We were thrilled to have Exelon Utilites CEO Calvin G. Butler Jr. join us for our “In Conversation” interview series last week at the #ThirdCloudSummit in Washington D.C. Calvin sat down with Wall Street Journal reporter Rob Barry and, as a utility executive, provided an intriguing perspective on the digital transformation for the utility industry.

When asked about some of the key challenges he is seeing in the utility industry, Calvin emphasized that customers are looking for something very different today and tomorrow – in terms of a user experience – than what they’ve traditionally had in the past with utilities.

“In the future, customers are no longer judging us against other utilities – theýre comparing us with their experiences to other industries – like Uber, Southwest and Dominoes,” Calvin said. “At the end of the day it́s a technology platform, and their thought is ‘Why should I have to give my cable a four hour window and wait around for him when I can track my pizza on a mobile app.”

Calvin stressed the need to get regulators to understand where utilities are trying to go so they can help us get there.

How do you keep data safe?

Rob asked Calvin about how utilities can keep data safe as they move to a more digital platform, to which Butler replied that privacy and protecting the data is paramount. He said that Exelon invests hundreds of millions of dollars across the company to do this.

What are you trying to accomplish 15 years out?

When asked about his 15 year plan for Exelon Utilities, Calvin said that “Operating the grid in a safe, reliable manner is going to be critical for who we are.” This works in tandem with providing the best level of service to its customers, and giving them the best experience possible. “Act as if your customers have a choice today, because they can all go off the grid tomorrow.”

Calvin expressed that Exelon Utilities is very diligent about putting together its long range plans, saying that calculated risks should be limited. “It’s important to acknowledge that we don’t fully understand where the technology is going, so we have a whole team working on that,” Butler said. “We’re always looking at technology, looking at start ups, and engaging in conversations about this. The partnerships we have formed are helping to form us, so recognizing that we dońt have all the answers helps us move forward.”

How are you navigating unpredictability of costs and challenges in transitioning from on-prem to the cloud?

Rob asked about how Exelon Utilities is navigating the costs of transitioning to the cloud, to which Butler replied immediately with, “Costs are key for us, every dollar we invest eventually flows back to our customers bill so we have to be cognizant of that.”

Calvin went on to discuss how Exelon and Exelon Utilities develops strategic partnerships – including one with Oracle Utilities. Their thinking was to partner with them on the front end, not knowing where it would end up, but knowing they’d get some place, and work together to determine what those solutions could feel like, and how they could better serve our customers.

“That partnership is one where you’re not worried about every dollar, it allows you to sit back and think innovative creatively, and say ‘okay if that’s where your end goal is, here’s what we can do’. And you’re not worried about all the inputs and outputs because it’s a partnership. That is how we’re managing those costs, but more importantly, think innovatively because we do not have all the best ideas, so we bring in those technology partners like Oracle to really leverage it and go and do it together.”

We’d like to extend a huge thank you to Calvin for joining us at the #ThirdCloudSummit this year and for sharing his point of view and insights as CEO of a utility company. These are critical as the industry continues its digital transformation.

Stay tuned for clips of Calvin’s interview on our YouTube channel.

Please visit our website for more recaps and photos of last week’s Summit.

Last week, we had the pleasure of sitting down with the Chairman of FERC (Federal Energy Regulatory Commission), Neil Chatterjee, at the #ThirdCloudSummit in Washington D.C. FERC plays a substantial role in the energy regulatory space – and with the Summit́s primary focus being the utility industrýs digital transformation (to the cloud) and overall technological innovation for the industry, we asked Neil to provide a brief overview of FERĆs involvement. “A lot of the regulatory policy issues flow through FERC. Our foremost responsibility is to oversee the reliability of the grid and evaluate applications for electricity infrastructure and equity investments in new technology,” Neil said.

What’s the intersection of FERC and technology?

Today, innovation is driving tremendous benefits for consumers, the economy and the environment in the U.S. As such, we asked Neil about FERĆs role in technological innovation.

