Thinking back on the past 4½ years that have passed since Katrina made landfall on August 29, 2005, I’ve had a lot of time to think and reflect on the transition from a pre- to post-Katrina environment – the post-storm period being something I’ve previously referred to as our New Normal. Katrina caused virtually everyone in the Gulf Coast region to adjust and adapt to a life and a lifestyle that is very different from the way things used to be. And although we’ve tried really hard to put Humpty Dumpty back together again precisely as he once was, we’ve learned that the cracks still show and that all the “glue” in the world will never quite fill all those cracks correctly or completely.

By contrast, the grid has remained relatively unchanged. But let me be very clear that by unchanged, I mean only from a grid topology perspective. In no way am I suggesting that the grid hasn’t changed or advanced in other ways. On the contrary, the grid has evolved significantly over the past century – mostly during the past 50 years – into a network that employs intelligent architecture at virtually every level and that is populated with roughly a gazillion (give or take a few) intelligent systems, subsystems and devices.

The more I think about it, the more I see emerging parallels between the post-Katrina challenges of our region and those of grid transformation. So, I want to take this opportunity to share some real-world experiences that I hope will offer useful insights into lessons learned in storm recovery and that may be at least partly transferrable to facing and overcoming the challenges of what I’ll collectively refer to as Smart Grid Transformation.

Don’t Change That!

To begin with, there are some stark parallels between New Orleans culture and that of the electric utility industry when it comes to change.

Neither likes change much, and if anything, New Orleans is far more stalwart when it comes to resisting it than it is to embracing it. I doubt that anyone would argue that it’s a whole lot different for electric utilities. But that isn’t necessarily a bad thing. At least to some degree, it has a lot to do with actually liking the way things are and not wanting to fix things that aren’t broken, purely for the sake of change – the latter sometimes called progress or modernization even when those labels aren’t entirely backed by hard evidence. But let’s not debate the pros and cons of change; we all know that there are always two sides to it – and both sides usually think they’re right!

Instead, let us consider one of the biggest reasons why many of the things that really need to change don’t – money! More often than not, we can’t change what we can’t pay for. Change is hard enough even under the best of circumstances, but lack of funding is usually the ultimate deal buster.

Take, for example, the U.S. Environmental Protection Agency program that appropriated some $150 million in the aftermath of the 9-11 attacks for water and wastewater utilities to undergo a security vulnerability assessment. Within a fairly short period of time they had spent the money and completed lots of audits, but when the money ran out, practically nothing was done to remediate the problems identified by the audits.

Why? Well it wasn’t that the utilities didn’t want to fix their problems; many of them were genuinely alarmed by the vulnerabilities the audits had identified. The main impediment was, quite simply, that no money was budgeted or otherwise available to be able to follow through with the recommended fixes. Yet despite several attempts to make that follow-through a legislated or regulatory requirement, utilities usually don’t respond well to anything they consider an unfunded mandate – which this clearly was – so those attempts failed.

Lesson #1: Deferred Maintenance

But let’s move on to the reason why many if not most of the problems in cities like New Orleans as well as utilities find themselves up the creek without a checkbook when it comes to the well being of their infrastructure: Deferred Maintenance. For decades, we’ve been “deferring maintenance” and thinking we were putting off the inevitable infrastructure failures we’re beginning to see with regard to roads, bridges, railroads, water pipes, sewer lines, telecom circuits and yes – power lines – as well as the surrounding support infrastructure so desperately needed to maintain their viability.

Perhaps nowhere in recent history has there been a more glaring example of the consequences of (habitually) deferring maintenance than in post-Katrina New Orleans after the storm waters from failed levees finally receded. Once “Lake Katrina” was drained and the ground began to sink, crack and crater, our water distribution and sewer systems turned into a huge sprinkler system, at one point leaking an estimated 90 million gallons a day through cracked or broken pipes and connections.

Two and a half years later, New Orleans Sewerage & Water Board officials estimated repairs at more than $800 million – the federal funding for which had not yet been approved – plus, the utility was already more than $500 million in debt at that point. But that doesn’t tell the whole story. By the utility’s own estimates, those pipes were already leaking an estimated 60 million gallons of fresh water each day – BEFORE the storm. It seems that our already crumbling, century-old cast iron pipes were already at the end of their useful life, and the floodwaters were truly the final straw. (Ditto for much of the gas distribution system, sewer lines, roads, and other parts of our already fragile infrastructure.) So why did we let it get so bad, one might ask? The answer is simple: No money, honey. But make no mistake; this is far from being a just a New Orleans problem, a Gulf Coast problem or even a regional problem. Virtually every other major metro area in the nation – possibly excepting some of the newer communities in places like Arizona, Colorado, Florida and Nevada – suffer from various forms of the same chronic lack of funding for maintenance and repairs. And even some of those younger cities and towns are already seeing the same kinds of problems in their K-12 schools, college campuses, hospitals and other institutions where deferred maintenance is estimated to be well into the tens of billions of dollars.

The good news – relatively speaking – is that for the most part, the grid is far better shape, since we really didn’t start neglecting it until fairly recently! Indeed, under a tightly regulated environment for most of its existence, the dual goals of safety and reliability helped to ensure that the grid was in top working order for decades. It wasn’t really until about 20-25 years ago that spending on infrastructure took a big hit as utilities got mixed signals about whether or not their investments would wind up being stranded assets – the very thought of which is anathema to most utilities.

