This is the second annual UtiliQ ranking of U.S. electric utilities – a list of the top 25 intelligent utilities based on a detailed analysis by IDC IDC Energy Insights and Intelligent Utility magazine.
UtiliQ was developed last year in response to a number of issues and challenges in the rapidly evolving electric utility industry. First, there was a desire to separate the smart grid hype from reality. Press releases alone do not make a company more intelligent. The UtiliQ ranking defines an intelligent utility as a company that applies information to energy, maximizing its reliability, affordability, and sustainability from generation to end users. Becoming a more intelligent utility requires more than just technology investments; it requires a real investment in people and processes too. Second, there was an interest in providing a way for utilities to benchmark their intelligence and measure progress against their stated goals and objectives.
A lot has changed since 2009. The influx of $11 billion in American Recovery and Reinvestment Act funding for smart grid activities, with awards announced last fall, ramped up utilities' plans for adding new intelligence to their operations. While the physical results of that funding have, in most cases, not yet come to fruition, it also required significant utility investment, and has also been factored into the mix.
Methodology
The current ranking is based on a company's performance using five quantifiable intelligence metrics:
- Productivity: An intelligent utility is an efficient utility (measured by revenue per employee).
- Renewable energy: An intelligent utility has a commitment to renewable energy as part of its resource portfolio (measured by renewable energy sales, renewable energy customers and renewable capacity defined as wind, solar, geothermal and biomass).
- Smart grid initiatives: An intelligent utility makes investments in developing smarter grids (measured by smart meter deployments and smart grid projects involving the T&D network).
- Demand response/energy efficiency (DR/EE): An intelligent utility allows consumers to manage their energy usage and costs (measured by the availability of energy efficiency, demand response and load management programs as well as percent of customers enrolled).
- IT investment: An intelligent utility invests in information technology to enable business process improvement (measured by IT spending as a percent of revenue and on a per-employee basis).
Utility companies get extra marks for sustainability. Utilities that issue annual corporate sustainability or social responsibility are awarded with extra weight added to their score, as are companies that regularly report to voluntary carbon disclosure organizations.
With the popularity of smart and intelligent themes, the UtiliQ ranks in terms of a utility intelligence quotient (IQ). Taken together, the metrics are used to create a company's intelligence quotient. Companies with IQs over 120, in this analysis, exhibit very superior intelligence compared with other U.S. electric utilities. Companies with IQs over 140 are at near-genius level compared with the rest of the industry. The analysis starts with a base of electric and combination electric and gas utilities in North America.
This year, the UtiliQ had the benefit of more comprehensive sources of data than last year. Data sources included SNL Energy, Edison Electric Institute, FERC, AWEA, and NREL. In the past year, organizations have picked up the ball and begun to track more utility efforts. As a result, the 2010 analysis is based on better data on renewable generation, as well as energy efficiency, demand response, and load management programs at the utilities. In addition, IDC Energy Insights research – in particular, an intelligent grid study conducted last fall – helped to round out the knowledge base.
The Rankings
The table presents the rankings for this year's UtiliQ. There were some changes since last year, besides having richer data to draw on. It is clear that some utilities rose in the ranks based on being awarded American Recovery and Reinvestment Act funding. Many companies that rose in the ranks are planning to contribute more than the 50:50 match for the ARRA. These are the same companies that tend to have developed a comprehensive intelligent grid road map.
