[Ebook] Utilities and IT/OT Integration

21 August 2012

The power industry has grappled with the “smart grid” buzzphrase for years — ever since Andres Carvallo, the former CIO of Austin Energy, coined it a decade ago. Today, the newest version of this buzzphrase centers on IT/OT integration.

Traditionally, IT (information technology) business systems and OT- (operations technology) managing and automating plants and equipment have been decidedly separate. However, a realization of the advantages of bringing the two together in order to align and integrate processes is beginning to emerge.

The smart grid brings a new level of complexity to the breaking down of silo’d operations as new capabilities emerge based on large-scale information management, real-time data analysis, and the move to closed-loop systems for managing, monitoring, and controlling the smart grid; however, the smart grid is not the main driver of IT-OT convergence, according to research conducted by The McDonnell Group.

Utility Priorities According to the 2011 research of 68 utility decision-makers at 39 North American utilities, the majority of utility decision-makers consider planning for future smart grid initiatives through 2014 a lower priority than improving their current level of IT/OT integration. The higher priority of IT/OT integration initiatives can be attributed to the fact that such initiatives are viewed as a necessary precondition for building the future smart grid.

Utilities in the McDonnell Group study ranked these five priorities in order of importance:

1. Ensuring the reliability of aging assets 2. Preparing for a changing regulatory landscape 3. Coping with an aging company workforce 4. Investing in new physical infrastructure 5. Developing the company’s smart grid roadmap.

If a utility is not aligning IT and OT and better managing its assets, it could become increasingly difficult to deal with the increased complexity and stress that smart grid conditions place on the grid. Utilities interviewed expressed the need for improved model accuracy and real-time update capabilities to better address the intermittency of solar, wind and future storage resources such as electric vehicles. These improved models will entail new monitoring capabilities for dispatchers at the utility, as well as the possibility of lessening the need to have traditional spinning reserve capacity on hand to back up renewables’ intermittency using demand response resources, again driving the need for deeper levels of IT/OT integration, according to The McDonnell Group.

GoinG ForwardTo maintain or improve system reliability and service levels going forward, utilities are preparing new IT and OT infrastructure, business intelligence and analytics tools to optimally manage the broader, deeper use of real-time data associated with grid improvement and smart grid initiatives, according to The McDonnell Group. Using IT solutions to draw better insights from real-time operational systems is a common thread across smart grid initiatives, including improved fault location, isolation and restoration capabilities and to support reliable widespread utilization of electric vehicles, renewable power sources and other distributed energy resources.

The convergence of IT and OT delivers high degrees of grid automation, sensing and visibility; achieves greater control of distributed generation; and provides better support of regulatory compliance not to mention offering staff in both areas to work together on system engineering standards and architecture, product and supplier

standards, and business case timelines. In addition to direct economic and reliability benefits, within each utility service territory reductions in the frequency and duration of outages will also bring important customer-centric benefits.

The shift toward smarter hardware also requires a step change improvement in software to take full advantage of the potential benefits. To analyze the flood of real-time data associated with asset health and smart grid initiatives utilities require new capabilities and processes — this is where the convergence of IT and OT is driving a transformation, according to the McDonnell Group.

As important as future grid improvements or smart grid initiatives are, The McDonnell Group’s research has shown that a utility’s first priority should be improving their levels of IT/OT integration, which will enable them to make significant improvements to the efficiency and reliability of their network operations and address smart grid initiatives.

This eBook will assist utilities in navigating the challenges and reaping the rewards of making the cultural, governance and organizational transition to IT and OT system integration.

by barbara VerGetis lUndin Editor /// Fierceenergy

3Industry Perspective: Juliet

Shavit, CEO, SmartMark Communications

6How the Convergence

of IT and OT Enables Smart Grid

Development

*Sponsored Content*

7IT vs. OT: Making Sense

of the Buzz

9Conversion Challenges

and Solutions

11Bridging the IT/OT Gap

13From Risk Comes Reward

15Q&A: Success in

IT/OT Convergence

Platinum SPonSor: SPonSored by:

sEptEmbEr 2013

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Utilities and IT/OT InTegraTIOn

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industry has traditionally been the responsibility of technology deployment teams installing and activating the monitoring infrastructure. Meters are installed and billing collects payments from customers. There hasn’t been a need for operations teams to be a part of that process.

But with AMI and the smart grid, we’re reading about people aggressively guarding their meters and protesting in the streets, or refusing to adopt the technology outright. So there’s a new need for a communications for utilities where IT, and strategic/customer communications, deployment, and OT teams work together. Deployment teams can sometimes take on the role of customer education, but it should be in the marketing team’s hands — there needs to be people with customer facing skills involved.

