Smart Grid Support — Video Text Version
Below is the text version for the video Smart Grid Support.
>>Erfan Ibrahim: Good morning and welcome from the National Renewable Energy Lab in Golden, Colorado. I am Erfan Ibrahim, your moderator for the Smart Grid Educational Series. Today is Friday, October 7, 2016, and I'm very pleased to introduce to you G Satish and Reid … how do you say your last name, Reid?
>>Erfan: Nuttall. Reid Nuttall. And they're going to be presenting on a very important subject of support for the smart grid. So before I bring them on to present their material, I wanted to put this in context. We started as an industry in the United States around 2008, 2009, with a major smart grid initiative. President Obama had come to office, and some $4.3 billion of the stimulus funding was provided through the Department of Energy in a series of grants in a public-private partnership with utilities, with vendors, with trade associations and consulting companies, and smart grid technology was deployed at the transmission, distribution, and end use level. The most popular version of that was the deployment of over 100 million smart meters throughout this country. And various vendors, like Silver Springs and Itron and Elster and Aclara and many others and Landis+Gyr went ahead and proposed their solutions, and various utilities picked them up and started deploying those smart meters.
Naturally, with the smart meters came a need for collecting data on the back end, through the head end, through the … into the meter data management system. Well, once you collect data there, then you have to integrate with the other systems, like outage management system, customer information system, and asset management, and fleet maintenance. So, what started out as deployment of technology quickly became a subject of information gathering and turning it into actionable intelligence and doing things with it. And various utilities have been deploying automation techniques in big data analytics techniques as well as developing new programs for customer service.
At the same time, we're seeing a fast move towards deregulation. And the emergence of independent power producers, as the traditional utilities are split up into generation, transmission, and distribution, we also have a lot of independent power producers that now want to enter the market and provide electricity either through renewable energy or distributed generation from natural gas units, and other sources of energy. So that creates a very complex market that an independent service operator, an ISO, has to deal with in order to maintain the just in time system, and make sure that the demand for electricity is met by an adequate supply at an affordable price.
So a lot has been going on in the last eight, nine years in the deployment of smart grid. The main drivers for it, one was, of course, creation of jobs. The second one was to lower the carbon footprint, and to migrate away from the fossil fuel type sources of energy to more of the renewable types have the lower carbon footprint. And when I say lower I mean in the total supply chain from the fabrication, transportation, and placement, they produce less carbon than a traditional coal plant would, or any other fossil fuel plant. So that's why there was that driver. And the third driver is just customers wanting more energy choice, and being able to participate in the market where excess electricity that they have could be delivered back to the utility, and in some cases even for revenue.
So there is a lot going on in the last eight, nine years. The one area that is very important to consider is that once you've deployed all this technology, you have to train the people adequately who work with all of these assets, and you also have to have the appropriate tools in place for these people to use, so that they are productive, and they can maintain the same level of reliability in the distributed generation model, and with all these smart meters as the traditional grid was, the five nines of availability that we talked about. At the same time we see a lot of disasters occurring. We are watching the news, and watching Hurricane Matthew devastating the Caribbean, and now going up the coast of Florida and South Carolina and Georgia. You can imagine how much we need automation, how much we need intelligence gathering capability, so that we can provide adequate service during these types of natural disasters.
So, to make sense of all of that, Reid and G Satish are going to talk a little bit about an approach to smart grid support. And with that, [audio dropout from 0:06:08 to 0:06:16]. Reid? I think you're still on mute.
>>Reid: Okay. Yes, it took awhile to get off mute. [unclear] phone. Appreciate everyone coming out today and looking at this. And we do want to talk about the unsexy side of the smart grid. Basically, we spent a lot of money, caught the bus in that we've done this wonderful [unclear] industry. We put these technologies in, we developed them, made them operational. But this presentation is not talking about the smart grid technology itself, it's a warning cry to remember that our world has changed. Now we have the smart grid technologies installed and operating, we need to make sure they keep working so we get the benefit that we have now grown to expect. Like the highlight, as Erfan was saying, we spent a lot of money. Not only the point three billion of stimulus, but if you look in the BNEF report, in the four years from 2010 to the end of 2013, we spent $18 billion. The change has been dramatic. The billions have been spent. Thousands of people worked on changes necessary to make the investment in smart grid result in the public good. And although we clearly have a lot more to do to take advantage of these technologies, we really have provided a lot of results for the public good. We depend on them.
Just for background, let me highlight three wins that were reported in the 2014 Department of Energy report to Congress. First we'll bring up one that I know intimately. I was involved when I was a Chief Information Officer at OGE. And they report that at Oklahoma Gas and Electric, the coupling of AMI with time based rates and in-home displays is reducing peak demand to the extent that will potentially enable the utility to defer the construction of a 170 megawatt peaking power plant. Second example they bring up is in the city of Chattanooga, which was able to simply restore power to half of the residents affected by a severe wind storm on July 5, 2012, from 80,000 affected customers to less than 40,000 within two seconds using automated [unclear] switch. And third, they bring up the Western Electric Coordinating Council, which has determined that it can increase the energy flow around the California-Oregon intertie by 100 megawatts or more using [unclear] data for real time control, reducing energy costs by an estimated 35 million to 65 million over 40 years without any new high voltage capital investments.
So yes, we've changed the face of the utility world, we've put in these technologies, and in many cases we have dramatic benefit of these technologies. What have we overlooked? What we've overlooked, I think and would like to posit, is that now we depend on these technologies, and we need to maintain them and keep them working. Look at the effect that we've had. Not all of the $18 billion over 4 years went to assets. We bought software consulting, other things, a lot of information technologies. But we do have many more assets, billions of dollars worth. Additionally, the other factor to think about is that many of these assets are spread out geographically throughout the field. At the same time that we've [unclear] in the field, away from the home office, we've reduced the utility eyes in the field. And in many deployments, and especially in those smart grid [unclear] that included significant AMI projects, we've reduced the number of meter readers who monthly would walk routes, and in the past, report on any visual anomalies within the utility's assets. We also lost most of the technicians, going to houses to turn on and turn off power. A lot of our troubleshooting is more based on systems in the main office and done remotely. So we have less people in the field. So, we have more assets in the field, and less people in the field to provide oversights and to see what's affecting those assets.
We also have new technologies and assets to maintain that we never had in the past. Communication devices are commonplace throughout our networks, now. New equipment has been added, from transmission to substations to distribution systems. Additionally, we have added capability and sophistication of the utility assets that previously had had little change for decades. So the complexity of our assets in the field have increased dramatically.
Now another thing to think of is the fact that with these additional assets in the field, there are just plain more things to restore in an emergency event. The volume of increased assets in the field means that we have more things to restore that need to function. Also, the complexity of these assets means that we have more work to do in restoring them. They aren't as simple as they used to be. And sometimes they require different skills. In many, you need to restore both the electrical function, and also the communication or information technology function of the assets.
Now, utilities have performed an outstanding job of completing significant projects in implementing these smart grid technologies. And lately most have been concentrating on [unclear] more benefits can be achieved by wise use of these technologies. We have learned how to operate these systems, and to do an increasing job of it. But as a consequence we have more assets … and importantly, more complex assets in the field … and we have less physical eyes on the equipment. So as these technologies age, demand maintenance, become less dependable or need maintenance, how will we handle it? Go back to the three examples that were mentioned in the DOE report. At OG&E, they've been very successful with their MAI project and how they utilized it to reduce the need for peak power. All you need to do is have 18 collectors of data put out on our poles start to fail, and the project fails. City of Chattanooga, if you have those automated switches but the automation fails, you don't get the benefit. WECC, Western Electricity Coordinating Council, those [unclear] lose connection in any way, you don't get the benefit of it. So we need to pay attention, if we want to maintain these benefits we're starting to get from the smart grid technologies, to how we maintain and supervise them in the field.
