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EPRI Smart Distribution and Power Quality Conference

Good afternoon and welcome to Charlotte.

I’ve been looking forward to speaking to you for some time. I say that because I hold this group in such high esteem. When I look at the topics you’ll be discussing this week, I’m reminded you are the “big brains” of the industry. You’re solving today’s problems, but more importantly you’re thinking about the future. I’m honored to be welcoming you to Charlotte.

About 10 years ago, Charlotte was really thought of as a banking town. Functions like this have people talking about Charlotte being an energy town. And there are facts to back that up.

  • The Charlotte region is home to more than 26,000 energy-related jobs.
  • Charlotte is home to more than 200 energy companies from small startups to large energy companies like Duke Energy.

And we’re trying to build more, not just in Charlotte but across the Carolinas.

  • Duke Energy is a primary sponsor for efforts like E4 Carolinas, the Research Triangle Cleantech Cluster and CLT Joules, an incubator for energy-related startups just getting off the ground.

We’re also pleased to have a very strong presence by EPRI in the region. As Duke Energy’s Chief Innovation Officer, I’ve got a keen interest in what EPRI’s doing to further technology and to prepare our industry. Also, Duke’s dues for EPRI come out of my budget for EPRI, so I like having them close by to see how our investment is doing.

Importance of the grid

Let me start today by framing the important work you’re doing. You might be working in distribution, transmission, research and development or technology – or with something like smart grid or grid modernization. But here are two facts:

1) In the U.S. every day, 316 million people, our customers, count on us to power their lives. I always start with the customer when I talk about our business.

2) And it’s a big business. That’s my second point. The electric system is one of the biggest cash registers in the nation. Last year electricity sales rang up more than $350 billion for U.S. consumers.

Now, let’s compare that to other big industries in the U.S. 2

So let’s start with box office sales … movies. Lots of people go to the movies. It’s about $10 billion a year.

Video game sales. That’s on the rise, and it’s around $16 billion a year. Gaming – racing, legal gambling at casinos. That’s around $40 billion. It’s getting a little closer.

Lodging, the hotel industry. That’s about $137 billion – still less than half of what the electricity business is.

Let’s get to something more serious. Alcohol sales … that’s a big business. At $197 billion in annual sales, it’s still a far cry from our industry.

Let’s shift over to Walmart. So Walmart is not an industry, but it’s certainly a big, important supplier to the economy. Their U.S. sales last year were $279 billion. Still less than our industry.

You have to go to the grocery store industry to find something bigger – $520 billion in annual sales.

So as you would expect, in the U.S., eating … basic survival is No. 1 with people. But electricity is No. 2 – and it’s more important than drinking or going to Walmart. That’s how important your job is.


Let me talk about the challenges that we face … and you face. It’s really to make this cash register – this economic engine – run better, smoother and smarter. As we’ve seen, it’s a pretty big cash register. It’s pretty reliable, too. Last year, Duke Energy’s average outage time per customer was around 120 minutes – and it’s been shrinking the past few years.

We want to do better. Low energy prices have been great for the economy. It gives our local industries and businesses global competitiveness. But there are a number of challenges facing us as we seek to make the grid smarter and more reliable.

Challenges like:

1) Aging infrastructures. Like roads and bridges, we need to maintain and invest in our grid. Grid bottlenecks – the technical term is congestion – areas in the country where there are bottlenecks getting power to customers during critical times are already an issue.

2) Gas supply. Normally, there’s plenty of gas. But in critical periods the supply and the price can be a very, very different story.

3) Security threats. Cyberattacks and physical attacks are something we are having to ready ourselves for as they become more severe and certainly more sophisticated.

4) Climate change and other environmental policies throw new elements into the mix.

5) Distributed generation. More and more solar and wind are being added to the grid – making the grid act more like a two-way street rather than a one-way highway. The integration of renewables is an immediate and growing challenge.

Let me share an example on that last point. This year, Jan. 30, the Polar Vortex hit many of our systems. Duke Energy hit an all-time peak demand, a first in seven years, around 7:30 a.m.

Not only does it get hot in the Carolinas but it gets cold, too. North Carolina is No. 4 in the nation for installed solar, Many supporters of solar said it would help us meet peak demands. However, at that particular time on that particular peak day, only about 3 percent of our installed solar was available. So instead of 350 megawatts contributing to that peak, we had closer to 10 megawatts.