In the history of utilities, this need has never existed before; they’ve never setup internal infrastructure to work together on these things. While these operations have been traditionally built into silos, the need for communications now exists between these different areas. The smart grid is about breaking down those walls. It’s about operational efficiency but also about what’s in it for customers.

Fe: Since IT and OT have been in silos for so long with such different processes and goals, how do the two teams view each other? JS: Deployment teams have never been challenged before with regulatory requirements for customer education, never had to deal with advocacy with metering or stakeholder groups; this is all very much a new issue. Utilities

are looking toward communications teams for help. Some will work with management consultants or outside counsel, since many utilities don’t have communications departments internally.

If you’re in a regulated environment, you’re the monolithic provider — like the telco world with incumbent providers. But in more competitive environments, when there’s choice, customers want more from their utilities. Sure, in many major areas we still have regulated markets, and when there’s NO choice, there’s no need for a communication strategy. Customer care in those instances is based on call centers and bill complaints — but I promise you the minute a utility wants to put a smart meter on your house and there’s increased competition, they’ll be nicer to you so you’ll be more engaged with your provider

and they’ll be more ways to regulate your bill. In the advanced metering infrastructure (AMI) world, customers have a huge role in the success of the smart grid. In fact, if customers don’t adopt part of AMI, then the whole business case collapses. If you look at the new ecosystem, customers are huge part of it and it’s a huge risk for utilities if they don’t buy-in.

Industry Perspective: Juliet Shavit, CEO, SmartMark Communications by ArEg bAgdAsAriAn

If customers don’t adopt part of AMI, then the whole business case collapses. If you look at the new ecosystem, customers are huge part of it and it’s a huge risk for utilities if they don’t buy-in.

Fierceenergy: What do you think about IT/OT convergence as an industry buzzword? Do utilities get it?Juliet Shavit: I’m not sure utilities know what IT / OT convergence truly means yet — there’s IT, and network convergence, and technology. OT though, is very much a telecomm term to me— it’s not about shoving new technologies down a customer’s throat though, as you do have to introduce things gradually.

There have been some cases where if you don’t test meters enough and

it, ot and the smart Grid

The best is yet to come for smart grid-enabled utilities that have embarked on the path of creating cross-functional teams to address the changing power ecosystem. That is according to Juliet Shavit, founder and president of SmartMark Communications, who says that aligning information technology (IT) with operations technology (OT) will pay dividends for utilities and customers alike as providers move from legacy systems to

don’t inform your customers about them they could go haywire and in some cases have ended up charging customers too much. When things like that happen, regulators get involved and it can bring the technology to a halt. The industry has seen what happens when IT doesn’t converge with OT in the right way. Utilities have to go through appropriate effort to integrate a customer education plan along with a deployment plan. In fact, in Maryland it’s a requirement. You can’t have an AMI roll-out without both plans, so from a regulatory experience utilities must do this and prove there’s a business case.

Utilities understand convergence is taking place between IT and communications, but may not understand where OT fits in. For example, the VP of customer care may not understand it, as it’s a language thing and it can be tech-speak; it’s simply something that’s not quite in the lexicon for a lot of utilities.

Fe: Successful IT/OT convergence requires a fundamental change in how utilities are run and how they communicate internally. What are the challenges in getting different departments within a utility to work together more closely? JS: Metering within the utility

more agile hardware and software that better meets end-user needs. For utilities skeptical about IT/OT investment, Shavit says dollars spent on mesh networks and greater IT integration will translate into flexible platforms that can provide municipal WiFi, cable and other services. Utilities and end users stand to gain from these innovations and the future is looking bright for those willing to capitalize on change.

Shavit has spent more than a decade providing strategic communications for the utility industry and acts as a strategic

advisor to utilities globally, helping them develop effective programs and messaging at different stages of smart grid deployment. Shavit is also the founder of the Homeland Security for Networked Industries (HSNI) Conference, the Smart Grid Customer Education Symposiums, the Smart EV Executive Leadership Forum, and GridComms.


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Fe: Many utilities are already bringing IT and OT together in the name of the smart grid while others are still deciding whether to even enter the game. Of those that have made progress, do any utilities stand out in terms of how they overcame IT/OT challenges? JS: PEPCO Holdings has done an excellent job integrating and developing a team to oversee deployments. That team is made up of IT and OT people, marketing communications and customer care specialists combined. You need to work with deployment teams, but you need those marketing communications teams or consultants there to help.

For PEPCO, it’s about market research. They wanted to understand their customers so they built a research program on baseline awareness on how people felt before the meter, then tested, then continued to monitor during and after installation to augment their program based on market

conditions. They’ve adjusted things as they’ve gone along — tailoring their message to customer needs and conducting strong research, while building flexibility and agility into their program. This is important because often smart meter roll-outs can take two years so you have to listen to your customers. Direct load control, smart thermostats, etc., when it comes to the smart grid, some utilities and customers want every part of it — but there are problems along the way. You can still achieve success, even if

you don’t throw the whole kitchen sink at it.

