Verizon, UTC do smart grid homework

Verizon and the Utilities Telecommunications Council energy trade group in September will issue a report on a study they're doing to determine the communications and information technology needed to support the nation's utilities.

How energy data flows — via broadband, telecommunications and the public Internet; or via narrowband and private networks owned and operated by the utilities — is a point of some contention between carriers and utilities.

Broadband, overseen by the federal government, can support consumer energy usage monitoring applications, but doesn’t extend to all areas of the country.

The private networks of utilities, overseen by state governments, are highly reliable and are built in conjunction with service delivery but cannot support the number of connections required to deliver smart-grid applications.

The Obama administration in March let its preference be known when the Federal Communications Commission unveiled its National Broadband Plan, laying out use of broadband communications as the delivery vehicle for smart-grid applications, including automating and maintaining the electric power distribution system.

Congress has established the smart grid as a national priority. Under the auspices of the American Recovery and Reinvestment Act of 2009, the Energy Department is in charge of $4.5 billion to speed standardization and deployment of the smart grid.

Additionally, the National Telecommunications and Information Administration and Rural Utility Service are administrators of another $7.2 billion in broadband deployment grants.

Telecommunications, already a major expenditure for utilities, is expected to grow because of the ARRA investments, said the Utilities Telecommunications Council. “Industrywide spending on telecom-related equipment and services totaled $2.33 billion in 2008,” according to a July 2009 UTC report, “Utilities Telecom Spending Market Forecast.” That number is going up, UTC said. A 13 percent increase — to $2.64 billion — was predicted in 2009, and telecom spending could top $5 billion in 2010, “with much of the increased spending flowing to smart-grid technologies,” the report said.

For the survey underpinning its report of a year ago, UTC surveyed its core utility members about “the types of equipment and services utilities use, the purchasing process for that equipment, the frequency of upgrades for telecom equipment and the cost of various equipment and services.”

The new study will “identify the unique requirements of the utility industry to ensure safe, reliable and cost-effective energy grids for the 21st century,” Verizon said in a press release.

“The analysis will encompass a wide range of factors that should be considered when designing and delivering the essential services that will facilitate the adoption of smart-grid technology,” Verizon said.

For the new study, UTC and Verizon will conduct focus group discussions with telecom technologists at UTC member utility companies, followed by questionnaires and background research into the business and technical issues shaping utility telecommunications, Verizon said.

The study may also provide a basis for a solution that would let utilities leverage some of their investment in existing infrastructure. Before passage of the stimulus bill, UTC said, utilities had budgeted $568 million for smart-grid spending in 2009.

“With all the communications challenges facing utilities today with smart-grid and emergency-response requirements, utilities will need partners,” said William Moroney, UTC president and chief executive officer.

“To be successful, utilities and their technology partners will need to have a common understanding of the technological, operational and financial factors that are the foundations for all the communications needs of utilities,” Moroney said in a joint release with Verizon.