As I leave the electric utility business after 28 years as an engineer and analyst I would like to relate some thoughts on what makes this business special, even as it gives way to competition. Let me offer some advice to "local" electric utilities on how to keep at bay the "Mega Marketers" and "PanElectrics" of the world, who will soon appear to romance away their customers. Keep your "home-field advantage." Capitalize on your traditional strengths and enduring relationships. These bonds represent a wealth of goodwill earned over years of working with customer communities. They will prove difficult to create anew should you choose to break entirely with the past.
The emphasis today calls for "benchmarking" (em comparing the financial and operating performance of electric utility companies against the real business world. Electric utilities also are trying out marketing and sales techniques that have proved successful for more consumer-oriented firms. However, to furnish electric power is not to sell Pepsi-Cola. Electric utilities must continue to think as public servants, even as they search the competitive market for new profit centers.
Accolades won in supporting local economies and serving the public should not be dismissed, but improved upon. There always will be paperwork to slash. Upgrades in technology arrive daily. Yes, new blood is healthy in any organization, but experience accumulated by loyal workers should not be treated as a scourge. These times demand a mixture of innovation and experience to carry out traditional roles in new ways.
Experienced employees represent a "home-field advantage" for local electric utilities. These employees can help maintain good relations with customers, even in the face of competition. Their
experience should not be taken for granted. More often than not, veteran employees should be pushed into service during times of crises, not discarded to meet cost-cutting goals.
Customers do not forget
The first responsibility is still to "keep the lights on." This job scores more points with customers than uplifting commercials or special offers of the latest gadgets. Every minute of a residential outage can lead to customers suffering in the dark and cold or losing meat in their freezers. A simple improvement like electronic ignition for home appliances can make reliability even more important to residential customers. A power outage may leave homeowners with no alternative but to cook over a fireplace or camp stove. It can mean lost production for a self-employed machine shop operator or lost wages for workers on tight budgets.
Customers tend to remember outages. Statistics cannot always measure the negative images that linger in the minds of customers. The electronic age has made every dip in voltage a major annoyance. The high cost of power interruptions has led some homeowners to compromise safety and the environment by turning to gasoline-fired generators. True or not, they sense a decline in reliability, especially with the downsizing of work crews.
However, keeping the lights on is not an easy task. Vast areas of the United States can go dark in a fraction of a second. Generation is operated farther from load centers. Transmission and distribution facilities are loaded closer to their maximum capacities. The equipment is old in many cases, and getting older. Replacing the electric infrastructure every five years never will be economical. And power always will be delivered via overhead wires exposed to the fury of the elements. Nikolai Teslas are not born every day to offer alternatives. Even underground facilities can succumb to attack from the environment.
The operation of electric utility equipment is not analogous to the natural gas industry with its buried pipes or the telecommunications industry with its microwaves bouncing all over the globe. For most people, it is more vital to have water pumped from their well than to talk to their currency trader in Hong Kong. The overall reliability of electric utilities in the United States has been outstanding, resulting in much good will from customers. However, people react emotionally to interruptions of electric service that cause them hardship or inconvenience.
Respect for a utility can turn to fury in a short time. Beyond that, a typical customer will remember the timing and duration of certain power outages for many years. Outages are much more serious than the local supermarket occasionally running out of a particular type of milk. Given the importance of electric service, customers want to know that restoration of their power is being given a high priority.
Fixing the problem
Most people assume their neighbors and friends comprise the crews that restore power to their common community. It does not give them the same feeling to hear that trucks from across the state are headed in their direction in the next few hours to eventually restore the power. Customers expect utility personnel to be experienced and not uncertain about the configuration of the network, as the hours tick by.
Residents want utility crews to restore everyone in an area once the trucks arrive. There is nothing more frustrating than sitting in the dark and cold while lights are blazing all around you. Some electric utilities now practice a strategy of feeder restoration: Cut and run for safety and legal purposes, and maybe return later. This strategy builds intense negative reaction when customers see line trucks appear and then disappear. And worse, it often afflicts the same customers over and over (em those who live in heavily wooded areas or a long distance from a substation.
Just like the police force, electric utilities must quickly mobilize the maximum number of experienced crews when trouble occurs. Improving performance might involve calling on retirees or management. Cutbacks of experienced linemen demand care and sensitivity. In exchange for greater job security, unions should be more pliable these days in allowing temporary reinforcement of the field workforce.
While their power is off, customers want to be able to exchange information and commiserate with knowledgeable people at the utility. Voice mail messages might help clarify the extent of outages, but will not necessarily lessen frustration or anxiety. Modern technology can deliver enough pertinent information to utility employees sitting at home with a personal computer to allow them to relay updates personally to customers. Employee experience in crisis situations should increase their credibility. Employees get a chance to help customers directly.
Of course, experienced engineering- and operations-support people are vital. Maps and diagrams often are not totally up to date even when computerized. It is helpful when the engineer who designed the substation or purchased the breaker is standing by on the site to offer suggestions for repairs. For underground facilities, it is good to have someone around who knows "where the bodies (cables) are buried" when determining the location of a cable fault or determining the availability of a spare cable to energize.
Wielding knowledge from experience
When experienced utility company employees are severanced, they tend to stay in the same communities. If the severance process is not handled properly, a dismissed employee can turn from lifelong, goodwill ambassador to public relations nightmare. It is partly for this reason that an electric utility company should not treat severanced employees as possible saboteurs. Nor should it degrade long-time employees by inferring sudden incompetence or lack of "team play" before their separation.
There is no need to show them to the door on their last day or to prevent their interaction with the remaining employees during or after separation. If long-term employees had desired to harm their company they would have implemented devious schemes long before their severance. Former utility employees should not be restricted or intimidated related to their seeking a livelihood for the rest of their careers by non-compete clauses in their severance agreements, even if it means they join emerging competitors. In fact, they should be assisted in every way possible by their former employer toward success because these former employees are still identified with that utility by their neighbors and friends. Vince Lombardi is still remembered as the coach of the Green Bay Packers, even though he ended his career with the Washington Redskins.
Utilities might even consider part-time training assignments as a means of facilitating transitions for former employees. The extra expense will be more than repaid in good will and public relations. Many electric utilities are venturing far afield in different parts of the world and into new businesses to diversify and create higher levels of revenue growth. In this process they will be wise not to cut out their hearts at home by alienating life-long supporters. These utilities may someday practice "sticking to their knitting" as many former conglomerates have done. If they do not preserve the valuable assets they have in the talents and good will of their experienced employees, there may be no home territory to return to. I hope this is not the case as I look back on the fate of my former associates and their companies. t
Sidney L. Spencer recently was offered and accepted severance from Centerior Energy where he was a market research analyst.
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