March 2013 - Energy & Utilities Newsletter
West Monroe Partners' Energy & Utilities Newsletter focuses on many key issues that are top of mind for our clients.
Date : March 7, 2013
There are many issues—associated with advanced technologies, regulatory strategies, and broader business strategies—that are currently top of mind for our consulting team here at West Monroe Partners. We expect that many of these same issues are keeping some of our clients up at night as well.
Industry:

To our clients and friends,

I am pleased to provide you with the West Monroe Partners’ Energy & Utilities Newsletter for the first quarter of 2013. I hope your year is off to a productive start. There are many issues—associated with advanced technologies, regulatory strategies, and broader business strategies—that  are currently top of mind for our consulting team here at West Monroe Partners.  We expect that many of these same issues are also affecting our clients. In our quarterly newsletter we seek to provide some insight and perhaps start a dialogue on key issues facing our industry.

In this issue, the topics we are covering include:

Data Analytics: We continue to hear about the explosion of data that is occurring across industries. In his article, John McNally addresses the ever increasing quantity and volume of measured events that advanced technologies are now providing to the Energy and Utilitiy industry. While the amount of customer and operational data continues to increase exponentially, the sources of the data is also particularly interesting to track, along with the fundamental question of what we do with the data now that we have it. The article discusses the “big deal” that enhanced business intelligence, informed by data analytics, has become for our industry and the long-term impacts this trend will have.

Analog Circuit Replacement: Dan Belmont  brings us up to date on activities in the telecommunications space that continue to point to the decline of the Public Switched Telephone Network (PSTN). In his article Dan looks at how carriers have realized that they cannot profitably shore up the investment in this crumbling infrastructure and are instead moving to more feature-rich broadband IP environments of VDSL, fiber, cellular LTE, and VOIP.  He also looks at current options for replacement of existing analog data circuits based on the different applications in utilities.

Performance-Based Ratemaking: In advance of a comprehensive webinar that Will McNamara and Jack Winter are hosting in late March, Will introduces the topic of Performance-Based Ratemaking in electric utility regulatory proceedings. In a number of state PUC proceedings, we have seen a reconsideration of how PBR is being used to encourage utility investments in advanced technologies for smart grid and energy efficiency programs; minimize risks and maximize opportunities for the investments; and increase overall management of the programs through the use of performance metrics.

Shedd Aquarium: Lastly, we have a case study of how West Monroe Partners helped the John G. Shedd Aquarium in developing a master energy roadmap. There are a number of “lessons learned” from this experience that we are happy to share with you, particularly as they relate to a three-step process we used in developing this roadmap: 1) Current State Profile Assessment; 2) Energy Opportunity Evaluations; and 3) Roadmap and Recommendation.

I hope you find the articles in this newsletter interesting and informative. If you have any questions or comments on any of the articles, or suggestions about future topics, please reach out directly to me or any of the authors.

Best regards,

Tom

Tom Hulsebosch
Managing Director, Energy and Utilities Practice
West Monroe Partners, LLC
Email: thulsebosch@westmonroepartners.com
Telephone: 312-980-9320

 

The carriers that have historically made an investment in analog telecommunications are now asking: How can we exit the analog circuit business and when can we eliminate support for this service?
Data is being created at such a rapid rate today that it’s estimated that 90 percent of the data in the world has been created in the last two years.
As advanced technologies are deployed by electric utilities pursuing broad smart grid initiatives, there is an increasing realization that traditional regulatory policies and ratemaking may be inadequate when it comes to striking the right balance between the risks associated with utility investments in smart grid technologies and the need to modernize what is clearly an aging energy infrastructure.
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