EET&D   : When we talk about Smart Grid, what does it mean to Progress Energy?

  Mazzocchi   : Smart Grid is a term used to describe a modernized electric transmission and distribution system – utilizing digital technology – that provides advanced information about the status of the transmission and distribution system and customer energy use. Progress Energy is primarily taking a grid-first approach to our Smart Grid investments, to enable the grid to become more efficient and support future potential customer-facing programs. This grid modernization effort involves significant upgrades to our existing infrastructure and strategic investments in two-way communications technology.

  EET&D   : How do these investments change the way Progress Energy delivers electricity?

  Mazzocchi   : Well, for one, it will create new efficiencies in the way we deliver electricity, which means we can help optimize our existing generation capacity during periods of peak customer demand. The advanced communications technologies we are building into the grid will also provide us with real-time information on the health of our system, enabling us to better meet our customers’ expectation of reliable service every day.

In the years ahead, we expect that our customers will increasingly look to the modern grid to provide even more functionality to meet their needs. So we fully expect that the way we deliver electricity – our work force and our processes – will continue to evolve as we seek to provide new value to our customers.

  EET&D   : The transition to a smarter grid doesn’t come without a lot of change for the utility. How are you effectively managing the changes this new technology will bring?

  Lewis   : The utility industry, as a whole, is currently experiencing transformational changes, of which Smart Grid is just one part. New policies at the state and federal levels, the need for fleet modernization and technological advancements all have impacts on the way we do business.

At the operational level, new technologies and programs will require significant changes in process for our company. We recognize that the evolution of process doesn’t happen overnight. We are leveraging established change management practices to help employees transition to new systems and processes.

  EET&D   : How important is change management to this transition?

  Lewis   : It is very important. Utilities must make change management and process optimization a core part of their Smart Grid deployment early in the process to be successful. This is also important at the industry level. As each utility takes a different path on their Smart Grid journey, standardization will become an important challenge and opportunity for us all in the years ahead.

  EET&D   : Tell us more about Progress Energy’s grid modernization initiatives and what they may mean for the customer.

  Caldwell   : Sure. As was mentioned already, we are focusing our investments primarily on the grid side. These investments include installing advanced communications and load management technologies on our distribution grid to make the system operate more efficiently, especially during periods of peak demand. We’re also installing technologies to isolate outages faster and monitor the health of assets on our system, which will improve service quality and reliability for our customers. And we are enhancing our electric system to support emerging technologies such as renewable energy and electric vehicles, as well as customer-facing programs that a smarter grid can make possible.

  EET&D   : So how will these initiatives be financed?

  Caldwell   : Progress Energy is investing more than $500 million in its EnergyWise® Smart Grid initiatives. The company is proud to have been one of only six utilities in the nation to receive a $200 million U.S. Department of Energy grant for Smart Grid projects. Our total Smart Grid investment includes more than $300 million in company matching funds, which will help to support projects in the Carolinas and Florida. The long-term result will be improved efficiency, quality and reliability for our customers and communities all across our service territories.

  EET&D   : As you deploy this technology within the utility, what are some of the challenges you are facing?

  Lewis   : Many of the challenges we are facing are the same as those being experienced across the industry. These challenges include preserving customer privacy and data integrity, addressing potential threats to cyber-security, anticipating impacts to reliability and grid management, responding to regulatory requirements and navigating political change. As with the introduction of any new technology, developing and implementing new processes will present additional challenges.

  EET&D   : You call your Smart Grid program “EnergyWise.” Why did you feel the need to brand your grid modernization activities?

  Caldwell   : Branding our initiative was about more than a catchy name or a marketing gimmick. When we talk about Smart Grid at the national level, the discussion often goes directly to the customer side – in particular, smart meters. And for many utilities, that approach makes sense. But Progress Energy took a different, and, we believe, very unique approach to modernizing our grid. Our initiatives are helping the company and our customers use energy wisely. Because of that, we felt that building our own identity for these investments was important.

  Mazzocchi   : I think Rob’s comment makes an important point. Each utility approaches Smart Grid a little differently. Our program evolution was driven by a number of factors, including the effects of existing and future regulation on our business, customer needs in our various markets, where we are operationally as a utility in each state that we serve, the business case for the investment and our risk assessment and recovery model for those investments. Each business case is different, making each utility’s grid modernization path different as well.

  Lewis   : The diversity of Smart Grid programs across the country also means that we have a lot we can learn from each other. We see that even within our company. In Florida, we are building on our existing direct load control successes. In the Carolinas, they are building on a different set of successes. But, in the end, we will share those strengths across our two utilities and move forward together. The same opportunities can exist across the industry. There isn’t a one-size-fits-all solution to Smart Grid.

  EET&D   : How will your proposed merger with Duke Energy change your approach to Smart Grid?

  Mazzocchi   : Each of our companies approaches Smart Grid investments a little differently, and those differences are largely due to the different business situations and regulatory environments in which we operate. But, as companies, we are much more alike than different. And just as we currently apply lessons learned between Progress Energy’s two utilities, we will have opportunities to combine the best practices of both companies to build a stronger Smart Grid vision for the future.

  EET&D   : I want to thank all of you for taking time out of your busy schedules to share this information with our readers and for being so forthcoming with details about your plans and programs. Best of luck to all of you as you continue along your strategic roadmap to creating an ever-smarter grid!