Utilities need to be adaptable if smart grid or IT/OT work goes over budget, and they need to do what’s right for their customer base. You need to articulate what you’re doing to the regulators and stakeholders, and then you’ll be fine. Don’t get too caught up in details and technicalities and lose sight of the big picture; you need to build toward your customer goals. It also helps to bring in seasoned experts — everybody thinks they can do smart grid implementations — but it’s hard unless they’ve done it before.

Fe: When it comes to data presentment and CRM systems, many of the existing legacy systems are not ready for IT/OT integration. What are the biggest challenges facing utilities as they decide how to upgrade their CRM systems? JS: Email doesn’t exist. The fact that older CIS and CRM systems don’t have a field for it is a huge problem. These are legacy systems that don’t have modern customer-facing information. Many of these systems haven’t been touched in many years and aren’t agile. Think about how customers want to be communicated with today: social media, Facebook, mobile phones — you wonder with CRM printouts that are difficult to read from some of these older systems, how these utilities will market to customers and have them understand.

Often CRM systems don’t distinguish between small commercial and residential customers. If you’re a mom and pop coffee shop, you’re on the

PEPCO Holdings has done an excellent job integrating and developing a team to oversee deployments. That team is made up of IT and OT people, marketing communications and customer care specialists combined.

continued on page 17

• Urgent requirements for utilities to integrate IT and OT networks

new ot deVices For the networkExpanding OT deployment has lead to the development of a smarter grid in many ways. Technologies introduced in recent years offer benefits from superior monitoring and supply control to more efficient generation and consumption to more innovative energy storage. Smart meters and home area networks are also blurring the lines between energy supply and distribution domains.

Many improvements to existing devices are also being deployed, such as smarter solid-state relays and controllers for reclosers and sectionalizers and improved regulators and capacitor controllers.

it redeFines rolesOperational IT is undergoing a steady transformation. Distribution Supervisory Control and Data Acquisition and Distribution Management Systems were once completely isolated and exclusively controlled limited assets. Now they serve far broader application and integration requirements.

Meanwhile, Outage Management Systems have migrated from the enterprise to the operations domain. Once an extension of a call center application, modern deployments embed network intelligence to support restoration and switching. It might seem obvious, but convergence has far-reaching implications for operational applications that model, monitor, and manage the distribution network.

inteGration on a massiVe scale

Convergence unites applications and devices in new ways, and ties systems that have primarily operated in isolation. Along with the growth in numbers of devices and functionality, convergence introduces integration on a new scale. Addressing the needs of the IT/OT-integrated distribution grid requires advances in communications, adherence to expanded standards, and a focus on architecture and security.

conclUsionThere is no need to fear the prospect of an IT/OT converged world. Change begins with the simple awareness of the significant influence of IT on operational equipment. Although almost every facet of traditional utility operations will change, the deployment of Smart Grid technology will allow utilities to better serve their customers, and ultimately do so at lower cost. The Smart Grid is an evolution, not a revolution. l

aboUt the aUthorJeff Meyers, P.E., supports Smart Grid technology for Schneider Electric’s Smart Infrastructure division with expertise gained during his 30-year utility career. Currently, he focuses on helping Schneider Electric customers apply integrated technology to realize energy efficiency. He is a member of the IEEE, IEC, GITA, and International Who’s Who of Professionals — and a five-time recipient of GITA’s Speaker of The Year award.

Greater efficiency and more reliable performance are the primary goals of utilities investing in Smart Grid technology. One trend — the convergence of Operation Technology (OT) and Information Technology (IT) — is powering many grid modernization benefits.

OT represents a broad category of operating gear, from oil circuit breakers and sectionalizers to solid-state relays, and many devices in between. It can include automated or semi-automated control systems. OT can be recognized by anyone in utility operations, and is often applied within mission-critical framework.

IT allows machines to quickly exchange information directly with people. The utilities industry has experienced an exponential increase in both quantity and quality of IT systems. Examples include improved Enterprise Resources Planning, Geographic Information Systems, Customer Relationship Management systems, office-based productivity tools, and mobile devices.

redeFininG technoloGy normsThe distinction between the two technologies is being blurred by rapid Smart Grid transformation. Individual grid elements are becoming both more intelligent and integrated, which is driving changes in smarter equipment and automation deployment, including:

• Continuous growth in OT deployment

• Continuous implementation of IT to monitor and manage distribution systems

How the Convergence of IT and OT Enables Smart Grid Developmentby JEff mEyErs, p.E., schnEidEr ElEctric

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The days of wondering whether a smarter, more interconnected electric grid will better serve the needs of end users and utilities alike are behind us. Countless utilities are already seeing the benefits of upgrading to a more holistic and responsive smart grid.

