SDG&E’s Chris Chen talks about intellectual capital, smart grid metrics, and the Utilities of Tomorrow competition

At the recent SAP for Utilities event in Huntington Beach SDG&E‘s Manager of Intellectual Capital, Chris Chen, gave a talk on the Smart Grid Metrics being asked for by the California Public Utilities Commission.

I caught up with Chris after his talk and chatted to him about his role as Manager of Intellectual Capital for SDG&E, his talk about Smart Grid Metrics, and the Utilities of Tomorrow competition.

See below for the transcription of our conversation.

Tom Raftery: Hey everyone! Welcome to GreenMonk TV, we are at the SAP for Utilities event in Huntington Beach. With me I have —

Chris Chen: Chris Chen.

Tom Raftery: Chris you are with —

Chris Chen: San Diego Gas & Electric.

Tom Raftery: Excellent! And what do you do for San Diego Gas & Electric?

Chris Chen: I am their Manager of Intellectual Capital. So I look for innovative ideas and solutions that we have developed that can be commercialized and benefit utilities around the world.

Tom Raftery: Excellent. So have you any interesting intellectual items that you have come across that you can talk about?

Chris Chen: We have come up with a number of things, some related to electric vehicles, we have done some stuff with a thing called smart transformer which is a way to allow distributed load management at the street transformer level. We are working with a company on some micro clearing transactions for smart grid data. Now with the explosion of smart grid data, we could be settling billions of transactions every month versus a million now so we are working with a company to develop solutions to that.

Tom Raftery: Interesting! And I haven’t come across many utility companies before you have an intellectual property arm, is this unusual?

Chris Chen: Well, it’s relatively new. I think that one of things that’s driving us, we have been really the smartest utility for three years in a row and we began to realize that a lot of the problems we are running into because we are an early adapter of smart grid and a lot of solutions we are coming up with could benefit a lot more people than just our utility, so we wanted to help with that.

Tom Raftery: Okay. And you gave a talk this morning on smart grid metrics, what was that about?

Chris Chen: The California Public Utilities commission came up with a list of 19 metrics to help SDGE and the other utilities in California, measure their success at this smart grid roll outs. Now we are putting a lot of money in the smart grid, we want to — they want to make sure that our customers and ratepayers are getting a value for the money they are putting the smart grid, so there are a set of metrics they have developed to help us look at and make sure that we are in fact delivering an effective smart grid.

Tom Raftery: Okay, and what kind of metrics are they?

Chris Chen: They revolved around things like outages, things like that some of the standard utility definitions, how long are some of these outages you have, that’s related to things like the advance metering infrastructure we have rolled out, does that meaning protection go well, did customers like it and were there hardware issues or network issues with it?

Also we did more advanced things like customer engagement, part of the smart grid is meant to engage customers in managing the grid and so they had some metrics around that, had metrics around electric vehicles and a number of electric vehicles being put into our system, also metrics around distributed generation another critical issue of smart grid and the smart grid will help us integrate renewables and be good for our customers, good for their environment, all the benefit of that.

Tom Raftery: Okay and you have mentioned as well, that there is kind of tendency now to move from the idea of asking the question of what happened to what’s happening?

Chris Chen: Yes, we call that predictive analytics. It used to be what happened, now we need — because we have so much more real time data available, now our internal operations are asking what’s happening now, but I think the next stage is going to be so and what’s going to happen, so that data that’s coming from all the smart grid, sensors and systems that we have out there, is going to help us look at things like renewable generation, yeah renewable generations is very intermittent, cloud cover comes over, all your solar goes away for a little while, we’d love to be able to predict that. So we can manage our system more effectively, customer loads, we’d like to predict what customer loads will be so we can combine that with things like understanding solar generation and really manage our system most efficiently.

Tom Raftery: Fantastic! And you are talking later on this afternoon about the utilities of tomorrow contest, can you tell us about that?

Chris Chen: Yes, so SAP in conjunction with several utilities and universities is sponsoring the Utilities Of Tomorrow contest, where we are going to invite students, teams of students from universities all over the world, actually any student can submit a proposal to come up with an innovative ideas related to the energy industry and not just energy, actually it’s any utilities so it could be water or waste management also and then we are going to have a group of experts asses those ideas pick the best ones and bring team of students out to work with experts in Silicon Valley on an expense paid trip to help develop their idea.

Tom Raftery:
And is it a global competition?

Chris Chen: Yes it is.

