August 30, 2010

Duke Energy's chief executive doesn't mince words.

It was early May, under stormy skies, when Jim Rogers gave the opening keynote, "Smart Grid: The Catalyst to Transform the Energy Sector," at the Smart Grid Roadshow in Cincinnati. Later that morning, he followed up about his vision for the utility industry. One of his key messages: Keep educating the customer, and pay attention to the customer's wants and needs.

"As we design products for customers, it's important to listen to what the customer wants," Rogers said. "But it's also important to notice that the customer doesn't necessarily know what he wants yet."

It's important to listen, he reiterated, but it's also important to see the future and to see the technology, and then to create the products and services that customers will want and need.

"In a sense, we stand in a place today where we have the opportunity to totally reconfigure our business," Rogers said.

To give his listeners a better vision of where the industry is going, Rogers spoke about its past. A few salient points: the price of electricity for the past 50 years in real time has been flat, and is going to rise in the future, and the only transforming technology we adopted in the 20th century was nuclear technology.

And while the current state may feel like "death by pilot," the challenge for our industry, he said, is to do more pilots to test the technology we're adopting. Along the way, we will be building the demand to move the pilots to deployment and bring the costs down.

"To me, adaptation of technology is really critical. Our role is to be a distributor of those technologies, but we also play the role of integrating the technology into our system," Rogers said.

Interoperability and open architecture are both important keys to thinking about technology going forward, and cyber security is also critical.

"As we deploy this technology, we've got to continuously make the business case. We have to continually educate our customers about the benefits of the technology," he noted.

It is this idea of continuous education of customers that has become a stumbling block for some utilities as they implement and deploy new technology. "Smart meter pushback" has become a front-of-mind term following deployments in California and Texas, despite the minute numbers of malfunctioning meters.

The way Rogers sees it, "Before you can move to the technology solution, you have to make customers understand their usage. Electricity is so back-of-mind for people. Turning on a switch is a pretty mindless experience."

Duke's Goal

Duke Energy's goal, and Rogers', is to make energy efficiency just as mindless as turning on a switch. Rogers is no stranger to energy efficiency; he walks the talk in an extremely visible fashion. He is the current chairman of the Institute for Electric Efficiency, past chairman and ex officio member of the Executive Committee of the Edison Electric Institute, chairman of the Edison Foundation, and co-chair of the National Action Plan for Energy Efficiency and the Alliance to Save Energy, and he was inducted into the inaugural Energy Efficiency Forum Hall of Fame by the U.S. Energy Association and Johnson Controls Inc. Last year, Newsweek magazine named him one of "the 50 most powerful people in the world."

"I believe there will come a day when the boundaries of our business will be redefined," Rogers said. "Right now, it goes from generation to meter." There will come a day, he said, when the boundaries of the electric utility business will go beyond the meter to the end use. "I believe we will understand the algorithms in the end home and end business," he predicted.

Again, though, that will take customer awareness. "We have to make sure we're not operating in a mother-knows-best situation. We have to give them both the plusses and minuses of the system," Rogers said.

Demonstrating to customers the key value of rolling out technology innovations is key to the success of the project. Comparatively, he said, every dollar Duke Energy invested in rooftop solar in its McAlpine Smart Energy Pilot project in North Carolina is the same as a dollar invested in transmission. "Having that same investment thesis in investing beyond the meter will incentivize us," he added.

"What we will enable with a smart grid and applications that are extended to homes and businesses ... we cannot even envision what we will enable. That's one of the reasons I'm still hanging around," Rogers said. "The next five years will be far more interesting, far more transforming, than the past 20 years. I'm really confident that we're in a period of great transformation."

And energy efficiency is a bottom line here, if we are to take Rogers' exhortations to heart. While some may describe him as somewhat evangelical, I think it's long past time for a bit more evangelism in our industry. And with that, I'd like to share two final quotes from Jim Rogers.

"My belief," he said, "is that we have a better chance of increasing the standard of living for future generations if we are energy efficient."

And finally, Rogers explored his "no regrets" approach to piloting new technology, and moving forward in advance guard: "In terms of 'no regrets,' you have to think that way. You have to push the edge of current innovation. But you also have to be mindful that you are.

"There is a great West Texas expression: the pioneers get the arrows, the settlers get the land. I don't mind being a pioneer in regulation ... but I think we need more people in our industry, regulators and industry leaders, who are willing to pioneer new ideas."

 

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Kate Rowland Managing Editor Intelligent Utility Magazine
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