While each power company may be in a different stage along that modernization path, there are many commonalities driving the transformation. These include forecasting future power needs more accurately, generating power more reliably, maintaining assets in the field, integrating renewable energy sources, and leveraging big data to understand end user behavior. Not to mention the cost and time savings inherent to running a more efficient and intelligent operation.

a merGinG oF silosAs strategy and resources more closely align, utilities are uniting two other key pieces of their business where information technology (IT) and operations technology (OT) converge. Two sets of systems that have operated in parallel yet separated by functional silos are finally coming together. Integrating IT and OT into a cohesive system will provide a more adaptable platform for power

companies to attain their modernization goals in a rapidly changing power ecosystem.

In the context of the smart grid, operations

technology includes the hardware and control systems from the point of generation to the “last mile” of power delivery to the end user.

“OT is about computers interacting with machines, whereas

IT is focused on computers interacting with people,” said Ashok Sundaram of Accenture’s Smart Grid Operations Technology practice.

If OT is about the management and operation of “production-side” physical assets, IT is about the other side of technology, including internal company data networks and customer retention management (CRM) systems. Both IT and OT have been critical to reliable power generation but have operated

IT vs. OT: Making Sense of the Buzz by ArEg bAgdAsAriAn

somewhat separately. This has been due to differences in strategy, processes, underlying platforms and even the speed with which technology in the industry changes.

Until recently, the overall strategy and process for OT systems was to enable reliable and consistent power to end users. Less emphasis was placed on how efficiently that power was being supplied and overall usage patterns. That power has usually been supplied through proprietary software systems that didn’t interact much with IT systems. Overall architecture and protocols for IT and OT systems have also been disparate, although this hasn’t impeded overall day-to-day operations.

But as utilities look to engage their customers by managing the demand side of the equation more than just building out more capacity, IT and OT will need to work more closely.

mixinG bUsiness it with Plant oPerationsToday, there is a greater push to merge hardware and plant operations from the OT side into business-oriented IT systems. In order to accomplish this, utilities need to first establish their business goals and strategy so they can lay out a plan to determine what level of technology convergence works for them. With both the IT and OT side of the house operating in relative silos for so long, this change has taken some time to gather momentum.

“For a while there’s been outright distrust between OT and IT, but that’s changing,” said Bob Lockhart, senior research analyst at Navigant. “Since I began researching this, I’ve seen big changes. At the beginning when I would ask about IT-OT convergence, people would laugh, but not anymore. They admit the planning and meetings can be difficult, but still very doable.”

There’s certainly little doubt that OT systems have been entrenched for a very long time.

“Electrical infrastructure is 100 years old and, in some cases, not much has changed since the light bulb was invented,” said Juliet Shavit, CEO of SmartMark Communications, a utility

consultancy. “As the world of communication has exploded, the grid has remained a one-way device.”

While many aspects of power generation and distribution have stayed the same, some things have, in fact, changed. Utilities that have invested in newer power generation hardware and smart meters are looking to get the best return on their investment. A large part of that comes from end users engaging more closely with their utility so the grid no longer remains a “one-way device.” That relationship is only possible through smart two-way communication where a utility understands its customer usage patterns and can incentivize them to use power more efficiently.

For those that have made the investment in advanced metering infrastructure (AMI), it’s vital to process to act upon the vast amounts of “big data” that end users transmit back to the grid courtesy of these recent upgrades. That includes time-interval data on customer usage patterns of their highest consumption appliances to data on transformer loads. The creation of appropriate platforms for analyzing this information will lead to improved efficiency across the ecosystem. Analytics are so important that McKinsey & Co. believes the analysis of interval data from end users could save the nation one-third of their annual electric bill or $130 billion per year. l

As utilities look to engage their customers by managing the demand side of the equation more than just building out more capacity, IT and OT will need to work more closely.

Analytics are so important that McKinsey & Co. believes the analysis of interval data from end users could save the nation one-third of their annual electric bill or $130 billion per year.


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Successfully overcoming convergence challenges begins with determining your goals. More accurate power generation and forecasting, centralized distribution management, and better maintenance of hardware and software assets are all worthy end goals that can be attained through OT-IT convergence.

A change in corporate governance can play a large role. Specifically, this includes altering the reporting structure of the organization so that formerly separate OT and IT departments can be pulled

out of silos and built into cross-functional teams. While it may be daunting at first, IT and OT

can begin to make other decisions as one unit. From handling internal and external (end user) analytics to making joint purchasing decisions from fewer vendors, a unified structure has its benefits.

