S&C Electric: Smart grid as the foundation of a smart city

Mon, 2013-05-20 12:46 -- Jesse Berst


Michael Edmonds is a smooth and articulate spokesman for S&C Electric, the Chicago-based provider of electric power equipment and services for utilities. The British accent certainly doesn't hurt, but he can also lean on many years in the sector in senior positions. In the 90s, he ran a firm called Power Technology Incorporated that was eventually purchased by Siemens. For the next three years he ran Siemens' energy management business (in simplified terms, the software in the control centers of electric power transmission and distribution networks).

Michael left school at 16 to join the UK Navy, and then eventually returned to college for a degree in electrical engineering. He started out designing ships and submarines and oil platforms before making his way into the electric power industry.

Although Michael cites Sydney and Brisbane as his favorite cities to visit, he says he's come to love Chicago as a place to live. He resides downtown and when the weekend comes, "I don't need to drive unless I want to -- it's all right here and there's always something going on." He does admit that when he retires, it's likely to be "someplace a bit warmer like Miami."

Today Michael overseas all of S&C Electric's product management as well as its brand management and messaging. More than any other single company, S&C is known for its ability to build a "self-healing grid." It is also active in other cutting-edge technologies such as grid-scale energy storage (batteries). Michael leads the employee-owned company's new technology decisions, including whether to build or whether to buy. When he's not talking with forward-thinking technologists, he's often talking with forward-thinking clients, giving him a great view of where things are headed. As we spoke, I was particularly interested to hear that:

  • Cities like Chattanooga, Tennessee are successfully using their smart grids as a recruiting tool to attract new businesses to town.
  • He thinks the North American market is near the tipping point. Now we just need to gather up the success stories and make them available to other cities.
  • S&C Electric has gone far beyond its roots in equipment to become a services and solutions company too.

You can read more below.

Jesse Berst – Chairman, Smart Cities Council
May 2013

When did S&C start to realize that the smart grid had great relevance to the smart city?

We started connecting the dots about three years ago. First internally and then for customers. And the focus around smart cities is continuing to grow. It's the same dots, but a different approach, a different deployment. So the smart city is something you need to think of as its own ecosystem.

Why the increasing attention to smart cities?

We are seeing it especially in cities that own their own utility. They answer directly to their residents for benefits. They can make decisions more quickly and they can consider societal benefits in doing so. The situation is more difficult for investor-owned utilities, which have to get regulatory approval.

Why should the city care about the smart grid?

You need maximum availability of your power grid just to keep your basic functions going, the things that allow society to work – alarms, pumps, freezers, traffic lights. In one city they are putting backup generators for the traffic lights near big intersections because power outages were creating gridlock. But another way to do it is to have a robust, self-healing grid that minimizes outages.

Cities have to compete for jobs to provide a better lifestyle for residents. For instance, Chattanooga, Tennessee used its upgraded grid to attract business. A big call center moved there because they have good fiber optic conductivity and a very reliable grid.

It used to be when Chattanooga was competing for a factory, the factory would ask for a two-source power supply to avoid downtime. That is very expensive to build for one customer. But now the city can say "how would you like a seven-source power supply?" because the city's smart grid can reroute power from different sources if an outage occurs.

What stands in the way of rapid adoption of smart cities technologies?

In North America, one factor is a regulatory framework for investor-owned utilities. There is a disconnect. Some regulators don't seem to realize the cost of outages to society and to business. In Illinois, for example, they are busy upgrading roads and railways, but they don't want to pay to upgrade the grid infrastructure.

As an industry, we have to do a better job of building the business case and quantifying the benefits. Once they been educated, the regulators often agree with the need for modernization.

Have you seen any creative ways to solve the financing challenge?

We are in discussions with a partner to provide financing to customers so they can lease or rent it from us. Over the past few years we've made a big switch to stop talking just about product features and start talking about solutions. And part of a total solution is the financing.

Has a smart cities market hit the tipping point?

We still have a few years to go. For instance, in Brazil they are still grappling with smart meters, they are still mired in that first step. In Europe, the market is driven by the mandate to integrate renewables. They do not have the proper controls and safeguards in their distribution grids. So cities will have to solve that technical problem in order to bring in renewables.

But I think North America is getting near the tipping point. We need to gather success stories and start to infect other cities with that knowledge. If we do that we can definitely get traction, but we need a roadmap to help them.

How important is the smart cities market to S&C Electric?

It is a major theme and a long-term intention. Right now we are updating our five-year strategy and we are realizing that we have a two-speed business, utilities and non-utilities. They have different influences and different sales cycles. So we are building out separate branding channels and web pages.

What does S&C Electric do better than any other company?

We make the power grid self-healing and reliable.

When S&C Electric wins in a competitive situation, why does it win?

We're not going to win on lowest cost but on best value. People trust the caliber of our equipment and have great comfort in our support.

Are there any common misconceptions about S&C Electric in its capabilities?

First, we're bigger than most people realize. Second, people know us very well for the products we make. But we also have many service offerings. We do engineering studies; we do engineering, procurement and construction. We deliver solutions not just widgets.

What are some favorite smart city projects you have seen so far?

I am impressed with Enmax in Calgary. It has been a slow burn, but they are steadily improving their grid one step at a time. And they are tracking how much they are saving for their customers with those improvements and letting customers know about it. They started back in 2003 and got the regulator to agree to let them increase their capital expenditure a little if they could improve reliability by 30%. Now that they have dramatically improved their longer outages, they are shifting their attention to reducing or eliminating momentary outages.

Likewise in Naperville, Illinois, they have a steady, gradual program of moving power lines underground and making other improvements.

And of course Chattanooga, Tennessee where their smart grid has already saved them millions due to reduced outage times during major storms -- and where it has made it easier for them to attract business.

What is the single most important thing city leaders should do today to position their cities for leadership and success?

A group hug. The mayor or the head of the municipal utility needs to develop cohesion between city leaders and get widespread support. They need to become champions of economic development and promoted to the city.

Next is to develop a strategy. Once you've got a strategy, you can decide whether to do it alone or to bring in a consulting firm to help you manage the project.

What you want city leaders to know about S&C Electric?

We are a stable, reliable partner not a flash in the pan. We'll be there, we'll make it work. We're foundational in cities around the world and were committed to their long-term success.