Utility CEOs Talk Innovation in August's PUF

AEP's Nick Akins: 

The technology drive should be focused on addressing the needs and desires that customers have. How we can expand into the economy and provide services in a different way? The professionals who innovate in that space are in high demand, but we have to add them to our team. 

We just initiated a project called Spark Tank, which is focused on generating ideas about how to advance and expand the benefits we can provide for our customers. That is a key focus for us.

We also focused on a cultural transformation. Our culture five years ago was much more autocratic than it is today. We have cultural initiatives underway that we are hoping support a culture of innovation and collaboration. 

One was called "Power Up and Lead" which is training to help people understand different work and leadership styles, how to interact with one another, and how to work together as teams. Nearly all of our employees - seventeen thousand - from every group and all levels of the organization have completed "Power Up and Lead" so we have a common understanding and nomenclature around how we want to engage. 

We also have eight different employee resource groups focused on supporting and celebrating diversity in our employee population - from military veterans to women leaders to the LGBT population. That's been very helpful to make sure that everyone knows that everyone is welcome to work at AEP and that we want diversity. 

If you are going to get ingenuity and creativity, you'd better have an open collaborative workforce to support it. 

Ameren's Warner Baxter: 

A culture of innovation has to start from the top. You have to have your leadership aligned around having the best culture available to deliver for your customers. That includes delivering innovative ideas. That's number one. 

The second thing is that innovation is truly for everyone. Innovation is not done with one team. You have to invite your coworkers to be innovative. It's important to say that it's safe to innovate. It's not only safe to innovate, but you have to have an expectation to innovate. Ask what if and why not, as opposed to saying it's just too hard. 

Ultimately to get that culture, you not only have to engage differently with your coworkers, but you have to then start moving. We as an industry used to wait to move forward on innovative ideas until we were ninety-five percent certain that they were going to work. We need to start living more in a seventy-thirty world. 

The seventy-thirty world requires you to check and adjust more. You have to build that culture that says it's okay to be able to live in a more fluid and agile atmosphere. 

Edison International’s Pedro Pizarro: 

One of the early use-cases was looking at how we forecast estimated restoration times when we have an unplanned outage. That's a really hard thing for utilities to do.

We all are equally bad at it. I believe the models from a year ago had about a twenty percent accuracy rate. We had to decide, where is the outage? What happened? We didn’t know. We found out later that a car hit a pole, or that a transformer failed.

The public doesn’t understand that. If we tell a customer, "well, we think it will take us five hours, but that's plus or minus a lot," we have a twenty percent accuracy rate.

We then asked for outside help, too. We asked ourselves, "are there big data resources? Are there big data and data analytics tools we can bring that can help improve it?"

That took about three months. It was hard, but it was not a two-year project. We were able in that space of time to rewire. We had data out there. We didn't create new data. We found additional data sources that we thought were relevant. We looked at the correlations behind that.

We created the pipes to collect that data, and we developed some new forecasting models within that three-month period. That allowed us to increase that to sixty percent accuracy. Sixty percent is still just a little better than tossing a coin, but it actually is a significant improvement.

Exelon’s Chris Crane:

One of the most innovative things that we have done around energy storage and energy management systems, is the formation of a company called Volta. The purpose is to commercialize DOE’s national lab technologies at a faster pace. They have a very deliberate mechanism to do that. We were the seed company to stand it up. We worked with Argonne National Lab to get it approved.

We're getting other founding shareholders, equity holders, to come in and invest in Volta. There are some large companies that are very interested in it.

As we do that, there'll be a special-purpose entity where the companies can come in. It’s about driving the technology, leading the application, and crafting our future. Versus our future being crafted for us, which is what happened around fracking.

I think the biggest wake-up call we had as a company, and the biggest wake-up call as an industry, was that none of us saw the extraction of natural gas would be happening at the rate that it did, with the success it had. We weren't involved. We have to be involved with the next technology that is going to change our business model.

Southern Company’s Tom Fanning

People typically say, "Oh I need diversity in terms of race and gender." I don't think this is a check-the-box, solely a representation kind of diversity. We know that diversity in the broadest sense is much more than race and gender. It goes to sexual orientation and religion, and age, and national income, and all kinds of things.

What you want is not so much the check-the-box diversity in representation. You want what that enables: broader thinking. And that is a broader cultural spectrum. You want bandwidth.

We want broader context, judgment, skills, and experience. If we can broaden our cultural bandwidth, we build greater cultural vision and courage with which to see the future. Representation across the cultural spectrum is important to enabling that.

The constantly-innovating magazine for commentary, opinion and debate on utility regulation and policy, Public Utilities Fortnightly.  “In PUF, Impact the Debate.”

Steve Mitnick, Editor-in-Chief, Public Utilities Fortnightly

E-mail me: mitnick@fortnightly.com