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With global stock markets reeling in the last week, I found a report from Black& Veatch to be quite interesting and worth the read.
Specifically, the report notes how the growing credit crunch could hurt capital-intensive utilities. Constellation Energy and Reliant Energy are but two utilities that have recently suffered. More examples may be on the way.
Richard Rudden, the Senior Vice President of Black & Veatch's Enterprise Management Solutions Division, noted in the report that:
"Regulators will play a critical role in ensuring the appeal of utilities as sound investments and the source of new critical infrastructure. Without proper regulatory treatment of the costs of infrastructure investment all the good that utilities might do as safe havens for more conservative investors and pension funds could be negated."
It’s important that regulators understand the role they play in utility operations, especially given recent events outside their or the utilities control. We believe that utilities are more subject to the vagaries of “disruptive regulations” than many of the other driving forces on the utility landscape, including technology innovations, the aging workforce, fuel and resource procurement, and mergers and acquisitions, to name but a few.
Not only are utilities exposed to the harsh atmosphere of competition or regulation enforcement but on an almost daily basis management and boards of directors are being asked to change their business operations to cost effectively integrate the significant regulatory demands of national, regional and local governments. Companies must also comply with financial regulations from Sarbanes-Oxley Act of 2003 (SOX), European Union (EU) directives, the Kyoto Accords, emissions trading and emissions rights, reliability requirements (e.g., NERC) and environmental mandates from governments.
Utilities are doing their best to comply with the regulations, through integrated, proactive approaches. We’ve written previously about AEP’s effort to harness Microsoft technology to comply with environmental emissions regulations. We envision regulators growing to appreciate how Microsoft and its partner community provide utility compliance solutions that are delivered on an enterprise ready, scalable and secure platform. We encourage utilities to convince regulators they are endeavoring to comply using solutions that take an enterprise-holistic approach. It’s a two way-street and now is a good time to look at improvements in the process. - Jon Arnold
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At the IDC Energy and Utilities Forum in Milan a couple of weeks ago I offered a presentation on the connected home. During my presentation I spoke about key enablers of the connected home and devices that make it easy to form a home area network (HAN) for energy efficiency and other home automation functions. The future home may be have a full array of sensors that discover each other (securely) and then form a network in conjunction with software in the home and cloud services, thus creating the home operating system. While the full manifestation of this vision is years off, Web services on devices may be a key component of this transformation. Feng Zhao of Microsoft Research has been working in this area and his video is worth watching. The video is from the annual TechFest event that we hold on the Microsoft campus in Redmond. Microsoft Research’s TechFest is an annual event that brings researchers from Microsoft’s labs around the world to Redmond to share their latest work with the product teams. Enjoy! – Jon Arnold 
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To follow up on our blog entry about CLP Group’s successful Unified Communications pilot, utility company CIOs considering the implications of Unified Communications should take a look at the September 15 edition of CIO, which contains the article “Your Plan for Unified Communications.”
Many utility observers believe that Unified Communications (a healing of the split between what you do on the computer and the phone) are one solution to several problems facing the industry today, including the large-scale retirement of a large portion of the workforce in the next few years. Because of workforce shortages, the remaining workers – those with less experience – are being asked to do more, sooner, and with less intellectual capital.
One solution is to break down the barriers that constrain communication access to a limited number of subject matter experts and to expand the availability of asset information.
For instance, when crews in the field or the plant need access to engineering expertise to resolve operations issues, they should have near instantaneous access to those subject matter experts (SME). When they initiate requests for help, the best available resource needs to be no further away than an Instant Message (IM) or phone call. The SME needs to be able to search all pertinent sources of data so that potential solutions can be immediately accessed can be immediately accessed and evaluated.
The SME will need a variety of communication capabilities to quickly and effectively collaborate with the field operation teams. This is the only way operations and engineering can be truly integrated and accomplish more while operations and maintenance budgets and workforce resources shrink.
