RMEL Electric Energy Issue 2 2014 by Alive Publishing Group

SPOTLIGHT ON CRITICAL ENERGY ISSUES

AN ELECTRIC ENERGY INDUSTRY REVOLUTION 316B REGULATORY STRATEGIES

CITY OF CODY’S UTILITY UPGRADE EVOLVING STAKEHOLDER ENGAGEMENT LEADERSHIP IN TODAY’S WORKFORCE PROJECTING FUTURE POWER DEMAND

ISSUE 2 / 2014 www.RMEL.org

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contents

11 20

FEATURES 11 Emerging Power Plant Wastewater Treatment Issues By Brad Buecker, Process Specialist, Kiewit Power Engineers

16 Utility Transformation: Utilizing Top-to-Bottom Teamwork By Bert Pond, Electrical Engineer, City of Cody

20 Building Relationships & Reputations through Robust Public Involvement and Early Stakeholder Engagement By Theresa McClure, HDR, Omaha, Strategic Communications & Public Involvement Manager; Emily Hyland, HDR, Minneapolis, Strategic Communications & Public Involvement Manager; Katie Hatfield Edstrom, Ph.D, HDR, Omaha, Strategic Communications & Public Involvement Senior Coordinator

ELECTRIC ENERGY | SUMMER 2014

26 Changing Leadership Styles: A Matter of Habit

By Jim Walters, EDD, Owner, Power of Learning, Inc.

32 U.S. Electricity Sales: Decoupled from Growth? By Paul Narduzzo, Sr. VP Electric Distribution, CoBank and Taylor Gunn, Economist, CoBank

DEPARTMENTS. 06 Board of Directors and

Foundation Board of Directors

08 2014 Fall Management,

Engineering and Operations Conference

36 RMEL Membership Listings 40 2014 Calendar of Events 42 Index to Advertisers

Power Generation Oil & Gas

DESIGNING AND BUILDING SUCCESS

Chemicals/Process

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RMEL INFORMATION

RMEL Board of Directors

Foundation Board of Directors

OFFICERS

PRESIDENT Dan Schmidt Black & Veatch Corp. Sr. VP, Power Generation Services PRESIDENT ELECT Stuart Wevik Black Hills Corporation VP, Utility Operations PAST PRESIDENT Andy Ramirez El Paso Electric Company VP, Power Generation VICE PRESIDENT, FINANCE Tom Kent Nebraska Public Power District VP & COO

VICE PRESIDENT, EDUCATION Tony Montoya Western Area Power Administration COO VICE PRESIDENT, VITAL ISSUES Mike Hummel SRP Associate General Manager VICE PRESIDENT, MEMBERSHIP Scott Fry Mycoff, Fry & Prouse LLC Managing Director VICE PRESIDENT, MEMBER SERVICES Kelly Harrison Westar Energy VP, Transmission

DIRECTORS Paul Barham CPS Energy Interim Sr. VP, Energy Delivery Services Doug Bennion PacifiCorp VP, Engineering Services & Asset Management Joel Bladow Tri State Generation and Transmission Sr. VP, Transmission Assn. Tim Brossart Xcel Energy VP, Construction Operations & Maintenance Jon Hansen Omaha Public Power District VP, Energy Production & Marketing

Tammy McLeod Arizona Public Service VP, Resource Management Cheryl Mele Austin Energy COO

CHAIR, FUNDRAISING Jim Helvig AMEC Director, Power Delivery

VICE PRESIDENT Walt Jones Intermountain Rural Electric Assn. Assistant General Manager, Operations & Engineering

CHAIR, MEMBER DEVELOPMENT Mike Jones SRP Director

VICE PRESIDENT, FINANCE Rebecca Shiflea Leidos Sr. Project Manager

BOARD OF DIRECTORS Kent Cheese TestAmerica Laboratories, Inc. VP, Sales Paul Compton Kiewit Sr. VP, Business Development

STAFF LIAISON Natalie Andersen RMEL Manager, Member Services & Retention Rick Putnicki RMEL Executive Director

Kelly Harrison Westar Energy VP, Transmission

Mike Morris Zachry Holdings, Inc. VP, Business Development, Engineering Jackie Sargent Platte River Power Authority General Manager Neal Walker Texas New Mexico Power President, TNMP SECRETARY Rick Putnicki RMEL Executive Director

Tom McKenna UNS Energy Corporation VP, Energy Delivery

PRESIDENT Steve Bridges Zachry Holdings, Inc. VP & Power Executive

ELECTRIC ENERGY | SUMMER 2014

Electric Energy available in digital format â&#x20AC;&#x201C; email, share, link. ACCESS FROM THE RMEL.ORG HOME PAGE

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time is right for utilities to invent their own future – or risk having that future decided by outsiders. Yolanda France, Director, Customer Contact Operations, SRP, will discuss SRP M-Power and explore the benefits of prepaid electric services. To stay relevant with evolving customer needs, many industries are moving towards “pre-paid” plans. To help ratepayers, some utilities are now offering free nights and weekends as well as pre-paid cards. Does our industry need to change the business model for how our product is perceived and used? Is it time to move away from the typical rate structure? Jim Fama, VP, Energy Delivery, EEI, will discuss emerging physical and cyber security threats facing the industry, including a discussion regarding implementation of the new NERC Physical Security Standard. This year’s CEO Panel will give attendees with a future look at the electric utility industry. The barrage of pending regulations, economic uncertainty and ever-increasing speed of communication are pushing electric utilities to act faster than ever before. Doyle Beneby, President &Chief Executive Officer, CPS Energy, John Hewa, Chief Executive Officer, Pedernales Electric Cooperative, Pat Reiten, President & CEO, Pacific Power, Hunter Hunt, Chairman & Chief Executive Officer, Sharyland Utilities and Kenneth Zagzebski, President, U.S. Strategic Business Unit, AES, will share their strategies for the future and how they’re going to get there. A brief discussion from each CEO, followed by an open Q&A session with the attendees, will convey the outlook for the different types of utilities. Erwin Furukawa, CEO, EF Strategy and Planning Group, will present on creating a model that balances customer, public policy and utility goals. Today we are seeing major changes evolving in our industry. New technologies are emerging that are becoming more viable alternatives; new market entrants are introducing energy services as part of their

