Sustained performance improvement is often a difficult objective to achieve in a large company. Many such attempts involve various cross-functional initiatives that leave companies with unfinished projects, lower morale and disappointing results. Commonwealth Edison (ComEd) has found that the key to sustained performance improvement is the establishment of a cadre of high-potential managers to address company-wide initiatives full-time. Providing such a team with ample training, visibility and support from senior management can lead to long-term financial, operational, and strategic benefits, while simultaneously developing the next generation of leaders for the company.

ComEd Looks in the Mirror

In October 2008, ComEd Chairman and CEO Frank M. Clark initiated a strategy to improve financial and operational performance as well as customer service. The company already had a number of initiatives under way, but the concern was that some of the cross-functional initiatives lacked the dedicated resources and analytical rigor needed to make real changes. For example, major projects, including efforts to “fix the work management process” and “improve new business,” had been assigned to executives without dedicating significant staff resources and time to address the issues.

Another challenge was initiative overload. Every department had its own set of projects that lacked a cross-functional view. These projects often had competing priorities and even if implemented well, the projects could pull the company in different directions. Those initiatives that did impact multiple business units within ComEd lacked the high-level priority status needed for proper execution.

Clark and the executive team wanted to address the issue from a fresh perspective without becoming dependent on consultants. The result was the formation of ComEd Sustainable Solutions (CSS). The company selected eight high-potential managers with diverse skill sets who would identify, prioritize, analyze and address critical company issues. The team included managers with MBAs, engineers and members with expertise in regulatory and legislative affairs. Part of the plan was to assemble the team quickly to analyze ComEd’s most pressing strategic and operational issues.

To ensure team members brought a fresh perspective to the process, CSS members from ComEd’s transmission and distribution and operations groups were assigned to analyze customer operations, while managers from customer operations concentrated on T&D and operations issues. This approach also created an opportunity for CSS members to broaden their skill sets and knowledge.

The team’s initial efforts included interviews of 200 line managers and executives, which resulted in opportunities to refine the priorities of various initiatives already under way. CSS members also identified new areas to investigate and highlighted more than 16 new performance improvement opportunities.

Originally envisioned as a six-month initiative, the CSS team became the foundation for a transformation of ComEd business practices companywide.

‘Consultant-Lite’ Approach

After more than 200 interviews, outside benchmarking and a site visit completed, the CSS team needed a structure to organize and prioritize its performance improvement ideas. The team created value chains for customer operations and transmission and distribution (T&D) to provide a common way of looking at these functions. For example, the primary links in the T&D value chain included: plan and analyze; design and construct; maintain and operate; restore; and support (see Figure 1). Critical issues and improvement opportunities were organized along the steps in the value chain and several initiatives were chosen for in-depth analysis and evaluation.

In Phase I of the project, the team analyzed long-standing, challenging cross-functional issues, such as revenue protection, storm response, work and contractor management and the budget process. Each initiative cut across multiple parts of the value chain and affected several groups within the company, while offering improvements in operations, finance and customer satisfaction. For example, the CSS team’s analysis of the company’s revenue protection efforts led to new ways to tackle the problems of energy theft, defective meters and consumption on inactive accounts. The results included new process designs, a new organizational unit and a significant financial benefit for the company.

Senior management also charged the CSS team with the task of creating a more analytical approach to improving the business while strengthening ComEd’s pool of analytical talent among its managers. ComEd partnered with Oliver Wyman, a strategy consulting firm, to institutionalize a structured approach to solving the complex, cross-functional issues that CSS was tackling. Oliver Wyman created a toolkit that included training modules on consulting best practices, such as problem structuring, presentation skills, project management and advanced training for Excel and PowerPoint software programs. The training facilitated ComEd’s goal of making CSS sustainable by reducing the need for additional consultant support.

The so-called “consultant-lite” approach proved successful for ComEd, because it provided the dual benefit of lowering consulting expenditures while creating internal consultants in the form of CSS team members. Furthermore, the success from Phase I of the project showed that this type of structure could offer long-term value if made permanent. After significant internal discussions as well as outside benchmarking, ComEd formed a new organizational unit, called operational strategy and business intelligence (OSBI). This group has a broader mandate than the original strategic initiatives team did. Modeled after successful strategy groups at eBay, Starbucks, and Fidelity Investments, the OSBI group consists of three teams: 1) strategic initiatives, responsible for cross-functional process improvement; 2) business intelligence, responsible for benchmarking, analysis and operational assessments; and 3) operational analysis and strategy, responsible for strategic planning, risk management and initiative monitoring and feedback.

This new group also consolidated key activities within ComEd, eliminating redundancies across several benchmarking groups, while also reducing the initiative overload issue. More important, the group has prioritized and scored initiatives from a variety of sources, linking these initiatives back to ComEd’s strategic drivers.

Playbook for Sustainable Improvement

The work done at ComEd can be structured into a playbook, which is being explored elsewhere within Exelon and can be used at other utilities. Although some of ComEd’s circumstances were unique, other utilities also could adopt the company’s performance improvement framework to drive lasting, positive change in their organization. The suggested plan consists of a structured, four-step approach (see Figure 2).

The first step in the process involves creating a small team of six to eight high-potential managers to dedicate to the strategy and process improvement projects. This assignment is designed as a six- to nine-month developmental role. At the end of each project, new team members are rotated in. To encourage a fresh perspective and also to develop leaders’ management skills, managers are assigned to initiatives outside of their normal functional areas.

It’s also important to develop a pool of high-powered analysts for the company. Project leaders should hand-pick a few high-potential analysts, who are smart, energetic and data-oriented, to support the team. If such skills already exist in the utility, the team will be off to a solid head start. If not, newer analysts could be mentored by outside consultants to develop a solid foundation for supporting the strategic initiatives. The analyst role also should rotate, albeit with a slightly longer term than the manager rotation, perhaps one to two years.

A strong team, composed of both managers and analysts, is fundamental in the effort to make substantial performance improvements.

After forming a team, it’s critical to prioritize the initiatives to tackle in the first phase of the project. To provide sufficient focus and resources, the company will limit the number of high-level, strategic initiatives to six to eight per year. At any given time, half of the projects should be in analysis phase and half of the projects should be in execution or implementation phase. This doesn’t imply that these projects would be the only ones happening at the company. Tactical improvement projects could take place within individual departments. However, larger, cross-functional projects need dedicated teams and management focus.

To prioritize initiatives, the team develops a robust scoring model linked to the strategic drivers of the company. For example, projects could be scored on their ability to enhance shareholder value, improve the customer experience, or improve operational efficiency. At ComEd, a 2 x 2 matrix of value versus ease of implementation was used, to summarize the priorities, with sub-components reflecting the strategic drivers of the company (see Figure 3).

A key to a successful internal improvement group is a partnership and close working relationship with business units (BU). BU leaders and line management need a voice and an ownership stake in the process. At ComEd, BU leaders meet regularly with the group and managers can propose initiatives online through an internal Web site. To score potential improvement initiatives, subject matter experts (SMEs) are employed from BUs to facilitate the decision-making process. Once a proposed initiative has been selected, these SMEs are involved in implementation of the project, providing credibility for the improvement team.

Along with strong BU working relationships, the team needs senior management visibility. This can be created through updates and presentations at senior leadership meetings. Strategic initiatives with the potential to deliver significant operational value are reviewed regularly by the senior executive team. At these meetings, the team is sponsored by a member of the senior executive team who can ensure that the team is empowered to deliver candid feedback while maintaining the ability to drive its change management initiatives forward.

A third key to success for an improvement group is an internal communications strategy focused on maintaining the linkage to the front line. For example, the ComEd OSBI team regularly communicated to first line managers and front line employees through monthly articles in the company newsletter. Each article highlighted a key initiative. OSBI also conducted briefings for the company’s key managers that focused on the link between ComEd’s vision and OSBI-led initiatives.

By gaining BU trust, seeking executive sponsorship and stressing internal communications, the improvement team has a much better chance of building buy-in and seeing its initiatives implemented. But once initiatives are implemented, how does the team ensure that changes will stick? Sustainable change needs a comprehensive feedback mechanism.

The feedback and monitoring process is often the most overlooked part of a performance improvement program. From the project team, there often is an over-the-wall mentality after hand-offs are made. From a management standpoint, it’s easy to claim victory and just move on. To ensure accountability, the improvement team should implement a strong feedback and monitoring mechanism. A new initiative should be returned to a BU only after a process is established to monitor the progress and evaluate appropriate metrics. At ComEd, each initiative returned to the business has a BU owner as well as an OSBI team contact. Senior management regularly reviews initiatives that have been returned to the business to ensure the functional management team is sustaining the changes made.

Talent, Trust and Morale

Implementing a sustainable performance team is not without challenges. The three main challenges involve accountability, morale, and talent.

In the initial phases of the project, BU managers often can be reluctant to trust the team with complex, cross-functional projects. The BU leader is accountable for the results of his or her division and bringing in outside challengers is difficult. Interestingly, this situation often reverses itself in later phases of the project. Once business managers begin to trust the improvement team, they often want to assign many of their improvement projects to the team. This can present a resource issue for the improvement team, but is a welcome challenge to address. The team can mitigate this risk through upfront and frequent communication and clear rules of engagement.

Morale also might suffer with the implementation of this type of cross-company initiative. Managers on the team could be seen as special, and with their careers on the fast track. This can lead to jealousy and even outside managers trying to undermine the team. Executive leadership can address this challenge by rotating members of the team and communicating the team’s mission to the entire organization. The performance team should not become a clandestine audit team. If the team’s mission is clearly communicated to the broader organization and the team has visibility to employees at all levels of the organization, these misconceptions can be prevented.

A third challenge to implementing this type of structure is talent. With the wrong type of analysts and managers on the team, the team could struggle to make real changes. Senior management should be extremely selective in staffing the team, focusing on managers with strong analytical, problem solving, and communications skills. Furthermore, senior management shouldn’t be afraid to change team members if one person isn’t pulling his or her weight. However, this should be done on a non-retribution basis. If an employee is selected for the team, that person shouldn’t be punished if they don’t succeed in this developmental role.

Despite the challenges, ComEd’s OSBI team has contributed to performance improvements in a variety of areas including strategic, operational, financial, and environmental. From a strategic standpoint, the OSBI team facilitated the development of the company’s strategic drivers. Through focused communications, employees are beginning to understand the link between the strategic drivers of the company and their day-to-day work. Operationally and financially, ComEd has reduced leakage and losses by redesigning metering processes, and has rationalized overtime and pre-staffing for storms without impacting CAIDI (customer outage duration). The OSBI project even provided environmental benefits for the company, through the development of a comprehensive transformer recovery program.

Beyond the strategic and operational benefits, the ComEd OSBI team has developed and enhanced the analytical toolkit of more than 30 ComEd managers. Some OSBI managers have rotated out of the department and are now managing projects in new line departments—many in a different area from their previous position—and are utilizing their improved analytical skills. Former OSBI managers also are expected to conduct training sessions with their new colleagues to pass on to the organization the skills they’ve learned.

It isn’t easy to make real, sustainable change happen at a large utility. The daily needs of the business, competing priorities and at times inertia, all could become obstacles. By creating a sustainable performance team, utilities can overcome these obstacles. The process doesn’t cost a lot of money, but requires an investment in dedicated resources, executive support and talented, analytically-oriented employees. The results are worth it and can put a charge in any utility’s performance.

Like many other long-established industries, the utilities sector is facing an aging workforce and an upcoming employee exodus as its core workers in both management and the physical work force approach retirement age. This is causing an unprecedented focus on the industry’s HR function, which must now compete for a pool of young, technology-savvy employees, many of whom are attracted to what they perceive as more lucrative and cutting-edge industries, such as high-tech and defense.

Utilities are already struggling with integrating and managing a multi-generational workforce with very different professional expectations. As the utility workforce transitions from being dominated by more mature traditional and baby boomer workers to the so-called generation X and generation Y age brackets, the industry must change or replace practices and support structures that were designed to manage and address the needs of those earlier generations.

Many utilities are already addressing this challenge, but many have just started, or have yet to start, understanding how they will be impacted by this challenge and how they will address it.

At the same time, utilities are implementing innovations such as smart grid, alternative fuel, and new nuclear generation technologies, which require them to have the skills and resources in place to successfully implement and sustain these innovations. This makes the utilities industry a potentially attractive career choice for young workers. But utility companies must shed their stodgy image characterized by outdated technologies and a hesitancy to change if they want to appeal to the next generation of talent.

Too often, potential employees perceive utilities as dominated by poles, wires, and coal, and they are turned off by the less attractive, non-urban locations of many utility companies and facilities. Utilities can best attract a new generation of employees by emphasizing the transformational inflection point the industry now faces, and the immense opportunity it creates. New skills are needed to manage these technologies and meet the leadership challenge of taking a diverse workforce through substantial changes in the way the day to day work will get done.

Multi-Generational Workforce

Individual companies must learn to market themselves as part of a technology-intensive industry that presents its workers with challenging career opportunities and safe, friendly, and flexible work environments that give back to the community. The next generation of employees isn’t wooed by the promise of life-long employment and generous retirement benefits. Gen Y alone is equal to or slightly larger than the baby boomers in terms of absolute numbers, and is much larger than the gen X population. They value challenging, family-friendly work environments over stable, steady salaries. They look for non-traditional work arrangements, including flexible hours, shorter schedules, and telecommuting options. They fully expect to work in multiple companies during their career and plan to move on to other opportunities whenever they are no longer challenged or advancing. They want employers that are environmentally conscious and active members of their communities. They want to be part of something greater than themselves, and what better option than to work in an industry that’s focused on making every other industry, and day-to-day life, work? Without power, nothing happens.

Unfortunately, these values often conflict with those of older workers who are accustomed to 9-to-5 work days and traditional hierarchical leadership structures. Many of these employees worked a lifetime to attain leadership positions, while young workers expect to climb corporate ladders much faster. Older workers tend to personally identify with their careers and value their continued involvement in their chosen industries. Utility companies must learn how to simultaneously appeal to young recruits to maintain their talent pipeline, manage the expectations of young employees, and retain their older workers to preserve and transfer valuable institutional knowledge.

One of the workforce-related metrics from PwC Saratoga’s Utilities Metrics Consortium (UMC) shows that the percentage of workers in the utilities industry eligible for retirement in the next five years is steadily increasing (see Figure 1). Although some baby boomers have begun to retire already, many others say they plan to remain in the workforce for a while longer. In the 2010 Retirement Confidence Survey by the Employee Benefit Research Institute, nearly 69 percent of boomers (ages 45 to 54) who haven’t yet retired said they plan to retire at age 65 or older—or never retire.

As these workers approach their intended retirement, companies can work to retain their skills and knowledge by paying attention to their concerns about preserving their health and well-being, financial security, and mental engagement. Older workers need to continue to believe that their contributions to their employers are as valued as their younger peers’ contributions. If they perceive this, they’ll be more forthcoming in applying their valuable experience, and also more willing to transfer it to the next generation of employees.

While a number of large utility companies have been examining their future workforce strategies for some time, many medium and small utilities haven’t, and they are subsequently behind in assessing their pipeline for filling their most pivotal positions as their older employees approach retirement age. According to PwC’s 2009 survey of utility CEOs, 57 percent of the 42 utility CEOs surveyed stated they were “somewhat to extremely concerned” about the availability of key skills in their workforce.

In addition, utilities have a more difficult time retaining young workers than they do attracting them. Companies invest considerable time, money, and effort in recruiting young talent, but they must also ensure they retain that talent. High turnover can have multiple, far-reaching consequences in a company, including:

• Lost productivity during vacancies and on-boarding of new employees;

• Diminished productivity of the team and managers who are covering for a vacant position;

• Increased labor costs due to overtime or contractor needs;

• Hiring and on-boarding costs; and

• Loss of institutional knowledge.

HR departments should be careful to present company leadership with a business case for reducing high turnover. This case must include pinpointing turnover hot spots in the organization; quantifying the financial impact of turnover by business unit, job class, and performance ranking; and determining actions the company can take to reduce turnover. If HR doesn’t clearly demonstrate the impact of a company’s turnover on its bottom line, company leadership might dismiss excessive turnover as having little financial impact and thus not make it a priority.

A number of methods can serve to give younger workers the things they look for from their employers, such as coaching and mentoring programs that pair young and experienced workers. This can go a long way toward promoting multi-generational employee teamwork. Other methods include giving young leaders challenging development assignments, networking opportunities, and more flexible work arrangements. Many of these and other methods of addressing the motivations and expectations of generations X and Y don’t require large dollar investments, but they do require thoughtful consideration and planning. Nevertheless, according to the utility CEO survey, only 21 percent of CEOs expect to make large or significant changes to flexible working environments.

Intensifying local recruiting programs can also curb early turnover. These include forming formal relationships with schools, unions, and agencies to promote internships and establish early industry loyalty. Some successful programs include PG&E’s PowerPathway program, which uses pre-employment candidate qualifications for line workers, and the Lansing Board of Water and Light’s First School to Training and Employment Program (First STEP), which consists of internship and outreach programs with local high schools.

Closing Skill Gaps

Some companies adopt a counter-productive mindset when it comes to the processes and practices they use to address their talent management needs. They think of talent management as a tactical HR function rather than as a strategic management function that HR facilitates and to which HR contributes expertise and value. This can separate effective workforce talent management from the potential bottom line impact in the minds of company leadership. They fail to perceive the importance of their talent management strategy because of its indirect ROI, and they thus underestimate its importance to the peril of the entire company.

This especially applies to a company’s pivotal positions, which perform a significant part of the strategically critical work of an organization. These positions usually don’t exceed 15 percent of the total number of a company’s jobs, and some functions might not have any such positions. Decreasing turnover in these positions is in a company’s best interests. A company’s talent management strategy is its plan detailing how it will acquire, deploy, develop, manage, and reward the premium resources it needs to fill its pivotal jobs. It’s a clear vision of the performance objectives, competencies, employment terms, and engagement each position must possess. To deliver on performance objectives, individuals in pivotal positions should have a clear understanding of the knowledge, skills, and attributes expected of them, and they should be compensated based on those measures of performance.

Boards of directors and top management appear to be getting the message. They’re concerned about a growing skill gap as experienced employees retire or otherwise exit the market. PwC research indicates 39 percent of surveyed CEOs see a lack of skilled labor as a major or significant constraint to growth. At the same time, 36 percent stated that their boards of directors are more engaged in assessing the leadership pipeline for succession planning.

All management must be committed to attracting optimal talent from outside the organization, deploying appropriate talent in jobs and on projects, developing technical and leadership competencies, managing talent for optimal performance, rewarding talent for success, and managing generational differences. Companies need to ensure their pivotal positions are staffed with premier talent, and that there’s a reliable pipeline of potential candidates ready to succeed retiring workers. For example, in the nuclear sector, forecasts indicate that 38 percent of current nuclear utility employees will be eligible to retire between 2009 and 2014. During the same time period, non-retirement attrition might be another 10 percent, according to Carol L. Berrigan, senior director for industry infrastructure and supply chain at the Nuclear Energy Institute (see “Statement of Carol L. Berrigan,” Blue Ribbon Commission on America’s Nuclear Future, August 31, 2010). To address the issue, the nuclear industry as a whole collaborated to develop the Nuclear Uniform Curriculum Program (NUCP) in partnership with community colleges to meet the industry’s demands for new workers in key disciplines. To be successful over the long term, this kind of program must be reinforced with effective and ongoing talent management once the employees enter the organization.

Technology Talent

As utility companies invest in their transmission, distribution, IT infrastructure, and new and existing methods of power generation, they’ll be demanding a lot from their employees as they support these and other initiatives and attend to day-to-day business. To mitigate the risk to their investments and the stress and strain on their employees, utilities need to balance their initiatives with the human capital necessary to implement and maintain new technologies. Companies that fail to do enough resource analysis before asking leadership for capital for specific projects might ask for less than they need, and thus end up short of workers to implement and maintain new capital assets. Like many companies, utilities can fall victim to focusing on the construction and implementation of new assets and capabilities, but not sufficiently take into account the ongoing need to maintain those assets. This puts the short-term and long-term success of new initiatives and the ability to attract and retain workers at risk.

While it’s important for utility companies to be able to attract well-educated, technology-savvy younger workers, they also need to educate their current employee base on the use of new technologies. Older workers are perfectly capable of learning new, complex skills. As a matter of fact, matching mature workers’ vast experience with new technologies can give a utility company unique perspectives that knowledge of new technologies alone can’t provide. This is particularly true for the largest part of the utility employee base represented by the physical workforce that builds, operates and maintains the infrastructure.

The learning and talent management systems available today can help companies better understand and compare the competencies, skills, and experience they have with those they need. These systems also provide integrated capabilities for assigning learning content, 360-degree and multi-rater feedback, succession planning, performance management, and compensation capabilities. In addition to providing robust functionality in one system, management benefits from having access to more comprehensive employee data and information.

