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Episode #62: ‘Elevating Digital Utility Systems to the Cloud' with Barry Jones, Federal Information Assurance and Compliance [an Energy Central Power Perspectives™ Podcast]

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The ‘Energy Central Power Perspectives™ Podcast’ features conversations with thought leaders in the utility sector. Each two weeks we’ll connect with an Energy Central Power Industry Network...

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  • Dec 7, 2021
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As data has become as ubiquitous and essential to the power sector as electrons themselves, many utilities are struggling with how to handle the influx of information and how to best process it to create actionable improvements to their systems. While it may seem like an overused buzzword at this point, the guest on today’s episode of the Energy Central Power Perspectives Podcast knows the answer comes down to one key place in particular: the Cloud. But cloud-based applications and processing create new waves of challenges for which utilities: from compliance with industry standards to cybersecurity concerns to the sheer cost and logistics behind making these moves.

To help wade through this web of risks, costs, and hurdles, host Jason Price and producer Matt Chester bring in one of Energy Central’s key thought leaders on the topic, Barry Jones. Barry is an independent consultant who gets knee deep in information assurance, privacy and regulatory compliance, and cloud-based systems, having brought that expertise to everyone from PG&E to the U.S. Department of Energy. In this whirlwind of an episode, Barry will share with our audience what they should be tracking as they dive into the world of utility digitalization.

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Thanks to the sponsors of this episode of the Energy Central Power Perspectives Podcast: West MonroeEsriAnterix, and ScottMadden

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TRANSCRIPT

Jason Price: 

Welcome to Energy Central's Power Perspectives podcast, the show where we invite thought leaders in the energy and utility industry to share about their passion projects, solutions, and thought leadership. We're going all the way up to the cloud in today's episode with one of Energy Central's foremost experts on IT and OT systems on the grid. So we're excited to climb in for an incredibly timely and important discussion. My name is Jason Price of West Monroe, and I'm coming to you from New York city and joining me from Orlando, Florida as Matt Chester, Energy Central's community manager and podcast producer. Matt, are you ready for today's episode?

Matt Chester: 
You know I am Jason. I think we're in store for a great conversation and it's a topic that we haven't dived too deep into before. So I think there's a lot of good meat in the bone here.

Jason Price: 
Yeah, I agree completely. That's a topic we haven't discussed much on, like you said, but it's been really compelling and it continues to basically be a hallmark discussion in the halls at utility. So across the sector from conferences to news stories to webinars and more the concept of the digital utility has been hammered home to the point of almost losing its meaning, but digitizing utility operations is anything but an empty buzzword. We are seeing it throughout the industry and the popular press. Taking relevant systems to the digital realm is the key to unlocking many forward looking aspects on the grid from instantaneous supply and demand markets to real time detection of fault and outages, decentralized power generation and powered with a smart grid and so much more. These new opportunities require massive amounts of data collection and processing. And more recently utilities are seeking to do so with cloud-based applications, but simply taking these systems from onsite data processing centers, solutions that are on-prem at the facility and moving it into the cloud is easier said than done.

Jason Price: 
And mitigating potential risks, costs, and challenges is critical to making these important decisions. So these considerations can be enough to make your head spin if you're not already knee deep in the space. So that's why we wanted to bring one of the Energy Central's leading voices on the topic to help break it down for us. But before we introduce him to the podcast booth, we do want to thank and acknowledge our Energy Central partners who are making today's episode possible.

Jason Price: 
To West Monroe. West Monroe works with the nation's largest electric gas and water utilities in their telecommunication, grid modernization and digital and workforce transformations. West Monroe brings a multidisciplinary team that blends utility operations and technology expertise to address modernizing aging infrastructure, advisory on transportation electrification, ADMS deployments, data and analytics and cybersecurity. We want to thank Esri. Esri an international supplier of geographic information, GIS software, web GIS, and geo-database management applications.