portfolio; customers are becoming more adept and regulators are in the pivotal position to create a new energy market place. As these changes evolve, it is critical for utility leaders to focus on customers and work with policy makers in shaping a model that meets customer, public policy and utility goals. Dr. Dale Klein, Associate Vice Chancellor for Research, University of Texas, will discuss how a nuclear plant works and the safety systems that are in place. The status of the United States and worldwide use of nuclear power plants will be described. Also included will be a discussion of the accident at Fukushima Daiichi. Foreign plans for the future of energy are moving in many directions. As Germany is in the process of going back to coal, the UAE is building nuclear like crazy. Can the U.S. learn from the foreign energy market? In order to stop “reacting”, do we need a 10 year plan? Gary Rackliffe, VP, Smart Grids North America, ABB, will discuss global trends and energy plans for the future. Thomas Casey, Managing Principal, Discussion Partner Collaborative LLC, will focus on the research which led to the best-selling book Executive

Transitions-Plotting the Opportunity! The presentation will highlight first party research with over 2,000 senior executives, and client experience with over 200 senior executives. The speech will contain insights on three aligned topics, including enterprise succession plans, capability deficiencies of successors and post exit planning challenges for executives. PDFs of the book and related blogs and articles will be made available. The Fall Executive Leadership and Management Convention is a threeday event that begins on a Sunday with a golf outing followed by an evening reception hosted by the RMEL Champions. Monday is a full-day of educational presentations ending with an RMEL Champions reception, dinner and the RMEL Foundation Silent Auction. The final day includes the RMEL annual meeting and a half day of presentations. A guest program, awards presentation and plenty of time to relax and network are also part of the tradition. Go to www.RMEL.org for more information and registration.

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Executive Leadership and Management

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EMERGING Power Plant Wastewater TREATMENT ISSUES B Y B R A D B U E C K E R , P R O C E S S S P E C I A L I S T, K I E W I T P O W E R E N G I N E E R S

WHEN I BEGAN MY UTILITY CAREER AT CITY Water, Light & Power in 1981, National Pollutant Discharge Elimination System (NPDES) guidelines focused upon a small core of primary impurities in wastewater and/or cooling water discharge streams. These included total suspended solids (TSS), oil and grease (O&G), pH, and free chlorine (or other oxidizing biocide). A common guideline is shown below in abbreviated form.

Constituent

Monthly Average (Limit or Range)

Free Available Chlorine

0.2 mg/l

O&G

10 mg/l

pH (range)

6.0 â&#x20AC;&#x201C; 9.0

TSS

30 mg/l

TABLE 1: AN ABBREVIATED NPDES EXAMPLE

At that time, many power plants utilized once-through cooling systems, so these limits were often easy to achieve in that stream. The majority of issues arose at coal-fired power plants from the discharges of coal pile runoff ponds and wet ash disposal ponds. The constituents in these streams that required the most oversight tended to be TSS and pH, but straightforward methods were available to control this chemistry. Per proposed regulations and additional effluent limitations the waste water treatment chemistry and treatment train will become more complex.

New Developments Due to the relative low cost of natural gas, penetration of renewable power, and environmental regulations, coalfired power is being replaced by simple- and combinedcycle generation. Due to 316b water regulations, which

W W W. R M EL .O R G

are designed to protect aquatic life from destruction in cooling water intakes, all of the many combined-cycle requests for proposals (RFPs) received by Kiewit in the last several years specify a cooling tower, or an air-cooled condenser, rather than once-through cooling. A cooling tower produces the largest liquid discharge at these plants. These discharges are now being regulated either prior to or after co-mingling with other plant wastewater discharges per current guidelines or eventually the proposed Steam Electric Generating Station Effluent Guidelines (SEGSEG). EPA regional water programs and state water programs are adding additional parameters to individual plant NPDES permits as they come up for renewal. Some of these additions can be attributed to the Toxic Maximum Daily Limit (TMDL) program within the states, but some parameters have been unexpected. In some cases, limits are being placed on effluent total dissolved solids (TDS). This has very important consequences for cooling tower operation. An example comes from a power plant in a southern state. Prior to 2013, the plant’s NPDES permit only called for monitoring of TDS. The plant’s new state permit imposes an average monthly limit of 1,200 mg/l. But, the very nature of cooling tower operation causes an increase in solids concentration due to evaporation of water from the tower. Consider a makeup water that contains 400 mg/l TDS. If the wastewater guideline is 1,200 mg/L, the tower cycles of concentration (COC) is limited to three. The blowdown volume at low COCs can be quite significant for a large cooling tower. Another constituent appearing in some permits is sulfate (SO4). Sulfuric acid feed to cooling tower makeup has been a common method to remove bicarbonate alkalinity and thus minimize calcium carbonate (CaCO3) scaling in the condenser and cooling system. H2SO4 + Ca(HCO3)2 + CaSO4 + 2H2O + 2CO2 Tighter regulations on sulfate in the discharge stream may eliminate this straightforward method of scale control at some plants. Phosphorus is also being banned in many waste streams. Phosphorus serves as a nutrient for plant growth, and when released to open bodies of water initiates and propagates algae blooms. The difficulty is that a very common cooling water treatment method relies on the use of ortho-phosphate and organic phosphates (phosphonates) 12

ELECTRIC ENERGY | SUMMER 2014

for both corrosion and scale control. Heavy metals are also on the list, with a primary example being zinc. This element was once an integral part of the phosphate/phosphonate programs mentioned above, as it assists with corrosion protection. Zinc’s use will be curtailed due to discharge limitations contained in the SEGSEG. The US EPA is proposing a 1 part-per-million (ppm) limit on zinc and 0.2 ppm limit on chromium in cooling tower discharge. Another metal that is now appearing on some permits is copper, in which the discharge limit may be below 30 partsper-billion (ppb). At these very low limits, copper discharge can potentially be a problem from units equipped with copper-alloy condenser tubes. Another source of copper is wooden cooling towers. Copper compounds were often utilized as a wood preservative.

