IBM Global Business Services
IBM Master of Business Change
Scott Prochazka
with CenterPoint
Energy Smart Meter
and Grid Deployment
The Opportunity:
Improve Consumer Energy Management,
Reliability and Environmental Impact through a
New Vision for Energy Delivery
Highlight
Under the leadership of COO and IBM
Master of Business Change Scott
Prochazka, CenterPoint Energy has
installed more than 2.2 million smart
meters throughout the greater Houston
area and is currently building an “Intelligent
Grid,” outfitting the existing infrastructure
with sophisticated sensors, automated
switches and other distribution automation
equipment. These enhancements will
enable the company to optimize energy
delivery, reduce outages, shorten repair
cycles and give consumers greater control
over their energy use.
Thomas Edison invented the first mass market light bulb in the late
19th century, and if he were here today, he’d see an electric grid that
hasn’t changed much since his time. While today’s grids are bigger,
and serve many more people, the way they operate is fundamentally
the same. For the most part, that hasn’t been a problem, as electricity
is delivered to millions of Americans at all hours of the day, every
day. But as our nation and demand for electricity grows, the time has
come for a smarter electric delivery system, one that addresses the
major shortfall of our current grid: a lack of two-way management and
communication.
Imagine shorter, less frequent outages; or a system that might even
predict and eventually prevent some outages. Imagine being able
to control your home’s appliances that use the most energy, or your
business’ energy use from an Internet connection anywhere.
CenterPoint Energy’s Action: Intelligent Grid and Smart Meter Deployment
It is that possibility CenterPoint Energy envisioned when it embarked
on its smart energy technology project. The company installed its
first of more than 2.2 million smart meters in 2009 and, aided by a
$200 million Federal Smart Grid Investment Grant, completed the
project just over three years later. The grant is also helping with
the development of an intelligent grid that will work in conjunction
with the meters to give consumers more reliable electric service.
By deploying a system of smart energy technologies, the company
will be able to better monitor the electric grid, respond to problems
more quickly and gain the grid intelligence to avoid some problems
altogether. Enabling new technology at the consumer level puts more
control and choice into consumers’ hands.
The first goal was to enhance service for CenterPoint Energy
customers. By communicating directly with the smart meter, the
company is able to automate routine service orders, eliminating the
need for a field technician to physically visit the meter. This leads to
much faster connection and disconnection of service, as well as remote
meter reads, so meter readers no longer have to access a customer’s
property.
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The meters provide specific benefits to individual consumers.
Consumers can monitor their energy consumption more
frequently and in greater detail via a web portal, helping them
take action to save energy and reduce their bills. These can
include small adjustments to their thermostat or running their
laundry or dishwasher at night, if their electric provider offers
time-of-use rates.
This focus on reducing energy consumption has implications
beyond the consumers’ wallet. Lower consumption reduces
greenhouse gas and other environmental impacts of electricity
generation. Automation of routine service requests, such as
connection and disconnection, also reduces the number of
CenterPoint Energy vehicles on the road. As a result, the
company could save as much as 300,000 gallons of gasoline
per year and could also produce 2,600 metric tons fewer
carbon emissions per year.
The program was deployed with a strong focus on
communication, education and advocacy. CenterPoint Energy
launched the program with extensive media and grassroots
campaigns to educate customers and employees on the
benefits of the new systems. Advertising and direct customer
communications were augmented by media relations, web and
social media.
CenterPoint Energy extended no less effort to educate and
motivate employees to embrace the technology. At each point
of change, employees were engaged to help them understand
the change, know why it would benefit themselves and
consumers, and see how they could help make it a success.
More than 2,000 employees completed training to become
smart energy “ambassadors” to their family, friends, neighbors
and communities. The message was not one of incremental
change, but instead focused on the fundamentals of how
CenterPoint Energy would run their business in the future.
This approach was extended to critical vendors within the
transformation process. IBM, for example, was a key vendor
in leading the change and providing critical information
technology and consulting services.
CenterPoint Energy is now working on the next phase, called
the “Intelligent Grid,” or distribution grid modernization.
Using line sensors and remote switching, CenterPoint
Energy will be able to detect problems and, where possible,
reroute power to minimize disruption to customers. While
similar technology has long been utilized in high-voltage
transmission lines that bring electricity from power plants
into the substations, this project brings this technology to the
lower-voltage distribution power lines that serve residential
customers, thereby vastly improving uptime and reliability
throughout the customer base.
With a smart meter as the hub, consumers will be able to
create their own home area networks, which will connect
digital devices, such as computers, televisions, security systems
and “smart” appliances. They can then monitor and manage
energy use in real time as well as remotely monitor and
control thermostats and other smart electric appliances. As
consumers use this smart technology to manage consumption
and the related costs, the environment could benefit through
less need for additional electric generation. The smart grid
also makes distributed generation a more viable option, and
creates a variety of new opportunities. Using the smart meter
technology that CenterPoint Energy now has in place, solar
and wind energy generated by consumers can be sold back to
the grid. This surplus energy means less demand for largecapacity power generation, again benefiting the environment.
Outcomes and Achievements for an IBM
Master of Business Change
CenterPoint Energy has executed over four million automated
transactions to date and with an associated reduction in truck
rolls. With the new system in place, electronic service order
success rate is 97 percent and remote meter reading success
rate is over 99 percent. As previously stated, the reduction in
trips has reduced fuel consumption, traffic congestion and
carbon emissions.
Consumer education and engagement activities have also
been successful. More than 600,000 Texans now get more
frequent, detailed information on their electricity use from
the Smart Meter Texas web portal, either directly themselves
or indirectly, for example in an email from the Retail Electric
Provider who sells them the electricity that CenterPoint
Energy delivers. Several innovative engagement programs
have been launched to great success, including a “Biggest
Energy Saver” contest designed to encourage customers
to use their meter data to save on their energy bills. The
top 10 percent of contestants in 2011 averaged 26 percent
savings with the Grand Prize winner reducing his electricity
consumption by 36 percent. Another program added in 2012,
the “Lighten Your Load” sweepstakes, saw ten events over the
summer to test the ability to reduce peak demand on short
notice through voluntary consumer efforts, with participants
reducing their electricity use by 5 percent on average during
peak demand events. In CenterPoint Energy’s 2011 annual
survey of 500 customers, the overall approval rate for smart
meters was 80 percent. The 2012 survey will be completed by
year’s end.
CenterPoint Energy’s successes have not gone unnoticed
in the global energy marketplace. Company leaders are
frequently asked to speak at industry events, often entertain
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foreign delegations interested in CenterPoint Energy’s
unique approach, and are widely lauded as leading the
industry into the future with their example.
Reflects Scott Prochazka, CenterPoint Energy COO and
IBM Master of Business Change, “I find it exciting to be
pushing the envelope of technology and value in such a vital
industry. While helping CenterPoint Energy be more efficient
and effective is a great achievement, helping Texans save money,
have more choices, and have more reliable electricity is even
more gratifying. These achievements not only make me and the
CenterPoint Energy team proud, it also helps pave the way for
additional, value-creating grid modernization enhancements in
the future.”
For more information
Please visit:
ibm.com/gbs/mastersofbusinesschange
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December 2012
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