So, what do we need to address? We need to maintain the assets. Now utilities have been maintaining assets for years. But I don't think that we've ever had the onslaught of this increased volume of complex assets that is aging in the field. How do you handle these maintenance demands? The answer needs to be [unclear]. You need to think of the people, process, and technology issues related to it. Let's talk about the people first. For 100 years, a person in substation maintenance is far different than the job in distribution, where you have a department maintaining that, which is different than the troubleshooters, and they are different than the staff in transmission. If we're building on our historic base of relatively stagnant technology, we had grouped people in different areas, and try to make incremental improvement in our operations. But these are improvements are incremental and based off of a grouping of the people skills that we've had in the past. And now that communications, networking … all of the communications networking aspect of our information technologies needs have been more complex, and they need a different way to look at them. And much of the new equipment doesn't fit our traditional organization of people.
Look at our processes. Our processes have been set up for years. They're set up for what we used to handle. I remember one consultant reported that, a few years ago, when he was working on a new system, they were required to do a customization that would report how many jobs were done by a truck for a day. It would put a little tick on each job, and then highlight when there's been a number of different jobs done. Why was this needed? It didn't make any sense to them. So they drilled down in the memories of the old and retired people, and they determined it came from a need to make sure that the horses had sufficient time to rest while the men were working. If they just did quick jobs and kept moving, the horse with too many … they'd have too many [unclear] on the vehicle, or on the wagon, and the horses couldn't handle it. We have to step away from our history. [unclear] our processes are made for how things used to be. Our technologies, and specifically our information technologies, our business applications have also been specified … they're very complex, and have been specified for how things used to be.
So now, we've experienced this huge influx of technology. Most utilities have done a great job of working through the operations issues, so we have the benefits. But our long and stagnant history of addressing the people, processes, and technology issues in supporting these is making our maintenance challenging. We have more geographically spread, complex assets. You add this to studies that show that 19 percent of the field service time is spent on paperwork, and you can only imagine that we must be very inefficient in our maintenance, and we ought to address it quickly as these assets start to age.
Then, later on we'll talk a bit more about emergency events. What we experience with these even before is different than now, as there is more equipment in the field and it interacts differently. For instance, in the past emergency event it was real easy. The crew would go down, and you'd drive down the streets. You'd see the power was on, driving through the neighborhood, looking for porch lights. Now, if you restore things correctly, you can make it so that the office, we know who has power and who has not [audio breakup] will be much more efficient than sending people out driving, looking for porch lights and knocking on doors. We'll talk about this later, but I wanted to highlight that we need to clearly understand that things are different now. These needs need to be addressed by utilities. While there are differences between the large and small utilities, every utility should be looking at what we can do in maintenance, and keeping these great technologies we've implemented working.
Now I want to take a little break. And while our industries in those four years mentioned spent $18 billion, what's been happening in the rest of the world? Now, we all have been here. We all live in the world, We know the world's changed. Our utility smart grid investment of $18 billion in four years pales in comparison to world-wide technology spending. Mobile phones and tablets abound. Don't need to talk about that. You know that. Communication is pervasive. Sometimes it's not fast. Sometimes especially voice gets weaker. And in some rural locations you still have to drive to get to a wireless area or a call … or find a cell data connection. But most of the time you are in touch or not far away from being in touch. Cloud, with this quick deployment and pervasiveness, affects everyone. It is mature. Its advantages are proven. It is applicable in many activities where you would not have used it in the past. It has a way of looking at the people, process, and technology, and using technology to force [unclear] standard process makes it so that you can implement ways of doing things, make them cheap, available, and timely.
You also see throughout the world that the use of contractors is increasing, from the gig economy [unclear] new work to manufacturing there's more reliance on contractors. We even contract the main technologies. There's not an iPhone that's not made in China. Companies are learning how to use people who are not trained in the field, mining information that helps them succeed in this crowdsourcing. You look at ways or Google Maps in ways you know the speed of the cars ten miles ahead of us, and you even see reports of where the police are. You look at crowdsourcing the information and results, look at Goldcorp in Canada, who struck gold, literally, and became outstandingly successful by providing data to the public. They funded a reward, 'cause whoever helped them strike the mother-lode, and they did it.
So question. I've identified these world-wide trends, and everyone's [unclear] because everyone talks about these trends. But then we go back to our homes in the utilities and we say, "I'm sorry. We're special. We in the industry will draw on our decades of experience and say that we are different. We're not like [unclear] not like these other companies, so we can avoid the trends. So let me discuss just really briefly how these trends affect the utilities.
I remember the complaints about the new computes we put in the trucks. They were manifested by these laptops coming back damaged because they'd been impaled by screwdrivers. It was no accident. Now, do you have any employees that don't have a powerful computer in their pocket that they're able to use? Despite that, I've got to say I'm so frightened that a lot of utilities still have these old hardened laptops in the trucks. Kind of a look back to the back ages. It's really hard to find someone who doesn't have and cannot use a digital device. And [unclear] the utility have always said that we need to keep our old and failing radio systems because cell phone coverage isn't universal. We'll go on eBay and buy parts that are 20 years old to keep those systems going, because we don't want to change to the newer technologies. Yet the old radio coverage still meant that we had to drive to the top of the next hill. Now you look at the cellular connections and you get cellular to wireless connections, there's times when you still need to drive. But you're pretty close to a connection most of the time. Even after an ice storm and a hurricane, the wireless communication recovers quickly, although it won't be at full speed, especially for voice.
I remember years ago, when I had to work with AT&T, and I had to provide our generators to them to get towers that we felt were critical operating after an ice storm so that we could communicate with our people, and that we would dispatch our satellite trucks, communication trailers, to the areas that were affected by the ice storm. That changed rapidly a number of years ago, where the emergency response of the cellular carries is absolutely tremendous now. They plan ahead, they have mobile equipment, they are there. And while their system will be overloaded, in many cases from voice, their data is pretty dependable.
Then you look at cloud. Cloud's been amazing. Put simple processes in a pervasive environment and quickly implement practices that used to take months or years of high cost to implement. A number of utilities, while they fought cloud forever, talking about either security, control, or whatever, cloud service is almost pervasive using as a component of the AMI program, or slowly getting there.
Contractors. We like to do things in house. But we've always had mutual assistance for storms. And now, it seems that more and more contractors are being used as the utilities are making sure that they're not over manned on personal cost. Some of this is because of the difficulties making staffing arrangements necessary for smart grid assets. And this will probably get worse as they get older. But, keep in mind that, as we put in these assets, most of them were under warranty for some period of time where we had contracted help.
Now, I haven't seen crowdsourcing used in the utility much. I would like to say that someday, I think especially in emergency event response, it'd be neat to see if we had quick access to pictures and damaged equipment that we could be showing up in the control room, as we're looking at where are staffs are doing, and what issues we have where. Someday we'll get there.
Okay. So, talked about the investment, the additional assets and complexity of assets we have. We talked about current trends in the world. So, let's put these together. And what are the decisions that we need to make in our utilities? Let's talk about conceptual alternatives. And again, people, process, technology issues need to be resolved. We need to make decisions and understand the cost and effectiveness of these decisions. So, let's look at that. We have departments, departments based on the old world, and work assignments based on the old world. We need to realize it costs less to inspect and assess than it does to maintain. So why don't we make that part of the world very, very quick, simple, effective, and inexpensive, and concentrate on throwing that out cheaply? Rather than organize the work in the way of the departments of the past, let's see if there's more effective ways of divvying up this work. And while doing this, let's just make sure that we separate the easy work, we make it easy, the inspection, appraisal, simple repairs, and be more purposeful in our use of our valuable better trained experts. Whatever systems, processes, and technologies we use for this should be simple enough that we should use contractors, low cost labor wherever we can, and not necessarily our traditional systems, which are complex, and developed for the trained utility employee. Let's change the paradigm.
