Smart city initiatives are driving grid modernization conversations, whether that’s accommodating for electric vehicle (EV) installations, leveraging system and customer data to make sustainable business investment decisions or developing distributed energy resources in the "innovation neighborhood."

The term smart city has harvested universal interest in its potential to deliver a smarter, cleaner, safer future. For each city and community, the effort is an investment in choosing to define its own path forward. As we modernize the grid to prepare for greater opportunities in electrification and renewable generation, smart communities and cities become the desired outcome. Smart cities improve operational efficiencies, provide a solid return on investment and give customers sustainable options for a cleaner, healthier and more prosperous tomorrow.

Regulatory and legal frameworks are beginning to shape the way for smart cities to unfold. For example, a recent smart city approval by the Public Utilities Commission of Ohio (PUCO) — to allow parts of American Electric Power’s (AEP) Smart City Smart Columbus into the Ohio rate base — is an important prcedent. With this PUCO mainstream decision, mayors and city managers across the U.S. can expect their local electric utility to support smart city initiatives — like innovation neighborhoods — to enhance the positive economic developments of communities, cities and regions.

The diversification of products and services is also influencing smart city business strategy. A solid business strategy for electric utilities would include positioning for multiple business scenarios built around technology, the economy and shifting customer expectations. Business leaders should position for many scenarios or options and may succeed with just a few. An innovation neighborhood could be used to test each scenario while addressing four primary questions:

  1. Does the technology work?
  2. Does it work at scale?
  3. What is the return on investment?
  4. Does the customer care?

Knowing the answers to these questions allows a utility to be influential among its current and future customers, and not be disrupted by the product and service diversification of others.

The transformation that customers around the world are craving is happening now and is made possible by state-of-the-art strategies and technological enhancements. A smart city could be in your future sooner than you think.


Take a deeper dive into smart cities and their impact on grid modernization.

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As a vice president for Burns & McDonnell, Mike’s top priority is helping electric and gas transmission and distribution clients take on complex projects. His team provides strong, smart and sustainable solutions in areas including critical infrastructure, the smart grid, smart cities and emerging technologies.