“Energy transition taking place today is being driven by innovation, ranging from fracking technology to accessing low cost natural gas,” he said. “Innovations abound in the distributed energy space. The cost of distributed resources has come down as new technology has occurred.”

With new technology comes new risk when it comes to cybersecurity. “While I think Americans are the beneficiaries of this tremendous innovation, it does come with risk, like increased vulnerability to cyber attacks,” the Chairman said. “We have to be vigilant in ensuring that wére staying ahead of our adversaries when it comes to cybersecurity.”

Neil is noticing that more and more technology companies are coming into the energy space. “Technology companies are huge users of energy, and I think theýre seeing that, as such significant users of energy, they can influence energy and policy space, like making commitments to ‘footprintś (carbon),” he said. “It́s been exciting to see tech companies come into the space.”

He noted that technology companies are now are now active participants in FERC dockets.

We want to thank the Chairman for joining us at the #ThirdCloudSummit and for sharing these critical insights as the utility industry continues to undergo its digital transformation.

Stay tuned for clips of this interview on our YouTube channel.

Please visit our website for more recaps and photos of last weeḱs Summit.

Interviewed by Rick Cutter, Managing Director, Cloud for Utilities

August 15, 2019

During the Cloud for Utilities Summit last November 2018, Rick Cutter, managing director of Cloud for Utilities, sat down with Calvin Butler, CEO of Baltimore Gas and Electric (BGE) to discuss Butleŕs career path and his decisions along the way that led to his position at BGE. Perhaps most importantly, Calvin touched on how important it was for him to “be prepared and to make calculated risks for his career.”

Cutter asked Butler about how he started his career and what steps he took that led to his position as CEO of Baltimore Gas and Electric, the first gas utility in the United States:

“For me, Ím not your typical utility CEO. And what I would always say in terms of how I got here – it was being prepared and taking calculated risks,” said Butler. “Out of undergraduate school, I had a great job lined up with Procter & Gamble, but I decided to go to law school. Then as a lawyer in government affairs. I took a calculated risk to go run manufacturing because I knew that was the course, the path, to be a CEO.”

In 2011, Exelon, another leading energy provider in the U.S., asked Butler to help them get their merger done with Constellation Energy. No questions asked, he went to Baltimore, sight unseen, four or five days a week. They completed the merger a year and a half later. In February of 2013, BGE asked Butler to come to Baltimore full time as a senior executive. About one year later, on March 1, 2014, he was named CEO of BGE.

“For me, it was all about understanding where I needed to be or wanted to be and taking the calculated risk to continue my career and my personal development to be ready for when that opportunity came,” said Butler. “And Ím appreciative of Exelon for giving me those opportunities, and my previous employers for making sure that I continued to be put in a situation to learn. And it́s really all been about continual learning, and Íve been very fortunate to have those opportunities.”

Butleŕs drive and willingness to continue learning, determining the right steps and taking calculated risks helped him become the successful CEO that he is today for BGE. Now, Butler continues to move BGE forward as a leader in innovation in the utility industry.

Innovation is a critical component to the continued success of virtually any company in todaýs world, and BGE is no stranger to this. Cutter asked Butler to tell share a few of the things that BGE is currently working on to keep up with the everchanging technology and societal evolution.

“You dońt normally think of a utility company as being innovative. As a matter of fact you think of just the opposite. But Ím so proud of the fact that as a 202 year-old company, we have to continue to innovate in order to keep ourselves relevant outside of just delivering gas and keeping the lights on.”

Butler emphasized that BGE was founded on innovation. In fact, BGE came about because of an artist who innovated a gas lamp just so he could showcase his art in the evenings. This same gas lamp is on display today right across from Baltimorés city hall. The question, then, is how do you take that innovative spirit and communicate it to the 3,200 men and women that work at BGE every day?

“Wéve done a couple of things, because innovation is critical. And I always stress that́s it́s critical because our customers are demanding more from their utilities today than they did five or ten years ago,” said Butler. “Theýre comparing their customer experiences to all the other outlets that they have. They expect their experience with BGE to be like it is with Amazon.”