So I think we can highlight the concept of the different options, looking at the systems we deploy. And keep in mind that systems [unclear] again, each one implies people, process and [unclear] differs, let's look at this, kind of a system view, but it looks like people, process [unclear], and look at three different options. What systems do we use? We have a choice of expanding our current systems. The big utilities have elaborate work order management systems. Some have different elaborate systems in different departments. In fact, most do. Should we expand these complex and very capable systems? Or, with the new world, recognizing the world has changed, should we go out and rebid it. Our assets have changed. New application vendors, and some of the old strong application vendors, developed some great software. Should we go for the current best of breed and just upgrade our home office systems? Or third, should we go after another paradigm different from those other two paradigms? Do we move towards simplicity, and follow trends found in other industries? Can we move into more of a mobile or field focus, rather than a back end focus of our big systems? Should we look at more of a cloud base, where we shove the technology and processes together, implement quickly, make things simple and defined, and force our workers to comply with the process that way? It's a different option than utilities are used to, where we really make more complex systems, because we want to be perfect.
Let's look at these three options. And don't worry, I'm not gonna go through everything on this decision grid. This is just an example. We're not going all the way through this chart. What I've got to say, as a CIO, I would force our team to complete this job, look at the criteria on the left. And I just have a sample there. Weight that criteria, and analyze how the options affect us. And I'm not ready to discuss these criteria on the left right now, because we could argue this for a few days. But the concept's important. But I'd like to make some summary observations about these options, and how we decide upon them.
Number one summary observation. I've seen so much conflict between operations and IT. IT naturally believe that the criteria of having an integrated holistic solution, expanding onto our current solutions, is beneficial. And they have some good reasons for that. Well, operations so often wants things done fast, simple, and now. And they will weigh the IT criteria lower. Now weighting these criteria takes discussion and [unclear] oversight, because these different departments have different objectives and different time frames. Understanding the world-wide trends, and deciding on the direction the utility should [unclear] material, your maintenance demands leadership involvement. You can't just have one department determine these criteria. We need to have some leadership, looking from above, seeing strategically what matters to us.
Second observation. Utilities, at least some of them from my experience, tend to be project oriented, and prefer capital to O&M. Therefore the natural inclination is expansion of current systems, despite the world-wide trends of moving these to O&M and being more of a cloud, pay for use type of thing. Now, cost is a subject to debate. Utilities have a lot invested in the traditional server based, home office based systems. And many are keeping to focusing on the capitalized cost of a new system [unclear] rather than the [unclear]-creasing operational expenses through a cloud based system. So as we go through our criteria, we're gonna see, we have a natural bias that we need to see, and make sure that [unclear] really makes sense to our utility, especially as a regulatory norms and the utilities are changing.
Third. Most utilities have a very short leash on contactors. They fear letting them in our systems. And this leads to a manual assignment of areas, and a lack of coordination. And we need to address that fear and overcome it.
Fourth. Individuals and departments have different rankings and weights. This is a problem, as we have so often [unclear] history not open to the current state of the world, and are over afraid of the future and change. Utilities, in particular, tend to over value complexity. Each department wants all their eventualities resolved. So therefore, when you get a team together, you tend to get a very expensive solution, as you satisfy everyone. I wrote a paper a few weeks ago based a conversation I had with a current utility IT leader who commented that, in his role in serving on the board for a charitable cause, that he could bring in capabilities, whether it be simple one like making an appointment or whatever at a cost of only a fraction of providing that same capability to his utility. In the utility, we tend to want the comprehensive solution that includes everybody's bells and whistles, and prepare for some unknown future solution that utilities may think may happen that will push the cost, and often paradoxically, decreases the benefit. All of us in utilities have IT business systems that can do probably 90 percent more than what we actually do with them, because we almost always over buy. And then, as we see the expense of the implementation, we under implement.
Fifth observation. Another very important factor to consider is of the outside pressure you have on your group making the decision. And here I'm speaking with my experience as a CIO. A CIO of a major organization in this world has the privilege of working with some of the very best sales companies in the world. There's a lot of money to be made in business application software. I've heard, in the '70s and '80s, IBM controlled the IT world. It was said that an IT professional never got fired for choosing IBM, and it was used exclusively for many years. Now, the largest, most complex, and most successful vendors have an out of the world sales capability. And they will press down immense pressure from all parts of the company. I think it was on the website Quora, in fact it was, where I read a question answer exchange that went something like this. "Question. What should the earth do if a death star suddenly appeared in orbit?" And the answer, written by a gentleman named Nick Kitchener, "We send an emissary of SAP sales people to them as an offering to help. This excellent sales machine will convince them to upgrade their computer systems. Five years later, and with the empire deeply committed to the project and financially indebted to the point of bankruptcy, they roll out the solutions. The death star, now irreparably crippled, gets caught in the earth's gravitational pull, and to save his own rear end, the emperor lets it plunge into the Pacific."
Now, this is over the top. But it's not over the top for the utilities to really take a sharp look. If they really want what is sold as being best in class, and able to take all possible use cases. I know that at OG&E, when we were racing ahead with our smart grid project, I wanted to be in line with SAP for the AMI part of the project. They're smart people. We joined a group of smart people from leading utilities that SAP had wisely put together. Smart and educated people were designing comprehensive work flows. The use cases from Edison helped us all. They were outstanding. However, if I had waited for SAP, we would have been delayed at least two years. We would have missed our Recovery Act funding window, and we would have missed the really key peak kilowatt-hour reduction that we absolutely needed for business purposes, and that we achieved then.
So the summary of the slide. Yes. Make your decision grid to determine what strategy you want to deploy. But company leadership and strategy needs to be more important then looking at this as a list of bells and whistles. Do not be overly held ransom by the past and thinking of the past, nor by the most comprehensive solutions with the best sales machines. Pay attention to the world-wide trends. There's a reason why they're trends. And don't get caught in history. The internal biases will be to expand current systems, or implement new large systems. While this is probably the right answer for some utilities, be careful. Decision making tends to be based on historical observations and experience, rather than looking at current and future realities.
Okay. Let's move on and look at another side of what to pay attention to and the need to maintain and keep our assets working. This picture's from a couple days ago. Absolutely amazing. This is Matthew. This is Matthew when it was hitting Haiti, I believe, where it killed I think 800 some people [unclear] looked at just a few minutes ago. We focused so far on the maintenance of normal operations. Well, let's look at this emergency event. Keep in mind, the premise of this webinar is remembering that we now have more, and more complex assets in the field, and that the current technology business environment in the world has provided tools and capabilities where we should expect more capability than we previously had in trying to maintain these assets.
So, in the emergency event, what should we be expecting now? I know that for many utilities, and I'm well acquainted with these with the ice storms we've had in Oklahoma. Many utilities' emergency events have caused a reversion of ways [unclear] from before. We had … The assets we have in the field now, and from before we had the benefits we have now of almost pervasive communications, the computer in the pocket by almost every potential technician … We know that expectations have increased, but at the same time, the volume of our response has increased. We will have more to restore per customer than we previously had, because we have more assets in the field, because of the smart grid technologies. So we need to do better. And therefore, I would like to posit that on a go forward basis, the utility should consider the following. First, call out the troops. It's time to move fast. While the small utility in the past relied upon the work management system of having Bubba drive up the hill and see what the lights are … were on or not, we need more in a work management system now. And we need it to work during the emergency.