Jason Price: 
We want to thank Guidehouse, a premier market research and advisory firm covering the global energy transformation. Thank you to Anterix, focused on delivering transformative broadband that enables the modernization of critical infrastructure for the energy, transportation, logistics, and other sectors of our economy. And thanks to ScottMadden, a management consulting firm, serving clients across the energy utility ecosystem, areas of focus include transmission and distribution, the grid edge, generation, energy markets, rates and regulations, corporate sustainability and corporate services. ScottMadden helps clients develop and implement strategies, improve critical operations, reorganized departments for entire companies and implement myriad initiatives. And now on today's guest, we're thrilled to introduce to our audience Barry Jones. Barry Jones is an independent consultant working to provide information assurance, privacy and regulatory compliance and cloud data and system expertise. He's provided direct advice to energy companies like Sempra Energy and PG&E as well as served as an expert voice to the US Department of Energy as they consider these critical issues.

Jason Price: 
Barry takes his time to share his viewpoints on these topics with the Energy Central audience, who aren't able to maybe keep up with the latest information. But you may have caught his popular article, posted in the community recently titled Recommendations for Next Generation Utility Technologies. Given that we wanted to dive into these critical topics for a podcast episode, we knew Barry was the right man to call up. So with that said, Barry Jones welcome to the Energy Essential Power Perspectives podcast. Let's start broad, from your position of advising and all things related to information systems being used across the grid. What changes are you observing in this sector?

Barry Jones: 
Jason, this is a great question. What I'm observing is that there's a discussion and actual projects and movement, whereas utilities and companies that provide the generation distribution, transmission of electricity and renewables, et cetera, generation through renewables are looking at moving their operational technology and their industrial control systems, which I call OT ICS to a cloud-based data centers, such as Amazon, Google, Microsoft Azure, and things like that. And the look at that is a lot of different ideas about it or purpose for cost savings for example, reliability, the idea that millions of computers in the data center can ensure the reliability of your applications and things. And so we're seeing some of that. There's some pros and cons to that, of course, including regulatory security and reliability, and some companies are further ahead along that curve. And some are still considering the value proposition

Jason Price: 
As we move away from a centralized system in computing to more of a cloud-based version of those operations. Tell our audience, are the utilities excited to be making this shift or are they worrisome regarding the loss of control and security? Just what is the general sentiment that you're experiencing in this space?

Barry Jones: 
This is the most important question in my mind, the consideration and that is what are we going to get at the end of the day? And so I would say I'm running into about a 50-50, half of the entities are excited about moving to cloud. They're looking at what are those services that they can get out of large data centers with combined computing power. For example, digital equipment placed in houses to charge, monitor electric vehicles or solar panels on houses, wind generators, et cetera, and all of that data and information being pulled back. And how can the utilities use that to make a more efficient system to control and monitor the existing load in times where maybe we have loss of hydro because of droughts. Maybe we have weather patterns that change or regulations that impact what we can and can't use.

Barry Jones: 
And so half of them are really excited about that digital transformation. And I would say there's another half that are a little bit skeptical. They look at this is critical infrastructure. People need to have reliable energy sources and there needs to be a good cost basis. It has to be affordable to everyone, not just people with expensive electric cars right now, for example. So those questions are out there.

Barry Jones: 
And then there's the third part of that other half, which is that, this is critical infrastructure, as I said, and how do we ensure that that's going to be sustained and that it's not going to get hacked? We're not going to read about it in the newspapers tomorrow about, well, there's a major hack of our critical operational technology systems and they shut down power or caused a surge that blacked out part of the Southern United States or something. So its split, people are excited and they want to look at what those services and what information they can get. And the other side concerned about that safety part of it, the functionality, et cetera.

Jason Price: 
I do want to come back to the grid-edge DER question in a moment and explore that further. But my follow up to what you just described is is there a roadmap or a prescriptive model that you're seeing utilities follow as they roll out more of the approach to the cloud?

Barry Jones: 
There's not a defined roadmap. I think some companies are ahead of the curve and others are a little bit behind. And this is partly due to the nature of what they currently have. Many utilities, there's municipalities, there's government entities, there's Mum and Pop generators out there, things like that. So they have different footprints and technologies. And then on top of that, you have a rate based customer that depending on where they live, maybe the cost of electricity is really imperative that they keep that low. So some of them are exploring it at different paces, but the way I see this unfolding and from talking to people within the industry is they want to look at first their existing costs. And they've done that for several years for email and accounting systems, things like that, and say, how can we gain a benefit?