Tom Raftery: Excellent, Fantastic. Chris that’s been great, thanks for talking to us.

Chris Chen: My pleasure Tom.

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SDG&E’s Chris Chen talks about intellectual capital, smart grid metrics, and the Utilities of Tomorrow competition

Hydro One’s Peter Gregg talks about modernizing the utility company

At the recent SAP for Utilities event in Huntington Beach, Canadian utility Hydro One were presented with a prize for the best SAP project implementation. After the prize giving, I caught up with Hydro One Chief Operating Officer Peter Gregg and he told me about their six year journey to modernize their utility.

Here is the transcription of our conversation:

Tom Raftery: Hey everyone! We are the SAP for Utilities event in Huntington Beach and I am here with —

Peter Gregg: Peter Gregg, Chief Operating Officer of HydroOne.

Tom Raftery: Peter, you won an award today, can you tell us about that?

Peter Gregg: Yeah, we won an award, it was the CIS Customer Information System Project that we have just been live with in May and we won best project from a Canadian perspective and it was an American project that won as well, but we have got one because we are special and we are Canadian.

Tom Raftery: And you mentioned that there were a number of projects you have done over the last couple of years?

Peter Gregg: Yeah, we have been on an SAP journey for about six years now where we have sort of done all of our HR, Pay, back office stuff, we have done investment management, workflow processes but this last one which we call our Phase four was the customer information system replacement.

We had a legacy system that had been built for us about 11 years ago, incredibly complex and purpose built rather than out of the box and it was unsupportable, we needed to change it, so we have gone live on May 24th of this year, and we have had excellent success so far.

Tom Raftery: Okay, and I mean apart from the fact that you had that legacy system, that was cobbled together as you say, what was the thinking behind the last six years investments?

Peter Gregg: It’s really — the theme of this event has been sort of modernization of the utilities, and I think we had the realization that to survive in this business, we needed to change our way of life, we had a real challenge where a lot of our assets were coming to end of life, there hadn’t been a major capital expansion in 50-60 years and our customer expectations were changing as well, the expectations of having better service, better information, a better company. So we took a step back, talked to a lot of professionals in the business and took what I think was a bold step to try to get ahead of that trend of modernizing utility, and we are proud to say that we had sort of been at the forefront of that modernization trend.

Tom Raftery: But that’s lot of money…

Peter Gregg: It’s an awful lot of money. And we have spent a lot of time discussing it with our regulator and customers, we have had wonderful regulatory support all the way throughout it, because they see the value of the business cases we put forward, I think the challenge for us now that we are taking a bit of a break from project time is now, how do we leverage all of that spend, all that investment to make sure that we are making better asset management decisions, we are making better investment decisions that we are getting more efficient processes to deliver the work to our customers and having that impact, that positive impact on rates that our customers see.

Tom Raftery: So long term, it should help, at least stabilize the price for a while.

Peter Gregg: It will stabilize the price, I think it will, we are having other pressures too in the Ontario market place outside of our own business but we don’t manage the commodity price, commodity price has been going up substantially and I think customers are saying we don’t really care who manages the price, you have all got to do your own part to keep prices down.

So I think the investment we have made is going to keep us on a flatter trajectory. Our challenge now, what we have given to our staff is to try to keep as flat rate increases as we possibly can and so we are going in for a distribution, we do a transmission at a distribution filing in our business and our challenge in our distribution five year rate case is to keep our average annual increase out at 1%, so less than inflation.

Tom Raftery: Excellent, fantastic! Thanks very much.

Peter Gregg: Great, thank you.

Hydro One’s Peter Gregg talks about modernizing the utility company

SAP for Utilities event 2013 was all about utility customer communications

Huntington Beach

GreenMonk attended the North American SAP for Utilities event in Huntington Beach California last week. The theme of this year’s event was Designing the Modern Utility. This was our fifth time attending the event, and for the first time we saw a significant focus on the voice/opinion of the customer (although in fairness, we didn’t attend the event in 2012).

Utility companies, as we have said many times in the past, have a very poor record with customer communications. Typically, the only times you hear from a utility company is when they are sending a bill, a disconnection warning, or notice of a rate increase. None of these are very positive interactions. It is no surprise then that in an age of increasing customer importance, trust in utility companies is the lowest level it has been in years.

