The number of trends, big and small, that are impacting the electric utility industry are almost too numerous and diverse to count. A sector that just a couple decades ago might have confronted no more than a handful of technological and regulatory developments is now faced with hundreds of emerging grid systems and devices, dozens of impactful government policies, vastly different and changing consumer expectations and unprecedented challenges to reliability.

“But these developments can also create stresses on the grid, budgetary pressures and challenges to co-op culture and operations. It's important for co-op leaders to stay informed about what direction these technologies and trends are heading and how each co-op should respond."

Strickland and her colleagues in NRECA's Business and Technology Strategies group helped consolidate a list of nearly a dozen major trends into the follow five key developments that are particularly relevant to electric co-ops.

• Artificial Intelligence
• Co-op Collaboration
• Load Growth
• Automation and Digitalization
• Cyber and Physical Security
  

Trend: Artificial Intelligence

Artificial intelligence, or AI, has entered daily life, showing up in everything from our phones to nearly every interaction with a customer service chatbot.

In the electric utility industry, AI has been mostly behind the scenes, but many analysts say its presence is sure to grow.

The AI that most consumers interact with is “large language models," which trains on books and articles to learn how human language works so it can interact conversationally with humans. However, AI comes in many flavors. In the broadest sense, it involves taking in and learning from large amounts of data of all kinds. In that way, features of AI, such as machine learning, are already being used in utility system management, says Lidija Sekaric, NRECA vice president of innovation and emerging technology.

AI's learning capabilities could be particularly valuable in managing the variable nature of renewables. The Electric Power Research Institute (EPRI), for example, has paired with investor-owned power utilities to study the ability of AI to improve wind-power forecasting.

Sorting through and analyzing images, whether photographs or system maps, could also become a useful tool for co-ops, says David Pinney, NRECA software engineering manager.

“I see application in engineering analysis," he says. “Let's say the co-op has a whole bunch of images to study. These AI models would be pretty good at seeing if anything is amiss in those images."

Several utilities have been investigating the use of AI to analyze drone imagery to improve the inspection of transmission and distribution assets. An EPRI study also found benefits in combining drone inspections with AI analysis to safely inspect cooling towers and containment buildings in nuclear power facilities.

For distribution co-ops, such image analysis could become a valuable tool in vegetation management, allowing a co-op to keep better track of growth along its lines from drone or ground photos that AI could correlate with other data, such as tree and plant varietal growth rates and health, to forecast potential trouble trees.

Customer relations is being transformed for businesses of all kinds as large-language-model AI chatbots increase their capabilities and become more common. They are expected to play a larger role in handling member inquiries at electric co-ops in the future.

Applying AI learning to data from smart meters and appliances could also enable greater personalization in the energy and product offerings co-ops create for members, providing a Netflix-like experience of options tailored to individual consumers, notes Abhay Gupta, CEO at Bidgely, one of several companies now offering AI utility software.

However, despite the predictions that AI will eventually reach into nearly every facet of the power industry, Pinney cautions that current applications have been limited, and AI has yet to play a role in a critical part of co-op management: making decisions involving large capital investments for infrastructure such as substations or new generation.

“There currently aren't AI solutions for that," he says. “But it's coming."

Trend: Co-op Collaboration

Generation and transmission co-ops and their member cooperatives have worked together since the 1950s. But changes in the grid and the needs of co-op consumer and business members are deepening that collaboration on many fronts.

The G&T and its members have been collaborating on a DER initiative since 2020 that involves the University of Minnesota. They are working to understand the best approaches to planning, integrating and marketing distributed resources.

Haase emphasizes the learning is a two-way street.

“It's great to have our member-owners talking about the things they're working on and having their consumer-members that have had experiences with EVs and solar stand up at events and talk about those experiences," Haase says.

GRE and member co-ops are also working together through the “Powerful Potential" program to address an industrywide challenge.

“One of the things that keeps GRE and our members up at night is a shortage of skilled labor. We know from our member surveys that staffing is a challenge," says David Ranallo, GRE director of culture, communication and strategy.

Through Powerful Potential, the G&T and its members hope to educate young people on opportunities in the industry and connect them with training programs that can open up those career paths.

In addition, GRE and members worked together to qualify for loans and grants from the U.S. Department of Agriculture's $9.7 billion Empowering Rural America (New ERA) program. A key to these efforts, Haase says, is “Communication, communication, communication."

Hoosier Energy, a G&T based in Bloomington, Indiana, and its members have embraced the same philosophy from senior management to staff. Member co-op managers meet monthly with the G&T. Standing subcommittees take the collaboration further.

“In particular, the technology and planning committee is focused on integrated planning," says Chris Blunk, Hoosier Energy's chief administrative officer.

The G&T is kicking off an integrated planning pilot with member RushShelby Energy, based in Manilla, Indiana, with the goal of more intensive collaboration.

