TSG Thoughts...

Happy New Year!

And, we're back...somehow, the second half of 2011 managed to get away from us, blogging-wise.  The good news is, the TSG team has been working on a ton of compelling projects, many of which are designed to empower consumers of electricity, regardless of domain.  We'll fill you in on more of these as the first quarter unfolds...and yes, we'll crank up the dialog, volume, and frequency!

The TSG Team

This could be the start of something...

You may have already seen the press release, or the analysis by my compadre Coop, but I thought it would be interesting (to me at least) to talk a bit about what a consortium on SEP 2.0 certification means, and what it doesn't.

First off, the press release notes that the consortium is specifically aimed at SEP 2.0 over IP (Internet Protocol.)  Any other flavor of SEP, particularly ZigBee Smart Energy (ZSE) is still a "walled garden," with most of the world on the outside.  That being said, it is at least a glimmer of hope for devices that use IP in one of its many forms.  But it may only be a glimmer...

The press release talks about a "joint certification and test program," but not a unified certification.  In, fact it specifically states that the consortium's work will "enable organizations ... to certify SEP 2 according to a consistent test plan."  Note the plural there.  Multiple organizations providing SEP 2.0 over IP certification.  A vendor may still have to chase down certifications from multiple certification houses in order to carry the proper imprimatur(s), unless this consortium can agree on a common and mutually recognized outcome of certification.

So, what good is it?

First, members of the various Alliances in the consortium may be able to be "SEP over IP" certified by their "home" alliance, without having to subject their designs and devices to the scrutiny of people beholden to a "foreign" alliance.

Second, a consistent test plan may mean that a manufacturer will presumably be able to develop a system that meets that test suite and be confident that it will pass regardless of which organization is doing the testing.

It may do a lot for the use of IP in Smart Grid, which may do a lot for making consumer-side devices available, since so many consumer-side devices already "do" IP in some form.

It could even lead to some genuine interoperability, and/or advance the development of "gateway" devices that speak IP over different physical layer protocols. 

What might this mean for regulators?  It may mean that there will be fewer different protocols, standards, and variations on a theme to keep track of when companies start making proposals, or consumers start trying to figure out what devices they need to get something useful from a "smarter grid."

Will it mean any or all of these things?  That remains to be seen.

Just because these guys are all standing in the same room doesn't mean it isn't for a pissing contest.

--Chris Kotting

Progress on SEP 2.0--Interoperability Consortium Announced

Moments ago at the Wi-Fi Alliance Smart Energy Forum, four key networking alliances announced a consortium to test and certify the interoperability of Smart Energy Profile 2.0 applications and devices.

This is big.  Important.  Vital to the success of the Smart Grid, even.

Why?  Well, until now, the ZigBee Alliance had a stranglehold on the certification and interoperability (C&I) of the forthcoming SEP 2.0 specification.  Organizations developing and certifying their own specifications is nothing new.  However, the development of Smart Energy Profile 2.0 has become so important to the Smart Grid industry in North America and beyond that a single alliance--even one with as broad a membership base as the ZigBee Alliance--maintaining the C&I program for devices running SEP 2.0 would be simply untenable.  Too many competing agendas from multiple competing alliances leads not just to a confused market, but to a non-interoperable market.

The Wi-Fi Alliance will ship a billion chipsets this year--they get interoperability.  ZigBee, HomePlug, and HomeGrid combined ship a fraction of that number; while each has a C&I program, the fact that Wi-Fi has certified more than 10,000 products over the last decade means they understand both the technical challenges and implementation nuances required to deliver successful products to industrial, commercial, and consumer markets.  I expect that the best ingredients from each of the four alliances' C&I programs will combine to deliver a compelling recipe, one which satiates stakeholders' hunger in their respective markets.

Do I expect to see all the alliances together on a stage at GridWeek singing Kumbaya?  Uh, no.  Never confuse selling with installing.  I'm thrilled that the four alliances have agreed to bury the hatchet in an attempt to collaborate on C&I.  But I'm entirely realistic that in burying the hatchet, each alliance will still bring to the table guns, knives, phasors (synchro?), shanks, and shivs.  Ultimately, SEP 2.0 customers will compel the participating alliances to behave, to cooperate, to deliver to market truly interoperable products. 

If I'm a utility like PG&E, Southern California Edison, Duke, BC Hydro, or Consumers Energy, I count today as a huge win; each of these utilities (and numerous others I don't have space to name) are contributing to and leading Smart Grid standards development efforts, in an effort to ensure that the products which go into commercial, industrial, and residential spaces deliver the reliability and security required by regulators and consumers alike.

If I'm a retailer like Best Buy, Amazon, Currys, or Media Markt, I also count today as a huge win; while utilities will be the key delivery channel for most SEP 2.0 products at inception, expect that many retailers will stock SEP 2.0 certified products soon after (or perhaps upon) shipment of the first SEP 2.0 products.  Retailers had a heck of a time with Wi-Fi routers in the early days, with no defect found (NDF) returns exceeding 33%.  These issues were not related to the interoperability of the products at a wireless level, but due to configuration complexity, particularly around security.  Retailers have made clear to vendors and alliances that they will no longer put up with products that are so immature as to cause high levels of NDF returns; while certain products still slip through before they're ready (GoogleTV, for instance), retailers simply can't and won't deal with a reverse supply chain pumped full of functional-yet-unusable products.  Today's announcement should give hope to all retailers that once an SEP 2.0 product is sold, it stays sold. 

If I'm a consumer, I count today as a huge win.  Utilities and vendors have been espousing the benefits of Smart Grid for years; today's announcement may've shortened the timeframe to successful rollouts, leading to better control and hopefully lower overall bills for consumers.

And, if I'm a regulator, I count today as a huge win, since the multi-alliance consortium should theoretically enable a market which is easier for regulators and their constituents to understand.

Is today the signing of an armistice?  Hardly.  Putting together under a single C&I umbrella four alliances with powerful, multinational conglomerates as members may simply lead to yet another venue for the alliances to gripe and snipe at each other.

For the sake of every Smart Grid customer, I hope not.  Somebody needs to be the general, with colonels, light birds, and other officers and enlisted below him or her.  We don't need another forum for thrash.  We need a forum for progress.

Years from now, with the right kind of eyes, hopefully we'll look back on this day as the high water mark--that place where the wave finally broke and rolled back.

