Utility Field Digital Transition

Transforming Networks

Wireless Broadband holds the promise of bringing ubiquitous high-speed Internet access and mobility to cities and their utilities, providing citizens universal access and governments lower cost services and increased security. It is no surprise that the potential for broadband has been compared to the wave of excitement that swept over the land when electricity came to cities one hundred years ago. Just as we now recognize electricity as a foundation of our digital economy, it's not hard to envision broadband networks becoming a new foundation for a digital transition that will change the way we do business and live our lives.

Building a National Network

At the start of the last century, finding the capital needed to bring electricity to communities was a huge challenge: it wasn't just the construction of power plants, but also the electricity transmission and distribution networks that would extend for miles to reach homes and businesses in neighborhoods to deliver the excited electrons. Large holding companies raised the vast amounts of capital needed to build investor owned utilities (IOUs) for the larger and more populated urban markets.

Smaller municipalities that weren't able to raise sufficient IOU interest created their own electricity production and distribution systems with municipally-owned utilities (MOUs).

Rural communities waited for years to get electricity, even as their urban cousins began to take for granted the modern creature comforts made possible by electricity. Finally they formed electricity cooperatives with help from the federal government.

Fast forward one hundred years and municipalities and MOUs that decide to build their own broadband networks rather than wait to have their needs met over time by incumbent providers merely reflect an approach ratified by history long ago. Metropolitan broadband pioneers today have an advantage over their predecessors though: the historic electricity model as a guide.

While any electric utility may choose to deploy a metropolitan broadband network, many still resist, sensing a departure from their core business of supplying power. But there's a different perspective to consider, so read on.

A Natural Alliance

Electric utilities and municipalities have a long history of working in unison to bring benefits to the communities they serve.

Larger IOUs work with municipalities throughout their service territories, supporting economic development activities as a means to retain and grow their revenues.

Similarly, the smaller but more numerous MOUs serve a valuable economic development role when they transfer payments to city government budgets to support city operations and keep taxes low.

As municipalities consider wireless broadband networks, power supply and mounting rights are critical to successful network designs, and a lack of either can stall a network plan. It is natural for electric utilities and municipalities to act more proactively, under their traditional economic development banner, to deploy networks that offer mutual advantages.

Such a city/utility team, working together with third party service providers, represents the best deployment scenario imaginable for communities that lack broadband access from traditional providers, that desire to help their underserved, or that seek greater business efficiencies & economic development opportunities.

A Second Anchor Tenant

While early fiber municipal networks tended to focus on digital divide issues, bringing telephony, ISP, and video services to smaller communities that had few options, the next wave of wireless broadband municipal networks has been more focused on mobility applications for public safety and public services.

Most often working with a private sector partner, cities find they have a win/win when they mitigate risk for partners by serving as anchor tenants for network services. Electric utilities can also act as anchor tenants, using broadband applications to provide themselves an array of services to achieve operational savings for utility managers (see insets).

The relative novelty of some digital broadband applications and supporting network technology makes this a very fresh approach for electric utilities, but early movers have already started deploying solutions to leverage wireless digital broadband applications & networks.

The remainder of this brief explores the connection between electricity and telecommunications and the growing need utilities have for such a digital transition to broadband infrastructure. When utilities focus on their own digital transition to broadband, their initiative is a catalyst for other municipal departments and communities to realize the potential of their own digital transition.

Bringing Two Essential Networks Together

What does electricity have to do with communications infrastructure? Electric utilities have invested a tremendous amount in fiber optic capacity over the past two decades because complexity demands that managers operating distributed power grids have access to detailed real-time, technical information, such as the status of voltage levels, power quality measurements, etc.

Utilities use such communications infrastructure to bring data from sensors in their networks back to their control centers, where that data helps them keep voltage levels balanced and power flowing. But increasingly, current infrastructure is perceived as inadequate to meet the management requirements of tomorrow.

The Electricity Supply Chain

The traditional electricity supply chain features: 1) electricity generation from turbines powered by steam produced by water heated by burning coal or gas, or through nuclear activity; and to a much lesser degree, water, not to mention the growing but still small wind, solar or biomass; 2) electricity transmission over long-distances at high voltage levels; 3) electricity distribution in local areas at lower voltages; 4) wholesale energy operations and 5) retail energy operations including metering, billing, and customer service.

This traditional supply chain is evolving to include alternative distributed generation sources, enhanced transmission and distribution grids, and competitive retail services. A new, expanded supply chain brings with it new demands on the supporting communications infrastructure.

The Electricity Grid

GridWorks, a program activity in the U.S. Department of Energy's (DOE’s) Office of Electricity Delivery and Energy Reliability, aims to improve the reliability of the electric system through the modernization of key grid components.

As described by the DOE, the nation’s power grid is comprised of interconnected, independently-owned transmission/distribution grids, operated by regional Independent System Operators, with North America divided into a Western grid, an Eastern grid, and a Texas grid, known as “ERCOT.” As stated above, individual electric utility grids are managed locally with utility-owned telecommunications networks that provide data to support the control and monitoring functions of grid management.

Control centers maintain constant voltage levels by balancing generation (supply) to match load (demand). Coordinated demand side management (“DSM” – also known as “demand response”) allows utility managers to forgo running expensive peak generation during peak consumption periods by getting consumers to consume less, but without two-way communication with customers, DSM remains an unrealized goal, although DSM is gaining new attention recently.

