A recent report from the Edison Foundation Institute for Electric Innovation found that as of the end of 2015, over 65 million smart meters have now been deployed in the US, accounting for more than 50% of all households. Through ongoing deployment efforts across the country, that number will to grow to 70 million by the end of 2016 (including over 1 million more alone deployed by ComEd in the Chicagoland area), and 90 million by 2020.
Smart meters have clearly become ‘table stakes’. Reaching the performance expectations of both regulators and an evolving customer base in areas such as reliability, storm resilience, field service and operations, customer engagement and satisfaction, and other areas are simply not possible without moving forward with grid modernization efforts with smart meter and smart grid technology at the core. Utilities that are still holding out from investment in this technology have run out of ‘reasons why not’. The overall value and business case has been proven time and time again, via delivery of a wide range of benefits, to the point where NOT moving forward with these programs is nearly impossible to justify.
Utilities are now trying to figure out what comes next. The answer very well could be a new way of approaching the role of the electric utility in the context of the ‘Platform Economy’. Through exciting, forward-thinking policy and program roll-outs via REV in New York, and similar activities in Illinois, Maryland, California and across the country, utilities, regulators, stakeholders, and policy-makers are discussing how to leverage recent investments in grid modernization to:
- Facilitate and optimize the integration of distributed energy resources in alignment with expansion of renewables, electric vehicles, storage, and evolving standards
- Enable new marketplaces where customers and third parties come together to transact on energy management solutions
- Drive increasing transparency and customer choice via dynamic rates and programs
Realizing this vision is no simple task. Innovators such as Uber, Amazon, and Dollar Shave Club are commonly referenced as ‘winning’ business models that all companies should be emulating. However, the direct application of those success stories to the utility space can be elusive. New ways of thinking are required, including the solidification of a vision and roadmap that includes specific milestones, aligned partnerships, and collaboration with customers, stakeholders, and regulators. This must also include the expansion of success criteria (and accountability for achieving it) that goes beyond the traditional utility operating model and associated key performance indicators.
While core capabilities around delivering safe and reliable power cannot be compromised, utilities now have a unique opportunity to leverage unprecedented large-scale investment in our energy system to drive economic growth in new ways, address the challenges of an evolving energy landscape, and provide the ‘creature comforts’ that our society now expects. These are exciting times for utilities, and it has become clear that deploying smart meters is only the beginning.