Auditing Grid Performance Not Enough

Come summer and people in the utilities start panicking of power shortages and potential blackouts. Media begin to get energized around reports such as the one here. Old transformers, stressed grid, and the list goes on. One always hear diverse viewpoints - not the least of them is the assurance that things are not as bad they sound. Like it or not, a seemingly technical problem always sees its resolution through a PR gymnastic contest. The mantra is: As long as something bad does not happen, it is fine. I would like to pause here and ponder on this for a moment. What are we saying here? Isn't is almost like waking up in the morning and telling that as long as I am alive when I go bed, I am happy. Maybe in a philosophical or mystical sense, it is acceptable, but in real world, when we as engineers start looking at the world with these glasses, then we literally kiss goodbye to creativity, innovation, and ways to make our lives richer and better. How did we get such a mindset? More importantly, when have we made "not-as-bad-as-could-be" become equal to "as-good-as-it-can-get" in our utilities. One of the reasons this happens is when we choose mediocrity over excellence. It happens when we prefer status-quo over change. It happens when we don't do anything because no one else is doing. It happens when more people tell us what to do and control our destiny rather than giving us the choice and freedom to think and implement new ideas. And it happens when we forget who we are serving and why we are in the business. And I believe this is the crux of the problem. Some say utilities are being overly regulated and their performance measured in ways that are bordering ridiculous. Regulators believe if utilities do not handle themselves causing societal problems like the 2003 blackout, public policy makers have to intervene. Both have substance in the argument. Take the audits as an example. When there are too many people wearing the proverbial holsters and cop hat to dictate what they should be doing, the entire effort shifts to find ways to avoid them. Utilities do just enough to satisfy the regulators. This is plain and simple human nature. And more often than not, the ensuing list to keep regulators happy becomes long enough to be the "be-all" and "end-all" of all the projects that utilities can afford.

Result: Le's do just enough to satisfy the regulatory audits (NRC audits, NERC audits). By some "glue" let's make sure the grid does not fall apart in my watch.

If we could move away from the audit culture and engage is ways to engage in conversations that promote open distribution and sharing of information to continually serve to the customer's best interests; if utilities develop a price structure that puts the customer before shareholders, it is possible to work under a more powerful context of innovation and improvement. Utility industry has had its quirks. From big barons like Samuel Insull to Enron, we have gotten our regulators excited in a variety of ways. The truth of the matter is somewhere along the way the conversation within the utilities has shifted way too far from serving the customer to serving the shareholders without angering the regulators. Or may be, the conversation of serving the customer was never powerfully constituted as the inelastic demand behavior of consumers was a favorable field to fulfill the goals of corporate greed for a few. As is known, with the regulators, you don't get much credit from doing more than what's required - just like no one credits you if you are driving below the speed limit, but fines you if you are over. Simply measuring the cholesterol levels do not ensure a healthy heart. Similarly, periodic auditing is just the minimum. If it becomes burdensome, as is the case with smaller utilities, there will be hardly any resources left for the grids to improve. In such cases, government needs to let the market decide to fix the prices - an exhorbitantly high price of electricity will signal market condition and initiate a correction. Looking at the "because effect" of electricity, the consequences are too large to live with a grid that barely survives. While some may keep finding ways to prove that everything is fine, I wish it is possible for the rest to begin by addressing the perception (allowing those who believe - all is fine to be true). The perception is: grid infrastructure is old and needs to be made better. And it cannot be done by paying with the proverbial "minimum wage" mindset laid down by regulators. For as the PR pundit will tell, changing perceptions do change reality.

Bonus: JP's post hits right on this point.)