Itron’s point of view – A message from our CEO

Seven months ago, I became a grandfather for the first time—an 8 pound 1 ounce grandson with a world of opportunities in front of him. I’m not only telling you this out of pride, but I’m telling you this because his arrival has underlined the way I think we need to look at the future. It’s changed my perspective on a few things—a few big things actually. Namely, why I’m in this business, and how all of our actions now, will eventually shape the world he grows up in.

Simply stated—the way we manage the world’s energy and water will shape this century. It’s a strong statement, but it’s one that I’m convinced is true. And it’s creating an urgency—and opportunity—that the utility industry has never before experienced.

And Itron, with locations in over 60 countries, and 8,000 customers worldwide relying on our expertise, is right at the heart of this transformation. We’re providing the world with smart grid technology, data collection and utility software solutions. Every day we’re helping utilities optimize the delivery and use of energy and water. But today isn’t just about Itron—our industry is at the center of unprecedented change. 

That’s why we’re approaching this century and its inherent changes with essential thinking. It’s reality about where we are today, and where we are going.

There are three key concepts to this essential thinking that I want to share with you:

1.    How we apply technology will play a central role in how we meet environmental goals and mandates.
2.    The world’s utilities need flexible solutions, rooted in reality.
3.    Empowered consumers will drive change in unprecedented ways.

How we apply technology will play a central role in how we meet environmental goals and mandates

Let’s start with technology, and its central role in meeting environmental goals. As global concerns around climate change and water scarcity force mandates, the pressure on utilities is intensifying. Whether mandates are driven by….
 
•    global concern about climate change
•    water scarcity
•    energy costs
•    or energy conservation

…it’s essential that consumers and utilities have timely access to actionable data. Another huge driver? Policy. Until we have more certainty on carbon policy, utilities will be reluctant to make investments in new technology.

These technologies support a clean energy economy by aiding in carbon reduction. For example, given the number of smart meters we can produce annually, with conservative demand response assumptions, over 1 million tons of carbon emissions could be avoided. The reduction in carbon emissions from the adoption of smart metering cannot be overlooked.

So how can policy help get these planet-protecting technologies in place? The environmental benefits of smart metering are clear and documented, but strong motivation—that is, cost recovery—from regulators is required for utilities to invest in the technology globally.

The world’s utilities need flexible solutions, rooted in reality

Second point I want to make….back to that essential thinking—the world’s utilities need flexible solutions, rooted in reality. Across the globe, differences in location, regulation requirements and size mean different challenges. But so much of the discussion is limited to what the top-20 utilities need, and can afford.

And so many of our competitors are focused only on the electricity side of the smart grid. Itron is moving beyond just electricity for smart distribution systems. For gas, we’re tailoring our advanced metering solution so that utilities can use the two-way communication of our fixed network technology to gather gas recorder and corrector serial data, and monitor cathodic protection. This is as opposed to reading the instruments manually or relying on expensive cellular technology. Accessing these readings through our gas AMI network will result in reduced operational costs for utilities.

And for water, we’re making tremendous headway in making usage information that has typically been static into dynamic actionable data. As these solutions become increasingly sophisticated, different players will need to work together to create integrated systems. This will require a new view of, and a new competence in, collaboration.

Empowered consumers will drive change in unprecedented ways

Newer technologies….time-based rates….according to FERC, they have the potential to reduce peak loads by 5-12 percent. Every 15 minutes we’re providing information about how much energy consumers use.

Consumer empowerment will shape industry change in the coming decade, and this trend will only become more significant over time. The engagement that needs to happen with the end-consumer represents a tremendous shift for utilities. I don’t think we should underestimate the fundamental change this kind of two-way communication means to how we will do business. And for the smart grid, or gas and water AMI to be successful, we have to get the consumer engaged and on board.

Itron’s global experience in prepayment systems, smart grid and smart metering has made customer engagement a possibility.

As we look at ways to create a new energy and water reality, it’s clear that this challenge is bigger than any single company or organization. Working together we can ensure reliable energy and water delivery at the lowest cost, lead the way to an entirely new economy, and secure our precious resources for future generations…..for my grandson James.

The best thinkers with the most direct experience must work together. The importance of this collaboration can’t be overstated.

For smart grid implementations to gain momentum, let’s move from rhetoric to reality, so that we ensure the incremental progress so badly needed to get this bold undertaking underway. Let’s be careful not to promise what is fashionable today, but instead, let’s deliver what is needed tomorrow. In the words of our president, this is a time to discover great opportunity in the midst of great crisis. The smart grid and smart metering can be such an “opportunity.” I thank you for your kind attention – as does my grandson.