Unified Communications, comprehensive search, enterprise wide business intelligence are all key ingredients to successfully rising to these challenges. The utility of the future won’t be able to afford to operate without leveraging these capabilities. - Jon Arnold
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Last week I visited London to speak at the Financial Times – World Energy Council Summit for “Investment Opportunities in Clean Energy Businesses.” The event featured a star-studded cast including (to name but a few) MIT president Susan Hockfield; Alston Chairman & CEO Patrick Kron; Union Fenosa Chairman Pedro Lopez Jimenez; U.S. Department of Energy Clean Energy Collaboration Director Barbara McKee; Eskom General Manager Brian Statham; E.ON Chairman of the Board of Management Dr. Johnnes Teyssen; and India’s Secretary Anil Razdan in the Ministry of Power. The speakers presented a convincing picture that utilities around the world are driving scores of great initiatives and solutions for energy efficiency, renewables, Green Transportation and Sustainable Cities. However, to be frank, I think many of the observers in the crowd (those not directly involved with a specific initiative ) had a view that while there are many great initiatives out there, they in fact are a giant patch quilt, a bit hap-hazard, and with no real global coordination. Take for example some of the thoughts expressed during my panel on “Energy Efficiency and Demand Management as a Business Line; Making the Most of Our Energy Resources.” First, we all agreed that energy efficiency initiatives are an important part of the portfolio mix and will have a significant impact on reducing the amount of new fossil generation that needs to be built to meet projections of a 50% increase of demand for worldwide power in the next 15 years. But there were some differences Both I and Nobuo Tanaka, the Executive Director for the International Energy Agency, agreed that unless regulators decouple utility profits from consumption and allow utilities to earn revenue on energy efficiency programs then those programs may become just paper tigers. Instead, those initiatives need the sort of backing it takes to put a man on the moon, which is what may be required to fully address global warming. There are some interesting news and studies out about these topics. First, take a look at Capgemini’s recent thought leadership piece, “Demand Response: a Decisive Breakthrough for Europe,” which advocates for greater demand response implementations, saying that “DR alone achieves 20-25% of the EU’s 2020 targets concerning energy savings and CO2 emission reductions, as well as pre-empting the need for the equivalent of 150 medium-size thermal plants in EU-15.” Then also take a look at a new report by the American Council for an Energy-Efficient Economy (ACEEE) which finds that “By investing in energy-efficient technologies, the Commonwealth of Virginia can reduce its electricity needs by one-fifth; deliver cleaner, less-expensive power to Virginia consumers; create thousands of new jobs; and better position the state to more cost effectively meet its future energy requirements.” ACEEE says that the “Commonwealth can meet close to 20 percent of its electricity needs by 2025 through energy efficiency, a strategy that also would cut Virginians' utilities bills by $15 billion by 2025 and create nearly 10,000 new jobs - the equivalent of bringing almost 100 new manufacturing facilities to the state." 
There’s obviously a lot of thought going into demand response/energy efficiency efforts and it’s good to see that some in Europe are working to create a unified effort. The verdict is still out in other regions of the world and the question has to be: Will energy efficiency be on more than a piecemeal scale? - Jon Arnold
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The utility industry continues to discuss how it will keep pace with the increasing numbers of Baby Boomer retirements that are expected over the next few years.
Observers believe one solution will be to attract the so-called Millennial generation, those born between between 1982 and 1994 to the utilities industry, by adaptation of technologies which Millennials have used since their youth. Industries that don’t adapt these technologies risk being labeled as non-progressive and out of touch, pushing workers to other, more “hip” industries. Utilities, already at risk of being pegged on environmental concerns, can shore up their appeal through attention to these Web 2.0 technologies.
This month’s edition of Computerworld Hong Kong provides an excellent story, beginning on page 12, about how one utility company, CLP Group, is tuned into the next generation of employees, the future knowledge workers we’ve written about before.