Assets that Improve

The utilities industry will continue to wrestle with these same challenges over the next several years. As both the traditionalists and baby boomers start retiring, many more will stay in the workforce for some time. These years are a time of unprecedented change for the industry as it begins to transition traditional sources of energy and delivery models for new sources and models. To stay competitive, companies must put a premium on their talent management strategies, their efforts to promote a productive multi-generational workforce, and their ongoing employee development. At the end of the day, the industry must understand that employees are the most important asset of any company, and the only assets that can improve over time.

America needs an energy policy today that will bring together our best and brightest, harness the limitless capabilities of our research institutions, and invest whatever it takes to ensure America’s leadership in clean energy technologies. The result will be to create billion-dollar industries and millions of new jobs.

The 14 million Americans unemployed and 8.8 million under-employed feel left out of the American dream. The almost limitless opportunities available to the post-World War II generation simply aren’t there today. But there are opportunities. They might require re-training or relocating; and they might provide less pay or benefits. But, for sure, opportunities exist. But—and equally for sure—the people seeking those opportunities require help.

What better way to help them than by taking advantage of opportunities to create new energy jobs?

In the 2011 World Energy Outlook, the International Energy Agency estimates that between 2011 and 2035, roughly $38 trillion in energy infrastructure will be required to meet global demand.¹ Investments in the power sector alone will equal roughly $16.9 trillion to maintain current supply levels.²

Surely President Obama and Congress can develop a bipartisan plan leveraging both government spending and private investment for home-grown energy solutions that heads America down an R&D path that eventually will produce more job-creating clean energy technologies. It’s fundamental that America must remain the land of innovation and opportunity when it comes to clean energy. But we can’t wait until new clean energy technologies arrive at our shores; we also can’t postpone domestic development, production, or manufacture of the entire spectrum of America’s energy resources.

America needs an energy policy today that will bring together our best and brightest, harness the limitless capabilities of our research institutions, and invest whatever it takes. The result will be the creation of billion-dollar industries, new technologies with applications heretofore unimaginable, and—critically important in today’s fragile economy—a million-plus new jobs.

Falling Short of Independence

Seven U.S. presidents have signed energy legislation to foster energy efficiencies, conservation, and, ultimately, energy independence. In 1946, President Truman signed the first Atomic Energy Act,³ creating the Atomic Energy Commission. Then President Eisenhower signed the Atomic Energy Act of 1954,⁴ opening the way for civilian nuclear power and the world’s first nuclear power plant in Shippingport, Pa., in 1957. In 1973, President Nixon launched Project Independence with the goal of achieving energy independence by 1980.⁵ In 1975, President Ford moved the date for achieving energy independence to 1985 and signed the Energy Policy and Conservation Act,⁶ mandating vehicle fuel economy standards and authorizing the creation of a strategic petroleum reserve. President Carter’s 1978 National Energy Act⁷ was designed to reduce the use of fuels by industry; in 1980, he signed an Energy Security Act⁸ promoting solar energy and other renewable energy sources. President George H.W. Bush signed the Energy Policy Act of 1992⁹ to reduce U.S. dependence on foreign oil by requiring certain fleets to acquire alternative fuel vehicles capable of operating on non-petroleum fuels. Between 1993 and 2001, President Clinton announced initiatives to stabilize greenhouse gas emissions and increase the use of sustainable energy technology.¹⁰ In 2005, President George W. Bush signed another Energy Policy Act¹¹ aimed at encouraging energy efficiency and conservation, promoting alternative and renewable energy, and promoting the expansion of nuclear energy. In 2007, President Bush signed the Energy Independence and Security Act,¹² which, among other things, increased automobile fuel economy standards and provided incentives for increased energy efficiency in public buildings and lighting. Finally, on Feb. 17, 2009, President Obama signed the American Reinvestment and Recovery Act,¹³ a $787.2 billion economic stimulus package providing energy development incentives, tax incentives, direct grants, and financing assistance.

Notwithstanding the efforts of seven U.S. presidents, these policies have fallen far short of their laudable objectives. In the meantime, world energy consumption continues to grow, including a 5.6 percent increase in 2010 alone, which represents the largest increase since 1973.¹⁴ The year 2010 was also significant as China, which increased its consumption by more than 11 percent, surpassing the U.S. as the world’s largest energy consumer.¹⁵

By 2035, word energy consumption is estimated to increase by 53 percent over 2008 levels and China is projected to use 68 percent more energy than the United States by that year.¹⁶ By 2020, the global clean energy market is expected to reach $2.3 trillion. First Solar, a major solar manufacturer headquartered in Tempe, Ariz., announced the largest solar project in the world in a joint venture with China Guangdong Nuclear (CGN) Solar Energy Development Co. Even as this investment by China in green technologies will ultimately be subsidized by taxpayers in the United States and other Western countries where it’s exported, China is moving forward in the development of new clean energy resources—in fact, investing nearly double what the U.S. invests in green technologies.

Another U.S. company, Chevron, is the largest producer of geothermal energy in the world; however, the company’s prominence is attributable mostly to its geothermal operations in Indonesia. Meanwhile, Iceland is the world’s largest exporter of geothermal technology and expertise, and India is developing cutting-edge wave technology with pending construction of a tidal power project. And Denmark continues to outpace the United States in installed offshore wind capacity, with nine offshore farms and more than 300 turbines.

Nothing less than a Sputnik response is required by the president and Congress to catapult the U.S. back to the forefront of the current race for clean energy technology and energy independence. Providing for U.S. energy security requires a Sputnik-like technology commitment—a national effort to develop technology that will provide America with energy independence while cleaning up the air, land and water for our children and their children, and ensuring energy for our national defense. And, importantly, a Sputnik commitment would provide the United States with millions of jobs.

A lack of commitment will still result in new investment and millions of jobs—just not in America.

A Sputnik Moment

President Kennedy’s goal to close any illusion of a space technology gap between the Soviet Union and U.S. was met with Neil Armstrong’s “one small step for [a] man; one giant leap for mankind.” Today, President Obama has established the goals of 80 percent of U.S. energy coming from clean generation sources by 2035 and closing the clean energy gap that exists between the U.S. and other countries like China. This is an admirable goal, but not if American workers aren’t at the forefront of developing and manufacturing the next clean energy resource.

America can be the innovator and leading exporter of clean energy technology in a $2.3 trillion market, or we can be a major importer. What we can’t be is an indifferent “porter.” The train is leaving the station full of future energy jobs. The destination should be the U.S. homeland, but it takes more than politicians’ speeches to create job opportunities. It requires hands-on action—a John Kennedy commitment, a Steve Jobs imagination, the force of Ronald Reagan and, above all, Americans helping Americans.

Endnotes:

1. World Energy Outlook, 2011, (Executive Summary), p. 2, International Energy Agency.

2. World Energy Outlook, 2011, “Cumulative investment in energy infrastructure, 2011-2035.”

3. Atomic Energy Act of 1946, 60 Stat. 765 (1946) (current version at 42 U.S.C. § 2011 et seq.) (2006).

4. Atomic Energy Act of 1954, 68 Stat. 921 (1954) (current version at 42 U.S.C. § 2011 et seq.) (2006).

5. See http://www.energy.gov/about/timeline 1971-1980.htm, last visited July 22, 2009.

6. Energy Policy and Conservation Act, 94 Pub. L. No. 163, 89 Stat. 874 (1975) (current version at 42 U.S.C. § 6201 et seq.) (2006).

7. National Energy Act of 1978 comprised five separate statutes: the Public Utility Regulatory Policies Act of 1978, Pub. L. No. 95-617, 92 Stat. 3117 (1978) (16 U.S.C. §§ 796(17)-(18), 824a-3, 824i, 824k (2006); the Energy Tax Act of 1978, Pub. L. No. 95-618, 92 Stat. 3174 (1978 ); the National Energy Conservation Policy Act, Pub. L. No. 95-619, 92 Stat. 3206 (1978); the Powerplant and Industrial Fuel Use Act of 1978, Pub. L. No. 95-620, 92 Stat. 3289 (1978); and the Natural Gas Policy Act of 1978, Pub. L. No. 95-621, 92 Stat. 3351 (1978).

8. Energy Security Act of 1980, Pub. L. No. 96-294, 94 Stat. 718 (1980) (16 U.S.C. §§ 2705, 2708) (2006).

9. Energy Policy Act of 1992, Pub. L. No. 102-486, 106 Stat. 2776 (1992) (codified as amended in scattered sections of U.S.C.) (2006).

10. The Clinton Presidency: Protecting Our Environment and Public Health.

11. Energy Policy Act of 2005, Pub. L. No. 109-58, 119 Stat. 594 (2005) (codified as amended in scattered sections of U.S.C.) (2006).

12. Energy Independence and Security Act of 2007, Pub. L. No. 110-140, 121 Stat. 1492 (2007) (codified as amended in scattered sections of U.S.C.) (2006).

13. American Reinvestment and Recovery Act of 2009, Pub. L. No. 111-5, 123 Stat. 115 (2009).

14. BP Statistical Review of World Energy, at 1 (June 2011).

15. BP Statistical Review of World Energy, at 2 (June 2011).

16. EIA International Energy Outlook 2011, Press Release, Sept. 19, 2011.

Acouple of years ago a major consulting firm reported in a survey of its clients that two thirds of their change programs failed. This is a disheartening number that suggests an uphill battle for those seeking to make change. But notwithstanding such challenge, when CEOs and their top teams are appropriately engaged—and they demonstrate a critical set of change leadership capabilities—they can greatly increase their chance of success.

The skills and strategic capabilities required of the top leaders in a successful change program are more demanding than those of leaders at lower levels, and they serve to distinguish effective executives from competent department heads. Specifically, seven commonly recognized strategic change capabilities differentiate those who succeed from those who fail. Though many companies have had varying levels of success by implementing some number of these capabilities, experience working with several dozen utilities on major change programs suggests that success depends on mastery of each of them.

Anecdotes from these real-world experiences help to describe each capability and also illustrate how each has influenced the outcomes of various utility change programs. While the names have been changed to respect confidentiality, each story reflects a real change program experience at a North American utility.

Executive Teamwork and Coherence

In his seminal work, Good to Great, Jim Collins makes the point that effective CEOs start by getting the right people “on the bus.” Experience shows that strategy formation and execution is a team sport. Thus not only should the right executive team be on the bus, they also must work well together for a common purpose. This requires a CEO capable of building a team of people with strong and diverse interests, and also requires that each executive agrees on the norms necessary to achieve both their individual and collective objectives.

It’s unfair to expect even the strongest CEO to think that he or she alone can lead a senior team in a way that will overcome their individual strategic deficiencies. Each must step up individually. Introducing a major strategy change is an immediate test of the credibility of the CEO and the senior team as individual leaders—and a leadership team. Strategy change introduces high expectations and produces high stress, and this will challenge team cohesion every day.

Teamwork, however, doesn’t just mean getting along, and certainly not going along to get along. Instead, it means coming together in a way that provides the critical, coherent leadership that the organization needs. What does this mean?

Each member of the senior team brings a unique set of strengths and perspectives to the group’s work. They also have the capacity to drive change within their areas of the business where they otherwise enjoy considerable autonomy. The senior team will be stronger the more each member can share views, but this can also result in stressful exchanges. Given the amount of potential autonomy, each member must be willing to engage and also be determined to resolve critical differences.

This capacity to resolve or at least reconcile critical differences is important because as strategy is formulated, senior members must be able to translate it in a meaningful way for the parts of the organization that they lead. Importantly, this doesn’t mean alignment in the sense of just being supportive of the strategy. Instead, it requires agreement and an active engagement in the work of strategy and change.

Yes, each executive leader has autonomy as a functional leader, but each also must keep in mind the entire organization. It’s this paradigm that allows for truly constructive exchanges as leaders help one another to meld their individual functional capabilities into a coherent strategic whole. Just as in a football team, where offensive, defensive, and special teams coaches need to develop their game plans, that development must happen within the context of the head coach’s strategy. Utility executives face a similar challenge to ensure their coaching is never done in a vacuum.

At the same time, an executive’s ability to fully engage in the work of the senior team is inherently personal. Each member of the top team must be comfortable working with the others in an authentic and open manner. If this is lacking, the top team members will be susceptible to giving mixed signals that will tend to defuse the overall utility strategy. The most effective CEOs recognize this and work with their direct reports both individually and as a team to build their capacity for openness and candor. They’re also sensitive to the need to capture the norms that shape such behaviors, so that any new members of the team can more easily be assimilated.

The approach of two different utility executives to top team building helps to illustrate the importance of managing the personal commitments involved in setting the stage for strategy. An executive named Jean worked with each of her direct reports to understand their interests and any concerns they had with one another, and with strategy execution. The subsequent dialogue made it possible for her to manage group interactions and the strategy formation process, getting a work product that each executive could authentically embrace. She worked diligently to identify and resolve key differences, always respectful of the sincerity and desires of the individual leaders involved.

Mark, on the other hand, didn’t feel comfortable with the kinds of personal, heartfelt interactions required for real sharing. He was, instead, satisfied with more formal relationships among senior team members. While Mark’s group would share, the dialogue was generally more superficial than that of Jean’s team, and often served as a smokescreen obscuring the fact that all team members felt at liberty to pursue their own agendas within their utility functions. The lack of coherence that resulted for Mark’s strategy ultimately doomed his change efforts when one of his leaders enlisted the aid of the board chairman to actively work against his agenda—ultimately resulting in Mark’s early retirement.

Customer-Centric Vision 

Gaining cohesion and working to get the senior team to gel pays significant dividends when the CEO initiates work on formulating a new strategy. The open dialogue that’s fostered allows each of the senior leaders to put their fingerprints on it, making it more difficult later for them to disavow the vision when times get tough. It’s also a critical step in preparing the senior leaders to each communicate details that will build a coherent understanding within their functional groups in the utility.

Developing a competitive vision for a utility, however, presents a special set of challenges. Utility cultures are shaped by regulatory mandates, obligations to serve, and capital requirements that can constrain strategic change. Utilities also have a special public service function that employees from top to bottom take pride in—and which also often constrains strategy.

The most successful utility executives approach strategic change with a respect for their public service mission, while simultaneously capitalizing teamwork of the executive leaders. Three factors here become especially important.

First, any strategic change needs to be explained in concrete terms that make it clear the likely public service benefit—i.e., the customer benefit. The work in most utilities is decidedly concrete and heavily process oriented. Whether it’s a customer connection, transmitting supply, or collecting on a unpaid bill, there’s little about utility work that’s inherently abstract. As a consequence, the case for change needs to be concrete and answer the simple question, “Why do we need to change and how will the public—and the utility—benefit?”

Second, the answer to this question of benefit implies that the launch of a new strategy should include clear decision-making criteria. Such criteria should make it possible to determine in any situation whether the employee’s conduct is congruent with the new strategy. This is important to help people understand how to be successful with the new way of doing things.

Finally, it’s important to craft a new strategic vision in consultation with the extended senior leadership team—i.e., the next 10 percent of managers below the level of the executive team. Why? Since the responsibility for explaining and socializing the new direction within the organization will be theirs, they’ll have useful questions and suggestions to help clarify the vision for others. It’s critical that they understand the new strategy and also that the new strategy capitalizes on the issues and opportunities that are perceived at the front lines of the organization.

To see these principles in action, consider a utility that launched a new strategy to create an improved customer experience. The utility started with discussions among the senior officer team to understand the basic outlines of the challenges. Then department heads and directors were engaged to understand what a top-notch service experience would look like and the barriers that would need to be overcome. This dialogue revealed that all too often hand-offs broke down as a result of internal squabbles, or because staff decisions were too policy oriented, so no vision of improvement would be credible unless these issues were addressed. Still, these discussions also made clear that there were many opportunities to improve the customer experience with only modest investment.

As a consequence, a vision and decision-making criteria were formulated, and summarized with a slogan: “Ours is a partnership.” This captured the intent of wanting to work more cooperatively, both internally and with customers, to improve the value of all work performed. As this and an associated reorganization were implemented, employees throughout the company could be seen challenging one another when they saw partnering breaking down, demonstrating both mastery of the intent and commitment to the value of the vision and new behaviors it required. And the importance of the vision, since it was crafted in a dialogue with senior levels, was always easy to explain and illustrate.

Cultural Re-engineering 

Peter Drucker pointed out that “culture eats strategy for breakfast,” so, of course, senior leaders pursing a new strategy must also consider how their cultures will need to change to support a new way of working.

It might seem like a harsh judgment, but utility executives who attempt to achieve major strategic change through a radical restructuring of their cultures—i.e., with posters, new sets of values, and flowery catch phrases—are on a fool’s errand. The regulatory, service, and capital requirements that utilities face create significant inertia, so an evolutionary rather than a revolutionary approach to changing behaviors is better advised. Even with a major smart grid remaking of a utility’s operations, there will still be more that is unchanged than is changed, certainly for the first several years.

From elaborate culture concepts like those in Gerry Jonson’s “cultural web,” to much simpler conceptions of values, norms, and assumptions, different authors emphasize different factors in describing culture. The definition that seems to work best for utilities, however, focuses on culture as habitual behaviors. This allows for a much more straightforward and concrete description, ideally with the culture design described as simply the behaviors required to achieve the new way of working envisioned by the strategy.

How does an organization go about defining a new way of working? Easiest is to start by identifying behavioral barriers to achieving the strategy. In other words, what habits or behaviors will need to change? If, for example, a continuous improvement strategy is envisioned, a tendency to do things uniquely in every part of the utility might need to cease, so greater process consistency can be achieved.

The most likely barriers pertain to six factors. Given the inherently dangerous nature of utility fieldwork, any barrier to working more safely should get immediate attention. Then there are barriers to decision-making, teamwork, managing conflict, and—because mastering new behaviors perforce requires it—organizational learning. Finally, in a separate category due to its importance, are barriers to trust.

In defining new cultural requirements, the advice of Stephen M.R. Covey on trust is especially useful. His research notes that low levels of trust impose a tax on any change or strategic effort. Conversely, having high levels of trust pays dividends by accelerating results. The implications? Any set of new behaviors should explicitly seek to resolve critical trust deficiencies as well. Experience shows the most common utility trust issue is related to the failure to listen well.

The best culture change strategies for utilities acknowledge the unchanging nature of their missions while also focusing on barriers to making desired behaviors more habitual. By specifying desired behaviors, a utility makes strategic change more concrete and easier to grasp. By addressing trust issues, new ways of working will evolve more rapidly. Finally, since culture is the expression of leadership, any change will have to start with the executive and senior teams modeling the new behaviors they desire.

Competence and Confidence

New strategies mean new behaviors and competencies. While this might involve some level of formal training, coaching and modeling are usually as important, if not more.

Senior teams are constantly in view and during periods of strategic change people throughout the utility will attempt to understand by observing the actions of the senior team how expectations are changing and what the new way of working is supposed to be. This means that senior leaders play an important role to both model new ways of working and in teaching others. They’ll teach when they share information; they’ll teach when they point out mistakes; and they’ll teach even when they don’t realize anyone is watching.

As a result, development of new behaviors logically must start at the top of the organization. The more cohesive the senior team is, the better equipped members will be to call out mistakes and help one another model the desired new way of working. Ideally this coaching should happen as close to real time as possible.

Time and time again, it’s been shown that the need to teach and coach can be a difficult challenge for senior leaders of strategic change. While senior leaders understand the importance of speaking and conveying their strategic expectations, they sometimes overlook the importance of the role they play in modeling, coaching, and providing feedback to one another and their people to master new ways of doing things. The most successful senior utility leaders exhibit four essential characteristics that make them effective teachers and coaches.

First, they’re conscious of their own conduct, and they’re quick to acknowledge mistakes they might make, in an effort to improve their personal performance. This humility is critical to accelerating their own mastery of new behaviors and to make learning less threatening for others.

Second, they’re willing to call out mistakes in a way that challenges the result, not the person. This requires the ability to be direct, and a presumption of positive intent. It also requires being on the lookout for learning opportunities and teaching moments. If the utility is trying to empower greater decision making, for example, the senior leader will want to question whether it’s appropriate for certain decisions to be made in executive meetings: “Should we be entertaining this recommendation or turning it back to the department to take whatever action they deem reasonable?”

Third, the best teachers foster in others self-reflection, not dependency. They use dialogue instead of lecturing to help others think through their actions and figure out on their own what they could’ve done differently. In other words, they respect the capabilities of learners and leave the responsibility for learning with them, taking on the role of a guide.

Fourth, senior leaders who are great teachers understand the importance of controlling stress. Learning can be inherently stressful, so great teachers tend to be both patient and enthusiastic. When others are struggling to master new behaviors, they’re patient, encouraging, and steadfast in their confidence the new ways of working can be achieved. At the same time, they’re also enthusiastic and eager to celebrate early successes and share the experiences of early adopters to provide models for others. In these ways they make doing new things more accessible and less scary.

Modeling, coaching, and teaching is difficult and demanding work, and this can be stressful even for the most skilled and successful leaders. The senior teams that are most effective seem to naturally find ways to have fun together. The quipping or kidding that takes place is cathartic and helps to control stress levels. If senior teams quell the fun and they get too serious, mistakes rapidly become threatening and serious as well. In our experience, executive teams that take the time to develop personally supportive relationships find coaching easier and more likely to be received as helpful, rather than embarrassing.

