GE Vernova Digital and PwC Team Up to Accelerate Grid Modernization

For grid operators, transitioning to the cloud doesn’t happen overnight. There are a lot of moving pieces, especially on the regulatory front. Which is why defining a utility's cloud solutions—and why they’re a beneficial investment as well as how to capitalize—is key to getting regulatory approval.  

Capitalization—or recognizing property and equipment as assets rather than expenses—is not a novel concept for utilities. And neither is looking to keep costs low to drive sustainability and growth. But applying these concepts as utilities transition to the cloud gets tricky.   

That’s why after GE Vernova developed GridOS®—the first software portfolio designed exclusively for grid orchestration—we chose PwC as a member of our complementary GridOS Partner Ecosystem. We carefully handpick partners who can help ensure optimal outcomes for our customers – especially around achieving lower implementation costs, better focus on the customer and user, and top-tier structure and governance in delivery methodology. 

PwC fits the bill across the board. As one of the world’s top professional consulting firms, PwC has an extensive track record of providing assurance, tax and advisory services to the energy, power and utilities industries. Its people add best-in-class accounting expertise to the portfolio to help utilities navigate asset management and capitalization opportunities.

For example, PwC’s teams can help integrate existing systems and solutions into the newer, modernized sustainable energy grid. They can also greatly assist with the culture change that comes with implementing new software – which takes a village, as anyone who’s worked in change management can confirm. Finally, PwC has launched a Center of Excellence that offers GridOS certification. Establishing the Center will help utilities move faster during and after solution deployment, resulting in faster time-to-value. 

Sean Moser, Grid Software’s Chief Product Officer, and Mark Panza, Managing Director, PwC, sat down to have a candid discussion about asset management and regulation considerations while transitioning to the cloud. 

“Unfortunately, accounting, regulatory, and IT don’t always talk to each other,” Panza says. “How [PwC has] been able to help our customers is to help to bridge that gap and chart a strategy that can help everyone be successful.” 

A major part of this strategy as both Panza and Moser see it? Focus on capital.  

“Utilities are seeing a lot of cost pressures right now,” Panza says. “ There’s a metric in the industry that says [investing] one dollar of expenses in capital should [yield ] almost seven dollars [in return] and the customer bill stays the same”. 

This is a win-win for utilities and their customers. “It helps [utility companies] bring new capabilities to their customers without impacting their cost,” Moser adds. 

As utilities look to transition to the cloud, it’s essential for them to see software as a key component to accomplishing grid modernization. It’s a topic Panza has been focused on lately.  

“Accounting is not always second nature to everybody,” he says. “And so people look for that magic bullet in the accounting guide that says it’s going to turn some of these cloud solutions into capital assets.”

But the reality is that accounting guidance is very new. Its applications are limited, so there are some growing pains to be expected. 

“Companies are trying to do an all-or-nothing solution,” Panza explains. “Is it capital or is it an expense? But the truth lies in the middle. There are certain components that can be capitalized.” 

Understanding exactly which components can be capitalized is where things get confusing which is why having best-in-class partners is essential.  

“Working with your partners, whether it’s GE or PwC, to make sure you have all the facts [and] not just guessing and going off assumptions is really important,” Panza finishes. 

As Moser and the GE Vernova see it, accelerating grid modernization and acquiring capital is a team effort which is exactly why the GridOS partner ecosystem is critical for success.  

“Utilities need to be able to move forward and embrace these technologies which  is why we’re bringing them to the market,” Moser concludes.“[This partnership will help them] embrace technology with a little bit more comfort and maybe relook at how they’re thinking about [cloud] right now.”