strikes deal with
US over nuclear power
Vietnam, which is home to the second-
largest market for nuclear power in East
Asia, struck a deal with the United States
over its nuclear power program. Under
the agreement, the U.S. will sell nucle-
ar fuel and technology to Vietnam. In
exchange, Vietnam is prohibited from
enriching or reprocessing plutonium or
uranium during nuclear energy develop-
ment, Bloomberg reported. The agree-
ment is aimed at curbing the creation of
nuclear weapons.
The agreement helps both nations.
“It will open up opportunities for Viet-
nam to have the best and most modern
technology,” Tran Chi Thanh, Hanoi-
based head of the Vietnam Atomic En-
ergy Institute, said by phone today. “One
key issues is that we must train personnel.
The agreement will hopefully give us op-
portunities to do so.”
U.S. Secretary of State John Kerry
said the deal will open numerous oppor-
tunities for businesses in the U.S. and
Vietnam.
“Our companies can now compete,”
he said, according to Bloomberg.
Vietnam has 13 nuclear power stations
in the planning phase. If built, these proj-
ects would add 16,000 MW of new pow-
er over the next 20 years, Bloomberg
reported. ⊗
1311PEJEW_16 16 11/6/13 1:10 PM
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