Executive Resolve 

In launching any strategic initiative, it’s common to use broadcast communications (e.g., CEO emails or corporate communication news releases) and public display materials (e.g., posters). These formal communications need to make clear why the change is important. But while formal communications are necessary, they aren’t sufficient for conveying executive resolve.

Executive resolve is communicated most clearly not by an endorsement of a strategic change, but by a deep personal dissatisfaction with the status quo. Daryl Conner and other authors speak of the importance of creating and maintaining awareness of sponsor dissatisfaction. This needs to be personal and conveyed in both public and private settings. This helps others understand why the reasons for change are personally important to the leader.

The approach used by one utility is particularly instructive. Harold, the CEO, launched an effort to build an improved customer experience by sending a letter to every employee’s home describing his strategic change vision and its importance for the utility and himself personally. He then followed up with his executive team by making a regular agenda item his concern with seeing measurable progress. Finally, he spoke with the members of the executive team individually to make certain they were each aware of his concerns and determination. In the end, no one doubted his resolve, or the executive team’s resolve, to make the new strategy a reality.

Harold’s experience points to an important dimension of resolve: the ability to manage endings for the organization. In expressing dissatisfaction with the status quo, it’s important to be very clear about what needs to end in the current way of working.

Endings come in three forms. The most evident are endings involving behaviors and the way work is done. For a utility intent on going paperless, for example this would mean ceasing to print out material.

Less evident but perhaps more important are endings in the way people think and feel about the current way of working. If a continuous improvement strategy required fewer unproductive meetings, for example, people might have to stop scheduling meetings in one-hour increments, or worrying that people will feel left out if they aren’t invited. Becoming aware of these tendencies that need to end will make it easier for the executive team to express personal dissatisfaction whenever it occurs—dissatisfaction in the behavior or tendency, though, not the person.

Finally, resolve sometimes has to be expressed by a willingness to appropriately reassign or even terminate employees. This is never easy and especially when the people affected have always done what was expected of them, but now can’t seem to make the transition. Nevertheless, nothing is quite as discouraging for those trying hard to embrace a new strategy as seeing and trying to work with others who make no effort. Tolerance of such behavior is the surest way for an executive to have her or his resolve questioned.

Emotional Control 

Change can prompt strong emotions and, as people first and foremost, senior leaders aren’t immune. Still, most of the work executives must do to lead strategic change requires they hold their emotions in check.

Ronald Heifetz discusses how to do this by using the analogy of “getting on the balcony.” By this he means being able to detach oneself from the change to observe how others are reacting and performing. This capacity to be self-reflective is critical to being sensitive to the needs of others and maintaining the patience required to control the level of stress in the organization.

Phil Quigley once noted, “there are no maps of uncharted territory.” This is an apt description of most strategy changes. In taking the utility to a place it hasn’t been before, executives need to be cautious of the potential for any number of fearful unknowns to arise. These can sometimes be outlandish, like an employee alleging the whole purpose of the change is to eliminate his or her job. Still, an executive on the balcony will respond not by denouncing the proposition, but with an eagerness to listen for the teaching opportunity. The key is to maintain the capacity for self-reflection.

How to become more self-reflective? First, senior leaders need to be mindful of their emotional states and avoid reacting to what they perceive is happening around them. When the executive sees something upsetting, it’s helpful to stop and ask, “What’s required to maximize the learning potential in this circumstance?” Finally, at a later point—and ideally daily at some regular time—reflect on what you’ve learned as an executive to make you a more courageous and empathetic teacher during periods of profound change.

One executive used an external consultant to help him control the emotional content of difficult conversations. He would share the feelings the situation had created and his plans to control the emotions in the discussion. This approach—planning it out before talking it out—is something anyone can practice, but it requires a period of detachment to sort things out.

Stakeholder Allegiance 

Finally, strategic leadership requires the ability to orchestrate the involvement of all the parties, both inside and outside the utility, who are critical to the success of the change.

Within the organization it means executives building sponsorship of three distinct kinds. Among the executive team, this means assuming a full-throated responsibility for the implementation of the strategy, including communication of intent and personal dissatisfaction with the status quo. It also means establishing project leaders who can sponsor and lead the development of various process, system, and behavioral tools or training necessary to master the new strategy. Finally, it also means operating sponsorship and succession—managing responsibility for the strategy among senior leaders in the utility and developing future leaders who eventually can take up ongoing sponsorship of the strategy.

Outside of the organization, executives need to identify key stakeholders and think through ways in which they can be engaged and influenced. Sometimes this requires, as W. Kim Chan notes, understanding the interests and motivations of key third parties. In a utility, for example, this might mean understanding the interests of union stewards and a willingness to help them achieve their objectives. The senior leaders at one utility, understanding the benefits related to a strategic relocation of its offices, were able to mitigate dislocation impacts by granting a transition allowance requested by union leadership. This enabled the union leaders to reinforce their role as helping and defending union members, while also winning over the employees whose productivity was obviously important. Interestingly, the cost was one-third what replacement would have been, and the change was implemented with an immediate gain in productivity of greater than 5 percent.

Executives who seek to develop stakeholder allegiance will find it very important that they establish reputations for being reliable and consistent. One way to accomplish this is to under-promise and over-deliver on commitments. Equally important is holding oneself and others accountable for actions and results, behaviors that start with teaching and coaching within the executive team itself. However, executives shouldn’t overlook the importance of asking for and granting forgiveness as new skills are mastered.

Finally, with the speed and openness of electronic communications, transparency becomes increasingly important to build and maintain trust with all stakeholders. 

Leading the Change

There are few places where the phrase “tone at the top” has more meaning than in setting and implementing strategic change. Effectuating the culture change that’s inevitably required is no doubt a very difficult and arduous leadership task. This can be even more acute in organizations like utilities, which often have a long history of how things are done and, until the past half decade, haven’t felt the pressure of external forces like many other sectors. 

Although there’s no perfect roadmap for assuring a successful change program, the strategic change capabilities demonstrated by the industry’s most successful utility executives create a path that increases the likelihood of success.

Utilities face immediate and unprecedented operational challenges – from asset failures to regulatory pressures – and they’re all exacerbated by a growing dearth of critical skills needed to effectively run today’s andtomorrow’s utility. Utility companies typically have been more reactive than proactive in the area of talent development and retention, and the result is an effect on their bottom line as well as their ability to meet operational, safety, and customer expectations.

At one U.S. utility, last-minute sourcing of capital construction work led to a 25 percent spending increase on a precious budget of only a couple of hundred million dollars. Failure to plan and secure resources associated with known asset investments proved to be a costly error for this utility. But even where cost pressures are manageable, other risk factors can be onerous. At another company, the markout-and-locate function was handled externally by providers who lacked the adequate internal skills to oversee and ensure the work would be performed correctly. In situations like these, the utility compact’s mandate for safety calls management to take action.

As Accenture authors Kelly Gallant, Timothy Porter, and Jack Azagury pointed out in these pages earlier this year,¹ the future is shifting. The utility’s role and its growth potential are becoming less clear. This demanding landscape is requiring companies to identify and find new resource types, and develop new relationships in order to obtain the critical skill sets necessary to meet the shifting environment. 

For example, in a recent conversation, an executive at a large U.S. utility said he found “daunting” the challenge of finding individuals who possess the analytical capabilities required to leverage the vast amounts of data from the utility’s smart metering implementation. As a result, the utility expects this gap to reduce the effectiveness of leveraging data as planned. 

This evolving environment and need for talent also presents newly coined roles, such as the “data scientist.” Such changing needs for talent happen at a pace much quicker than universities’ ability to adapt, nurture, and produce qualified graduates.

According to a 2013 Conference Board CEO Challenge survey, human capital was cited as the No. 1 most critical challenge by executives in Europe and Asia – but not so by North American respondents.² For North American utilities, this lack of prioritization and responsiveness around workforce strategies bring consequences, namely increased costs, increased risk, and decreased customer satisfaction. What’s viewed as a deficiency today will become an imperative tomorrow. 

Companies with this foresight are acting now. Utilities that want to remain or become more successful must prepare and execute accordingly. The plan for talent acquisition, internal skills development, and supplemental support from external entities needs to be carefully architected within a cost-balanced framework and a keen eye for business in the future. Those that prepare well and effectively execute the plan stand to improve effectiveness and efficiency, reduce costs, and mitigate their operational risks.

Prioritizing Talent

Many issues and challenges within and outside the industry already are affecting utilities and their workforces, or they will in the next three to five years. This situation underscores the need to move the focus on talent higher on the priority list, especially so for skilled craft talent. Natural disasters such as Superstorm Sandy have many utilities intensifying their focus on evaluating electric infrastructure reliability and the associated cross-company operating model to manage through these types of outages. Many companies now are relying on contractors as partners to assist them in restoration efforts due to internal shortage of manpower. The San Bruno explosion, as well as other incidents, has given rise to significant pressure on the gas side of the industry from the U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration (PHMSA), National Transportation Safety Board (NTSB), and general public opinion. Shifting customer expectations are driving utilities to take on new multichannel approaches to communicating with their customers, such as adding the use of Twitter, Facebook, text messaging, and chat to their call center capabilities. 

Every one of these challenges brings with it an associated workforce effect. In many cases, the results have been costly, and in some instances, have affected share prices and service to consumers. The aftermath of Superstorm Sandy is a prime example. In the days, weeks, and months following the event, some utilities struggled with how to get labor across company boundaries, and create and execute the mutual assistance process. (See “Manpower Strategy for Mutual Aid.”) 

In other cases, the challenge is potentially an opportunity. New technologies available today enable companies to look at different ways to execute work. For example, Procter & Gamble is leveraging technology and crowdsourcing³ models to innovate. These capabilities have enabled the company to solve R&D problems through partner organizations, individual contributors outside the organization, and employees. Additionally, new technologies such as Elance, oDesk, and TopCoder have created vast pools of independent, just-in-time, virtual workers with top skills and knowledge. While other industries are taking advantage of these ideas, many utilities have yet to fully embrace them. 

Utilities must also look to the needs of the future in a changing and uncertain industry environment. For example, capital spend is projected to increase as infrastructures across North America age and new build continues. Investments in energy-related capital projects forecasted by the International Energy Agency are to be $16.9 trillion globally by 2035.⁴ Translating this to talent, the gap is widening in North America over time, as the demand curve increases and the supply curve decreases, leaving utilities and similar industries with a shrinking skilled labor pool to draw from (see Figure 1). The question is, how will utilities stack up in this intense draw against other capital-intensive industries?

The talent gap also is accelerating within areas such as information technology (IT) and engineering, given the advancement of emerging technologies such as plug-in electric vehicles (PEV), compressed natural gas (CNG) vehicles, fuel cells, microturbines, smart grid, and photovoltaics (PV). (See Figure 2.) 

In some cases the capabilities in demand are relatively new. For example, on the customer side, many utilities are evaluating how to change and shore up skills in areas such as marketing, social media, and analytics to address rapidly shifting customer demands. As these functions gain significance, it raises the question of how to build skills at the appropriate pace. 

The same pool of talent that utilities must exploit to address their immediate and emerging challenges is also being targeted by organizations in industries that are perceived as more attractive. How do utilities get the right slice of talent when everyone wants to work at the Zappos, Googles, and Apples of the world? Even some oil and gas companies are creating a more attractive work and lifestyle environment that catches the attention of new graduates and young talent. The same can’t be said for most utility companies. The overall trend is reinforced in the findings of Accenture’s 2013 College Graduate Employment Survey,⁵ where utilities wasn’t only ranked close to last among interesting industries to work in, but has fallen in ranking from the 2011 and 2012 results (see Figure 3). 

While companies in competing industries have already begun to see the value of developing long-term resource plans, many utilities continue to struggle to get theirs off the ground. For example, not one of the organizations ranked in the “Fortune 100 Best Companies to Work”⁶ in 2013 and 2012 was a utility – although several came from neighboring industries such as energy and natural resources. This lack of a plan drives many utilities to spend more on contractors, as a percentage, and causes a talent imbalance that’s hard to correct. Many have outsourced work to such an extent that they essentially are moving competencies and skills out of their business, and once lost, gaining them back will become extremely costly – if a utility can reacquire them at all. 

Utilities should reflect on the competencies required to effectively run their businesses and assess the strategic importance of each. They should then identify which ones they are good at executing. Finally, they should determine the capabilities andcapacity of their current resources as well as how their talent pool is changing or needs to change.

In short, understanding the capability of a utility’s workforce and how to raise it to meet current and future needs is now, more than ever, a CEO-level concern. Utilities must become good at planning for and managing talent, inside and out, at an unprecedented pace. How does an organization become that good at something that fast? 

Paradigm Transition 

The solution is a robust workforce plan that strategically addresses the old paradigms and shifts an organization to the new way of thinking about human resources as a critical capability. This thinking includes a very prescriptive view of the extended workforce – the global network of outside contractors, outsourcing partners, vendors, strategic partners, customers, and other nontraditional workers at an organization’s disposal. By maximizing the potential of both an extended workforce and permanent employees, companies would gain critical advantages and minimize the risk of inability to serve. 

It’s clear utilities will need to create new strategies that reflect new realities and create a new employee value proposition in order to attract, retain, and optimize their workforce. In addition to the paradigms needing to change, companies also need to examine their operating models for efficiency related to talent management. In many cases, fundamental issues about human resources and sourcing need to be addressed and resolved first. Two major issues in many organizations are that the people making the decisions across the company are poorly connected to the people in human resources, and few, if any, are focused on the future recruiting needs and workforce competition one year out, three years out, and 10 years out. As one utility executive stated, “The spray-and-pray approach to hiring will not work in the future.”

To define a workforce strategy for today as well as tomorrow, utilities need to recognize the link between the direction of their business strategy and their true workforce capability. If there’s no major strategy change planned, then are there projects of greater magnitude or variety that require special skills? And are those skills need for two years, five years, or indefinitely? 

Answering this question and others drives a corresponding workforce plan with lead times and costs that might not be currently or adequately accounted for. As part of this process, a utility needs to put in checkpoints to enable the organization to shift as the market shifts. To support its workforce plan or strategy, a utility will need to set up planning processes, decision-making capabilities, an operating model, and a governance model to flex when needed and make appropriate decisions at the right points in time. 

These requirements suggest taking four key actions.

First, evaluate your talent and workforce strategy in alignment with your current and emerging business strategy. Create a linkage between your business direction, asset strategy, and your workforce plan. You wouldn’t acquire a company without evaluating the financials first, so how can you take on a new business function or project without a clearly defined path for meeting the resource requirements? As part of this activity, map the resource requirements by volume, skill set, regional availability, cost to acquire, and other data points to the actual projects and business endeavors with as much precision as you would identify the price per share of an acquisition target. And then identify the scenarios that will force shifts as the future unfolds. 

Second, decide what capabilities should remain in-house and what capabilities can be sourced externally. Recognize that the picture you forecast likely will look very different from what you have today. If it looks the same, you probably haven’t challenged your organization to be realistic. Utilities need to strategically determine where to maintain complete in-house talent and where to include the new extended workforce: a network of outside contractors, outsourcing partners, vendors, strategic partners, customers, regulators, and other nontraditional contributors to fulfill demand. 

Next, evaluate the operating model and governance to position a tighter coalition between core operations, IT, procurement, and human resources on forecasting, sourcing, and deployment and development of both internal and external talent. This evaluation then needs to go a step further and consider defining how talent needs will be determined; how talent will be sourced, developed, and deployed; and at what pace and flex. Everyone has a role to play. The responsibilities can be aligned in different ways, but all of the responsibilities must be understood and owned by some part of the organization so that accountability can be assigned accordingly. 

Finally, prepare leaders and hold them accountable to understand and lead these shifting dynamics. Assess and develop the appropriate leadership principles for your business direction to be successful. Just as with the ranks of the workforce, define a leadership strategy for developing, recruiting, and retaining the leadership talent that mirrors your company’s ambitions or critical imperatives. Once it’s clearly defined, drive it out in every communication and performance management opportunity available to build the culture your company wishes to possess. The success of the workforce overall is in the strength and consistency of the leadership team’s guidance. For example, if retention of engineers is a persistent issue, tie accountability for resolution to the vice president and director levels. 

Delivering on Expectations

The stakes are rising. Utilities must decisively take steps today with insight and focus on the future of the corporate vision. Ultimately, defining a workforce strategy and plan is more than about improving; it could become the defining element that differentiates those who survive. By being proactive in workforce strategy, a utility can optimize its labor spend today (sourcing spend, talent acquisition costs, development costs, and the like) and be in a better position to deliver on the expectations of tomorrow.

Endnotes:

1. “Profit and the New Normal: Delivering value in a zero-growth market,” Public Utilities Fortnightly, June 2013. 

2. The Conference Board CEO Challenge 2013.

3. Merriam-Webster defines “crowdsourcing” as the practice of obtaining needed services, ideas, or content by soliciting contributions from a large group of people, and especially from the online community, rather than from traditional employees or suppliers.

4. World Energy Outlook 2011 OECD/International Energy Agency 2011. 

5. Accenture 2013 College Graduate Employment Survey. 

6. Fortune “100 Best Companies to Work For,” 2013.

New Opportunities:Andrew L. Ott will become PJM Interconnection's new president and CEO later this year, the PJM board of managers announced. Ott presently is PJM's executive v.p. of markets. Current PJM CEO Terry Boston announced his plans to retire on Dec. 31, 2015.

American Transmission Co. named Mike Rowe, executive v.p. and COO, as the company's future president and CEO. The current president, CEO and chairman John Procario, has led ATC since 2009, and announced last year his plans to retire. Rowe joined the company as v.p. of construction.

DTE Energy named Paula Silver as v.p. for corporate communications. Previously, she was v.p. of communications and investor relations at Federal-Mogul Corp.

Georgia Power named Craig Barrs executive v.p. of the company's customer service and operations organization. Barrs replaces Anthony Wilson, who recently accepted the role of executive v.p. of operations at Mississippi Power. Chris Cummiskey succeeds Barrs as executive v.p. of Georgia Power's external affairs organization. Since joining Georgia Power in 1981, Barrs has held multiple leadership roles throughout the company. Cummiskey joins Georgia Power from Southern Power.

ITC Holdings promoted Christine Mason Soneral to senior v.p. She retains her present position as general counsel.

E.ON Energy Services named Keith Day president of its newly formed business unit. Most recently, Day was regional v.p. of operations for E.ON. Prior to joining E.ON in 2010, Day had filled stints at General Electric, Hewlett-Packard, and Magnom Corp. The following persons will join Day on the new E.ON energy services leadership team: Guy Dees, as v.p. of operations, Michael Cossentine, as head of sales and marketing, and John Franklin, the current head of E.ON North America Operations, as senior advisor. (Dees previously spent several years at General Electric, Upwind, and Clipper. Cossentine worked previously for a subsidiary of Bosch Rexroth. Before coming to E.ON, Franklin had worked for Nextera Energy.)

Associations: Gil C. Quini­ones, president and CEO of the New York Power Authority, was elected chair of the Electric Power Research Institute. Quiniones, who was previously EPRI vice chair, succeeds Denis P. O'Brien, the CEO of Exelon Utilities.

The board of directors of the Alliance to Save Energy elected Jane Palmieri, as industry co-chair. Palmieri is president of Dow Building and Construction at The Dow Chemical Company.

Rich Meyer, senior v.p. and general counsel at the National Rural Electric Cooperative Association (NRECA), was named the 70th president of the nation's Energy Bar Association. He becomes the first NRECA lawyer - and only the second energy trade association general counsel - to lead the EBA.

Board of Directors:Chesapeake Energy appointed Kimberly K. Querrey to its board of directors. Querrey is the co-founder of SQ Advisors, LLC, a registered investment advisor, and has been its president and managing member since August 2010.

Edison International and Southern California Edison elected William P. Sullivan to the board of directors of each company. Sullivan served as CEO of Agilent Technologies from 2005 to March 2015.

AES elected Holly Keller Koeppel to its board of directors. Previously, she was executive v.p. and CFO of American Electric Power (AEP) from 2006 until 2009.

We welcome submissions to People, especially those accompanied by a high-resolution color photograph. E-mail to: people@fortnightly.com.

I sensed trouble right away, on the morning of Day One, when my colleagues and I started gathering to meet in the company auditorium. My employer had been acquired by another company, and we were going to hear all about it - both from our former supervisors, and from the new management that had taken us over.

On entering the auditorium, I was given a golf shirt with the logo of the acquiring company (whose name I will not share, but it should be well known to Fortnightly readers.) The size of my shirt was XL. That would fit me, but my female colleagues who weighed 100 lbs. less than I did also received XL-sized shirts. Maybe that was an oversight or a logistical snafu. Or maybe our new bosses had embraced a "one size fits all" view about the workplace - they would determine the metaphorical "size," and we would either learn to fit in that slot, or we would leave.

