Graceful Systems
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Pamela’s Blog:
The Energy Utility - re-imagined, re-invented

Who am I?

March 19, 2012

I came to the energy utility industry in the early 1980s, a tumultuous decade that followed the challenging 1970s.  The production of natural gas was being deregulated and pipelines and local distributors forced or strongly encouraged to unbundle the service of delivered natural gas into the two (or more) services of moving gas and selling gas.  The electricity industry was coping with huge construction programs begun in the 1970s, write-offs and disallowances stemming from having vastly over-estimated electricity needs, and – for some – excess cash not needed for electricity infrastructure that needed a productive place to go.  I worked first for a law firm representing industrial customers in their interactions with energy utilities.  In 1986, I went to work for an electric utility.

For most of my utility career, I worked in what is known in the energy utility industry as “regulatory affairs.”  These affairs are predominantly the processes involved in setting utility rates, along with other processes concerning all of the things regulators must give permission for utilities to do.  Regulatory Affairs provides a great view of the people in this industry, inside and external to a utility; it is both a temporal and human crossroads.  During my first ten years, I saw large financial losses to the utilities from both regulatory disallowances and failed diversification and regulators that struggled with no-win compromises.  The 1990s opened with the hope that market competition could fix all, resulting in low prices and the best welfare for everyone and ended with the fall of that hope to the temporary market manipulation and persistent high fuel prices of the 2000s.  The first decade of the 21st century included economic and fuel price roller coasters and, for many utilities, a desire to return to the comfort of the basics: keep the lights on; try to keep prices “low.”

As the years of this career passed, my functional role expanded to include strategy and I wrestled with the perennial question utilities ask: which came first – business strategy or regulatory strategy?  Good sources of insight on utility strategy generally eluded me.  I also spent a year in utility distribution operations.  This was a cross-training assignment, an opportunity to learn about different parts of the utility on the job, so to speak.  Having no experience, I went to watch the work in every area now under my direction.  This included people who trimmed the trees under the utility distribution lines and who took the calls for new construction that needed electric service and coordinated installing that service with gas and telecommunications facilities;  people who prepared work packets for line crews and recorded installed  meters so that billing could begin; people who managed the utility’s vehicle fleet and provided services to customers who owned their own high voltage electric equipment.  Because I had no experience, I also had no expectations.  With the clarity of observation that a lack of preconceived ideas allows, I saw capabilities rather than tasks or specifications.  I saw interactions and relationships rather than functions.

I spent these years of my career in and around energy utilities participating, but also observing and asking: how did things come to be this way?  And, of greater importance, if “this way” is not producing what we want and/or need; if things have changed such that our actions – and interactions – produce outcomes suited for decades ago but not today, what can we do about it?

Upon leaving the electric utility, I turned to systems thinking and systems dynamics for help addressing these questions.  After four years of serious work, I now consider myself a mash-up, a term I appropriated from the web world that connotes the combination of two, perhaps unlikely, things – in this case, of two kinds of knowledge.  I offer this mash-up to us – the involved stakeholders of the energy utility industry — to help us see where we are and, from that perspective, consider our future.  In my Welcome post, I noted the ancient Chinese proverb, “the fish is the last to know that it lives in water.”  But, I said there, the bird does know that.  Together, the bird and the fish can consider the bigger whole.

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