The story details CLP’s implementation of Microsoft Office Communicator as part of an early-adopter pilot program and specific examples of how unified communications – between email, video, chat, calendaring, voice, conferencing and instant messaging – can strengthen utility operations by increasing the collaboration of utility teams. It’s a great read with a level of detail that’s inspiring and informative. - Jon Arnold
Microsoft Chairman Bill Gates demonstrates Microsoft RoundTable during the Unified Communications launch on Oct. 16, 2007, at the Bill Graham Civic Center in San Francisco
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I’ve written two previous blog posts about Surface computing here and here but I’d like regular readers to take a look at this quick video, recently posted to the Microsoft Power & Utilities Web site (under videos). 
This is one of the best videos I’ve seen on Surface computing and it demonstrates many of the points we’ve been talking about in our Point of View presentation to our customers. I encourage you to view it before reading the rest of this blog. First, the technology: while the video demonstrates how Surface computing will dramatically improve operations on the manufacturing plant floor, it will have similar applications for Power & Utilities companies. Our Microsoft application teams and our partners in asset management/fleet performance enhancement are working now to ensure that this technology is adapted to the needs of utility organizations and we will have more announcements on this progress in time. Second, this video demonstrates our vision for the Integrated Utility. Imagine bringing network computing capabilities to the plant generation floor in a way that it hasn’t been before. As the expected worker shortages affect plant output, a technology solution like this – one that lets you know where your workers are and what they are doing – will make sure you are getting the most from the workforce you do have on the job. Additionally, all the workers are connected to each other, in even more meaningful ways than they are now, and thus more capable of greater production output. Third, the video notes how various processes and departments are interconnected to provide real-time business intelligence at the business level. Executives aren’t the only ones receiving real-time dashboard information about key performance indicators. Every worker throughout the plant can have some dashboard presented to them as they perform their jobs, even their own! Fourth, the Surface computing solution recognizes that paper documents still matter on the plant floor. Safety and process checklists are indispensable to daily operations, as are invoices, inventory and other reports. Having the ability to quickly scan those reports and supply the entire organization with their information instantly speeds productivity and better informs everyone involved in every process, from accounting to receiving. Fifth, Surface computing unshackles the plant worker from the desk top, giving them the flexibility to walk the floor and direct operations. Surface computing accomplishes this by letting workers through computer touch screens and voice recognition capabilities. Sixth, Surface computing relies on and is empowered by search capabilities. Again, integration coupled with data architecture that enables and optimizes the search function is vital to future computing technology and its application to industrial operations. Seventh, Surface computing that’s integrated across the enterprise will greatly improve every type of scheduling – work flows, personnel, inventories, resources, everything. And again integrated scheduling plays a role in assisting the Utility with the daily headaches of resource and personnel shortages, peak demand or outages and other reliability disruptions. I could go on and on of course, but these seven areas are clearly demonstrated in the video and its’ my hope this will serve to inspire, so that you might inquire, “What could we do better, tomorrow?” - J
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It’s also a key to driving business value. Ask Anglian Water Services in the UK, through better forecasting, planning and scheduling they have managed to reduce overtime costs by 11%, travel time between jobs has reduced by 24% and the level of service has increased 33%. Having the right number of resources in place with the right skills and parts at the right time has resulted in the backlog of work dropping by 95%. So utilities can definitely realize savings through better scheduling of their fleets. While many utilities have sought various money-saving solutions for their fleets over the years (including transitioning them to spiky natural gas!), better scheduling through software solutions should obviously be an option. One Microsoft partner, ClickSoftware, is making a difference in power delivery solutions, in the areas of mobility and mobile workforce management because of its scheduling optimization engine. They have been migrating their solutions to the Microsoft platform using MOSS and SQL Server Reporting Services and it’s been working. Scheduling is a mini-green play: improving scheduling reduces fuel consumption and thus decreases emissions. Better scheduling also improves business processes, which is important when utilities face shortages of workers due to retirements. 
In addition to scheduling, ClickSoftware played a role in the recently concluded Beijing Olympics: ClickSoftware’s ClickSchedule and ClickAnalyze mobile workforce management software helped China Netcom Group Corporation (CNC) China ensure maximum uptime for critical telecommunications services for athletes, coaches, venue organizers, the media and millions of spectators. Over seven million people at the Beijing Olympics depended on more than 1,000 field technicians managed by ClickSoftware Technologies Ltd. Good going ClickSoftware! - Jon Arnold
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Our hearts go out to the people of New Orleans, Baton Rouge, Houma, and Lafayette, and the countless other towns and cities throughout Louisiana, Texas and Arkansas in the wake of Hurricane Gustav the last few days. It is hard to imagine the physical and psychological suffering that those people have experienced within the short time of three years.