And my concerns only increased when I found my seat. There, placed carefully on the chair, was a coffee mug with the acquiring company's logo on it, plus a similarly adorned baseball cap and pad of paper.

Now let's fast-forward five years. The acquisition eventually failed, as many strategic initiatives do, and its flameout provided real-world validation of something I had heard in one of my MBA classes a few years earlier: namely, that any merger or strategic initiative launched with a burst of golf shirts, coffee mugs, upbeat banners, clever slogans, and lots of happy talk from executives about "strategic synergies" would soon hit the rocks. It was just a matter of time.

"Don't forget," my professor had advised, "that the first two letters of the word, 'merger,' are ME - employees want to know how a strategic initiative will affect them specifically and personally." And she was also a change-management consultant, who knew her stuff.

"Before you can talk about the strategic reasons to enter a new market or how 1 + 1 will equal 3," she told us, "employees need to know a few basic things," including:

• Will I be a victim of 'headcount rationalization?'
• Will I have a new boss?
• Will I have new responsibilities?
• Will I have to relocate?
• Will you want me to change how I do what I do?"

My experience and my professor's words floated back to me recently as I prepared Budgets, Gadgets & Price Increases, my company's 2015 survey of utility company communicators and marketers. One of the questions we asked respondents concerned their top strategic challenges for 2015. Figure 1 summarizes the results for that question.

I was not surprised by some of the priorities listed by respondents: price increase communications, environmental regulation and customer satisfaction are all long-standing challenges facing communicators and marketers at North American electric and gas utilities.

But I was intrigued - though not particularly surprised - to see that 15 percent of respondents said employee engagement as their #1 or #2 challenge for 2015. Over the years, friends, colleagues and clients have shared stories with me about their efforts to measure and improve employee engagement. But I didn't know if those stories were random anecdotes or a fair representation of a broad industry-wide challenge. Now we have quantitative evidence that employee engagement is a top strategic issue facing North American electric and gas utilities.

When you think about it, it should not be especially surprising that utility employees are feeling disengaged and beaten down. There is a tremendous amount of change hitting electric and gas utilities. The commitment shown by your employees is being put to the test by any number of factors, both external and internal. Here are some of the most important internal factors roiling utilities and sapping employee commitment:

• Systems integrations, digital meter rollouts, and other IT upgrades and process redesigns,
• Repeated reorganizations and staff reductions,
• Lack of opportunities for professional advancement,
• Poor or infrequent communications about the progress of strategic initiatives, and
• Leadership changes.

But if employees are more committed, they will work harder to remedy difficult internal and external problems. Employee engagement can even become a company strength that supports utilities through challenging times. Looking ahead, no one I know thinks there will be a shortage of challenges facing utilities. So consider employee engagement a strategic investment in coping with disruptive change.

Utilities are not alone in facing a disengaged workforce. A Gallup global poll across numerous industries found only 13 percent of employees said they were actively engaged at work, meaning they were "psychologically committed to their jobs and likely to be making positive contributions to their organizations." Nearly twice as many - 24 percent - identified themselves as actively disengaged. The remaining 63 percent said they were simply (or passively) disengaged.

A Harvard Business Review study from 2013 found 72 percent of those surveyed said employee engagement was very important for an organization to achieve its goals. But only 24% said employees in their organization were highly engaged.

In a 2013 report, Pricewaterhouse­Coopers found 79 percent of businesses are worried seriously about engagement and retention. Two-thirds of business leaders surveyed said "the overwhelmed employee" was a top business challenge.

Like all enterprises, utilities can only succeed if their employees bring their energies, hearts and minds to work. That's where the answers live to all the vexing problems utilities face. Showing up may account for 80 percent of life, as Woody Allen once asserted, but utility leaders need that other 20 percent from their employees if they want to be truly successful and competitive.

"Employee engagement is key to the success of strategic initiatives especially if an initiative has significant employee and customer impacts," notes Colleen Campbell, who heads the Organizational Change Management Practice at Centric Consulting. "Your employees are the front line to the customer. They are often a cost-competitive resource with great ideas and know-how to address challenges.

"The key is to effectively empower employees to create solutions and support in the process," she continues. "Learn to trust that they have the answers. And since employee engagement ranks high as a key factor to employee retention, this is a wise investment."

What utility today is not concerned about keeping its high-performing employees coming back to work each day?

Who else but actively engaged employees would be willing to go the extra mile to lead a cross-functional team, spot and address a new threat to the business model, fix a process or drive the creation of a new service? These are hard tasks that require a lot of time and energy to remedy. They won't get done well by employees who are disengaged, let alone by actively disengaged, employees.

"There's nothing more dispiriting to employees than getting a new assignment with no tools or training, or poor tools or training," Christina Kelly, director of communications and marketing at Mosaic, told me.

"It happens frequently with IT systems integration. A firm is hired to install an expensive piece of software, hardware, or both, and that's what they focus on. When the system goes live, they see their engagement as over. They hand the training manual to the utility's project manager and let him or her worry about employee training."

"A strategic technology upgrade's 'Go Live' date isn't the end - it's just the beginning," Kelly continued. "You might be surprised how often utilities spend heavily on a strategic technology project without the requisite investment in employee training. Communications - including, but not limited to training - is the cornerstone of employee engagement. That includes giving employees the tools to do their jobs, and communicating frequently with them about how the upcoming changes will affect their jobs."

An organizational change initiative must accompany any strategic initiative, or the initiative will fail. Kelly listed a few tips for a successful organizational change initiative:

• Make employees part of the process to ensure buy-in.
• Explain repeatedly what will change and how it will affect employees.
• Repeat key messages - far more often than you think is necessary. Not every employee "gets it" the first time.
• Use multiple channels for communications.
• Face-to-face communication is optimal. Employees need to be able to assess the messenger as well as the message.
• Seek and listen to feedback: Effective communications is a two-way street.
• For utilities that operate across a wide geographic area, consider holding "road shows" at each regional office.

And don't forget: The more changes that managers and employees have been through, the more skeptical and jaundiced they are likely to be about each successive program. You can hardly blame them for waiting until the enthusiasm over this or that change initiative dies out.

Sad but true: Sooner or later, many leaders will embrace some other hot management imperative and forget about employee engagement.

There's no one way to communicate effectively during strategic change. Each organization has its own unique set of historical and cultural characteristics, and any change-management initiative must take place within the unique confines and characteristics of a utility's organizational culture. But there are a few "no regrets" ideas that could shape your particular initiative.

Campbell of Centric Consulting recommends engaging all employees by helping them understand high-level strategic initiatives through effective change-management campaigns. "Employees want to know what direction leadership is taking," she said. "Centric has supported many organizations facing unengaged or unmotivated employees that don't understand the company vision, direction or key initiatives."

Recently Centric supported an organization where the employees rated their "Understanding of Corporation Direction" as a low score of "2" on a scale from 1-10. With an intensive combination of leadership alignment, cascading messaging, creative lunch-and-learns , key initiatives fair, engaged employee change agents and presentations by employees for each initiative, the score jumped to a new high of "8" with three months.

"The key is to sponsor the effort, educate employees, trust they know the answers and let employees develop the solutions," she noted.

If utilities fail to provide employees with challenging, satisfying work, they will not have engaged, committed employees. Utilities will get the best out of their employees to the extent they create and sustain an environment where employees are challenged to perform meaningful work and they have the opportunity to grow professionally and advance. Everything else is lipstick on a pig.

New Opportunities

Southern Company elected Daniel S. Tucker as its treasurer. Previously he was v.p. of investor relations and financial planning for Southern Company.

PG&E appointed Jason P. Wells as senior v.p. and CFO, effective Jan. 1, 2016. Wells will succeed Kent Harvey, who is retiring in the first half of 2016. Currently, Wells is v.p. of business finance for the company.

Chesapeake Energy appointed R. Brad Martin as non-executive chairman of the company's board of directors. As part of the transition, Archie W. Dunham will remain a director and has been named chairman emeritus.  Martin, chairman of RBM Ventures and retired chairman and CEO of Saks Incorporated, was appointed to Chesapeake's board of directors in June 2012. 

Mississippi Power named Anthony L. Wilson president. Previously he was executive v.p. of operations. In addition, Ed Holland, the current Mississippi Power chairman and CEO, will become president and CEO of Southern Company Holdings and executive v.p. of Southern Company Services, effective Jan. 1.

Entergy named Paul Hinnenkamp as senior v.p., COO for Entergy Corporation. Hinnenkamp replaces Mark Savoff, who announced his retirement. Hinnenkamp most recently served as senior v.p. for capital project management and technology.

American Electric Power (AEP) named Joel P. Gebbie as senior v.p. and chief nuclear officer of the Donald C. Cook Nuclear Plant (Cook) in Bridgman, Mich., effective Jan. 1, 2016. Gebbie heretofore has been the on-site v.p. at Cook. Gebbie replaces Larry Weber, who is retiring after 17 years with AEP.

The Alliance for Sustainable Energy (Alliance) appointed Dr. Martin Keller as director of the National Renewable Energy Laboratory (NREL) and president of the Alliance, which manages the laboratory for the Department of Energy. He joins NREL from the Oak Ridge National Laboratory where he served as the associate laboratory director for Energy and Environmental Sciences.

Advanced Microgrid Solutions (AMS) named Kellogg (Kelly) L. Warner as president. Warner has been an advisor to AMS since the company's inception in 2013.

Renewable Energy Systems (RES) added Dr. Matthias Leuthold and Dr. Craig Horne to the company's market development team for energy storage practice. Dr. Leuthold will serve as business development manager for RES in Germany. Dr. Leuthold worked as a researcher at Rheinisch-Westfälische Technische Hochschule Aachen University. Dr. Craig Horne joins RES as v.p. of business development of energy storage. Previously, Dr. Horne served as CEO and chief strategy officer at EnerVault. 

Regulators

The Nuclear Regulatory Commission selected Julie Boettcher as the new resident inspector at the Palisades nuclear power plant. Boettcher joined the NRC Region III office in 2013 as a reactor engineer. The PJMboard appointed Andrew L. Ott as PJM's new president and CEO. Terry Boston will serve as CEO emeritus until his retirement on Dec. 31, 2015.
The New York Independent System Operator (NYISO) named Kevin Lanahan as v.p. for external affairs. Prior to joining the NYISO, Lanahan served as director of government relations for Con Edison.

Board of Directors

Rafael Flores, senior v.p. and chief nuclear officer of Luminant, was elected to the Ameren board of directors.

In Memorium

Judge Richard D. Cudahy, of the United States Court of Appeals for the Seventh Circuit (Chicago), passed away recently, as communicated to us by his secretary, Pamela Jacob. Judge Cudahy was a frequent contributor to Public Utilities Fortnightly, often on the topic of electric restructuring and deregulation, and voicing a healthy skepticism through his unique and always colorful way with words. We will miss him.

We welcome submissions to People, especially those accompanied by a high-resolution color photograph. E-mail to: people@fortnightly.com.

Have you noticed? The role and relevance of the utilities is under duress.

Changes in what technology enables, policy makers want, and consumers expect, don't easily fit the business models that now underpin our industry. What happens next hinges on you, dear reader. You are, after all, a person in a
position to lead and shape the future in some way.

The question is, do you stand strictly in defense of the way things are as good enough? Or are you a strategic leader, one who actively explores how to make things better?

Best lean to the latter, since the former is a predictable path to irrelevance. History affirms this as true.

"You see what your knowledge tells you you're seeing," says James Burke, esteemed science historian. So, it stands to reason that those who don't seek, or worse ignore new knowledge, have only the status quo to defend.

And defend they do with absolute certainty of their truth. It's human nature.

Indeed, as Thomas Kuhn, author of The Structure of Scientific Revolution, wrote in 1962: "awareness is prerequisite to all acceptable changes of theory." You need not look far for proof.

Our ancestors once believed, with conviction, that the earth was at the center of the universe, not the sun. The laws of physics were absolute, not relative. The continents were static, not adrift upon tectonic plates.

As paradigms shift, so do cultural norms. Typically, shifts occur after some tumultuous period of unrest, resistance, or disruption.

For example, note how concepts of work and employment changed as agriculture gave way to the industrial age. In the mid-1800s, Florence Nightingale fostered nursing as a profession and led several health-related social reforms. And most will recall Rachel Carson's 1966 book Silent Spring which invigorated an environmental movement that has grown stronger ever since.

It's an obvious lesson. Scientific discoveries can translate into practical technologies, unleash fresh thinking about possibilities, and forever alter societal priorities.

This lesson is best exemplified by our own industry and the story of electrification that has powered the most prosperous nation on earth. But here's the irony. Electricity, once valued as a technical and market novelty that shaped the future, is now viewed in the developed world as a basic commodity.

Our industry successfully reduced the complexities of power delivery to the flip of a switch and a monthly bill. But now our industry is at a crossroads with many changes afoot.

One path is to defend what we've known and resist change. The other path is to embrace our historic role as an enabler of change and discover what more can be.

Do you see the shifts in motion? Today it is possible to measure almost anything, anywhere, anytime, at low cost.

You see it in real-time weather apps on your phone, and health devices you wear. You also see it at work in the form of internet-addressable transformers, smart meters, and more.

This growing trove of data harbors rich insights waiting to be mined. Data science offers the new advanced tools that make predictive analytics possible.

And the massive computing power required to crunch the numbers is readily available via the cloud. In short, what wasn't possible a few years ago is now, and that in turn, again changes what's possible.

Who can succeed by standing still in the face of change? Striving to make things better is a wise course on any field of play, as famous sports author Steve Wilstein has written. "It's dangerous to believe you will remain successful simply by doing the same things that once brought success. That will be true only if the world doesn't change. To be successful over the long haul, you need to change before it stops working."

The dynamics of change are clearly at work in our industry. The cost curve on distributed energy devices continues a downward trend. Policy makers and regulators press on for more renewables and a cleaner more resilient energy system.

Companies of all kinds are introducing technologies and services to help consumers manage energy in new ways. On this point, pay particular attention to the emergence of blockchain technology which enables peer-to-peer transactions directly by consumers for value of all kinds - energy included. And there are more.

The inescapable truth is that our industry, once the enabler of change, is now the subject of change. Returning to how we began, you (yes, you) are in a position to lead in some way. To stand as a champion of what happens next.

By understanding the past and accepting what is known, you have the chance to offer strategic leadership that's about discovery, not defense. Please, take it.

Endnotes:

1. "The Day the Universe Changed," a BBC production, Episode 1, aired 1992.

2. "Getting What It Takes to Win,"Hemispheres, June 1994.

I first met David Owens in the mid-eighties. At the time, I was surprised the Edison Electric Institute had an intellect like David on staff. Expected an industry association to be a lobbying group, mainly, with member services mixed in. I had a lot to learn.

During my four decades in the industry, EEI has been a vigorous debater in the many scrums about utility regulation and policy. It has sponsored thorough research and offered detailed recommendations. Depending upon where you sit, you might have agreed or disagreed with its positions. But you likely found the work rigorous and well-considered. And you likely observed that David was the driver for the work and its eloquent spokesman.

Indeed, David has been the industry’s debater-in-chief. This month, uncharacteristically, he’s decided to put down the mic for good.

You also likely observed that David exuded passion for helping people and the public, through his intellectual prowess. All while he practiced compassion, religiously, with both proponents and opponents of his positions.

There are hundreds, nay, thousands, who would tell you a story about how David took the time (when he seemed to have little), touched them with his caring, and made a difference in their careers, in their lives. Did he touch your career and life too?

One always hears how tireless David has been. How he constantly travelled to talk, to listen, to persuade, to be persuaded. Though I believe that David was everywhere – from NARUC conferences to board rooms – because he wanted to be everywhere. Because he wanted to learn all he could learn about utility regulation and policy, and to teach all he could teach.

The Public Utilities Fortnightly team considered how we could honor David. We do so by selecting him as the first recipient of PUF’s Owen Young Award, for devoting his powerful intellect to the public interest.

Owen Young was general counsel of General Electric, GE, when he founded our company Public Utilities Reports in 1914.

Young was working with the National Civic Federation to develop and submit to Congress model legislation on utility regulation. The often-drastic inconsistency from state to state troubled both utility leaders and regulators:

“Of more immediate concern was some means of simplifying, or keeping abreast of, the diverse laws and regulations affecting the burgeoning public utilities. As power systems crossed state lines, which was rapidly becoming the rule rather than the exception, the multiplicity of jurisdictions to which these natural monopolies were subject was not merely an annoyance; it was a source of confusion to investors and management, and so, too often, of public suspicion. [Young found] the situation profitable to no one save the politician in search of an issue…”

– From Owen D. Young and American Enterprise, by Josephine Young Case and Everett Needham Case, David R. Godine Publisher Inc., 1982.

The initiative, to have Congress enact national model legislation on utility regulation, ultimately failed:

“… The next best thing was to provide a guide for utilities and investors in the form of case reports on state laws and relevant decisions of the courts and public service commissions.”

– From Owen D. Young and American Enterprise.

Public Utilities Reports was thus founded. After a few years had passed, the first Public Utilities Fortnightly was published. Young’s college roommate, Clifford Spurr, was made its first editor-in-chief, my first predecessor.

Soon after, Young led both the electricity and telecommunications industries as chairman of GE and of the Radio Corporation of America, RCA.  He later, at the request of the president of the United States, engineered the settlement of Germany’s World War I reparations.

And, as one of the nation’s most famous and respected personalities, Young was expected to become president of the United States in 1932. He declined to run, in favor of his friend Franklin Roosevelt.

David Owens also was a friend of a president of the United States. When you ask David what’s his proudest professional achievement, he’ll cite his leadership role in the response to the devastation of Hurricane Sandy at the request of President Barack Obama and EEI president Tom Kuhn.

The Public Utilities Fortnightly team honors David in a second way. We’re starting a new annual list, PUF’s Top 40 Innovators. Debuting in November’s Public Utilities Fortnightly, we’ll announce our selections of the forty most innovative influential thought-leaders in utility regulation and policy in 2017.

We’ll be issuing the criteria shortly, the specs that will guide our picks. That will support our analysis of the greatest thinkers and doers in utility regulation and policy.

But, to make the list, in sum, you need to be a David Owens. A powerful intellect that’s impacting the course of our industry.

Coming up with the list should be a blast. And you have a key role. Send me your nominations, to mitnick@fortnightly.com. Tell me why John Doe or Jane Smith ought to be in PUF’s Top 40 Innovators.

Did they reset how we thought about regulation and policy? Did they make you want to hear them out? Did they change your mind?

Did they reshape our industry’s future?

Were they like Owen Young? Were they like David Owens?

While an elementary school student in inner city Philadelphia, David K. Owens heard President John F. Kennedy's dramatic call for the U.S. to put a man on the moon. It changed the course of David's life. The young boy was attracted to math, science, engineering, and the idea of aiming high.

As an adult, Owens' career became a moon-shot ascension within the electric power industry. He rose from a challenging childhood to become one of the most respected voices in the electric power industry and a leader at the Edison Electric Institute, the industry's largest trade association.

In the process, he achieved many accomplishments, from shaping the modern response to storm disasters and cyber threats to mentoring and leaving a legacy of talent. He is responsible for policy innovations that will influence the industry for years to come.

Owens, sixty-eight years old, will retire in June as executive vice president of EEI, an organization he joined in 1980. In many ways, he has been a public face of EEI for decades, especially for regulators.

In a sign of the influence and respect he commands, Owens has received a send-off that is a tribute to both what he has done and how he's done it, as a skilled and thoughtful consensus builder.

Upon announcing his retirement, Owens received a standing ovation from the EEI Board of Directors. Separately, more than a thousand regulators gave him a standing ovation at the National Association of Regulatory Utility Commissioners' winter meeting in Washington, D.C.

"David is really a unifier," said EEI President Tom Kuhn. "He's a consensus builder, and he knows how to bring people together. He can be very persuasive." If he has a weakness, Kuhn quipped, it may be excessive modesty. "But it's hard to call humility a fault," he added.

Owens was raised by his mother and grandmother in Philadelphia. He started at the University of Pennsylvania but transferred to Howard University in Washington, D.C. for the more hospitable atmosphere at the historically black university.

He earned Bachelors and Masters of Engineering degrees at Howard; later he earned a Masters in Engineering Administration degree at George Washington University in Washington, D.C.

Owens started his career as a design and test engineer at General Electric and at Philadelphia Electric Companies. Then, in an experience that helped him understand the perspective of regulators, he worked at the Federal Power Commission, helping to evaluate proposed power plants. Later, he worked at the Securities and Exchange Commission, where he served as chief technical officer.

Owens joined EEI in 1980 as director of rates and regulations, representing the industry in public hearings. He advanced rapidly to senior director, vice president, senior vice president, then executive vice president. He was the first African-American to serve as an officer at EEI.

As executive vice president, Owens has been Kuhn's right-hand man and confidant since Kuhn became president of EEI in 1990. "Our incredible run" is how Kuhn described the last twenty-seven years. "There's an incredible chemistry, and I think we have similar judgment on issues. We provide a sounding board for each other," Kuhn said.