Control Methods Adjusting to new NPDES guidelines is not simple or inexpensive. Sometimes other factors compete against any efforts. A primary example is the growing requirement to use recycle water in place of fresh water as plant makeup. Recycle water, such as tertiary-treated wastewater, can have quite variable concentrations of many impurities, two of which are phosphorous and ammonia. The latter is increasingly appearing in discharge permits, as ammonia can be lethal to aquatic creatures, and like phosphorus serves as a nutrient for toxic algae blooms. For plants facing tight TDS restrictions, reducing the cooling tower COC is a method to lower the dissolved solids

content of the waste stream, but that technique in turn increases the discharge volume. This may or may not be a problem depending upon the environmental authorities in charge of permitting. For new plants, this factor could be very important with regard to plant location and the quality of the water available for makeup. The emerging restrictions on sulfate in the discharge may, in some cases, eliminate makeup water acid treatment as a scale-control mechanism. An alternative method to reduce the threat of calcium carbonate scaling, albeit at considerable expense and increased system complexity, is cold lime softening. This technique will lower both the calcium and bicarbonate alkalinity of the stream, but not without proper operator control and monitoring of the unit. A factor that may favorably influence softening for some applications is the ability to also include magnesium feed for reduction of silica. Silica chemistry is quite complex, but a general rule-of-thumb suggests 150 ppm as the silica limit in the cooling tower recirculating water, with possibly an upper limit of 200

ppm or so with some of the newer chemical treatment programs. This is often not an issue with surface water supplies, as these may contain only small silica concentrations. However, groundwater is a fairly common source for cooling tower makeup, and some supplies, particularly in the West, may contain 30 to 50 ppm of silica. Thus, the high makeup silica will greatly limit the cycles of concentration in the tower, unless some of it is removed from the makeup. If phosphorus discharge is prohibited, one possible alternative for recirculating water treatment is an all-polymer treatment program. 1A simple polymer, often a polyacrylate, typically is included in a phosphate/phosphonate program to act as a sequestering agent and/or crystal modifier. An all-polymer program on the other hand relies on what are known as co- and ter-polymers that have more than one functional group to act as the sequestering agents/crystal modifiers. If an all-polymer program is not an option, phosphate can very readily be removed from water streams by reaction with iron or aluminum in a clarifier. Of course,

REFERENCES 1. Buecker, B., Post, R., P.E., and R. Aull, P.E., â&#x20AC;&#x153;Chemical Treatment and Fill Selection Methods to Minimize Scaling/Fouling in Cooling Towersâ&#x20AC;?; from the Proceedings of the 72nd Annual International Water Conference, November 13-17, Orlando, Florida.

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CT Blowdown

wastewater clarification increases the complexity of the wastewater treatment process. Given the continuing evolution of discharge regulations, other impurities may appear on future permits. Chloride and bromide may be regulated in the future. Other heavy metals may appear. For this reason, some experts in the industry recommend that new plant design include zero liquid discharge (ZLD) treatment so that plant personnel will not have to worry about future regulations, whatever they may be. ZLD is not an easy process and must be planned carefully. The next section outlines an emerging technique that can play an integral part in ZLD design.

Backend Discharge Reduction Several methods are possible to reduce the volume of plant discharge, but I wish to focus on one technology, a generic diagram of which is outlined below. Keys to the process are: • Micro- or ultrafiltration (UF) to remove suspended solids in the waste stream. • Sodium bisulfite (NaHSO3) feed to remove residual oxidizing biocides. • A sodium softener to remove calcium and magnesium. • Sodium hydroxide injection to elevate the pH above 10. (The combination of hardness removal and pH elevation keeps silica in solution.) • Two-pass reverse osmosis (RO) treatment to recover 90 percent of the water. While the process appears straightforward, a number of lessons-learned have emerged. These include: • Some standard water treatment chemicals may foul MF or UF membranes - M ost MF or UF membranes, and reverse osmosis membranes for that matter, carry a slight negative charge. Cationic polymers can be death to the membranes. - T he membrane manufacturer and type may greatly influence this phenomenon - U se of upstream multi-media filters to help remove treatment chemicals may be completely ineffective. • Use of poor quality backwash water for the UF membranes may result in scaling of the effluent surface of the membranes. Even when the system outlined in Figure 1 operates steadily, a waste stream still remains and must be disposed. Potential solutions include: • Deep well injection • Evaporation pond(s) 14

ELECTRIC ENERGY | SUMMER 2014

NaHSO3 Permeate Return to Process

UF or MF

High pH RO Unit

Sodium Softener NaOH

Reject to Pond or E/C

FIGURE 1: GENERIC OUTLINE OF AN EMERGING WASTEWATER TREATMENT TECHNOLOGY

• Thermal evaporation/crystallization • Have the material transported off-site to a waste disposal firm All of these techniques require careful planning. Deep well injection and evaporation ponds both require environmental evaluations and the required permits before implementation. Permission is often not granted. Deep well injection has its own set of technical issues including the need to pump the material at high pressure into the well(s) and the possibility of scale formation within the well casing, particularly as temperatures increase deeper underground. Thermal evaporation/crystallization is a proven technology, but these systems typically require a significant amount of energy, plus they can be labor and maintenance intensive. However, one design that has been successfully applied in the salt production industry and at other facilities employs crystallizers that operate under a partial vacuum. The vacuum greatly lowers the distillation temperature, thus reducing energy requirements and also mitigating scale formation. I can provide contact details for any interested readers. Power plant personnel are facing tighter restrictions on waste stream discharges and thus will have to plan accordingly. Brad Buecker serves as a Process Specialist with Kiewit Power Engineers in Lenexa, KS. He has over 33 years of experience in or affiliated with the power industry, much of it in chemistry, water treatment, air quality control, and results engineering positions with City Water, Light & Power in Springfield, IL, and Kansas City Power & Light Company’s La Cygne, KS station. He has B.S. in chemistry from Iowa State University, with additional course work in fluid mechanics, material and energy balances, and advanced inorganic chemistry. He has written many articles and three books for PennWell Publishing on steam generation topics. He is a member of the ACS, AIChE, ASME, CTI, and NACE. He is also a member of the ASME Research Committee on Power Plant & Environmental Chemistry and the program planning committee for the Electric Utility Chemistry Workshop.