We must make use of the mutual assistance and contractors. We must make that use more seamless, not just giving them a geography on the map, like we did last year. Many utilities just divide this map up and historically have crews from different companies take different sections. That's what we did. But the distribution grid and supporting technologies are more interdependent now. A utility should be ready, not only for the mutual assistance teams and contractors to arrive, but we should be able to provision them immediately, so that they can safely and properly have the integrated technologies, and be integrated in our communication system, our organization system, our safety program, from us, the host utility, when they arrive. It shouldn't take long to get them out and keep them connected, and keep them integrated with our response teams. We should have instant damage assessment. In this era of crowdsourcing. Why do we limit the capability of getting information to our head office to just be our highly trained and provisioned utility workers. There are things that they have to appraise, but we should also have other information in the field. Let's simplify it and speed it up. We need to have that information in the control room, actually.
And let's get more organized on how we manage the workflow, rather than just give geographical areas. I remember working to clean up the results of one ice storm in Oklahoma. I was eating dinner at the recovery center that we leased at the end of the day with one of our mutual assistance crew from Arkansas. I asked a lineman how he was responding to all of these members of the public coming up to him and trying to pull him off his current activity and persuade him to come to their house? And he reported with his drawl, exaggerated, "It's easy. I just turn on my Ozark hills accent, tell them I don't really know what I'm doing, and that's why they sent me here and away from my home area, and act incapable, as I try to remember their address and directions. And then they just don't expect much." I really think it's better if we work off our work orders and priorities insure organization.
Fourth. Safety is a concern. We needed to be more concerned about it in the past. We can't just say, "Here's a map. [unclear] section. Be safe." We need to know where people are, what they're doing. They need to have the host utility's standards with them. We need to communicate progress, when things are close to getting hot. We need to make sure that even the contractors and mutual assistance crews have our safety procedures and record that they have their safety tail gates. Communication and control. We shouldn't have to guess whether the mutual assistance team mounted the AMI communication device, concentrator, to the pole. We should have a picture, and a completion of the work order. We shouldn't wait until the end of the day to get a manual report from different areas of what's been restored. We should know when the work is done, or at least within a few hours of when it's done, and what the next job is. Smart grid related expenditures have made the entire grid a more integrated system. We need to be more organized in the way we bring it up.
And, whatever … what we need to expect, now, is that the technology managing our event is rock solid. As a worker, if I complete an order, take a picture, form an appraisal, request drawings, I should not have to go to plan B or go manual, because the home system did not survive the disaster, or maybe a loss of communication to the Internet. As long as I can get somewhere where my device communicates with the Internet, the system needs to operate. We will still have some communication gaps. But if I'm on Nowhere, Oklahoma, and AT&T isn't up to snuff in the area, I can drive a few miles to the top of a hill, or find an Internet connection somewhere, wireless, and my information will make it to the head office. That's system must work so that communications is the only issue we manage. And the system must be such that access could be made offline.
So, now let's move away from emergency events. And I've asked Satish if you could review what we should expect in systems, in an ideal system, that would take advantage of the current capabilities of the modern world to allow the utility to better deal with the maintenance and restoration of the smart grid technology assets that we now have aging in the field. Is your mobile working, or your voice?
>>Satish: Yes, I'm here, Reid. So.
>>Satish: So, thanks, Reid, for that. So, the answer to your question really is this really ties back to much of what you've already talked about earlier, Reid. Fundamentally, large business systems tend to be back end or integration based. But modern technology's really put capabilities in the field that allow us to be mobile based rather than home office based. Essentially, we really need to simply readjust our thinking, our provisioning in the field, for the worker, needs to be really quick. It needs to be focused on efficient action, rather than being stuck with systems that focus on back end based complexity, that delay and complicate our adoption of new capabilities. So essentially what I am saying is, what you need is a simple system that allows rapid response, and the ability to manage from the field.
So let's put some of the technology we discussed earlier to good use. So first thing that we focus on is, it needs to be flexible and adaptable, flexible and adaptable enough to work in any situation, whether it be standard operations, or during emergencies. Second, we talked about cloud. So for many reasons, including cost and ability to sustain through disasters, cloud is essential. It is not a good to have. It pretty much is a necessity at this point. So let's discuss the ability to sustain during a disaster. While IT departments spend a lot of money to keep their data systems up, in a disaster you have to both keep your data system up, and also make sure that all communication systems related to it are also up. In a cloud situation, once the user can connect to the cloud, the bases comes available impervious to the storm in that location. And keeping in mind that the wireless communication giants are doing a much better job of keeping their systems up, and recovering them, and that data works smoother and faster than voice, you will have more success during a disaster of having relatively good communication with your cloud system.
Additionally, for normal operations, having a system in the cloud reduces the need for levels of IT expertise, and tends to be much more affordable. And this is especially of value to the smaller utility. For many of the reasons we discussed here, it is obvious that any new solutions should be mobile driven. It should essentially utilize what is almost universally and widely available today. Mobile often also means faster. In this day and age, we should have things up to date, and not simply queue it up for later review and data entry.
The second aspect we should address here is, it needs to be intuitive and instant. Simple provisioning for contractors, temp workers, lightly trained workers, mutual assistance, or volunteers, without needing an act of Congress. One of the many reasons mobile apps have caught on is because … is that they don't need massive change management or [unclear]. Any app should necessarily be easy to install, simple to learn, and intuitive to use. This is critical, now, as we see the trend to use more contractors, and also less skilled people for assessment.
Let me also point out what we don't want is anarchy. You also want to simply impose the right degree of restrictions, use of geo-fencing, lone worker tracking, validity periods. How many days can a user actually use this app, within what regions, and with what restrictions, with what capabilities, and so on? All these need to be a part of whatever system is put in place.
I also want to say that … don't just automate what you have done in the past. That device in your hand can do far more than that. Unlike any other technology available before, smart phones and tablets are mobile. They have massive amounts of computing power. Any system has to put that power to use. You can go far beyond simply filling out forms. You can capture photographs that are automatically geo-tracked and time-stamped, for example. [unclear] damage assessment or just routine reporting, Reid, as you talked about a few minutes ago.
One of the aspects here is that we talked earlier in the presentation about 19 percent of field time being wasted in filling out paper forms. And that is at the low end. The median for the utility industry has centered around 29 to 35 percent. That number is not gonna go down just by setting up electronic paper forms on the field. Everyone now has computing power, photography power, communication power, geo-tracking power, all the way to simply flashlight power, all available automatically, and without the need for any additional training. So let's put that power to use.
And while on this, here's a fun fact. Your cell phone has more computer power than all of NASA had back in 1969, when it placed two astronauts on the moon. If nothing else, that's an indication of the power we have today.
Among the last things I want to talk about here also is integration, and Reid, you also alluded to that a little bit earlier. Integration to back end systems is important, but let's be cautious here. It is important, but it should not be the sole driver. For instance, what if your back end systems are down? Can you still run your field from the field? And certainly, incumbent vendors provide packages, but they must necessarily play well with other vendor systems that a utility uses. And something that they don't have a great history in doing this in the past. And let's also remember that not all utilities have the same level of back end system capabilities. So an ideal system should integrate when required, and should also be able to manage and operate stand alone, if that is the requirement there.
In summary, I really can only say that faster, simpler, and smaller. That just about defines every popular app running on your phone or tablet. No reason it should not equally apply to utilities.