Sometimes, the colleagues have thrown cold water on each other - literally. In 2014, Owens dumped a bucket of ice water on Kuhn as part of the ALS Ice Bucket Challenge. Kuhn returned the favor by challenging Owens to be drenched by ice water as part of that fundraising phenomenon.

Owens' diplomatic skills played a key role in keeping EEI together through a time of turmoil. In 1992, the Energy Policy Act forced the industry into a major restructuring. "It was a very, very turbulent time," Kuhn said. "People were talking about the breakup of EEI at that point."

Owens helped the industry and EEI emerge stronger than before. He set the stage for an industry moving into the modern era of electricity competition, smart grids and fuel diversity. The increased policy cohesion and influence of EEI over the last quarter century can be significantly attributed to Owens' persistence with elected officials and regulators in state capitals and in Washington, D.C.

He has testified many times before Congressional committees, appeared more than fifty times in state capitals, lectured at universities, made hundreds of presentations to business groups, and has been quoted countless times in the news media. He has made more than a dozen appearances on C-SPAN.

"He is incredibly articulate and makes fabulous presentations," Kuhn said. "He leads on issues. He's probably led this industry on every major issue we've faced."

Superstorm Sandy may be the greatest example of Owens' ability to define a problem and get diverse groups to coalesce around a solution. As the devastating storm approached the Northeast in 2012, the White House asked if EEI could send someone to the Federal Emergency Management Agency to improve coordination on the ground. "I got just the guy," Kuhn said. "David Owens is coming over."

Owens embedded with FEMA and set out to turn conflict into cooperation. He worked long hours, sometimes sleeping on a cot at FEMA's command center. The result was a new level of industry-government cooperation that extended far beyond the Sandy recovery effort.

Today, the lasting impact of Owens' efforts can be seen in the establishment of a permanent Electricity Subsector Coordinating Council for storm recovery and cybersecurity. In public policy, Owens helped embed the idea that, in a storm disaster, electric company workers are first responders, not adjuncts. They need to be involved in decision-making, because getting the power back on is what the public needs immediately.

"David will take on a challenge any time," Kuhn said. "It was a monumental time.

We established a partnership that everybody now says is incredibly important for storm recovery and cybersecurity."

On economic issues, Owens' role has been equally important. He's worked relentlessly to improve the public policy climate to make the electric power industry an attractive investment. Because of his deep technological knowledge, Owens foresaw how energy grid modernization, the digital world, and environmental policy would change the electric power industry.

He got out in front on grid modernization issues, so the industry could be prepared to pursue smart grids, clean energy, customer solutions, and much more. As Owens put it at a recent conference, "I wouldn't say we're in a period of transition. I'll say we're in a period of transformation."

Leading is not always easy, especially when views by companies, regulators and the marketplace can be at odds. Because he has a heart for other people, Owens has a great ability to influence others. He's beloved by EEI staff and beyond, because of the personal interest he has in individuals.

He rose from Philadelphia's inner city to the top of his profession. Owens has spent enormous amounts of time helping others succeed. He served as chair of the board of trustees of IDEA Public Charter School, where he and the board successfully restructured the struggling school over three years to become one of the top performing public high schools in Washington, D.C.

In March, City Year presented Owens with its Idealist of the Year award for his work with the school. He has also served on the Board of the National Academy of Sciences and as chair of the National Institute of Standards and Technology's Smart Grid Advisory Committee.

Owens' efforts have earned him the industry's most prestigious awards. The American Association for Blacks in Energy twice awarded him its highest honor, the James E. Stewart Award, and later its Chairman's Cup for outstanding service on energy policy.

The Women's Council on Energy and the Environment gave Owens its Champion Award for mentorship of women in the industry. This year, he won the John D. Dingell Award from the National Labor and Management Public Affairs Committee for advancing the mutual goals of organized labor and the electric power industry.

"David cultivates people. He mentors people. That's inspiring," Kuhn said. 

As for retirement, Kuhn says Owens' golfing ability is a bit weak, but he does have a great family and young grandchildren who he can mentor in his free time.

By Steve Mitnick with Jim Laurito

Jim Laurito, EVP, Fortis: I've known David for probably close to fifteen years, through my work on the Edison Electric Institute Board of Directors. I first went on the board back in early 2003, and David was the first to stretch a hand out and make me feel very welcome in the organization.

At the time, I was just coming into the electric industry as CEO of New York State Electric and Gas and Rochester Gas and Electric, two subsidiaries of Energy East Corporation, and really didn't know anyone in the industry. David reached out to me and walked me through the chairs, which is a typical David Owens move. I've always appreciated that from him. We've been great friends.

PUF's Steve Mitnick: You used the term, "through the chairs."

Jim Laurito: I would say he got me to understand EEI, how it operates. Who the people were in the organization, how to leverage the organization in order to get the maximum benefit for us as a member company, and he also helped me meet the other directors.

EEI is a large organization with probably close to fifty directors from all walks of the industry, co-ops, generation companies, and the large vertically integrated companies.

He made me feel at home. Even though we weren't the largest company in the industry, he made me feel like our voice was as important as anyone else's.

PUF's Steve Mitnick: And it seems like you two did things over the years together.

Jim Laurito: We did. We worked on a variety of projects. Mainly I would say under two umbrellas. One, regulatory. Any time there were technical considerations of a complicated nature, you could rely on David to help you understand the issue and help the company position its strategy.

The second umbrella is innovation. David thinks out on the cutting edge. Not of what utilities are doing today, but where they should be in the future.

He traveled to St. John's, Newfoundland and Labrador a few years ago to speak to our board of directors at Fortis Inc. regarding the utility of the future. That was a very important discussion for our board to hear. With utilities all across Canada, the United States, Caribbean, and Central America, we're literally doing business from tip to tip to tip of the whole North American continent.

We see so many different types of regulatory jurisdictions and we have board members from all walks of life across that geography. It was very important for them to hear David's view on the utility of the future.

A lot of the more innovative and cutting edge developments were happening in a couple of parts of the United States where we have operations: namely New York and Arizona. He explained these innovative technologies and their potential impact to our board. Along with the regulatory and business implications for your companies. You need to make sure you understand it, engage in it, and embrace it because it's coming towards you.

It was a classic David Owens presentation. Very candid. Very passionate. Very forward-looking. Our board really appreciated it.

PUF's Steve Mitnick: He's been around for a while and has touched so many people.

Jim Laurito: When I think of David, I think of a few different adjectives for a guy like this. David's breadth of experience is so broad. I see him as a visionary. I see him as extremely dedicated. A really hard worker. Committed to everything he does.

He's always prepared. In fact, he over-prepares for things. David is very passionate about what he does, but at the same time, when he looks at other people, he is very compassionate as well.

He is very driven by the things that he does in his personal life: on the philanthropic side, on the social side. Extremely candid, which is very hard to find, especially in an industry association, where at times the associations want to placate the members. David is very candid with the members, yet he's very grounded and authentic.

He is a tireless advocate for the industry. I mean, the guy works twenty-four/seven, three hundred and sixty-five days a year. He's been in the industry a long time, yet he's a catalyst for change. He is always pushing companies to think in different ways. When we get into a discussion with David, the discussion is very provocative. He is always trying to push you to think in new ways and be innovative and think about what's coming ahead, not where you've been.

Last, but not least, he's a great friend to me and just a great man. I know all the other directors in EEI feel the same way. He's known and respected by everyone in the organization. He asks the tough questions, but does it in a very professional and constructive way, as only David can.

We recently had the EEI International Utility Executive conference in Washington. We had CEOs there from all over the world. I was privileged to speak on one of the panels. Once again, in true David style, regardless of who the CEO was, he was asking the tough questions.

When you engage in a conversation with David, you can expect to be challenged in a very intellectual way. I always say, when you sit down to have a discussion with David, you better be ready because he always brings his "A" game.

But again, he does it in the right way and that's why he's so well respected throughout not just the industry, but throughout Congress and the Department of Energy. He's on a first-name basis with everyone and it's because he's earned their respect over the years.

There's only one David Owens that comes around in your lifetime in an industry like this. He's left an indelible mark on it. While I think he is making the right decision to move into other things that he wants to focus his time on, we will sorely miss him.

PUF's Steve Mitnick: Can you remember anything funny about David?

Jim Laurito: I think one of the things I would say is classic David. I didn't find out about this until after the fact, but it happened when I had him come speak to our board a few years ago. It was our biggest board meeting of the year in the summertime in St. Johns, Newfoundland and Labrador.

I called David up and said, "David, I really need a big favor." He says, "Sure, what?" I said, "Well, David, you know, we have this strategy session at the board. We're really looking to educate and inform our directors about the utility of the future.

We have people coming from all over the North American continent who want to get a better understanding of what's happening in New York and I really need somebody to level set them on where the future is." He said, "Sure. I'd be happy to. No problem." I said, "Okay, great. I'll send you the dates and we'll see you there." You know, classic David, "I'm there."

David, as you know, is on the road probably five days a week. So to him, this was just another road trip, right? Unbeknownst to me, he hangs up the phone, he gets my email, and he goes to his assistant, Kim, and he says, "I'm going off to talk to the Fortis Board about this in St. Johns, Newfoundland and Labrador." She says, "Where?" He says, "St. Johns, Newfoundland and Labrador." She says, "Where is that?" He says, "I don't have a clue. I have no idea where that is."

That starts a trickle-down series of events where David has to figure out how to get himself from Washington, D.C. to a part of the world he never even knew existed. Lo and behold, I don't know any of this is going on because he's not whining to me about it, but we get up to the board meeting and I have dinner with him the night before and I said, "So how was your trip here, David?"

He said, "It was quite the experience. First, I had to figure out where on the map Newfoundland and Labrador were. We had to figure out whether there was a way to get there from where I started out. And then it took me a day and a half to get here, but I'm glad to be here."

We had a good laugh over that because that's classic David. He's just dedicated, committed. He'll commit to it before he even knows he can do it.

This issue of PUF will be a great tribute to him. He deserves it.

By Steve Mitnick with Hilda Pinnix-Ragland 

Hilda Pinnix-Ragland, former VP, Duke Energy: I have known David for much of my career, working with him through the American Association of Blacks in Energy and with several energy organizations. His family, like mine, is originally from North Carolina. We both served on the board of AABE for almost 15 years.

Even though we have rotated off the board, we remain actively engaged on the Executive Advisory Board. For this new advisory board, David is a critical leader with a wealth of energy expertise. He is joined by several prominent leaders, including Dave Velazquez, CEO and President of PEPCO Holdings.

We have a great group of visionary and strategic leaders who are focused on advancing the overall mission of AABE. We are building on forty incredible years where everyone is committed to leaving a legacy.

PUF's Steve Mitnick: Did you and David have a role in making the organization as great as it is?

Hilda Pinnix-Ragland: Of course. Both of us are mission driven to make an indelible impact.

To make sure all customers understand energy and the various opportunities such as jobs, supplier diversity, and regulatory policies. We gave the organization our leadership, vision and strategic skills in addition to execution skills. While I was Chair, and even afterwards, David was Chair of the Policy and Legislative committee. He remains on the committee and is instrumental with significant issues.

PUF's Steve Mitnick: I suppose that you and David probably feel that the work of AABE is hardly done and there's still a long way to go. Can you talk a little about how you feel about it and how David might feel about that too?

Hilda Pinnix-Ragland: David has incredible public affairs acumen. He was responsible for convening the team that authored many of AABE's current policies and white papers. In essence, David did what AABE originally set out to do 40 years ago. If there was an opportunity to make sure LIHEAP, net metering or any other initiative continued, David led that effort. 

He strongly believes people of color who are economically challenged must have representation at the table. He was instrumental in making the case with state and federal government in addition to the electric utilities.

If there were new regulators or even exiting regulators who needed to have more insight into the industry than they thought they possessed, David was sensitive and eager to share information. It's making sure we share what we value. Of course, he provided a comprehensive and neutral perspective.

David often educated Members of Congress on energy. He shared the pros and cons as well as the challenges with respect to all people.  

PUF's Steve Mitnick: A lot of people feel that David touched many lives and had a big impact on the industry.

Hilda Pinnix-Ragland: Oh, without a doubt. I think there's much more work to do over the next forty years with AABE. To really take it from where Clarke Watson and the founders started to another level of excellence and inclusion. Without AABE, we would not have LIHEAP or advancements in net metering, new meter technologies, or many other initiatives.

By Steve Mitnick with Kevin Fitzgerald

PUF's Steve Mitnick: When did you first meet David?

Kevin Fitzgerald, Chief Utility Officer, Energy Impact Partners: The first time I met David Owens, he was sitting on Ray Dacek's couch having a conversation with "Dr. Dacek." Ray was senior partner at Reid and Priest and an industry legend.

As a junior lawyer, I was asked to sit in along with a senior associate, Greg Nelson (now GC at Ameren), and listen to a new issue that David and EEI were analyzing. The issue - tax and regulatory matters associated with normalization - was complex.

David jumped up from the couch, grabbed my hand, and said, "So you're the ball player! Nice to meet you, grab a seat and listen because we have a big ball game in front of us."

He was fired up. And after twenty minutes of railing about all the horrible things that would be done to the industry if the proposed changes were allowed to stand, I found myself getting fired up too! That was David - only he could make normalization accounting and ratemaking exciting.

I then saw him weekly after that at the EEI Washington rep meetings. David always took an interest in what I was working on, or what I thought about a policy issue in the industry. He always valued input, even from someone low down in the ranks like I was. That had a big impact on me - that a leader in the industry actually cared what I thought.

PUF's Steve Mitnick: Lots of people say he's touched so many lives and made such a big impact on policy in the last thirty years. How would you describe that?

Kevin Fitzgerald: His fingerprints are on every piece of federal legislation and major policy issue over the last thirty years. From the Energy Policy Act of 1992, subsequent FERC orders, retail choice matters, and RTO market developments, to the net metering debates of today, David has always been in the middle of each issue finding common ground for the industry to stay united. 

As outside counsel to many different utilities during this time, I was continually amazed that David and Tom Kuhn were able to keep the industry together. But they did, and because of that the industry has survived and flourished.

PUF's Steve Mitnick: In recent years when you and your colleagues had a lot of challenges at Pepco Holdings, it seems like you were often talking during those years, too.

Kevin Fitzgerald: David was an incredible help to me and others at Pepco as we worked through our challenges. He had become a mentor of mine during my years in private law practice, and ultimately he and EEI became my client.

When I moved to Pepco, he said, "Fitz, I am just a phone call away - buzz me anytime." He was someone that I could bounce concepts and ideas off as we worked through some challenging times at the company.

David's strong and unwavering support of me and Pepco during our merger with Exelon was something I will never forget. His insight into the regulatory processes in each of our jurisdictions was uncanny. He was dead on in his predictions as to where the risks were and possible ways to get various approvals.

When everybody else on Wall Street and in the industry were saying, "The deal is dead," David kept reassuring me, "Keep the faith, Kevin, keep the faith. Stay positive. We're going to get there." Frankly, he was the only person who was saying that throughout the process. That leadership and moral support meant a great deal to me and kept me positive.

PUF's Steve Mitnick: You've made a change and now you're at this remarkable fund - Energy Impact Partners. As you were making the transition, did you talk? This was a pretty big move for you.

Kevin Fitzgerald: Yes. We did talk, and honestly his guidance and counsel had a big impact.

After the merger closed, David and EEI's Richard McMahon asked me to share some M&A best practices with the EEI CFOs. At that meeting, David bought me lunch. He knew I was mulling over an offer to take a C-level opportunity that was somewhat peripheral to the utility space.

David said, "Fitz, is that really what you want to do? You have a lot of fire left. At Pepco, you stood up a utility-of-the-future vision that the industry recognized and embraced. Why not work on that vision and help the entire industry in the process? Don't you want that to be your legacy?"

Those words hit home. When Hal Clark (retired banker from Evercore) and Tom Fanning (Chairman and CEO of Southern Company) discussed EIP with me, something just clicked.

Joining EIP as a partner and Chief Utility Officer affords me the opportunity to work with our electric utility investors from around the globe on the evolving utility of the future, as well as the new technologies and companies that will have a significant impact on the industry. m

By Steve Mitnick with Ralph Cavanagh

Ralph Cavanagh, Co-director, Energy program, NRDC: I started at NRDC in 1979. David started at the Edison Electric Institute soon after. At the time, the utility sector was about as male-dominated and as non-diverse as is possible to imagine.

Look at how the cultural expectations and support structures in utilities have shifted over the years. Not just utility staff but also utility boards and utility leadership. David has been tireless in pushing forward and mentoring candidates who don't look like the people who dominated the system when he got there.

EEI has gone out and recruited more diverse board members. It has quietly, but I think effectively, made efforts to advance the cause of female leadership. And there are a lot more CEO's now, and there are a lot more senior VP's, who come from diverse backgrounds.

The overall diversity of the industry has shifted, and continues to shift. And I think a lot of people have contributed to that. Tom Kuhn has been an important force, but I think that David, over thirty-five years, has done more than anyone else.

Now, he doesn't advertise this, but it is part of his story. And he hasn't done it by going out grandstanding or denouncing anybody. He's done it by quietly working across the full spectrum of his extraordinary list of contacts.

And he finds and helps promising young people as they emerge. I have cause to know this, because he and I teach together every year at the University of Idaho in their summer program for utility executives.

It's basically billed as a daylong debate between David Owens and me. He always wins because, of course, it's his hometown crowd.

We perform that same role frequently at meetings of utilities and their customers, from the American Association of Blacks in Energy to the major regional associations.

The audiences expect us to be in conflict. Yet people generally respond favorably to what always turns out to be a civil discourse. It's clear that the debaters are listening to each other, which is rare.

We don't get up and deliver our talking points and sit down. We actually have a conversation. We've been doing that for now more than a quarter century, and for that entire time we have had the same jobs.

PUF's Steve Mitnick: It's like the Lincoln-Douglas debates.

Ralph Cavanagh: Yeah, it is a little. Now, I have to say, in these debates, there's no question as to who is Lincoln and who is Douglas.

It's the Harlem Globe­trot­ters against the Washington Generals.

That's the way the utility audiences enjoy seeing it. But I think that there has been enduring value in terms of helping them get a sense of the many bridges that can be forged between traditional adversaries.

PUF's Steve Mitnick: Why do you do that?

Ralph Cavanagh: Was it planned like that all along? No. To be fair, it started out as simply a theatrical event involving two people who both appreciate good theater. But then we discovered that we were listening to and learning from each other.

I often say that I started out in 1979 at NRDC assuming that I would spend my entire career suing the utility industry. But things have turned out differently, in part because of people like David Owens, who were interested in partnerships and in opportunities for mutual progress as opposed to an endless sequence of clashes.

I like to think that we have helped to reshape the relationship between the environmental community and the utilities sector, which was once purely adversarial and is now much more about mutual progress towards a clean energy future.

And Steve, you are in a good position to reflect on how different things are now than they were back in the late 70s, when much of the leadership of the environmental community simply defined itself in opposition to whatever utilities wanted to do.

It's dramatically different and dramatically better now. There's been tangible progress across the board on energy efficiency, renewable energy, pollution emissions, and clean energy progress.

David has been an important thought leader in that. He spends a lot of his time going around the country to utility commission proceedings. He's frequently an expert witness. He is very active at the state level.

The typical trade association executive sits in Washington, represents the trade association and is visited by the people from the field. David goes out into the field. He's there all the time.

And as you watch the evolution of the utility sector, as you watch the emergence of energy efficiency as a utility system resource, and as you think about utilities' efforts to drive their capital budgets in the direction of a clean energy transition, he's in the middle of all that.

PUF's Steve Mitnick: You and he made an electrifying announcement in 2014.

Ralph Cavanagh: In 2014 we were coming out of a period during which the solar industry in particular and the utility industry had been at each other's throats. There were adversarial TV ad campaigns running in multiple markets.

The narrative that was emerging was one in which the distributed resource industry at large, and solar in particular, were inevitably going to be in conflict with entrenched monopolists who didn't want distributed renewable resources and would fight them at all costs.

The joint statement that we released in February 2014 made the point that utilities were essential partners in a clean energy transition. We said that utilities and distributed resources were better off working together and integrating their efforts than fighting each other.

And indeed, they couldn't achieve their joint promise if they kept fighting each other. It was a statement of optimism about the future. Technology innovation and distributed resources are not disruptors of the grid. They're not alternatives to the grid. They're grid enhancements. They should be understood as ways to make grids work better, and deliver more economic and environmental benefit. The joint statement was a commitment to work together to make all that happen. And thanks to David's prominent role, people took it seriously.

PUF's Steve Mitnick: How did it happen?

Ralph Cavanagh: David and I were part of it, but we had groups of people from the EEI staff and board, from NRDC, and from other groups with a stake in the issues, working together to try to frame these proposals.

There were contentious and difficult meetings in which people did a certain amount of shouting at each other. In the end, what made it work out was a mutual sense of possibility. We knew that we could make a difference if we were able to reach agreement.