Entergy, the main electricity company in that area, has made significant headway in its recovery efforts from Katrina. Certainly Gustav has presented a challenge and the front page of Entergy’s website gives the story:
As of 5:30 a.m. on September 3:
- Hurricane Gustav made landfall Sept. 1, at 10 a.m., near Cocodrie, Louisiana.
- At the peak, 850,000 Entergy customers, primarily in Louisiana and Mississippi, had lost electrical service due to the storm.
- Hurricane Gustav caused the second largest number of outages in company history, behind only Hurricane Katrina. Gustav restoration rivals the scale and difficulty of Hurricane Katrina restoration.
Part of the headway is Entergy's ability to keep the public informed of service outages. Interested people can keep abreast of Entergy’s progress in dealing with a service restoration that rivals the scale and difficulty of Hurricane Katrina restoration at this link. Here’s the big picture on outages.
Again, we’re thinking of you all in your time of trouble. - Jon
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Reliable electricity supply is a key part of achieving prevalent “Smart Energy,” a term which the Microsoft Worldwide Utilities Group uses to mean the entire Power and Utility value chain, from fuel source to inside the home. Reliable electricity is produced by power operators who strive to keep their plants operating at peak performance, in order to achieve maximum efficiency in how they use fuel, produce power, minimize impact to the environment and contain costs.
The utility industry has for years been employing technology to maximize and continually improve plant operations. When Invensys’ Wonderware announced last week that they will acquire SAT Corp, two strong Microsoft partner companies advanced the cause for greater industry plant optimization through the combination of their technology components, built upon Microsoft solution platforms.
According to Invensys’ press release, their acquisition was made “to offer mobile solutions that will help drive operational excellence for customers. With this acquisition, Wonderware will form a new mobile solutions group that further expands on SAT’s position as a leading global supplier of mobile workforce management and decision support solutions, used to enhance manufacturing visibility and task execution within industrial and manufacturing markets.”
Wonderware provides mobile workforce management and decision support software for enabling mobile business processes in manufacturing industries, including the utility industry.
Wonderware leverages the latest Microsoft mobile infrastructure and communications foundation, RFID technology, secure wireless, support for hazardous location devices, and integrated BlueTooth peripheral devices, to deliver an enterprise class mobile infrastructure and decision support system.
For those just beginning to learn about the benefits of mobile infrastructure improvements, I’d suggest viewing this page on the Microsoft website. It provides some good case studies about what mobile workforces can do for companies. And IT professionals will benefit by learning more about the platform, here.
Going mobile is a important part of the Smart Energy future we foresee for utilities. In future blogs we will talk about its importance to field operations. - Jon
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Today’s Boston Globe contains a brief article about Microsoft Surface and its application for visitors to Sheraton hotels. The story has a neat picture as well as information on how the hotel chain is deploying Surface to serve as a virtual concierge for its visitors.
We blogged in June about Harrah’s use of Microsoft Surface and its likely usefulness to the utility industry, especially for running the power grid, making it smarter and self-healing, and managing power fleets.
An example where it could be used is in grid visualization applications like this  situational awareness application from our partner Areva. This solution provides “situational awareness” of power events on the grid. The energy management system dashboard demonstrates the ability to create on the fly dashboards, the ability to drill down into problem areas and send live snapshots to others for collaboration and problem solving. This could easily be accomplished with Surface.
We continue to see great hope for these sorts of new technologies and their applications to the utilities industry. We also continue to urge utilities to keep a keen eye on the types of technologies which potential younger workers will have grown up with, especially as they compete with other industries for the next generation of employees.
Larry Cochrane
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To say that Utilities are meeting the challenges of a difficult age is probably the understatement of the decade.
