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Strategic Leadership

Get ready for fundamental changes.

Fortnightly Magazine - May 2010

the right students, including those from other countries. It also means making companies more attractive to minorities and women. Finally, leaders will adopt people-first strategies that have proven successful for other companies. 4

Fueling the Future

The United States won’t run out of fossil fuels in the next five to 10 years, but leading energy companies are taking serious steps to develop non-fossil forms of electricity production and new and innovative approaches in delivering this electricity to customers. Based upon current production and consumption trends, civilization today might not possess energy resources and production means to sustain growth, security, quality of life, and productivity by 2040. 5 In the long run, the United States must eliminate dependence on Middle Eastern countries and lessen the electric industry’s impact on the environment. As Canton explains in his book, energy resources determine the ultimate prosperity and security of nations, corporations and even individuals. This is no small matter. Developing nations need reliable and cost-effective energy to defeat poverty, install democracy, develop the middle class and grow their economies. New energy sources must be abundant, reliable, renewable, clean, affordable and secure.

This issue is much bigger than our industry, but electric utilities have an important role. They can move forward with building smart grids, in order to support distributed, small scale, person-to-person electricity generation, as such generation will be more sustainable in the future. Smart grids also enable provision of more services to help customers make their energy usage more efficient. Utilities can pursue or encourage wind energy development, especially off-shore wind farms where the potential for significant electricity production exists. They can innovate to address the intermittent characteristic of wind generation. They can develop the infrastruct- ure necessary to bring wind energy to market. Companies that pursue with authenticity an environmentally friendly strategy will see profits increase, as there is a trend toward renewable, clean, nonpolluting, and sustainable values. Finally, utilities can pursue business strategies that help bring energy to developing nations, where there exists enough stability and growth potential to support investment.

Changing Customer Needs

In the future, customers will be less tolerant of interruptions, even intermittent ones resulting from recloser operations. Customers will accept help in their use of energy, but utilities shouldn’t expect them to alter their lifestyles or become active in managing their energy use every day. Customers will look for stable prices and long-term price arrangements that reassure them—and tools that allow them to control costs without their ongoing intervention.

To address these changing needs, leading utilities will continue to maintain and improve electric delivery systems to avoid interruptions. This requires the need to: 1) maintain transmission systems by staying ahead of reliability standards; 2) consider putting most urban distribution facilities underground; 3) develop interfaces with customers that help them use electricity more efficiently and during lower-cost time periods via smart meters, smart appliances and smart energy-management systems; and 4) develop ways for customers to store electric energy during low-cost periods for use during higher-priced periods. With the decline and eventual elimination of fossil-fueled generation, utilities must be able to