Colum Lundt
Founder & Chief
Operating Officer

Tony Giroti
Chairman & Chief
Executive Officer

  EET&D   :  I know from our previous conversations that BRIDGE seems to have a markedly different view of the challenges associated with achieving Smart Grid objectives, and your approach to meeting them is also considerably different from that of most traditional suppliers and consultants. Maybe a good starting point would be to help our readers understand your views on this by explaining how you perceive the problem.

  Giroti   :  Well, you definitely hit a nerve with that question since we agree that we start by framing the problem – or the challenge, as you put it – a bit differently than a lot of people see it. That’s probably because they’ve been so close to it for so long, it’s hard to develop and maintain an objective view. You and I have discussed this before, and I think we agree that most companies – utilities and suppliers alike – are extensively focused on deploying a tool or a piece of technology, such as Advanced Metering Infrastructure or Meter Data Management as the focal points of their objectives.

Our approach is to start by developing a strategy that takes into account a holistic approach based upon the business drivers and objectives for the program. This approach must include investment in the back office so that enterprise IT and integration architecture has the capacity to handle the data and the capability to integrate disparate systems and applications to deliver new services and solutions – which after all is the real value to the consumer and the utility not just the investment in the hardware.

Without the right back office, a tangible return on the investment in AMI and/or MDM cannot be realized. An enterprise architecture and enterprise integration strategy is the necessary pre-requisite that will help utilities realize the real benefits of their investments in AMI and MDM. A contemporary architecture that provides a foundation for integration and interoperability within and across domains is the real need. This is where we believe the real challenges reside.

  EET&D   :  Are you still seeing examples of this behavior in the marketplace?

  Giroti   :  Yes, of over 25 pilots that we evaluated, most included Smart Meters and AMI/AMR, but none of them included implementation of back-office integration. Those that do include integration have point-to-point integration that will not, and cannot, scale beyond the pilot. Back office integration and Enterprise Architecture is integral to Smart Meter and AMI/AMR deployment. Without a holistic strategic IT integration architecture, achieving the true vision of Smart Grid is simply not possible.

  EET&D   :  So why do you think it is that these kinds of considerations are being overlooked?

  Lundt   :  Probably the main reason is that for a lot of folks, IT has long been an afterthought, especially around application integration. As Tony mentioned, this continues to be the norm for a majority of the Smart Grid pilots across North America. Right now, most utilities are focused exclusively on deploying smart meters, the technology behind the meter, communications infrastructure and MDM in their pilot phases. Some have included MDM integration with CIS, but very few have included developing a strategic integration architecture that ties MDM data with other enterprise applications such as their Outage Management System (OMS), Customer Information System (CIS), Interactive Voice Response (IVR), Geographical Information System (GIS), Workforce Management (WFM), Distribution Management System (DMS), or Supervisory Control and Data Acquisition (SCADA) systems. All these systems need data that will be pouring in from the AMI head-end.

Additionally, the popular approach of connecting MDM with CIS is in a point-to-point manner. That might work for low data volumes and low transaction rates, but it may not scale to accommodate full deployment volumes and bi-directional communications models.

  Giroti   :  Moreover, if the CIS is ever to be replaced, MDM integration with the CIS will require redesign and rework. In the absence of a strategic IT approach, current integration practices provide little value to achieving larger scale Smart Grid & Demand Response objectives from an IT perspective.

  EET&D   :  Are there any other issues that are contributing to the scenario you’ve laid out here?

  Lundt   :  Yes, another big problem is that a lot of these projects are being done on a “one-off” basis. In many cases, that’s because of the way these projects are being planned and budgeted on a compartmentalized basis. But overall, an enterprise vision and strategy are often missing. Without a holsitic approach that views IT and OT integration as critical, an investment in AMI/AMR may actually shortchange future benefits in other areas of distribution automation. A holistic enterprise level approach is really the only way to optimally reduce cost and risk.

  EET&D   :  Why do you think that is so prevalent?

  Lundt   :  As it turns out, there’s actually a very logical reason for it, and that is a fundamental lack of necessity. For decades, IT and power systems engineering applications have typically operated in silos due to the lack of any compelling need for integration across the enterprise, which is still an evolving concept. I’m talking about integration between business units, business processes, applications, and even the integration of databases. Until now, the industry has had minimal real-time integration capabilities built into IT systems because applications and data integration needs have been met tactically through the routine one-off and project-based approach. IT has never had the motivation, the business drivers or the budget to develop a strategic architecture or develop a standardized approach to integration.

  EET&D   :  Clearly there has been a lot of progress made towards meeting the integration challenges, but there is still a long way to go, I suppose.

