Electric Utilities

MAYOR’S OFFICE OFECONOMICDEVELOPMENTMAUI COUNTY

Electric UtilitiesThe Future Is Not What It Used to Be

Michael Mount Pace Global, a Siemens Business

Restricted © Siemens AG 2014 All rights reserved. usa.siemens.com/infrastructure-cities

Expectations Of Tomorrow’s Utility Customers Pace Global, A Siemens Business March 26, 2014

Restricted © Siemens AG 2014 All rights reserved.

Page 2 SEM / Pace Global

Pace Global, A Siemens Business that provides a wide range of energy advisory services to a large base of world wide clients

•! Acquired by Siemens in December 2011

•! 37 years serving a global client base with experience in over 60 countries

•! Pace expert staff has, on average, in excess of 20+ years of global experience

•! Over 40% of clients are Fortune 500 companies

•! Two primary energy advisory offerings to clients:

•! Energy Supply Management For Large Energy Users

•! Energy Consulting

•! Managing Energy Supply for more than 15,000 customer sites worldwide including

•! $15 billion in annual energy spend

•! 50 Billion kWh of electricity

•! 10,000 MW of peak electrical demand

•! 375 Million MMBtu natural gas consumption

•! 200 million gallons of liquid fuels

•! Reporting on more than 30 million metric tons of CO2(e) annually



Facility Intensive Energy Consumers

Our clients are large and small, utilities and non-utilities, large energy generators and users and others in the energy business

Mid and Upstream

Utilities Financials



Our expertise and services focus on energy and risks

Energy Planning and Risk Management

Energy Market and Commercial Advisory

•  Strategic & Resource Planning

•  Enterprise Risk Management

•  Energy & Sustainability Planning

•  Market, Commercial, and Regulatory Advisory

•  Infrastructure Development

•  Renewable Development

•  Energy Procurement and Risk Management

•  Utility Bill Management

•  Sustainability Reporting

Energy Supply Management



What will future electric utility customers expect?

•  Can we learn from history?



Does plain old telephone service provide a model for the future of electric service?

Plain old telephone service (POTS): based on 19th century technology requiring a pair of copper wires to each customer. . . . it was the only service available if you wanted telephone service.



Technology and customer demands have transformed telephone service in the last 25 years

Historical response of POTS service providers: •  Cellular service is unreliable and

too expensive •  Internet speeds required for VoIP

service is too expensive and unproven in mass deployment

•  Cable service infrastructure will be overwhelmed if you try and use it for TV, telephone and internet service



. . . and the results of technology, competition and regulatory transformation?

•  Two to three cellular subscribers in each household

•  Many households have no wired phone service •  Basic phone service is provided by cable, fiber,

satellite and, a few remaining POTS lines •  VoIP and Cellular are the new standards •  FCC is in the process of transitioning remaining

POTS to VoIP •  Companies are selling or abandoning POTS

lines in favor or new technologies



. . . and how does Plain Old Electric Service compare?

Plain old electric service (POES) based on 19th century technology requiring wires to each customer. . . . it was the only service available if you wanted electric service



and how have the POES providers responded?

Current response of many POES service providers to new technologies and evolving customer choices: •  Distributed energy sources are still too

expensive (on the mainland) •  Storage technologies are way too expensive

(on the mainland) •  We “the utility” are not responsible for

supply, we are just the wires guys(on the mainland), DER doesn’t really impact us



Will POES follow the path of the POTS?

•  Communication systems and power systems have many technology, safety and regulatory differences.

•  They will not follow the same path,

but . . .

we can learn from the telephone industry transformation, and the snail mail industry, and the horse and buggy industry and . . .



The Future of Plain Old Electric Service (POES)

• Technology will evolve, customer expectations will expand, and the rules, regulations and laws will change.

• Electric customers in the areas around the U.S. already receive and, everyone will eventually demand, continually expanding:

• Advances in technologies (DER, controls, storage, etc.) • Choices for price, quality and energy sources • Competition for their business • Connected and independent microgrids • Energy districts formed to collectively purchase or

generate electricity



The Future is in our hands

Thank You Michael Mount Vice President Pace Global, a Siemens Business Email: [email protected] Phone: +1 (203) 895-5150 www.paceglobal.com

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