Interview with Larry Oliva of Southern California Edison (SCE)
Larry Oliva also serves as Vice Chairman on the ADS Board of Directors
How long have you been at Southern California Edison?
I joined SCE 5 years ago in my present position. Prior to that, I worked as a consultant for SCE on
their advanced metering program, which began in 2003. I also consulted to SCE in the late 1990s on
a major implementation to enable retail energy competition.
What is your role at SCE?
I am responsible for the operation and development of demand response programs for the
company as well as other customer programs that leverage smart grid technologies including advanced metering. I also am responsible for SCE’s customer readiness for new technologies including plug-in electric vehicles and home area networks that link with our smart meter.
How long have you been involved in demand-side activities?
I’ve been devoted to demand-side activities since 2003. I have worked as a consultant for many utilities over a 30-year consulting career covering a wide range of strategic issues including resource planning, economic analysis, system implementation, and rate design.
What challenges have you faced as a DR professional within your organization and within the industry?
SCE has a legacy of leadership in demand-side management. When I joined the company five years ago, California led the nation in demand-side management initiatives beginning with a state policy for utilities to create a loading order of demand-side management first, renewables second, and then conventional generation technologies. California also led the nation in the first complete implementation of advanced metering by its investor-owned utilities.
The challenge for me has been to execute innovative programs to make demand response part of our customer’s culture. Advanced metering has been the key. We first began with 15 minute interval metering for all our large customer accounts, which enabled a variety of price-responsive demand response programs, including those that allowed third-party aggregation and DR delivery contracts. Now we are enabling programs for our residential customers as well as rolling out smart metering. Our Save Power Day (Peak Time Rebate) will be a key new program adding to our very successful legacy air conditioning cycling program.
Another challenge has been to change our air conditioning cycling program to make it an economic resource in addition to an emergency resource. Advanced metering allows us to closely measure the load reductions from the program for dispatch and settlement geographically.
An ongoing challenge is to maintain the cost effectiveness of demand-side programs in the face of changing market conditions for generation alternatives. Within the industry, we face ongoing challenges by traditionalists at utilities and at the regulatory commissions who do not support demand-side management because of the availability of very low cost generation resources. This is understandable. However, without proper retail electricity pricing or demand-side program options, consumers use electricity in wasteful ways and drive the construction of a network and generation resources to meet infrequent peaks, which is highly inefficient in the long run. The utility industry load factor is very low compared to other capital intensive industries such as airlines, rail, shipping, hotels, and rental cars. Low load factors eventually lead to higher costs to rate payers and negative regulatory outcomes for utilities. Demand response programs that are cost effective provide important price signals that reflect a utility’s cost and thus achieve higher economic efficiency, resulting in lower rates to customers.
What changes have you seen in the industry as it related to demand-side management?
Clearly, there has been a significant push in many states and at the federal level to encourage demand-side management as a resource comparable to supply-side resources. Smart grid technologies that merge advances in information management, telecommunications, and measurement have spawned tremendous opportunities for better pricing, better management, and innovative new programs for customers.
Demand response need not be just a reliability program, but rather a daily economic choice. New technologies are available to inform and manage usage for the customer so that DR is automatic via smart appliances, auto DR energy management systems, and mobile apps to monitor/manage HVAC, lighting, home security, etc. The past 5 years have been very interesting because of these technological developments, but I think the next 5 to 10 years will be amazing. We will see distributed resources become main stream and demand-side management will help integrate those with our traditional and still vital supply-side resources, as well as renewables.
What do you expect to be the biggest challenge with implementing DR in the next decade?
Information systems are the backbone of the smart grid and DR. The full integration of supply-side and demand-side resources, both at the retail and wholesale levels, will require large investments in information technology at the same time that we face the need for huge investments in traditional infrastructure. The biggest challenge is to maintain a course that uses technology to improve efficiency in the delivery of customer wants and needs for energy which provides comfort, work, education, entertainment, and an improved quality of life.
What advice or guidance would you give to young professionals who are considering a career in demand response and smart grid?
The electric utility industry has many challenges ahead, including competition from non-utility distributed supplies like solar and other on-site generation. Electric utilities will have to address the need to be more efficient and provide more service choices. Demand response provides rate options and savings to customers that otherwise would not be available. I note the success of a company such as Priceline.com, which is basically demand response type pricing for airlines and hotels. Priceline.com has a market cap of $36 billion, far exceeding the largest electric utility companies today. Solutions to demand-side management will continue to be critical in the foreseeable future. If you like the idea of merging information technology, communications, and large capital infrastructure, this is an area that will continue to provide great opportunities.
