In this video, Ken DeFontes, President and CEO of Baltimore Gas & Electric, discusses his company’s approach to implementing smart grid technology into BG&E’s territory.
It is a unique look at smart grid technology from a utility perspective.
Full Transcription:
Justin Segall: Justin Segall here for the Daily Energy Report with Ken DeFontes, President and CEO of Baltimore Gas & Electric. Ken thanks for sitting down with us today.
Ken DeFontes: Sure, my pleasure.
Justin Segall: You talked today in your presentation a lot about the future of the smart grid and your role as utility. Going forward, could you tell us a little bit about how you see your role for Baltimore Gas & Electric in the coming age with your smart grid deployment and the merger that you have upcoming?
Ken DeFontes: We’ve been at the forefront of testing out and evaluating this technology now for several years. The information we’ve learned from our customers is that opportunity for energy efficiency and saving money for our customers is significant. By providing this innovative solution, we think we’re going to bring up a real value proposition for our customers. Our role is really to provide the infrastructure. We put in the meters. We provide the raw data. I think once customers have information at their disposal, they will innovate then through the adoption of portals and web applications and mobile applications that will be developed by third party providers. Our job is to make sure that the infrastructure is sound, that the infrastructure is reliable, and that the quality of the data that we produce is consistent and reliable. That’s going to be our role in terms of being the enabler of this smart grid explosion.
Justin Segall: What do you see as your biggest challenge then for that engagement of the customer, getting them to uptake the applications whether they’re coming from you or from a third party provider?
Ken DeFontes: I think, obviously there’s a lot of work to accomplish just to go out and replace two million meters. If you think about, that’s not an insignificant effort in itself.
Justin Segall: Absolutely.
Ken DeFontes: That has to be done first before you can provide the data. I think preserving the data integrity and the privacy of the information would be something that’s important. We’re doing a lot of work to make sure that that’s done properly. We also are spending a lot of time on the grid security, the cyber security– a lot of focus there. I think those are challenges that all utilities that deploy this technology are going to face. But I think it’s worth the risk when you recognize the tremendous opportunity there is for customers to save energy and reduce peak demand. They’re more confident the more they pay for the system many times over.
Justin Segall: Do you think that that paying for the system comes out of the demand-response and peak shifting? Does it come out of the decoupled energy efficiency revenues, outage management? Where do you think the biggest bang for that buck comes from?
Ken DeFontes: I think it’s all of those. We can probably pay for about 75% of the deployment just for the operational savings, not having to roll trucks to start, stop service or read meters and those things. But the real benefit is on the demand-response side. We’ve done some pilot testing that suggests the potential there is significant. We’ve demonstrated this in a repeatable way, where we’ve gone out year after year and tested these pilots, and each year, customers actually get better at it. We do think that the demand-response is very significant. What we’re also experimenting with is there an overall energy efficiency improvement. Some utilities have seen 3-5% efficiency savings simply because customers now have real time information that tell them how much energy they’re using as opposed to the way we do it today, which is, I get a bill at the end of the month. We believe all three of those pieces are going to be significant contributors to helping to justify the investment we’re making.
Justin Segall: With the announced merger, how does that change your business model? If at all, how does that change your approach to the smart energy, smart grid roll-out?
Ken DeFontes: It doesn’t change. If anything, it enhances it. We now have two other utilities, PECO and ComEd, that we can learn from and share best practices. I’m looking forward to doing that. Exelon, PECO, and ComEd are all promoters of energy efficiency and choice as is Constellation, a parent of BGE. We’re very aligned in the same way into thinking about what’s the right way to go about doing this. I actually think we’ve married up with a great partner that’s going to be very aligned with the objectives that we already have in place.
Justin Segall: You spoke on the panel a bit about some of the regulatory challenges that you’ve been facing especially in Maryland from the legislature. What do you see on the regulatory front both at the state level and at the federal level as your biggest challenges, and what would you like to see as the outcome?
Ken DeFontes: We’ve actually had some successes in Maryland in spite of some of the challenges. We did get our smart grid project approved and we’re going forward with a very aggressive plan. I give a lot of credit to the regulators for working through that with us, and we’re pleased that we’re moving forward with that. I think the bigger challenges that we’re going to have are not going to be so much on the smart grid. It’s going to be more in the infrastructure upgrades and the cost recovery for those things. And that’s not unique in Maryland. That’s true really across the nation we’re all struggling with as we have to make investments in our gas infrastructure to improve the safety and security, as we have aging electric infrastructure. We have to figure out the right mechanisms to get fair and timely cost recovery for those investments that we know are going to need to be made.
Justin Segall: How can your customers help you?
Ken DeFontes: I think the first thing they can do is engage in the educational opportunities we’re going to make available to them and work with us as partners, step up to the plate and try out some of the new things we’re going to do. The evidence has been very strong. In our pilot programs, we’ve had customers experimenting. They’ve demonstrated a great interest in doing this to engage, and when they do, they save money. And so to me, that’s a win-win.
Justin Segall: Great. Thank you very much for your time today and we appreciate it.
This post originally appeared on The Daily Energy Report.