Barry Jones: 
And so cloud is very appealing to them because we can take our email system and move it to one of the cloud providers and then host email out of there, and then they don't have to maintain or manage or cover those systems. So they look at that first and then they're going to look at those programmable devices that are in the field and the substations generator plants, distribution areas, and say, "Can we do these as well?" And so within that, there's a kind of middle ground, and that is the systems that really manage and monitor the data.

Barry Jones: 
So I think some are looking and saying, "Okay, well here are my SCADA data, for example, from my EMS from substation, and it may contain voltage and load, it contains telemetry information and things like that, monitoring data, assessment data. And so the idea we could move that and still keep our critical infrastructure application here at our control center, so that we're secure. And then security systems that monitor all of that, those could certainly be moved to the cloud and be a cost effective solution. And so that's what I think the roadmap is looking like for many is the middle ground. Can we move just data? Can we move things that can't make inherent changes on the grid and do those first, then let's talk about the grid itself.

Jason Price: 
You mentioned the rate-based customer, are there customer advocacy groups, I guess the question is basically along the lines of what's the impact of the customer? Does the customer really care? Are they affected at all? What are the pros and cons around that? And are you seeing any advocacy groups or privacy groups on behalf of the customer raising volume, if you will, around these shifts that we're talking about today?

Barry Jones: 
That's a good one. And of course we have all the politics that are divided across the nation. And some of the President's current bill contain budget for infrastructure and renewable energies and things like that, as well as maybe looking at how can we regulate rates further to where people are insured at least of basic service. It follows the healthcare mantra. So there are those groups out there, but they tend to be politicized. And again, it depends on what state you're in. Certain states regulate more or look after that more than others. And so we have some really interesting things where you may have a state that or a utility company or an entity that sits in a state that has lot of state regulations about when and what and how you can distribute and sell and market energy.

Barry Jones: 
And so to me, it's not really clearly defined. There's a lot of different areas around that and that I think leads to part of the confusion for customers about what does it mean when I see the amount of kilowatt-hours or usage, and why is it that I can go from maybe one territory and cross three mile boundary and pay 28 cents a kilowatt-hour cheaper. I think that's an area that really is difficult for customers because they just want to get power at the end of the day and they want a cost effective solution. And so it seems to me that within all of those formulas and functionality, there's a lot of room for cleanup, if you will.

Jason Price: 
Well, let's bring it back to what we started with. We're talking about the movement towards the cloud, and that is a sign of modernizing the utility. Let's run on that assumption. So what I'm getting at is that modernizing the technology is not just around improving the accounting system or web or email servers and such. It's really the meat of the utility, which is the operational and the informational technology, the IT and OT. And that's moving that meat, if you will, to the cloud. Talk a bit further in terms of just the overall significance of what that means both internally at the utility, but then what are the controls that they're giving up or gaining. Paint the picture of what the struggle is currently in the industry regarding this whole topic.

Barry Jones: 
So this is at the heart of it, and I keep going back to the term critical infrastructure. And so the question really is what is that? When you drive through the gates of a substation and you ask yourself, or if you are somebody that works there or you're new and you say what exactly is critical and what isn't. And so I like to compare it to the FAA flight system, because we've all been on flights where it's bumpy, my wife's terrified of flying and things like that. And so my question is, would you be okay taking your FAA systems that monitor and control flight air traffic data, or air traffic systems and move those to one of the cloud providers? And then would you be okay with that? And then would you really be okay with another words over time? Would we be fine?

Barry Jones: 
There's not going to be any reliability failures and things like that. So it's really along those lines. And so what you have in technology is going back historically in the '90s and in the 2000s the dot-coms and you had the gain of distributed computing and a rapid change of things. We used to use Blackberries and then those were gone immediately and replaced by smartphones. And so many companies that you would have people in IT that would experience, "Hey, we're going with this new application right now." And then not eight months later, pulled out and replaced with another application. And then of course the form factor of the technology is getting smaller. So now a smartphone will do what your old 386 PC would do in the 2000s. And so that software and hardware transitioning and transformation is impacting everybody across the board.