Yet that doesn’t change the fact that much of the grid’s physical plant (i.e., not just the wires) is approaching the limits of its useful life – generally deemed to be 35-50 years for workhorse grid components such as switches, transformers, regulators and breakers. And, although the grid is nowhere near as bad off as the New Orleans water distribution system, there’s a lesson to be learned about how neglect and failure to reinvest in that which we have come to rely on in our daily lives can be immensely disruptive, not to mention expensive to fix under duress.

Lesson #2: Funds Flow

Fortunately, the Federal Emergency Management Agency (FEMA) and the U.S. Congress stepped in and stepped up to help fund the storm-related repairs, which were just recently estimated to be in excess of $80 billion – which brings us to the second parallel: Funds Flow. Anyone who follows the news at all knows that we’re in the midst of the biggest economic stimulus in our nation’s history, that being the American Recovery and Reinvestment Act (ARRA), commonly known as the Stimulus Bill.

And as most of you reading this probably also know, approximately $3.4 billion of the $700 billion+ being injected into the U.S. economy is targeted for the energy industry. These are both very big numbers, and I, for one, have no doubt that given sufficient time, these funds will have a huge impact on the economy and spur both jobs and economic growth.

Quite frankly, I don’t see how it couldn’t, even though it is inevitable that there will be the usual inefficiencies and waste that invariably comes along with most large government programs. But again, let’s not get into the political debate – I’m all for whatever works, but at the same time I’m concerned about that phrase I used in the previous paragraph: “…given sufficient time.” Why? Because when it comes to actually getting the folding green into our hands, it turns out that “sufficient time” can be a really long time. Here, Katrina offers us another teaching moment…

Towards the end of 2005, after the initial wave of post-Katrina chaos finally cleared a bit, and the government set about mobilizing its money machine (Congress), those of us here in the devastation region were (and will always be) truly grateful for the economic assistance we have received – and continue to receive – from a generous populace across the country and around the world. Of course, the standout in the crowd was the U.S. government, which appropriated billions of dollars for disaster recovery in the months and years following the storm.

But the nasty little secret here is that “appropriation” is not the same thing as “delivery” – nowhere near. In fact, it was years before any substantive portion of the monies that were initially announced finally reached the affected areas. And then, of course, state and local bureaucracies did their part to further retard the flow of funds to a point where many began to think they would never actually see a dime. Fortunately, that was not the case, but the amount of time it has taken to weave its way to the intended destinations has been long and agonizing to say the least, despite the scope and urgency of the need, taking years to accomplish what most thought would be a matter of weeks or months.

Now that the Stimulus funds have been appropriated and awarded in the energy sector, we are once again in that “wait and see” mode. Only recently has the first utility actually received the initial chunk of cash to execute its plans. But along with the check came a mountain of paper – forms and reports to be filled out, reportedly within 30 days after receipt, with another batch of paperwork expected to follow soon thereafter. This brings me to my third and final point…

Lesson #3: The Paper Chase

Following Katrina, the federal government set up several field offices in and around New Orleans to assist businesses and individuals applying for SBA (Small Business Administration) loans. Now I already knew from previous experience as a longtime small business owner myself, that navigating the SBA was no easy path; but I was willing to give it a chance. The first clue that this might be a quagmire is that scores of companies exist – and do quite well – helping small business owners to fill out SBA loan applications in exchange for a fee. Unfortunately, I was not to be disappointed that this would be an arduous process, at best.

Although I don’t personally know of a single person or business that actually received an SBA loan, I’m sure there must be some. But what I do know is that there are many who were either turned down flat, repeatedly told to re-apply after being informed that their application had been lost – often multiple times – or simply ignored altogether. Today, most people here agree that the SBA loan program was at best a bureaucratic nightmare, and at worst, a dismal failure.

Moral of the Story

The moral of this story is not at all that there is no hope of transforming the grid into the dynamic, 2-way power network it needs to be to take us through the next 50-100 years. In fact, there is no doubt in my mind that we can – and will – accomplish that task and a lot more. But we have to be realistic, and we have to change our ways if we’re going to keep from making the same mistakes all over again.

First and foremost, that means taking care of our infrastructure and investing incrementally to avoid a meltdown and the need for another rescue at some point. Second, it means not relying on instant gratification, at least not financially. We’ve learned that the wheels of progress turn slowly – and even slower if they have to roll through bureaucratic entities to see the light of day. And finally, let’s not wait for the other shoe to fall. Be proactive in pursuing goals and objectives, and don’t wait for the gravy train. Hope for the best, but be prepared for whatever challenges might lie between where you are and where you need to be.

Today, New Orleans is in a far better place than on the morning of August 30^th, 2005 – the day after Katrina, and each day it gets a little bit better. By working together, we have moved mountains (figuratively speaking; we still don’t have any here, and Monkey Hill at the Audubon Zoo is still the highest point in the city!). By coming together at this historic IEEE Conference, we move another step closer to a smarter grid and a brighter future.

So welcome to New Orleans... and the New Normal.