Grappling with Electric Power Resilience
As electric utilities grapple with the increasing incidence of extreme weather, and in some areas, wildfires, they are intensifying their focus on enhancing resilience to these events. Loss of life and property in the California wildfires in 2017-2019, the Australia bushfires, and Hurricanes Harvey and Maria in 2017, and other events have made enhanced resilience a high priority for most utilities. Some public utility commissions that regulate electric utilities, as well as many utility customers in some areas, are increasingly demanding enhanced resilience. At the same time, the specter of significant financial repercussions and liability related to insufficient resilience is motivating electric utility action.
A Historical Perspective
When was the last time one challenge motivated such pervasive interest in change and response in the electric power industry? Perhaps it was the call for enhanced power system reliability in the aftermath of the Great Northeastern Blackout of November 1965. This event ultimately led to the formation of the North American Electric Reliability Corporation (NERC, originally the National Electric Reliability Council) in 1968 as an industry self-regulating standards organization, and the Electric Power Research Institute (EPRI) in 1972 as an industry collaborative research organization.
The call for enhanced electric power resilience is unlikely to abate as the frequency and intensity of extreme weather (predicted by many scientists) continues to rise. Like the need for enhanced reliability in the late 1960s, the need for enhanced resilience is likely to persist for a long time.
The Scope of the Need for Enhanced Electric Power Resilience
Although the type of extreme weather varies across the U.S. (e.g., hurricanes, floods, severe wind events, ice storms, and heat islands), few utilities are immune to its effects. The size of the utility affects the scope of the impacts, but not their intensity and challenging aftermath. Moreover, the utility ownership type (i.e., investor-owned utility (IOU), municipal utility, or rural electric cooperative) does not affect vulnerability to these extreme events.
Thus the need for products and services to enhance electric utility resilience [1] spans most, if not all, U.S. electric utilities. According to the U.S. Energy Information Administration (EIA), almost 3000 U.S. utilities were operating in 2017. This represents potentially 3000 utilities that need resilience solutions, including 168 typically large IOUs in the U.S., but not including other large utilities outside the U.S.
Opportunities for Resilience Solution Providers
This ubiquitous societal need for enhanced electric power resilience is creating new opportunities for resilience solution providers. Utilities and the communities they serve need effective, flexible, economical, socially equitable, and regulatory compliant solutions. (See our blog on “The Top 15 Questions Electric Utilities May Ask about Your Resilience Solution” to learn more about our take on these and other attributes of resilience solutions.) Resilience solution providers deliver much of the equipment, systems, and advice that utilities need to enhance their resilience to wildfires and extreme events [2]. Rather than a few dominant players, this sector includes a large number of regional and national companies.
Creative Practices to Engage Utilities
Based on a recent survey of the literature on creative ways to engage with electric utilities, Hoffman Power Consulting identified the following five practices that can complement existing approaches:
Yet, as for-profit entities, these providers are vying for an evolving slice of the large amount of work needed. In this crowded market, how can a resilience solution provider serve the needs of utilities and communities, while differentiating its products and services from those of its competitors?
Many legacy providers will continue to strengthen the existing relationships they have forged with utility partners, extend their long history of providing reliable, high-quality products and services, and respond to their clients’ needs. Relatively new providers in the space will not be able to fall back on these relationships. However, both types of providers can uncover and even create new opportunities by adopting creative forms of engagement with utilities to complement existing practices.
- Conduct a survey and report the insights gained. Surveys can be expensive and time-consuming, but if properly structured, can provide thought-provoking insights. For example, in a recent Itron survey, 300 utility executives ranked the top three barriers to utility deployment of resilience technology as:
1. Difficulty prioritizing investments in technologies (33%)
2. Regulations and rate recovery approval (30%)
3. Lack of utility or municipal funding (26%)
- Partner up, work together, and write about it. Collaboration can lead to new insights. For example, Holy Cross Energy (electric cooperative) is partnering with the nearby Rocky Mountain Institute in Basalt, Colorado, on a resilience project in response to a July 2018 wildfire that almost shut down power to the entire upper Roaring Fork Valley. Ideas the team identified include buying electric school buses that can be used as backup power sources during severe events; installing solar generation and batteries at gasoline stations to help ensure mobility during an evacuation, and several others.
- Run a contest and document results. Contests can provide fresh ideas and positive publicity. For example, the Resilient by Design (San Francisco) Bay Area Challenge is a year-long design contest that assembled public officials, national experts, and local residents to “develop innovative community-based solutions that will strengthen our region’s resilience to sea level rise, severe storms, flooding and earthquakes”.
- Hold a symposium in your community and report insights. The process of co-hosting a symposium with a utility can strengthen existing business relationships, build new relationships, and yield new insights on product and service development. For example, the Resilience Week 2019 Symposium in San Antonio was entitled “Transforming the resilience of critical infrastructure systems and communities.” A mix of public and private sponsors included government, universities, associations, and private companies [5].
- Communicate in Creative Ways. People absorb information in different ways. Infographics, for example, cater to visual thinkers, while written content caters to readers. For an example of a visually appealing display of information, see the nonprofit RAND Corporation’s “Building Blocks for a Resilient City” infographic.
Can you think of other creative ways for resilience solution providers to better engage with utility prospects? We value your feedback! Please contact us with your thoughts.
Footnotes
[1] Organizations that supply products and services to enhance electric utility resilience include a diverse array of equipment manufacturers and system integrators, product and parts suppliers, service providers, consulting firms, and others, which can collectively be termed “resilience solution providers.”
[2] Although many electric utilities enhance resilience using in-house resources, most rely heavily on contractors, vendors, equipment manufacturers, and consultants.
