Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government
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UtILIty WEEK | 16th - 22nd May 2014 | 23 Operations & Assets "That's how we've always done it," say many utilities. "It", in this instance, is corralling asset and customer data to benefit the business. But the utilities' time-honoured way has been to use data from separate and unaligned asset and geospatial information systems with no common data standards. It can't continue. UK utilities have, for years, mulled over getting their asset and customer data in order. It's getting urgent that they do so. Wrong data leads to wrong decisions and it mars a utility's understanding of its perfor- mance and its regulatory and other reporting. Water, gas and power companies are amid changes that will challenge severely their capacity to get the best out of their data. Regulatory interventions and the immi- nent, widespread deployment of smart technology will bring challenges and opportunities to the entire utility value chain. Examples might include: the Service Incentive Mecha- nism, calls on power and gas networks to engage further with customers, water compe- tition and the deluge of data from smart metering. Recently the water regulator opted for reputational incentives only under the Abstraction Incentive Mechanism, citing poor data as a chief reason for not adopting financial incentives. So how confident can utilities be about how assets are performing? Can they work up business intelligence and pro- cesses to play winning strokes against mounting competition? Can they combine operational technology and enterprise IT to get the most out of their data resource? The answers lie in responses to the following: • is the business working with a unified system that secures sound reporting? • is the information that needs to be recorded for each asset, and the terminology used, con- sistent among the data sources? • can the operation share data and collaborate confidently with regulators, other utilities and service providers? Poor data standardisation and data silos create serious problems for utilities. Many have spent too much time rec- tifying those problems instead of basing strategy on rock-solid data. Utilities commonly ask: can I process new data while sorting out my data problems, or should I first get everything into an orderly state? Both approaches are doable and neither is wrong. But dispa- rate, misaligned data needs to be made good, otherwise it will exacerbate business challenges and undermine opportunities. There are plenty of standardisa- tion processes. Right now it's more about the mindset. There are many ways to skin the bad data rabbit, but first you have to catch it. Suman Dasgupta, Utilities Director, Rolta EXPERt VIEW Suman DaSgupta, Rolta Breaking bad data utilities cannot go on using discrete data systems that can't talk to each other. Standardisation is critical to give you the unified picture you need to manage your business. Analysis Networks failing on competition Ofgem needs to act after not seeing enough evidence of competition in networks, says Megan Darby. I f the electricity connections market were subjected to the same political pressure as energy supply, a com- petition referral would look very likely at this point. Ofgem gave incumbent monopoly providers three years to open up connection services to competition, but they have proved unable or unwilling to do so in most cases. Ofgem is considering its next steps, which could include a "review" of competition in the sector. The elec- tricity distribution network operators (DNOs) had passed its "competition test" for less than one third of market segments identified as contestable. In an open letter to stakeholders, the regulator said DNOs had addressed some barriers to competition and made improvements in some areas. However, it con- cluded: "In the majority of market segments, we have still not seen enough evidence of effective competition." Of course, the electricity connections market does not attract nearly as much interest or flak as retail. It bears a negligible relationship to energy bills and as such is well clear of the cost of living agenda. Worth around £1 billion a year, it is not a large enough market to excite major players. Nonetheless, it matters to the likes of home builders and solar installers, who complain of high charges, poor service and limited choice. There are independent play- ers who think they could offer a better deal, but say the DNOs are not doing enough to level the playing field. And while the heat has been on energy suppliers lately, MPs on the Energy and Climate Change Commit- tee are lining up an inquiry into the networks. Committee chair Tim Yeo in particular has a bee in his bonnet about "complacent" network monopolies. He gave the DNOs a hard time over their response to widespread power cuts caused by the Christmas storms and may be expected to take a similarly pugnacious tone on connections. Ofgem also noted variations in the state of competition in different parts of the market. Electricity North West came out on top, having passed the competition test for seven out of nine segments, which covered 97 per cent of connections in its area. At the bottom of the table was SSE Power Distribution, which did not pass a single segment in its Scottish region and only one in its southern patch. The regulator has made no mention of penalties for the worse performers. If it is seen to let DNOs get away with failure, Ofgem risks giving the Labour shadow energy team another opportunity to bring out its favour- ite "toothless watchdog" taunt. Ofgem is due to set out its next steps in June. DNOs are unlikely to get the same rough treatment as energy suppliers, but they should be prepared to up their game.