I have lived in Austin for almost five years. When I moved here from Dallas in 2012, my expectation of the city was that of any other non-Austinite Texan: the place is weird. But having watched Austin transform as one of the fastest-growing cities in the nation over the past five years, I’ve come to realize that normality is relative.

Population growth in the city catapulted Austin to become a hub of innovation that is now home to a robust startup community. This eclectic community promotes creative thinking as a problem-solving mechanism in today’s fast-paced economy. In fact, back in the early 2000s, a librarian named Red Wassenich called into a local radio station to pledge to the show. When the DJ asked Wassenich why he supported the show he simply replied, “I don’t know. It keeps Austin weird.” The Austin Independent Business Alliance liked the line so much they adopted it as their slogan to promote local small business.

On the Austin Chamber’s homepage is a list of key industries to the city’s economy. On the list of six industries, two stuck out to me:

  • Clean energy and power technology
  • Data management

These industries are notable because they all play a critical role in the transformation of the energy industry. Renewables, distributed generation, digitalization, and consumer expectations and preferences are triggering new business models in today’s utilities. But implementing and maintaining a new business model that moves away from centralized generation to leverage distributed generation through the digitalization of processes and services within utilities and on the distribution grid in a seasoned energy industry is a challenge. How can utilities successfully take on new business models influenced by the digital revolution?

Disruptive change can happen when market followers reposition themselves as market leaders through innovation. However, it’s not exactly that simple in today’s changing marketplace. Certain utilities have led the market in terms innovation for the past few years, but the entrance of new technologies in the marketplace has allowed other energy providers to innovate and adapt as fast or sometimes faster than traditional market leaders. For utilities, disruptive change is present all along the power-industry value chain, from generation to customer relationships.

Disruptive change does not create winners and losers in an existing market but it creates market growth. Utilities can continue to grow in the energy market by repositioning today’s business while simultaneously creating a future one.

The front line of the digital revolution is the power of data and technology. Utilities are looking to reposition today’s business models to make them more resilient to the disruption of traditional power delivery by transitioning into fully digital-integrated entities. In the recent Zpryme webinar, Digital Transformation: Delivering Value from Generation to Customers, Kelly McGinnis, CFO of GE Power Solutions said, “The leadership team in the industry knows we have to transform. They know we have to go through this digital transformation.”

So, who are some of these utilities helping lead the charge for new business models by leveraging digitalization and distributed generation? Here are two examples:

Green Mountain Power

In Vermont, Green Mountain Power (GMP) serves roughly 265,000 residential and business customers across the state. The CEO, Mary Powell, is a vivacious, driven woman known for characterizing her organization’s transformation as moving “from a utility to the un-utility.” In late May, GMP launched its eSmartwater pilot program to add another opportunity for customers interested in distributed energy resources.

GMP’s eSmartwater program uses Aquanta smart water heater controllers and Nest learning thermostats to help reduce customers’ overall energy costs. The Aquanta smart water heater is a retrofittable device that attaches to existing water heaters giving consumers remote control through a mobile device app. The app gives users capabilities like programmable schedules, remote on/off, leak alerts, and even usage data. The program also includes a Nest thermostat that provides remote monitoring and control of the temperature from a mobile app. Virtual Peaker, a GMP Inspire Space contest winner, provides the utility with the software platform to integrate all of this. It helps utilities manage residential demand by shifting the consumption patterns of internet-based household devices.

GMP is the first utility in the world to get a B Corp certification through meeting rigorous social, environmental, accountability, and transparency standards. Listen Mary Powell speak about the “energy services utility” concept in our discussion “As a Service” for Software and Energy.

Ameren Corporation

In Champaign, Illinois, Ameren completed one of the most technologically advanced utility-scale microgrids in North America at its Technology Applications Center (TAC). The microgrid is capable of serving live customer loads on an actual utility distribution feeder. The project involved creating a nested 50-kW microgrid within a 1-MW microgrid, all interconnected at 12 kV.

Ameren built the microgrid facility to test and monitor control methods for aggregating wind, solar, and natural gas resources with advanced automation and battery storage. The microgrid is one of the few in the world that operates at utility-scale voltages, between 4 kV and 34.5 kV, with multiple levels of control.

Ameren is also the first IOU to island customers on an active feeder using a microgrid. S&C Electric developed adaptive protection and control software to help transition the multiple generation sources into and out of “microgrid mode” without creating outages. This “islanding” concept allows the utility to deliver more than 1-MW to customers without experiencing an outage. Also, S&C’s solution allows the microgrid to “black start” without the need for a reference voltage from the utility source. The storage management system (SMS) provides battery energy storage for the smaller of the two microgrids. This system allows Ameren to fully integrate renewable energy sources. Wind and solar generation can run uncurtailed in the microgrid and even exceed the load because the SMS can be put into charging mode while still providing the microgrid reference frequency and voltage.

With the new energy era right around the corner, some utilities will pioneer by the successful implementation of innovative technologies and quality partnerships. Green Mountain Power and Ameren Corporation are utilities pushing innovation culture and leveraging partnerships to adapt to the changing marketplace. Are their approaches to DERs, digitalization, and bi-directional power flow the right fit for the future of utility business models? That’s something we as an industry need to explore more deeply: the path of how utilities move from market followers to market leaders and introduce true disruption into the industry.

To dive more deeply into these topics, check some our recent sessions discussing The Next Utility // Crafting New Utility Business Models and Business Model Innovation Around the Meter where industry experts discuss their approaches to the complexity of changing business models.