--Mike Coop

A Week for Connectivity, Smart Grid Style

The multi-headed being that is Connectivity Week returns to Silicon Valley this week for its annual confab.  I'm looking forward to participating again, contributing to panels focused on electric vehicles (Tuesday) and demand response (Thursday).  I've been at the forefront of some pretty cool technology advances (10Base-T in the early 90's, interactive television in the late 90's, secure Wi-Fi for the military in the early 2000's), but I don't think I've ever been as excited about the growth and potential of a market as I am about the Smart Grid.  Connectivity Week has five tracks and five co-located conferences over the course of four days, so the biggest challenge is typically figuring out which most excellent session to attend. 

California is an interesting location to host Connectivity Week; Grid-Interop and GridWeek (Clasma's other two conferences) move around, but Connectivity Week is firmly rooted in Santa Clara.  Though Santa Clara itself is served by Silicon Valley Power, Northern California is PG&E service territory.  PG&E is one of the Smart Grid's early innovators, but has run into widely-publicized problems (particularly around smart meter rollouts) because they seem to have little concept of how to market programs to their customers, or how to make compelling market-driven rate cases to regulators.  PG&E's not alone in this regard; this also isn't the first time we've seen monolithic monopolies--those which fulfill a fundamental need whose ubiquity, reliability, and necessity are typically taken for granted by customers--struggle with customer service and messaging.  This rodeo has played out before in other markets, particularly in the telecommunications and pay television sectors.  

(Note to PG&E…we can help.  We've been there.)

PG&E is spending an enormous amount of money on Smart Grid technology development, not just in metering but in Home Area Networking (HANs), Home Energy Management Systems (HEMS), and Demand Response (DR), among other areas.  Anyone who lived through the rolling brownouts California had a decade-plus ago (as I did) well remembers the uncertainty that customers of all types had to endure.  Residential consumers had to worry whether or not their air conditioners would stay on, or whether they'd be forced to swelter in triple-digit summer heat.  Commercial and industrial consumers fretted whether they'd have clean enough power to run their fabs, or any power at all to run their offices.

Speaking of less-than-stellar memories, baseball fans also remember the Enron sign in the bottom left of the scoreboard at Pac Bell, er, SBC, er, AT&T Park.  The Smartest Guys in the Room even had enough foresight to do a multi-year deal with the Giants, ensuring that their name and logo would remain front and center, right in the faces of denizens of The Phone Booth, long after their shell game had collapsed.

Speaking of collapses, we're at a crucial point in the Smart Grid's development, one which over the next 12 to 24 months will prove whether this market has legs, or is another fad like, uh, Enron Broadband.  The next year or two will determine whether business models surrounding the Smart Grid are as legitimate as the stories startups tell their Sand Hill Road investors, or whether government aid is a panacea and the sole profitable path to a smarter grid.  Naysayers believe that the Smart Grid is a house of cards, one which will collapse just like Spain's and Italy's solar markets did over the past few years once their respective governments pulled incentives.  Supporters (yeasayers?) see the Smart Grid as a collection of technologies and capabilities that, in toto, lead to not only a more efficient utility network, but one that spews fewer noxious emissions into the atmosphere.

The next four days at Connectivity Week, Smart Grid braintrust from North America and beyond will converge to discuss a myriad of issues--many which are important to some, some which are vital to all.  Hopefully I'll see you here, where we can discuss electric vehicles, demand response, or any of the wide variety of topics covered over the course of the week...

--Mike Coop

Big Data for the Smart Grid

(This post originally appeared at Christine Hertzog's Smart Grid Library site)

Big data is one of the buzz words tossed around in Smart Grid circles these days, and it will be the subject of discussion at a session I’ll host later this week.   What exactly is it?  Like the universe itself, Smart Grid data is in an expansion phase.  Big Smart Grid data consists of large datasets enabled by the Smart Grid that create value for data owners and data users.  (That’s my trial definition, and I invite your comments on it).  This data is so new that it doesn’t have many examples of organization.  However, other business sectors have been inspired by biology and organized data into taxonomies that create hierarchies, categories and rankings to identify relative positions of data within those hierarchies.  These experiences offer lessons to help utilities, service providers, and vendors manage the looming tsunami/avalanche/deluge of Smart Grid data.

Here’s my speculative description of how we will organize Smart Grid data (with apologies to my high school biology teacher).  It will be categorized in various classes – such as utility data, consumer data, and market data.  It will consist of primary data, completely factual “it is what it is” data; and secondary data created from primary data through analytics and business intelligence applications.  Within the utility data class, there will be operational data, services data, and market data.  Operational data includes status information about assets in substations, alarms, maintenance schedules, and meter readings.  This operational data has subclasses of data, such as maintenance data, which will apply analytics to equipment performance data to predict and prioritize assets in need of repair.

Consumer data includes name, address, and meter number, and much more.  For instance, a consumer may have a home energy management system (HEMS) service and voluntarily furnish household information about number of occupants, home office presence, heating, ventilation, and air conditioning (HVAC) details, and number and type of appliances.  A significant amount of value is anticipated to reside in secondary consumer data –behavioral analytics of consumer usage data will have value to utilities, service providers, and vendors, in addition to the owners (consumers) of that data.

Utilities and other energy service providers need this type of consumer data to effectively enlist support for future energy efficiency and demand response campaigns and programs that reward changes in energy consumption.  CRM and analytics applications can deliver valuable information to let utilities act as “trusted advisors” to consumers to reduce or shape energy use.  The recent California Public Utility Commission (CPUC) proposed decision about consumer electricity usage data stated that “Enabling consumers and companies to assess and act on this information is key to advancing many of California’s energy policies, such as promoting conservation, reducing demand in response to grid events and price signals, reducing summer peak demands, and efficiently incorporating renewable energy and electric vehicles into grid operations.”  It’s easy to hear the ka-ching of monetization in consumer electricity usage data, along with other classes of big Smart Grid data, and the critical need to effectively organize it into meaningful information.

Utilities and other energy service providers face dual challenges with big Smart Grid data – particularly regarding consumer data:  1) cost-effectively collecting consumer data with appropriate security and privacy safeguards and 2) climbing a steep learning curve to conduct analyses of the data and develop meaningful information.  For many firms, it will be more effective to outsource the data collection and analytics to companies skilled at handling big data to get full information value from consumer data.

A lot of meaningful information will be exchanged in the next two weeks at several upcoming Smart Grid shows, including ConnectivityWeek , Grid ComForum, and the Smart Grid Technology Conference, and join me there to contribute to the conversations.

 --Christine Hertzog

PEVs and Fuel Taxes, Part II

(This post originally appeared on Chris Kotting's SmartGrid Realities blog)

Way back on Valentine's Day, I wrote about the problem of declining fuel-use taxes associated with PEVs, in the context of a discussion about the right and wrong ways to handle "roaming" (recharging away from your primary home / business location.)