One need only look at the comments of Rick Sergel, president and CEO of the North American Electric Reliability Corporation (NERC), to the state regulators at the National Association of Regulatory Utility Commissioners (NARUC) summer meetings on July 20, where he outlines all the various measures being taken to increase cyber and physical asset security of the North American power system.
Of note to utilities with Microsoft solutions in place, we believe our technologies will help address many of the very specific requirements that NERC is laying out. In particular, Sergel mentioned the following two critical infrastructure protection requirements:
CIP-003: Security Management Controls essentially requires entities to document a cyber security policy, review it annually, and make it accessible to appropriate staff, but appropriate staff only. It also requires each entity to document exceptions to the policy, review it annually, and closely control access to the plan. As one additional matter of course, the standard requires each entity to identify a cyber security contact within their organization and provide this information to NERC or their Regional Entity.
CIP-007: Systems Security Management essentially gives some basic requirements about IT maintenance, like installing anti-virus systems, downloading security patches, and securing unused access points (or ports) to critical cyber equipment. It also contains some requirements for logging user access, managing permissions and administrator privileges. Perhaps most importantly, it requires entities to assess cyber vulnerabilities annually and to document this assessment.
We will be writing more about meeting NERC reliability standards in the future but for now you might look at the following discussions about NERC:
Several Microsoft partners sponsored the recent EUCI conference on NERC
Warren Causey wrote a Whitepaper on Microsoft’s role in complying with NERC standards
Using familiar Microsoft tools to reduce the complexity of compliance
2007 Office System Document: Compliance Features in the 2007 Microsoft Office System
Microsoft solutions for regulatory compliance
Of particular interest is the Energy Central Webcast entitled “Are you prepared for your next NERC/RRO Audit”. In the Webcast Warren Causey of Energy Central along with Steve Rossi of Flexnova, Andre Chon of AUS Consulting and Pat vanMidde of San Diego Gas & Electric discuss the internal process, procedures and documentation responsibility NERC compliance and solutions for preventing NERC compliance activities from turning into a document management nightmare!
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In the previous blogs I wrote about the value of Microsoft’s coming together with its partners at a conference in Houston and the work that ICONICs is doing to develop innovative solutions for the utility industry.
Another good example of how our investments with partners is coming to life is the innovative work we are doing with ESTEQ Engineering and the Pebble Bed Modular Reactor Company in South Africa (PBMR).
As electric power prices continue their move higher worldwide, many countries are re-evaluating the potential of nuclear energy as a generation source.
PBMR’s use of Microsoft high performance computing will be a go-to learning experience for every future High Temperature Reactor built because PBMR is on schedule to be the first commercial scale reactor with a closed-cycle gas turbine power conversion system in the power generation field.
 In PBMR’s case, the utility required an integrated, reliable, and easy-to-use, easy-to-administer high performance computing platform. We have a brief video and case study on it, which I’d encourage you to visit.
In sum, PBMR deployed 17 HP Proliant DL Series servers with Windows HPC to start migrating one of the applications (MSC Marc) from Linux to Windows with the help of ESTEQ Engineering. Integration, performance, stability, and ease of use on Windows proved to be excellent and now PBMR is considering moving other applications to Windows.
With the increased demand for energy and there is an increasing need to extend high performance computing to the masses for applications such as power grid analysis and situation awareness, the simulation of plant outages for re-fueling and equipment repairs and the design of complex next generation power systems in the case of PBMR. As HPC pushes out beyond traditional supercomputing centers toward departments and divisions there is a need to speed deployment, manageability and overall ease of use. Using tools like the automated deployment servers (ADS) feature of Windows Server 2003 HPC nodes can be deployed via multicast and then managed with the cluster through Windows Computer Cluster Server’s management tools and user interface. Plus, by deploying Operations Manager a company can monitor detailed cluster performance information in a scalable fashion throughout the enterprise.
