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Why Location Intelligence Matters

May 19, 2020
Location intelligence helps utilities make the right decisions about what to do to improve their metrics.

Russ was one of my favorite bosses. He was the president of the utility where I ran electric operations. Russ was an accountant — a bean counter. I was an electrical engineer. Yet we agreed on almost everything about running a gas and electric utility. Russ once told me that there are only four things you must do to be successful at running a utility: make money, keep the customers happy, keep the employees safe and happy, and stay out of trouble. But, Russ warned, you can't separate those things; they are all related. If you simply cut costs to make more money, employees will balk, customer service will suffer, and the safety of the community could be compromised. He said you had to balance those four things to be successful.

The Mission of the Company

In effect, Russ had defined the mission of the company. As a proper bean counter, Russ made sure he could measure how well the company complied with his rules. Each rule defines a critical stakeholder in the utility: the shareholder, the customer, the employee, and the community. Metrics, such as earnings per share, operations and maintenance (O&M) spending, capital spending, and overtime compared with the budget define specifically what Russ meant by making money.

Reliability, power quality, and customer service are standards that help ensure customer satisfaction. The number of accidents and union grievances and the rate of employee turnover indicate the pulse of the employees. Complaints to the public utilities commission, fines for ruining a vegetated wetland or some other serious environmental violation, low customer satisfaction ratings, and negative press are markers of trouble.

We all recognize these metrics as key performance indicators, or as consultants like to say, KPIs. However, what Russ clearly understood was the relationship of these metrics to one another. Having real insight into the business requires a good set of analytics. It is a way of enriching the KPIs to not only display them on a dashboard but also to fully understand the relationship of cause and effect.

The Mission and Geospatial Technology

What does this have to do with geospatial technology? Russ understood that most metrics are averages. The best example is the most common metric for reliability, called the system average interruption duration index, or SAIDI. It is equal to the total number of minutes all customers are out of power during the year divided by the total number of customers. The average SAIDI in the United States is roughly 120 minutes or about two hours per year. What SAIDI doesn't tell is whether customers are happy. The unanswered questions are, where are the unhappy customers and why are they dissatisfied? Also, is there a correlation between low customer satisfaction and poor reliability? Probably. Even if the SAIDI for a utility is above average (lower than 120), there may be pockets of the territory that have terrible reliability. At our utility, even if reliability was good on average, Russ might still have to face an angry mob at a town meeting to explain why the service was so bad. He often sent me to meet the mob. An angry mob at a town meeting always made the newspapers, thus violating Russ' fourth rule to stay out of trouble.

Location intelligence answers the question where. However, it also sheds light on why. If SAIDI is poor in a small area, adding additional data, like tree trimming history or maintenance spending or age of equipment, could shed light on why reliability is so bad in that area. The more data, the better the clarity of why. Location intelligence helps utilities make the right decisions about what to do to improve their metrics. So, location intelligence is about where the problems are, why they might be that way, and what can be done to fix them. Averages are fine to get started but homing in on where the problems are most severe will help solve them.

Russ was a numbers guy. But he fully understood that to run a power company, you need insight beyond what the numbers say — that averages don't always tell the full story. Sure, our utility was above average in reliability, but customers still complained. Russ knew that it was the relationship of factors that really tells the story. Using location intelligence allows utilities to see the connections. That's because a utility company's customers, employees, communities, and assets are distributed all over the service territory. It's not surprising that using geospatial technology, like location intelligence, will achieve Russ' goal of making money, satisfying customers, keeping employees safe and happy, and staying out of trouble.

For more information on how GIS can bring location intelligence to utilities, visit here.

About the Author

Bill Meehan

Bill Meehan, P.E., heads the worldwide utility industry solutions practice for Esri. Author of Enhancing Electric Utility Performance with GIS; Modeling Electric Distribution Performance with GIS; Empowering Electric and Gas Utilities; Power System Analysis by Digital Computer, and numerous papers and articles. Bill has lectured extensively and taught courses at Northeastern University and the University of Massachusetts. Bill is a registered professional engineer.

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