It is hardly surprising though. Many utilities are coming from a situation where they are, or until recently have been, regional monopolies. Their customers had no choice of supplier, and so the utilities didn’t feel a need to listen to their customers views. Furthermore, utilities are, by their nature, extremely conservative organisations. They need to be, given they are handling such necessities as water, gas and electricity. So any change in their attitude to customer communications will happen slowly.

Change, it would appear, is very much underway now in the utilities industry. Jane Arnold from City of San Diego Public Utilities, San Diego’s water utility, gave a talk entitled Putting the “E” in Customer Engagement. Kevin Jackson from Oklahoma Gas and Electric (OGE) discussed in his talk how OGE have rolled out 800,000 smart meters and are using these to provide their customers with access to realtime energy consumption information. They hope that by providing customers with this information, and by rolling out time of use billing to defer the need to build a new power plant in 2020.

And Tracy Kirk from New Jersey’s Public Service Electric and Gas Company (PSEG) talked about how PSEG started to use Twitter to begin a two way conversation with its customers. Then it was hit with Hurricane Sandy, and Tracy outlined how Twitter helped PSEG to manage its customers expectations and reduce frustrations associated with the hurricane’s damage to its infrastructure.

There was even a keynote from Julie Albright, a research scientist at the University of Southern California, on the topic of the Social Utility, strongly echoing the closing keynote GreenMonk gave at the same event in San Antonio in 2011 on the topic of Potent Social Media strategies for Utilities.

Even the conversations in the corridors referred to the need for increased customer communications, far more than at any previous SAP for Utilities event.

Utilities are starting to realise the necessity of improved customer communications, and this can only be a good thing.

This post was originally published on GreenMonk

SAP for Utilities event 2013 was all about utility customer communications

Next generation of communication

If we look at demographic of people who are customers of a utility company we see it covers everyone from generation Y up to centenarian’s, and I am only speaking about people who are account holders and paying the bills, not the actual users. Due to this broad demographic spectrum of their customers, utility companies facing a complex challenge; how can they communicate with these customers ensuring that each individual is targeted the most effective way while at the same time being cost efficient. In a time where we as consumers are overloaded with information from an ever increasing number of sources and thru multiple channels only information that stands out, is provided to us thru our preferred media and specifically aimed at our current needs will find its target. Other information is at risk to be lost in the general noise.

Let’s relate this to a simple but important utility process: the handling of an overdue bill. If the message that a bill is overdue is not received and acted on by the intended receiver it could lead to costly collections and even disconnections. Therefore it is in the interest of both the utility company and the utility user that the message is received and acted on. However expectations on the customer side vary widely on what the best way would be to receive such information.

Generation Y maybe expecting an alert on their mobile apps or thru social medial that they have missed a payment and that their utility bill is now due, a middle age family man would be looking for an email reminder from their utility company, a 65 year old pensioner maybe sees a call from a friendly agent as the best way to remind him, while a 80 year old grand-mother would be best served with a nice letter from the utility company written with a LARGE FONT. As for the grand-mother, maybe an additional alert to her 20 year old nephew would be an alternative?

In my opinion utility companies need to do two things to provide additional service to ensure their customers will stay loyal. First they need to put in place effective communication with their customers around standard processes. This should not be a problem with today’s technology, however it would be good to hear ideas on how utility companies can improve this basic level of communication with their customers using technologies such as call centers, social media and mobile applications. The second thing is harder, they need to figure out how to use communication to bind customers closer their company and creating a stickiness that ensures their utility users turn in to loyal customers for life. An example could be using real-time smart meter information to detect the usage at the 80 year old grand-mother’s house is abnormal high at midnight and use that information to have a call center agent to give her a call to check up on her to see if she is okay, maybe she left the tv on or the fridge door open. How do you see utility companies using communications to provide a world class service to their customers in the future?

Next generation of communication

Using the contact centre to avoid bad profits

The majority of utility companies are still in the habit of relentlessly pursuing bad profits and in such doing themselves more harm than good. Let me start with explaining what we mean with bad profits? Simply put it, bad profits arise when utility companies puts the bottom-line before its customers.
A typical example of a utility process that results in bad profits is the chasing of open bills by sending customers multiple over-due notices increasingly focussing on penalty charges and disconnection warnings. Of course a certain percentage of customers will pay the outstanding bill after receiving these threatening letters, however what are the hidden cost of such actions? If a customer feels they are not treated fairly or compassionately they will remember this, and in the future when the opportunity arises they will jump ship and you could be losing a good customer for ever.