FindinG a chanGe aGentBut how do utilities find a change agent to head up the effort? In

an OT-heavy industry, how does IT mesh with OT in the long term? Finding someone who has experience on both sides of the operation to take the reigns would be ideal.

“You need to adopt the hero approach, with someone leading who came up through the engineering side and then went to IT. Someone who can speak both languages and act as a bridge,” said Bob Lockhart, senior research analyst at Navigant. “For the convergence to work, both sides should be involved from the get-go.”

Conversion Challenges and Solutions by ArEg bAgdAsAriAn

A unified strategy leading to more centralized systems is certainly a good thing. However, understanding how to deal with more readily accessible data calls for the right analytics. A centralized OT-IT operations platform can easily tell you a lot more about customer usage patterns as well as internal data on the state of various endpoints in the system.

Good analytics can help you sort through the data stream to find patterns that can lead to direct enhancements in operations. This could include detecting when a particular neighborhood on the grid is consuming power heavily due to electric vehicle charging and creating a time of use billing program to more closely match customer needs. Investing in analytics can also help as more data comes in through various renewable sources through distributed systems. Without IT and OT closely linked, analytics packages will have difficulty sorting through patterns to find insight.

more data, more challenGes When IT and OT come together, more data can flow between systems but it’s important to keep data secure and in the right place. Bob Lockhart stresses the importance of isolating control networks (OT) from enterprise networks (IT).

“You need strong barriers between networks so only the right data passes between them and there isn’t free access,” he said.

As more systems are linked, sensitive customer financial and usage data should only be shared with teams on a need to know basis. Protecting incoming data from end users and the different links in the communication chain becomes more

relevant when IT and OT become one.

“Now that decision making is automated, and decision making is done differently, it’s based on customer data coming back that hasn’t been altered, and is coming back from a known device. There’s even fear that with more access points on the IT side into the OT side, people can hack into the grid and shut it down, so security is important to prevent this,” said Lockhart.

These challenges do not have to be taken on alone. Utilities can look

to outside vendors for partnerships. In the last several years, many grid hardware manufacturers have themselves acquired software and analytics firms.

Juliet Shavit, CEO of SmartMark Communications advocates just this. “Look at your neighbors and at technology that’s proven in mesh networks and other areas for your communications needs,” she said. “There may be off the shelf systems that would fit your needs. Find partners with experience in the right areas, see their successes and failures.” l

More accurate power generation and forecasting, centralized distribution management, and better maintenance of hardware and software assets are all worthy end goals that can be attained through OT-IT convergence.

“You need to adopt the hero approach, with someone leading who came up through the engineering side and then went to IT. Someone who can speak both languages and act as a bridge.”

bob lockhart, Senior reSearch analySt at navigant


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Merging any system between OT and IT requires a far-reaching company initiative where two sides of the aisle agree that bringing the two closer will lead to the fulfillment of company objectives.

strateGyA strategic plan for bridging the OT-IT divide includes deciding how the silos between OT and IT departments will gradually be removed. Strategy should also address a governance model for how the departments will unify with greater cooperation between teams.

Research from Accenture Consulting shows that only 50 percent of utility clients have developed a strategic IT plan in the context of smart grid modernization. Many of these plans have also not considered the employee skill sets needed to maintain a joint OT-IT operation. But the right strategic approach may indeed be to see what can be accomplished in the short term first before moving onto larger goals.

“Create a small quick win early, think big but start small” said Jeremy Oosthuizen of Origin Consulting.

This is particularly relevant for utilities trying to cultivate

a business sponsor or an executive within the organization to help

promote strategic change. Once a new strategy is agreed upon and relevant departments join the cause, managing convergence becomes all the more viable.

workForce/teamsFor years, utilities have had a solid core team of operations technology experts and engineers. The IT department has often played a smaller role and has been staffed with fewer people. Organizations

heavy on operations expertise but light on IT should decide how to integrate both departments. Depending on strategy, hiring additional IT personnel or even bringing in outside vendors for

Bridging the IT/OT Gap by ArEg bAgdAsAriAn

support could make sense and utilities of all sizes can benefit.

“Small utilities stand to gain as much as large utilities, but they may only have one IT person so they have to use cloud services for analytics and outside vendors,” said Bob Lockhart, senior research analyst at Navigant.

Utilities shouldn’t hesitate to partner up or acquire outside resources as needed to fill in their skills gaps.

technoloGy and systemsOne of the biggest challenges in the industry remains the isolation between OT and IT platforms. These sub-silos have been especially pronounced in data storage and operating systems. Traditionally, data on internal operations and whatever limited end-user data has been available has been stored on proprietary databases. These databases have operated in silos away from CRM systems, where valuable end-user information was not analyzed in real-time, and opportunities to fine tune operations were missed.