I joined SCE 5 years ago in my present position. Prior to that, I worked as a consultant for SCE on
their advanced metering program, which began in 2003. I also consulted to SCE in the late 1990s on
a major implementation to enable retail energy competition.
What is your role at SCE?
I am responsible for the operation and development of demand response programs for the
company as well as other customer programs that leverage smart grid technologies including advanced metering. I also am responsible for SCE’s customer readiness for new technologies including plug-in electric vehicles and home area networks that link with our smart meter.
How long have you been involved in demand-side activities?
I’ve been devoted to demand-side activities since 2003. I have worked as a consultant for many utilities over a 30-year consulting career covering a wide range of strategic issues including resource planning, economic analysis, system implementation, and rate design.
What challenges have you faced as a DR professional within your organization and within the industry?
SCE has a legacy of leadership in demand-side management. When I joined the company five years ago, California led the nation in demand-side management initiatives beginning with a state policy for utilities to create a loading order of demand-side management first, renewables second, and then conventional generation technologies. California also led the nation in the first complete implementation of advanced metering by its investor-owned utilities.
The challenge for me has been to execute innovative programs to make demand response part of our customer’s culture. Advanced metering has been the key. We first began with 15 minute interval metering for all our large customer accounts, which enabled a variety of price-responsive demand response programs, including those that allowed third-party aggregation and DR delivery contracts. Now we are enabling programs for our residential customers as well as rolling out smart metering. Our Save Power Day (Peak Time Rebate) will be a key new program adding to our very successful legacy air conditioning cycling program.
Another challenge has been to change our air conditioning cycling program to make it an economic resource in addition to an emergency resource. Advanced metering allows us to closely measure the load reductions from the program for dispatch and settlement geographically.
An ongoing challenge is to maintain the cost effectiveness of demand-side programs in the face of changing market conditions for generation alternatives. Within the industry, we face ongoing challenges by traditionalists at utilities and at the regulatory commissions who do not support demand-side management because of the availability of very low cost generation resources. This is understandable. However, without proper retail electricity pricing or demand-side program options, consumers use electricity in wasteful ways and drive the construction of a network and generation resources to meet infrequent peaks, which is highly inefficient in the long run. The utility industry load factor is very low compared to other capital intensive industries such as airlines, rail, shipping, hotels, and rental cars. Low load factors eventually lead to higher costs to rate payers and negative regulatory outcomes for utilities. Demand response programs that are cost effective provide important price signals that reflect a utility’s cost and thus achieve higher economic efficiency, resulting in lower rates to customers.
What changes have you seen in the industry as it related to demand-side management?
Clearly, there has been a significant push in many states and at the federal level to encourage demand-side management as a resource comparable to supply-side resources. Smart grid technologies that merge advances in information management, telecommunications, and measurement have spawned tremendous opportunities for better pricing, better management, and innovative new programs for customers.
Demand response need not be just a reliability program, but rather a daily economic choice. New technologies are available to inform and manage usage for the customer so that DR is automatic via smart appliances, auto DR energy management systems, and mobile apps to monitor/manage HVAC, lighting, home security, etc. The past 5 years have been very interesting because of these technological developments, but I think the next 5 to 10 years will be amazing. We will see distributed resources become main stream and demand-side management will help integrate those with our traditional and still vital supply-side resources, as well as renewables.
What do you expect to be the biggest challenge with implementing DR in the next decade?
Information systems are the backbone of the smart grid and DR. The full integration of supply-side and demand-side resources, both at the retail and wholesale levels, will require large investments in information technology at the same time that we face the need for huge investments in traditional infrastructure. The biggest challenge is to maintain a course that uses technology to improve efficiency in the delivery of customer wants and needs for energy which provides comfort, work, education, entertainment, and an improved quality of life.
What advice or guidance would you give to young professionals who are considering a career in demand response and smart grid?
The electric utility industry has many challenges ahead, including competition from non-utility distributed supplies like solar and other on-site generation. Electric utilities will have to address the need to be more efficient and provide more service choices. Demand response provides rate options and savings to customers that otherwise would not be available. I note the success of a company such as Priceline.com, which is basically demand response type pricing for airlines and hotels. Priceline.com has a market cap of $36 billion, far exceeding the largest electric utility companies today. Solutions to demand-side management will continue to be critical in the foreseeable future. If you like the idea of merging information technology, communications, and large capital infrastructure, this is an area that will continue to provide great opportunities.
© 2016 Solar Electric Power Association :: 1220 19th Street NW, Suite 800, Washington, D.C., 20036 :: contact us
Periodic updates on news & events related to demand response and smart grid.