>>Reid: Well, thank you, Satish. So, let's look at this in summary. In summary, I've got to say that I'm surprised that anyone signed up for this seminar, because the sexy thing is that smart grid technology, and getting the benefits out of the smart grid technologies are absolutely great. Our warning is, these technologies are comprised of millions of assets spread throughout the geographies that are aging, and that require maintenance and restoration. So, we're off track of where the sexy stuff is, but if we don't make sure that we address and solve the maintenance issue, the smart grid technology would not give our benefit. Our argument in this presentation is to recognize that the world has changed, and we can use some of that change in how we address and improve our maintenance, restoration, appraisal, other capabilities, so that we make sure that we keep getting the benefit that we need from the smart grid technologies.
With this change in the world, we urge that we change from a back end focus on our integration and large systems, to focus on a mobile focus. Focus on the worker in the field, and making it so that they can be efficient, but more importantly, effective, and in a very timely way. We highlight that cloud capabilities are mature, and that our industry needs to move along with the rest of the world in taking advantage of that. We've highlighted that contracting and outsourcing is expected, not only in restoration, where we have additional contracting and mutual aid. But it should be expected. And we should make it so that we can provision people and deprovision them very quickly and very safely. We also highlight that following what successful companies are doing nowadays, quick improvements are often more important than a delayed and very expensive perfect system being built.
So we submit that utilities need to change, to strategically change from our 100 year old traditions, that we need to use modern technologies and concepts as we take a look at maintenance, realizing that we have an increasing problem there, and an opportunity to save cost, but most importantly, keep things working [unclear] these tremendous gains that we've had in implementing and operating the smart grid technologies will continue to be to our benefit.
So with that summary, that's what we've been prepared. And so I think we're ready for Q&A, if there's any now.
>>Erfan: Okay. Very good.
>>Satish: Erfan, just one other point, there. I think just a quick summary, an add on to what Reid was saying. There's a lot of good material out there, several reference documents, that talk about mobile and cloud, and how they actually apply for [unclear]. There's some … ton of good white papers [unclear] In fact, we've got a few, too. So, just invite your audience, if they're interested, just email me or Reid and we'll be happy to forward that along to you. Back to you, Erfan.
>>Erfan: Thank you. So we have a few questions. We'll get started. The first one says, "While much of this makes sense, how much does this apply to smaller utilities, the munis and coops? We have pretty much the same issues, but no dollars to spend."
>>Reid: Hi. Always their issue. Great question. My personal experience is with large utilities, but as in most industries, the problems that are faced are somewhat uniform, whether you're large or small, and whether you're a [unclear] or a T&D company contracting. But the challenges and choices are are consistent. But the interesting thing is that the new capabilities, the cloud, the mobile focus, is universal in that applicability, and actually means that the small utilities can take a lot more action now than they could in the past, where they couldn't afford the large, expensive systems. Satish said a few minutes go, "Simpler, faster, smarter." He also should have added, cheaper. Not having to buy heavy duty hardware or software, and instead, buying just the component, just what you need, and not having to keep the never ending backup systems up and [unclear] are key factors for our utilities, but especially important to the smaller ones. There are places where they can take focused, small implementations where you pay for use, of capabilities, cloud based capabilities that will help them maintain their technologies.
Large utilities can afford to think in a large, grandiose way. Small utilities, however, they need to be more aggressive, and keep looking at their immediate [unclear] needs, and getting a targeted solution just for that.
>>Satish: And this is Satish. If I may add to this, small utilities are already really using cloud subscription and mobile solutions to gain pretty much the same functionalities as the larger ones have. And arguably, as Reid pointed out earlier, the larger ones, too, should reconsider the large scale enterprise approach vs. cloud based deployments. Erfan?
>>Erfan: Okay. Next question. "Earlier you showed a table for ranking options. Is this a standard table and evaluation used by all utilities?"
>>Reid: Oh. Well, I don't know if it's standard or not, but I've always used it, and even when I haven't been in the utility sector I used it. It's a great system, or can be a great system, 'cause it makes a team put on paper the real criteria, argue about weighting that criteria, and getting a more objective result. The problem with it is that it depends on the sophistication background, and the power of the team. Software vendors love to show bells and whistles, so they like to keep the team [unclear] and more things and things, you tend to buy more expensive systems that way. And that's why, as I showed my common tool, a simplified version of it, my message is that we need to have management involved, and make sure that we're going after the right [unclear] and not just looking at, "Oh, which solution has the most bells and whistles." There's always, I used to say [unclear] in the IT world, when you look at a business system, that the … if you have a team working on it, you're gonna get the most complex, and/or the most … the large company that released the latest version. As we look at this, we need to think more strategically and say, "Hold it. I know we're a utility, but look at what's happening in the world. Let's not just go out and pick a piece of software. Let's look at how we address the situation."
>>Erfan: Next question is, "To what extent should we look at incumbent enterprise system vendors for some of the types of solutions you talked about?"
>>Reid: Yeah. So, the large enterprise business applications companies, they have a lot of smart people there. They see what's happening in the world, and at the macro strategic level, they have been spent the last few years doing the following strategically on their applications. One, they've been buying add-on technologies to expand the scope of what they do. They've been buying successful companies all over the place. And second, is they've been working on growing or buying mobile and cloud capabilities. So, they're moving in the direction that we've been talking about. And, in fact, a company that has a fully rolled out enterprise software system with a large internal IT team to support them, they could decide to go with one of these larger vendors.
However, I would warn you of the following. That the DNA of these large companies is for complex and involved projects. Will they help you to be agile, and help you to be mobile user focused, as opposed to back end focused? Can you deploy then as fast as you can with modern thinking and mobile focus? Even on the large utilities, in my experience, we have implemented 10 percent of the capability of the software we purchased, because the implementation is too costly, despite the fact the software's absolutely wonderful. I would urge you to think about that, and saying you can go with these other companies and they have a lot of capabilities. But maybe the DNA is wrong. Maybe you ought to target, and get a fully implemented solution.
Other thing to consider is that their [unclear] models, [unclear] been expensive. They thrive on high maintenance costs, while I think there's some tremendous advantages to pay for use. Why am I paying for someone in my system as a contractor, when he's gonna be gone in two months, or a mutual assistance right now. I … that's completely anathema to the pricing model of these big companies, unless they've changed in the last year, where, to me, they specialize in getting maintenance charges for shelfware. We pay for a lot of stuff we don't use that we bought from them.
The other last point … I don't mean to wax on forever but … the last point is what makes them very good can also be their downfall. They are very good and do better at back end integrations, a totally connected solution. But however, think. There's a reason why the trend in the world is moving towards more modular, agile, easily implemented, and easily changed solutions. And …
>>Erfan: Right. Go ahead, Reid.
>>Reid: No, that's enough. I'm already going into my bias too much anyways. I've …
>>Erfan: I will give you two examples from two different verticals. One example that comes to mind is Kraft Macaroni and Cheese. Mediocre cheese, and mediocre macaroni. But it comes from a big company called Kraft Food. Non-discerning young kids, who just want something salty, are willing to eat that stuff. Very margin friendly. But the worst cheese and the worst macaroni from a big brand name. Another vertical I'll give you is pharmaceutical companies that create chemical based drugs. And when they saw biotech type drugs coming in, they started buying those companies out, many times just to crush them, or start selling them, because they couldn't really compete with their chemical based drugs. So we see examples of big players in the market, either first trying to deny the newcomers, or they try to co-opt them. So we see that all the time. All right.
>>Reid: Good examples.
>>Erfan: Thank you. Next is a question. So, William Miller and Michael Shay have monopolized the asking of questions. So it's either William asking, or Michael asking. And they have asked six or eight questions. They're the most diligent students of my webinar. Okay. First question is, "What has been done for community resiliency? 600,000 are now without power. Are you using the Internet? If so, all of those assets are not available. What about renewables, such as solar, autonomous operation is not important, where those systems can operate without utility intervention, and available during disasters or emergencies?" So the reference is to Hurricane Matthew.
