Duke Energy Corp. and Progress Energy Inc. announced in January that both companies’ boards of directors have unanimously approved a definitive merger agreement to combine the two companies in a stock-for-stock transaction. The combined company, to be called Duke Energy, will be the largest U.S. utility, with:
- Some $65 billion in enterprise value and $37 billion in market capitalization,
- The country’s largest regulated customer base, providing service to some 7.1 million electric customers in six regulated service territories: North Carolina, South Carolina, Florida, Indiana, Kentucky and Ohio,
- Some 57 gigawatts of domestic generating capacity from a diversified mix of coal, nuclear, natural gas, oil and renewable resources, and
- The largest regulated nuclear fleet in the U.S.
“Our industry is entering a building phase where we must invest in an array of new technologies to reduce our environmental footprints and become more efficient,” said Jim Rogers, Duke Energy chairman, president and CEO, in a press release. “By merging our companies, we can do that more economically for our customers, improve shareholder value and continue to grow.
“Combining Duke Energy and Progress Energy creates a utility with greater financial strength and enhanced ability to meet our challenges head-on.”
Progress Energy Chairman, President and CEO Bill Johnson said the combination is a natural fit.
“It makes clear, strategic sense and creates exceptional value for our shareholders,” Johnson said. “Together, we can leverage our best practices to achieve even higher levels of safety, operational excellence and customer satisfaction and save money for customers by combining our fuel purchasing power and the dispatch of our generating plants. This merger also provides predictable earnings and cash flows to support our dividend payments to shareholders.”
When the merger is completed, Rogers will become executive chairman of the new organization. In this role, Rogers will advise the CEO on strategic matters, play an active role in government relations and serve as the company’s lead energy policy spokesman.
Johnson will become the new company’s president and CEO.
Both Rogers and Johnson will serve on the combined company’s board of directors, which will be composed of 18 members: 11 designated by Duke Energy’s board of directors and seven designated by Progress Energy’s board of directors.
The combined company will be headquartered in Charlotte, N.C., and will maintain substantial operations in Raleigh, N.C.
The companies expect to close by the end of 2011.
IEEE Initiative Makes Color Books Easier to Use, Revise
Carey J. Cook, IEEE
The pace of technology innovation has prompted the IEEE Standards Association to update its Color Books series with more up-to-date information and to give the IEEE more flexibility for making timely revisions.
Each of the current 13 books contains information, some of it current and some worthy of revision. Moving to a chunked information approach is in line with current trends. During the past decade, the publishing world has moved toward an online model because it makes information much more accessible to users.
Several of the Color Books are in wide use by engineers in electric utilities including: the Emerald Book on powering and grounding sensitive loads; the Orange Book on emergency and standby power systems; the Buff Book on protection and coordination; the Brown and Violet books on power systems analysis; and the Gold Book on reliability. The Yellow Book covers maintenance, operation and safety of industrial and commercial power systems.
IEEE’s initiative will replace the original Color Books with some 55 standards covering specific technical topics. Converting them into these smaller standards will allow power systems engineers to select only the information they require while still being confident that it:
- (1) Conforms to current best practices,
- (2) Is technically correct, and
- (3) Reflects the latest technologies.
The new format also will reduce the opportunity for duplicate material to appear, which occasionally occurred in the original series.
The project will be managed by eight working groups, including one that will develop an introductory book to serve as a detailed index to the topics covered by the 55 dot standards. The remaining working groups will develop the actual dot standards. Because there are parallels between a large industrial electrical system and small utility distribution systems, many of the new standards will be useful for those who generate, transmit and distribute electricity to end users and manufacturing facilities.
Carey J. Cook has been with S&C Electric Co. 33 years and is a senior strategic marketing manager in the Strategic Marketing Group. Cook is chairman of the Technical Books Coordination Committee in the Industrial and Commercial Power Systems Department of the Industry Application Society with IEEE.
GUEST COMMENTARY
Smart Grid Interoperability—Adopting Strategies Today for a Smarter Tomorrow
Tim Wolf, Itron Inc.