David and I believed very strongly that there were no fundamental conflicts here, and that if we worked at it long enough, it wasn't a matter of compromising away principled differences. It was a process of identifying common interests and then figuring out how to express them in a way that everyone was comfortable with.

The discovery of common interests is the most important part of a successful negotiation. As opposed to a process where people feel like they're giving up fundamental convictions in a desperate effort to cobble something together.

It never felt like that. If you go back and look at EEI/NRDC joint statements over more than a decade now, they also helped to drive progress at the state level on multiple issues, starting with what is called decoupling, removing the link between utilities' financial health and commodity sales. We also have worked together on vehicle electrification, on performance-based regulation, on a whole host of clean energy transition issues. No one would suggest we're anywhere near done, but we were taking on, and have been taking on, the biggest issues surrounding the future of the utility business model.

David has been fearless in doing that, and he has a uniquely deep understanding of all the dimensions of the problem.

PUF's Steve Mitnick: Seems like you and David could write a book on art of the deal.

Ralph Cavanagh: I hope David does. He is an ideal candidate for memoir writing. The first chapter should be what he was doing during Hurricane Sandy and its immediate aftermath.

The President of the United States figured out that someone needed to be managing the emergency response on the electricity side, and picked David to bring order out of that chaos, and guide a recovery that affected tens of millions of people.

PUF's Steve Mitnick: Is there any interesting experience that you had with him that we wouldn't know?

Ralph Cavanagh: First of all, he is completely unscriptable. On that February 2014 day at NARUC he insisted, over the outraged objection of his media advisor and me and every one else, that he was going to spice things up by converting himself during his presentation into his "evil twin Skippy."

The advice we gave him was "David, if you go into your evil twin Skippy mode, that's all anyone will remember," because it's a little too theatrical and colorful. But no, he had to go ahead and do it anyway.

There is spontaneity about him, and mischievousness.

Something else about him that is unique and delightful to watch is his teaching style.

He uses many PowerPoint slides, and looks like a conventional teacher at the outset. But, within a minute or so of starting his class, he starts wandering through the room. He walks up and down the aisles, and periodically he will stop and place his hand on the shoulder of someone in the immediate vicinity, and begin an interrogation.

This keeps the entire class constantly on edge, because David's wandering around and you never know when he may reach out in your direction. And then suddenly you're having a highly public and unscripted conversation with David Owens.

Yet he doesn't humiliate people. Never. I've seen professors use variations on this technique. In law school it's called the Socratic method. It's used to intimidate and harass. But David finds a way to have a friendly conversation. You're on the spot, of course. You want to perform. And this is a way of getting the best out of a class, and keeping all the students thoroughly engaged.

It's the most compelling teaching technique I've ever seen.

By Steve Mitnick with Paula Glover

Paula Glover, Executive Director, American Association of Blacks in Energy: What I have always loved about David Owens is that he is authentic. He is always going to be who he is - a Philly boy.

As brilliant as he is, and he's incredibly brilliant, David is dynamic, a great mentor, a supporter and caring to so many people. He's still a young man from Philly. He had this dream and understood that if he was the best that he could be at whatever he did, big things would happen.

I think David has touched more people's lives than he will ever come to know. The fact that I get to work with him now is such a pleasure. I can remember seeing him and being amazed by the fact that an African-American man was the person being sought after. And at the same time, you can't help but be really impressed. He easily navigates an environment where he is the only one. And I've watched people flock to him, because he is truly the smartest guy in the room.

We all love him.

. . .

PUF’s Owen Young Award

David Owens is the first recipient of PUF’s Owen Young Award, for devoting his powerful intellect to the public interest. Owen Young founded our company Public Utilities Reports, Inc., and led both the electricity and telecommunications industries in the early twentieth century as chairman of General Electric, GE, and the Radio Corporation of America, RCA. He later engineered the settlement of Germany’s World War I reparations and was expected to become president of the United States in 1932, but didn’t run in favor of his friend Franklin Roosevelt.

Throughout my career, I've tried to share my passion for energy issues with family and friends, not always successfully! When I was seven months pregnant, as a mid-career energy lawyer, I tried a month-long natural gas pipeline rate case. This was back when it was all the rage to play classical music, preferably Mozart, to your child in utero. Instead, my child got a full month of cross-examination about rates of return and minimum bills.

Once she emerged, my daughter heard lots more about rate cases and navigating FERC practice and procedures. So, you might have thought my daughter was poised for a career in energy. But the moment of truth came when her middle school had Career Day. I offered to go and talk about my job. Annie refused because my job was "too boring." That was soul-crushing, but I survived.

Today, Annie has a successful career in broadcast journalism - with a STEM connection. She co-hosts and co-produces the brand-new podcast "Undiscovered" for NPR's Science Friday, telling the stories of the "left turns and false starts that make science happen." And I am still trying to convince younger people how cool an energy career can be!

In fact, the energy industry has much to do to attract young people to our rapidly changing workforce. The good news, says the Center for Energy Workforce Development, is that the number of eighteen to thirty-two year olds in the energy workforce is trending upward. Targeted career awareness and recruitment efforts are attracting the next generation to energy careers.

However, as the center points out in its 2016 State of the Energy Workforce report, our industry is not just dealing with an aging workforce. Age is just one factor. Other trends like infrastructure modernization, regulatory policy changes, cleaner energy mix, new build, and cyber and physical security threats are shaping our workforce needs.

In many organizations, retired employees are not just being replaced one-for-one. "In fact, their jobs may be retired with them while the work is completely reengineered," says the center. These changes are redefining our approach to workforce planning and development.

Attracting the Workforce We Need to Power Our Future

Public power utilities are focusing on four key areas - engaging students, understanding millennials, investing in succession planning, and nurturing diversity. And the American Public Power Association, along with other energy organizations, is partnering with the Center for Energy Workforce Development to transfer best practices and lessons learned to our members.

Engaging students: From middle school to community colleges, public power utilities are often in local schools to talk to students about careers in energy, get them to think about smart energy use, and invite them to experience what it's like to work at a utility.

Our association's research and development program, Demonstration of Energy and Efficiency Developments, offers student scholarships and funds member utilities to hire interns to work on special projects. Often, these interns go on to have long-term careers in public power or other energy sectors.

When Girish Balachandran was studying at UCLA in 1989, he didn't have the money for next semester's tuition. He saw a flyer posted in the engineering department for just such a scholarship. The project dealt with load control and energy efficiency concepts.

It was perfect timing and his application was accepted. Today, Balachandran is the general manager of Riverside Public Utilities in Riverside, California, and serves on the Association's board. The scholarship introduced him to a successful career.

"In a five- to six-year period, I was given an opportunity to be an analyst and work on contract negotiations with many utilities and then be involved in regulatory proceedings that were happening statewide," he said. "Many of my friends who finished graduate school and went on to do MBAs - the stuff I was doing at work was what they were learning about in business school. Contract negotiation, regulatory proceedings. At a muni, you get to deal with all these things. So it was very satisfying to work in public power."

The Center for Energy Workforce Development has a National Energy Education Network. It comprises more than a hundred fifty universities, community colleges, technical schools, high schools and career centers that train students for technical careers in energy. Educators there must foster partnerships with the Center industry members, provide education required by the industry member and report results through agreed upon metrics.

As Ann Randazzo, executive director of the Center points out, "If we know the population is struggling to get a certificate or degree that our industry requires, it's automatically 'our' problem. We need to take a strategic and coordinated approach as an industry to change the outcome. Fortunately, we see many examples across the country where the center's members are doing just that."

Understanding millennials: It's been said many times already, but we can't say it too often. Millennials - generations Y and Z - entering the workforce are very different from Baby Boomers and Generation X. These new entrants are sophisticated, tech-savvy, flexible and eager to explore. And this "selfie" generation will constitute more than fifty percent of the energy workforce by 2020.

Public power utilities are working to evaluate and revise long-standing employment practices to keep up with the cultural norms and needs of the changing workforce. For example, Easton Utilities in Maryland allows telework for jobs that don't need face time, offers flexible work weeks for those whose work can only be done in person, conducts onsite fitness training programs and even has a garden that employees can work in.

Many millennials are passionate about social causes and hence ideally suited to work in not-for-profit, community-owned utilities. Public power is leveraging this passion by engaging younger employees in its public service mission and empowering them to find new ways to give back to the community in which they grew up.

Every sector of the energy industry needs to understand millennials and find out what it can offer to suit their wide spectrum of interests and skills. We also must recognize that this generation is seeking new experiences and opportunities rather than permanence.

Millennials are not likely to stay in the same jobs for ten or even five years. So we need to prepare to get the best out of them while we have them - and hope they like us so much they decide to stay!

Investing in succession planning:While welook at the incoming workforce, we cannot forget the seasoned workers in energy who still have a lot to give before they retire. While new technologies and new players are rapidly entering the energy space, the fundamental values that enable the delivery of safe, reliable, and affordable electricity for all are unchanging and must be passed on from one generation to another.

At Nashville Electric Service in Tennessee, addressing the gap in knowledge transfer has been a priority for over a decade now. All managers and supervisors go through systematic training so they can move up exposed to the same knowledge.

President and CEO Decosta Jenkins introduced the focus on succession planning. He says, "The best way to do that is to put in place programs which are documented and structured. And then those procedures are more easily passed along - as opposed to knowledge transfer from one generation to another by word of mouth or on the job training. And now we see increased efficiency, higher levels of safety and higher levels of employee satisfaction. People seem to like to know what's expected of them."

Santee Cooper, a large public power utility in South Carolina, has an impressive program called STEP - Shaping Tomorrow's Energy Professionals - that is designed to develop leadership qualities, transfer company and industry knowledge and help to groom replacements from within the company for employees who are likely to soon retire.

Much time and thought has been put into this curriculum and choice of employee participants from various parts of the company. I can say from personal experience, having presented twice to these groups, that there is a spirit of camaraderie among the participants. Given Santee Cooper's size, these folks might not have gotten to know each other very well but for this program.

Nurturing diversity: Diversity in the workforce is not easy to define. As Lisa Lewis, vice president of people and culture at CPS Energy in San Antonio says, "Being diverse means our workforce reflects the community in which we live and serve, through age, gender, ethnicity, race, education, etc. And it means valuing those differences when it comes to solving problems and getting work done."

A workforce that reflects the diversity of the community ensures that the utility is more in tune with customer needs and preferences.

Many companies also create employee resource groups, which bring together staff with similar backgrounds. "If you create a resource group for military veterans, for example, there's automatically a place where they feel comfortable asking questions or asking for help," says the Center's Ann Randazzo. "Having an organization you can go to where you feel welcome makes a huge difference."

The Omaha Public Power District has five employee resource groups - the Society of Engineers, Young Professionals Group, African American Network, Women's Network and Veterans Group - which help cultivate ideas from all types of employees. 

Diversity of thoughts and ideas helps them drive good decision-making and better customer service.

Courtney Polk, chair of the Young Professionals Group, says, "We put together a team to create an innovation initiative, so employees have a voice in new ideas the district goes after. It's been exciting that we've gone from being just a social group to also figuring out how we can be a seat at the table and have a voice."

We in the energy industry need to have a strong voice when tomorrow's workforce makes career choices. We need to show our stuff, and get them energized about the vitally important work we do. Because without electricity, the quality of life for all of us, including the future workers we want to attract, would be radically different - and certainly worse.

PUF's Steve Mitnick: What is the purpose of your organization as it's evolved?

Ann Randazzo: This is the Center for Energy Workforce Development, or CEWD as we call it. It started back in 2005. We were incorporated in 2006 and we had a pretty singular mission at that point.

The energy industry was in the middle of a construction build, and saw the aging workforce coming upon us. We knew that we needed to do something to address those issues. We needed more people and we also needed to bring in younger people to replace some of the experienced workforce that was leaving.

We believe in the saying, you can do something better together than you can do it separately. So, the industry came together to share what they were doing to address the aging workforce issue. That concern led to the development of the center.

We have, now, most of the electric and natural gas utility members, along with the major trade associations: the Edison Electric Institute, the American Gas Association, the Nuclear Energy Institute, the National Rural Electric Cooperative Association and the American Public Power Association. That really covers the waterfront in terms of utilities.

Most recently, we have had contractors who are beginning to join. We had a big effort in the last year doing some strategic planning.

We were focusing on our tenth year.

Our contractors and their need for a workforce continues to come up.

What we've seen over the time that we've been around is we really shifted from the singular focus on the aging of the workforce. That's just one of many things that impact our workforce.

Probably the biggest issue now is this transformation of the industry and how we can help people obtain the skills that they need as the jobs are changing. It's as much a skill gap issue as it is about the aging workforce.

We have so many companies that have done great things and really put talent pipelines into place. But there is still a lot of work to be done.

PUF's Steve Mitnick: Do other issues like greater diversity of the workforce and more digitizing come into play too?

Ann Randazzo: Absolutely, because technology is one of the fastest changing issues we are dealing with. The way technology has changed just in the last four or five years is incredible.

But you overlay that with the way the industry is modernizing the grid and upgrading the infrastructure. All of that has technology embedded in it, including digitizing and being able to access data in ways that we haven't ever before.

That means the jobs change and that's really where CEWD comes in. We can help companies think about where they are in this process, and is that going to impact the jobs they offer?

What skills will people need coming in? What kind of skills does the upcoming workforce need to upgrade to? It's just a broader look at what this workforce looks like for the future.

It's very difficult to be able to forecast what kind of jobs are going to be there, and what we're going to be doing. That's where we spend a lot of our time focusing on strategic workforce planning.

We are always looking at the future, even if it's just a few years down the road. Also, how does that impact the training for people who are entering education right now?

PUF's Steve Mitnick: How does the center do this?

Ann Randazzo: We started with this idea of industry solutions with regional implementation. The idea there is that if we can figure out how to do something well, we'll give the companies a jump start. So, they won't have to start from scratch.

We began by focusing on very specific issues and identifying best practices. We pull people together and identify what's the most efficient or the most effective way to go about doing something. and then we create tools and templates to help our members companies.

We have lots of tool kits and processes and great websites with resources.

One of the most effective things has been what we call State Energy Workforce Consortia. They are almost like state chapters of CEWD.

The utilities within a state, along with their educational partners and sometimes government agencies, will all work together to figure out what's needed in the state. They also think about how to balance the education supply with the demands for workers now and in the future.

By doing that we're all sharing the load. It's very hard for one company, to set up an education program and then hire everybody coming out of that program every year.

But, if we have all of the utilities in a state, or most of them working together, somebody is going to need those people. You can sustain the programs over time with that balancing act of how many do we need and then where's the supply.

We've also focused not just on education and people going through high school and technical community college programs, but also on the military. We did a similar kind of thing called Troops to Energy Jobs where we focused on what's the best way to recruit, hire, train and retain the military.

We have a similar focus on women, particularly bringing women into non-traditional jobs. We focus on transitioning adults, and people who might be in another field. Maybe they want to make a change. Maybe their jobs are going away.

It's the combination of all those demographic sources that will make up that workforce for the future. That means we have an incredible opportunity to create a more diverse workforce.

As our workforce is leaving, the population is more diverse, and we have been actively working to make sure we have a diverse group of future employees.

It's not all about just gender and ethnicity, but there's a concerted effort in the industry to create a more diverse workforce. We have to make sure there's diversity in the classrooms and in everything we do in that talent pipeline.

PUF's Steve Mitnick: Are there big differences in doing this?

Ann Randazzo: There absolutely are. We started with this idea of what we have in common. We hit on some critical jobs that all the companies needed to focus on.

Those were lineworkers, plant and field operators, skilled technicians and engineers. Most of these jobs are pretty unique to our industry. But state by state, the needs might be different. For example, California's needs for a particular job might look very different from Georgia or Louisiana.

Focusing on what kind of skilled technicians you need, you might take a different look. That's the idea behind the state energy workforce consortia, to be able to say, "What's going on in this state, in terms of the utilities and the contractors?" And then, "What kind of programs do we need to put in place for education?"

There are significant differences. One of the things we were a little surprised at in the beginning is that the education system is so different from state to state. So, you can't just say, "Oh, this is the way that you put a program in at a community college."

Because, if you're in Indiana, they have one community college system - Ivy Tech. If you're in another state, all of the community colleges are completely separate.

You have to know how to work with your own state and what the rules are in place there. Again, that's where the consortia come into play.

We also group by seven geographic regions, and we have regional meetings. We just finished our last regional meeting earlier this month.

We pull together states and consortia from areas to talk about what they're doing, to share, and to be able to say, "If it worked in Nevada, then yeah, it might work in New Mexico." That's the idea, to be able to group that way.

We group in a lot of different ways. We do have some national meetings, but we also have communities of practice. For example, people who are particularly interested in workforce analytics or workforce planning, work together on our workforce planning council. They help us figure out the best way to do something.

Or they share ideas from one company to another. We also have communities of practice for companies that are working in high schools with high school career academies. We have a diversity community of practice.

It's another way to just kind of group based on a specific topic. And, because we have this network of people in companies across the country, we can throw out questions and people can work together and figure out the best way to do something.

PUF's Steve Mitnick: Do you feel like you're making a lot of progress? A big impact?

Ann Randazzo: I think we are making progress. It's a slow go. That was a lesson we learned early on. I must say, when we started we all thought, "Well this is going to take about five years."

We'll get all this stuff mapped out. Everybody will know what to do and then we'll move on and do something else. That, of course, wasn't true.

We have made progress in eleven years, but about the time you make progress, something changes, so there's always something new to be looking at.

Each company is making progress at their own pace and based on their own needs. One company may be far ahead, getting better at hiring veterans, for example. And another one may be surging ahead in terms of what they're doing at the high schools.

Or working with student extracurricular groups, like First Robotics, or others. Everybody is doing something great, but everybody also has areas that they can work on and learn from each other.

We are making progress. We've seen it in our survey work on hiring and retirements. We see that our workforce is getting younger, and that curve retirements have definitely slowed down.

We're getting closer to what might be considered as normal. It's not just about aging or years of service. Now it's about skills. There's a lot more work to be done.

I do think that we are making progress and all the credit goes to the companies. They are doing great work in terms of implementing, because that's where it happens.

It's what happens in the field. It's with the state consortia, and with those people that are volunteering their time working with SkillsUSA or are teaching in a technical school. It's all of those kinds of things that go into creating this talent pipeline that's going to make a huge difference in the future.

PUF's Steve Mitnick: How did you get involved in this?

Ann Randazzo: I have worked my entire career in the utility industry. I started with Georgia Power when I was fresh out of college and I've had many different careers within the company.

When we talk about millennials and wanting to move from one job to another, I look back in my career with Georgia Power and I had many different careers, but all within that same company.

There's so many opportunities. I started in what we now call IT. I worked in finance and operations, and did all kinds of different things. It's a way to move around but not necessarily move companies.

I had quite a few different roles with Georgia Power, including working for a while with the Southern Company College. That was my only experience with education.

Then my husband took a job in D.C. I moved with two babies and I started my own consulting business and kept working on projects in the southeast.

As part of that, I was asked to come and facilitate a meeting in D.C. And for me at that time it was like, "Oh, I don't have to travel. I'll be glad to do that." It was just downtown, at EEI and it was the start of CEWD.

So, I helped to figure out how you go about doing something like this, and helped put together some of the initial plans. Then we started looking for an executive director.

I just kept thinking about it. I didn't want to give it up, because I was too far in at that point. For me, it's been a great way not only to give back, but to share this kind of legacy of what a career in this industry means.

It's also nice to be able to tie together so many of the benefits I received over the years, and also what I learned in just about every job I've ever had in this industry. I was there in the beginning and have enjoyed every minute of it. It's just been a great opportunity for me, that's for sure.

In an era of fast and profound change to technology and regulatory approaches in all utility sectors, the National Association of Regulatory Utility Commissioners and its members must be adaptable and resilient to spot new trends and opportunities.

The technology and structures of the telecommunications, transportation, water, and energy sectors have been at the center of a maelstrom of systemic changes in regard to what NARUC members do and how they do it.

Therefore, on January 17, 2017, NARUC President Robert F. Powelson and the Executive Committee established a Presidential Task Force on Innovation. The task force, led by Illinois Commerce Commission Chairman Brien Sheahan, was charged with spearheading the 2017 Innovation Awards, which recognize both state and utility innovators.

Chairman Sheahan provided his insights on the value of recognizing and embracing innovation.

Is the award a recognition that the utility regulatory space can keep pace with and adapt to changing technologies?

Commissioner Powelson's leadership in establishing the Task Force on Innovation and these awards has been unprecedented. He has provided a gateway for NARUC members to embrace innovation and encourage members to find ways to leverage new technologies in each sector.

The purpose of these awards is to highlight those propelling the energy industry into the future and leading the adaptation of the many technological and regulatory changes we are seeing today.

In addition to recognizing leaders in regulatory policy innovation at multiple levels of government, including federal, state, municipal, and local levels, the awards will recognize energy-industry innovators in the various utility sectors, such as water and sewer, electricity, gas, and telecom.