Bringing OT databases into more flexible IT platforms such as SQL or Oracle is key. The advantage is that these platforms can more easily link to CRM, customer service, and other systems, and in many cases, are the same systems that are currently used for storing other customer data. Results include

more centralized control over IT and OT as well as lower operating and maintenance costs.

Operating systems themselves have been separate for years. OT-exclusive systems have often had little in common with their IT Windows-based counterparts. Bringing entire software platforms into a Windows environment may take some effort but the advantages include centralized control, unified maintenance and support for one system instead of many. l

Merging any system between OT and IT requires a far-reaching company initiative where two sides of the aisle agree that bringing the two closer will lead to the fulfillment of company objectives.

A strategic plan for bridging the OT-IT divide includes deciding how the silos between OT and IT departments will gradually be removed.

The IT department has often played a smaller role and has been staffed with fewer people. Organizations heavy on operations expertise but light on IT should decide how to integrate both departments.


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Utilities should build a business case for OT-IT convergence based on their most important goals while taking known risks into account. Return on investment should be a big part of the discussion, and the case must be made to leadership that the benefits of this change will outweigh the cost. The most pressing of these challenges are found within operations, technology, and data management (data analytics

and security). There is risk inherent to overcoming these hurdles but the biggest risk can indeed be not seeing the value of IT-OT convergence. When OT-IT changes do begin to coalesce, the rewards are more than worthwhile.

As utilities pursue convergence, there’s work to be done in combining the separate “islands” of technology that have developed. These islands can make integrating new technologies and systems difficult. To make the requisite technology changes to unify OT and

IT, the priorities of both areas must also begin to merge.

demand resPonseAn OT priority may be to keep systems up and running through consistent power generation. The IT department, though, may place emphasis on accurately billing end users for their consumption.

If a technology goal is incentivizing commercial and residential customers to use power more efficiently through a time-of-use (TOU) program, then OT and IT personnel and systems must work closely to achieve that. If teams don’t begin merging at least some of their systems, then cross-functional initiatives such as TOU billing will be at risk.

But the rewards for building a technology bridge between departments can make it worthwhile. Cross-departmental initiatives can save both end users and utilities a great deal of time and allow them to operate more efficiently without needing to build out more capacity to cope with changing customer needs. Streamlining energy use is all the more important given that, global demand for energy could increase by as much as 35 percent by 2035, according to the International Energy Agency.

distribUtion manaGement Distribution management is all about the applications and hardware that monitor the grid and attached networks. Integrating applications and hardware downstream and upstream can pose a challenge, but not doing so risks greater inefficiency by obstructing operations’ view of power needs throughout the system.

From Risk Comes Reward by ArEg bAgdAsAriAn

The good news is that many utilities have already invested in distribution management by virtue of the advanced metering infrastructure they’ve rolled out. Granular usage data from end users combined with precise measurement on how energy is flowing through the network can help OT and IT personnel understand what’s happening and how to make changes. A well-thought out distribution management system can rewards its users by providing efficiency in operations through initiatives such as voltage reduction.

Voltage reduction is a win-win for end-users and utilities, according to Bob Lockhart, senior research analyst at Navigant.

“You’re able to provide the same level of service but you’re running the system at a lower voltage,” said Lockhart. “This results in using less energy and better control of the power band that your circuit is running in.”

Smart distribution management can help with managing the ever-looming risk of outages as well. The more a utility knows about what their customers are doing through bi-directional communication, the more easily they can restore power during interruptions or weather related events. First class outage management is when a utility can pinpoint trouble in the system before their end users have to report it.

Juliet Shavit, CEO of SmartMark Communications cites Tennessee’s Electric Power Board (EPB) for their success in this area.

“Many utilities are waiting to see the benefits before they actively pursue IT-OT convergence, but the evidence is there. Look at Electric Power Board in Tennessee,” Shavit

said. “They’re already seeing better outage management after a recent tornado along with cost savings from operational changes.”

renewable enerGy inteGrationThe move toward renewable energy sources is being driven by regulatory change as well as growing consumer and business desire for more sustainable energy choices. If utilities don’t prepare their systems for the growth of renewable energy sources, they risk being unable to cope with the increased load on their systems. Solar panel usage and electric vehicle charging are two examples of this. Consumers that install solar panels on their home will need a way to be accurately

charged not just for the energy they use, but for the energy they store and feed back into the grid. The steady growth of electric vehicles is placing a growing strain on the grid as well. Utilities will need to create steady power during nighttime charging hours and change pricing structures.