Barry Jones: 
And so for the generation, transmission and distribution of electricity, that's been a very static area because you don't want a lot or great deal of change in that area, because guess what, that's about the reliability of your system. And you certainly don't want to have a cascading event where somebody makes a change or goes to a different technology or something makes an error. And then that causes a massive cascading event across a major region or large swaths of cities and things like that. We all read about the squirrel that went into substation and turned off all the power on the East Coast, for example, or things like that. So you want to prevent that from occurring. And then there's a safety factor that goes along with that. And so you have now this convergence of rapid IT technology into these static, low change OT and ICS areas.

Barry Jones: 
And so how do you manage that? How do you ensure that that reliability and safety occurs? And there are other factors too, because with cloud, what we're talking about here is moving our computing systems to a large data center somewhere. And you may have replicated data centers, either worldwide. If you picture this, you could have a transmission control center with operators anywhere in the world, operating monitoring and situational awareness of the grid that exists somewhere in another country, for example.

Barry Jones: 
And so how that would work is they would have computing computers. They could be even at home with their EMS system or their SCADA systems, and they could control and monitor grid elements through the cloud data center applications, and then back to those substations and those generator plants. And so the change there would be massive because you could consolidate all your operators into a large say, operational center, and they could control the Western half of the grid. Or you could parse those out to regions and say, "Hey, well, I'm going to have these operators using their applications that resides in one of the cloud providers to monitor and control the grid in the Northern part of the United States or something."

Barry Jones: 
So you get the picture it's about that move to cloud and moving traditional computing or OT and ICS computing systems to cloud. And it's a cost effective benefit because it's a management of a lot of data and data systems, information systems that argue once that were just used for switching at substations and monitoring load and voltage. And again, going back to the pros and cons of that, you don't want to have a cloud data system, for example, be compromised to where you could change readings or shut down power to certain areas or perform switching that's unauthorized and things like that. So you have to have that reliability, security in there.

Barry Jones: 
And then there are some other ancillary things, and I won't go into too much detail. There's certain jobs that depend on regional people that provide support. And now you're moving those jobs to cloud providers. Some people may be upset about that notion. There's a lot of implications with it. There's security, safety, reliability, and there's certainly the cost benefit. So both sides of the coin have some strong arguments for again.

Jason Price: 
So for our audience, who's listening in, particularly those that really want to track the marketplace more closely, a scale of one to 10 and 10 being all in with OT/IT. Where's the industry, are they at three? Are they at a four? And then are there any shining stars, utilities that we should keep an eye on? And where do they fall into that scale?

Barry Jones: 
Yeah, that's a great question. So I'm going to answer this by also pointing something out, typically internal to many utilities, there's a split. And the split is you have the utility side of the company, and these are the people that have for years been maintaining, monitoring, controlling the electrical infrastructure, the critical infrastructure, and then you have an IT department inside and those have not converged fully yet. And that has to happen by the way. You have to see things as it doesn't matter what the end device is. It's programmable electric. If it has an ethernet or wireless interface, it is a technology. And so many companies still have that split to say, well, this is my SCADA system. It's not a mail server as I pointed out earlier. And so that's, I would say, a three or a four. I see that as shifting further and further as you have what would be called shadow technology groups, moving more into mainstream IT, and then more mainstream IT understanding how the grid and the systems that support it work.

Barry Jones: 
It's a three on that. Now, as far as actually moving to cloud based technologies for these OT and ICS systems, I see that as a strong desire in the seven range because of the cost effectiveness. You can go back to rate payers and it's a great case to say, "Hey, rate payers and shareholders if I move this over, I can save us X number of dollars. Our value goes up." I wanted to point out those two sides that internally there has to be that transformation of understanding what we're talking about. What's getting moved. And then there has to be the other side about, okay, let's go ahead and move it and what are the risks and rewards? Like I said, internally, it's still a one and a three, but there's I think a six or seven to move to cloud-based systems, to remove existing systems to cloud-based.

Jason Price: 
And just to follow up any utilities that come to mind that are that have fallen to above the five mark.