What this means is a dramatically reduced turnaround time for customers to quickly respond to market drivers and get meaningful results to Empower Excellence in Power & Utilities. - Jon
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In our last Blog we talked about WW Partner Conference and the investments Microsoft is making with its partners. One example is the work we are doing with our Gold Certified Partner ICONICS around fleet management of wind farms. BTW, ICONICS was Honored as 2008 Microsoft Partner of the Year for ISV/Software Solutions at the WWPC this month.
As power and utility companies continue to increase the percentage of renewables in their generation mix to help tackle the challenges of climate change, generation assets such as wind turbines present new challenges from an asset management perspective: they are unmanned resources that can be scattered over a wide geographic area and on many different terrains. New approaches are needed to optimizing operations at individual wind farms and managing an entire fleet of wind farms. The ability to connect a number of active wind farms from a centralized operations center(s) offers opportunities for increased efficiency, cost savings and better overall management of assets.
The solution in this video shows how a company can use innovative software to manage a fleet of wind farms for:
• Improved information visibility for better decisions and profit optimization
• Decreased asset downtime and associated preventative maintenance costs
• Strategic asset management and outage prevention
• Knowledge management and collaboration
• Enhanced knowledge retention
The solution is built on Microsoft Vista using Windows Presentation Foundation (WPF). WPF applications can be deployed on the desktop or hosted in a web browser. It also enables rich control, design, and development of the visual aspects of Windows programs. It aims to unify a host of application services: user interface, 2D and 3D drawing, fixed and adaptive documents, advanced typography, vector graphics, raster graphics, animation, data binding, audio and video.
The Microsoft World Wide Utilities group believes that renewables will drive adaptation of collaborative software solutions, especially as the newer energy sources are integrated with existing systems. In this environment, Utilities will have greater need for business intelligence and fleet optimization solutions provided by Microsoft and its partners. - Jon
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Every summer we at Microsoft go through a rejuvenating process at the end of our fiscal year (June 30th) that cleans the soul and refocuses our efforts on strategy, partners and customers for the coming new year. Since about 95 percent of Microsoft revenue originates from our partners it’s important that we sync up with them and hear what they’re saying about the industries we serve, together. It helps us achieve clarity in our relationships and service to industries, especially as technologies and business strategies change.
This year, right after the US 4th of July holiday, we held our worldwide partner conference in Houston. Some 7,500 partners were represented by some 13,000+ people(http://www.microsoft.com/presspass/events/wwpc/default.mspx). The energy and optimism there was palpable. It’s always a very impressive showing, even if the partners there represented only a fraction of Microsoft’s 650,000 partners worldwide. (Think about that: We’d have to “rent” the Mall in Washington to even have a shot at fitting one representative from all those partners worldwide. Impressive.)
Since our common goal with partners is to find ways to innovate and help customers with new concepts, we use this conference to come together, share strategies and ideas and otherwise work together to develop new solutions around new platforms and technologies. For instance, we had a lot of discussions about S + S and how partners can use this new platform to build innovative solutions for customer business problems.
For the Power & Utilities vertical, it was a great time to visit with our partners and they were well represented. It’s a long list of partners that the Power & Utilities team engaged with at the conference but here’s a sampling: OSIsoft, Areva, Clicksoftware, Enspiria, ESRI, EG Utility, Itron, Accenture, Bentley, SAT Corp, Logica, Mariner, Subnet Solutions, InfoSys, Enterprise Informatics, McLaren Software, Ferranti, Invensys and Dassault Systemes. Our meetings served to share ideas about innovations and new initiatives. They also served to strengthen our convictions that issues like environment, regulation, smart grid and smart metering, and generation optimization are key issue currently driving utility industry decision makers.
It’s an understatement to say that partners are key to our efforts and success in Power and Utilities. We continue to spend the most in R&D of any technology company (http://www.ciozone.com/index.php/Editorial-Research/Top-50-Technology-R&D-Spenders/50-Biggest-R.html) and the knowledge , insight and innovation that comes out of this investment goes directly into our work with partners, customers and investments that we make with them. In coming days, I’ll blog about a couple of examples of this dynamic.
