The evolution of the electric grid, and the power industry as a whole, has certainly changed the understanding and nature of risk. For many years the greatest risk utilities faced was financial, related to project risk in building and operating assets. Over time, with the convergence of technology, consumerism and policy, the number of risks, with both positive and negative consequences, are growing exponentially.
Utilities still have project risk and financial risk, but we also have heightened risks in cyber and physical security, reputation, customer retention, workforce attrition, regulatory compliance, organized markets, stranded assets and emergency response and resiliency. These risks create a multifaceted, multidimensional matrix of opportunities and consequences. Visibility into how risks relate to each other, directly or indirectly, and the ability to anticipate are keys to right-sizing the mitigation.
Risk avoidance is too expensive and too restrictive if an organization is seeking to innovate and meet evolving customer needs. Effective risk management and decision-making is a much better way to be responsive to capturing the value of new technologies and expanding customer offerings.
Policy adherence, regulatory compliance and basic transactions need to be fulfilled, but reside in the background, out of the view of customers. Customers aren’t as interested in back office functions unless they don’t work. Executing those capabilities well are the price of entry for successful business now.
So how is it possible to do all of these things well? Since there are many pieces of information that support decision making in this multidimensional, multifaceted matrix of risk and opportunity, it is important to have the information correlated and presented quickly and comprehensively to help manage the present and predict the future.
Situational intelligence, especially visual, provides information that isn’t one dimensional. It can present a multidimensional set of information that looks at risks and opportunities comprehensively allowing consideration of many options for mitigation.
The digital communications component of the modern electric grid has created two way information, exponentially more data and the ability to correlate disparate data to provide a full picture of the past, present and future. With it, utilities can incorporate and correlate financial, operational and environmental data visually to allow for an integrated view of risk and opportunity.
A strategy to deploy situational intelligence to manage data and the emerging internet of things will move utilities from network operators to technology platform providers. A well designed and deployed technology platform will ensure compliance and fulfillment of core functions and expand the ability of utilities to capture and deliver opportunities most valued by customers.
John Di Stasio is President of the Large Public Power Council.