BGE customers want, as many other utility customers do, to be able to communicate with their utility company in the same ways they communicate with their social networks – phone apps and social media. “Customers are asking the question, ‘why do I have to wait at home between 12 and 4 ó clock for a service truck to show, when I can track my Dominoes pizza on my phone?́,” said Butler. “It́s real.”

“We have to communicate with everyone all the time, using the channels that customers prefer, and that all starts with innovation,” he said. ”And innovation for me is not about the next iPhone. It́s about looking at our processes, looking at how we can employ technology, and make us more efficient in delivering the service that́s so core to peopleś lives.”

One of BGÉs recent developments is its electric vehicle program. BGE is partnering with the Maryland Public Service Commission to make Maryland one of the most progressive in the nation in installing EV charging stations around the mid-Atlantic.

“BGE is the first utility in the nation to have an electric bus fleet,” said Butler. “We bought two electric buses last year to shuttle our employees from one location to this main office location and it does a couple of things: (1) encourages them not to drive to work, (2) reduces emissions in the city of Baltimore, and (3) highlights and showcases what an all-electric bus fleet looks like. That́s innovative.”

At the end of the day, technology drives companies forward, including utilities like Baltimore Gas and Electric. As the CEO of BGE, Butler understands the importance of leveraging the latest technologies to achieve the companýs mission.

“Technology is all over our business and I say, Ím a CEO of a company that happens to deliver electricity and gas. You should have the highest expectations that your gas flows and the lights come on,” said Butler. “What Ím trying to do is utilize all this new technology to deliver it the most efficiently, at the lowest cost, with the highest service.”

This yeaŕs theme at BGE is “Innovation at Work.” Last yeaŕs theme was “The Energy to Innovate.” The emphasis being that innovation is not going to go away and that BGE is always on top of it.

“This is really about how we go about doing our business each and every day, and it takes all 3,200 of us to lean in and be committed to moving this business forward,” said Butler. “At BGE, we talk about it, we live it, we recognize it, and we reward it. I think that́s how you get a culture of innovation and let people know that we welcome it and this is going to be the business of the future.”

Therés no doubt that Butler has been and continues to be a leader for the 3,200 employees at BGE. He attributes his readiness to take on the position of CEO to his focus on being prepared and taking calculated risks. His desire to be put in positions where he can learn is what allows him to be forward thinking, helping to keep BGE moving with the changing tides.

WASHINGTON, Sept. 6, 2018 / PRNewswire

Cloud for Utilities today announced its Industry Consortium, which aligns industry thought leaders from utility companies and leading technology firms to establish best practices related to cloud computing and digital solutions for the utility industry.

In addition, Cloud for Utilities announced a collaboration with Oracle – a flagship Technology Partner of the Cloud for Utilities Industry Consortium. As an industry leader, Oracle is a global provider of enterprise cloud computing, including intelligent cloud applications, integrated cloud platforms, emerging technologies for businesses, open platforms for developers, and the acceleration of digital transformations.

As an Industry Consortium partner, Oracle Utilities will join the Executive Advisory Board, work with other Utility Industry leaders to author white papers, and attend the Best Practice Working Group Forum taking place September 2018 in Southern California.

“We are excited to be a leading contributor and to work together with Cloud for Utilities and their members. Oracle has always been an innovator; therefore, this collaboration was a natural fit,” said Guerry Waters, Senior Vice President, Oracle.

“We are pleased to have Oracle as one of the flagship members for the Cloud for Utilities Industry Consortium. We look forward to their thought leaders’ contributions for the advancement of the Utility Industry,” said Rick Cutter, Managing Director, Cloud for Utilities. “Cloud for Utilities is developing as the industry leader, covering the intersection of cloud technology and the utility industry. Oracle’s increased participation will further accelerate our growth and industry collaboration.”