That’s part of our challenge and it’s no secret to you. The grid is a much more complicated place to be – making our jobs that much more interesting with problems to solve.

But these challenges present significant opportunities for our future and the future of our customers. We’re already seeing pretty impressive results from our modernization deployments. Since 2008, we’ve invested $1 billion in automated technologies across our territory.

During the Polar Vortex, thanks to advanced technologies that allow us to achieve greater volt-VAR optimization, we reduced voltage by 5 percent. That allowed us to avoid rolling blackouts other utilities experienced.

The direct reliability benefits to our customers are also significant. In Ohio, we’ve avoided more than 11 million customer outage minutes since 2009 due to self-healing capabilities made possible through automated technologies. And in that time frame, we’ve reduced our outage frequency from 1.5 to .979 – well above our original goal.

From a distributed resource perspective, our investments in systems like Distribution Management System – or the brains behind the grid – will provide our operators greater visibility of what’s happening across the system. This will allow them to better predict and manage the intermittency caused by growing distributed energy resources.

As we look to the future, the two-way communications capabilities we are creating with advanced metering infrastructure and additional technologies will pave the way for future energy services our customers want.

Keys to embrace

If I had to share a vision for how the industry will address the future of our grid, it would center around three key things we need to embrace.

1. The first thing is collaboration.

The industry has a lot to be proud of. EPRI is a success story at taking research and making sure that knowledge gets spread out to its members.

But we can’t depend solely on EPRI to be the only source of collaboration. We’ve got to open our own doors, pick up the phone and get out and see what others are doing.

We need to share best practices – and it’s not all technical either. Regulatory best practices might be just as important. Remember our cash register has two components: How it works and how do our companies make money from it?

One area of collaboration that I’m proud of is Duke Energy’s work on interoperability – or interchangeability. The plug-and-play aspect of your personal computer, which you take for granted, isn’t part of today’s electric grid. There are so many proprietary systems on our grid today, it makes the grid needlessly complicated.

Companies suffer, but also our customers suffer. The push for interoperability will not depend solely on Duke Energy. It’s an effort that we all need to be a part of – utilities and suppliers alike. I know there’s a session on this topic tomorrow, and I would urge you to check it out.

2. The second theme is line of sight to value for our customers and our business.

One of the temptations of research and development work is to have the cool factor sidetrack the reality factor in what we’re doing. We must always ask ourselves, “How can my work today help customers tomorrow?”

And if it’s not tomorrow, how far away is it? We need to be disciplined about looking at things that will create near-term value – but also looking at long-term value and the future for our customers.

There’s an old saying that goes, “One average idea that gets implemented is better than three genius ideas that are sitting on a shelf.” We need to make sure we have the proper hand-offs with our R&D work within our company.

I’m a strong supporter of making sure we set aside time and money within Duke Energy to prepare for the future with our research and development. Part of that is to make sure our vision is housed not only in R&D, but is shared with and embraced by others.

The best way to lead others to the future is to connect them in the present. If that means presenting to an interested staff meeting or employee group, go for it. We can’t work in a vacuum.

3. The final theme is innovation

I saved that for last because we have so many innovative people with us here today. I probably don’t have to spend too much time talking about innovation. But our actions need to keep up with our intellect.

Another old saying, “Ideas are a dime a dozen. People who implement them are priceless.” We still live in a world where we’re measured by results, and the electric grid is a perfect example of this.

Today we have a $350 billion machine that runs pretty well – with very little downtime. But we have forces that are working against us. Some of those I mentioned earlier.

But we have people like us battling those challenges – plus working to post even better results. We’re building a better, faster and smarter grid of the future. Innovation, collaboration and line of sight to value are three cornerstones of making that happen.

I’m happy to have so many people here in Charlotte with us today, working to implement those things and create a better electric grid.


I’ll leave you with one last quote that’s been attributed to so many people – I don’t know who said it. So today just assume I said it: “What comes easy will not always last, but what will last will not always come easy.”

That sums up our work with the electric grid. It would be easy to allow the grid to coast along but put Band-Aids on it and keep it going. That will not last. What will last is the good work you’re doing to improve the strength of the grid to make it more efficient.

We know it will not always be easy. But through innovation, collaboration and line of sight, we can make that work easier. We can make that work become a reality, and we can make the grid help more people be more productive. It’s not easy work, but it’s important work.