“Renewable energy is intermittent by nature,” said Hanan Eisenman, communications manager at San Diego Gas and Electric. “If you have a lot of solar on the grid, you need technology to accommodate that and sense changes to continue accommodating it. We’re looking for smart inverters to be placed on solar panels to regulate voltage. It’s clear

The good news is that many utilities have already invested in distribution management by virtue of the advanced metering infrastructure they’ve rolled out.

Granular usage data from end users combined with precise measurement on how energy is flowing through the network can help OT and IT personnel understand what’s happening and how to make changes.

continued on page 18


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attention to data, communications and integration. It’s something we’ve had to become better and better at, and a characteristic we look at in our supplier partners. It does us no good when it’s too hard to interface with a proprietary system and that creates a bigger problem. We have to become better and more integrated as a result of the smart grid.

Fierceenergy: How are you managing and protecting all the additional data coming in from your end users? Jn: With this flow of new data, first you have to detect it. It’s a new data set on a very large scale. Make sure you think about how you’re going to install controls to protect the data. One thing we’ve done that’s different is that we do information security and information management --protecting data and managing it well downstream. Once you make sure you have data protected, the rest is an efficiency and integration play. There are a hundred different approaches to large scale analytics. The advice I would give is to make small bets on new technology and processing platforms as the space is changing very rapidly.

Fierceenergy: Describe a benefit that’s come out of SDG&E leveraging big data.Jn: As a direct benefit of the smart meter roll-out, we’re seeing people able to more conveniently manage their energy -- and conserving energy and saving money in the process. The Energy Management Tool we have is a great example of that. The specific data coming out of that tool shows how we took operational data, metering and

usage data, and our customer group and IT team to work together to build value for our customers. With the Green Button Connect, the next phase of smart meters, customers can manage and view their data utilizing mobile devices on the go.

Fierceenergy: How do you manage the risk involved with OT-IT convergence and balance that with your day-to-day operations? Jn: It starts with a plan or several interlocking plans. A smart grid deployment plan that we have is a great example, but we have other plans that lay on top of each other and we work to coordinate them with IT capacity management and analytics. When you don’t have a good plan, there’s

the risk of big inefficiencies when bringing IT and OT together. You really don’t want to solve analytics or other issues multiple ways with multiple solutions and platforms. Take the issues with renewable energy -- when it comes to integrating renewable technology, and electric vehicles, our customers are driving this. They’re forward-looking because they put a premium on sustainability. We already have 26,000 solar panels installed throughout our system, 5,000 electric vehicles, and we’re working on integrating that into our grid. We need charging rates that shift rates to non-peak hours to deal with this. We need new technology to deal with sustainable solutions that are coming onto the scene. It’s a necessity because if you don’t do it well, you can’t have renewables on your system or an automated the grid -- you run the risk of service availability problems. At the end of the day, our mission is to provide an efficient and reliable energy source. Even though we have to build a smart grid, we can’t sacrifice reliability -- that’s our core business. l

Fierceenergy: Tell us about your smart grid initiatives, especially your efforts to bring operations technology and information technology together strategically.Jeff nichols: For operations and IT, we’re actually letting it happen naturally at SDG&E, and not necessarily forcing the issue. We’re letting information technology, electric transmission, and the distribution side work on this together on several fronts. They’re using new work processes and governance to make it work, and our smart grid team is lead by one of our company directors who has a strong background in IT. We started by putting together a smart grid deployment plan detailing the areas where IT and OT groups can work closely together. Really, the smart grid is about applying new digital IT to existing the grid and integrating it over time. We’ve formed an Analytics Center of Excellence

San Diego Gas and Electric (SDG&E), a Sempra Energy company, has several initiatives underway to align OT and IT operations for its smart grid conversion plan.

On the strategy side, SDG&E has removed silos between departments to form an Analytics

Center of Excellence to handle OT and IT changes. Customer engagement has strengthened as result of their initiatives, giving end users more choice and allowing SDG&E to be more responsive to future energy demand.

Finally, data analytics and

cyber security are of paramount concern. SDG&E has made great progress in keeping new data flows secure and acting on insights from the data. Jeff Nichols, SDG&E’s director of Information Security and Information Management, offers more insight about these efforts.

--involving OT and IT and our parent company Sempra. We share best practices, optimizing approaches to predictive analytics, across silos; we don’t want to solve this five different ways, we want to solve it once.

Fierceenergy: Can you describe some of the factors driving the transition to the smart grid and OT-IT convergence for SDG&E? Jn: I think it is both internal factors and regulatory, too. NERC CIP (North American Electric Reliability Corporation – Critical Infrastructure Protection) would be an example from the regulatory side. This level of compliance and regulation is really a tough set of regulations that are broad and prescriptive. It requires regulatory, transmission, distribution and IT groups to work

together towards the single goal of being compliant, so really the barriers are coming across from the regulatory side as well as the need to make our internal operations more efficient and connecting more with our customer base. We had our smart grid plan approved by the California PUC (Public Utilities Commission) -- it’s a multi-year roadmap on how to integrate communication and control systems and sensors into the grid.