About Cloud for Utilities
Cloud for Utilities is the preeminent resource for cloud business models focused on the utility industry. The organization focuses on the education, best practices, supporting career advancement, improving organization success, and supports the advancement of cloud business models in the utility industry.

Utilities that would like to attend the Cloud for Utilities Best Practice Working Group Forum can request an invitation by clicking here.

The second annual Cloud for Utilities Summit will be held November 14 to 16, 2018 at the Fairmont Hotel in Washington, DC. Click here to register.

To learn more about Cloud for Utilities, visit CloudForUtilities.org.

Trademark
Oracle and Java are registered trademarks of Oracle and/or its affiliates.

Contact: Tara Bauer at TaraB@cloudforutilities.org

SOURCE Cloud for Utilities

A resolution passed on November 16, 2016 by the National Association of Regulatory Utility Commissioners (NARUC) at its 2016 Annual Meetings in La Quinta, California, encourages State regulators to consider whether cloud computing and on-premise solutions should receive similar regulatory accounting treatment.

The organizatiońs Resolution Encouraging State Utility Commissions to Consider Improving the Regulatory Treatment of Cloud Computing Arrangements recognizes that electric, gas, and water utilities faced with how best to respond to modern customer expectations, technological innovation, and new regulatory drivers may need to modernize and transform their business operations. A key element of this may be access to state-of-the-art commercial cloud computing services, which is increasingly delivered via a “cloud-based” or “software-as-a-service” model.

NARUC notes that highly regulated industries such as financial services, healthcare, telecommunications, and auto insurance use commercial cloud computing services and are delivering a superior customer experience and outperforming utilities in customer satisfaction rankings, according to surveys from J.D. Power and Associates. Federal government agencies, including the Departments of Treasury, State, and Defense, are rapidly transitioning to commercial cloud computing services and cloud-based solutions as well, through a federal requirement to “evaluate safe, secure cloud computing options before making any new IT investments.”

The NARUC resolution recognizes that, in addition to enhanced security, commercial cloud computing services can provide increased reliability and flexibility, while allowing frequent and easy updates with minimal business disruptions.

But, as NARUC also notes, commercial cloud computing services and traditional on-premise software currently have different business models and payment streams, with the former involving periodic payments for the services consumed, versus a large up-front payment and a regular maintenance fee for the latter. And while a utility may classify investments in legacy hardware and supporting on-premise software as a capital expense on which it can receive a rate of return, it must typically treat an investment in cloud-based technologies as an operating expense on which it does not receive a rate of return.

Due to the current disparity in accounting treatments between these two software approaches, NARUC is concerned that a regulatory incentive exists for utilities to invest in on-premise software solutions, creating unintended financial hurdles that hinder utilities from realizing the benefits other industries are experiencing with cloud-based software. The organization therefore recommends that cloud computing and on-premise solutions be regulated such that both would be eligible to earn a rate of return and would be paid for out of a utilitýs capital budget.

Continue reading at NARUC…

The latest report from Global Cloud Accounting Software Market provides future predictions on its market based on company, product type, application and key regions. This report is critical for manufacturers of Cloud Accounting Software as well as industry experts and other stakeholders. The top players in the Cloud Accounting Software Market include Intuit, Sage, SAP, Oracle(NetSuite), Microsoft, Infor and more.

The main objectives of this study include the following:

To determine and forecast the customer engagement solutions market based on various traits and analyze the factors that affect market growth.
To analyze the individual growth trends and prospects of each submarket
To uncover opportunities for stakeholders by finding high-growth segments of the market
To create profiles for the top players in this market and provide comparative analysis
To track and analyze competitive developments (i.e. mergers & acquisitions, joint ventures, etc.)

Continue reading at The Future Gadgets…

This yeaŕs EY Global Information Security Survey 2018-19 (GISS) of more than 1,400 C-level cybersecurity and risk leaders examined the most urgent concerns about cybersecurity and efforts to manage them.

