Power Lines Blog

Avoid being the horse that shows in a 3-horse race

34-Three-Horse-Race-B-1-20-15

From Jan. 11 to 13, I was in Key West, Florida attending APPA’s Joint Action Workshop. While it was definitely nice to escape the frigid weather in the DC area and provide some additional customer load for APPA member Keys Energy Services, there was much good work done at the workshop. We held sessions on EPA’s 111(d) proposed rule on CO2 emissions from existing power plants and cybersecurity. We heard a presentation by Gil Quinones, CEO of the New York Power Authority and incoming board chair of the Electric Power Research Institute, on how APPA members can benefit from EPRI’s research activities.

Spending time with this group reinforces for me how vital Joint Action Agencies (JAAs) are to public power as a whole. The JAAs aggregate the loads of their respective member distribution utilities, which in turn provide retail electric service in their own cities and towns. The JAAs provide a great variety of services to their member utilities — everything from help with power supply and wholesale transmission service to energy efficiency programs and rate studies. Some JAAs even arrange for cybersecurity audits for their members and provide distribution line maintenance services using “circuit rider” line crews. One purpose of the Joint Action Workshop is to compare notes on such services and discuss which ones distribution utility members like most, which ones are cost effective, and what needs are not being filled that need to be.

One topic that generated great interest and discussion was how to pay public power utility personnel at both the distribution and JAA levels the competitive salaries needed to attract and retain strong employees. Public power systems are going to need staff that can meet the increasingly complex challenges facing our industry. Yet, the electric utility industry has the highest percentage of baby boomers of almost any industry in the U.S. economy, and public power’s workforce is no exception. We are already starting to see substantial retirements from our ranks, and we will see more. And there are far fewer potential new hires available in a number of important job categories, including power system engineers and the craft disciplines.

To fill these positions from the limited pool of prospective hires, we need to be able to compete on salaries and benefits with other sectors of our industry, including investor-owned utilities (IOUs) and rural electric co-ops. Yet, salary surveys show that public power systems often pay lower salaries than our IOU and co-op competition. I have personally heard many stories of lineworkers who can and do leave their municipal utilities (after we have trained them) to go to work for the local co-op — they can make 30 percent more with the co-op and don’t even need to move. Similarly, we have lost experienced senior management personnel to both co-ops and IOUs, simply because they can offer substantially higher salaries. It doesn’t help to “home grow” our talent, only to have it lured away by competitors that can pay more!

One of public power’s long-standing challenges is to make our governing bodies understand that the salaries paid to “enterprise” employees need to be competitive with those offered by other employers in the field. For these specialized skill sets and responsibilities, standard city government pay scales often just will not cut it. Many public power utilities are already finding this out — as their baby boomer incumbents retire, they are simply unable to fill those positions at the current salaries. And as more boomers retire, this problem will become more acute. APPA can assist by documenting these trends through its salary surveys, and by highlighting ways to foster the next generation of public power talent. But the old adage “you get what you pay for” will increasingly apply in our industry as our boomers retire and must be replaced.

I would be very interested in hearing from you about how you are tackling compensation issues at your organization, and ways you think APPA might help you with this issue. We do not want public power to be the horse that “shows” in the three horse race for talent!

Sue Kelly

Sue Kelly

President and CEO

2 Comments

  1. The Jobs in these Electric fields are critical. the City needs to recognize this and pay competitive salaries that match the Industry. There will be a lack of reliable experience employees to handle daily Task and yes these people can make more money by working as a contractor.

  2. Munis and co-ops are not paying what IOUs are paying, not even close, we all know that. Munis tend to sell their benefit package as the opportunity to make up some of the difference in salary. However, as I evaluate various benefit packages across the industry and municipal environment – the healthcare costs and pension matches, vacation, sick time, and other flexible work benefits – it’s clear that there are also plenty of IOUs who offer a better package. And if truly considering the entirety of a career, making 20%+ more salary in the investor owned utility world, a lower pension/retirement savings account match of a few percent really doesn’t even matter in the long run. One benefit touted to me about working in the muni world was the slower pace, doing more with less, and more flexibility to work differently and uniquely. However, realizing that being governed by a board of publicly elected officials, can often be more limiting than flexible. The concept that your future is in the hands of publicly elected individuals who very likely have no background in the electric utility industry, and possibly even carry personal agendas, can be disheartening to say the least.
    Tread carefully, be a realist and admit the cons along with touting the pros, and be competitive. In this industry, at this time given a huge exodus of retiring knowledge and experience, along with exponentially increasing technological advances familiar to the new generation of personnel, it must be admittedly transparent and obvious that education, knowledge, and experiences are valuable commodity. In the grand scheme of things, paying a bit more for the right talent, must be a no-brainer, not a bargaining chip at the negotiating table, nor a desire for the municipal employer to feel a need to “win” the negotiation by getting the last word, making the least amount of compromise, or having the last offer in the salary negotiation.

Comment

Your email address will not be published. Required fields are marked *