cellular smart gridAT&T already has a ton of business in the utility sector, providing everything from workforce connectivity to the backhaul networks that help connect millions of smart meters and other grid devices in the field. But to date, AT&T and its telecommunications coequals, such as Verizon and Sprint, haven’t made the leap from smart grid ICT solutions providers to actually putting together smart grid projects themselves.

This week, AT&T announced that it’s taking on that central role for the first time, in a project with Duck River Electric Membership Corp., a 71,000-customer rural cooperative utility in Tennessee. Under the terms of contract, AT&T will integrate cellular-connected smart meters from Itron, meter data management software from ElectSolve and volt/VAR optimization and distribution grid controls from S&C Electric, and will then manage the entire affair for the utility.

Consider it the first stab by AT&T at becoming a smart grid project integrator and service guarantor for the thousands of U.S. utilities that want to outsource their smart grid integration and operations tasks. Whether it’s known as “smart grid as a service” or goes by the name of a hosted or cloud-based smart grid platform, the idea is to open smart grid investments and benefits to the mass of utilities that either can’t afford or can’t justify doing all the heavy IT lifting on their own. 

While large investor-owned utilities (IOUs) account for the majority of U.S. power customers and smart grid deployments to date, that leaves a lot of mid-sized investor-owned utilities, as well as the 2,000 or so municipal utilities and 900 or so electrical cooperatives in the country, as targets for smart grid service offerings like these.

A Different Approach to Smart Grid as a Service

In fact, AT&T is a bit late to the smart-grid-as-a-service party. General Electric, SAIC, Silver Spring Networks, Aclara, and Calico Energy, as well as many other smart grid players and partnerships, are aiming at the same market, with some in the market for years now.

So far, the concept has seen only limited uptake, however, with only a handful of municipal and co-op utilities signing up as customers. Part of that is no doubt due to the poor economy and other factors, as well as the newness of the concept itself.

But then again, these companies, while big and important in the smart grid, don’t play quite the same role as AT&T does for the utility enterprise, Ed Davalos, director of product management for AT&T’s smart grid wireless business, said in a Thursday interview.

In other words, while a smart grid vendor might start with an offering to install and operate gear in the field, and then contract the communications out to different vendors, “We’re putting together an offering that starts with wireless transport,” and then adding a host of smart grid solutions, he said.

While AT&T and its partners are working via reseller agreements today, “we envision more permanent types of relationships” with specific technology vendors coming later this year, he said. That could include systems integrators to fill specific smart grid gaps, a role that AT&T and ElectSolve are filling for Duck River, but could include big players like IBM or Wipro for larger projects, he said.

In terms of the smart grid, “We aren’t a systems integrator; we’re a solutions integrator,” he said. But AT&T will also draw on the expertise of its own mobility services and solutions business, which helps customers with “solutions that are out of scope of what AT&T sells today,” he said.

The Cellular Network as Smart Grid Platform?

AT&T has already connected individual smart meters via its cellular network. In fact, it linked up the first such mass-scale residential AMI deployment in the United States in 2009 with Texas-New Mexico Power and SmartSynch, the company that Itron bought in 2012 to get into the cellular smart meter game.

But that project was strictly smart metering, whereas Duck River is asking AT&T to connect a host of smart grid systems, Davalos said. That’s also a bit of a first for U.S. utilities, which have mainly relied on buying and running their own communications systems for their smart grid efforts.

There are many reasons for that, including investor-owned utilities’ preference for capital spending, which can be recovered in rate increases, over operations spending on things like smart grid services, which has no such guaranteed return.

But the main barrier to cellular smart grid connectivity had been the high prices that carriers were charging for the service. In the past five years or so, those prices have dropped from $5 to $10 per smart grid device to “fifty cents per megabyte per month,” Davalos said, making it harder for utilities to justify building their own redundant network.  

Indeed, cellular connectivity is part of the future plans of pretty much every smart meter vendor (Silver Spring Networks, Elster, Aclara, et al.) out there, representing a big shift from the unlicensed spectrum wireless mesh technologies those companies have used to network the vast majority of the smart meters deployed in the U.S. so far.

At the same time, the advance from 3G to 4G LTE technology is enabling a lot of smart grid functions that cellular couldn’t necessarily perform reliably in the past. That includes various network traffic prioritization, VPN tunneling and cybersecurity features, Davalos said, as well as low-latency connectivity for fast-reacting grid control devices, which could help in integrating S&C’s volt/VAR equipment in the case of Duck River.  

AT&T certainly wants to replicate this model with other co-op and municipal utilities, Davalos said. But it’s also supporting big utilities in broadening their smart grid ICT integration plans to include cellular, he noted. For example, last year, AT&T bought the spectrum that San Diego Gas & Electric was planning to use for a private, WiMAX-based smart grid network, but it’s working with the utility to support many of the same solutions it had originally planned to run itself, he said.

Beyond falling prices, however, it’s taken a lot of hard work on the part of telco providers like AT&T, Verizon and Sprint in the U.S., Deutsche Telekom in Europe, and NTT in Japan to get utilities to sign on to expanding their reliance on networks they don’t own. It makes sense for a deep-pocketed, well-connected partner like AT&T to take on the risk of properly deploying and managing smart grid systems, if it can help it land new customers and lower the barriers of entry for utilities. No doubt we’ll see more smart grid-focused telecommunications providers announce similar projects and partnerships aimed at the same opportunity.

 

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