If a customer does not pay their utility bill would it not be better to try to find out the reason why and if the circumstances warrant to mediate an outcome that benefits both parties instead of resorting to a one directional, generic, and cascading threatening communication. Chasing bad profits is short sighted and in most cases totally unnecessary in today’s time and age. Customers will eventually turn their back on companies who have a culture of aggressively chasing outstanding debts. In a time where customers have a choice and where churn rates are deteriorating to the point where utility retailers may lose half of its new customers in less than three years, chasing bad profits might not be a good business practice.

So how can technology help eliminate bad profits or even better turn bad profits into good profits. With today’s technologies such as “big data” and ‘analytics” the information is available to utility companies to differentiate between “notorious” bad payers and customers who struggle to keep up with their utility payments due to circumstance outside their control. I am sure most of us have in one point in time experienced reduced cash flow due to reasons mostly outside our control, it could be that you are between jobs and the next pay check does not arrive for another month, or it is the start of the school year and your kids school fees are due, maybe your car broke down and costly repairs are needed, or it could be an unexpected high dentist bill. Once a utility company recognizes that even a customer is willing they sometimes are not able to pay their bills on time, the utility company can use their contact centre to reach out to these customers and add the human touch to the whole transaction of chasing overdue bills.

In a time where more and more of our interactions seems to be through social media and electronic gadgets, speaking to a person who understands someone’s situation, shows compassion and can guide a customer with an overdue bill towards a long term payment plan, implement a delayed payment programs or direct debit can do wonders. So think before you send out the 3rd or 4th “overdue bill notice” –let alone disconnection warnings, and see if a more “human” touch would not result in better results.

How do you see utility companies using communication to provide a more human touch to interactions?

Using the contact centre to avoid bad profits

CIO of Singapore Power, Mr Wong Chit Sieng, discusses unified billing

At the SAP for Utilities event in Singapore I had a chat with Mr Wong Chit Sieng, Chief Information Officer of Singapore Power where we discussed his talk at the event.

Here is a transcript of our conversation:

Tom Raftery: Hey everyone, welcome to GreenMonk TV! We are at the SAP for Utilities Event in Singapore and with me I have Chit Sieng from Singapore Power.

Chit, you were talking a little bit about the SAP implementation, but also we want a little bit of a chat about the consolidated billing that you’ve got going. Can you tell us a bit about that first?

Wong Chit Sieng: Okay. In Singapore we are the market support services licensee. What that means is we take care of billing, customer management for the entire electricity market. That also requires us to provide services, not just to the electricity people, but also the gas consumers. On top of that we do provide a service to the water people and the refuse collectors.

Now, as part and parcel of our implementation, we have consolidated all of our billing into the same engine, and therefore, Singaporean customers have only got one bill to take care of.

Tom Raftery: Very nice! And you talked about your rollout of your SAP Solution in your talk this morning; can you tell us a little bit about that again?

Wong Chit Sieng: Now, successful implementation requires us to pay attention to a few things. Essentially, you have to talk about — you have to focus on people, processes, the system itself and more importantly you have to have a framework to manage the entire project.

It all starts with having the right framework, the right governance of the project itself, so as to ensure that you have policies in place to plan, to monitor, and to control the progress of the project.

The other thing that I always focus on is having project sponsorship or ownership; projects in my mind are not ideal projects. You’d have to have it looked upon as a business project; therefore, it will then deliver business value to you.

Tom Raftery: So it’s a business project which happens to have an IT component as opposed to an IT project with a business component.

Wong Chit Sieng: Yes, that’s right! Because IT is supposed to help deliver business benefits; not the other way around.

Tom Raftery: Okay and the ownership you talked about, it’s the organization rolling out the project needs to take responsibility for the outcomes.

Wong Chit Sieng: Yes, that’s right!

Tom Raftery: Okay, any other learnings?

Wong Chit Sieng: More importantly if you are engaging an SI to do a huge project, you’d have to select the right SI and you’d have to look at the SI as a partner to you, not subservient to you, not someone whom you can abdicate everything to, that’s really, really important. Selecting the right SI, knowing what the SI can do, or cannot do, and more importantly, you’d have to make sure that you have a very clear set of deliverables that the SI is supposed to provide.

Tom Raftery: Okay, great! Chit Sieng; that’s been fantastic, thanks for talking to us today.

Wong Chit Sieng: Thank you!

CIO of Singapore Power, Mr Wong Chit Sieng, discusses unified billing