EDITOR'S NOTE: As distributed generation proliferates, utilities will need new three-dimensional understanding of their assets as they migrate to new business models. The Energy Times sat down with Philip Mezey, Itron president and chief executive, to discuss the change ahead. This concludes a two-part series. Last week: "Intelligence for the Future Grid."

ENERGY TIMES: Do utilities have the business model in place to figure out how they’re going to make money in this new environment?

MEZEY: I don’t necessarily believe that they have the business model in place. The fundamental requirement to succeed in this future environment is they are going to need communications and control all the way to the edge of the network.  As a distribution coordinator – which is where the business is moving - there are going to be multiple prosumers and suppliers that are on the network. The utilities role is going to be one of coordination and stabilizing the network, in addition to providing energy resources themselves.  The enabling technology there is going to be connection, measurement, sensing, and control. That basic foundation has to be put in place.  Exactly how these transactional systems work - there are still questions about how that’s going to evolve.

ENERGY TIMES: Half of America has smart meters, half doesn’t. How will that shape how you address the market?

MEZEY: We see different segments of the market where we have customers that have some experience with smart meter  data and are already coming back and taking a look at needing greater visibility and capability in their systems.  But of course we also want to address those parts of the market that really have very little automation and support additional adoption of the technology.  We have a strategy for integrating the IoT-based advanced platform that we’ve launched, the OpenWay Riva platform, into our existing meter installed base to allow customers to continue to extend their capability.

ENERGY TIMES: How will the meter technology business evolve in the next five to 10 years and serve the utility of tomorrow?

MEZEY: The meter has been a cash register for the utility.  We now see the device that we’re putting out in the field as a sensor that’s going to enable not just revenue services, but give the utility an incredible awareness about how the distribution network is performing and the customer an incredible awareness about how they’re using electricity, gas, and water.  So five years from now the vision is that in addition to providing accurate billing and transactional settlement for what’s going on in the network, we’re providing a full range of services of network optimization and grid visibility. We are providing  consumers with greater awareness, and also the ability to schedule into the network and get different types of services from the grid. We’re going to grow beyond just making sure the bill is correct to making sure that the utility is as successful as it can be in managing the network, with understanding of what’s going on to the edge.

The utility business model of the future will be front and center at the Empowering Customers and Cities executive energy conference, November 1-2 in Chicago.