Change is sweeping through utility telecommunications at a furious pace, as nearly 60 percent of electric and water providers are planning for replacement, upgrades or new communications infrastructure in the next five years.

“This change is challenging utilities to adapt to transformative technologies, and to place a heightened focus on security and regulation,” said Dean Siegrist, Director of Black & Veatch’s utility telecommunications business line. “Utilities must also manage an aging workforce that is being asked to adjust to – and find efficiencies in – a disruptive environment.”

Siegrist said those challenges are not stopping utilities from moving ahead. Black & Veatch’s 2015 Strategic Directions: Smart Utility report finds that electric utilities are leading the path toward change, with 63 percent of those surveyed moving ahead with new systems. For water utilities, 59 percent stated they are planning new systems.

Source: Black & Veatch

“A key driver is the need to support capacity demands for future smart grid/smart utility projects,” Siegrist  said. “This is a clear sign that providers are developing systems designed to meet today’s communication and asset management expectations, while at the same time keeping an eye on how these systems will integrate with future expansion.”

The sunsetting of legacy connections, such as frame relay and POTS, is prompting this exciting transformation, and it brings the promise of cost savings and agile, speedier networks. But according to Craig Watson, Network Services Manager with Black & Veatch’s telecommunications business, these changes also carry big implications for utilities, even for those that are already moving aggressively.

“Utilities must consider the big picture,” Watson said. “For example, does a utility have a master plan? Do security concerns occupy an important space in planning? Is the workforce ready? How these questions are answered will go far in determining how change is managed.”

IP Leads the Way

At the forefront of these changes is the move to Internet Protocol (IP), a network protocol standard at the heart of communications networks that provides the basic building blocks and allows for seamless integration and compatibility among all devices. IP is being adopted from multiple angles, Siegrist said. One key migration comes with supervisory control and data acquisition (SCADA) programs. Previously, remote terminal units monitored and controlled information flows through hardwired serial connections that relied on fixed endpoints.

“IP delivers more flexibility and the bandwidth necessary for handling corporate data and other traffic,” Siegrist said. He noted that the value proposition is high – IP delivers a common, standardized approach to efficiently enable devices and applications to directly communicate with one another through an assigned address.

However, these benefits can only be realized after a utility considers several key factors:

• Equipment costs and the resources to support the upgrades. Do utilities have the trained workforce required to support and maintain the new technology?
• The need for thorough testing to ensure “proof of concept.”
• Will equipment and systems scale to accommodate future upgrades and equipment changes?

Watson said that momentum for wide IP deployments is building, driven by the promise of reduced capital and operational expenses that a single, shared network infrastructure can provide.

“Some utilities are completely embracing a converged mentality and running everything over a shared infrastructure, while others are moving more cautiously by keeping protective relaying and other mission-critical applications separate from the converged network,” Watson said.

But there are other advanced technologies, such as multiprotocol label switching (MPLS), that offer similar speed and network reliability gains, he said. The technologies offer utility customers the ability to converge networks or systems in a segregated traffic model across a shared infrastructure. Under MPLS, tags are added to packets that speed them along predefined routes according to a network’s quality of service requirements.

“Black & Veatch recently migrated a large utility to an MPLS scheme,” Watson said, “which underscores how providers are willing to retire traditional data management systems.”

Security Remains a Key Issue

The change to IP and other automating technologies comes with a renewed – and federally required – focus on network security. The new systems bring speed and latency improvements but open utilities to new risks that need to be understood and mitigated. Providers that once piggybacked on public-carrier networks to handle network traffic are increasingly initiating, or considering, privately operated networks.

According to the report, 70 percent of electric utilities said they now operate a private communications network for transmission and distribution, with water utilities not far behind at 60 percent adoption.

“Utilities increasingly prefer the private option because it gives them control over reliability and access,” Siegrist said. That control also lowers the data-leak risks inherent to a network that must accommodate sensitive utility monitoring and control traffic as well as general, user-generated voice and data.

That said, public network solutions are still a significant connectivity option for utilities, with 37 percent of respondents saying they use public-carrier cellular networks to help with advanced metering infrastructure (AMI), SCADA and other devices.

NERC-CIP Version 5

It is notable that 56 percent of utilities and municipalities serving populations of 2 million or greater say they are installing new or updating communications infrastructure because of cybersecurity initiatives. Utilities must factor in tighter government regulations, such as Version 5 of the Critical Infrastructure Protection (CIP) requirements set out by the North American Electric Reliability Corporation (NERC).

Source: Black & Veatch

Version 5 of the CIP requirements also emphasizes the need for more stringent security controls. It requires the documentation of practices for physical and remote cyber access to highly critical operational areas and devices that comprise a utility’s bulk electric system.

One such technology that will continue to be adopted is video surveillance. Although widely recognized as a crucial component of physical security, this requirement will significantly impact a utility’s available bandwidth.

“It may also force the creation of new workflows to address who monitors the video, and how and where it is stored,” Watson said. “Many utilities reported not knowing the full impacts of the NERC/CIP Version 5 on their businesses.”

What’s the Plan? 

Complex systems featuring IP, MPLS and other technologies require thoughtful advanced planning.

“Black & Veatch recommends a master telecommunications plan that acts as a road map for adopting and exploiting these advances,” Watson said. “Thorough planning, design and proof-of-concept regimens will ensure that a new system aligns with the utility’s larger goals and is adaptable to change.”

He said that developing conceptual network architecture, identifying system requirements and identifying mission- and nonmission-critical assets are just a few of the factors utilities must evaluate during the planning, assessment and architecture stages.

“This then evolves into a smart strategy – developing and documenting operational standards, plus creating detailed network designs and specifications,” Watson said. “This works to establish a solid testing phase to help utilities understand these changes and exploit their full potential.”

Published originally on Black & Veatch Solutions.