The effort is predicted to save Vermonters money and perhaps someday involve remote control of customers’ electric use to maximize savings.
The partnership comes in the form of a business called Utopus Insights Inc., which is based in Valhalla, New York, and Bengaluru, India.
The company is a startup, with IBM’s help, and with VELCO serving as both an investor and a strategic partner.
The move is an unusual one for both companies, said Utopus Insights President and CEO Chandu Visweswariah, who is an IBM Fellow.
“It’s something very novel that (VELCO is) trying … and I don’t think that IBM has ever done anything like this,” Visweswariah said.
This is IBM’s first entrepreneurial startup, he said, although IBM purchases and divests itself of companies “all the time.”
What VELCO’s done is unusual as well, he said.
The electric transmission company identified future challenges with a changing electrical grid, developed solutions over the past three years in collaboration with IBM, and has now signed on as an investor in the new company, Visweswariah said.
When VELCO first contacted IBM several years ago, Johnson said, the transmission company faced new difficulties resulting from the state’s increasing dependence on weather-based forms of renewable energy.
Much of the company’s interest at the time was in forecasting weather as a way to anticipate electrical supply.
“We were experiencing much more frequent, much more severe, much more costly extreme weather events,” Johnson said, “and we could see, if this pace of renewable energy growth continues, it’s going to begin to impose significant challenges to balance supply and demand.”
“We felt the riskiest strategy, the riskiest place we could be, would be to do nothing,” Johnson said.
VELCO and IBM first contracted with each other 3½ years ago, Johnson said, and the effort was successful for both entities. Software IBM developed to meet VELCO’s needs at that time has become the industry standard, Johnson said.
This next venture builds on that, but the idea remains the same: improved forecasting for the electrical grid using machine learning.
Because of its dependence on the weather, renewable energy often introduces uncertainty into the electrical grid, Visweswariah said, and his company aims to reduce that by forecasting both the weather and electrical demand.
IBM already owns The Weather Company, after a 2015 purchase that includes the Weather.com and Weather Underground websites.
Utopus Insights will marry IBM’s weather data with precise, anonymous information on electrical demand that’s gathered at the level of individual electric meters, Johnson said. This will enable electricity supply and demand models for neighborhoods, communities and the entire state, he said.
Vermont possesses several attributes that made it an ideal place to put a concept like this into effect, Johnson said.
For instance, 94 percent of Vermonters have what’s called a smart meter on their home, which is a device that sends and receives information to and from the grid, he said. Vermont also has a 1,500-mile, 72-strand fiber-optic cable running from border to border, connecting many of the state’s electrical substations, he said.
In the end, Vermonters will save money, Johnson and Visweswariah said.
A major part of ratepayers’ bills each month consists of charges related to peak demand, Johnson said. Peak demand occurs when Vermonters consume the greatest amount of electricity, and the New England electrical grid operators assess a fee based on how great that peak demand is.
Reducing peak demand reduces these fees, which would significantly reduce ratepayers’ costs, Johnson said.
This reduction in peak demand “might well be” accomplished someday through remote, centralized control — for example, by preheating homes when the sun’s shining, or by charging vehicles when the wind’s blowing, Visweswariah said.
“If indeed there is control over what happens behind the meter … it will be, and should be, with your knowledge, and cooperation, and to save you money and meet your goals,” Visweswariah said.
Along with predicting and managing peak loads, the Utopus Insights software will anticipate icing events. These can knock down power lines, block solar panels and cause wind turbines to emit unpleasant sounds.
The new company may not employ large numbers of Vermonters, but it will attract people from other states and countries who want to see the concept of electricity supply and demand modeling put into practice, Johnson said.