>>Reid: Yes. And it'll be interesting to see Hurricane Matthew, to see how much I'm right in the resiliency of the cellular providers. My experience is more ice storm related in Oklahoma, but dealing with the large providers in their plans, and they are very good about bringing the tools, following up the storm, to get some communications going, and especially data communications. Let's see how well it works with Hurricane Matthew, as it goes through.
And the point of using solar, makes a lot of sense, but a lot of solar tends to be … our solar plants that they tend to be fragile. It would be nice if we could get past that and have the fragile part of solar attached to those communication towers, and then deployed as the storm passes. I don't know if that will happen. That's way outside my expertise. It is true that whatever solution you have, you will be detached from the communication grid for a while. But let's see how fast the get the data portion of that up now, 'cause they're far better than they used to be.
>>Erfan: Yeah. One other challenge in Florida is just where the water table is. So a lot of the subterranean infrastructure gets just covered with salty water whenever these things happen. And it's very difficult in that terrain. So, yeah. It'll be a good case study. But I really feel for the 500 plus people who've passed away in Haiti, and several thousand people are homeless. So it's just … One of the things that we enjoy in the United States is our healthcare system that allows people who get injured not to have their injuries get worse and lead to death. Whereas, in many of these developing countries, when something like this happens, they die not because they were dead at the time when they arrived at the medical facility, but because the facility just can't give them the service they need to take care of their immediate emergency. So that's why the casualties rates are very, very high.
>>Reid: Yeah, it breaks your heart.
>>Erfan: Yeah. Yeah. And to be so close to so much wealth. Look at the Bahamas, and look at Florida, in terms of gross domestic product. It's just a tragedy, human tragedy.
Okay. Next question from Michael Shay asks, "Assuming a near ideal world, where redo is a possible option, how would the utility industry do it differently for AMI smart meters, and the utility IT, as well as the utility IT process? If you could erase what we have and do it again, what would you do different?"
>>Reid: Okay, that's an interesting question. So, here's a strange answer. We put in the smart grid resources in very … While we put in a lot of smart grid technologies, the real push for it came from the incentive, the … recovery money. I'm sorry. Had trouble getting that out. So, while we … I'll give you an example. I was at OG&E. We had our plans ready. We were trying to make them financially justified. We were trying to see what we were gonna do. And the all of a sudden you had Uncle Sam say, "Here's free money. Take this." You get the free money. Now you're gonna have to give 25 percent of it back, because it's government, so you're reporting, it's gonna be crazy, and you're gonna have to do stupid things. But the rest of it is basically free money. The problem is, you have to go and spend it as fast as you can, as opposed to make pilots and grow. Well we said we had a pilot, but in fact, as we were making the pilot, we were making plans to spend the money. So, while I appreciate the fact that we put this technology in so fast, I think we took a lot of short cuts. I know we at OGE, while we had a very successful project, and accomplished this business goal of reducing … not having to get the other peaking plant, or buy the other peaking power, we went so fast that there's a lot of do overs that we'd love to do if we went slower.
The other thing … and this I don't know how to be … is that we still made everything so blasted complex, as opposed to look at trying to make our projects as cellular as we could, or as componentized as we could. My IT staff in that utility there was far different than my IT staff before I went to a utility. They were very into very complex, perfect, unbreakable systems that were overkill, and therefore we lost the capability to do a lot benefits. So if there's a do over, I would have loved to see that, when we went into the smart grid, we just didn't have a whole bunch of consultants with us, but we actually changed out people with different industries within our company.
>>Erfan: Okay. So, one of the challenges that the high speed environment created was that we didn't approach this from an architectural perspective. We looked at applications. We brought in vendors who had vertically integrated solutions. They had their own architecture. But many utilities did not have their technology and vendor agnostic architecture on which to dress it with technology. And I think that one of the problems that that causes is there is lack of modularity. And so, if there' obsolescence, you'd have to have forklift upgrades, which are very expensive. So, …
>>Reid: You know, Erfan, when we were doing that, for instance, what we did is we had a smart grid team that we separated off of the rest, working on this project for many years. But I had, on the IT side of it, I had some real conflicts, because my architecture group ended up fighting the smart grid group, because the architecture group wanted things to be coordinated, but to a point that they were dragging it down, while the smart grid group wanted to ignore architecture altogether. So, I actually moved my entire IT architect and communications architecture group into the smart grid team, so that they had a … they still had … were reporting to me, but they were reporting to the smart grid leader, as opposed to the architecture leader, for a period of time, just to make it so that they didn't shut out the smart grid team and let the smart grid team go by itself and just buy things that didn't fit.
>>Erfan: Yeah. I think that part of the challenge there is that the architecture teams quite often become very theoretical. And they lose semblance with the reality. And then, on the other side, you've got the ESBJ types under [unclear] who quickly want to put stuff in the field, and you have that conflict. Now the better thing would be that the architecture people just come up with a set of requirements at the interfaces of the logical layers, and the different portions of the overall application, and just leave it. And then, let the smart grid designers and implementers actually develop procurement language based on that criteria. Then the vendors will respond and meet that requirement, and then the scientific method works. But …
>>Reid: Yeah. A very important thing is, architecture teams complain about not having control, but when they try to get control they make it very, very complex, and look at everything, when in fact, what you need to do is realize that you want to compartmentalize your business as much as possible. The architecture team isn't there to map each and every single data field, or whatever it is. They're to look at how different compartments would interface with each other. Putting them together with the smart grid people, we got more in that direction. But I gotta say, even though I was boss, I could waggle my gums all day, but I couldn't convince these old guys that they needed to back off the control bit, while at the same time we need the architect to … we needed a architecture, but we didn't need a stifling control.
>>Satish: So Erfan, Reid, while we also talk about, from the utility perspective, let me also say that the vendors, perhaps also own some responsibility. Not that we are actually facing a disaster situation now, but just a question of where the returns are coming, and where we stand, today. In conversations I've had with smaller utilities, some of the munis and the coops, keep in mind that they were also able to upgrade their metering capabilities and so on. And I think part of the challenge was, as they went back to try to find out where exactly the returns were gonna come from, and pretty much addressed some of the questions we talked about today, the one complaint I heard was, "Every time we talked about, well, 'Hey, what do I get out of this?' our vendor would come back and say, 'Well, here's another piece of software you need to actually insert here.'" And at least in one major … with one very large utility, I know for a fact that that vendor came back and said that, "Look, you have now way of tracking which meters are down. Well, here's a new piece of software you need to insert." And the question back was, "Well, shouldn't that have been a part of the original solution anyway?" So think it goes back to talk a little bit about architecture [unclear] I think some responsibility from the vendors, too.
>>Erfan: Yeah. And the vendors can be financially incented to approach this from an architectural perspective by putting the language in the procurement language, because they ultimately want to make money. That's their primary driver. And if the utilities tell them how they can make money, then they'll do it that way. The utility has to own the game plan.