While the industry is in the midst of unprecedented change, utilities envision migrating from an advanced metering infrastructure (AMI) to the broader applications of a smart grid. The two go hand in hand: The shift to a smart grid focus will transform the way utilities manage and deliver energy and the way consumers use it.
But do we really comprehend how the underlying network architecture needs to support advanced metering requirements, comprehensive smart grid applications and objectives?
Utilities seek a smart grid communications architecture that will support multiple applications and connect millions of devices that go beyond smart meters. These include distribution automation devices and sensors, distributed resources, electric vehicles, smart appliances and other technologies that proliferate into the market. Equally important, utilities want an architecture that will enable them to run multiple applications—AMI, distribution automation, demand response—atop a common, secure, world-class network infrastructure instead of through a meter-centric AMI headend.
In response to the multi-application smart grid challenge, some technology companies and utilities understand how to build a viable architecture that takes advantage of industry standards to lower the total ownership costs for utilities while meeting current business case requirements.
To future proof the smart grid, the core network infrastructure must be adaptable. The smart grid represents a continuously evolving network of networks and system of systems that must support utility and customer-facing smart grid applications. This is critical to a utility’s overall smart grid strategy to ensure a strong return on investment and to avoid stranded assets or technological obsolescence.
From improving distribution system efficiency and reliability to empowering customers to control energy and costs, today’s advanced metering networks must mature into interoperable, multi-application networks that are scalable, reliable, secure and affordable.
Itron is collaborating with Cisco to design a unified, enterprise-class network architecture that is secure, simple to deploy and manage, and extensible to multiple utility applications. This alliance brings the world’s leading smart metering and networking communications suppliers together to deliver the definitive 21st century Internet protocol (IP)-based communications and control platform for the smart grid market.
The companies’ engineering teams are co-developing a reference design that defines a standard for smart grid field area network communications using the most advanced version of IPv6 and other applicable open standards. This, for the first time in the smart metering and smart grid industries, will create an open and interoperable network stack from top to bottom while fully supporting proposed guidelines from the North American Electric Reliability Council (NERC) and National Institute of Standards and Technology (NIST) cybersecurity requirements.
Once completed, the reference design will be made available to other smart grid technology providers to implement within their devices and applications. Driving this widespread adoption of open standards among vendors is the only way to solve several challenges hobbling smart grid progress. First among those challenges is optimizing the ownership costs of the systems by standardizing certain aspects of the architecture such as network operations and network security and enabling a much wider range of applications and devices to run over a common network architecture.
This partnership will open the grid by employing industry standards and by seamlessly connecting any smart device or application within the network to transform the electric grid from proprietary and closed to open and flexible. This openness will improve the overall economics and business case for far-reaching smart grid implementations by reducing utilities’ total ownership cost and by providing a highly adaptable platform that enables real-time and pervasive monitoring and control for grid operators and consumers.
Innovative technology provides the foundation for a new way energy is delivered. The key to extracting long-term value out of the connected grid is to open it. The broad industry adoption of open standards will reduce the total ownership cost, enable true interoperability and standardized security and unleash a wave of innovation for emerging products, services and programs that will create new value streams to utilities and customers. This is vital to ensuring that utilities are building out a smart grid that unites utilities, consumers and technology.
It is time for AMI architecture to grow up and become smart grid architecture.
Tim Wolf is director of marketing for consumer outreach at Itron.
EYE ON EUROPE
Telvent Goes to Moscow
The Inter-Regional Distribution Grid Co. (IDGC) of Centre Moscow will implement Telvent’s advanced distribution management system (DMS) solution to further improve the reliability of its electrical grid.
IDGC is one of the largest utility providers in Russia, serving 11 regions throughout the central and western parts of the country. With Telvent’s solution, IDGC gets full network monitoring and control in one complete system to plan, design and operate a smart grid. IDGC will integrate Telvent DMS with existing components of its infrastructure, including supervisory control and data acquisition (SCADA), outage management system and customer relationship management software. This integration will provide a visual and detailed model of the distribution network to achieve advanced network analysis, fault management and energy analysis on a local and central level.
