Thursday, April 24, 2008

Smart Grid News Profiles Austin Energy

When Michael Burkhalter called a few weeks ago to inquire about our journey, I was taken by surprise for his knowledge of our transformation. I thank him for sharing our success and congratulate him on a fine online publication.

Here is the content from his article that you can also find in his site by clicking here

By Michael Burkhalter, Smart Grid News

The promise of abundant, reliable hydropower drove Google and Yahoo to building huge server farms in the Northwest. But what brought Google and Hewlett-Packard (HP) to Austin? We don’t think it was for the abundance of hydropower. We think Austin Energy’s progressive approach to laying the track for a Smart Grid was a factor. (See SGN article link below.)

High-tech industry increasingly demands electrical power and services that meet high standards for quality and reliability. Meeting those standards increasingly requires utilities to be ready to employ Smart Grid technologies, which in turn requires a robust IT enterprise architecture. Andres Carvallo, the CIO of Austin Energy, believes that the Smart Grid will be deployed a lot sooner than most people think. He is on a mission to make Austin Energy a Smart Grid leader.

Working under the same constraints as many other public utilities, Austin Energy has cut costs, increased customer satisfaction, attracted new high-value customers to the city of Austin, and established a foundation for a Smart Grid.

About Austin Energy
Austin Energy is owned by the City of Austin, Texas and generates $1.2B in sales. It is the 10th largest public power utility in the U.S., serving 1,000,000 residential customers and 41,000 businesses. They are the number-one seller of green energy in the U.S., according to DOE, and the first electric utility to receive ISO 9001 certification. For Austin Energy, this meant developing a Quality Management System that reflects standards of performance and continual improvement of processes and services to its customer, in this case, in the delivery of electric power. ISO 9001 is the most complete and demanding standard in the ISO 9000 series. (See ISO 9001 link below.)

Moving beyond obstacles
Four years ago, Austin Energy faced the industry’s familiar problems: regulated rates, profit driven by revenue, price- and tax- sensitive ratepayers, and technological risk aversion. With a clear vision, Austin Energy adopted new business guidelines of “People, Planet, Profits” – their so-called “triple bottom line”. With these social, environmental and financial guidelines, they used applied technology, conservation and efficiency to build credible business cases for technology investments. Largely due to a sweeping information technology transformation, they shaved millions of dollars off operating costs and re-invested in even more cost-saving technologies. For example, by applying software virtualization of servers, Austin Energy increased its computing hardware investment by very little while quadrupling its computing functionality.

Rounding up the data
Well-planned and well-applied technologies go a long way to eliminating Smart Grid obstacles. “What most people don’t get is the Smart Grid’s foundation,” says Andres Carvallo. “It must be built around enterprise architecture because there are such huge amounts of information”. (See CIO Master link below.)

Austin Energy uses a service-oriented architecture (SOA) to integrate all the information and applications they need. This has helped the utility to improve not only internally, but also in its customer-facing processes and services. They are now better prepared for new Demand Response programs such as peak pricing, time-of use pricing and prepay pricing as they expand their smart meters and replace their billing system. Getting a rope around huge volumes of data also enables Austin Energy to offer innovative energy management services, which helps explain a respectable customer satisfaction rate of 76%. (The JD Powers national average for 2007 was under 70%.)

Applying other information technologies, Austin Energy has also implemented an updated website, a new customer portal for online bill paying, and a wireless system that supports both automated meter reading and automated field service.

With the help of these technologies and the disciplines used in applying them, the utility has experienced:
New, high-value customers -- Google, HP, and now Samsung will enjoy the flexible services, “digital quality” power and “smart building” expertise offered by Austin Energy.
Cost savings that free up cash -- Austin Energy moved from spending only 15% of its capital on improvements to spending 50% on innovations and 50% on day-to-day operations.
Satisfied ratepayers -- Customers now have easy access to useful web-based portals, effortless transactions and flexible services.

Granted, a utility’s robust IT infrastructure alone will not attract new customers, fund innovative improvements and keep customers satisfied, but it sure can help.

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