Booz Allen Identifies eight trends for utilities in 2015; Nobody wants to be the new LIPA

by / Thursday, 06 November 2014 / Published in Smartgrid-CI Blog

“In the midst of a major, global transformation” utilities have to deal with well-known challenges as well as with new ones.

2014 is coming to an end and predictions for next are starting to flourish. Booz Allen’s just published its Annual Energy Sector Trends for 2015 under one theme; “Business Resiliency Depends on an Integrated, Predictive Approach”. Some of the eight trends are not coming as a surprise. The firm reminds us how critical it is for utilities to get prepared for cyber threats, this sector being according to Booz Allen the largest one under this threat and no company in this setor wants to be a “Cyber Macondo”. The challenge being that utilities need to go way beyond simply putting up electronic barriers to protect their IP, supply chain, operations and networks. Responding to cyber security threats requires to develop “capability for proactive advanced threat detection across a now multi-dimensional threat surface. Coupled with this challenge is the weighty task of assessing the security of third-party vendors and protecting critical business assets from those who should not have access”. At the same time, utilities need to develop incident response and back up plans.


The new dimension that cyber security threats, and their consequences, add to the utility business environment is reputation. A successful cyber security attack does not only cause big and costly damage to any utility and its customers but also tarnishes its reputation, a critical element that needs to be part of any risk model. One reason is that most customers now have “energy choices”. As a result, utilities need to spend time “understanding their market ecosystem of customers, investors, communities and competition”. And also regulators are tying customer satisfaction to rate cases, making reputation much more of a commodity. In other words, utilities have to learn how to deal with customer relationship and its risks.


Other trends identified by Booz Allen have to do with the pervasive need for utilities to become predictive. This advice is valid for as well for dealing with safety and environment as it is for dealing with more active and fast changing regulatory landscape. One new dimension of prediction seems to gain traction is investment as balancing investment not just in front of changing needs and economic trends is not sufficient anymore. Utilities now need to add new source of energy and new technology such as power storage to their already very complex equation.

Data is a way to make this task easier to grab and also the understanding that some issues, like risk management, need to become much more top priorities than before. This is what Booz Allen means in saying that “Risk management must move from the backroom to the boardroom”. Any failure in front of a risk can have terrible consequences. Everyone has in mind what happened on Long Island in the aftermath of Sandy and what happened to LIPA afterward.

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