A Grid at Risk

In this land of plenty, we don't tend to notice our bounty of electricity until it is threatened or stops flowing altogether. Electricity, or the lack thereof, certainly becomes the primary topic of conversation during a blackout. Since the power shortages in California in the late 1990s and the Northeast blackout in 2003, the reliability of the nation’s electricity grid has been under increasing scrutiny.

Years of under-investment have left our national grid increasingly inadequate to provide sufficient capacity to meet the growing need for high-quality power for digital customers, and at increased risk of catastrophic failure, like severe outages or blackouts. Regional infrastructure inadequacies are highlighted by location of renewable resources such as wind towers in remote locations, where they require transmission capacity to transfer the renewable power, much in demand, to populated areas.

Demand Increases, Capacity Falls

Regulatory uncertainty has been cited as a key reason for the failure of investment in transmission and distribution infrastructure to keep up with demand growth (projections in load growth by 2010 are 20%, compared to a 5% projected growth in transmission and distribution capacity during the same time period, leaving a shortfall of 15% to compound current short-comings).

Government and research groups (i.e, DOE, FERC, NERC, EPRI, CEIDS) have begun to raise awareness in the electric utility industry about a U.S. power grid increasingly vulnerable to periodic and expensive disruptions, even including terrorist threats, and the impetus to act to address the situation is gradually emerging.

Utilities Under Pressure

Amid a growing awareness of the grid's vulnerability and the need for industry reform, electric utilities are squeezed by a number of market forces and face a sea change in the architecture and operational processes that drive their industry.

First, traditional utility equipment and technology are growing more antiquated, providing less control for managers in an industry where operational control is mission critical.

Second, traditional monitoring methods (limited SCADA augmented with physical inspection) are becoming too expensive and provide insufficient information.

Third, reactive maintenance of aging infrastructure is increasingly expensive and provides unpredictable reliability.

Fourth, regulatory priorities have migrated from cost-plus ratemaking to integrated resource planning to free markets to their current focus on enhanced security and reliability requirements.

Finally, supply agreements pass along costs to distribution utilities that lack any control over their demand side, and demand spikes cause uncontrollable increases in the cost of power.

From Grid to "Smart Grid" With Broadband

A variety of electric utility programs enhance reliability and better manage the transmission and distribution grids (SCADA, AMR, etc.), enable new sources of electricity ("green power," solar, wind, etc.) and promote conservation and efficient energy use among end users (Demand Response, Demand Side Management, etc.).

In most utilities, these programs are delivered by separate departments and when they need communications infrastructure, it is provided independently.

A utility communications infrastructure upgrade provides a common shared broadband network to the benefit of all such programs. By overlaying a ubiquitous information communication network on the power distribution network, an “energy internet” not only constitutes the foundation of a more reliable and functional power distribution system, but also enables a revolutionary new communications link between the utility and its customers, between the municipality and its citizens.

A "Smart Grid" Transforms the Utility

Advanced technologies are the path to improve a national electric system whose engineering design is over 50 years old according to EPRI, which sees digital automation as the "heart" of a "smart digital system" whose foundation is modern communication architecture.

Development and integration of distributed energy resources and storage capabilities are key elements, with additional power electronics-based controllers & market tools. But any revitalization of the electric utility starts with a modern communication architecture.

A New Day Dawns

Utility communications infrastructure initiatives can be roughly divided into two types:

1) smaller utilities, which more often use communications infrastructure to offer comprehensive services (Cable TV, voice telephony, broadband ISP); and

2) larger utilities that tend to focus on utility efficiency benefits, and then enjoy enhanced communications capabilities that can also be used to provide broadband access and/or to lease to third party service providers.

Many projects begin by optimizing core utility activities (e.g., SCADA, meter reading), and then use any surplus communications infrastructure for other services (telecom, broadband access, cable TV).

Most 20th Century projects were based on fiber optic networks, and many are well established. Pioneer utility communication projects (Burbank, Provo, Tacoma) were all wired, using hybrid fiber/coaxial cable (HFC) and fiber optic lines.

Newer projects reflect newer technologies, integrating fiber-optic trunks with different wireless technologies (Sun Prairie, Alexandria, Braintree, Owensboro, Rochelle).

Wireless technology for metropolitan area networks is a rapidly developing field, as new projects increasingly use newer wireless broadband technologies like Wi Fi Mesh (802.11a, g, n) and WiMAX (802.16d, e). (e.g., Corpus Christi, TX).

Metropolitan Networks

By leveraging their unrecognized advantages as communications providers to meet their critical business needs, electric utilities can create a converged infrastructure and services business that provides ubiquitous wireless digital information to revolutionize not only their own utility operations, but how cities and citizens interact. Wireless Broadband can serve not only to upgrade grids for better reliability and enhanced energy services, but also to realize the latent broadband communications potential of existing power networks.

The Path to Synergy

Digital transition to wireless broadband applications running on metropolitan networks represents an attractive solution to the critical business issues and pains facing an electric utility, and municipalities face a unique opportunity to align with their community's trusted monopoly infrastructure company - the electric company - to explore network-based solutions to their own business problems.

By working together, the utility and the municipality discover a lower risk, less expensive, more rapid road to a ubiquitous digital transition that will not only lower their costs and improve their services, but also bring to ratepayers and citizens new digital-based services and an improved quality of life.

As a municipality examines its prospects for bringing broadband to its community, this analysis would point that municipality to their local electric utility as Step One: its best natural ally in the long road ahead.

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