By: Scott Prochazka with Ron Pernick
Part of a series of insights from leading smart-grid, clean-energy, and utility experts speaking at gridCONNEXT. Questions asked by Clean Edge managing director and gridCONNEXT co-chair Ron Pernick.
Pernick: When you look out the next three to five years, what are the biggest changes you expect to see with regard to grid modernization?
Scott Prochazka: Distributed generation will continue developing in Texas, but at a measured pace. Customer interest in cost control and electric reliability will continue to drive development of microgrids, but CenterPoint Energy sees this as an opportunity, not a threat. The growth of distributed energy resources (DERs) will make the grid more important than ever as an integral part of the energy network.
I also expect to see more developments in grid-hardening efforts and further improvement in outage response as we learn from such events as Hurricane Harvey and continue modernizing and reinforcing our systems.
Pernick: What were the biggest lessons you learned from Hurricane Harvey (where massive rainfall and historic flooding resulted in an estimated $125 billion in damage across the region). What did you get right, what surprised you (if anything), and how will the experience impact your future planning?
Prochazka: If there was a surprise from Harvey, it was the sheer volume of the rain. You don’t have to live along the Gulf Coast for very long to understand how serious a tropical storm or hurricane can be, but Harvey hit our entire region with unprecedented amounts of rain. When Hurricane Ike hit in 2008, our crews faced an enormous job in recovering from down trees, poles and wires because of the wind.
But Harvey was a rain event. Even though we had made major improvements to protect our grid after Ike – and after the flooding from Tropical Storm Allison in 2001 – the record flooding from Harvey left 17 of our substations out of service or inaccessible due to high water. Nearly 1.3 million of our customers lost service for some time during the event.
Even so, CenterPoint Energy and mutual assistance crews were able to respond quickly and effectively. Our smart grid technology enabled us to quickly isolate problems and restore service, avoiding almost 41 million outage minutes for our customers. We are using the hard lessons learned from Hurricane Harvey to further elevate some of our substations or take other flood control steps, and we are continuing our work in grid modernization to help anticipate specific problem areas during extreme weather and take proactive measures. We also are continuing to incorporate drones in asset management and storm recovery, to expedite work in remote areas and complete certain higher-risk tasks with less exposure to employees.
Pernick: What do you see as the greatest regulatory barriers to deploying a smarter, cleaner, more resilient grid?
Prochazka: We must have a rate structure that can ensure grid modernization and electric reliability to better serve our customers as well as safeguarding the long-term financial health of transmission and distribution utilities.
To meet the needs of customers, utilities will need to provide a mix of traditional and nontraditional utility services. Market rules may need to be evaluated so as to not prohibit utilities from providing solutions to customers’ needs.
Pernick: At gridCONNEXT we had a lively discussion on the future of energy and blockchain technology. What was your takeaway on the likely impact of this emerging technology on utilities?
Prochazka: Blockchain technology could offer utilities an efficient, economical, secure means of tracking and processing the enormous amounts of data that we collect. With our smart grid technology, CenterPoint Energy collects hundreds of millions of bits of data every day from equipment such as smart electric meters and intelligent grid switching devices. The challenge to manage this mountain of information and put it to maximum use is growing daily, along with our expanding customer base and our continuing innovation in the use of technology.
CenterPoint Energy has developed a mature data analytics engine that supports the full enterprise. We have completed most of our large integration of information and computing systems, including our advanced metering system (AMS), our advanced distribution management system (ADMS) and our Customer Vision Program.
Our company’s more than 2.4 million AMS smart meters across Houston are the basis of our Intelligent Grid. Smart meters automatemeter reading and service connection and disconnection as well as give consumers more frequent, detailed information on their electricity use.
Our ADMS is an integrated network that’s often called the "brain" of the intelligent grid. It uses real-time smart meter and intelligent grid data to provide faster, more accurate information on outage types and locations, make crew dispatching more efficient, reduce outage duration and improve electric reliability and customer service.
Blockchain technology’s role in the power sector is enabling a future where electricity is traded between buildings and where consumers can choose where their energy comes from, and in what amounts. The security and transparency of this technology make everything easier, from billing to energy trading, enabling us to develop a smarter, more distributed power system.
Regarding blockchain technology and many other leading-edge innovations, we are moving forward at CenterPoint Energy with a mindset that embraces disruption – opening ourselves to new ideas and new approaches that may mean discarding or completely restructuring what has worked in the past.
Ron Pernick: An increasing number of utility executives are saying that solar and wind will be cheaper than maintaining coal power plants in the near future. And in many locations wind (and even solar in some cases) is already the cheapest new energy source to deploy. How do you view renewables from your vantage point at CenterPoint?
Prochazka: Renewables certainly will have a growing role in the energy network of the future. Texas is No. 1 in the U.S. in wind power, but solar is not as prominent as it is in some other states. Even as the technology and infrastructure for renewables is developing, our mindset at CenterPoint Energy is that the traditional grid will continue to have a prominent role as the energy network to enable renewable use/integration. Our continuing development of innovative technology will give customers the reliability and service they have come to expect. Traditional baseload power, combined with renewables, allows for a grid that is both more environmentally friendly and has the reliability and operational characteristics needed by residential, commercial and industrial customers of today and the future.
Scott Prochazka is President and Chief Executive Officer of CenterPoint Energy.
He was a speaker at gridCONNEXT 2017 in Washington, D.C. The conference provides an unprecedented opportunity for utilities, policymakers, regulators, investors, businesses, service providers, end-users, and other stakeholders to explore policies and share best practices on building a modern 21st century grid. For more information, visit www.gridconnext.com.