Back then, I indicated that states were going to be looking to replace that lost revenue.  Well, it looks as though I wasn't the only one to see that hand writing on the wall.¹  A scant nine days after I wrote that entry:

• a Texas legislator introduced a Bill that would require the Texas DOT to initiate a pilot project to charge a per mile driven tax on electric vehicles, through either a periodic reading of the odometer, or an electronic device installed on the vehicle to report mileage.
• a Bill was read into the Washington Senate that would impose a $100 / year tax on electric vehicles (the link is to the latest version.)

What I had missed was that an Oregon legislator had already introduced a Bill about a month earlier to establish a per-mile vehicle use tax (based on either electronic reporting of mileage or location tracking), which you can bypass if you're willing to pay a flat $300 / year fee.  For PHEV (Plugin Hybrid Electric Vehicles, that can either use an engine or an outlet to recharge) owners, the bill apparently allows one to petition the state for a refund of fuel-based road use taxes.

At this point, none of these measures has been passed, though none of them has died yet, either.

Sometimes, I hate to be right.

But the question is raised, which is the more appropriate measure?  There seems to be movement in the direction of both really invasive (mileage reporting) to ridiculously invasive (location tracking) and non-invasive KISS-principle (annual fee tacked on to vehicle registration.)

It seems to me that the cost of more invasive methods outweighs any advantage there may be in equitable allocation of tax burden, though I imagine that the DOT planning gurus would love to have the vehicle transit data. The hitch is that you have to pay to collect and secure a lot of personally identifiable information, and then there's the problems (real or imagined) that may arise from one government agency (the DOT) having information that another government agency (law enforcement) may want, whether there are protections on that information or not.

It seems to me that a not-unreasonable compromise would be a flat fee that factors in vehicle weight, but I'm not a Civil Engineer, so I don't know how well that compares to the wear and tear a given vehicle puts on roads.

It still appears that the easiest solutions, involving maximum re-use of existing structures and systems, are being bypassed in favor of different models, just because this thing is called "new."

---

¹ For those inclined to correct me to "handwriting on the wall," I refer you to the origin of the idiom, the Biblical Book of Daniel, Chapter 5.

--Chris Kotting

Why We Need to Do This...

(This post originally appeared on Chris Kotting's SmartGrid Realities blog)

The following is an early draft of an intended first entry in this blog.  I never posted it, but recent events, both in the industry and in my own life have made it more relevant than when I first wrote it.

This blog is supposed to be about realities, here are some realities about why we need to do Smart Grid, as I understand them:

• The economy tanking when it did actually did the electric power industry a huge favour. It bought us all a little bit of time. When the economy is really cranking, demand for electricity grows. 
• Despite the economy diving faster than an SR-71 with both engines flamed out, the demand for power still grew. However, it's been doing it a lot more slowly. 
• As the economy recovers, electric demand will rise faster than it has been of late, possibly faster than it was rising before. 
• We have two choices from here. Either do what we've always done; build additional (expensive, fossil-fuel consuming, environmentally difficult) powerplants, or learn to use the grid, different resources, and the powerplants we already have in place, more efficiently. 

That's a lot of what SmartGrid is about, making the most of that second option. A lot of very bright people are trying to make that possible, along with a few "Average Joes" like me. Will it be expensive? Probably. Will it be more expensive than building those powerplants? That depends on how you do the math.

You see, for far to long, we've treated our environment like resources are limitless. By "environment" I don't mean strictly the pure air/tree hugging/save the whales variety, though that's certainly a part of it.  What I mean is the whole socioeconomic engine that's driven in large part by fossil fuels as a source of energy.

We've been treating fossil fuels like like they're infinite, but they aren't. We have a closed system here, and eventually, we're going out run out of stuff to pull out of the ground to do energy conversion with.  That reality is a future cost that hasn't really been factored in historically, so we're starting to pay the price now for having ignored it.

Yes, nuclear power is a possibility, and there are some really intriguing designs out there.  However, getting from intriguing designs to practical application takes time.  Sometimes lots of it. 

The longer we keep whistling in the dark about this, the worse things are going to get before they get any better.

I'm no tree-hugger (well, maybe a little bit.) Still, I like to go fast in my car, be comfortable, and have all the power I need whenever I want it at cheap rates as much as the next person, and maybe more than some of you.  However I do know when something is a threat to my children's future, and this is one.

Now we could do this Smart Grid thing very wrong, and end up with a terrible, limited, energy constrained, privacy invaded, society. 

We could also do it very right, and hand our kids and grandkids a better, freer, cleaner and less limited world than we started with.

The difference between the two is likely to be telling each other the truth about what we're doing and why.  Deal with the realities, even when they're ugly, and every once in a while look further ahead than next quarter's (or next year's) financial statements.

--Chris Kotting

Smart Grid Lessons from Distance Running...

(This post originally appeared on Chris Kotting's SmartGrid Realities blog)

A long time ago, I was a competitive distance runner.  Well, I was competitive in the sense that I was in Junior Varsity and Varsity cross-country races in High School, but my competition was pretty much the guys bumping, huffing and puffing in the middle of the pack.

Bill Cosby was a High School Cross Country runner, too.  He defined Cross Country as a sport where you run 10 miles to throw up.  Funny to a non-runner, too true to be all that funny for me.

I never became a great distance runner, but I learned how to stay in the race, endure the tough parts, and finish respectably.  Some of those lessons have analogous lessons in the evolving Smart Grid world.

Lesson 1: Don't be in a hurry.
In every race, there were some who would take off like rabbits.  A few (very few) could pull ahead and stay there for the whole race.  Most of them faded into the middle of the pack, or worse yet, got shelled off the back. 

Those who could stay out front had already learned Lesson 2.


Lesson 2: Plan to run the whole race.
A good runner knows what to expect from the course, when and where to push, and when to take it easier and recover a bit.  You only have so much energy to expend, and knowing where and how to expend it, and always keeping some for the end makes the difference between a good run and 10 miles of sheer freaking torture.

Lesson 3: Get better at the hardest stuff.
I am not built like a distance runner.  I had a distance runner's upper body, but a football lineman's legs.  On the flat, any decent runner could outstrip me after a few miles.  My one advantage was hills.  The steeper, and the later in the race, the better.  Nothing takes the heart out of a distance runner like someone hammering smoothly past, up a steep hill, late in the race.  The problem was, there were never enough hills for me to place well, and I never got really good on the flats, but I got better.

Okay, enough of me reliving my gory days (no that isn't a typo, I left the "l" out on purpose), how does this relate to Smart Grid?

