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