Like a physician with her stethoscope at the outset of a check-up, astute shareholders and directors should use the level and trend of a utility’s market-to-book ratio (MtB) as one of the first...
Transforming the SysOp
Strategic pain points require an artful approach.
technology such as the distribution management system (DMS). The DMS is able to pull various capabilities together into a single user interface for the system operator. This allows the system operator to work online using electronic mapping and advanced applications. In addition, there is an increased acceptance of the need for a more automated outage management capability to meet customer and regulatory demands.
In the past, low benefit/cost ratios have stifled widespread application of these improvements. The environment is changing, however, as regulatory requirements and better cost profiles resulted in greater acceptance. As this environment continues to evolve, the system operator’s job undoubtedly will change in dramatic ways.
Additionally, utilities are facing significant external pressures from a variety of sources. For example, competition from municipalization threatens the loss of customers. In addition, advocacy firms and industry watchdog groups are highlighting inadequate service, forcing regulatory commissions to demand more from utilities. All this attention has resulted in increased expectations from customers, which in turn directly affects utilities’ revenue streams.
In order to respond to these new pressures, utilities need to raise their level of customer service in order to meet higher expectations. Increased focus on customer service covers a wide range of functions and behavior, including employee interactions with customers, and operations. For example, system operations employees must think critically about how to continuously minimize the duration of outages, as well as the number of customers affected by disruptions in service. And, utilities constantly must uphold commitments made to customers.
“Given the criticality to serve customers and keep the lights on after the last energy crisis, the competencies and leadership skills associated with our system operations area are becoming more and more important,” says Jim Detmers, vice president of operations at the California ISO.
Consideration of these and other issues require from the systems operators a different paradigm as they relate to skills and capabilities, as well as how to best represent the utility’s brand image to its customers. To be sure, it requires operators to be more preemptive, rather than reactive, with respect to potential outages.
At the same time, a changing workforce will continue to have a significant impact on the utility industry. In the next 10 years, the utility industry can expect a major change in its operator demographics. Today, the average system operator is 50 years old (see “An Aging Workforce,” Electric Perspectives, September/October 2005) . In response, utilities will need to plan for either: A) retirees returning to work part time, which would require utilities to be more flexible, or; B) the entry of younger people into the workforce who come with different work habits and familiarity with technology.
Utilities have a number of challenges as they navigate this changing dynamic. These challenges range from loss of key personnel and their expertise and experience; the need to attract and retain new personnel; increased competition from neighboring utilities and municipalities; and the ability to maximize workforce flexibility ( e.g. use of retirees as part-time contractors).
This problem is further exacerbated by the longer lead times required to train new