In sum, our mutual customers should know that the Worldwide Microsoft Utilities Team values the time we spend with our partners. Simply put, it empowers excellence, something everyone in the utility industry aims for daily.
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There’s been a lot of concern over the Big Crew Change in the Power & Utility sectors over the past few years. The aging workforce is certainly an issue for Utilities as it is an industry that is dependent on specialized skilled workers and tends to be somewhat of a craft industry.
This aging workforce issue is a frequent discussion topic within the Microsoft Utilities Group. It certainly makes our list of market forces (see chart) shaping the future of Utilities: we see it as both a risk and a great opportunity for Utilities in the future.
In fact, AMR Researcher Tony Firisca recently sent out an e-newsletter titled “The Future Ain't What It Used To Be.” In it Mr. Firisca talks about how, with the Boomer retirements, we will only have a shortage of skilled IT professionals if we think in present terms. And by “present terms” I believe he means the continuing struggle to extract value from traditional systems, such as enterprise applications, for a model of work that may be retiring with the Baby Boomers.
To quote Mr. Firisca: “[Our current thinking in present terms] is a huge disconnect. Conditions are going to change, as are the way people are deployed, the way they interact, and the kinds of skills we need when we build tomorrow’s workforce.”
I think Firisca has a point.
There is great opportunity ahead for utilities. Sometimes I think we live too much in the past with business processes created, maintained and protected by the Boomers, the aging, on-its-way-out workforce. It’s human nature to cling to systems and processes that you have a vested interest in. It’s human nature to create walls for their defense. I do it. You do it. We all do it.
The real challenge may be twofold in capturing critical knowledge around some of these specialty business processes while at the same time being able to attract the best and the brightest that can help with the kinds of skills needed to take us from the past and position us with new ideas and processes to meet the challenges ahead of us.
We see many Power and Utility Companies making these adjustments. Good examples are with Constellation Energy and American Electric Power.
In the case of Constellation, they implemented a solution to increase their ability to manage their tariff/rate case processes. The specialized knowledge and processes for rate cases rests with a handful of individuals and it is extremely important to the financial bottom-line of a Utility. Constellation’s system not only helps provide a better outcome it also captures the specialized knowledge and processes for the future.
AEP is another good example in its project to enhance the way it measures and reports environmental compliance, including emissions and subsequently water and waste. Like the workforces of other Utilities, AEP’s plant engineers and environmental compliance personnel are reaching the age of retirement. Not only did the project yield common business practices, but the company was able to implement more precise and well-documented procedures for meeting certain regulatory requirements. This is especially helpful for those tasks that are not required to be completed every day, but only every two or three years. Then, too, as employees retire or change roles, a system that contains full documentation of compliance procedure eases the transition to new staff.
In terms of attracting the best and brightest for the next generation workforce, I have had more than one conversation with Utility CEOs and CIOs concerning this opportunity.
One of the challenges they face is creating a work environment that attracts the best and brightest. In one of my recent conversations with a Utility CEO he mentioned the lack of investment his company has made in communication and collaboration technologies:
“We are talking to some really bright engineers and MBA students from top schools and these kids wake up using Facebook, instant messaging and web collaboration tools. They look at the work environment we offer and they often have second thoughts about joining us.”
For Power and Utility companies that are still operating with “stone knives and bear skins” (OK, which famous Star Trek episode is that line from?) many realize they have to change and are doing something about it by moving to a rich communication and collaboration environment.
During the past couple of years some of the largest Utilities in the world have upgraded their communications and collaboration environments to help position themselves for the change that lies ahead. To quote Tony Firisca: “Conditions are going to change, as are the way people are deployed, the way they interact, and the kinds of skills we need when we build tomorrow’s workforce.”
So maybe we worry too much about the departure of the aging workforce.
Will we miss the aging Baby Boomers and lose some knowledge? Yes, most definitely!
Will there will be some problems associated with this? Yes.
Will there be a crisis, or is it more of a Y2K non-event? My bet is the latter.
The Utility industry has an opportunity to put some old thinking – pun unintended – behind it as the aging Baby Boomers move on. - Jon
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