“We'll be working together on planning down to the substation level, down to the feeder level," says Blunk. “That's more granular than we've done in the past."

The project includes mapping out how Hoosier and RushShelby would handle different scenarios, including more or less growth.

“It's a much deeper dive than the industry has typically done," Blunk says. “We hope it will set the stage for replicating it around our entire system."

Hoosier Energy's member solutions department works with member co-ops on immediate challenges.

“We focus on the co-op staff," says Blake Kleaving, manager of member solutions.

For example, after hearing interest from members about data centers and the large loads they could offer, Hoosier Energy created “a mega-load project process" providing a workflow for interconnecting large loads.

Recognizing that the energy transition was changing the game for key account executives, Hoosier Energy initiated workshops and training sessions to help member co-ops deal with expectations regarding ESG goals and energy efficiency requirements. The member solutions group has also worked with staff on handling DER emerging technologies, a recognition that “the energy transition is drastically changing the way we do business," Kleaving says.

Venkat Banunarayanan, NRECA's vice president of integrated grid, says the collaboration between G&Ts and their member co-ops reflects the mutual benefits of working closely together.

“The grid is evolving to the point that we all need to be talking and exchanging data and information more, not less," he says.

Trend: Load Growth

Northern Virginia Electric Cooperative (NOVEC) serves a region that was once at the center of U.S. history as the home of the decisive Civil War battles of Bull Run. Today, Manassas-based NOVEC's territory is again at the center of an inflection point as power-hungry data centers and other new demand drive eye-popping load growth outside Washington, D.C., and in several regional pockets nationwide.

After decades of relatively flat growth, the Federal Energy Regulatory Commission at the end of 2023 upped its forecast for the five-year growth in U.S. electricity demand from 2.6% to 4.7%, a jump of 81%.

The growth has been spurred by the region's closeness to the nation's capital and a fiber backbone laid down years ago by the Department of Defense and AOL.

“Once you hit that fiber backbone, you can touch the rest of the world," says Schleicher.

The data centers have been expanding their computing capability, and some now draw up to 90 megawatts of power per building, says Arnold Singleton, NOVEC's vice president of engineering. Overall, he adds, they account for 10,900 MW of contracted electric capacity through 2030.

NOVEC has seen its load increase by 15% to 20% annually as the centers have grown, an extreme example of the impact these facilities are having across the country. EPRI estimates data centers could consume up to 9% of U.S. generation by 2030, more than double their load in 2023.

EVs are another major driver of load growth through 2030, with electricity consumption from the transportation sector likely to increase seven-fold from 2023, according to a study by Rystad Energy consulting group.

Allison Hamilton, NRECA's director of markets and rates, says other factors are also contributing to an increase in demand. Spurred by federal incentives, “industrial manufacturing is coming back into the U.S.," she says. “We're seeing EV battery factories and other kinds of manufacturing, which is creating growth. Cryptocurrency mining loads have also created challenges among some co-ops."

However, Hamilton notes that growth is not uniform across the country. Virginia, Texas, South Carolina and Arizona have seen the largest growth, according to the U.S. Energy Information Administration, while much of the Great Plains and Northeast have seen little or no increase in demand.

For electric co-ops, the surge in demand can present challenges, particularly in the need to build infrastructure to meet new loads. NOVEC has eight 600 MVA substations under construction, 12 in the engineering stage and 58 in the planning process, says Singleton.

The co-op requires data centers to pay for capital improvements up front, part of a structured approach to managing growth and risk.

“When you've got 20 companies all wanting to do things 20 different ways, it's very confusing. We've done a lot around standardizing the intake and design processes," says Singleton.

NOVEC is one of the largest electric co-ops in the country, with service to around 180,000 members. Now, with 65% of its energy sales coming from data centers, Schleicher stresses the importance of maintaining quality of service and a healthy relationship with its residential and business members.

The data centers are “our growth engine," says Schleicher. “But we can't take our eye off the ball for services we provide those 180,000 members."

Trend: Automation and Digitalization

The automation of electrical distribution systems at cooperatives and other power utilities has been a transformational trend for decades, but research and the smart grid technology continue to push system automation in new directions.

“In Hawaii, residential batteries are being used to do this," Sekaric explains. “If they need to support frequency on the grid, those batteries are triggered and will discharge very quickly, in a matter of a millisecond."

Consumers can contract with the investor-owned utility that serves all the Hawaiian islands except Kaua'i (served by Kaua'i Island Utility Cooperative) to allow a percentage of their batteries' stored power to be automatically dispatched into the grid at certain times of the day.

“Managing a fleet of thousands of batteries? It's already happening," says Sekaric.

In general, distribution automation uses digital technologies including smart switches, advanced metering infrastructure, sensors and communication networks that feed data to algorithms capable of machine learning to analyze, control and improve the efficiency and reliability of distribution systems, including feeder switching, outage management, voltage monitoring and control and reactive power management.

