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Beyond Smart Cities: The Role of Utilities in Enabling Smart Regions

April 29, 2019
Thanks to their scale and infrastructure, electric utilities can play a central role in creating smart regions, and reap the benefits.

The emergence of next-generation technologies, such as the Internet of Things (IoT), artificial intelligence (AI), 5G, and data science, are poised to transform today’s cities into advanced smart cities. Electric utility companies, with their critical infrastructure and essential services, are well positioned to co-lead this transformation. While smart cities represent a major business opportunity for utility companies, “smart regions” are a more significant opportunity.

The smart region addresses challenges individual cities cannot solve

Smart cities employ advanced digital technologies and data science to solve problems and create new outcomes for its residents, businesses and visitors. However, some challenges are too complex and beyond the scope and capability of any one city and county to solve. These include traffic and mobility, air quality management, and resilience to natural and manmade hazards. A regional approach, combined with innovative digital technologies and data science, will create large-scale impacts that were not possible before.

Utilities are well poised to enable smart regions

Utilities are ideal smart region builders. They operate in and service large geographic regions that span multiple counties and hundreds of cities. They have deep customer knowledge and established relationships with every city and county in the region. They have infrastructure, personnel and facilities throughout the region. More importantly, some of that existing infrastructure, such as distribution poles, streetlights and AMI networks, are ideal platforms to build new smart services quickly and economically.

While cities and counties think in terms of their own needs, utility companies already bring a more regional focus and execution capability. Their organizations, operational processes, policies and systems are built to support the diverse needs of the smallest cities to the largest metropolitan areas.

The smart region opportunity for utilities

As the definition of the smart region evolves, business opportunities for utility companies begin to emerge. One entry point opportunity is for utility companies to be a regional “smart services provider” and offer smart city services to small and mid-sized cities. These smaller cities are at risk of being left behind because they lack the expertise, resources, skills and funding to transform.

This opportunity calls for the utility company to place IoT sensors and controllers on their poles, streetlights and towers, and offer it to cities as a managed smart city service. One example is to place streetlight controllers (and dimmers) onto existing LED streetlights, and then offering it to the city as “streetlight as a service”. Other smart city devices, such as air quality monitors, pedestrian and vehicle counters/trackers, cameras, EV charging, and digital signage, can be offered as a service in the future.

In this role, the utility company leverages its regional scale, infrastructure assets and operation capability to fill a marketplace gap and becomes a central point for smart city services.

Plan for the future now

The digital transformation of cities and regions is still in its early stages. Utility companies, with their unique regional scale, infrastructure, capabilities and presence, are poised to play a critical and strategic role. “Business as usual” is not an option. A new vision and strategy is needed. New skills, business models, operational processes, and partnerships will be needed for utility companies to lead and thrive in this new era. The smart region journey starts now.

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