Keeping up with future energy demands means finding a solid partner to help manage priorities, wade through regulations, and provide the most economic and efficient solutions.

Burns & McDonnell handles all the complexities of your energy projects from siting and design to generation and distribution. • New generation to decommissioning • AQCS, water and material handling • Environmental studies and permitting

• High-voltage substations • High-voltage transmission • Program management

For more information, contact: Tom Haensel, PE Regional Practice Manager Energy 303-474-2261

Justin Sherman, PE Regional Practice Manager Transmission & Distribution 303-474-2235

9785 Maroon Circle, Suite 400 Centennial, CO 80112

E n g i n e e r i n g, A r c h i t e c t u r e, C o n s t r u c t i o n , E n v i r o n m e n t a l a n d C o n s u l t i n g S o l u t i o n s

UTILITY TRANSFORMATION

UTILIZING TOP-TO-BOTTOM TEAMWORK BY BERT POND, ELECTRICAL ENGINEER, CITY OF CODY

n 1993, the City of Cody’s Municipal Electric Utility stood at a crossroads. There was considerable public criticism, largely justified, due to frequent outages. The system was aging and the leadership team did not have a clear picture of required improvements. There were public calls to sell the utility to the Investor Owned Utility (IOU) that served the areas surrounding the town. A new Mayor was elected. He listened to the citizens’ concerns, spoke with other municipalities and determined that a complete overhaul of the city electric department was necessary. He felt that the sale of the utility to an IOU would cost the city control 16

ELECTRIC ENERGY | SUMMER 2014

of its rates and the ability to determine what improvements would be made and when. He also felt that portions of the city that were currently served by the IOU should be served by the city. Later that year, the mayor hired the city’s first electrical engineer to head up the electric department. The engineer determined that there were numerous technical challenges facing the utility. Three substations served the city: two owned by the Western Area Power Administration (WAPA) and one owned by the city. One of the WAPA substations was severely dated and had limited capacity. The other had recently been upgraded, but there were challenges with the upgrade that resulted in several extended outages.

The third substation, installed by the city, was a padmounted, self-contained unit that couldn’t be serviced without taking it offline. There were no adequate tie lines to allow load transfer between substations, so maintenance on the substation was behind and could only be completed if the loads it served were without power for extended periods of time. When it could be taken offline, the other two substations could only accommodate a portion of the load. Even limiting additional load to the two remaining substations challenged the system. Seventy percent of the distribution system was overhead and 30 percent was underground. The underground lines had been installed in

PENDLEY SUBSTATION

SETTING THE NEW PENDLEY SUBSTATION TRANSFORMER

the very early 1970s, were direct-buried and the majority of the transformers on the system were overhead units mounted in doghouses. This required the primary connections to be live front design, creating dangerous conditions for personnel accessing the units. The overhead systems were more than 40 years old and in need of rebuilding. Another problem facing the system was that almost none of the city’s distribution transformers had been tested for PCBs and the city was behind in meeting EPA requirements for the testing and cleaning of its transformer inventory, both on the system and in stock. The engineer developed a plan to upgrade the system involving transformer testing, initiation of voltage conversion, substation upgrades and the creation of computer-based mapping for the entire distribution system. The mayor and council were extremely supportive of the plan and

authorized the expenditure of funds to complete the work. All transformers were tested within a threeyear period. The PCB-contaminated transformers were removed from the system and properly disposed of by the end of 1996. The city initiated a voltage conversion project starting with those areas served by the most recently upgraded WAPA substation. The system voltage was raised from 4.2Y/2.4 kV to 12.5Y/7.2 kV. This area represented approximately one-third of the city. Numerous step-up transformers had to be installed on the system to create “pinch points” that limited the amount of capacity available during substation load transfers. The next step considered was the upgrade of the oldest of the WAPA substations. It was determined to be more cost-effective for the city to replace the old WAPA substation with a new one, owned by the City of Cody. The city owned land immediately adjacent to the oldest substation; this allowed the city to build a parallel substation with twice the capacity, using up-to-date regulation equipment and electronically

controlled reclosers with only a brief outage during switchover. Instead of one circuit, the new substation was built with three. It was also designed with a dual voltage secondary so that the voltage conversion could extend to an additional third of the city. This substation came online in 1996. While this aided the capacity shortage for the city’s system to a degree, its substation was still too small and could only serve at 4.2 kV. It was also upgraded. To alleviate the inability to back up the other substations, this station’s capacity was more than tripled. Finally, a new computer-based mapping system was completed that allowed easy map updates as well as provided an accessible, detailed system database. The mayor who initiated the transformation felt that the strong mayor/ council form of government was unable to provide the specialized expertise necessary to develop a systematic method of approaching infrastructure upgrades and setting long-term goals, not only for the electric system but also for water, sanitary sewer, roadways, parks and recreation, and storm sewers as well. He felt the city would be best served by the city administrator form of government, an idea he brought to the public, who supported it. A new charter was approved,

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ELECTRIC ENERGY | SUMMER 2014