It is critical that NARUC members have access to spot new trends and opportunities in the public utility sector, and be able to adapt to those coming changes.

Why is it important for people to participate - to nominate a utility or regulator?

It is important for people to participate and nominate their peers because NARUC is a forum to share best practices and foster innovative solutions to improve regulation. It is essential that we recognize those that have dedicated their time, energy, and expertise to furthering innovation.

This is a great opportunity to put a spotlight on those groups and individuals who are paving the way to a more customer-focused, resilient, reliable, cost-effective, and efficient future for the utility industry.

What are the biggest challenges or obstacles faced by regulators as they try to be innovative? Are they hindered by staffing issues? Financial resources?

The biggest challenge for regulators is navigating change in an industry that provides critical services to customers twenty-four hours a day, seven days a week. Regulators have a duty to balance the interests of consumers and utilities to ensure adequate, efficient, reliable, safe, and least-cost public utility services.

There is understandable hesitation as we move toward a future full of new technology and innovation, but this industry must keep up. We cannot be stagnant. We must embrace innovation in order to meet our obligations.

We believe that the utility industry will change more in the next ten years than it has in the last one hundred years. We have an aging workforce. The industry must hire the next generation of talented professionals from a wide range of backgrounds who are excited about the utility industry. We have to attract diverse new talent to join the industry quickly in order to retain the invaluable institutional knowledge from our retiring workforce.

Thoughts on leading the task force?

I am honored to lead the Task Force on Innovation, and hope that NARUC members will take advantage of the opportunity to award some deserving people these exciting awards. v

PUF's Steve Mitnick: How did the Vets in Energy organization get started?

Ann Randazzo: CEWD has always focused on veterans as a key demographic for our energy jobs because they're a terrific fit, both in terms of experience and mindset. Our heightened focus on veterans began about five years ago with a charge from one of our members.

Tom Farrell, head of Dominion Resources, and Chair of the Edison Electric Institute at the time, challenged us to think about what we could do to move the needle on veteran hiring. A few months later, we introduced Troops to Energy Jobs, which began with a national template for companies to use in planning and implementing comprehensive hiring and retention strategies for veterans.

Fast forward to today, and we have an equally comprehensive resource guide for veterans themselves. It includes a veterans' roadmap, a job translation tool that helps them see how their experience matches up to our jobs, a job posting site that lists our members' jobs in real time, and even a virtual career coach who's available to answer questions and offer guidance. The career coach is a veteran himself.

We made excellent progress in terms of helping our members and the country's veterans find each other, but we began to think about support for veterans after they're hired. That's where Veterans in Energy (VIE) comes into play.

One of the best practices included in the Troops to Energy Jobs national template is the creation of a Veterans Employee Resource Group. A veteran-focused ERG is a great way for veterans to transition into a civilian job and connect with people who speak their language.

One way to think about Veterans in Energy is as a national ERG. Not only does it recognize and celebrate veterans who are employed in our industry, it puts direct focus on the natural fit, at a national level, between veterans and energy jobs.

Last October several organizations, including the Nuclear Energy Institute, the Edison Electric Institute, the American Gas Association, the National Rural Electric Association, and the American Public Power Association partnered with CEWD and the Department of Energy. We organized the first convening of veterans in energy to invite them to get involved and help define what we could do together at a national level. That is the way VIE started.

PUF's Steve Mitnick: I didn't realize that it's not as easy as it seems. Not only to get them in, but in particular to get them to stay. It's a lot more complicated than I thought.

Ann Randazzo: It is. A veteran's transition into the civilian world can be a little bumpy, particularly if the military was that person's first job out of school. Military life may be the only life they've really known.

Helping them translate and understand what they did in the military to what they can do in the energy industry, including matching their skills to our qualifications and learning the industry lexicon and protocols, is very important to successful employment and retention.

Our first focus is to help them understand whether their skills and interests actually do match up well to our needs. Then there is the question of "job" versus "career." Most of these men and women have families, and it's in their best interest to join a company and start a career rather than simply finding a job with no career path. The more we can do to make them aware of our jobs and help them understand that they are qualified for them, the more everyone benefits. Both the veterans and the industry.

PUF's Steve Mitnick: What's the specific purpose of the October conference?

Ann Randazzo: Last October's conference was an introduction to the concept, to gauge what if any interest we saw in our veteran employees. And we saw a great deal of interest and enthusiasm. From there, we began working with a group of veterans who literally volunteered to create VIE as an entity of its own, to make it self-sustaining and to plan this next conference.

The group is led by Hal Pittman, director of external communications with Arizona Public Service. Hal is a retired admiral and clearly has a vested interest in seeing VIE be successful. They've made a lot of progress in the social media space, including a website, Facebook and Twitter, so there will be much to report and celebrate on October 5 and 6 in Washington.

They've lined up some amazing speakers and some very informative plenary and breakout sessions. Veterans will be sharing a number of best practices in transition and being successful in the industry. The fact that energy companies are supporting the attendance of their veteran employees is significant, and we expect to see a substantial growth in the number of employee veterans who attend this year.

PUF's Steve Mitnick: If I'm a commissioner, or I'm working in a utility but in a different area in our big industry, why should I care whether Vets in Energy is successful?

Ann Randazzo:I guess my response is, "How could you not care?" Our country will always have a need for a strong and highly skilled military. After they have served, our veterans return home and face the need to transition into civilian life.

And our industry will always be driven in part by sacrifice and service, qualities that are essential to keeping the energy flowing and to protecting our country. Veterans exemplify the very values our industry needs.

Why wouldn't we do everything we can to support their transition and success in our industry? Why wouldn't we want a national organization that can continually help our industry understand their needs and address their obstacles? That is why you should care about whether VIE is successful.

PUF's Steve Mitnick: How will we know three to five years out if this initiative is successful?

Ann Randazzo: I think the veterans themselves will tell us. Last year you saw the excitement and power in the room during the forum. Just the fact that veterans came and felt as if they learned something is great, but they also met and shared experiences with others. That's what will help VIE grow in the future.

If the national organization generates interest in the creation of state-level Veterans in Energy chapters, that will tell us the concept is meeting a need out there. Growth in involvement, volunteerism, programmatic planning: those are all indicators that can be easily tracked and measured.

More difficult to measure, but also possibly more telling, will be any influence on veteran retention in energy jobs. Job longevity, staying with one company or even one industry throughout your career, is no longer the norm. We know that veterans frequently leave positions within the first five years. That's not good for the company and that's not good for them. If VIE influences retention and the drivers of retention, including career satisfaction, we will definitely label that a success.

Veterans who are already employed in the industry can get involved by going to the Veterans in Energy website and registering.

PUF's Steve Mitnick: Do you have a lot of companies that are really active?

Ann Randazzo: Yes, we do. The initial development of the Troops to Energy Jobs National Template was sponsored by six of our members. Today we have more than fifty companies publicly committed to the principles of Troops to Energy jobs that are recognized as military-friendly employers on our website and theirs.

Veterans in Energy is an important continuation of that effort, a natural maturity of the influence Troops to Energy Jobs has had in our companies and on our returning veterans. VIE indicates that veterans are not only employed in our industry, but are leaders in our industry who want to support each other and learn from each other. That's extremely gratifying to all of the people who have supported Troops to Energy Jobs over the years.

PUF's Steve Mitnick: It must be pretty rewarding, your work in this field.

Ann Randazzo:It absolutely is. Through CEWD, we are able to play a role in helping our veterans find rewarding careers where they can learn, grow, buy a home, care for their families and know that they are continuing to provide a service to their country. Getting the word out to our veterans that "we're here and we want you" is sometimes a challenge. But that's far outweighed by the rewards when we hear amazing stories of career success and see veteran recruitment climbing. VIE is the piece we've been missing in terms of engagement, retention and getting the word out. Satisfied veterans are the best recruiting tool we have. I think VIE is going to grow into a powerful voice for our industry across the country.

Related article: Turning Over the Keys to Tomorrow’s Energy Workforce, part I: It’s as much a skill gap issue as it is about the aging workforce.

The U.S. coal industry has been distressed for years, and the fate of U.S. coal mining regions and jobs, especially in Appalachia, figured prominently in the 2016 Presidential election. Coal mines have closed, coal power plants have shut down, and many jobs in coal-related industries have been lost.

In the 2017 Annual Energy Outlook, EIA forecasts that coal will continue to decrease as a source of U.S. electricity generation through 2050, even without the Clean Power Plan. It is important to determine the current state of the industry, jobs and potential future trends under different possible scenarios.

In Part I, we assess the recent past and current state of the U.S. coal industry, with emphasis on Appalachia. In Part II, we examine alternative scenario futures for the industry involving assumptions about economic growth, energy requirements, technologies, tax incentives, and research and development.

Coal History

Coal was the cornerstone of the U.S. energy supply for nearly two centuries. Oil eventually replaced coal in transportation and natural gas replaced coal in space heating. However, moderately priced coal as the basis of U.S. electricity generation enabled families to take advantage of a vast array of home appliances and provided manufacturers with affordable and reliable electricity.

Coal enabled the U.S. to electrify its cities and to power remote regions. In the 1920s, less than ten percent of farms had electricity. Thanks to the Rural Electrification Act of 1936, access to electricity steadily increased. At present, nearly all farms have electric power.

In 1950, the U.S. produced 560 million short tons of coal, 92 million of which were utilized to produce 155 BkWh of power - forty-six percent of U.S. electricity. By 2010, the U.S. produced 1,084 million short tons of coal and 975 million of those were utilized, to produce 1,847 BkWh.

As natural gas power plants replaced some aging coal plants and as anti-coal regulations increased, coal's role in electricity declined. By 2016, about one third of U.S. electricity was produced by coal.

At the same time, productivity in the coal industry increased rapidly due to a combination of easier-to-mine surface coal in the west and technological advances in mining. In 1950, productivity per miner was 0.76 short tons per hour; by 2010 productivity per miner had increased to 5.55 short tons per hour.

U.S. coal mining employment peaked in 1923 with 863,000 coal miners. Since then, employment has declined at the same time coal production has increased. The number of coal miners declined from 174,000 in 1985 to about 65,000 in 2015.

This was below the previous low of 70,000 in 2003, and was the lowest number of U.S. coal miners in a hundred and twenty-five years.

Over the second half of the twentieth century, coal lost market share in space heating and transportation, but gained significantly in electricity production. The U.S. still uses a large amount of coal, and over ninety percent of it is utilized for electric power.

Since 2010, increased natural gas generation and environmental regulations have reduced coal's role. But coal still plays a crucial role in electricity generation. In the spring of 2017, U.S. coal production increased fifteen percent year-over-year (2016 to 2017). However, it remains to be determined if this is a reversal of a longer-term trend of declining production or a temporary development.

The Importance of Appalachian Coal

Hundreds of communities have depended for generations on coal for their livelihood. The economic activity and the jobs created by coal mining have provided employment and income. Coal also brings a sense of purpose and pride to these communities and the families within them.

Further, since coal facilities are located in rural areas, the coal industry is frequently the major employer in the region. Many Appalachian communities are almost totally dependent on the coal industry to maintain at least modest prosperity, and the rapid decline of the industry in recent years has taken a heavy toll.

While many U.S. regions have prospered and grown in recent years, communities in coal country have endured a bleak spiral of poverty and population attrition. Coal company bankruptcies and mine closures have contributed to escalating social and economic difficulties. Those include drastic declines in tax revenues, outmigration, decreasing birth rates, school closures, breakdown of community services, and increases in social problems such as drug abuse.

The loss of coal mining jobs is devastating, since these are some of the highest paying jobs in the coal regions. For example, in Belmont County, Ohio, the average weekly wage of a service job is five hundred seventy-five dollars, whereas coal miners earn sixteen hundred dollars per week. In eastern Kentucky, coal mining jobs pay nearly three times the average wage.

The increased poverty associated with coal job losses is striking. In eastern Kentucky, twenty-six of thirty-one counties are ranked as distressed by the Appalachian Regional Commission. In many of these counties, poverty rates exceed thirty percent, and child poverty rates approach fifty percent.

In addition to reduced economic activity and job losses, a major driver of coal community problems is the decline in severance tax revenues. Coal producing states obtain substantial revenues from severance taxes. They utilize these to support government activities and fund counties to provide services. Decreasing tax revenues combined with continuing outmigration have placed local public health and safety services and school systems in jeopardy.

Appalachian Distress

Between 2000 and 2011, Appalachia contained about two thirds of all U.S. coal mining jobs. However, with the rapid decline of Appalachian coal mining, the Appalachian share of U.S. coal jobs declined to fifty-seven percent in 2015, its lowest point in fifteen years.

While the U.S. lost twenty-eight percent of its coal mining jobs from 2011 to 2015, coal mining jobs in Appalachia decreased by thirty-six percent. Nevertheless, Appalachia still provides most U.S. coal mining jobs, with the Illinois Basin and the Western Region each accounting for fewer than 20,000 jobs.

Between 2011 and 2015, Appalachia lost more than 23,500 coal mining jobs. About seventy-one percent of the Appalachian coal mining job losses were concentrated in Kentucky (more than 8,800 jobs lost) and West Virginia (more than 7,800 jobs lost).

Figure 1 shows the percentage of coal jobs lost in each state and illustrates that. Kentucky, Tennessee, and Virginia lost more than forty percent of their coal mining jobs; West Virginia and Alabama lost in excess of thirty percent of their coal mining jobs; Maryland, Ohio, and Pennsylvania lost more than twenty percent of their coal mining jobs.

See Figure One.

However, thirty to forty percent of total coal mining employment is comprised of contractors. These jobs data are included in national jobs estimates, but are not included in state estimates of coal mining employment.Exclusion of these contractor job estimates from state estimates results in a serious undercount of coal mining jobs and obscures the significance of the coal industry.

To provide more robust estimates of coal mining jobs by state in Appalachia, we prorated the contractor jobs to each Appalachian state according to the percentage that contractor jobs comprised of the national total in each year.

We estimated that including contractor jobs, coal mining employment in Appalachia totaled more than 95,000 in 2009, increased to over 102,000 in 2011, and decreased to about 65,600 in 2015.

As shown in Figure 2, in 2015, there were about 66,000 coal mining jobs in Appalachia - not 41,000.

Coal jobs in Appalachia increased more than seven percent between 2009 and 2011, then decreased sharply by fifty-three percent between 2011 and 2015. By 2015, employment was thirty-one percent lower than in 2009.

These jobs can be translated into total jobs, which are the sum of the direct and indirect jobs. Direct jobs are those created in the specific activity or process. Indirect jobs are those created throughout the required interindustry supply chain and in supporting or peripheral activities. Total jobs are the sum of all the jobs created.

See Figure Two.

We estimate that the Appalachian regional multiplier for coal mining jobs in Appalachia is about 2.5 and that the national multiplier for coal mining jobs in Appalachia is about 3.5. Thus, for every coal mining job in Appalachia we estimate that 2.5 jobs are created in the Appalachian region and 3.5 jobs are created in the U.S. as a whole.

For example, it is estimated that in 2011 the coal mining industry in Pennsylvania generated in the state nearly 13,900 jobs directly and about an additional 22,300 jobs indirectly. The 22,300 indirect jobs were in industries that supply goods and services to the coal industry, as well as in industries across the entire economy.

We estimate that, as illustrated in Figure 3, Appalachian coal mining jobs created a total of 238,000 jobs in 2009; a total of 255,000 jobs in 2011; a total of 164,000 jobs in 2015 overall in the Appalachian region.

Thus, 91,000 jobs in all, direct and indirect, were lost in Appalachia between 2011 and 2015 due to declining Appalachian coal employment.

Figure 3 indicates the number of coal mining jobs in Appalachia created in the U.S. as a whole. The chart shows a total of 333,000 jobs in 2009; a total of 357,000 jobs in 2011; a total of 230,000 jobs in 2015.

The total job loss in the U.S. between 2011 and 2015 due to declining Appalachian coal mining employment was 127,000 jobs. These estimates indicate that the employment impact of Appalachian coal mining is much greater than generally realized. 

For example, conventional estimates indicate that Appalachia lost 23,000 coal mining jobs between 2011 and 2015. However, we estimate that the total impacts of the loss of Appalachian coal mining jobs between 2011 and 2015 were 91,000 jobs lost in Appalachia and 127,000 jobs lost in the U.S. as a whole.

See Figure Three.

Figure 4 illustrates the actual total employment impacts in Appalachia of the loss of coal jobs between 2011 and 2015. It shows that 91,300 jobs were lost in these eight states. 34,900 jobs, nearly forty percent of the total, were lost in Kentucky. 31,100 - thirty-four percent of the total - were lost in West Virginia. Nearly three quarters of the jobs, 66,000, were lost in these two states.

Since the labor force in Kentucky is nearly three times as large as it is in West Virginia, the impact in the latter state was nearly three times as severe. The job losses in West Virginia comprised more than four percent of jobs in the state, whereas the job losses in Kentucky comprised less than two percent of jobs in the state.

Nevertheless, the loss of coal mining jobs was devastating in both states: Kentucky's 2015 unemployment rate was 5.4 percent. Absent the loss of nearly 35,000 coal-related jobs, the state's unemployment rate would have been about 3.5 percent. That is essentially considered full employment. Without the loss of coal-related jobs, Kentucky would have enjoyed full employment.

West Virginia's 2015 unemployment rate was 6.8 percent. Absent the loss of over 31,000 coal-related jobs, the state's unemployment rate would have been less than three percent, or full employment. That is, without the loss of coal-related jobs, West Virginia, instead of experiencing a recessionary unemployment rate of near seven percent, would have enjoyed full employment.

The coal-related job losses in Appalachia were actually four times as large as is generally supposed, and the job losses in the U.S. were nearly six times as large as is generally supposed. The loss of nearly 100,000 jobs in Appalachia over a five-year period had devastating consequences, especially for Kentucky and West Virginia.

In particular, West Virginia has been seriously harmed by recent coal mining job losses and is at risk for future job losses. Unfortunately, this state is especially vulnerable, since it is a relatively small state heavily dependent on coal mining. It lacks a diverse economy, unlike states such as Ohio, Pennsylvania, and Virginia. The state is one of the most impoverished in the U.S; among all the states, it has the lowest portion of its population employed - less than forty percent.

See Figure Four.

The loss of coal mining jobs is sorely felt in Appalachia, and Figure 5 illustrates an alarming economic situation. Of all Appalachian counties, ARC identifies 203 as either distressed or at-risk, only 11 as competitive, and only 1 as in attainment.

See Figure Five. 

Even more troubling, ARC's rankings pertain only to direct coal jobs impacts, excluding contractors. As discussed, the total job impacts in Appalachia from coal mining job losses are four times as severe.

Thus, the negative impacts in the region of coal mining job losses are truly dire. However, if current coal mining jobs can be saved and new jobs created, the impacts in Appalachia - and in other U.S. coal mining regions - will be much more significant than is generally recognized.

Conclusion: What is Coal's Future?

The role of coal in the U.S. and particularly in Appalachia, has undergone significant transformation over the past century. The increasing importance of electricity and the concomitant demand for coal is probably the most significant change that has taken place.

The U.S. is at another crossroads. Specifically, the question is how much coal will be produced and utilized in the future and what will be the likely impacts on U.S. electricity generation, the economy, and jobs? Has the death of coal been greatly exaggerated?

We address these issues in Part II.

The growing consensus among power and utility executives is that digital technologies and "digitization" are becoming a strategic and risk mitigation imperative. Faced with rapid, far-reaching and unprecedented changes, many leaders are rethinking how they can tackle new issues in new ways.

If companies haven't already brought a chief digital officer into the fold, a rising number of executives are asking if they should. More and more, the answer is yes, as digitization is fast becoming one of the key ways in which utilities can improve earnings, redefine business models, and compete in the market.

This new digital landscape includes sensors enabling power machinery to operate more efficiently; software and apps integrating generation, trading, and the functions of power system control; algorithms and big data helping utilities keep their plants and grids in balance and more flexible; and apps and bots vastly improving the customer experience.

In most utilities today, the chief information officer is the obvious candidate to assume responsibility for the extension and enhancement of the people, process and governance requirements related to emerging technologies.

But there is a difference between today's suite of digital products and services and yesterday's technological upgrades. And we believe that today's offerings present challenges to CIOs that require new skills. Put another way, if CIOs simply apply their usual roles and responsibilities to the digital challenge, they will likely come up short.

Given the strategic implications of digitization, many utilities are contemplating whether they should be constituting a new position of chief digital officer. We believe that simply setting up a position with a title is not sufficient to address the fundamental issues and needs.

The reality is that leading digitization will require an executive with expertise in seven crucial areas, regardless of the title he or she holds:

Strategic thinking: Connecting digital implications to utility performance goals and other business objectives.

A transformation mind-set: Thinking holistically about the organizational overhaul, driving organizational change and results aligned with business objectives.

Ecosystems adoption: Harmonizing legacy IT and system enablers with emerging technology frameworks.

Execution agility: Driving multiple initiatives at different speeds to balance near-term and longer-term priorities and risk exposures.