Lesson 1: Don't be in a hurry.
I hate to say it, but the ARRA funding wasn't necessarily the best thing for Smart Grid.  Having to get a plan together, be "shovel ready", and spend all the money in a short time frame seems to have given folks a bad case of "starting line fever."  Taking off and getting the lead early isn't necessarily how to do well in a market place that is going to take at leasta decade to develop.  Probably closer to 20 years.

I hear the cries of "Sacrilege!", with fingers pointing to the fast-track standards development, and the massive rollouts of Smart Meters in many places.  Well, I'm not the only one saying that the Emperor's naughty bits are showing.

Let's be real.  Where we're talking about changing how we produce, distribute and use energy, we aren't talking a technological change.  In reality, we're talking about a societal change.  Changing a society takes time.  You can hammer through hardware implementations in the grid as fast as you like, and design model tariffs for every scenario, but until the ones making energy usage decisions (i.e. the folks buying appliances, homes and cars, flipping light switches and making decisions about their businesses and commercial buildings) are accustomed to the new paradigm, the new system doesn't exist.

Look at internet services.  The generation of people who dreamed up the technology isn't the generation that built a marketplace around it.  Our kids are more fluent with, and have a more intuitive sense of, the paradigm than most of us old geeks.  The same thing will happen with Smart Grid.  We can theorize, but the market won't really be in play until a generation has grown up with it as normal.

That means my daughter may not really "grok" it, but her kids will.

It's going to be a log run, and being out in front now may mean that you will learn (or maybe are already learning) Lessons 2 and 3 the hard way.

Lesson 2: Plan to run the whole race.
This is really an extension of Lesson 1.  The fact is, we don't know the course yet, and early lock-in of a race plan is a risky idea.  Whether you're a systems vendor, a utility, or a consumer, be careful.  Plan for change.  If the profitability of a decision is dependent on a kickback, rebate, tax break or other incentive that doesn't naturally occur in the marketplace, don't bet the race on it.  It may not be there later.

Some companies are learning this the hard way right now.  They put a pile of money into systems that support (or mostly support) what has already been deemed a "legacy" standard, and isn't able to do what is being asked of it today, let alone tomorrow.

If you're one of those companies, you know what I'm talking about.  That next hill is going to hurt...

Lesson 3: Get better at the hardest stuff.
Lets face it, folks.  Utilities are good at engineering.  Really good.  They have had to be for a long time.  Many (though not all) of them have gotten pretty good at dealing with regulators as well.

What they aren't good at (for the most part) is dealing with customers as "customers" instead of "ratepayers."

What's the difference? 

• A ratepayer is someone who pays a tariffed rate for something that you (and only you) provide, on terms that are set in the tariff.  
• A customer is someone who you have to convince should spend their hard earned dollars on your service.

Even if a utility doesn't face competition per se it needs to start treating customers like customers and not ratepayers. 

Making good on the promise of Smart Grid over the long haul will require both honesty and trust.  Utility service is moving away from "We provide it, you pay for it" towards a collaboration.  In a smart-grid world, customer-owned devices will be providing energy services, and customers will expect fair compensation for that.  Utilities will command and control less, and act more as a conductor in an orchestra than a drill sergeant.  That requires a greater degree of trust.

Utilities with "ratepayers" don't trust, and are rarely trusted.  Utilities with "customers" are actively engaged in the process of earning their customer's trust.

One other thing I learned.  There are lots of ways to "play dirty" in the middle of the pack to get an advantage.  The advantage is temporary.  The pack remembers, and a runner who uses those tricks will end up paying the price, maybe not today's race, maybe not tomorrow's, but soon and for the rest of the season.<sup>*

*</sup> With apologies to Casablanca fans everywhere...

 --Chris Kotting

Right Idea, Wrong Platform...

(This post originally appeared on Chris Kotting's SmartGrid Realities blog)

Okay, I can't help sharing this.  A quick search on Facebook reveals that there are 3 different groups there with concerns about Smart Meter data privacy.  One of them is completely open.

Really?  Are you sure you want to use Facebook to build your privacy advocacy group?

I mean, I understand about privacy concerns, that's why I'm involved in the privacy work on Smart Grid (among other areas.)  Addressing those concerns is critical.  I've said so elsewhere.

But if you are really a privacy advocate getting those concerns addressed means rolling up your sleeves, and helping with the real business discussions where standards and business practices are being established, not flapping around Facebook with a bucketful of speculation and little credibility. 

(Sorry, but using a platform created by the guy who called people who "trust me" "Dumb ****s" does not enhance one's credibility as a privacy expert.)

Really, those of us working on this stuff could use some help.  All we ask is that you come willing to do two things;

• listen to what is already being done to resolve the potential problem, and 
• help us do it better.

--Chris Kotting

Smart Grid Security East, Day 2

(This post originally appeared on Chris Kotting's SmartGrid Realities blog)

Still getting caught up on e-mails after Smart Grid Security East.  I was hoping to update things from the conference site, but with moderating two panels and networking, I got behind the curve.

So not as much from the second day, but I'll update this as I get a chance to review the conference session videos.

Panel of Security Solutions Vendors

Interesting comments: Most threats are insiders. 

(I'm not sure about that, but clearly most successful attacks are insider.  One defence against both insider and outsider threats:  Before executing a command, the system needs to ask "Does the command make sense?")

Interesting to hear security vendors name the meter manufacturers they're working with.

Who's not on the “we're secure” list?

You may have an interoperability standard, but without the ability to enforce interoperability, you don't have anything. It becomes interoperability in theory only.

At one point, commenting on how long the standards process takes (and it is admittedly a long painful process), Mike Ahmadi compared the standards process to the food service industry, noting that food service is all about “there are people here, make food now.”

Based on that comparison, I'd say that the Smart Grid standards process is the Iron Chef of standards processes;

• There's not enough time,
• You don't know what you'll have to work with, and
• When you're done, people who weren't involved in the process will judge the result.

A great comment from Annabelle Lee's keynote: "If you're not failing, you aren't doing R&D."

From the DOE, FERC, NERC Panel on the Energy Grid Risk Management Process

William J.Hunteman of DOE commented that the goal is the development of a risk management process, not a risk management “howto.”  He also commented on the need for a greater utility representation.

As I said, more later after I've had a chance to catch up on the video from parts I missed.

All in all, this was an outstanding conference, with the top people in the field discussing how they see the world of Smart Grid Security. We need more conferences like this.

 --Chris Kotting

Will Smart Grid Need a Carterfone Decision?

(This post originally appeared on Chris Kotting's SmartGrid Realities blog)

Anybody remember the days before the AT&T breakup?