“As utilities throughout the world upgrade to a smarter grid, more emphasis is being placed on maximizing the benefits of distributed management systems,” said Telvent CEO Ignacio Gonzalez. “Telvent is proud to partner with IDGC and provide smart grid solutions for its 15 million customers.”
IDGC and Telvent began the first of a three-phase pilot program in November and expect to complete the DMS implementation by January 2012.
NorthWestern Energy Avoids Data Freeze
David Ridderikhoff, Avineon and Jolene Sestrich, NorthWestern Energy
NorthWestern Energy (NWE) serves some 656,000 customers throughout Montana, South Dakota and Nebraska. The company maintained homegrown records of existing facilities that it needed to align to Montana’s state cadastral landbase. [Editor’s note: A cadastral landbase is a written, publically filed lay of the land—both natural and man-made—that impacts infrastructure, all according to data in the public records, including survey statistics.] The cadastral landbase included data about property lines while the homegrown NWE information had updates such as new subdivisions, field notes and dimensions for underground facilities.
Aligning the two data sources required careful oversight because data from both systems had to be preserved to ensure the company was working with the most accurate data. The challenge of consolidation was in handling data that NWE needed on a day-to-day basis. Previous attempts yielded a freeze, suspending on-going information updates while data was being manipulated. This required updates to be captured after the manipulated data was returned.
Along with avoiding data freeze, NWE had additional goals for the project, including the creation of a pole-span model of its overhead electricity coverage, eliminating redundant information, reconciling field-collected geospatial information system (GIS) coordinates for its existing poles, and correcting connectivity and establishing service connections for its customers. Along with the logistics of managing a multitask project on live data, the changes to the existing data needed to be compatible with Intergraph’s G/Technology platform. NWE had upgraded to this data management software a year earlier.
NWE recently implemented the G/Technology platform to standardize and streamline its data management and was migrating data from its previous FRAMME system to the new framework. Once the data migration was underway, NWE began evaluating GIS service organizations that could provide smooth data cleanup and realignment without disturbing the daily workings of its electricity and natural gas units. Through Intergraph, NWE learned of information technology and geospatial services provider Avineon Inc.
NWE contracted with Avineon for a small project to capture its 500 kVA network to G/Technology, a project that was quickly expanded as Avineon began to explore the possibilities of manipulating G/Technology within Oracle database software.
Avineon’s first step in the expanded project was to create a snapshot of NWE’s existing data to serve as a working file. Avineon then migrated the G/Technology data from the snapshot of each district to Avineon’s production environment. In parallel, the cadastral landbase was referenced with the NWE homegrown landbase while eliminating duplicate information and keeping only the NWE specific information. Technicians also splashed the global positioning satellite (GPS) locations into their production environment and confirmed the locations of existing poles, with classifications such as size and diameter. GPS data was captured, and coordinates and pole numbers were aligned to the existing structures. Using the combined data, Avineon realigned and converted NWE’s electrical overhead facility model from the previous location and format to a pole-span model, which reflects lines that run from pole to pole with a relationship to their attaching structure, providing an accurate means by which NWE can track assets to a physical location. This updated data will enable NWE to improve its customer responses and anticipate what materials and manpower will be needed in the field.
During the data cleanup and realignment process, the company introduced a new methodology for updating and converting data that dealt specifically with G/Technology’s Oracle database. Where FRAMME, the old software solution, used a computer-aided design (CAD) system to maintain its graphics and Oracle to store attribute information, G/Technology graphics are generated directly from Oracle spatial coordinate and attribute information. Avineon developed a process to extract the edits performed and created scripts to communicate these changes to the G/Technology.
One of the biggest challenges was managing the data backlogs. After creating a snapshot of NWE’s database for a given district, the company performed a comparison to capture differences and gaps. The physical changes—such as adding a new subdivision, deleting removed transformers and adding new poles—presented the biggest obstacles to properly maintaining and updating the database. NWE was still using the homegrown landbase, and the new system needed the original and new locations of related facilities due to the realignment and conversion process. Avineon used scripts to update the production database to provide deletes, attribute/component updates and graphic relocations.