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adopting a city administrator form of government in 1999. It was through these efforts that the city was able to purchase and serve the remaining areas of town still supplied by the Investor-Owned Utility. With support from the administration and city council, the electric division reversed the mix of overhead versus underground distribution so that it now consists of 70 percent underground and 30 percent overhead facilities. In addition, 60 percent of the remaining overhead lines were rebuilt and an aggressive cable upgrade program is replacing old underground lines with new lines installed in conduit. The fourth stage of the transformation was probably the most important: the employment and use of well-qualified lineworkers and their inclusion in the early stages of new projects. Rather than the engineer producing a project design and passing it to operations to install, the engineer drafts initial plans and estimates for a project, and then has operations review those plans and suggest changes. This input improves the installation phase as well as addresses maintenance concerns more easily recognized by people in the field. Suggestions made by operations personnel reduces outage times when they occur, improves the system’s reliability and dramatically improves the public’s perception of the city’s electric system. The teamwork of the city’s government, the administration, the engineering and the operations branches have led to a long list of changes and improvements in the electric system. These include:

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POND OLIVE GLENN :: CABLE REPLACEMENT AREA

1 The electric system is PCB-free. 2 The conversion of the distribution system from 4.2 kV to 12.5 kV operation is nearly complete. 3 Ninety percent of the distribution system is loop-fed. 4 Seventy percent of the system is underground and thirty percent is overhead. 5 Seventy percent of the city system has been upgraded within the last 20 years. 6 All areas within the city limits are served by the City of Cody Electric System. 7 All substations can be tied together with load transfers, allowing scheduled maintenance of the substations. 8 To increase the lifespan of new underground lines, the use of 25 kV cable placed in conduit for all new additions and cable replacement projects is required. 9 The city’s mapping system is AutoCAD-based and uses AutoDesk Utility Design Software. 10 Nearly 95 percent of all distribution transformers have been replaced in the last 20 years, partially by design but mainly as a requirement of the system voltage conversion.

11 System reliability for all causes (scheduled and unscheduled outages) has average 99.979 percent over the last six years. 12 The city performs 98 percent of all engineering and installation using its own personnel. 13 The city’s streetlights (1,145 lights) have been converted to LED, leading to a 60 percent reduction in streetlight energy usage and a 70 percent reduction in streetlight maintenance costs. 14 System upgrades are now well planned and scheduled to fit within the city’s budget. 15 The electric system is 100 percent debt-free. In summary, the entire city organization—the city government, the city administration, engineering and operations—has worked as a team, making this city’s system work efficiently and reliably. Without any one of these team members, very little of the progress would have been possible.

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LEFT ENGAGING IMPACTED STAKEHOLDERS TO EDUCATE AND INFORM RIGHT PROVIDING FORUMS FOR MEANINGFUL PUBLIC DIALOGUE

Building Relationships & Reputations Through Robust Public Involvement and Early Stakeholder Engagement

by Theresa McClure, HDR, Omaha, Strategic Communications & Public Involvement Manager; Emily Hyland, HDR, Minneapolis, Strategic Communications & Public Involvement Manager; Katie Hatfield Edstrom, Ph.D, HDR, Omaha, Strategic Communications & Public Involvement Senior Coordinator

NEW ROADWAYS, WIND FARMS, HIGH-VOLTAGE transmission and pipeline projects are all facing development challenges at the federal, state and local levels. The hurdles electric utilities face are parallel to those across energy industries. As projects continue to encounter these hurdles, social approval of these projects is quickly becoming a deal-breaker. Several industries are responding to this level of public participation by setting new industry standards for communicating with stakeholders, landowners, communities, officials and agencies. To meet this demand, smart industry leaders rely on standardized public engagement approaches as critical to success, not just of individual projects, but of the overall company reputation and industry image.

INDUSTRY EVOLUTION. The National Environmental Policy Act (NEPA) established a federal process for environmental review of development projects, including public comment periods so the community could have a voice. Comments are collected, reviewed, considered, and sometimes included in revisions of the environmental review documents. NEPA was the flagship of public engagement. Fifty years ago, people had fewer opportunities to engage 20

ELECTRIC ENERGY | SUMMER 2014

in projects outside of attending public hearings and reading mailed information. As our society has evolved to a wired or now wireless community, technology has provided new sources for information gathering and participation. Electric utilities and the energy industry must reach beyond simply meeting requirements and evolve to relate to stakeholders of todayâ&#x20AC;&#x2122;s society. Successful public engagement has the ability to strengthen community relationships and reputations for your project and company. However, if success is to be realized, evolution must occur as an industry and not on individual projects and stand alone companies. Now is the time for leaders to develop best practices, review success stories from other projects and develop a new standard for outreach industry wide.

COMMUNITY UNDERSTANDING. What is your reputation in the community? Have you had a recent project stopped by public controversy? What do you risk if you open up your process to public opinion? What do you gain? Stakeholders, from the boardroom to the union, are different for every organization, in every region. Each stakeholder group will have local and regional differences that make it

nearly impossible to apply a standardized outreach approach allows active participation from all levels of the company and for public engagement. Yet, certain processes apply, coast community. Regardless of the region or community your projto coast, industry to industry. It is imperative to define what ect will impact, a suite of print and web-based channels will “stakeholder” means for your organization or project. Most be needed to reach all stakeholders. This includes developing importantly, consider all of the people who may experience unique and sometimes bold strategies that leverage standard quality of life changes in their community as a result of your media outreach, social media and interactive web-based tools, initiative. Understanding where your stakeholders are coming allowing the audience to view content at their convenience. It from, and what might be important to them, will help frame is important to determine the right media and delivery chanyour project’s purpose and need and better position it for nels to support communication goals. public acceptance. Stakeholder analysis is the first step toward Providing an opportunity for one-on-one interaction is also determining the range of public engagement necessary to important. While this type of interaction might be faced with encourage meaningful participation. some trepidation, this intimate engagement can be accomBeyond understanding the needs of the community, a plished by attending large public meetings or small grassroots thorough issues analysis will help to uncover unknown or events and everything in between. Throughout the project unforeseen constraints, and often opportunities, that would development process, you should be working to develop either explode or calm the public and political process on relationships with your stakeholders in a way that proactively your project. In the realm of infrastructure development, advances public opinion toward consent, project support and stakeholders are bombarded with project after project, creatacceptance. Consider how you can include those who might ing corridor and public meeting fatigue, and eliminating the oppose your project and involve them in ways that educate ability to get critical grassroots input. and potentially sway their views. Invitational dialogue can go While understanding coma long way to show commitment to munity needs and issues is the all stakeholders. It is the old art of first step in a standard approach compromise. In the end, the project for public engagement, it is all for will benefit from decisions that reflect naught if a transparent process not only the sound technical requireis not in place to collect, discern ments of the job, but also a partnerand incorporate meaningful inforship with the community. mation into the decision-making SUPPORT. process. Today’s public demands An outreach strategy is only as clarity, brevity and a voice. Most good as the team executing the plan. importantly, in the age of the 24Support from all levels of leadership hour news cycle and the demand within your company and the project to have current and accurate team are required for the outreach information readily available on INNOVATIVE USE OF MOBILE TECHNOLOGY TO vision to be successful. Working the web, projects are inevitably INSPIRE PUBLIC PARTICIPATION through internal speed bumps may prone to public scrutiny. While slow the full strategy integration program, however, even if this might draw concern, opening your process to the public you allow time for several levels of company leadership to can be an opportunity for community confidence building. approve the outreach strategy process, it will streamline the Every piece of information that can be made public should be outreach process when you are in the thick of the project. to clearly articulate, enforce and communicate back to your stakeholders in an open and reciprocal process.

