When we talk about the utility of the future, we all too often focus only on new technology, modernized infrastructure, transformed business models and smart grid-enhanced operations. In his response to our last topic on California DRPs, our colleague Mike Beehler astutely observed that people need to be part of the future equation.
Quoting Mike, “The ‘next-generation’ distribution system envisioned by the CPUC and the New York PSC will require a next-generation distribution engineer… we need to cross train a whole new generation of young men and women to plan and design our next-generation distribution system. And, we need to start now.”
People have always been a utility’s greatest asset. Their attitude, dedication and drive to “keep the lights on” have been critical to past success. In the future, they will be even more crucial.
Here are your questions:
What skills sets will utilities need in the future?
How will utilities acquire, train and retain these people, and what if any will be the impact upon utility salaries?
Lastly, please offer some advice: What do current utility employees need to do to prepare themselves for what is shaping up to be a very different utility future?
In the 1960s, I was entering my teenage years, fascinated by the space program. Seeing Neil Armstrong come down that ladder to step on the moon inspired me to become an electrical engineer. I was not too fascinated with electronics, but the "bigness" of electric power and the public service aspects of utilities led me to join American Electric Power in 1976 upon completing college.
Some say the utility industry is stodgy. That may be the perspective of millennials today. But they would be wrong. The electric power industry is absolutely vital to the United States economy and life as we know it. We are at the epicenter of environmental initiatives and at the beginning of a transformation at the consumer level that demands technological advancement and a change in the fundamental utility business model.
How do we get this message out? We need to start at the level folks begin to formulate their future. We need elementary and secondary school outreach. We need to continue co-op and intern programs starting at the junior level in high school. We need to preserve these programs even in the face of budget cuts, else we cut our future. The cuts and downsizings of the past have created a huge age gap between entry level and other employees that only continues that stodgy feel.
We also need to spawn professional growth at the entry level, encouraging professional licensure, and introducing them (and funding them) to join groups such as IEEE, CIGRE, ASCE and others. The price is small relative to replacing these professionals if they see other companies providing the benefits of opening their eyes to what is going on in the world. We miss this aspect in the current wave of cultural initiatives that focuses internally and misses the external stimuli that truly inspires. Remember, that salary is foundational, but it is usually the other benefits and work environment that help retain in a big way.
As many know, I am currently president of the CIGRE U.S. National Committee. With the help of folks such as co-blogger Mike Beehler, we developed a Next Generation Network within CIGRE U.S. for professionals with 10 years or less experience. CIGRE (a French acronym for International Council for Large Electric Systems) provides these young professionals with access to practical information on technological advancements in more than 90 countries. It is efforts like this that help employers retain these professionals. Go to cigre-usnc.org for more information.
Lastly, let us not forget those people who will be needed who do not have college-level backgrounds. The backbone of the electric power industry is the folks who climb the poles, work in highly technical substations and sit at desks in operations centers in highly technical environments. Most of these careers require two-year degrees, but some can be trained from high school degrees. Vocational and community college avenues are often overlooked, but one can develop relationships with vocational schools and two-year colleges to provide curriculum that ensures the pipeline of these professionals. Many of these professionals have a head start with military training, and that outreach is important as well as noble given the sacrifices these individuals and their families have made for our freedom.
Attract, inspire, retain consistently and proactively, even if budget cuts prevail. If budget cuts create gaps in this program, a company's future will take years to recover. Think about NASA in the 1960s and compare that era to today.
Regardless of what the future may hold, utilities have been facing challenges in personnel needs for some time, while the average age of the workforce has continued to increase. The reason for this has not necessarily had anything to do with the headlines we see today, but more so because of restructuring to establish wholesale energy markets and the rate freezes accompanying that which resulted in reduced workforce size to control overhead and reduce costs.
Before these reductions, utilities performed quite well in recruiting and training personnel to keep up with day-to-day challenges as well as the evolution of the future of the industry. Therefore, rather than any radical changes in how utilities develop the workforce going forward, maybe there is only the need to return to the past. This would involve supporting utility educational programs and activities at universities, and reigniting aggressive campus recruiting efforts that would offer attractive jobs that offer competitive salaries compared to careers in information technology, for example. Beyond this, internships and cooperative options would also help, as would reinvigorated apprentice programs for the workforce as a whole.
This type of workforce development process seemed to work quite well in the past in preparing utilities for major changes in the industry, and along the way, produced utility systems that on average provide 99.99% reliability. Perhaps before reinventing the wheel to deal with the acronyms of today, we should try it.
My experience was a little different than Michael’s. I popped out of grad school at UC Berkeley in 1969. A very exciting time. A number of my profs were consulting in what was to become Silicon Valley. PG&E was looking for someone to manage its high-voltage lab, and I jumped at the chance, thinking I’d be there long enough to do some exciting research, recharge my bank account and then move on.
But...compared to other organizations I had worked for, I found the utility bureaucracy across the industry to be incredibly stodgy. It appeared as though risk adversity discouraged almost anything new.