Once the company developed these scripts, it performed a quality assurance and quality control test and then sent the scripts to NWE, where they were put into production. Capturing the backlogs, updating the realigned data and providing new scripts to NWE was handled within two-weeks to reduce the overall GIS backlog of the particular district. NWE is rolling out updates for each district and synchronizing all of the data into the system. Due to the data cleanup and alignment, NWE already has seen an improvement in data integrity, and the company can respond to customer calls, provide feedback and update the facility information in a more timely matter.
David Ridderikhoff is senior project manager with Avineon. Jolene Sestrich is manager of data systems with Northwestern Energy.
COMMENTARY
The Governator Exits Stage Left
Kathleen Davis, Senior Editor
At times, he angered his own party. He was a handful—a big, brash personality difficult to compete with. He was a source of pride and frustration for Californians, sometimes at the same time. And he is the Governator no more.
Monday, Jan. 3 marked Arnold Schwarzenegger’s “hasta la vista” to politics in the Golden State. He is no longer a governor. He’ll have to return to his career as matinee god.
Schwarzenegger blew into office a little less than eight years ago when nearly the entire state hated then-Gov. Gray Davis, and headlines such as “Pacific Gas and Electric to Gov. Davis: We’re Busted” were regular bits of ink in the trade presses. Deregulation had taken the state—and the state utilities—to the cleaners, and Davis was left holding the bag, whether he was at fault or not.
Schwarzenegger swept in like the action hero he often portrayed—trying to save the day for the state and for the state of energy.
During Schwarzenegger’s big rescue, I worked for Electric Light & Power magazine and wrote a piece on Schwarzenegger’s energy plans. (You can read it online by typing this long link into your browser: https://elp.com/index/display/article-display/195657/articles/electric-light-power/volume-81/issue-12/industry-news/arnies-new-plan-the-gubernator-sets-sights-on-energy.html.) At that time, the only thing we were arguing about concerning Schwarzenegger was whether to use “governator” or “gubernator” as his nickname. (Governator won, but I still have a soft spot for gubernator.)
Whatever the nickname, though, Schwarzenegger was going to fix it all.
“I will restore stability to our energy system and stimulate private investment in electricity generation and transmission,” the governor’s campaign website stated at the time.
He had a multipoint plan that included:
- Reforming the 13 state agencies with sway over the markets,
- Creating a regulatory structure based on “other states and the FERC standard market design” while eliminating incentives for “gaming” the regulatory system,
- Investing in natural gas and transmission capacity,
- Encouraging conservation,
- Creating reserve requirements for generators, and
- Addressing “overpriced legacy power purchase agreements.”
How much of that he did or was necessary depends on whom you ask. No one talks about power purchase agreements anymore. The regulatory structure in the state hasn’t changed all that much, but there has been movement in transmission capacity and conservation. And he combated global warming like no Republican in history, in or out of the Golden State. He was even named 2010 Green Governor of the Year by the Beautiful Earth Group and Opportunity Green for his efforts.
When accepting the award, Schwarzenegger said, “California is showing the world that you can protect the environment and grow the economy at the same time. We are creating a new economic foundation for the 21st century built on clean fuel, clean energy and clean cars that is turning California into the green capital of the nation and the world, and I couldn’t be more proud of these accomplishments.”
Despite the California greening, the BBC reported on his last day in office that Schwarzenegger’s “political star has faded” since he came onto the scene. Approvals hovered in the 20 percentile range at his exit (close to Davis’ in 2003). Whether you think Schwarzenegger was a driving force for energy change or was stagnated by other issues no longer matters, except in his legacy. He handed over the state driver’s seat to Democrat Jerry Brown, a former governor who first served from 1975 to 1983.
It is likely that Brown will continue down Schwarzenegger’s greening power path (the environment and clean energy jobs were a part of his eight-point campaign platform). There is no word whether Brown will have as fabulous a nickname. Granted, in Brown’s first round as governor, he was called “Governor Moonbeam” by one journalist for his liberal policies. Somehow, that just doesn’t compare. In the nickname arena, the Governator will always reign supreme.
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