  Giroti   :  Yes, and there are many reasons that we still have a long road ahead. First, IT and OT integration is not a common practice. Second, application and data integration requirements have typically been met through a tactical approach based on just about any available technology or middleware offered by the application or system vendor. In most cases, available resources have placed limitations on these development efforts, usually restricting them to quick point-to-point interfaces between applications in order to achieve critical near-term objectives. I call this an “accidental architecture”, where each interface is non-standard and custom-coded. Many of these interfaces are batch rather than real-time, with database links and proprietary code that is customized by writing more code within the application.

  EET&D   :  It seems that making the transition into this holistic approach has been a bit slow coming. What is impeding the progress?

  Giroti   :  A lot of it really requires more of an IT philosophy adjustment than anything else. You can’t let an MDM vendor modify your internal applications, and you can’t let your application integration strategy be determined by whatever tool is being used by a particular MDM or AMI supplier. In the future, utilities will have to address – at a minimum – integration-related aspects of strategic enterprise architecture to address IT challenges related to many demands on the system. These include interoperability with applications and systems (within and outside the organization); Integration complexity, data volumes and real-time data needs; event processing, throughput, performance and security, just to name a few of the most essential considerations.

  Lundt   :  And that’s just the beginning. New operating models to accommodate electric vehicles, distributed renewable energy resources and new regulatory mandates, such as FERC Order 719 for load curtailment, impose even greater architectural demands around interoperability, application and data integration as well as IT governance, security and data management. There is enough empirical evidence from organizations implementing Smart Grid programs to support the concern that systemic problems within today‘s IT environment could seriously derail many Smart Grid programs before they get off the ground. Therefore, without a holistic strategic vision, planning, and an architectural approach, some Smart Grid programs – Demand Response is one example – will pose formidable challenges that cannot be fully solved.

  EET&D   :  What about the rapid growth of Service Oriented Architecture (SOA) that we’ve been hearing so much about lately?

  Giroti   :  SOA is relatively new to the power industry, and there have been several false starts in adopting SOA. Many of the early adopters failed on their first try and are requiring a fresh start – primarily due to lack of SOA vision, strategy and experience. Some of these early adopters had wrongfully assumed that buying an SOA integration tool would be the silver bullet. This is not the correct assumption. Vision, strategy and technical leadership must precede the SOA tool procurement. The bottom line is that SOA is not really a technology or a product. SOA is a strategy and an approach. Rather than seeing IT as a set of applications, databases, storage and other resources, SOA is a strategy to create a true enterprise architecture that views IT as a set of services.

  EET&D   :  Does SOA have any typical set of what I’d call rudiments, and if so, what are they?

  Lundt   :  Yes, we know that enterprise architecture within an organization includes infrastructure, databases, applications and the business architecture. It is this business architecture that defines the business processes of an organization and provides the starting point for any application development. After all, IT exists to serve the business. SOA is rooted in the notion that business architecture drives the enterprise architecture. Based upon that premise, an IT that delivers services is equipped to handle the needs of the business as and when needed. In other words, rather than offering monolithic applications, IT builds a set of services that it threads together for the specific purposes of the business.

  Giroti   :  The point is that these services can be easily added or removed from the business process, thereby making IT more responsive to the needs of the business. This is the holy grail of where all IT needs to arrive – that is, a set of service tools that bring agility to the organization. This top down approach is quite revolutionary in IT – not that the motivation was really ever missing – but now we have a strategy and approach that works.

This is remarkably different than the tool-driven approach or the bottom-up approach extant in prior distributed computing and architecture initiatives. Again, that’s what SOA is – a new strategy for IT that delivers business agility as its principal benefit.

  EET&D   :  As you have already mentioned, AMI/ AMR/MDM are creating data volumes that are already significant – and growing. Existing IT systems are literally choking on these unprecedented data volumes, and although storage is relatively inexpensive these days, turning those enormous volumes of data into meaningful and useful information remains a huge challenge. How do you see that evolving?

  Lundt   :  Back to an earlier point, much of the initial focus around Smart Grid has been on deploying Smart Meters and reading these through AMR and AMI. MDM products and applications are being employed to collect the data for various Smart Grid initiatives such as advanced billing, real-time pricing and managing grid reliability. These programs call for collecting huge volumes of meter data at 15-minute intervals. For a million meters, this amounts to more than 1,000 transactions per second; going to from one million to 2 or 3 million meters quickly gets you to 3,000 transactions per second. Receiving sorting, storing and evaluating this data and collectively integrating the results with legacy applications make for a very challenging task. To put this into perspective, we worked with one utility whose system was already choking at 400 TPS, so this is by no means a trivial matter.