Nonetheless, I stayed for almost 30 years!
At that time, the industry was vertically integrated, meaning that PG&E owned its generation, transmission and distribution assets. Distribution was sort of seen as the poor stepsister. The G&T issues were complex — system harmonics, state estimation and massive load flow analysis, etc. But radial distribution? Not so much.
But then deregulation and industry delamination came along, and suddenly, the long-neglected distribution system became many companies’ largest business asset. SCADA morphed to advanced distribution automation, and we have the communications and metering networks to detect faults without the customer calling in. Now networked distribution, automated reconfiguration, distributed generation resources, micro grids — wow! Except for voltage level, ‘distribution’ looks like transmission.
And the distribution engineer’s job has become incredibly complicated. No longer can we use the old joke that the distribution engineer’s best tool was the straight edge used for load growth projection. The distribution engineer may be setting parameters on a highly complex integrated outage management system.
Also, the engineer can’t be the back-cubicle grumpy nerd. Helping customers solve complex issues will require good people skills.
About half of utility employees reach retirement age this decade. New graduates are looking less for career employment and benefits (the legacy utility attractions) than they are for interesting high-paying jobs. Like IT and other technical industries, we can expect to move towards the “gig economy,” where high-value professionals see all jobs as temporary moves toward something even more interesting and higher paying.
So, if we want this high-level workforce, we’ll need to pay them a lot more than we’re used to.
On the other hand, as has been suggested, maybe we can just employ highly skilled operators and pole climbers, and let the brains lie in the consultants and manufacturers. Or maybe we use the EPRI model and have banks of managers supervise outsourced consultants and other technologists.
I’d rather not go either of these two routes. Instead, I suggest:
1. Start active dialogues with our regulators to make sure we can offer and sustain salaries and training budgets competitive with other high-tech industries.
2. Begin consistent rotation, training and other development to ensure that the work environment is interesting and challenging. Internal training can work and is already excellent in some utilities. But you can’t lead where you haven’t been, and just training folks to do what we’re already doing just isn’t enough.
3. Finally, set a high bar. Engineers and other workers can’t be doing just OK, they need to be striving for excellence or lose their jobs. Not the kind of actions we’re used to but we must change the culture and the image of the industry to attract the brightest and the best.
Bottom line: Make it a high-paying, challenging, interesting profession and market forces will supply what we need.
The skill sets utilities need in the future are the following:
- Look for the big picture. Don’t stick with the device only, or the system only, but cultivate the holistic integrated solution. The solution has a much greater value proposition for the utility than the device or system only.
- Need a good understanding of the technology and the business side of the technology. Should be capable of putting the business case together for a technical project.
- Should have a number of different internships or coop assignments to have a broad base of work experience.
- Should have taken several power engineering courses.
- Be hungry to learn at all times.
- Desire to have several mentors to meet with on a regular basis.
- Be creative: look for new and better ways to do the work.
Utilities cannot manage the young professionals in the same way as they have managed employees previously.
- Don’t have a set amount of time for a young professional to be promoted from one salary band to another. Exceptional “role model” level of work should be rewarded with accelerated merit increases and promotions.
- Keep young professionals challenged continuously.
- Maintain frequent communications with a lot of feedback from both the manager as well as company executives.
- Offer training courses.
- Be willing to subsidize graduate school in both electrical engineering as well as in business (MBA).
- Recognize that the amount of money made and the work location is third in importance for today’s college graduate. The top two considerations with their first full-time job are to help society and to help the environment. This is why young professionals are extremely interested in distributed generation and microgrids.
The power and energy industry in the United States has a serious aging workforce challenge. According to the PwC report titled “Power and Utilities Changing Workforce – Keeping the Lights On” dated December 2013, 40% of the employees and 60% of the executives today are eligible for retirement in five years. How do we attract kids of all ages to the energy industry — to study engineering in college and look for a job in the energy industry? Put another way — how do we make energy “cool” to kids of all ages?
We should all be ambassadors for our industry and do as much as we can to influence the kids. One example is the Explorer Post I established at GE Digital Energy on energy. I’m on the Atlanta Area Council Boy Scouts of America Board of Directors and learned there are around 50 Explorer Posts in the Atlanta area. An Explorer Post is for high school age boys and girls and is career focused. For the past two school years we’ve had 30 high school boy and girls meeting in our Grid IQ Experience Center one night each month for different programs on energy. We have influenced many of the kids to major in Electrical Engineering in college and look for a job in the energy industry after graduation. T&D World magazine wrote this article about our Explorer Post and its positive impacts:
The IEEE Power & Energy Society (PES) has a very active Young Professionals program. One aspect of the program is for industry experts to give webinars on a regular basis. I gave a Smart Grid webinar to the group last December and had a lot of good questions from the attendees.