How about the days (before that) when you had to lease a special "protective device" from MaBell if you were going to hook up something?  Or the time before that when you just plain couldn't get anything but Ma Bell equipment?

Just a bit over 42 years ago, the FCC told the phone companies that they couldn't have absolute control of what got hooked to their network, and set standards for what could be hooked to the phone network.  While it still took a while to bear fruit, that was the beginning of the process that got us to the anywhere / anytime connectivity that we have generally gotten used to.

While some very talented people have been working hard at interoperability, I hear a lot of talk (and have read a few use cases) that indicate that at least some parties think that if the utility doesn't exercise control over the devices on the customer side of the meter, there is a threat to the reliability of the grid.

Think about that for just a hot second.  The existing grid doesn't need that kind of control of end-user devices, so why should a more intelligent and adaptable grid need it?

Now, I can see an argument for direct control of customer owned generation and storage, perhaps.  I can also see ways that it seems to me the same job could be done without it, and I suspect that if we don't design in that kind of flexibility now, it will be required of the grid later, and require some expen$ive re-engineering.

I invite comment and thought...

--Chris Kotting

Thoughts from Smart Grid Security East

(This post originally appeared on Chris Kotting's SmartGrid Realities blog)

Note: I'm not naming names here, because (a) some of these honest comments could get people in trouble back in the office, (b) I recognize that these comments are out-of context and paraphrased, and the speaker might not have meant exactly what I heard.  

(My opinions are in italics.)

An interesting observation from a meter vendor:
Security is starting to come from meter vendors because their customers (the utilities) are insisting on it.  It is a market-driven commercial need.

His advice to consumers who are concerned about security and privacy:

• Ignore the 'tinfoil hat brigade' in Marin County. Do your own research.
• Ask the tough questions of your utility, and / or your PUC:
  • What data is the company gathering?
  • How long will they retain it?
  • How will they protect it?
  • Who else gets it, why and under what conditions?

 In my opinion, this will only increase as PUCs get up to speed on security and start demanding it of utilities.  PUCs, ask your utilities these questions. 

The utilities need a financial reason to spend the money on security and privacy.  There is a need to educate the business professionals about the need for security. From a business standpoint, by itself, security is a negative ROI item.  You can spend money on it, and have no ROI.  In fact, if you do it right, you'll never have any ROI on it, because the ROI impact of security is a negative ROI for not doing it.

Other interesting comments overheard:

One software company rep claimed to have achieved "absolute development security." Move over IBM and Watson.  Heck with artificial intelligence, these guys have developed artificial omniscience.

If you're interested in a good analysis of insider threats, Google the Verizon insider threat study.  (This from a former Secret Service agent.)

(From an equipment supplier) We do security testing on our competitor's products, but we don't keep our findings secret.  We call or e-mail them if we find anything.  It does me no good to hide the results of my testing on my competitor's equipment from my competitor. If I try to screw him, I screw myself.

(From another supplier on the same panel)  In other industries (finance, for example) there is a common association for sharing vulnerabilities and certification processes. That needs to be done for Smart Grid. It is happening to some extent organically, but it needs to happen intentionally.

Equipment vendors are doing what they can, but the buyers need to be held accountable for secure implementations. True in part, but the buyers are dependent on the vendors to tell them how to secure the implementations.  The components have to be secure, but so do the combinations of components, and the operations and systems they interact with.

The problem of long lifespans of security-related equipment.  The ability to upgrade field equipment remotely is critical.  For example, in residential meters, a truck roll to upgrade a meter may cost more than the device.

The appliance vendors still may not have come completely to terms with the need for a software upgrade path.   How do you upgrade a refrigerator's firmware?  Appliance upgrades are not likely to be allowed to come through the Utility AMI network. 

Meter vendors have to treat whatever is on the customer side as inherently hostile. They do not know whether the equipment is currently patched, so they must limit what data can come from the customer side of the meter to that which is absolutely necessary.

From a security standpoint, passing “content” (consumer information, appliance firmware or consumer instructions) either way over a “control” network is a bad idea, particularly if equipment on the customer side of the meter is passing commands to (or through) the meter.  It creates too much opportunity for an attack vector.
This makes “prices to devices” a far more viable option from a security standpoint.  For example, if;

• the utility broadcasts pricing information to the customer and/or the customer's equipment (via the AMI network, or through another channel), 
• equipment on the customer side responds to that pricing information without discrete commands from the utility and
• the utility simply reads the meter as needed,

the result is an "air gapped" communications system.  Far more secure for the utility and the customer.

All in all, a very interesting conference, and I was only there for half the day today (the morning was spent in travel mode.)

More to come tomorrow...

--Chris Kotting 

Smart Grid Security East...Late-Breaking Discount!

Smart Grid Security East takes place next week in Knoxville.  With workshops on Monday and conference sessions Tuesday and Wednesday, the key movers and shakers in North American Smart Grid security will converge for three days of hardcore discussion, education, and debate.  Keynotes from Bill Hunteman of DoE and Annabelle Lee of EPRI highlight an all-star cast, including speakers from leading vendors like GE, IBM, and AT&T, and utilities on the cutting edge of Smart Grid deployments, including PG&E, Southern Company, and Duke Energy.

We're humbled and honored that two members of the ThinkSmartGrid team have been asked to participate.  On Tuesday morning, Mike Coop will moderate a panel discussion focusing on NIST's Interoperability Report 7628.  Version 1.0 of the NISTIR establishes a framework which organizations can use to develop their own specific Smart Grid security policies; if you haven't read it, grab a copy from NIST's site here.  Wednesday morning, Chris Kotting is participating in a panel discussion on customer data, with a specific focus on privacy impacts and considerations.  Both Kotting and Coop are active in multiple Smart Grid standards efforts, and have been active participants in the development of the NISTIR since 2009.

Kotting and Coop hope to see you in Knoxville--and if you haven't signed up yet, click here to save $300 off of your registration!

Oh, Give Me a Home Where the PEVs Roam...(?)

(This post originally appeared on Chris Kotting's SmartGrid Realities blog)

There has been a lot of discussion about Plugin Electric Vehicle (PEV) "roaming" in various contexts.  For those not familiar with the term, PEV "roaming" is like cellular phone roaming. 

• With a cell phone, if you take or make a call outside of your cellular carrier's service territory, the carrier who handles the call bills your carrier, who bills you, and the call gets charged back to your home (or business) cellular phone bill.
• With a PEV, you recharge your PEV outside of your local distribution company's service territory, that distribution company bills your distribution company, and it gets charged back to your home (or business) electricity bill.

Roaming makes sense for cell phones, but I'm not sure it makes sense for PEVs. 

