Fortnightly Magazine - June 2004

Consolidating Co-ops

Like it or not, changes are coming for electric cooperatives. Fewer and bigger might be the inevitable result.

Like it or not, changes are coming for electric cooperatives. Fewer and bigger might be the inevitable result.

When power planners at Basin Electric Power Cooperative began trying to decide how and where the company's next big power plant would be built, they did what a co-op does best -they reached out and formed a coalition.

Risk-Management Principles for the Utility CEO

Board coordination is the key.

Board coordination is the key.

Many utility CEOs are happy to pass off risk-management policy to the CFO and the head of the trading desk. After all, with deregulation and re-regulation, collapsing spark spreads, hypersensitive rating agencies, and nervous investors, there is enough to worry about. So what's the problem? If the financial guys control and report the risks and profits and losses (P&L) within risk tolerances, why should the CEO be concerned about risk management?

Gen-X and gen-y: Teaching Them the Business

How to bridge the age gap between older and younger workers in the utility industry.

How to bridge the age gap between older and younger workers in the utility industry.

The utility industry will face its most severe workforce problem since World War II in the next five to 10 years-a massive loss of plant- and job-specific knowledge through the retirement of a large portion of today's utility workforce. This magnitude of attrition has been masked somewhat by slow and steady, economically driven staffing cutbacks, but it will accelerate as we move into the second half of this decade.

Boardroom Directors: Caught in the Matrix

Building a system to evaluate the leadership's ability to meet corporate goals.

Building a system to evaluate the leadership's ability to meet corporate goals.

Nominating committees and CEOs need to ask hard, fundamental questions about their own boards and their board's ability to formulate and govern effective and ethical business strategies. One way to know where you stand is to draw a basic matrix chart. Along the top, list the skill sets your board will require to move the company toward its future goals. Down the left-hand column, list each director. Then begin to check the skills that each current director brings to the board.

Biling, Blackouts, and the Obligation to Serve

Complex billing is one way to minimize the size and frequency of blackouts.

Complex billing is one way to minimize the size and frequency of blackouts.

The search continues for the smoking gun responsible for the Northeast blackout last August. Absent a clearly defined single cause, analysts turn to the usual suspects: Is the grid large enough? Does it require additional investment? Given that the grid was never designed to handle a competitive industry, is it reasonable to require that it now do so?

Managing Service Quality: The Customer Is Always Right

Service-quality improvements need to be thought through in advance and managed.

Service-quality improvements need to be thought through in advance and managed.

Customer information systems (CIS) are almost never justified and implemented to realize dramatic gains in quality of service. Revenue improvements? Yes. Rates management flexibility? You bet. Delinquency and write-off improvements? Sure. Statutory pressure, including introduction of deregulation? Maybe not as often these days, but still true. Technology consistency, supportability, and application integration? Absolutely.

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