127. Cutting Costs with Technology-Driven Improvements

If you’ve been in the power industry workforce for any significant length of time, you may have asked your supervisor at some point “Why am I doing this?” regarding a task that you were assigned, only to have them respond, “We’ve always done it this way.” That’s because the power industry has a reputation for being stuck in its ways of doing things. As long as a process is safe, reliable, and reasonably cost-effective, the feeling is often, “Why change?” But just because something works, doesn’t mean its efficient or the best practice. Sometimes you have to step back and consider, “Is there a better way?” And sometimes you have to spend money to make money. The old English saying goes, “Penny-wise and pound-foolish,” which is intended to keep people from being too careful with small amounts of money, while missing out on large windfalls. Implementing new technology typically requires an initial investment, which in many cases can seem substantial. For power companies, that often means justifying the expense to the purse-string holders. “If we think about the focus on operating expense [OpEx] versus capital, within the U.S. sector at least, looking at leveraging cloud or other SaaS [Software-as-a-Service] solutions that may come across as an unwelcome operating expense can definitely hinder the speed of adoption of some of these newer technologies,” Casey Werth, general manager for the Energy industry with IBM Technology, said as a guest on The POWER Podcast. “We work closely with a lot of our clients on how to address these and build out business cases that can show that even if you have an increase in OpEx, for instance, the downstream reduction of OpEx cost far outweighs the OpEx increase of the solution.” Werth offered an example based on IBM’s Vegetation Management solution, which he helped a transmission and distribution (T&D) customer implement. “Veg management is a massive operating expense on any T&D operator’s budget that can be optimized or improved upon to have a better outcome,” Werth said. IBM’s web