Phone companies have had an infrastructure all along that provides for one carrier billing another for service provided to end users (i.e. intercarrier compensation.)  That doesn't mean that it works without problems.  The FCC has been wrestling with intercarrier compensation problems for about a decade, and still hasn't found a universal solution.  For that matter, ask any telco exec about access charges and "traffic pumping" sometime if you want a real earful.  However, at least there is a business case and infrastructure for doing it.

Electric utilities have never had or needed kind of infrastructure.  I'm not sure there's a business case for developing it for PEVs, either.

Let's take one aspect of transportation costs for an example of the problem; taxes on transportation fuels. 

Right now, gasoline is taxed at a rate of $0.18 / gallon at the federal level, and between zero and $0.461 / gallon at the state level.  That is just the excise tax on fuel.  Some states charge sales tax on top of that.

In most States, most of that money goes to fund the Department of Transportation (around 60% of the Federal portion goes to the USDOT.)  In some states, it is the vast majority of the money that goes to build and maintain roads.  As electric vehicles increase in market penetration, that tax revenue will dry up.  It won't take long for the various states to start taxing electricity when used as a "motor fuel."  I imagine that it isn't happening now only because (a) there is a desire to encourage initial PEV adoption, and (b) the revenue impact of PEVs hasn't been felt yet.

Right now, these taxes on gasoline are paid along with the fuel, in a "pay at the pump" situation.  It's a fairly efficient and equitable way to collect taxes to support road use, since presumably one drives the roads in the locality where you purchase fuel, at least most of the time.  If PEV recharge stations operate on the same "pay at the pump" concept (you pay whatever the local rate is for a recharge wherever you're recharging, when you're recharging) the transaction is fairly simple, and the taxes continue to get collected in pretty much the same manner.

Now if the Utility operates the recharge station, they'll have to rework their backoffice systems to handle taxing "motor electricity" and remitting to the correct authority.  That's fairly straightforward, even trivial, in a "pay at the pump" scenario.  The customer swipes a credit card at the recharge station, and the credit card charge includes the taxes in effect at that recharge station.  If the corner 7/11 can do it with gasoline, I gotta figure a utility can do it with watts.

Are Utilities additionally going to rework their back office systems to handle

• different tax rates, depending on the state (or even locality) in which a PEV is charged,
• billing for, tracking and remitting the taxes to the appropriate State,
• tracking and remitting to the Feds their portion,
• dealing with the inevitable errors and exceptions,

just so they can do PEV roaming? 

I'd love to be listening in as a customer service rep tries to help a customer understand their electric bill after Grandma and Grandpa make a cross country trip to see the kids.  That's another aspect, Customers are accustomed to paying for transportation fuel where they "fuel up". 

What happens if localities jump on the bandwagon?  City transportation departments are cash-strapped, and while people are screaming over fuel prices already, having something new to tax gives a great opportunity to "bury" the tax.

All of that gets avoided in a "pay at the pump" scenario.

"Ah," I hear you saying, "but what happens when I recharge at a friend's house?"  Uh, you settle up with your friend, on whatever basis you and your friend choose.  That's no different than a million other "6-pack" transactions that happen every day.  Last week I repaired a friend's PC and charged him a cup of coffee.  Does AEP want to get involved, just because electricity was involved?

Fuel taxes are only the beginning.  Privacy and data security issues (with all that those entail) get rather simpler in a "pay at the pump" scenario as well.

Could these problems be resolved?  Probably.

With an existing, simple, and customer friendly business model, and no compelling reason to open that can of worms, should we? 

--Chris Kotting

Smart Grid Valentine’s Messages

(This post originally appeared at Christine Hertzog's Smart Grid Library site)

It’s Valentine’s Day, and here are a few special wishes I’m sending:

1.  A Thinking of You to my electric utility, and to all the hardworking employees there who work so diligently to ensure my ongoing reliable and safe delivery of electricity in spite of an aging infrastructure.  I do appreciate the great service you provide.  However, don’t rest on your laurels.  There’s lots of work to be done to regain the hearts and minds of other ratepayers who don’t have such a positive view of you.  You might start with more education about the consumer benefits of smart meters – within your company as well as to your customers.  Not enough ratepayers know that these will help everyone manage their electricity use and help avoid the investment in new peak power purchases or equipment, thereby saving all ratepayers money and reducing CO2 emissions.
2. A Thanks for Being There greeting to California representative, Jackie Speier, who just introduced HR 654 to protect Internet users’ personal information.  Called the “Do Not Track Me Online Act of 2011”, it delivers an opt-out capability for consumers regarding the collection and sale of their online history.  This bill sets up a “do not track” feature that consumers could invoke to prevent detailed data gathering about search history.  According to a recent USA Today poll, 70% of Facebook members and 52% of Google users are either “very concerned” or “somewhat” concerned about their privacy, so, if passed, this bill would enable everyone to get a small measure of protection for some online activity.  However, the bill does not address broader privacy issues, and it does not address whether or not energy use data is a form of online data.  (As I mentioned in previous blogs, Smart Grid leaders need to clearly articulate what types of information is collected by smart meters and/or gathered by Home Energy Management System (HEMS) solutions in order to avoid consumer concerns about their energy use privacy.  So far, there’s little evidence that lawmakers or regulators are considering this new type of data in their development of online data legislation.)
3. A You’re Special sentiment to all the auto manufacturers introducing electric vehicles (EVs) to the American market.  The latest turmoils in the Middle East should serve as sobering reminders of the incredible risks the national and world economies face because of dependencies on oil.  Further amplification of that need to disentangle our economy from oil comes from today’s headlines about gas prices topping $4 a gallon this year.  There’s no amount of drilling that gets around the fact that more countries like the fast-developing economies of China and India are competing for the remaining supplies of petroleum, and these will go to the highest bidders.  Yes, we need more affordable models and rapid build-out of a charging infrastructure, but these are surmountable problems that create local jobs.  Did Henry Ford stop building cars because there were more stables than gas stations when he started his company?
4. A Don’t Stop message to the growing numbers of application developers that are entering the Smart Grid sector.  While much initial attention has been given to the HEMS market, developers should keep in mind that the entire electrical infrastructure needs upgrading, and much of it will be done with software.  From sophisticated communications capabilities to distributed intelligence for complex event processing to knowledge retention and training applications, the need for software is growing, and existing vendors, many of whom have hardware expertise, won’t be able to develop and support quality software on their own.

--Christine Hertzog

Security Lessons from the Financial World...