The ability of the algorithms to handle and learn from large data sets should allow the software to “forecast DER asset availability and fold that into load forecasting," says Sekaric.

Many distributed energy resource management systems (DERMS) already incorporate some automated capabilities, but Sekaric notes, “No one can do everything." Co-ops, she says, should do a thorough cost analysis of the benefits of the functionality of any DERMS before adopting it.

Researchers in government and private industry are also continuing to expand DERMS capabilities.

A National Renewable Energy Laboratory project operated in partnership with Holy Cross Energy, a co-op based in Glenwood Springs, Colorado, has tested the capability for a small community to autonomously share electricity from solar panels, batteries and EVs between homes to balance generation and demand across the community.

An NRECA research project, the Community-Integrated Distributed Energy Resilience (CIDER) Initiative, is designed to manage DER through a smart home API (application programming interface), software that allows behind-the-meter DER devices such as water heaters, rooftop solar, EVs and home batteries to communicate with each other.

The project is working with Camus Energy's DERMS and home energy optimization software from Emulate Energy installed at five electric cooperatives. A primary goal is to demonstrate how affordable, existing technologies can be used to control DER and boost grid efficiency and resiliency, says David Pinney, NRECA analytics research manager.

But the initiative could also unlock new options in automated DER management.

“We are working on a feature that aggregates power across device types and characterizes them all together as a virtual battery," says Pinney. Should system operators, for example, need half a megawatt for an hour to manage peak load, they would not have to individually manage different resources.

“Instead of trying to figure out, 'Should we stop our EV charging at this time and turn off the water heaters and then use the batteries?'" Pinney says, “operators could get a much better dispatch by looking at the aggregated resources as one combined battery-equivalent system."

Trend: Cyber and Physical Security

“The elephant in the room is AI," says Carter Manucy, director of cybersecurity for NRECA, about the evolution of security threats to electric co-op operations and the power grid.

Artificial intelligence is adding new sophistication to efforts by hackers to penetrate co-op systems, Manucy notes. For example, phishing emails, which try to lure the recipient into clicking on a link to malware, previously often contained misspellings or awkward language that made them relatively easy to spot.

The online attempts to penetrate co-op systems are coming from a variety of bad actors, Manucy says, including cybercriminals simply looking to make money with ransomware to hostile nation-state actors probing for weaknesses in grid operations.

But in this changing landscape, “your basic cybersecurity hygiene is still the same. You just have to be more diligent," says Shira Dankner, director of security services at Ninestar Connect, a co-op based in Greenfield, Indiana.

That hygiene includes educating your employees on online security and maintaining secure password and system access protocols, Dankner says. She cites NRECA's Cyber Goals program as an important tool for benchmarking progress.

With so much data now in the cloud, it's also vital to understand where the security responsibility lies in those cases, she adds. And when dealing with vendors, it's important to “mark out who's critical and check their security posture."

Recognizing the importance of protecting the grid, the U.S. Department of Energy has prioritized cybersecurity. Efforts include cybersecurity training for co-op employees, the Rural and Municipal Utility Advanced Cybersecurity Grant and Technical Assistance Program, and Project Guardian, a joint effort with NRECA to provide co-ops with tools to detect, respond to and recover from cyberattacks.

Spencer Tomlinson, technology/cybersecurity manager at Daviess-Martin County REMC in Loogootee, Indiana, says the electric co-op community's greatest strength in combating the evolving threat is the co-op principle of “cooperation among cooperatives."

“Your greatest resource is going to be each other," he says. “That's the only way you're going to learn what other people are facing and what you might face."

Manucy says NRECA's Threat Analysis Center, Cyber Goals Program and annual Co-op CyberTech conference are all helping create resources, share information and build a co-op community to meet cyberthreats.

While cybersecurity has gotten increased attention, physical threats to grid infrastructure have also evolved. Most attacks on substations or other facilities are minor acts of vandalism or theft, but some have caused serious disruptions.

Of the 2,800 physical attacks on power facilities in 2023, about 80 led to outages or other operational problems, according to the North American Electric Reliability Corp. Authorities fear that power facilities may be particularly vulnerable to political extremists attempting to sow chaos by bringing down parts of the grid.

For co-ops concerned about physical security, “the very first thing you should start out with is what is a called a vulnerability assessment for each substation or asset," says Jason Langella, a security adviser and chief marketing officer at Permacast Walls.

Cooperatives have a range of security options available, starting with stronger fencing and walls that can make it difficult to break into a facility or even stop different calibers of ammunition, he says. Cameras and “squawk boxes" that let attackers know they have been spotted can serve as further deterrents.

The Department of Energy promotes a layered security strategy: “Deter, detect and delay." And Manucy emphasizes that it's not the job of co-op employees to respond in-person to attackers, but to “delay them long enough to give the people who are meant to respond—local police or sheriffs—time to do so."