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Energy - April 2004
In fact, that August day in 2003 was triumphant for Sean O’Leary and Sterling Lapinski, former energy traders and founders of Louisville-based Genscape, the nation’s first and only supplier of real-time supply side information on power generation. The privately held company started in 1999. Genscape’s customers now include the majority of the top 50 U.S. power-generating, trading and marketing companies as well as federal and state entities. Collaborating with a number of the largest energy companies in the U.S., the firm was able to develop an effective information delivery mechanism and launch its information delivery network in 2001. Genscape is now part of Los Angeles-based GFI Energy Ventures, which purchased the company in August. A mysterious blackout Also on the line were federal and state energy regulators eager to seek an answer to what possibly could have caused such a massive outage. Genscape had developed the nation’s only real-time tracking system to measure power flows through the U.S. electric grid, and at this moment, the Louisville firm was the only resource around with any possible way of shining some kind of light on what was going on. As O’Leary, co-founder and Genscape CEO, explains it, Genscape is the only business in the world to have commercialized – and patented – real-time power supply information through data-gathering technology that monitors the output of power plants and the load on high-voltage transmission lines, creating a snap-shot of the country’s grid system every few minutes. Genscape’s “observation posts” at more than 275 power plants and transmission points, as well as its system of tracking the high-voltage output at about 1,300 high-voltage transmission paths, allowed the firm to see the cascading power failure that would grip much of the nation’s grid. In the second minute of the crisis, the blackout spread out much farther, “but it was not a simple domino-like failure moving from one area to an adjacent geographic area,” O’Leary explains. Within hours, the entire Northeastern U.S. and portions of Canada were affected. Nuclear power plants shut down, food stored in restaurants and stores throughout the region was ruined, and people trying to get home from work jammed the streets with automobiles or were stranded in subway stations. The rolling blackout had quickly become the worst such disaster in the history of the country, overshadowing the blackout in New York City in 1977, which left nearly 10 million people without power and the famous blackout of 1965 that affected almost 30 million people in New England. The challenge for industry captains and energy regulators in 2003 was finding a way to get a grip on what was happening. “Individual utility companies have good information on what happens within their own service area, but little, if any, data on neighboring utility operations,” O’Leary notes. “Our existing monitoring, aggregation, analysis and communications capabilities provided a strong starting point for problem identification and remediation as well as one of the tools to use in preventing and quickly reacting to similar situations in the future.” Identifying a niche The advent of Lapinski’s Genscape career leads back to his days when was a bonds trader in New York City. Seeing an opportunity to work in a slightly different milieu, Lapinski got into the energy trading market in 1997, when deregulation in that industry was just under way. He and O’Leary met in Houston, working first in energy trading at the Southern Company and then landing at the Columbia Energy Corporation. They forged an impressive track record in Texas, but more importantly, they identified a niche in the energy marketplace that remained unfilled and yet very much needed. Thus was born the concept for Genscape. The idea was straightforward and simple: Create an information package that allows customers to maximize their competitive advantage while minimizing the risk associated with fluctuations in the power grid supply throughout the country. The result was Genscape 2.2, which provides an interactive map of Genscape-monitored power-plant output as well as real-time changes and variations in flow along strategic transmission points. O’Leary says that information on current megawatt output, capacity, fuel type and plant ownership are all displayed on Genscape’s interface. Customers can, at a glance, see what happened throughout the grid a couple hours ago or as far back as 30 days previous. The data feed is distributed via the Internet; customers then integrate the information into any number of software management programs they may use, from projecting usage to security and safety. Other products available include Genscape’s Morning Update, which reports unusual activity at any of the company’s monitored plants or transmission points. According to O’Leary, there are currently more than 1,000 trading professionals who read the report first thing every morning. Future developments include the creation of a printed product that may be made available on a quarterly, monthly or even weekly basis, depending on customer demand, he said. New horizons Genscape has started reselling AWS Mesostreamer to the energy market. MesoStreamer is a Web-based application that provides accurate, localized, up-to-the-second weather information that is specifically designed to meet the operational needs of these companies in the areas of wholesale energy trading, fleet management, dispatch operations and field service management. And, in anticipation of the next generation of growth at Genscape, O’Leary says that the firm is focusing new attention on Europe. The future at Genscape, it appears, is very bright. And the accolades for the innovative company support that outlook. In June 2003, Genscape’s former CEO, David A. Doctor, as well as founders O’Leary and Lipinski, were recognized with the Ernst & Young LLP’s Southern Ohio and Kentucky Entrepreneur of the Year award. Then, in December, Genscape was named the winner of the 2003 Platts/Business Week Global Energy Award for Information Technology. Kudos were awarded the firm, based on the “reliance of wholesale energy companies, utilities and state and federal agencies on Genscape’s monitoring and alerting capabilities,” including the initial reporting and subsequent investigation of the August blackout. Genscape joined 200 other nominees from more than a dozen countries. “Genscape had a great year,” O’Leary says. “And this award just validates that. We’ve continued to enhance our domestic power network while looking to expand overseas. We’re also developing technology to monitor other transported fuel types. We certainly appreciate the recognition and look forward to building on our successes in 2004.”
Dennis O'Connor is a staff writer for The Lane Report. Back to April Issue The Lane Report is a trademark of Lane Communications Group. All other trademarks are the property of their respective owners.
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At first, it seemed like a simple power outage. Office workers on the East Coast probably thought the problems were isolated to their companies or buildings until people began to pour onto the streets in the wake of the massive power failure and saw masses of humanity on foot or jamming the roads trying to get home. Was it a terrorist attack? What had gone wrong? How far spread was this rolling blackout?
The answers, limited as they were at the moment, were available only from Louisville, as a company with its fingers literally on the pulse of the U.S. electrical grid system watched the inevitable events unfold.
O’Leary explains that the company’s keystone product, Genscape Power 2.2, was utilized to make sense of the outage, piecing together a fleeting puzzle that, viewed from satellites, formed a huge dark cloud over nearly a third of North America. Genscape’s data-gathering network shows that in the first minute of the blackout – between 4:09 and 4:10 Eastern Time that day – “power plants hundreds of miles apart in three different states began tripping offline as the grid became unstable.”