(This post originally appeared on Chris Kotting's SmartGrid Realities blog)

I'm getting caught up on some reading that I set aside until I had a gap.  Once again, an InfoWorld columnist has pointed out an IT security threat that can affect the SmartGrid.  In a nutshell, Bill Snyder (whose column is on the financial side of IT) points out that a sufficiently clever hacker could manipulate the financial markets, particularly the ultrafast transactions in high-frequency trading networks, in a way that would be exceedingly difficult to trace.

Our anti-hero wouldn't send a bogus transaction, pretend to be someone else, or any of the usual schemes.  All (s)he would have to do is diddle with network latency.  In some (nay, many) financial markets the phrase "seconds count" is outdated.  In these markets transactions delayed by milliseconds can make a difference of millions of dollars in the value of a transaction.  You don't have to take my word for it, since Bill Snyder points to both a cPacket Networks whitepaper and a previous InfoWorld Column that discusses an article in Physics Review E that suggests that the location of financial datacenters should take into account the latency that distance adds to speed-of-light communications.

The latter paper (titled "Relativistic statistical arbitrage") reads like what you would expect at the conjunction of physics, mathematics and economics, containing phrases like "Such slowing or stopping of the propagation of pricing information due to arbitrage is somewhat analogous to the refraction and  scattering of light by a dielectric medium, but novel in an econophysical context."

It's a dense read. It's also bleeping brilliant, and potentially deeply frightening.

Okay, so what does that mean for the SmartGrid world?  Ask any power engineer about what effect a few milliseconds change in latency lag would have on frequency regulation, particularly in an "event" scenario.  I'm not that imaginative, but I can see some clever soul with an ax to grind, a point to make, or a bundle of cash to make, playing "crack the whip" with spinning reserve.

Nasty.

For that matter, some enterprising soul could make a bundle in our bulk energy markets, if the transactions get dense enough.

Once again, security is not a product feature, it's a business mindset.

--Chris Kotting

Building Policies and Guidelines for Energy Use Data Is Critical to Smart Grid Success

(This post originally appeared at Christine Hertzog's Smart Grid Library site)

Distributech 2011 showed that the Smart Grid is big, and getting bigger.  With over 8000 attendees and 400 exhibitors, there was plenty of buzz about distribution automation, partnerships, and the last link in the value chain – the consumer.  Many exhibitors featured their own or partnered Home Energy Management Systems (HEMS) solutions aimed at helping residential consumers manage energy use in their homes.  While there’s plenty of talking points about the value of energy use data to reduce utility bills, there’s virtually no talk about the information value of energy use data beyond that immediate application, and who benefits from it. 

It’s clear that consumers, policy makers, utilities, and Energy Service Providers (ESPs) need to understand the value that energy use data may have in the future.  Today, we have offline data, which includes income, credit rating, home value, past purchases, number of children – all types of data that have been used by direct marketers for years.   Online data, which consists of IP-addressable search history and public information posted on sites such as Facebook and LinkedIn, is relatively new.  The latest trend is the merging of offline and online data for sale to advertisers, researchers, and content aggregators, and here’s where the concerns rise.  Electricity use data is a new form of online data – especially if you have a HEMS solution or IP-addressable appliances and electronics.  HEMS solutions will probably be offered by your local utility and/or ESPs.  Therefore, the policy about collection and use of that data could vary by utility (if these are the data collectors), or by ESPs such as a wireless communications company or a HEMS company.

Will we see HEMS analogs to the Google business model in which the search is free and the money is made selling search history data to advertisers and researchers?  What if the HEMS solution is free and the ESP or utility has the ability to take subscriber energy use data and market it?  What are the responses from policy makers so far?

The German government recently announced a new German foundation to investigate data security and the use of security standards and technology to protect user privacy.  Canada has a Privacy Act that defines how the federal government must handle information about individuals. There is ongoing National Institute of Standards and Technology (NIST) activity to create privacy and security recommendations for energy usage data for both residential as well and Commercial and Industrial (C&I) customers.  The USA does not have a comprehensive national data law, but instead relies on a patchwork of privacy laws and enforcement mechanisms. 

Until the NIST recommendations are completed, utilities and vendors might want to follow the lead of PG&E, which outlined this privacy policy on its website.  This policy reflects the collection of data by smart meters, and goes well beyond the usual privacy statements that are found on most other utility websites.   It clearly states, “We do not sell or provide personal customer information to third parties for their commercial benefit.”

Another source for guidelines is the Network Advertising Initiative‘s self-regulating policy for consumer opt-outs from behavioral advertising which addresses existing online information.  This might be the type of policy that manufacturers and ESPs offer for new online information about energy use collected from IP-addressable devices.   Consumers who understand that value of their data may be more likely to opt-in to enjoy reduced prices, membership discounts, or money back on their utility bills.  Transparency about who gets the value of energy use data will be key to win consumer confidence and support for Smart Grid initiatives.

--Christine Hertzog

Consumer Privacy, Energy Use Data, and Trust

(This post originally appeared at Christine Hertzog's Smart Grid Library site)

Consumer privacy concerns are an important focus of many Smart Grid conversations.  Everyone agrees that consumers need to be educated about the entirely new types of energy use data that can be created with Smart Grid technologies.  While we must ensure that consumers are aware of their rights and responsibilities regarding energy use data, there is less conversation ongoing about educating utilities and vendors to deploy programs to ensure data privacy, and there are no conversations ongoing about who owns the value of that energy use data.  

Like many introductions of past technologies or services, our knowledge of best practices and management lags behind the discovery of unintended consequences.   Do you recall when credit card receipts used to display the full card number?  It didn’t take long for unsavory characters to collect discarded receipts and go on spending sprees.  Credit card issuers and consumers didn’t think through the consequences of this display of information.  Many are learning the hard way today about posting information on social media sites.  There are recent news reports of insurance companies patrolling sites like Facebook to determine if claimants with back injuries just competed in marathons or completed other strenuous physical endeavors.  Doing much of the work previously done by insurance investigators, photographic evidence is voluntarily supplied with these updates.  Just like mom said, honesty is the best policy – and now we know why – you avoid the unintended consequences.                                                                                                                                                   

Many companies employ Chief Privacy Officers (CPOs) to develop and enact guidelines for the use and management of consumer data.  These companies also have documented policies for internal handling of data as part of employee training.  The four cornerstones of good privacy program development cover people, policy, process, and technology.  Privacy by Design identifies seven principles for good programs, including a proactive stance, end to end lifecycle protection, and respect for user’s privacy.  Utilities and vendors of Home Energy Management Systems (HEMS) should implement good privacy programs now.  These programs should emphasize protected handling of the minimum amounts of personally identifiable information because as far as data breaches are concerned, security professionals agree that it’s a matter of when, not if, these breaches will occur.  Privacy, like security, needs to be built into all products that monitor and/or manage energy consumption. 

