Eric Murray, President & CEO of Tantalus, discuss the changing role of the utility company and what they are doing to improve utility load management tools.

Full Transcript:

Ben Lack: I’m with Eric Murray, president and CEO of Tantalus. Thanks so much for being with us.
Eric Murray: Good evening.
Ben Lack: Could you start off by telling us about Tantalus and where you guys are from and how long have you been in the business?
Eric Murray: Absolutely. Our company was founded in 1989. It started as a communications engineering house. Since 1999 we’ve been looking at the utilities space, specifically. We see ourselves as an enabling technology. We’re all about communications. But as an enabling technology our job is really to take the communication side of a problem and use it to enhance the value of the existing assets, processes, and procedures that a utility already has.
Ben Lack: All right. So that’s cool from fifty thousand feet, but what does that really mean from an operating standard?
Eric Murray: Operationally, that looks like things like automated metering infrastructure, what they used to call automated meter reading. Basically, substituting labor for technology in some relatively low value added activities, labor activities that sometimes cost the utility significantly. And applications like that are load management that help a utility average the overall cost of energy they deliver to their customers and hence the average monthly bill a customer would be paying.
Ben Lack: So are there certain types of competitive advantage that relates to types of communications that your provide these utilities that maybe some of your competitors don’t necessarily?
Eric Murray: Well, from our perspective we focus on a couple of key things. First and foremost in the utilities domain, connectivity or the ability to ensure every customer’s connected is a key issue. And to do this at a low price point or at a reasonable price point is critical. And so one of the key competitive advantages that we first set out to demonstrate in the cooperative or the very low density world applications is our ability to connect. That started out to be demonstrated through meter reading, which was the first applications utilities really looked to doing. But ultimately it’s going to be more and more relevant as demand-response or load management and energy storage and distributed generation get adopted by technologies in the future.
Ben Lack: Talk to us a little bit about how over the past couple of years you’ve seen these technologies grow. Where is it going?
Eric Murray: Well, the marketing side of the vendor community has coined the term smart grid. In all reality, a lot of what is the smart grid utility has been doing for quite some time, and we’re really looking at driving those practices in a more systematic fashion or at a more effective price point. So what we’ve seen overtime, and I think why we’re becoming more relevant in the marketplace, is historically utilities looked at the communications that they were purchasing as a data acquisition vehicle. And industries really evolve from data acquisition to more of a command and control, not only understanding what’s going on but effecting some sort of action that either enhances customer service, reduces overall cost, or reduces the down side of energy delivery.
Ben Lack: And so tell us how you are trying to enable this smart grid, what’s the underline solution that you’re saying that this is our approach to the problem?
Eric Murray: Our approach to the problem basically has three legs of a stool. First and foremost, it has to make good operational sense. We look at a problem and say first and foremost it has to be an operational problem, either reducing the cost to serve or enhancing the time or the relevance of the information that we’re getting. And those are the things like automated meter reading, being able to restore more effectively energy when you have an outage and looking things like voltage sag and swell or power quality issues and take evasive action in a timely fashion. That’s why, of course, connectivity is so important because you’re dealing with a number of disparate devices across the service territory. We also look at it from a cost perspective the requirement to minimize the infrastructure or the communications cost to the utility problem. And so we look at being able to substitute a variety of communications technologies that utility may have already purchased or is looking at purchasing and being able to leverage them in a cohesive communications solution. And our ability to migrate between technologies as they evolve is one of the things that I think separates us because utilities they look at these problems in terms of decades. Most other industries look at a three to five year technology horizon. Utility is ten, twenty, thirty years, so whatever they decide to use, they need to ensure that it’s going to remain relevant over the course of the decade it’s in use.
Ben Lack: So, what kind of role is fiber taking into the solutions that you’re offering?
Eric Murray: That’s a great question. Fiber is one of those technologies that offers huge band width and is being installed more and more as we drive to a more connected world. Some of the technologies that we have developed now allow us to provide solutions to the utility that rides on top of existing fiber or DSL infrastructure. So basically, we’re taking an asset that’s already put in place to serve utility customers with Internet access, streaming video, IP TV. And that’s smart grid applications on top of it. And the true real benefits there are first and foremost, leveraging in infrastructure that’s already in place instead of putting a parallel infrastructure in place. But the other real benefit that we’re looking at is there’s a medium that really helps the utility engage their customer base because it already provides a number of visual entrees into the household and helps the utility customer understand cost of power availability and some of the things the smart grid is trying to deliver. When I look at the strength of energy delivery in North America, historically utility is haven’t been rewarded for being innovative some much as they’ve been rewarded for delivering a superior reliability– four nines, five nines of performance. So, what’s really happening with the smart grid is the fundamentals of energy delivery are changing. And utilities are trying to balance continued service delivery with predicting the future. And there are a number of challenges or a number of questions they face right now: How quickly would distributed generation evolve? Will technologies like fuel sales really emerge? Will electric vehicles be largely battery operated or hydrogen fuel ultimately prevail? And these are all questions that the book’s not written on yet, the chapter’s not written on yet. And so when I look at the challenges that utilities are faced with, what really strikes me is from our perspective, enabling utilities to mitigate their risk and put solutions in place for today and the near future while still enabling them to adapt depending on which technologies prevail. And I think a question of distributed generation or electric vehicle is a great illustration. We don’t know how they’ll end up. But either way utilities will play a significant support role in their mass adoption in the future.
Ben Lack: For a lot of the folks that are in a regulated town, they don’t really have much of a choice as maybe they can select as their utility provider. So why do utilities want to work with folks like you when customer service doesn’t necessarily matter because they don’t have that much customers?
Eric Murray: Well, I think the fact that you have a customer doesn’t necessarily mean you don’t want to serve them well. We started out in the small power industry because we observed that cooperatives in municipalities tend to look at customer service as an integral part to what they do and who they are. And customer service ranks high on their priorities going forward. And so my view is as the world changes and technologies like energy storage and electric vehicles enter commercial production, how the utilities support these and delivers support services to their customers is a critical part of who utilities are evolving to be.
Ben Lack: I’d like to know, personally, why the industry is interesting to you, why you’re in this business, and also why you’re doing what you’re doing.
Eric Murray: Well, it’s interesting. I started looking at this issue for many ageing infrastructure perspective. And one of the really interesting things about infrastructure, in general, in North America is that it is a large part of who we are as a nation. And we take it for granted. And it has been in place in the utilities space in many cases since the ’50s and ’60s. And understanding how to extend its useful life and continue using it without damaging it as our individual electric footprint goes up was very interesting to me. What I found is as time goes on is I’m probably a little bit of a closet granny. This is an industry that’s fascinating to me because of the environmental issues, because of the social issues, and because of what I’m learning more about what utilities have done for us in North America. Clearly our cost of energy has been a competitive advantage on the world stage for quite a while and we need to continue that capability as emerging economies threaten our dominant position globally.

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