Summary:

Analytics, sensors, networking — Utilidata is bringing the tools of IT to the last mile of the power grid and in the process could make it operate more efficiently.

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Picture an electric grid as streets that connect power plants to your home: if you aren’t familiar with the landscape, traffic patterns or potential roadblocks in the area, your route home could get blocked. A Rhode Island-based startup called Utilidata has developed software that can help utilities transport electricity more efficiently over that last stretch of the power journey through the grid and up to the home.

The company, which recently closed a $20.5 million B round, counts power giant American Electric Power as both a customer and an investor, and that should help it persuade other utilities to give its software a try. Utilidata also recently inked a deal with National Grid and plans to install its software initially in a small region in Rhode Island in 2014, Scott DePasquale, CEO of Utilidata, told us in an interview recently.

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A smarter grid

Utilidata is among technology developers that are building businesses off of utilities’ need to modernize transmission and distribution networks. It’s been called smart grid technology, but it’s essentially using software, sensors and wireless networks to make the power grid more efficient and smarter.

The networks have historically relied on analog technologies to relay information and send power in one direction, from centralized power plants to homes and businesses. Along the way, there are substations that lower the voltage gradually so that electric current reaches a suitable level for use by the customers.

The push to use smart meters (and digital communication networks) and renewable energy are giving utilities both the opportunity to more closely monitor and control their grid operations, as well as the headache of managing infusions of solar and wind power from both large power plants and their customers’ rooftops.

Utilidata has built its technology for the distribution grid, between a substation and the last miles of cables called “feeder lines” that pipe electricity to homes and businesses. The startup’s software collects data and analyzes, in real time, the changes in current and voltage in the feeder lines and automatically adjusts the voltage to a level that reduces energy losses.

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“Between substations and homes, utilities have been blind,” DePasquale said. “There wasn’t communication and optimization in between.”

How it works

Utilidata provides its customers with servers and software that sits at a utility’s operation center, and the system collects data from routers that are installed on voltage-regulating equipment. The routers use sensors that can tell the upper and lower thresholds of the correct voltage levels.

The communication devices and the software make it possible to automate the voltage regulation process in real time. Without them, the process typically uses pre-set commands that change the voltage levels when they reach a certain threshold, and each voltage regulating equipment does its own thing. A more sophisticated method would be to use historical data to determine the proper voltage level, and that change in voltage would be done via remote control.

Basically Utilidata’s routers create a network so that a utility can gain finer control of the voltage levels over a broader area at once. The algorithms use data in real time to decide on the right voltage levels, and can adjust the voltage levels to be as close as possible to the minimum threshold of 114 volts, which can reduce energy losses.

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The startup’s technology has shown to achieve, on average, a 4 percent energy savings for every kilowatt-hour of energy that passes through, DePasquale said. That savings surpasses by a few percentage points what Utilidata’s competitors could deliver, says DePasquale. Utilidata isn’t the only company developing voltage management software — larger players such as ABB also tout the sophistication of their own software.

With American Electric Power as a customer and investor, Utilidata has a solid opportunity to prove its technology. By the end of the next year, Utilidata expects to have its technology covering over 140 feeder lines, DePasquale says, and each feeder line could serve hundreds or even a few thousand customers.

Utilidata has been around for over a decade, but it was re-organized in 2012 by its investors, American Electric and Braemar Energy Ventures, which counts American Electric as a limited partner. Braemar tapped DePasquale to lead the company, which had first created the voltage management software in 2005. As a reborn startup, Utilidata has raised $25 million in venture capital so far.

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