The CIGRE U.S. National Committee (USNC) has a Next Generation Network (NGN) program. In my role of CIGRE USNC VP, Technical Activities I’ve given a webinar each year on how to write an abstract or paper for a CIGRE conference and be successful in having it accepted. My goal is to encourage more NGN professionals to write and submit abstracts and papers. In addition, I’ve been successful in getting NGN professionals accepted as members in CIGRE Working Groups, though their resumes are light in work experience compared to senior industry representatives. Presently, we have a paper competition for NGN professionals with 14 NGN professionals submitting papers. I’m one of the judges and was very impressed with the quality of the papers. We chose the top 5 papers and to be presented at the CIGRE USNC Grid of the Future Symposium on October 12 in Chicago.
The predominant spending in Smart Grid has shifted form smart metering to the distribution system. Market research analysts reported recently that the average benefit-to-cost ratio for investment in the distribution system is 6 to 1. In other words, for every dollar spent, the utility will receive $6 of benefits. Of the 48,000 distribution substations in the U.S. less than half have any automation installed. And, of those that have automation installed, half of the installed automation is operating standalone — not utilizing the two-way communications capability in the device. There is even less monitoring installed downstream of the distribution substations on the feeders, what is called “intelligent line monitoring”. There are many opportunities for increased benefits in the distribution system.
I presented the manufacturer’s perspective at a recent ADMS (Advanced Distribution Management System) workshop at DOE’s National Renewable Energy Laboratory (NREL) in Golden, Colorado. Three speakers presented the utility perspective and three speakers presented the manufacturer perspective. The consensus of the industry experts at the workshop was that 70% of the cost of an ADMS project is integration costs. This requires compliance to industry standards for communications and exchange of information for successful interoperability.
The distribution system of the near future will be very different from how it was designed. There will be two-way power flow, varying fault currents, protection ratings not coordinated with short circuit current levels, voltage regulation issues and possible congestion. The impact of high penetration of residential rooftop solar PV has resulted in three new applications of power electronics: transformer load tap changer (LTC) controls, dynamic low-voltage network grid edge controllers, and smart inverters. The traditional centralized architecture is transitioning to a hybrid architecture — a combination of centralized and distributed working together.
These are exciting times in the power and energy field, with revolutionary changes being made and with many opportunities for young professionals. With the large number of retirements in the next five years there is tremendous demand for employees and not enough supply. Let’s all do everything we can to encourage boys and girls of all ages that energy is “cool.” Our next challenge is to retain the young professionals once they do decide to work in the energy profession.
Our resident utility sage Paul Mauldin listed three steps that utilities should do. In the first one, he mentioned that utilities should "start active dialogues with our regulators to make sure we can offer and sustain salaries and training budgets competitive with other high-tech industries."
Here is a follow up question:
What other actions will regulators need to take to ensure that utilities will have the necessary workforce to accomplish all that will be asked of them in the future?
Regulators should be informed on workforce attraction and retention issues. Typically, incentive pay and benefits may become more scrutinized in rate proceedings than salaries. In fact professional salary levels are usually benchmarked nationally over all industries by utility human resources departments. The trick is to peel the onion back to show the workforce costs from the usual benchmarks by customer, line mile or other metrics usually present in rate proceedings.
Costs for programs that are win-win for universities, community colleges, and vocational schools to support utility worker pipelines are seen favorably by regulators. The costs for these programs are usually less that "go it alone" recruiting strategies. These costs should be viewed favorably by regulators given the community value added.
The critical issue is to make sure that the regulators are informed in rate proceedings of the issues of attraction and retention and how that affects rates. It is incumbent on utilities to prove their case rather than regulators proactively coming up with a solution to the problem for the utility. Note that regulatory offices have the same issues attracting and retaining their staff, usually at governmental rate and benefit structures.
Ideal venues to discuss workforce issues are at conferences such as NARUC. This allows much more free-flowing information and generation of ideas than the narrowness of rate proceedings.
Yep, back-office conversations on adjusting workforce salaries/other expenses have to happen apart from the rate hearings. But, to be candid, in my opinion, regulatory staffs aren't of the temperament (based on their own employment benefits) to respond well to these requests. And the regulatory management — local and at NARUC — have primarily a political focus. Put all that together and you have decision cycles that could stretch into years, maybe decades, on this line item alone. Or at least longer than the usual three-year rate-case cycle.
So, rather than begging at the bottom of the food chain and waiting for it to filter up, maybe we should start with governors and legislators. Maybe even POTUS via head of DOE. Let them deal with a sleepy, unfocused NARUC. Our elevator pitch is that we need to move rapidly to overhaul the nation's utility capabilities. We're facing a brain drain at a time when we need to be very smart and proactive. Security issues (cyber and physical), reliability declines, greenhouse gases and renewables...on and on. All big topics that require the best technologists...now.
Maybe the usual electric utility industry routes through EEI need to be overhauled, supercharged or replaced. Maybe we could learn something from proactive CIGRE, or maybe we get a streamlined consortium of movers and shakers together apart from existing organizations. We’ve seen some of that, for example, in California utilities’ getting some control over solar rooftop inverters.
Please share your views in the comment section below.