August 27, 2007

In the old days, utilities used radios to give work orders to their crews. Today, they have converted to digital communications that can transmit more data at faster speeds. Budding technologies are now beckoning and utilities are once again faced with how they will embrace the future.

Power and gas companies need communications systems for more than voice. They need to be able to transmit maps, issue work orders and survey available inventories. They may even need video streaming and video conferencing capabilities. Utility services, though, are destined to get more involved and will require advanced metering with demand response programs as well as those that can "heal the grid" and better regulate the flow of electrons over the wires to relieve congestion.

Undoubtedly, utilities have progressed. In turn, they have improved productivity and decreased costs. But, the transition has been time consuming and expensive. Perfecting those operations is also outside their core competency of generating and delivering power and gas. So, they have increasingly turned to vendors that offer integrated services. It's a phenomenon that will continue as the offerings become more complex.

Many utilities are partnering with experts to deliver services. Reno, Nev.-based Sierra Pacific Power Co. just completed a wireless field service application that will operate on the AT&T wireless network. Similarly, Akron, Ohio-based FirstEnergy contracted with Sprint to replace 50 individual analog mobile radio systems.

Whether utilities focus on upgrading their existing information systems or whether they outsource those operations to others, chief information officers are emphasizing that one of their major goals is to convert their departments into knowledge bases where all employees turn to learn and to communicate -- an integration process that will allow upper management to make more informed decisions.

"To operate an effective and profitable business, executives must understand what is going on throughout the business," says Warren Causey, principal with Sierra Energy Group, a division of Energy Central, in a report on wireless communications that the organization just released. "As executives learn more about what is going on, they can continue to make better decisions and all the while technology can continue to advance and do more of the work than is currently done manually."

The goal is to ensure that every unit and every subsidiary within a utility's umbrella can communicate with one another. Grid operations and back offices, for example, would be tightly integrated. While about 30 percent of companies are beginning that process now, Sierra says that the undertaking is so large that it will require an increasing number of utilities to outsource it. The vendors, meanwhile, are jockeying for position with many of them merging their operations to better compete for the business.

Persistent Challenges

Through existing protocols and technologies, utilities can wirelessly transmit not just voice and paging but also e-mails and other relevant documents like status reports and invoices. In doing so, they are streamlining operations and improving efficiencies.

Consider those field engineers who restore power after a storm: They can now access their mobile devices to get the latest information on when they are to make calls, as well as to learn the histories of particular facilities and what supplies they are to bring with them. They furthermore can electronically report those results back to their accounting departments where invoices can be generated. The result is improved customer service, reduced billing cycles and fewer expenses.

It's estimated that the utility wireless market for equipment and related services is valued at $1 billion and growing at 15 percent a year, according to Motorola's estimates. The costs of systems vary depending on the size and need for the technology, although returns on investment are estimated at between one year and three years. Larger utilities, which have hundreds of trucks out in the communities in which they serve, are the biggest consumers of such technologies. As innovation improves and prices decline, however, more smaller and mid-sized companies will enter the fold.

The Sacramento Municipal Utility District had a manual inventory tracking system. But, the system lagged, resulting in a reliance on inaccurate data and continued inventory shortages on everything from truck parts to high-tension power lines. The nation's sixth largest public utility then installed a wireless network and provided hand-held computers to its field force. Now, those who handle materials can wirelessly enter or scan data, allowing the utility to maintain an accurate and up-to-the-minute view of inventory.

"This investment will pay off handsomely for them in terms of reduced costs, more accurate data, and simplified business practices," says Dave Siebert, senior vice president, CIBER Enterprise Solutions, which implemented the wireless project.

Progress is for the nimble. The scope and pace of changes to occur, though, may be too much for many utilities. They may therefore outsource those services to experts.

Invariably, data will be transmitted at faster speeds and in greater volumes. Managing such things as emergency calls and inventories through wireless hand-held devices was once a luxury, but today it has become a necessity. That same transformation will likely occur as the advanced metering space seeks to control energy consumption and as the wires sector aims to automatically minimize the impact of power interruptions.

The goal is not just to survive the economic and technical changes. The objective is to thrive and to be the best in the business. That's a challenge that will keep pushing enterprises to use the latest and greatest technologies available.

More information is available from Energy Central at: Sierra Energy Group

For more on this topic, visit these Energy Central Topic Centers:

Mobile Work Force Management Topic Center,

Metering, AMR & Data Management Topic Center

T&D Automation Topic Center.

Respond to the editor. (Ken Silverstein EnergyBiz Insider Editor-in-Chief)