Next question is, "Reliance on technology makes us vulnerable due to the lack of knowledge. More hands on, and also training. Certification is useful, but does not necessarily mean they learned anything." So, that is …
>>Satish: It is a good observation. Let me point to two factors here, right? So one is, in general, we talked about mobile and web, mobile and cloud, and all of that. I think part of what we should acknowledge is that while training is an essential component to anything, especially look at critical operations, there has to be a degree of intuitive use built into any of these applications then. I think most enterprise software vendors will probably confess that that has not been the highest priority. Being user friendly has not been the highest priority. And I'm sure Reid has complained about that enough in his lifetime as a CIO. So that's, I think, one key factor here. I think the second is also that, as you look at the next generation of employees, of workers within these fields, that expectation is also that there should be a degree of use, ease of adaptability. So while I think the certification is important, and I think it's a good observation, certification doesn't equal learning. Most of us with degrees actually know that. I think that the key here is that the actual product, the actual solution in use must actually be easy to [unclear] and easy to use. I really think it needs to be approached the other way, from the perspective of the software itself.
>>Erfan: Yeah. And also, if you want to talk about technology, then you also have to talk about resilience. And when you are designing these systems, the key thing to do is to avoid the domino effect, that if something fails, then a whole bunch of other things start failing. And then you become very vulnerable that way. So that's why the architectural perspective is important in putting the appropriate safe guards, so that if … technology will fail. Systems fail. It's just part of life. But that doesn't mean that the whole infrastructure falls apart, just because one system fell apart. So, there has to be failure scenario analysis, and figuring out ways of mitigating them, so that you don't have the domino effect.
>>Reid: Yeah. So, Erfan, I wasn't gonna go there, but the architecture discussion could take forever. But I believe so strongly that a lot of IT departments miss it. The architecture needs to be focused on deciding and creating a synchronous, loosely coupled modules. In IT, we like things to be tightly coupled. And that means that you get what we talked about, cascading failures. We need to look at it different, and look at the input and the output, and look at things being asynchronized, as being a traditional IT system where it faults here, here, here, here, here, and that we really look at the in and the out of different modules.
>>Erfan: Yes. And also, within the modules, have the ability to announce to their neighboring modules, "I'm out of commission, so please don't talk to me. Don't expect things from me, 'cause I'm gonna cause more disruption for you." [Laughs]
>>Reid: Yeah. You have to look at issue not being tightly synchronized. You have to be asynchronized as much as possible.
>>Erfan: Right. Okay. Next question comes from William Miller. He says, "The use of cell phone are extremely vulnerable to cyber attack, and they expose big data and other systems to potential virus, worms, and other systems. Using a dedicated wireless network that is not cellular would be a lot safer. Though it seems convenient, it is growing more and more dangerous.
>>Reid: I think that we overstate the danger. And I need to be careful there. I don't think you can keep a computer, or a cell phone completely safe from attack. I like the concept of having components that are relatively safe, and especially when you don't put them together. I don't think that you should have an immense amount of data that resides on your cell phone so it could be taken away. You need to build your systems so that you don't have that. You need to make your communications so that if your communications are intercepted, they just don't mean that much. Again, if you think about building things modular, you will be attacked. You need to make sure that attack doesn't mean that much.
>>Erfan: Yes. And so, on that, on the smart phone business, you have to have a concept of what I call the sacrificial goat. So, when a smart phone is connected to infrastructure, whether it be a cloud, or the utility's own assets, there needs to be the proper monitoring at that gateway to decide whether someone is providing me bogus information, or it makes sense. And if it's bogus, you just expel that entity from the infrastructure, so that if there are virus, and smart phones will naturally get viruses, because people have Internet browsing capability on it, that it doesn't mean that the utility has to get infected by all that stuff. And there are tools now available that can do deep packet inspection, and do white listing of applications, and so on. So we don't have to rely on the security of the cellular network to protect the utility's assets, [unclear].
>>Reid: Yes. I [unclear] believe that you can have an application that's connected to a tablet, and that tablet could be infected, but that your application can be protected from that infection, and your communication can be mad sure that you white listed what matters, and [unclear] what doesn't. Again, you have to think about these modularly. You're not gonna protect your whole system.
>>Erfan: Next question from William Miller. You see? William and Michael have a monopoly on questions here. "The benefits are very useful, but use of smart phones are high cyber risk. The current protection software may be inadequate vs. obtain your own wireless network with dedicated frequency licensed to the utility. Then you also element the cost to telco that is getting higher." So yeah, it's kind of generally in the same area, but what William Miller is talking about is having a dedicated spectrum, and having protected networks, with the appropriate security controls when you are talking about utility applications as opposed to just a popular, cellular networks for everyday life.
>>Reid: Yeah. And again, I … could be right, but I respectfully disagree. I know that there is not IT system out there that can be protected from the Chinese. I do believe, however, that you can compartmentalize your protection so that when you're … when something is breached, you don't lose everything. I would hate to have one dedicated, private network, where a breach affected every machine, 'cause [unclear] didn't focus on each different component, and instead tried to stop any incursion into that network, because you're not going to.
>>Erfan: Right. Okay. So, Anner Aspen, he has left, but he just wanted to know if we are gonna provide him slides in the webinar video, and the answer is yes. And then, William Miller asked, "During Hurricane Katrina, it knocked out the Internet and all wireless cellular for almost two weeks."
>>Reid: Yes. And I'm interested to see if my theory is right with Matthew. From my experience with the … at least one of the large cellular companies, they've taken disaster recovery seriously. And they've … we'll see how it works with Matthew. 'Cause they have mobile devices that were ready to follow the storm, go up and get working. I would bet you, you're gonna have two weeks of really splotchy phone communication. But eventually you start having some data communication happen pretty soon, because that's the easiest thing to be carried on the network. And when the network is working at a quarter speed, that's still gonna make it.
>>Erfan: So, the way I see it is that no one media is going to provide you resilience in these natural disasters. It's really gonna be a combination of different types of … even within wireless … different types of networks, starting with mesh, of course, and then you've got your cellular, and then you've got tower based type solutions that you can connect with WiMAX. And if you have all of these options available, then the natural disaster may impact certain things and not others. So the important thing is not to put all your eggs in one basket. And if that thing goes, then you have no connection. You can today, with tower based technology, with very little bandwidth, you can go pretty long distances. I have seen demos of On-Ramp Wireless and other companies that really do a good job. So you may not have to be necessarily in the eye of the storm. As long as you have a communicating node in the field, and you have a tower, it could be even three to six miles away, it can still talk. The bandwidth is not very high, but you can at least get basic functions done.
>>Reid: Yeah. I think that if you have people out there that are using a tablet or phone based system to keep track of things, helping to do appraisals and all, like Satish said, that system has to be able to work offline. The typically, you're gonna find a way. And the first day you might only dump your data once or twice because it's gonna be rare places where you can get [unclear] communications will become more pervasive. Again, the thing is, don't think like a utility where you want everything perfectly working all the time. Think, "I'm gonna get this component working, and then, yeah, I'm gonna be a [unclear] here. I'm gonna be six hours here, but that's the best I can do now. But it's gonna get better through time.
>>Satish: I think that brings up, I think, the point that I was driving towards, also, which is I think what percentage of users are up and running within what period of time? If we plotted that on a graph, I would say that between Katrina and now, I think there have been significant changes, and again, I think Reid pretty much stated that, it is not gonna be 100 percent within the first two hours. But I think we will see that it accelerates as we go forward. So, it is not perfect, but I think we're going to have perfect as it can be, when these [unclear] events happen.
>>Erfan: William Miller tells us that 850 have now passed away in Haiti. The number was at 250 yesterday. So I guess that they're getting out into the outlying areas of the island. They're finding more casualties. It's just real bad.
>>Reid: So sad. Unfortunately, as it goes on, they might find more. [unclear] just imagine what a mess it is right now. And, I gotta say, someone like Haiti, they won't have the support, the communications support for quite some time. They could find horrible surprises.
>>Erfan: My main concern in these tropical places is communicable diseases that come from the water, the stagnant pools of water that are left from the flooding. And it's not so much … yes, the impact occurred of the hurricane, but it's all the flooding and the diseases that concerns me the most.
