IMS Research Analyst Blog

Connecticut Light and Power (CL&P) was extremely slow to restore service to many customers left without power following the October 29^th, 2011 snowstorm. Some commenters (nytimes.com) have pointed to the comparatively strong performance of Norwich Public Utilities, which under similar circumstances managed to restore almost all affected customers’ power within a few days. During the previous year, CL&P spent much less per customer on maintenance/upkeep, and it seems in hindsight that the end result was less robust infrastructure and slower response to (admittedly extreme) conditions.

The fallout of CL&P’s slow response to the snowstorm has hurt goodwill not only with the utility’s customers, but with regulatory bodies. The utility’s standing with these two crucial groups is not helped by CL&P’s already nationally high per-kWh electricity pricing. If perception of the utility’s performance is bad enough, this could potentially endanger approval for CL&P’s intended merger with neighboring utility NStar, representing a real and immediate consequence for lack of infrastructure investment and planning.

Undoubtedly, the continued economic weakness in the US and pressure from customers and government alike to keep utility costs low make capital investment in smart grid projects difficult. However, as seen in Connecticut, the potential costs of failing to provide for clients under extreme circumstances can be serious. Not all smart grid-related investment need be exorbitantly expensive, wide in scope, interconnected or cutting edge. In fact, the effort to restore power after a major disturbance like that in Connecticut can be made safer and more efficient through the use of fairly simple equipment, including AMI data management, power line monitors along feeder lines, and low-level distribution substation automation. These technologies do not enjoy the next-generation smart grid hype that energy storage or remote restoration may, but they are more affordable and offer a compelling business case for utilities. Increasing penetration of AMI networks in North America allows for a greater share of endpoints to be instantly queried for power problems, and AMI networks can also be used as backhaul for simple, low-bandwidth distribution automation tasks like power line monitoring or remote fault detection. These investments allow for fewer, more targeted truck rolls by the utility in the aftermath of an environmental event, and shorter wait for power restoration by customers. Affordable, independently functional equipment like power line monitors or remote fault detectors could potentially repay their initial purchase cost after only a few uses in the field, and application of analytics/intelligence to AMI meter data can represent a relatively small per-meter-endpoint cost for the utility.

Recent projections by IMS Research analysts covering the markets for distribution automation equipment and AMI rollouts have highlighted the market opportunity tied to these immediate-impact investments. While new housing builds and general economic indicators remain weak, and while AMI projects have reached a peak and can be anticipated to decline in the short term, IMS Research projects steady revenues for the sum of the three technologies covered here (feeder line and distribution substation automation, and AMI). 

Written by Donald Henschel

Share this Blog