OUTREACH STRATEGY. A well-coordinated, inclusive and robust stakeholder engagement process will help develop a project that is sustainable and provides a framework for relationship building in any region. Each project or organizational initiative will require a customized approach that best serves specific project and stakeholder needs. Each strategy should be designed to carefully select appropriate tools to collect, understand and incorporate stakeholder input. The process starts with planning an effective outreach program that will help facilitate broad public involvement. Understanding what makes each company and community tick is the essence of developing an achievable approach that

MESSAGING, MONITORING. AND ADAPTING.

Ongoing and consistent messaging from the conception of a project to the day the ribbon is cut brings added value to a project. If every project team member is provided with key messages and major project themes, they can accurately talk to anyone about the project being proposed or constructed. One of the top ways to lose trust with members of the public is inconsistent messages and responses. For example, if a landowner attends a public open house meeting and asks a project representative about right of way easements and is provided one answer and then asks another project representative about right of way easements and is given a different

W W W. R M EL .O R G

answer, the landowner will be skeptical of all of the information provided at the open house meetings. To help mitigate the problem of inconsistent messaging, media and public meeting training is essential. The more comfortable project team members are with their messages and talking points, the more likely their answers will be delivered. Listening is even more important than messaging. You can be sure that with pages of messaging developed for a project, there are bound to be questions or issues that arise during the life of a project. A project team must employ avenues to listen, track and respond to the conversation. Each stakeholder may not be involved in the outreach process from start to finish and additional stakeholders may weave in and out throughout the process. Tracking stakeholders’ participation, understanding their

issues and location within the project area allows the project team to review the outreach strategy and develop messaging that addresses the stakeholder’s concerns. Reviewing messaging should be an ongoing component of successful communication.

SOCIAL AND INTERACTIVE. MEDIA. The free social tools available today surpass anything companies were using 10 or 15 years ago. Consider how many times a day you search for information on the internet. Do you have a personal Twitter account? Are you frequently on Facebook? If you are using these tools to gather information, don’t you think a stakeholder would be interested in using these same tools to hear about your company or upcoming projects? A tweet about an upcoming open house meeting is a quick and easy communication avenue. Social media should be used as a form of two-way communication. If the tools are only being used to push information out, the social and community aspect are lost. Use social media such as Twitter, Facebook and YouTube, as a critical listening tool, where you can manage, monitor and adapt your message. If you aren’t listening, you may miss a post from a project supporter or be disengaged when an opposition group forms against your project. Listen and engage! It’s the most valuable aspect of social media.

RETURN ON INVESTMENT. (ROI).

Corporate Office 562.220.1450 www.total-western.com Contact Ezra Jenkison or Ron Matson 22

ELECTRIC ENERGY | SUMMER 2014

Understanding the true cost of an open house meeting, newsletter mailings and tweets can assist in selecting the most appropriate methods of communication. Just as a project tracks and adapts messages, a project team must also understand the costs associated with the outreach strategy and modify tools and techniques if the return is lower than expected. If the data shows your tool has a low return, go back to the drawing board, identify a new approach and try it. Ask stakeholders how they prefer to be contacted. Review the analytics

Energy Generation Operations program trains entry-level operators

Southeast Community College in Nebraska offers an associate degree program designed to satisfy the need for entry-level operators at utility power plants, ethanol production facilities, wind farms, and other process-related industrial sites. The Energy Generation Operations program is taught face-to-face on SCC’s Milford, Neb., Campus. Some courses also are offered online. This program is intended to train workers to be operators at nuclear, fossil fuel, biofuels, wind, solar, and other types of energy generating facilities, including electrical and fluid fuel systems. SCC designed the program based on common core skills and competencies required by operators at all types of energy production facilities. The program enhances SCC’s Electronic Systems Technology (I&C) and Electrical & Electromechanical Technology programs, which have been supplying highly-qualified technicians and electricians to the utility industry for decades.

The program consists of five quarters of instruction in core competencies common to all types of energy generation operations. The final sixth quarter is our focus quarter in which students choose from Nuclear, Fossil Fuels, or Process Operations focuses. Because SCC works on the quarter system, students can achieve their twoyear degree in 18 months. SCC collaborated with various service providers in developing the program, including the Nebraska Public Power District, Omaha Public Power District, Black Hills Energy, Lincoln Electric System, the Nebraska Ethanol Board, American Wind Energy Association, and the Nebraska Wind Working Group. What employers say about SCC’s program: “LES appreciates the foresight at SCC that drove investing the time and resources to bring the Energy Generation Operations program online. Having a local program that Nebraska utilities can help mold to fit their specific needs is a valuable resource that LES is proud to be a part of. The desire to source locally-educated and skilled operations staff for our generation facilities has been met by SCC with this program." Brian McReynolds Generation Operations Lincoln Electric System

www.southeast.edu/ EnergyGenerationOperations

For ore information about the program: John Pierce, jpierce@southeast.edu 800-933-7223 ext. 8394. If you are interested in hiring graduates: Shelly Tolle, stolle@southeast.edu 800-933-7223 ext. 8242

of how they currently receive project information to understand the effectiveness and efficiency of your communication tools. Stakeholders may prefer electronic forms of communication instead of hard copy mail. People have busy lives and may not make it a priority to attend a public meeting. Using online tools or social media forums to create a community conversation may create a better venue for project discussion.