Barry Jones: 
Yeah. I see some pretty progressive ones. I've known people at NextEra Energy who are doing great job with a lot of renewables. I think that renewables, they have newer technology. They have less impact to the grid. So it's a safer proposition to do that. And I see some of that working well at company like NextEra, Xcel, PG&D, Addison, the big gems like Duke Energy. The big gems they want to look at that. They want to move, "How can we control and monitor and get a better market share idea about what's going on."

Jason Price: 
Back to an earlier conversation. You talked about grid-edge technologies and generation and such, and that falls into the rank of DER. So what is the role of the cloud and the context of utility information, particularly as the rate of DER adoption continues to grow?

Barry Jones: 
Yeah. This is a big question because I think the term Internet of Things is good because now you've got your digital refrigerator, right? And there's an idea for customers that... Again, I believe a customer. I'm a customer. I want to come home I just want to make sure it works. I want to be able to have the light go on and add my car, plugged in if I have a EV or whatever. What ends up happening now though is it's about asset management because you put all of this stuff out there that's programmable, and maybe some of it goes through your actual smartphone that you're using where you have an app and then you turn your heater on before you go, or you have HVAC systems in your home where it parses out, and it controls the temperature in one room. And then the other one stays cool and becomes an efficient use of that electricity.

Barry Jones: 
And then of course the solar and wind farms that generate when they do, pump storage, hydro, things like that. And the information from those devices is pretty interesting. It can give regional location. It can give the names of the people that use the system. And in the case of cars, it may reach right into the car and be able to program the car if you will. So once it's all networked it's fair game as it's out there and it's visible, it's discoverable. And so the idea of consumers may not know is that what if I talk to my car, for example, and I give it a command, is my voice now going to be recorded back up to this cloud-based data center? And then what will they do with that? How will they use it?

Barry Jones: 
There's a lot of discussion about privacy right now in the United States. And then there are other things about gathering this digital information could provide information on consumers' behavior, when do they heat their rooms and how do they do it? And what's their economic status? And how many people live in the house and their usage and things like that. There starts becoming information about people versus information about systems. And then of course the great par is about the systems you can now say, "Hey, let's fine tune the load for a given region and area. And let's focus on the usage there to make a much more efficient system." Which I should be the end goal of it is focus on making that a very efficient system. And then guess what? You have less generation, you have less carbon footprint all around.

Barry Jones: 
And I think that probably what many of the utilities and many of folks in the industries want to see. They want to see a more efficient system. I think people are definitely worried about the use of carbon, but there's no real quick way out of that. So I see that as that big ball of wax around DER is that it's great information, but we have to also protect the consumer portion of it. And we have to be smart about how we use the end point information and cloud can enable that greatly. That can use massive computing resources to now crunch that information store it, provide reporting about what the state of the grid is and be prepared for changing.

Barry Jones: 
You maybe have droughts or you have low hydro output for a while. And so that crunching of that DER usage information and things like that can look ahead to say with forecasting, say, "Hey, look, let's shift load from this area to this region using those cloud technologies." I think that's a really exciting part of the business. The caveat is the consumer information I worry a little bit about that.

Jason Price: 
Where do the regulators come into play in the wellness?

Barry Jones: 
So the regulation part of it's interesting because if you regulate, you're going to stifle growth of business in some cases. And so you have to be very careful, but you also have to protect the consumer. So I see this as part of a bigger picture about what is the government and their regulatory agencies going to do about utility information, right? Gathered from people usage. And so there's really nothing in there about that right now. There are the NERC standards, for example, for their operational and planning standards, which ensure reliability of the grid.

Barry Jones: 
And then there's an accept critical infrastructure standards, which provide security measures for the grid. But none of those crossover into personal identifier information, PII, or really much around the distribution and the renewable energy sector. So I don't know where that's going to go. I don't have an answer for that, but I do think it's somewhere in there. If you could separate customer information from system information, if you will, I think everybody would buy into that. And it would be a much easier pill to swallow from a regulatory perspective.

Jason Price: 
So Barry, we're going to give you the last word, but we also have something called lightning round. It's an opportunity for our listeners to get to know you Barry Jones a bit more and not just in your day job. We've got a series of questions and you are to respond back either with one word or one phrase. So are you ready?

Barry Jones: 
I am ready.

