Tuesday, August 25, 2009

2009 UtiliQ Rankings: Austin Energy #2 Intelligent Utility in the US

2009 UtiliQ rankings
Top 25 intelligent Utilities
By Rick Nicholson and H. Christine Richards

Welcome to the inaugural UtiliQ ranking of U.S. electric utilities—a list of the top 25 intelligent utilities based on a detailed analysis by IDC Energy Insights and Intelligent Utility magazine. We developed this ranking in response to a number of issues and challenges in the rapidly evolving electric utility industry. First, we wanted to separate the smart grid hype from reality. As we have learned over the years, press releases alone do not make a company more intelligent. This magazine defines an intelligent utility as a company that applies information to energy, maximizing its reliability, affordability and sustainability from generation to end users. Becoming a more intelligent utility requires more than just technology investments; it requires a real investment in people and processes, too. Second, we wanted to provide a way for utilities to benchmark their intelligence and measure progress against their stated goals and objectives. We view the UtiliQ ranking as an ongoing effort that will evolve over time. For example, should we start to track the relationship between a company’s rank on the list and its share price? We welcome your input. Please give us your ideas for improving the ranking at crichards@energycentral.com.

The current ranking is based on a company’s performance using five quantifiable intelligence metrics:

Productivity: An intelligent utility is an efficient utility (measured by revenue per employee).

Renewable energy: An intelligent utility has a commitment to renewable energy as part of its resource portfolio (measured by renewable energy sales, renewable energy customers and renewable capacity).

Smart initiatives: An intelligent utility makes investments in developing smarter grids (measured by smart meter deployments and other smart grid projects).

Demand response/energy efficiency (DR/EE): An intelligent utility allows consumers to manage their energy usage and costs (measured by the availability of energy efficiency, demand response and load management programs).

IT investment: An intelligent utility invests in information technology to enable business process improvement (measured by IT spending as a percent of revenue and on a per-employee basis).

With the popularity of smart and intelligent themes, we couldn't resist providing the ranking in terms of a utility intelligence quotient (IQ). Taken together, the metrics are used to create a company’s intelligence quotient. Companies with IQs over 120, in our analysis, exhibit very superior intelligence compared with other U.S. electric utilities. We believe that the few companies with IQs over 140 are at near genius level compared with the rest of industry.

Looking ahead

As the utility industry begins to move from the current energy economy, characterized by heavy reliance on fossil fuels, lack of energy security, high environmental impact, aging infrastructure and passive consumers, toward a new energy economy that includes increased use of renewable energy resources, less reliance on foreign oil, lower environmental impact, a smarter grid and active consumers, we expect these top 25 companies to lead the transition. Companies that want to make the list or improve their position should focus on these strategies and investments:

Drive company cultural change:
Becoming a more intelligent utility has a lot to do with people. Your employees need to understand your company’s vision, your strategy for getting there, why it’s important to all major stakeholders—including customers and regulators—and what this all means to your employees on a day-to-day basis.

Improve processes for both “lean” and “green”:
For example, does a work order have to be 100 pages long and require a dozen approvals? Can waste energy be captured and used to create value? Efficient processes drive down the cost of maintaining the current environment and free up resources for innovation and growth.

Make intelligent technology investments:
Find ways to get the best return from your technology investments by ensuring that your spending on information, communications and energy technologies lines up with your enterprise strategies, enables process improvement, supports regulatory compliance and creates value for your customers.

UtiliQ ranking breakdown

Company - Overall IQ - Productivity Renewable Energy Smart Initiatives - DR /EE - IT investment

1) Sempra Energy 143 119 105 179 145 112
2) Austin Energy 141 118 110 179 150 135
3) Edison International 140 118 124 179 110 117
4) Oncor 139 117 100 179 130 119
5) PG&E Corporation 139 116 121 176 115 118
6) CenterPoint Energy, Inc. 137 130 100 176 110 118
7) FPL Group, Inc. 136 125 100 179 110 112
8) American Electric Power 135 115 110 179 103 118
9) Southern Company 133 114 100 176 108 118
10) Pepco Holdings, Inc. 132 146 100 179 100 122
11) Constellation Energy Group, Inc. 130 144 100 176 110 121
12) DTE Energy Company 130 121 100 176 100 118
13) IDACOR P, Inc. 130 111 102 176 128 132
14) Xcel Energy, Inc. 128 123 165 103 114 123
15) Alliant Energy Corporation 126 116 110 176 115 112
16) National Grid USA 126 120 101 104 131 115
17) Northeast Utilities 126 122 100 151 128 118
18) PPL Corporation 126 117 100 179 105 119
19) Hawaiian Electric Industries, Inc. 125 121 100 176 120 106
20) Puget Energy, Inc. 125 128 110 100 150 134
21) Salt River Project 125 114 100 124 110 140
22) Bonneville Power Administration 124 126 100 102 125 119
23) Exelon Corporation 124 122 108 125 110 118
24) Pinnacle West Capital Corporation 124 110 100 158 120 119
25) Portland General Electric Company 124 114 107 176 100 124


90-109 Normal intelligence
110-119 Superior intelligence
120-140 Very superior intelligence
Over 140 Near genius

Note: Overall IQ is an average of the IQs for Productivity, Renewable energy, Smart initiatives, DR /EE and IT investment. Utilities participating in Top Knowledge Centers, like GridWise Alliance, (listed in the March/April issue) received a bump up in their Overall IQ.

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