MOVING FORWARD. While the practice of involving the public and other interested groups in a project’s early stages is nothing new, the level of stakeholder influence and engagement has never been higher. This trend will continue upward as infrastructure budgets

ELECTRIC ENERGY | SUMMER 2014

shrink and the problems we, as industry leaders, work to solve become more and more complex. Additionally, regulatory requirements will continue to impact our projects. As a result, leaders in the electric energy industry must move beyond the requirements set by federal, state and local standards. They must look for ways to engage a community in an authentic way. Industry leaders must set new standards for engagement to blaze a path for productive project implementation and industry progress. Recently Minnesota’s Great Northern Transmission Line project was lauded by the Obama administration as a “leading example in 21st century infrastructure” projects. The project engaged stakeholders over the course of two years at more than 75 public meetings, utilized online engagement tools, and found ways to meaningfully engage landowners, tribes, agencies, politicians, and other interested stakeholder groups. This trend of robust engagement is on the rise. Various electric utilities are investing in communities by giving staff opportunities to step outside the office and build real relationships with the surrounding communities. Think about the opportunities available for your company to make a difference in the lives of the people in the community in which you work and live. What small or large changes can your company or project team make that may create a lasting impression of your company on a particular community? The first step is to create opportunities for people to have their voices heard. If your engagement program successfully gives your stakeholders a voice, be sure to listen. And be true to your engagement program, as it will allow you to adapt and build relationships.

Empowering the Bakken The oil boom brought 30,000 new workers to the Bakken, but we didn’t blink. We’ve streamlined the rapid expansion of the area’s electrical infrastructure to meet 50 percent increases in electrical loads annually, well above the typical 1 to 2 percent growth. This is where great begins.

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d a e e r L s hip g n i Sty g n a les h C :

A MATTER OF HABIT BY JIM WALTERS, EdD, OWNER, POWER OF LEARNING, INC.

ELECTRIC ENERGY | SUMMER 2014

ast summer’s edition included my article,

Management connotes control; manager refers to a position in an organization, controls what subordinates do.

underscore the need for continued “Leading for Safer and More Civil Environments,” development to change leadership which generated interest in how to change leaderstyle to a more people-centered ship style, and specifically how to change from a leadership practice. Leadership leadership style that relies primarily on positional Subordinate-centered leadership connotes influpower to a style that embraces trust and relationship as a shifts power from the traditional “by ence; leader means of influence. This article is devoted to helping those position,” where, like the military, refers to influencing others, not interested in changing their leadership style to more efas one ascends the hierarchy, more position; ability fectively lead today’s more knowledgeable, demanding and information is entrusted to him/ influence (lead) empowered workforce. her. Yet positional power today is is associated with Leadership is about the ability to influence others. During less effective since information is potentially any the Industrial Revolution, leaders influenced subordinates ubiquitous. These two forces alone worker. in the same way they managed machines: with basic care. beg the question: They made sure that gears were well oiled so machines How do I lead an informed and would work at the push of a button; workers were provided more intelligent workforce? paychecks so operations would run just as smoothly when Before delving into this question, it is important to unbosses told them what to do. derstand I am not suggesting a subordinate-centered style A shift from the boss-centered leadership style began as in all situations—nothing in life is absolute. I am suggesting far back as the ’70s with the realization that leading people leaders learn subordinate-centered leadership and practice was far different from managing machines. As workforces nudging first and pushing second. became more informed and better educated, treating them Observing those by whom we are led typically forms like machines didn’t work; a subordinate-centered leaderleadership habits. To be sure, leadership style has deep roots ship style was soon ushered in. Indeed, humans are not and is difficult to change. The difficulty lies in the lack of machines; they are living systems with feelings, goals and, personal preparation for changing habits. With the help of perhaps most importantly, a fundamental desire to choose. author Charles Duhigg (The Power of Habit), here are some This means that leading in the 21st century requires leaders strategies for personal preparation toward changing leaderwho demonstrate respect for workers by nudging more than ship habits/style and the process of changing habits. pushing behavioral change. STRENGTHEN EMOTIONAL INTELLIGENCE Effective leaders in the 21st century understand the difChanging a habit requires willpower and strengthening ference between managing and leading and the need for one’s emotional intelligence can help. Emotional intelligence adopting a more humanist approach in their leadership prac(EQ) relates to how leaders manage their behavior and relatice. As shown in Table 1—Industrial/Information Age Leadertionships with others. In EQ parlance, the former is referred to ship, boss-centered leadership style fuels us/them interacas personal competencies (e.g., self-awareness), and the latter tions and virtually eliminates opportunities for trust-building. as social competencies (e.g., ability to empathize). As shown Without the opportunity to build trust, leaders’ ability to in Figure 1, body behaviors are motivated by signals from the influence is significantly eroded. Contrarily, subordinateexternal environment and body sensory sources. The signals centered leadership is founded on relationships that include travel cell to cell on their way to the neocortex, which is the workers as much as possible in decisions that affect them— home of logical thinking. This means we experience emosubordinates are nudged rather than pushed. tions first and thinking second and further explains without You should be concerned about developing your leadermanagement of emotions, we are prone to primal outbursts, ship practice for several reasons, not the least of which is worker incivility and its impact on safety. Statistics from the Industrial Age—20th Century Information Age—21st Century May 2013 Security Director’s Boss-centered—Push Subordinate-centered—Nudge Report from the Institute of Information = Power = I have it Information = Power = Everybody has it Finance and Management, Feelings are not important Humans have an innate sense of justice How Will You Stem the Tide Centralized control Autonomy with accountability of Workplace Incivility (and Adversarial relationships Cooperative relationships Worse)?, incivility has increased Autocratic decision-making Shared decision-making by 33 percent for utilities and CEO or boss is “king” Customer* is “king” the construction and mining * Remember internal customers. industries as a group. These, and other related statistics, TABLE 1: INDUSTRIAL/INFORMATION AGE LEADERSHIP

