Ensuring reliable power amid new technologies

Without substantial investment in the electric distribution system customers could experience substantial delays and costs as a result of this new technology.  In an environment of rising electricity rates, failure on the part of utilities to meet these challenges will create a maelstrom of criticism from regulators and politicians as well as tens of thousands of customers.

Turning to electric vehicles (EV) as a specific example, the proliferation of EVs in the coming years will create new strategy, reliability, and investment challenges for utilities.   Substantial capital investments in the distribution grid will be necessary to meet customer expectations for both service reliability and power quality.  Yet today, most utilities do not fully understand where on the distribution system these investments will be needed, making planning a real challenge.  Utilities are likely to see neighbourhood clustering of EV purchases across their service territories. The specific locations on circuits and the available capacity are critical data points that will drive investment and planning decisions, but these have yet to be revealed.  Planners could be facing significant investments in transformers, poles, conductors and even substations, depending on planning criteria, penetration rates, EV and battery technology, and charging patterns.  Fundamental strategy decisions must be made regarding how each utility will participate in the EV value chain.  What role will the utilities play in charging infrastructure, batteries, customer billing, reliability, and power quality?  How will utilities engage customers on these issues?  What alliances will be formed?  What are the winning regulatory strategies regarding rates, demand response, and other important issues?  The utility that gets out in front of these critical issues will be well placed to take full advantage of the opportunities presented by EVs.

Capital investments associated with electric vehicles (eg charging infrastructure, system reinforcement) along with smart grid investments, and transmission system expansion will put substantial pressure on retail electric rates that are already at a boiling point. Regulators are demanding utilities implement austerity measures to reduce operations and maintenance and improve efficiency while maintaining service levels.  Utilities must learn to optimise the benefits from smart grid investments to achieve both performance innovation but also capitalise on cost reduction.

At PA Consulting Group, we annually honour a group of North American utilities that have gone above and beyond to provide reliable service amid these new industry challenges. Our 2010 recipients, whom will be announced on November 17, have substantially outperformed the industry.  Customers served by ReliabilityOne^TM recipients have experienced outages that lasted on average only 53 minutes versus an industry average of more than 2 hours and 15 minutes.  In addition, the average customer served by ReliabilityOne^TM recipients experienced half the number of service interruptions.

To learn more about how we work with utilities in the area of reliability or about our ReliabilityOne^TM  programme, contact us now.