Beyond the privacy concerns, there’s one other issue about energy use data that needs discussion – the topic of data use or exploitation.  Google, Facebook, and Amazon devised many profitable ways to sell or use information based on search history, purchase patterns, or like attributes.  There’s no doubt that HEMS solutions can collect vast amounts of use data about appliances and that utilities and other vendors may have authorized access to it. 

The bottom line question is:  who owns the value of that energy use data?  In the case of investor owned utilities, should regulators insist that proceeds of sales of anonymized energy use data be disbursed to ratepayers instead of shareholders?   And in the case of energy service providers, whether a utility or another vendor, there are a range of questions about how that data could be used that must be answered to avoid the mis-steps and abuses of privacy that we have seen from some social media sites.  Transparency will be critical to developing consumer confidence in Smart Grid technologies and programs, and all players planning to work with energy use data need to be aware of the responsibilities they have in building trust about that data.  Abuse or careless handling of this data could have the unintended consequences of damaging consumer support of Smart Grid projects.

--Christine Hertzog

Rethinking Electricity Production

(This post originally appeared at Christine Hertzog's Smart Grid Library site)

The Smart Grid offers ample opportunities to introduce disruptive technologies and disruptive thinking into the electricity supply chain.  Indeed, disruptive technologies and services that enable electricity production at the point of consumption or close to the point of consumption are prime examples of how the entire value chain for electricity may alter in the next 20 years.  But the generation of electricity in a distributed manner should not presume that consumption must only occur at the point of production.  

The existing grid configuration places centralized generation of megawatts (MW – a million watts) or gigawatts (GW – a billion watts) of electricity at locations that are usually far removed from the customers that use them.  A grid configuration that incorporates distributed generation (DG) puts electricity production on a smaller scale close to consumers.  Solar panels on business and residential rooftops are examples of DG, and offer interesting new business models that modify the electricity value chain.                                                                                                                   

An individual homeowner today may sell back excess generation capacity to the local utility at rates set by the local regulatory authority through Feed-in Tariffs (FiTs) or just run the meter backwards through net metering.  But what if a business aggregated the output of many homeowners’ rooftops to represent large kilowatts (KW) or even MW of electricity for sale back to that local utility?  That could result in better prices and greater revenues shared by all participating homeowners, and might also mean reduced costs for the utility since it was dealing with one entity rather than multiples of homeowners.  We already see some evolving forms of this business model at work.  Companies like Sun Edison focus on large expanses of rooftops found in commercial and institutional sectors, and do everything from purchase the solar equipment to monitoring its performance and dealing with utilities.  Solar City uses a similar business model for residential homes as well as commercial facilities.  Their residential model includes leasing solar equipment to homeowners and assuming responsibility for its upkeep.  These companies literally “lease” the rooftop to create electricity that is consumed on premises, and reducing the amount drawn from the grid. 

The driver for these business models is to reduce the costs of electricity for the participating businesses or homeowners.  However, there are untapped markets for the owners of rooftops that don’t have expensive electricity bills to justify solar investments, but do have prime real estate to generate electricity from the sun.  The disruptive thought here is to look at another industry – the minerals extraction industry – for leasing models that operate on a royalty basis.  The natural gas well on a property doesn’t necessarily supply nearby buildings with natural gas.  The property owner collects a royalty check from one company, and building occupants continue to pay the utility. 

As solar materials improve in performance, as new software applications appear that can monitor and predict solar energy production, and as more states encourage utility purchases of solar-generated electricity, perhaps we’ll see new business models that harvest the solar energy landing on our rooftops and deliver monthly royalty payments on an infinite and clean energy source.   It’s a paradigm shift to be sure, but the prospect of earning money from a rooftop would be a welcome technological and financial disruption for many homeowners and commercial property investors.

--Christine Hertzog

The Smart Grid and Disruptive Thinking

(This post originally appeared at Christine Hertzog's Smart Grid Library site)

Silicon Valley loves buzz words almost as much as new technology.  Entrepreneurs must have “disruptive technologies” to attract funding from venture capital firms.  The migration to a Smart Grid needs disruptive technologies that will range from new materials that increase energy intensity in renewable energies to new forms of energy storage.  But more than that, we need disruptive thinking to gain the full benefits of the Smart Grid.  Borrowing a couple of well-used buzz phrases, we need to think outside of the box and expect some paradigm shifts.

Many discussions about Smart Grid solutions focus on disruptive technologies without examining the underlying implications to business models and processes.  This is akin to buying an expensive, high-performance car and then pushing it down the street.  When results don’t measure up to expectations, the technology is inevitably blamed, heads roll, and new consultants are brought in.  When we were the new consultants, the highest priority task was usually a careful review of processes asking a few questions such as, “why do you do this?”  Once we had reviewed and revised processes, along with identifying skills and training gaps to assist employers in reskilling workers, the expensive technology investments did deliver the desired results in productivity improvements, reduced costs, and increased employee and customer satisfaction.

Smart Grid technologies enable changes in the electricity supply chain that will be disruptive to existing business and regulatory models.  Decreasing prices for new solar technologies and new financing options make distributed generation of electricity more likely on a greater scale in many regions of the country.   In California, 61 school districts are receiving American Recovery and Reinvestment Act (ARRA) tax credits to offset the costs of solar panel installations and build energy-efficient classrooms.   The state schools superintendent also announced an initiative that focuses on planning, procurement, and operational processes.  Called the Schools of the Future team, it includes representatives from education, state, labor, and business to identify and remove regulatory barriers, find potential funding sources, and build best practices about smart energy management in schools.  This is a great example of disruptive thinking to accompany disruptive technology.  One financing innovation I’d like to see is creation of public/private partnerships that let California polluters offset carbon emissions with investments in these school deployments of solar and building energy efficiency technologies. 

We should consider this decade the Great Electricity Restructuring.  Regardless of where you see yourself in the electricity supply chain it’s an opportune time to ask if there’s a better way to make electricity, transmit it, or use it.  For utilities, there are growing numbers of Smart Grid technologies that improve the safety, reliability, and delivery of electricity.  For consumers, the mainstreaming of home energy management solutions and energy efficiency solutions offer many new options for intelligent consumption of electricity, as well as residential generation opportunities.  Regardless of where in the supply chain that disruptive technology is introduced, it would be a mistake to presume that organizational behaviors (processes) or home operations shouldn’t have some paradigm shifts.  The Schools of the Future team offers us a teachable moment about the application of disruptive thinking with disruptive technology. 

--Christine Hertzog