Data and analytics competency: Adapting and applying data sets and emerging analytics such as machine learning and artificial intelligence to drive business value.

Customer centricity: Utilizing technology to meet the changing customer journeys, preferences and engagement channels.

Enterprise technology: Adapting, integrating and aligning with installed enterprise systems.

We believe the new skills will be critical to guiding a company through the infrastructure and scaling opportunities to boost value and mitigate risks in the power sector.

Utilities that heed these changing trends and focus on ensuring that the underlying skills are in place will be in a better competitive position for the future, relative to their peers. We invite you to explore the latest trends and findings from our recent Chief Digital Officer study.  

It is often said that big ideas begin with a small spark, and that's exactly what happened in Pennsylvania in late-September with the launch of an enhanced #UtilityCareers campaign. Supported by a wide-reaching group of utilities, state agencies, legislative and community leaders and educational institutions, the statewide and ever-growing initiative includes new videos and website materials aimed at encouraging more talented candidates to consider careers in the utility sector. 

The initial challenge from Pennsylvania PUC Chairman Gladys Brown and the Commissioners was to identify ways to better showcase employment opportunities at the Commission as well as the utilities we regulate. The PUC - like so many of our utilities and other organizations - faces issues related to the "baby boomer bubble," and the steady outflow of experienced staffers who are reaching retirement age. Quickly, the Pennsylvania plan evolved to include a variety of state and national efforts related to utilities and commissions, including NARUC initiatives regarding workforce development and outreach to veterans.

Doing the Homework

The foundation of every good communications initiative is research, which guides both planning and execution. With the support and involvement of our Commissioners, research for the #UtilityCareers campaign has included a series of school visits, roundtable discussions, educational summits and other opportunities to meet and discuss issues with utilities, educators and young people. Together, we worked to identify common factors, develop a statewide perspective and identify key audiences. 

Those behind-the-scenes efforts also helped build support from stakeholders across sectors such as trade schools, community colleges and universities; technology councils and STEM programs; and key state agencies, such as the state departments of Labor and Industry, Education and Military and Veterans Affairs.

Shaping the Message

Mirroring a national trend, about one-third of the current Pennsylvania utility workforce is approaching retirement. And, while individual utilities have all been working hard to address their individual needs - and as schools and training programs gear up to address a rapidly growing demand for skilled candidates - we identified an opportunity for the Commission to collaborate with all key stakeholders to elevate discussion about this topic. 

A potential problem (the need for a new generation of skilled workers) has transformed into a statewide discussion about opportunity (with data showing that utility jobs are growing faster, with wages that are substantially higher, than the overall statewide averages). And, the demand spans a wide range of services and training levels - from engineers, IT specialists and cybersecurity personnel to line workers and other field skills, as well as plan operators, analysts, technicians, mechanics, customer service representatives and more. Adding to the opportunity is the knowledge that these are community-based, family-sustaining, career-building positions, with institutions that have a long history of service and will be operating well into the future. 

Hiding in Plain Sight

Research has shown that the generation of Americans currently in school, known as Gen Z, are the most technologically-connected, most educated and most diverse generation we have seen. They are also very financially motivated, having witnessed the struggles of parents and siblings during the economic depression of the late 2000s. They are looking for careers that will provide economic security, and the flexibility and independence that goes along with a solid financial foundation. 

Unfortunately, utilities often operate in the background. They work so well and are so reliable that they "hide in plain sight," only noticed when something goes wrong. And, in those rare situations where the lights do go out, a water line ruptures, or there is some other problem, the work that most members of the public see involves field crews repairing power lines and digging up streets. What they don't see is the massive amount of time, effort, ingenuity and problem-solving that goes into keeping our essential systems running 24/7 - and they certainly don't see the thought and time being invested in developing the systems of tomorrow. 

Connecting to the Audience

In many regards, utilities are victims of their own success. Our systems have operated so reliably for so long that the average citizen takes service for granted. And that certainly applies to the average middle-school or high-school student, even though the technology they are so connected to would not function without our utilities - and the same applies to the "tech giants" they are so drawn to. Pulling back the curtain to help this rising generation understand the opportunities available, the skills needed and the potential rewards - economic and social - is the current focus for Pennsylvania. 

The latest tools in our arsenal include videos targeted specifically at the social channels where Gen Z searches for information, along with continued outreach with utilities, sister agencies and schools. A new #UtilityCareers portal - www.PAUtilityCareers.com - provides a central go-to source for a growing pool of information about the many programs and opportunities available to job-seekers.

Next Steps

The late-September launch of new materials is the first step in the next phase of PUC outreach, with a myriad of additional events on the horizon: school visits, career fairs, veterans' outreach, greater coordination among various state agencies involved in workforce development. Immediately following the recent premiere of new #UtilityCareers materials, the PUC was invited to develop a pilot program that could help bring utility workers and human resource teams into secondary technical schools, to help students currently learning trade skills better understand how their training could connect them to opportunities they may not have ever considered.

Additionally, collaborative planning is under way with a local science and technology university to better showcase the STEM-related work currently underway in utilities across the state, and the strong demand for a new generation of people and ideas to carry our systems into the future. In Pennsylvania, we are deeply grateful for the strong support demonstrated by our utilities. Their leadership, human resources and communications teams have jumped at the opportunity to highlight this important issue, and they have participated and helped amplify our events. The same applies to sister state agencies, with strong support from their leadership and the Governor's Office. And schools across the state have also welcomed us with open arms. In that respect, the program is already successful, and we are optimistic for the future.

For us at Public Utilities Fortnightly, this was one of our most favorite articles to work on and present in the magazine. As soon as we heard about the Icebox Derby from Exelon Utilities CEO Anne Pramaggiore, we were determined to bring this extraordinary story to you. What an awesome way to create excitement and confidence among middle and high school girls in STEM! Read on. You'll see it isn't just the girls who are inspired by the Derby but also the adults at ComEd who participate.

PUF's Steve Mitnick:Give us an overview of this program you've created to get girls more interested in STEM - science, technology, engineering and mathematics.

Anne Pramaggiore:Let mestart from core principles. We think of ourselves as not exclusively, but significantly an urban utility rooted within the communities we serve. Our company has always been focused on connecting with our customers and communities and finding ways to help support education initiatives, ultimately facilitating greater economic impact for our customers and neighborhoods. That means a focus on diversity.

In that assessment we recognized that our workforce from a diversity standpoint, should match the communities we serve. Particularly in the STEM areas, we fall short.

As our business has evolved to incorporate new technology and tackle new goals, we also have tackled the idea of building the workforce of the future. We recognize we need both technical talent and creative talent in one package.

We also recognized the pool we were drawing STEM talent from wasn't always diverse and decided we must do something about that. We knew we couldn't sit and wait. We had to go out and create this workforce of the future. We decided to use the platform of our employee resource groups to promote STEM.

Women's History Month five years ago offered a great vehicle for launching Icebox Derby. It was an idea our communications partner Leo Burnett introduced, and it immediately resonated with me.

The reason it resonated was, we've done some research about what's holding back girls from entering STEM fields in larger numbers. Women make up about fifty percent of the workforce but only about twenty-five percent of the STEM jobs in the United States.

Research shows there are three gaps for girls in STEM. Lack of awareness of the kinds of jobs out there. Lack of access to learning. When I say learning, I mean experiential, hands-on learning. Third, I call it attitude, or confidence. Research shows that girls and young women think that employers prefer men in STEM jobs.

What I love about the Icebox Derby program is that it hits all three elements. It's creating awareness, offering access to experiential learning process, and confidence is created by seeing the women in ComEd who are doing these jobs and also from meeting other girls who, like them, are interested in STEM.

I'll give you an anecdote of one of the girls who participated in the program two summers ago.

We were sitting together while being interviewed for a story about the Icebox Derby program. I knew she was part of the Girls Who Code group at her school, and I asked her about it.

She said, well, there's only four of us in the group, and we don't have a lot to do. Sometimes all we do is sit around and talk. I asked what they talked about? Having been a thirteen-year old girl myself at one point, I was imagining that they were talking about typical young teen things. She said, at the last meeting we talked about the difference between copper communications technology and wireless communications technology and the meeting before that, JavaScript.

As you can imagine, I was definitely impressed by what they were talking about. But what struck me most was what she said about having very few girls to connect with at her school. I was glad that we were able to offer her a STEM experience through the Icebox Derby, where she got to be part of a larger group of girls and young women who have similar interests. That builds confidence.

PUF: How does the program work?

Anne Pramaggiore:Every spring we launch an online application process to recruit thirty girls ages thirteen to eighteen. Again, that's based on research that tells us we start losing girls in the math and science areas from middle school to high school. That's the age when they start dropping out, so that's our target audience.

Applicants are asked to fill out an online application and submit an essay. We promote the application period via a number of external channels including advertising, social media, and through our employees, as the idea is to get diverse applicants from across our vast service footprint, including the city of Chicago, the city of Rockford, and city of Joliet.

Once signed on, thirty applicants are divided into six teams of five young ladies each. We give them an engineering plan, a recycled refrigerator from our energy efficiency recycling program, and a ComEd engineer mentor. They have four weeks or four build sessions to transform the refrigerator into an electric racing car.

We also partner with Northern Illinois' Dr. John Shelton and his team of engineering students. Not only do the Icebox Derby participants work with ComEd mentors but they also get to meet college students from Northern Illinois' engineering program and the school's Society of Women Engineers.

At each of the build sessions, we take time to get to know the girls better and expose them to STEM careers and STEM stars in our company.

It all culminates in a final race day event. The last two years we have held the race at the Daley Plaza - a well-known location in Chicago. There is a great deal of excitement on race day. We always have a celebrity emcee to help engage the girls and raise awareness of women in STEM. The girls get a safety briefing, and a briefing on the race day rules.

While the electric cars racing around the track is a component of the competition, it's not the main focus. The program is centered around the idea of teamwork and STEM. During the race, each team must work together to solve STEM challenges. Once they solve a challenge as a team, they take their fridge car for a lap around the track. It's less about how fast you can drive the car, and more about using your brain power and collaborating as a team.

Everyone's a winner. All girls receive scholarship money. The winning team receives trophies.

PUF: How many years have you been running this?

Anne Pramaggiore:We've just completed our fifth year. 2019 will be the sixth.

PUF: Have you seen the results? Do you keep in contact with those girls?

Anne Pramaggiore: Yes. We're starting to see some of the outcomes. We've had about a hundred and fifty girls participate in the program. We've had about fifteen to twenty girls, who've come back to us and participated in our internship program.

Our communications group at ComEd keeps in touch with former participants and invites them to company events and we also invite them back to the Icebox Derby every year. Many of the alums join us and are happy to welcome and engage with the new participants.

We've been glad to learn that several of our girls have gone into STEM programs in college.

There's also one other way that we've been able to bridge young women to STEM education. At [Exelon CEO] Chris Crane's direction, we joined the U.N. HeForShe project about a year ago.

I give Chris tremendous credit. He's been very focused on getting more women into the energy field. Through our involvement with HeForShe we created a STEM Innovation Leadership Academy, a prime feature of our three-year, three million dollar commitment to encourage women in STEM. 

The STEM Innovation Leadership Academy is a week-long program. This year we launched the Academy in Chicago and D.C. at the campuses at the Illinois Institute of Technology, and at the University of Maryland. During the week the girls participate in field trips to the museums and make trips to power plants.

They engage in experiential learning projects in STEM and meet with employees of our company. Some of the Icebox Derby girls participated in the STEM Innovation Leadership Academy.

PUF: What do you all take from this?

Anne Pramaggiore: We're building the workforce of the future. Our business is at the epicenter of transformation to a digital economy and transformation to a cleaner environment, and we need the largest pool of talent to draw from. If we're only able to draw talent from half the population we will struggle to reach our goals. So, for us, it's about being proactive and building the workforce of the future, creating excitement so that we get the best, the brightest, the most creative, the most committed.

On a personal level, it's just so rewarding and fun to see the excitement in these girls' faces when they engage with us and participate in our programs. The best part of what I am fortunate enough to do, is to open the doors of opportunity for the kids in our cities - who are our future. It's an honor and a joy.

Every year, I go out and meet these talented young women. I always ask the girls what they like most about the program. Nine times out of ten, their answer is that they love using power tools.

PUF: You're looking to expand this program beyond Chicago. Tell us where this is going.

Anne Pramaggiore: We are now looking to build this program at our other Exelon utilities. We're in D.C., Philadelphia, Baltimore, Wilmington, and Atlantic City, and we are focused on bringing in our other utilities to the Icebox Derby.

I would ultimately like to take this nationally, whether it's through other utilities, or through other STEM-oriented companies. I think it's such a wonderful program, and again, it's addressing the three gaps to getting more girls in STEM: awareness, accessibility to learning, and confidence.

As most utility regulators do, I approve rates, enforce laws, and ensure that consumers are protected; however, a distinguishable responsibility of which I am also proud is maintaining and championing Illinois as a leader in energy policy across the nation. 

In the course of supporting the State's grid modernization, I have come to understand and witness the impact that good policy has had not only on our power system but also in the lives of Illinois citizens, particularly disadvantaged communities.

Here, I share an encouraging story of good energy policy at work and how it can change a person's life. Moreover, this is a story about the future of the energy workforce and one of its rising stars, Cynthia Myers.

The Future Energy Jobs Act

While laws are enacted with the best of intentions, some do not play out as intended; thankfully, however, Illinois' Future Energy Jobs Act (FEJA) does not fall into that category of statutes. 

The comprehensive, forward-thinking law leverages the State's former grid investments and bolsters the State's path toward achieving its clean energy goals. In addition to improving Renewable Portfolio Standards and calling for the development of over forty-three hundred megawatts of new wind and solar in Illinois, the law mandates equal access to renewable energy resources and the economic prosperity that is derived from its deployment. 

FEJA invests more than seven hundred and fifty million dollars in low-income programs, including an Illinois Solar for All Program that avails access to community solar to disadvantaged communities and job training programs. 

The job training programs will result in thousands of jobs and welcome numerous individuals from communities who in the past were not, or would have not, likely been participants of the clean energy economy if it weren't for this law.

FEJA allocates a total of thirty million dollars to develop and implement a number of major energy job training programs. These fall into three categories: Solar Pipeline Training, Multicultural Training, and Craft Apprenticeship Training.

The funding is allocated in three, ten million-dollar increments paid in 2017, 2021, and 2025. As FEJA outlines, the solar pipeline training effort will focus on individuals who are from economically disadvantaged and environmental justice communities, alumni of the Illinois foster care system, and returning citizens. 

The Illinois Commerce Commission recognizes that a clean energy future in Illinois is unattainable without a proper workforce. As such, the ICC has made it a priority to ensure that Illinois citizens are availed the opportunities to be part of the necessary workforce of the future.

Accordingly, the ICC approved ComEd's thirty million dollar Workforce Development Implementation Plan, a first-of-its-kind plan. In November of 2017, the multicultural training grants targeting individuals from diverse and/or underserved backgrounds and totaling four million dollars were awarded to the Chicago Urban League, Hispanic American Construction Industry Association, National Latino Education Institute, ASPIRA, Inc. of Illinois, Chatham Business Association Small Business Development, Inc., and Austin Peoples Action Center. 

In December of 2017, ComEd chose Elevate Energy, Illinois Central College, OAI, Inc., and the Safer Foundation to develop and conduct solar pipeline training programs. 

These organizations received a total of three million dollars to begin program implementation. The third program, the Craft Apprenticeship Training Program being offered through the International Brotherhood of Electric Workers, also received a three-million-dollar grant in 2017. 

The Citizens Utility Board identifies FEJA as, "one of the most significant pieces of energy legislation ever to pass the Illinois General Assembly. It followed nearly two years of negotiations between energy companies, consumer advocates, and environmental groups." Not only has FEJA been applauded in Illinois, but throughout the country. This historical law serves as an example on how energy policy can extend beyond wires and empower lives.

Rising Star

This brings me to the reality of FEJA's success in workforce training attributes, which I have been fortunate to witness. I recently visited the OAI Training Center in Downtown Chicago. OAI stands for Opportunity, Advancement, Innovation in Workforce Development, and as mentioned, is one of the multicultural training program grant recipients.

The organization focuses on helping provide workforce education to unemployed and underemployed individuals while also supporting current workers to understand how to do their jobs safely. OAI also provides employment services and community development.

There, I met Cynthia Myers, a graduate from OAI's Solar Installation Certification Program, also known as ECWT/LYTE 2018-2019 Cycle 1 Training. The LYTE Solar Pipeline Training Program is aimed toward economically disadvantaged individuals who are minorities, were children in the foster care system, women, or veterans.

Trainees prepare for a position to design, install, maintain or troubleshoot photovoltaic power systems. Technical training, basic industry-related education, and professional development are provided. Also included in the program is hazardous waste worker training aimed at first responders, non-union workers, and temporary workers. Workers are educated about OSHA and EPA standards and receive extensive safety training. 

I sat down to hear Cynthia's story and was blown away by her positive energy. Her journey into the renewable energy sector began by serendipity. Cynthia had come across a pamphlet about OAI's solar panel installation training program after being denied public aid while working for minimum wage as a manager at a chain restaurant. 

She called OAI that same day, and as fate would have, it was the last day to sign up for taking the entrance test. She mustered up the courage, took the test, and passed. She was then interviewed by the program managers and selected to begin the training program.

As I learned, the program managers put the responsibility on the potential trainees to follow through to prove they deserve to be a part of this program. Cynthia did just that. She described the twelve-week training program as challenging and there were many times that she felt discouraged to continue because she had lived her life as a self-described girly girl. 

Cynthia was pushed to do things she never saw herself doing, such as learning to use power tools, learning carpentry skills and safety standards. She learned how to work in confined spaces and received a forklift certification.

Cynthia excelled at everything she put her mind to. Most important to her was what she learned as part of the Power Skills Program course developed by Sean Phillips, Innovation and Learning Manager at OAI. 

This course teaches confidence building, skills to overcome fears and achieve goals, and how to deal with the negative people in your life.

She credits this course for changing her life and seeing her super self, versus her normal self. She has learned to look at the bigger picture before reacting and has found that the way her mind works now has changed for the better. 

Cynthia accomplished her training while balancing work and being a single mother of three. She credits her peers and the OAI instructors for believing in her and pushing her when she found it hard to believe in herself.

Before graduating, Cynthia started her new career with ReThink Solar and went from earning minimum wage to a starting salary of eighteen dollars per hour with benefits in just twelve weeks. 

She gained life and professional development skills in her time with OAI. She now sees the importance of etiquette such as thank-you letters, proper use of social media, giving an elevator speech, and she learned industry level Spanish.

Cynthia is excited about the solar industry and feels like a superwoman working on roofs, the highest to date being twelve stories, when before she was afraid of heights. She feels that everything happens for a reason and that she was able to take an opportunity that was afforded to her at no cost to better her career in an unimaginable way.

Cynthia sees herself excelling now at solar installation and in the future, excelling at the business end of selling solar. She knows it's a male-dominated industry, but she is giving it her best and as recent history has shown, she can do anything she puts her mind to. 

Her daughter and two sons think she is a hero, which has continued to drive her in this career path. She is a role model for her children, and for others, and has shown the value of a career in the trades with good hourly wages.

Cynthia now even provides mentoring to other trainees, telling them, don't be afraid to be successful and to face challenges.

OAI Training Program

I also met with OAI leadership including Cleophus Lee, Kentina Kellum, and Cleveland Smith. They explained that at OAI they understand that adult learners learn in different ways, some in a classroom setting, and others with more unconventional teaching methods such as a hands-on approach, mobile, and e-learning.

OAI accommodates trainees' learning styles as best as they can once an applicant is accepted and begins training. An OAI training program spot is not guaranteed; rather it is earned through tryouts, test scores, and orientation meetings.

There is a selection process and individuals who show initiative and self-motivation, followed by passing a basic math test and physical fitness tests will be considered as candidates for the program. These are all meant to assess willingness to put in the effort and a team building quality in a person, which OAI finds imperative. Ultimately, only twenty people per program are selected.

Since the inception of the program, there have been two graduating classes and eighteen graduates employed so far. In Illinois, more people are obtaining jobs in solar than originally thought. OAI credits working with ComEd for the success and source funds for this program.

My visit to OAI ended with a stop into the math class where the positive vibes were palpable. It was great to see and hear how well FEJA is working and how the future workforce of this industry and renewable energy space is currently benefiting from training throughout Illinois. 

The trainees were visibly grateful and enthusiastic for this opportunity and obviously adored their math teacher who was teaching a lesson in trigonometry. One student noted that he's learning and being trained for a gainful trade in less time and less cost than a degree in environmental health and safety.

Of all things I get to do as a regulator, this was an unforgettable day. I was so lucky to meet the OAI staff, see the students in action, and especially learn all about Cynthia Myers, who will always be an inspiration to me. 

Without the Illinois Future Energy Jobs Act, Cynthia might still be working making minimum wage, but now, thanks to FEJA, Cynthia gets to be her super self.