Fierceenergy: Can you describe how you’re specifically integrating your OT and IT systems? Jn: We’re seeing a blending of the supplier base for IT technology suppliers and OT suppliers. We’re seeing IT personnel needing to get a lot more familiar with dependable suppliers of OT. On the OT side, we have to decide which IT supplier best fits requirements for smart grid suppliers. It’s one thing to buy software for desktops and data centers, but another to do it for computing systems for field environments. You have to pay

Q&A: Success in IT/OT Convergenceby ArEg bAgdAsAriAn

For operations and IT, we’re actually letting it happen naturally at SDG&E, and not necessarily forcing the issue.

There are a hundred different approaches to large scale analytics. Make small bets on new technology and processing platforms as the space is changing very rapidly.


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that the traditional one way flow is now two way and coming to our customers.”

data manaGement (analytics and secUrity) So much of the potential of OT-IT convergence is in the flow of data that can be unlocked through a more responsive grid. For those who’ve taken the time to install new hardware and mesh networks, understanding new informational patterns in the systems is the next step; and there’s definitely a large quantity of information to dissect.

A smarter grid can “collect meter data from users at 5 to 15-minute intervals” instead of monthly intervals from the past, according to Arun Vyas, a consultant with Infosys Limited.

But before the data can be

understood, it has to be secure. As there are more endpoints on the system, there are more places where data is susceptible to being tampered with or reported back inaccurately due to a device failure. The risks of overlooking usage patterns in data, or not protecting data to begin with, can be severe. But the rewards for proper data management and analytics are nothing short of the ability to answer the biggest problems a power company can face. Answers about when to upgrade equipment, how to understand customer preferences and forecasting future power needs are all within reach.

Data is most valuable when it is understood and taking the time to integrate analytics packages and systems that can unearth meaningful patterns is the right way to go. To do so, utilities can either create internal analytics teams that report to a CIO, or bring in outside consultants to implement a system which can then be maintained by internal staff. If current trends are any indication of future growth, utility spending on data analytics — less than half a billion dollars in North America in 2011 — is expected to swell 29 percent a year to $2 billion in 2016, according to the Utility Analytics Institute. l

continued from page 14A well-thought out distribution management system can rewards its users by providing efficiency in operations through initiatives such as voltage reduction.

Federal grant money is drying up for this type of work, so what does that mean for the smart grid and convergence going forward? There’s no doubt that convergence will continue, but in different ways.

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same rate as a residence, meaning that mailings to that business and residence are the same and there’s no program targeted to commercial services. CRM systems are often not segmented the right way, making it hard to market easily to residences and businesses — you have people manually plucking names out of a list to do that. The other big challenge is the installation of new CRM systems, without messing up your current system, and migrating data over. You can’t lose customer info or have interruptions.

From a security standpoint, old CRM systems are cumbersome and not secure. So many things and safeguards form the last few years don’t apply to these systems. They’re simply not up to the same security standards.

Fe: There’s so much happening in the world of OT and IT and the smart grid. What changes do you see on the horizon? JS: As more utilities participate in smart grid rollouts, they’re going to decide what do we roll out and in what order? Do we want to be in the energy management space? Do we enter that world too?

Around the country, utilities are providing other things over their

smart grid networks — we’ve seen wireless mesh networks utilized as municipal WiFi, and innovators thinking about how smart grid could be a platform for doing more than just energy related work. Electric Power Board (EPB) invested heavily in their smart grid infrastructure and today they offer an array of new services including cable. They are a good example of leveraging smart grid as a platform for the future. We’ll find as people look at the ROI of these hardware rollouts, the economic benefits take longer to realize. So utilities that haven’t gotten grants from federal funds are looking to see how they can maximize their investments.

I spoke with another municipal utility about their smart grid initiatives. Right now, they’re focusing on where they can make money and offer additional value added services to customers.In regulated environments they don’t have that flexibility, but in a municipal environment, where the city owns the utilities for example, or in a co-op environment, there are other possibilities. A strong focus now, for example, is home energy management and services and technologies around that. As an industry, we’ve been focused on the smart grid and the conventional benefits, but newer players are looking at how they can take that infrastructure and use it in different ways.

The next wave is really what are the business benefits of the smart grid? Are they more than operational efficiency? Federal grant money is drying up for this type of work, so what does that mean for the smart grid and convergence going forward? There’s no doubt that convergence will continue, but in different ways. l