Okay. The next question is, "What about impacts of high integration of renewable energy into smart grids? Are our experts ready to deal with such changes to the power system?
>>Reid: [Laughs] They're trying.
>>Erfan: Yeah. I've seen even negative pricing for electricity from wind, and being offset by tax rebates or subsidies from the state to offset as much as eight cents a kilowatt-hour. So minus eight is the price I saw. And then 23 cents being given by the state per kilowatt-hour too, as a way of saying, "Thank you for producing wind power." So, I don't know how sustainable this economic model is, really.
>>Reid: No. But I sure would like to see the negative price at my house, though.
>>Erfan: [Laughs] Yeah. So the perfect storm with renewable energy that I'm finding is that wind power, which is available at night a lot, will slowly gut out centralized generation units. And then, natural gas will be the dance partner to wind. And then, what happens when the natural gas price doubles or triples, once we have large scale export of natural gas from the US to the world market? That's what my concern is in a regulated market. What happens to the cost of electricity if 30, 40 percent of our electricity starts coming from a combination of natural gas and wind?
Okay. Now let's move on to happier subjects. "The real key, as you mentioned, is the cloud, and distributed apps, and data. What can we do to accelerate this?" This is Ken Van Meter asking.
>>Reid: What can we do to accelerate? That's an excellent question, just excellent question, because … I don't know the answer. I'm trying to figure that out, because I know the problem. The people … I had some bright people on the utility. But they were stuck on history, and could say no to anything new. And then you look at the established vendors. And while they're following world trend, they're doing it in a very slow way. They have … they're not trying to push us to be more progressive. That's part of the reason I'm here in this webinar is, I think that we're really missing something. I also think that I get more people talking positive to me from the operations side than the IT side. I think the IT side is way behind on this game. I'd love to find a way to address it, and step out our [unclear] make us be more modern as an industry.
>>Satish: So just to add to that, Erfan, I think this change is inevitable, that there is gonna be more mobile and cloud coming down. I think we only need to look at the move from desktops to laptops, and laptops forward. I think now that some of these things are inevitable. However, I think the question is, what can be done to accelerate, I think in a word, I think the history that the industry lives with, as well as what the vendors live with, I think has to change. The need for heavy duty … the natural assumption when a large utility is out looking for a solution is that it has to be a certain seven or an eight figure value solution that runs on an implementation over 8 months to 18 months. That has to change. And that, I think frankly, is a matter of education. And there are forward thinking IT and OT groups that I think understand that, but frankly, in most situations, they don't. I think there is still some distance to go.
>>Reid: It's interesting. There's a psyche that has to change. I was just talking to some friends the other day, in a utility, that are buying new Panasonic rugged laptops for the trucks. Really expensive machines. You could buy four tablets for each person and replace them everywhere when they break and save a lot of money over that one rugged tablet you buy for the truck. And when you buy it for the truck, and not the employee, you're violating the whole concept of mobility, 'cause you're still focused on the back end system, and me talking to that tablet, rather than focus on the mobile person who's out there with the piece of equipment with this machine in hand. I just think that we need to keep raising our voice to pay attention to the rest of the world. And the utilities, yeah, they're different, some. But let's pay attention to the trends in the world.
>>Thank you. So, there is going to be growing competition in the energy sector. And the companies that will survive are going to be the ones that are innovative, that look at the trends of technology and leverage them, and work with a streamlined workforce. So, there is a Darwinian principle here that is at work. And while speaking about it, making the case is important, ultimately the way business works in our country, there's a natural filtration. And the innovative companies survive, and the ones that are holding on to antiquated techniques for … with the best of intentions, are wanting security, reliability … may lose business, and eventually leave the community. So I foresee a lot of mergers and acquisitions and changes going on in the energy sector. We saw a lot in the last five to seven years. I think we will see a lot more. And you'll see this type of technology, with cloud and distributed apps, becoming a mainstay. And these ruggedized laptops that you're talking about, Reid, will become more of the exception rather than the rule, just because companies won't be able to afford the operational costs associated with maintaining those.
>>Erfan: So, what I'd like to do is, first, ask if either you or Satish have any final things to say before I speak about our next webinar.
>>Reid: Go ahead, Satish.
>>Satish: Well first, Erfan, I think I want to circle back to just the one additional point … I really think it bears emphasis … the question of what can be done to accelerate adoption. And I know we talked about that. I think it is essential that A, perform more such programs, more such webinars are essential. I think it is key to helping the industry understand why, while the fears of security, for instance, are real, that it is possible, or they will be addressed as we move forward. I think the key is education and evangelizing to some extent, the value of these solutions. And B, I think Reid brought some insight also into that, that the cost/benefit, or the risk ration can be managed substantially. So [unclear] is a table base, but it still is one fifth the cost of a ruggedized laptop out there. So I think it's a bit of a change in thinking, and with new employees coming into this industry, and certainly the industry is looking to attract newer, smarter employees, as the come out of … as they join the workforce, this is going to be essential. There's not gonna be enough patience to sit and learn [unclear] enterprise systems, and heavy duty green screens, and so on. So I think education is key to this, and I think greater understanding of technology is going to be key here.
One final thought on that is, when you look at driverless cars and how they are essentially … I use the word with caution … disrupting the market out there. Yes, there will be some accidents, and yes, there are going to be some challenges. But I think we all recognize that this is inevitable, that [unclear] is inevitable, and it is better that we embrace rather than resist beyond a point. Reid?
>>Reid: Okay. I'd just like to make a point that the providers of the smart grid technologies, and also of the business applications that support these technologies and support our operations around them, are some of the biggest sales machines in the world. There are very capable people there, and some of what they do is in our interest, and some of what they do is in the interest of making their sales machine work. I think that we in the utility need to look for possible disruption, even if it be minor, and we need to make sure that we talk to each other, have forums, seminars, and do things, and make sure that we have some of the thinking about the philosophies of how we go forward come from us, and not only from the sales machines. Going on this webinar I think is great, because you have people who are just discussing some issues, and making up our own mind about it. I think we need to do that, and not just rely on the sales machines.
>>Erfan: Yes. So this presentation, and the webinar recording, is going to be shared with 4 thousand 500 and some people across ten countries. And they are in the electric sector in a big way, in many different ways. So, we'll get the word out. I think that what would be really helpful going forward is if there's some early adopters of this type of technology in utilities, and they're willing to work with you to develop case studies which we an showcase, that would be the best example of how a utility handles an emergency situation with this distributed app cloud model. How did they handle the coming in of different independent power producers into their market? How were they able to streamline their operational cost to handle that? When people see tangible examples, the credibility goes up. Then they want to adopt it. So, there is a lot of this peer-to-peer kind of dialog that goes on in the electric sector. And if someone does something, and the word gets out there, other people want to do that. So, I would encourage both you, Reid, and Satish, to look for such case studies with the work you're doing, and bring them to our smart grid educational peers and share it with us.
>>Reid: Okay. Noted. You're right.
>>Satish: Will do, will do.
>>Erfan: Okay. Very good. So, I thank you both for the wonderful, informative presentation, and thought provoking and controversial also. So I like that. We're going to have our next educational series webinar in two to three weeks. I'm getting Glenn Steiger, who is the former General Manager of Alameda Municipal Power … he recently retired, and before that he was General Manager at Glendale … to talk about how a small to medium size utility is operating in these changing times, and some of the best practices that he deployed in his career over in Glendale, and in Alameda. So, look out for that presentation in a couple of weeks. And with that, I'm going to end the recording. I thank you all for participating today, and for continuing to support this forum. Thank you very much, and have a good afternoon.