Horizon Power turns to data to drive business decisions

Western Australian state-owned electricity service provider Horizon Power will invest a further AU$124 million during the 2015-16 financial year, as part of its five-year long transformation journey aimed to help reduce energy costs and save the state government AU$100 million a year by 2018.

According to Horizon's chief information officer Paul Thomas, speaking at Gartner Symposium ITxpo 2015, the company, which is two years into its commitment, has already achieved AU$70 million in savings.

Thomas said aside from helping reduce its subsidy from the state government, the project's other key goals are to help automate its workforce so that the company internally becomes more efficient, and being able to help its customers, such as BHP and Rio Tinto, stay relevant.

"If you think about our service area, it's very, very expensive for us to operate. We've got a complete commitment to the WA government to reduce the subsidies that allows us to operate in those areas," he said.

"So disruptive technologies like solar and battery storage ... are going to play a critical role in servicing those customers and maintaining our cost base, so being prepared for that is going to be a significant challenge for us. If you listen about the spiral of where the industry is going, we're going to need to be ahead of the game and reasonably soon," he said.

One project underpinning the company's transformation success so far has been the roll out of the advanced metering infrastructure, an integrated system of advanced meters, communication networks, and data management systems that can record how much electricity a household or business is using at 30-minute intervals. During the 2015-16 state budget, it was forecast that Horizon Power would invest AU$34.1 million in the total rollout.

Thomas said the advanced metering rollout is expected to help achieve several benefits, in particular in regional Australia.

"It's very difficult to send people out to help decide whether to turn people off or not. We have a lot of remote indigenous communities who want to be on a prepayment meter. They want to be able to manage those prepayment meters to the money they've got coming into the community because they don't want to go into debt.

"Our advanced metering is able to turn from credit to prepayment. The whole process from meter to billing is now fully automated. We're only dealing with exceptions through that process, which has allowed us to reduce our cost significantly to manage those meters."

Thomas said part of the transformation process has also been about reducing regulatory red tape, in which the company spent 12 months working with regulatory bodies to amend. He said regulation previously dictated the way the company operated but since spending 12 months working with regulatory bodies it's no longer the case.

"An example of that is that we have a disconnection process that could take up to nine months. Regulation now says we have to tell people but there's a whole process of making sure we don't impact our customers unnecessarily and we have to keep people in the loop. Now we're able to talk to our ministers and any stakeholders about why the cost of the business is what it is," he said.

In addition, the company is currently running a proof of concept of installing intelligent meters to examine the way people use their power in regional areas. Thomas said the six-month pilot will provide the company with customer usage patterns, which will enable Horizon to tailor its product sets according to customer needs.

"We need to be able to structure pricing around their usage. At this stage, our intelligence stops at the meter, we need to go beyond the meter and help people work out how they can use their network," he said.

On the topic of data intelligence, Thomas said up until earlier this year, the company was not taking advantage of 52 percent of the data it collected through its 825,000 data points in its 2.3 million kilometre wireless network.

"Our networks have had intelligence for quite a long time. We just haven't used it. We started a journey two years ago to really clean up our data. We inherited a whole heap of data when we exited the Western Power parent company, and we had to look at our data and see the relevance of it," he said.

Since cleaning up its data sets, Thomas said it has introduced a self-service culture into the business. For instance, the IT team is no longer "crunching out reports" on behalf of the business, as the intelligence is now being shared within the company, and reports no longer take weeks to generate but in real-time.

"It gives people the ability to analyse everything themselves. We don't build reports anymore. Instead we give that back to the business, which has taken the burden off the IT space," he said.

The data is also now being collected to monitor the status of the company's network, Thomas said, noting that the company will receive alerts when people have tampered with the meters, when power quality changes, and when transformers heat up.

Thomas also revealed the company plans to roll out a self-healing network app after Christmas to enable customers to have a holistic view of the electric network right to their meter to help determine where and when the issue is occurring. Thomas believes that this will help reduce the amount of calls to the company call centre.

At the same time, Thomas said the app will help track the status of its internal network and will be designed to raise service calls if something needs fixing, and it will also be designed to have remote access to the company's main control centre.