UtiliQ ranking breakdown
|
2009 Rank |
2010 Rank |
Company Name |
IQ |
Productivity IQ |
Renewable IQ |
Smart Grid IQ |
LM, DR, EE IQ |
IT Spending IQ |
1 |
1 |
San Diego Gas & Electric |
142 |
118 |
122 |
174 |
116 |
154 |
2 |
2 |
Austin Energy |
135 |
118 |
143 |
142 |
116 |
131 |
4 |
3 |
PG&E Corporation |
134 |
121 |
128 |
169 |
110 |
115 |
7 |
4 |
FPL Group, Inc. (now NextEra) |
133 |
124 |
128 |
169 |
110 |
109 |
55 |
5 |
NV Energy, Inc. |
133 |
136 |
108 |
171 |
115 |
120 |
19 |
6 |
Salt River Project |
132 |
120 |
103 |
171 |
110 |
141 |
10 |
7 |
Pepco Holdings, Inc. |
131 |
130 |
104 |
161 |
110 |
126 |
3 |
8 |
Edison International |
130 |
117 |
129 |
160 |
110 |
121 |
8 |
9 |
American Electric Power Company, Inc. |
129 |
122 |
107 |
167 |
110 |
115 |
13 |
10 |
IDACORP, Inc. |
129 |
117 |
109 |
166 |
105 |
135 |
16 |
11 |
Northeast Utilities |
129 |
126 |
123 |
138 |
120 |
111 |
18 |
12 |
Alliant Energy Corporation |
129 |
119 |
119 |
164 |
116 |
112 |
9 |
13 |
Southern Company |
128 |
119 |
100 |
169 |
115 |
114 |
22 |
14 |
Portland General Electric Company |
128 |
123 |
113 |
161 |
115 |
126 |
38 |
15 |
Sacramento Municipal Utility District |
127 |
119 |
113 |
171 |
116 |
116 |
27 |
16 |
Central Vermont Public Service Corporation |
127 |
120 |
116 |
161 |
105 |
130 |
53 |
17 |
OGE Energy Corp. |
126 |
117 |
104 |
170 |
115 |
109 |
40 |
18 |
Clark Public Utilities |
126 |
136 |
142 |
100 |
110 |
140 |
14 |
19 |
Xcel Energy Inc. |
126 |
129 |
129 |
104 |
116 |
125 |
33 |
20 |
Duke Energy Corporation |
125 |
120 |
102 |
145 |
120 |
114 |
12 |
21 |
Constellation Energy Group, Inc. |
125 |
113 |
106 |
161 |
110 |
109 |
15 |
22 |
PPL Corporation |
125 |
110 |
106 |
164 |
110 |
120 |
11 |
23 |
DTE Energy Company |
125 |
114 |
102 |
171 |
110 |
114 |
5 |
24 |
Oncor |
124 |
122 |
110 |
168 |
105 |
117 |
74 |
25 |
Cleco Corporation |
122 |
121 |
100 |
167 |
105 |
116 |
| Ratings | |
| 90-109 | Normal intelligence |
| 110-119 | Superior intelligence |
| 120-140 | Very superior intelligence |
| Over 140 | Near genius |
Note: Overall IQ is an average of the IQs for productivity; renewable energy; smart initiatives; and LM, DR, EE; and IT investment.
Source: IDC Energy Insights and Intelligent Utility magazine, 2010
Looking Ahead
Companies that want to make the list or improve their position should focus on the following strategies and investments:
- Partner with the customer. Recent customer backlash in some areas is in large part due to insufficient communication with the customer. Develop a b communications plan to make the customer aware of the long-run advantages of intelligent investments and use pilot programs as a testing ground for customer partnership.
- Drive company cultural change. Becoming a more intelligent utility has a lot to do with people. Your employees need to understand your company's vision, your strategy for getting there, why it's important to all major stakeholders – including customers and regulators – and what this all means to your employees on a day-to-day basis.
- Improve processes for both "lean" and "green." Efficient processes drive down the cost of maintaining the current environment and free up resources for innovation and growth.
- Make intelligent technology investments. Find ways to get the best return from your technology investments by ensuring that your spending on information, communications, and energy technologies is in line with the business.
Access the full IDC Energy Insights report here:
2010 UtiliQ Rankings: Top 25 Intelligent Utilities - Document #EI224340, August 2010
Related Research:
North American Intelligent Grid Utility Spending Forecast - Document #EI220896, December 2009
2009 UtiliQ Rankings: Top 25 Intelligent Utilities - Document #EI219691, August 2009
