Advanced Metering Infrastructure (AMI) capabilities add a new dimension to utility’s ability to more deeply engage the “customer as partner”

Why the Smart Grid Needs Smart Business Communications to Succeed Both Now and as AMI and Smart Grids Evolve, Engaging Customers is Key to Achieving Operational and Energy Efficiency Goals by Dennis Ladd, President and CEO StreamServe, Inc. The Americas Corporate Headquarters 3 Van de Graaff Drive Burlington, MA 01803 www.streamserve.com Why the Smart Grid Needs Smart Business Communications to Succeed Both Now and as AMI and Smart Grids Evolve, Engaging Customers is Key to Achieving Operational and Energy Efficiency Goals The Smart Grid is the key enabling technology for meeting the most dramatic challenges the utility industry has ever faced. Beyond the radically new physical infrastructure, the Smart Grid also changes almost every utility business process, business system, and even entire business models. In this evolving world, the customer will play a major role in the success of the utility. Many utilities are beginning to actively engage their customers and are seeing some positive results. The introduction of Advanced Metering Infrastructure (AMI) capabilities will add a significant new dimension to the utility’s ability to more deeply engage the “customer as partner.” But in order to fully capitalize on the insight that AMI provides into the customer base, and to proactively communicate with them in very segmented and relevant ways, utilities will need to synchronize and leverage three major business components—billing/usage information, CRM customer profiles, and presentment. Solutions are available today to achieve this. They provide rapid ROI on today’s issues while simultaneously equipping the utility to keep pace with the evolving environment. Giving utilities end-to-end control over their business processes and business communications, StreamServe and SAP provide fully supported, pre-integrated solutions designed for immediate benefit, minimized risk, and maximum ability to master change. This article explores some of the business issues and opportunities of both the present and the emerging environments, and how utilities can take advantage of them. The Smart Grid Answers Serious Challenges Success Tomorrow Starts with The emergence of the Smart Grid is driving the Smarter Customers Today most dramatic changes in utility industry history. An The unique, historical combination of necessity and unprecedented convergence of multiple factors makes opportunity presents the electric utility industry with the transition to a new energy grid not only necessary, the most exciting and achievable transformation since but also inevitable. These factors include: its birth. Conceptually, the Smart Grid encompasses two major domains: • Aging infrastructures and intensifying pressure on capacity Smart Infrastructure The first domain, of course, is the physical components • Social and government demands such as that enable the generation, distribution, delivery, increasing environmental issues, regulatory measurement and management of electrical energy. mandates and security concerns These components improve the effectiveness and • Growing energy demands, rising consumer reliability of the infrastructure through better expectations, and the rising cost of capital, raw transparency and control. For example, Smart Grid materials, and labor, and technology enables load shifting (optimized to time-of- day, for example), tighter integration of non-renewable • New complexities such as variable tariffs and and renewable energy sources, and better anticipation pricing, time/supply-driven consumption, plug-in and management of load and usage changes, to name electric vehicles, consumers as generators, etc. just a few. It also can enable customers to influence Change is also being driven by rapid innovation in overall usage in their community, for example technology. The Smart Grid will replace the current, by allowing the utility to automatically adjust air aging grid with an intelligent, resilient, self-balancing conditioning settings to reduce demand if there is a risk and interactive network; one that provides both of brownout. technical superiority and new business models. The Advanced Metering Infrastructure (AMI) is a primary Technology enables utilities to not only transition to enabler of much of the innovative promise of the Smart a new state of the art, but also to capitalize on the Grid. Currently being implemented in many localities, opportunities it offers. AMI touches virtually every business process in a utility. Energy Efficiency Plays a Key Role The AMI smart meter attached to their residence is also The Smart Grid will put into place the infrastructure of the most visible Smart Grid emblem for the public. Its the new energy landscape. How well that grid is used installation is the physical evidence for consumers that will have a tremendous impact on its success, and that’s something new is happening, and the associated web where energy efficiency comes into play. Since the portal driven by AMI-supplied information confirms efficient use of energy depends to a great extent on a new level of connection and cooperation between changed consumer behavior, the question facing utilities consumers and their utility. That is, it’s a new level if the is, “How do we influence our customers to embrace an utility is able to fully leverage the business opportunity energy-efficient mindset?” that AMI offers. This isn’t a question only for the future. Better and fuller Smart Customers use of the existing infrastructure includes shaving the This brings us to the second domain, which is the peaks and filling the valleys of consumption. That will customer side of the meter, where attitudes, behaviors help neutralize the expected growth of demand over and investment in household, commercial and industrial the next couple of years, as well as enabling the utility equipment define consumption levels and timing. This to cost-effectively fulfill mandate directives. Equally is the side that holds the real key to the success of the important, it will result in a more efficient business that Smart Grid, since educated and motivated customers gets higher ROI out of both its existing and its future will at least be more conscious of, and likely will better infrastructure investments. manage, their energy demands. Smarter customers combined with innovative pricing Although operational gains such as automated meter incentives will smooth out the peaks and valleys of reading are important and obvious drivers of the ROI demand, resulting in more efficient use of existing from AMI investments, they represent only a part of capacity as well as providing a clearer picture of the contribution that AMI can make to the business. consumption trends. In addition to the customers The insight into the customer base that the utility gets themselves using energy in smarter ways, smart from AMI opens up substantial new possibilities for appliances and smart electric or hybrid cars that interact much more effective DSM and other programs, and that with the grid will optimize when and how they operate. adds very significant, new aspects that accelerate and AMI is the technology they will use to do this, and it’s increase the ROI from the utility’s AMI investment. also the technology that will enable the utility to service and bill appropriately in a world where electric vehicles Smart Technology Provides may draw upon energy, or release it back into the grid, Information; Smart Utilities Use It Well from multiple locations.