The Road to Becoming a Digital Utility

Todd Inlander, VP & CIO, Southern California Edison (NYSEAMERICAN: SCE-E)

At Southern California Edison, we recognize that the utility business is undergoing an accelerated period of change—potentially more transformative than the cumulated changes of the last 100 years. And, information technology is a critical component of this re-conceptualization of the way we provide energy to our customers. We must transform into a digital utility and advance our capabilities reinventing our systems, processes and skills to reflect the technological landscape of 2018—and steer strategically into the digital landscape for the rest of the 21st century.

Our strategic vision is customer-centric; we are empowering customers and their service providers to accelerate customers’ return on investment in clean-energy technologies, opening new markets and value streams for clean-energy service providers and collaborating with customers to access reliability services for an increasingly complex distribution system. By starting with the question, “What will our customers need?” we are looking at strategic platforms that will adapt to rapid change and near-real-time communications as customers gain increasing energy choices.

We see four primary movers for change in the IT space: First, customer expectations and needs are evolving; second, the pace of technological change is accelerating dramatically; third, information technologies are becoming an integral part of operational, service provider and customer technologies; and fourth, the basic tenets of the utility mission to safely provide reliable and affordable power must be protected and improved even as we transition our technologies.

Customer expectations for real-time personalized information

Connected and smart devices have increased customers’ expectation for on-demand access to all relevant information in real time on the digital platform of their choice. Today’s customers, both business and residential, also expect their experience to be transparent and specifically tailored to their home or business. They want comprehensible, personalized usage data that guides them through their bills as well as proactive communications on outages. The customer expectation that information be available on any device, anytime and anywhere requires IT teams to ensure that systems enabling the customer experience leverage the entire modern, mobile, analytics, cloud and security tools and technologies of a digital native company.

The accelerating pace of technological change

The increasing expectations for transformative solutions from customers, regulators and clean-energy vendors require utilities and conventional utility vendors to reduce procurement and product development cycles. This means both understanding the markets’ ability to support new requirements and ensuring that advanced technologies are proven out and will not jeopardize the grid.

As utilities’ “clock speed” increases, so must the existing vendor community’s or they could fall victim to new market entrants that are bringing business and technological innovation. Given the continued drive of device miniaturization, increasing processing power, significant improvements in connectivity and advances in artificial intelligence, utilities must digitally reinvent core processes and create new ones to unlock new business capabilities fast enough to keep pace.

The Integration of IT and OT

The boundaries between IT and Operational Technologies are blurring, as IT is transforming the way utilities monitor and control the electric grid. OT technologies that are network connected, are remotely manageable, require routine patching and are capable of running on virtual machines require the same cybersecurity and skills to manage as a general server or device in the enterprise. IT and our business partners must collaborate in multi-discipline teams to tackle solutions that require converged IT/OT technologies. For IT, this means developing a depth of understanding of the business. Conversely, we need to educate our partners on architecture, design and IT implementation principles.

Putting safety, reliability and affordability first

Lastly, and arguably the most important challenge of digital transformation is to ensure that the core utility mission is protected and improved. This requires a disciplined systems-engineering approach. Once implemented, these modernized platforms must be standards-based and secure, and then they will be capable of supporting rapid application delivery using agile/devops methods or agile-at-scale techniques.

Robust test environments and smart infrastructure platforms with evergreen designs may have higher upfront costs and may require substantial process redesign and organizational change management. However, once they are in place, utilities are no longer burdened with ripping systems out and replacing them when new requirements are introduced or the technology and support becomes obsolete. This dramatically reduces ongoing operational costs.

If IT solutions are deployed with the appropriate evergreen architectures, utilities can unlock the value and agility seen by digital native companies. For example, the virtualized, hyper-converged infrastructure used by cloud providers use the same technologies SCE is adopting in our data centers, including our grid control centers. And, as we leverage virtual containerization, self-diagnostics and cybersecurity services accessible for clouds on and off-premise, the applications we develop are portable enough to be moved to the cloud or back to our data centers, depending on operational and cost benefits.

The road forward

We must move from traditional “point-solution” thinking to a platform-centric perspective that allows us to adapt to the evolution of customer, business and regulatory needs. To enable the flexibility and agility necessary to meet new requirements in an unknowable future, this new software- and network-based design paradigm requires standardized hardware, IP-based communications and robust cybersecurity standards and tools.

Ultimately, to be a completely 21st-century digital utility, we must leverage the data from smart, connected technologies running on standardized platforms to anticipate customer needs, predict grid failures and provide unprecedented situational awareness in operations—all the while surpassing customer and regulatory expectations. Employees, customers and technologies will collaborate to rapidly adapt to the ever-changing energy needs that power our society. Companies like ours must master information, technologies and continuously re-skill to become agile, resilient and safe providers of affordable and reliable power for the next generation of utility customers.

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