Jason Price: 
When are you most productive?

Barry Jones: 
2:00 AM in the morning.

Jason Price: 
Do you have any hidden talents?

Barry Jones: 
Standup comic.

Jason Price: 
What past trend or fad do you hope makes a comeback?

Barry Jones: 
Pet rocks.

Jason Price: 
What did you want to be when you were growing up as a child?

Barry Jones: 
A racecar driver.

Jason Price: 
What are you most passionate about?

Barry Jones: 
I hope this doesn't sound a little too corny, but I am really passionate about our industry and information systems and doing it right. And I know there's a whole, what is right. But I like seeing efficiency. I like seeing things done well. And I'm very passionate about, and that's why I'm here with you guys today.

Jason Price: 
Great. So based on that, we're going to give you the final word to our audience and this audience, you're speaking to people who are decision makers in the C-suite and represent not just the national but global audience of utility professionals. So what would you like to leave as your final word to that audience?

Barry Jones: 
I'll just say, look, keep up the good work. We have a vast footprint of a patchwork world of different sizes, shapes and functionality within our industry. And I am in awe of these people who can keep this running well. And look, we are one of the most reliable systems on earth in the history of mankind. And we have to keep that in context. It's never going to be perfect. You're going to still have your outages, but gosh, there's so few and far between that these people are doing something right. Keep up the good work. Keep using technology and great job is what I say.

Jason Price: 
Well, I can say it to you as well, a great job for enlightening us and informing us and sharing your wisdom today. These topics are fast moving and I'm sure that a year from now, if we can get your time to join us again, I'm sure a lot different than just a year ago. So we want to check in with you and appreciate your time today. So thank you so much for joining us today, Barry.

Barry Jones: 
You're welcome. Have a great day.

Jason Price: 
Absolutely. So once again, I'm your host Jason Price and plug in and stay fully charged in the discussion by hopping into the community energycentral.com. And we'll see you next time at the Energy Central Power Perspectives Podcast.

 


About Energy Central Podcasts

The ‘Energy Central Power Perspectives™ Podcast’ features conversations with thought leaders in the utility sector. At least twice monthly, we connect with an Energy Central Power Industry Network community member to discuss compelling topics that impact professionals who work in the power industry. Some podcasts may be a continuation of thought-provoking posts or discussions started in the community or with an industry leader that is interested in sharing their expertise and doing a deeper dive into hot topics or issues relevant to the industry.

The ‘Energy Central Power Perspectives™ Podcast’ is the premiere podcast series from Energy Central, a Power Industry Network of Communities built specifically for professionals in the electric power industry and a place where professionals can share, learn, and connect in a collaborative environment. Supported by leading industry organizations, our mission is to help global power industry professionals work better. Since 1995, we’ve been a trusted news and information source for professionals working in the power industry, and today our managed communities are a place for lively discussions, debates, and analysis to take place. If you’re not yet a member, visit www.EnergyCentral.com to register for free and join over 200,000 of your peers working in the power industry.

The Energy Central Power Perspectives™ Podcast is hosted by Jason PriceCommunity Ambassador of Energy Central. Jason is a Business Development Executive at West Monroe, working in the East Coast Energy and Utilities Group. Jason is joined in the podcast booth by the producer of the podcast, Matt Chester, who is also the Community Manager of Energy Central and energy analyst/independent consultant in energy policy, markets, and technology.  

If you want to be a guest on a future episode of the Energy Central Power Perspectives™ Podcast, let us know! We’ll be pulling guests from our community members who submit engaging content that gets our community talking, and perhaps that next guest will be you! Likewise, if you see an article submitted by a fellow Energy Central community member that you’d like to see broken down in more detail in a conversation, feel free to send us a note to nominate them.  For more information, contact us at community@energycentral.com. Podcast interviews are free for Expert Members and professionals who work for a utility.  We have package offers available for solution providers and vendors. 

Happy listening, and stay tuned for our next episode! Like what you hear, have a suggestion for future episodes, or a question for our guest? Leave a note in the comments below.

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Thanks once again to the sponsors of this episode of the Energy Central Power Perspectives Podcast: West MonroeEsriAnterix, and ScottMadden

 

 

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