Key findings – on the negative side:

  • 87% of organizations operate with a limited budget to provide for the level of cybersecurity and resilience they require
  • The riskiest vulnerabilities are careless/unaware employees (34%), outdated security controls (26%), unauthorized access (13%) and related to cloud-computing use (10%)
  • Among organizations that have been hit by an incident over the past year, only 31% say the compromise was discovered by their security center

On the positive side:

  • 70% of all organizations say their senior leadership has a comprehensive understanding of security or is taking positive steps to improve their understanding
  • 77% are seeking to move beyond basic cybersecurity protections and toward fine-tuning their capabilities using advanced technologies like A.I. and robotic process automation

While emerging technologies have created new possibilities, they also created new vulnerabilities and threats – so experts say that cybersecurity needs to be embedded in the DNA of the organization as well as its overall business strategy.

Continue reading at Network Asia…

The American Water Works Association is considering a draft policy statement on “Affordability.”

The proposed affordability policy is stated to have been approved by the organizatiońs Technical and Educational Council and will be considered by its Board of Directors.

The draft policy would read as follows:

The American Water Works Association recognizes that providing reliable and high-quality water, wastewater, reuse, and stormwater services at just, reasonable, non-prejudicial, and non-discriminatory rates and charges to all customers is fundamental to a utility’s mission. To be financially sustainable, utilities optimize expenditures through operating efficiencies, implement water conservation and resource management best practices, and prudently manage capital, operating, and financing costs. However, even with sound planning and budgeting practices, some utilities are faced with affordability challenges among some of their low-income residential customers. Such affordability challenges can occur in any community, regardless of size, location, demographic makeup, and income of the customers.

AWWA strongly recommends the adoption of policies and procedures by utilities, regulators, and local and state governments to address the affordability challenges experienced by some of their residential customers. Utilities should work closely with their local, state, provincial, and national governments to ensure that applicable laws and policies do not impede utility efforts to address affordability challenges and evaluate new policies that allow disadvantaged households to have reliable access to utility services.

Low-income customer assistance can take many different forms that should be designed and implemented to meet the unique challenges of individual communities. Effective communication and education programs targeting fiscally challenged households are also important to build awareness about available assistance programs and strategies to use water more efficiently.

Implementing long-term solutions to meet affordability challenges entails applying both existing tools and modification of current local and state policies. Along with partners, effective locally appropriate solutions can deliver assistance to financially challenged households through collaboration with existing community service programs, customer assistance programs operated for other utilities (such as energy service), and community housing assistance programs.

AWWA describes itself as an international, nonprofit, scientific and educational society dedicated to providing total water solutions assuring the effective management of water.

By Ken Tysiac

FASB issued a proposed Accounting Standards Update on Thursday that would clarify the accounting for implementation costs related to a cloud-computing arrangement that is a service contract.

The proposal also would add new disclosure rules for implementation costs for internal-use software and cloud-computing arrangements.

In issuing the proposal, FASB is addressing concerns that arose after the board issued ASU No. 2015-05, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customeŕs Accounting for Frees Paid in a Cloud Computing Arrangement. That standard was designed to help companies evaluate the accounting for fees paid by a customer in a cloud-computing hosting arrangement. The standard includes guidance for determining when the arrangement includes a software license.

Several stakeholders asked FASB to provide additional guidance on accounting for costs of implementation activities performed in a cloud-computing arrangement that is a service contract. FASB issued the proposal Thursday to address diversity in practice that arose because existing guidance is not explicit in that area.

Continue reading at Journal for Accountancy

In August 2018, the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) that reduced complexity for the accounting for costs of implementing a cloud computing service arrangement.
 
Existing U.S. Generally Accepted Accounting Principles (GAAP) were deemed unnecessarily complex by stakeholders and were updated to reflect emerging transactions in cloud computing arrangements that are service contracts. The standard now aligns the accounting for implementation costs of hosting arrangements – regardless of whether they convey a license to the hosted software.

Depending on company type, the changes will be effective for annual periods – including interim periods within those annual periods, in 2020, 2021 or 2022.

Continue reading at FASB…