Source: Pulaski Electric System
Utilities and telcos could seemingly not be more distant from one another--but both will continue to leverage the same rights of ways (ROW) on the poles that collectively carry homes and businesses. Given that utilities have unique needs in terms of processes and technologies that have been in place for a better half of the last century, what's driving the alliance between these industries now?
The marriage is being driven by the emergence of IP-based technology and the evolution of the smart grid concept. The advent of IP technology can be used in the utility's smart grid infrastructure to drive two main elements: grid modernization and the home area network (HAN).
Utilities are modernizing their electric grid with IP-based communications to monitor transmission points, while the HAN can communicate with the grid through IP-enabled thermostats and other household appliances to provide consumer measurements on their energy usage patterns from a web portal or a smart energy device (thermostat).
Already, a growing number of incumbent service providers, including AT&T (NYSE: T), CenturyLink (NYSE: CTL), Sprint (NYSE: S), and Verizon (NYSE: VZ), offer some form of wireless and wireline solutions and even divisions dedicated to utilities.
Verizon not only crafted a deal last year to provide managed services to National Grid, but also worked with the Utilities Telecom Council (UTC) to conduct a study of what utilities require for their telecom and information technology needs. While the initial contract with National Grid did not mention smart grid, if Verizon does perform well with the utility, it's always possible the partnership could be leveraged for that application.
Incumbent service providers, of course, aren't the only ones driving the alliance with utilities.
Regional electric utilities themselves, some of which actually operate as telcos themselves like Chattanooga, Tenn.- based EPB Electric Power and Washington state-based PUD #3, are also driving the smart grid trend.
EPB is currently rolling out smart meters to over 1,000 of the homes in its Fiber to the Home (FTTH) footprint with the ultimate goal of reaching all 168,000 residential and business customers who will have smart meters attached to their house to provide energy use reporting. Alternatively, Washington Public Utility District (PUD) #3, which offers wholesale services to other last mile providers on its last mile open access FTTH network, has primarily been leveraging IP-based technology to monitor its internal substations and regulators, a process that it said saved them over $0.5 million.
Inside the Network's educational track "The Smart Grid Utility Network" on Wednesday, May 18 and Thursday, May 19 discusses the diverse issues in a series of panels featuring speakers from both the utility and telecom industries.
On the telecom side, the panels will feature Ed Davalos, Director of Product development Utility/Smart Grid, AT&T, and Brian Huey, Strategy and Business Development, M2M Smart Grid, Oil and Gas, Sprint. Representing the utility side are Colman Keane, Director of Fiber Technology, EPB Electric Power, and Martin Lowery, Executive VP of the National Rural Electric Cooperative Association.
Regardless of the progress made in utilities and telecom operators working with one another, the two sides have traditionally not always been friendly. There has always been resistance in sharing and making data "open" to customers and to service providers (intermediaries) on behalf of customers.
"The two industries (telecom and utilities) are still learning about one another and I think people are aggressively going into it and there are other groups watching what happens," said Grant Seiffert, President of TIA. "I think the government with the stimulus funding for smart grid initiatives is forcing this to happen. From a standards perspective, there's a lot of education and best practices sharing going on and people trying to understand each other."