Why utilities are going big on data
Utilities have begun a major grid and digital transformation, giving them access to more granular and temporally specific data than ever before. A traditional utility meter can read a customer’s monthly energy usage. But smart meters—already at around 75% penetration in the U.S. and expected to hit 80% by end of 2021—can take readings in 5-to-15-minute intervals. That means in any given year, a utility customer with a smart meter can access 35,040 (i.e., 365 days x 24 hours x 4 intervals) energy-usage data points—instead of the previously available 12.
In addition to smart meter data, other grid and customer devices are now able to collect more significant data. There are clear opportunities embedded in energy-related data: for example, insights into customer usage patterns, energy savings, Distributed Energy Resources (DER) optimization, and customer acquisition.
But there are challenges to navigate. For investor-owned utilities (IOUs) with millions of customers, measuring, collecting, storing, and sharing enormous amounts of data can quickly become a daunting task. Utilities need to resolve technical issues in tandem with business considerations to identify what they can do, how they can do it, how much it will cost, and what value they can create.
Some examples of data-driven monetized value include the existing utility demand side management (DSM) programs, especially demand response (DR) and pay for performance (P4P), time varying rates (TVR), and managed electric vehicle (EV) or battery storage charging. Data access has also been instrumental in delivering positive societal benefits in these customer programs. For utilities experiencing or expecting high DER penetration, granular data access, strong data analytics, and proper distribution control capabilities will be critical for aggregating and orchestrating these resources to maximize grid flexibility and continue to deliver reliable and affordable service. But even for those that aren’t, the new data landscape will be transformative, and it is here to stay.
There are also significant privacy and cybersecurity risks when opening data access to third parties. Energy-usage data—especially when combined with other commercially available data sources—can reveal a lot about a customer. Sharing that data with third parties requires strict protections around who can access it, how it is used, and how it is protected. Negotiations over these standards can be tense, as observed in the New York proceedings.
A new spotlight on rate cases, grid mod plans, and planning from regulators
Many existing regulatory data access requirements originated during AMI, grid modernization, and distribution system planning (DSP) proceedings. As utilities continue to invest in and deploy new grid technologies (i.e., AMI, customer portals, grid sensors, DER) that collect advanced data types and formats, stakeholders and regulators will demand more transparency for customers, third parties, and the public. As the market grows more attuned to the value of energy data access, questions such as how data will be used and where value can be captured will be front and center in rate cases and other regulatory proceedings such as distribution and grid modernization plans.
In other words, the market is entering a new phase of utilities introducing technology investment plans that require a clear articulation of potential benefits grounded in data use cases. At the same time, a major challenge for many utilities will likely be that stakeholder and regulator expectations may outpace their capabilities. If utilities lack the functionalities to support new data access requirements, they will need to seek incremental investments and budgets, introducing the question of funding and cost allocation.
In addition, increased energy data access may bring market innovation, but it also creates new privacy and cybersecurity risks. As states continue to adopt new data privacy and security legislations and regulations, sharing customer and system data will become a more complicated and onerous process with additional disclosures, privacy, and safety requirements for all the parties involved. Also adding to the list of investments and regulatory review.
The table below includes considerations from the perspective of key energy data access players.
How other states are acting on data access
Although no state has progressed as far—or as fast—as New York, some are actively exploring data access. In 2021, many states engaged in data access discussion under the promise of creating more transparency, enabling more dynamic energy markets, offering innovative customer products and services, and supporting clean energy goals.
New Hampshire’s stakeholders reached a settlement agreement to move forward with exploring a statewide energy data platform and Maine recently passed a bill to evaluate its feasibility. In Minnesota, the IOUs submitted their first annual open data access compliance report and are participating in parallel stakeholder discussions to explore the risk and benefits of sharing system data with third parties through hosting capacity maps. In addition, New Jersey, Michigan, Maryland, the District of Columbia, and Connecticut have active stakeholder engagement processes to explore access to customer and/or system data.
Conclusion: The future of energy data is quickly approaching
The energy data revolution is underway, and data access mechanisms can originate from utilities, government agencies, DER providers, aggregators, or a combination of those. Deciding on the data access delivery model should consider best value (i.e., timing, quality, costs) and privacy and security risk management.
We are already observing rapid change on short timescales, and it’s not hard to imagine even more profound data-driven innovations in utility business models and the energy market in the near future. Some possibilities include:
- Big data analytics companies monetize new services based on energy-related data
- New customer products or services—in energy and beyond
- New expectations for utility business models, including partnerships and offerings based on their ability to provide energy data
The market is moving on energy data access, regulators and stakeholders are taking notice, and developments in New York over the next 12 months will provide valuable lessons for other states. We should all pay attention.