Utility of Several Cities on Smart Futures

PUF's Steve Mitnick: What is your role at Exelon?

Phil Nevels: Anne [Pramaggiore, CEO of Exelon Utilities] has put forth a vision for the future and where we want to go. Our group is tasked with looking at that vision, thinking ahead, thinking some few years out, and asking ourselves, what holes exist in this vision?

The hole can be either an opportunity, where there are opportunities that we haven't identified or fleshed out fully, or where are there potential issues that could inhibit or prevent us from executing the vision that Anne has set forth.

Once we've identified those holes, our team is tasked with going deeper and trying to articulate and understand how we can turn an opportunity into action and how we can mitigate a risk. Then the second piece of that is working with the utilities to define projects that help advance our understanding in a particular area or to experiment or test a hypothesis that we might have about an opportunity or risk.

When I use the word projects, I'm using it very broadly. It can be either a pilot or a study. It can be a simulation, a paper, or several items. I'm going straight to pilot, but that's essentially what we do. It's critical for us to be able to interact well with all of our utilities because that's where the magic happens.

We need to find ways to create and build a funnel of projects for the utilities to ensure their livelihood, the strategy where Anne wants to go, to help the utilities design those projects such that they maximize potential earnings on any given topic.

PUF: How does this fit in with the smart communities, smart city, which is very customer centric, too?

Phil Nevels: How do you build a smart city, and how do you build a utility of the future? In both cases, you start with customer needs. You've got to start with a vision for what you think the customer needs of the future are and through that you can identify the key priority use cases, and what is the experience of a citizen or a business or any person living in its borders.

That's another way of saying what problems in the future do we need to solve that the customer needs? It's the same thing as saying, we have solved this problem for a person or a business and that's how we satisfy customer needs. You start there.

Then we start to articulate what roles, responsibilities, and capabilities are required to address those customer needs, and satisfy those customer-use cases. In some cases, the utility is well suited to provide the capability required to satisfy a need.

In some cases, it's other partners. In some cases, it requires a partnership between the utility and others to sufficiently address that customer need. We're working on identifying what capabilities we have today and what capabilities are required to support that.

There are two things I say in terms of why the utility is well positioned to potentially provide capabilities that satisfy the future situation. One, much of what is required for these future-use cases is infrastructure.

Part of what we're trying to do is identify how we take infrastructure today that we're using solely to deliver electrons to customers and start to build a rationale and a case for leveraging some of that infrastructure to provide other services to municipalities and the like. That's the first piece of it.

When we look deeper at that, if there are different types of infrastructure, there are poles and wires and items like that, but even more factors that may be more applicable to smart cities are the data and then the connectivity of the connections.

A lot of utilities are focused on that right now, thinking about at the end of the day, a smart city infrastructure, plus sensor, plus communications network, plus data, plus a use of the data, like using the data and aggregating the data in useful ways.

We have sensors in the network. We have technology in place to allow the sensors to communicate with one another. We have lots of data that we generate, and we have mechanisms for handling that data such that it's useful.

Most of what we do today is for our own purposes of delivering electrons. What we're trying to understand is how can we take some of those same assets, some of that same value, and apply it to other useful use cases.

I've got several lists going. I don't know which list is which. We start with use cases. We look at roles and responsibilities and think about what technology needs to take this given a certain capability or role or responsibility. That's when you get into the layer I just mentioned.

To go further, when we really get to innovate is around business models and policy. That's the icing on the cake. That's how you do all that because we can't stay in the mindset where we can pass everything strictly through a rate-base paradigm. That model could be rate based or not, but we need to put forward other business models that will work, too.

One was the infrastructure. Two is for the common good. When we think about electricity, our mandate, our charter, is to provide the same quality of power to everybody, irrespective of function, income, stature in society.

If you think about it from a smart-city perspective, everybody should have the same access to the benefits of a smart city as everybody else. The utility is naturally poised to be that entity to guarantee that all members of a smart community are able to extract the same benefits from a smart community.

Two hundred years ago, electricity wasn't what it is today, and it wouldn't have been considered necessarily a right, such as a right to life or air or water. It's the same with the internet thirty years ago. Now that's part of our society. If you want to have a job, you need to be connected. If you want to succeed, your family needs to be connected. That's absolutely number two.

Number three is the fact that we're regulated. The fact that there's oversight is a plus. You want to build these items in a deliberate way. Two and three are related, but the fact that we're regulated is a benefit.

PUF: How do you determine what each community needs?

Phil Nevels: What might satisfy the needs of one community may not satisfy the needs of another. In Brownsville, you've probably heard of the microgrids there. What's more interesting is not only are we developing microgrids but we're developing and controlling the microgrids so you start to think about networks of the future and how different microgrids and systems can network and share resources between one another. That is in the network of the future.

Another interesting item, it's not necessarily super futuristic, but it provides a demonstration of how you can create win/win/win situations for society, and that's in the realm of electric vehicles, which is a no-brainer, triple-win scenario for any use case.

In the Brownsville territory, they've created a ride-share program where they hire individuals from the neighborhood to be the drivers of the vehicles. They're using electric vehicles and they're using those vehicles to help the elderly get from home to public transportation.

In that case it may be more than a triple win, but you've got an economic development win, an environmental win in that you're using an electric vehicle, you've got a societal win, and you've got a transportation win, because you're getting someone from point A to point B. Then you have the utility win because we have more load on the system. That's really four wins. There's probably two or three more.

That's not a futuristic technology, but it demonstrates how we can think about the future. We need to think about the future from a systems approach. One trap we get into, is we get enamored with one technology or another.

We start talking about solar or storage or microgrids or smart substations or AI. It's really more valuable thinking about those as a system and how do all the system components interact with one another. You'll gain a lot more by having some broad, expansive view of the world and not a narrow, technology specific view of the world.

You can get there faster if you start with the customer needs and then work your way back. You'll find that truly some of the customer needs are going to require an aggregation of multiple solutions and technologies. You don't start with a technology and work your way up. You start with their needs and work your way down.

PUF: Why should the industry be excited about this?

Phil Nevels: That's the deal with smart cities. I get excited when you say that term. There are eighty thousand definitions of what it is exactly. In my mind, I boil it down to ten words or less. A smart city is a more efficient city.

You can apply efficiency to every dimension, energy, flow of traffic, or resources. It's about efficiency. A more efficient city is a city that costs less to operate, which means more savings for people.

At the end of the day, people like to talk about electric vehicles. Well, the air is cleaner. We'll have healthier lives. That's a huge part of this, but if you want to talk about people's pocketbooks, that's a big part of it, too.

In a smart city, we can do more with less, put more money in people's pockets, and give them more. It's a higher quality of living at a lower cost. At the end of the day, that's what we're trying to achieve.