  EET&D   :  Clearly, transactional data collected from customer meters can quickly reach staggering proportions that will require significant storage capacity and an information life cycle management approach to managing the data. If I’m running the utility IT department, what is best way for me to make that transition – or at least start preparing for it?

  Giroti   :  Transaction performance is critical to the success of any system. Many Smart Grid & Demand Response projects are hitting performance bottlenecks due to architectural constraints. In addition to collecting the data, an organization will need to manage performance and storage challenges. A general practice is to add more CPU and hardware to solve a performance problem. Although a short-term fix, performance problems will re-surface over and over again until the fundamental architecture is altered.

  EET&D   :  With so much fundamental change going on, what’s the best way to start down this path?

  Giroti   :  To start making the transition, utilities will need to develop a real-time architecture where disparate applications can interoperate with one another to achieve objectives such as self-healing, load curtailment, air conditioning load management and other advanced applications. These capabilities require DMS, MDM, CIS, OMS, SCADA and other applications to interoperate without compromising their data integrity or their application performance. The first step in making this transformation is to take a holistic view of how all of these activities are tied together and develop a strategy and roadmap for the future “to-be” enterprise architecture that serves both the near-term tactical objectives as well as the long-term strategic vision of the utility.

  EET&D   :  If future Smart Grid initiatives will require real-time integration of applications and systems to enable real-time communication and timely sharing of data across the enterprise to make informed decisions, that sounds like a fairly substantial effort, time and cost.

  Giroti   :  Unfortunately, most utilities will grossly underestimate the IT Integration and Interoperability effort required to evolve to the next level. The core business of energy generation, transmission and distribution has been operated and managed by “non-IT forces” for years, and until recently, IT has only had a modest role in energy operations. With Smart Grid, that paradigm is about to change. The ambitious objectives of Smart Grid, when combined with some early warning signs from those who‘ve embarked on the journey, indicate that IT is going to play a more prominent, if not dominant, role in making Smart Grid a reality. The utility industry needs to take a long and careful look at these indicators, make appropriate course corrections and reconcile with the role that IT will play in the future. IT will need to develop a strategic Smart Grid architecture to replace the accidental architecture previously mentioned.

  EET&D   :  Meeting the broadest objectives of the Smart Grid initiative will require a consistent process and methodology that all stakeholders must conform to in order to be successful. But as we know, the electric utility industry has not in the past invested very aggressively in the IT organization and leveraging it. As a result, IT has often been working in a decidedly reactive mode. How is that going to change?

  Lundt   :  As Tony implied, IT has historically been relied upon to merely deliver the bare minimum the business requires. Consequently, many IT departments are missing an organizational structure that is capable of leading a large initiative like Smart Grid, which requires strong technical leadership, discipline, standards, processes, methodologies and a governance framework. In some organizations, the role of Chief Information Officer (CIO) or Chief Technology Officer (CTO) is either missing or its role diminished. Even in organizations with a CIO/CTO, IT management is not always represented at the executive level, and therefore, often does not get its ‘fair share‘ of budget or resources. Simply stated, this will all have to change.

  EET&D   :  What is the role of standards in all of this?

  Giroti   :  Although it has a reputation for being stodgy in some areas, the electric power industry is one of the leaders in leveraging standards, not just in traditional power system engineering, but more recently there has been a significant effort to define specific Smart Grid-centric standards. For example, in the summer of 2009, the Electric Power Research Institute (EPRI) delivered its Smart Grid Interoperability Standards Roadmap to the National Institute of Standards and Technology (NIST).

  EET&D   :  What is the best way for utilities to prepare themselves appropriately to accommodate these extensive future changes and evolving standards?

  Lundt   :  Organizations should also stay abreast of the work being done by FERC, which provides the overall policy, direction and market design; the North American Energy Standards Board (NAESB), which is accredited by American National Standards Institute (ANSI) that provides leadership on business practices; the North American Reliability Company (NERC), which provides guidance and standards for reliability. The GridWise® Architecture Council (GWAC), whose role is to help identify areas for standardization that allow significant levels of interoperation between system components, has developed the Gridwise Interoperability Context-Setting Framework to introduce interoperability groups, categories and a classification of interoperability issues.

  EET&D   :  Tony, do you have any other advice for utilities preparing to make this transition?

  Giroti   :  New demands being placed on the grid such as PHEVs, distributed renewable generation, new types of load curtailment programs will require new operating models to be developed to handle those demands, and the resulting new models will definitely tax the underlying IT systems over time. For example, EVs will need to be serviced, charged and appropriately billed for their power consumption – or generation – as the case may be. Preparing for these challenges will enable utilities to deliver new services gradually, over time, without making wholesale changes to their IT infrastructure. A strategic architecture that accommodates the business case of delivering yet-to-be-known business applications and services will be absolutely essential to success.