W W W. R M EL .O R G

Limbic System

demonstrating poor soimagined and what is real. Home of cial skills and an inability What we tell our mind has Neocortex Feelings to empathize and accept a very powerful effect on Home of criticism. How, then, can behavior, i.e., our ability to Reasoning habits change if we are change habits. not aware of our The subconscious is also true selves? unable to recognize a negaBrainstem From a leadership pertive. Consider this request: spective, knowing yourself Do not think about kangaSignals Spinal Cord enter here spurs authentic relationroos. I know—you instantly ships and confidence, that thought of a kangaroo. are vital tenets of effective Maybe you visualized a leadership. kangaroo’s unique eyes, or What is more, selfmaybe you thought about a FIGURE 1: BODY SIGNALS awareness transcends Kangaroo’s cousin the Walorganizational position, e.g., Director, because people at all laby. But I asked you to NOT think about a kangaroo. levels of the organization have an innate ability to influence Towards success thinking and not recognizing a negative others. You may be wondering how can someone who does be used to help us manage our thinking and reward us with not know what upper management knows influence others an enriched life. so effectively? Here’s a hint—you can be gifted with ability to With reference to Figure 2, trying to lose weight by thinkthink logically and the capacity for abstract thought, (IQ), ing about foods to avoid, e.g., ice cream, deep-fried chicken, but are of little use if you cannot relate what you think and etc. programs the mind to get what it has been programmed know to others effectively (EQ). to do—seek fatty foods. In like fashion, thinking about bossy Researchers like Daniel Goleman, author of Working and self-centeredness actually programs one’s behavior to with Emotional Intelligence, and Daniel Goleman, Richard be bossy and self-centered. Boyatzis and Annie McKee, co-authors of Primal Leadership: Allowing one’s subconscious to continually think in terms Learning to Lead with Emotional Intelligence, have demof avoiding problems can produce three unhealthy outcomes: onstrated repeatedly that people with high IQ, often do not 1. When the problem goes away, one is left with no goal. outperform colleagues with lower IQ. Indeed, as IQ rises, the For example, I don’t want to live in a mobile home. Once I ability to relate to others’ emotions (EQ) declines, resulting can afford a stick-built home, I am left with no goal and am in decreased leadership effectiveness. Leading in the power unmotivated until I am left with no home again. industry is as much about technical ability (IQ)—demonstrat2. Thinking away from failure is automatic for humans ing the ability to build a power line—as it is about behavioral and easily becomes habitual, and works to keep us in a cycle ability (EQ)—the ability to build trust with crew members. It is of fearing the future and thinking of past negative memories. a human performance issue that requires emotionally intel3. Away-from-failure thinking is akin to eliminating probligent leaders. lems in one’s life in hopes of finding what is wanted. The Bottom line: Read how others perceive you by honing problem is, if success were available, the mind would not your personal and social competencies in order to close sense it because it has been programmed to see failure. the gap between who you are publically and who you are LET TOWARD-SUCCESS DOMINATE YOUR privately. Closing this gap removes or least diminishes the THINKING, ESPECIALLY REGARDING LIFE GOALS communication noise that disrupts sense making. If successToward-success thinking is powerful, but not mysterious. ful, others will more accurately perceive you as an authentic I can’t believe it: Ever since I bought this Volkswagen person, which is another key trait of effective leadership. Jetta, I see them all over the road! TOWARD-SUCCESS AND The brain is very good at pattern-matching, even to a AWAY-FROM-FAILURE THINKING fault. In 1942, soldiers stationed on the beaches around Los What is it that enables some people to achieve so much? Angeles fired antiaircraft guns because they thought they It is due in part to their tendency to think toward success insaw enemy planes. Knowing the country was at war, the stead of away from failure. Toward-success thinkers are the mind was alert to war and the soldiers saw Japanese fighter same people who are highly satisfied with life and motivated planes in the sky that did not exist. In the same way, buying to achieve. Those who think towards success understand the the Volkswagen Jetta alerted the mind to a new pattern— power of the unconscious mind. The power rests in the fact Volkswagen Jettas. So why not use this power for aligning that the subconscious cannot differentiate between what is one’s life to what is wanted? Doing so programs the mind 28

ELECTRIC ENERGY | SUMMER 2014

“CoBank has always provided financing when we’ve needed it. Our relationship with the bank is similar to this solar energy project: always there and at the right price.”

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FOCU S E D O N O U R C U STO M ER S, POS I T I O N E D FOR T H E FU T UR E. In 2014, 7,800 members of Illinois Rural Electric Cooperative will get a portion of their energy from a new source – the sun. With the help of CoBank as a financial partner, Illinois Rural Electric Cooperative is the first electric distribution cooperative to build a utility-scale photovoltaic solar energy system in Illinois. At full capacity, the 500-kilowatt solar plant will provide enough electricity to power about 170 homes. CoBank is proud to partner with cooperatives on forward-looking projects that benefit not only the environment, but also their membership. We remain dedicated to the rural infrastructure industry and are proud of the strength and spirit of our customers.

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AWAY: FAILURE

TOWARD: SUCCESS

“I need to avoid “I am going to to think as if you already have whom the change will affect is these foods look great after I it, thus providing the motivation a recipe for failure. in order to be change my diet to change your habits. Again, Authors James Kouzes and slimmer.” and exercise more.” with reference to Figure 2, a Barry Posner in Credibility: How toward-success statement such Leaders Gain and Lose It, Why “I need to be less “I can’t wait for as “I can’t wait for the feeling I People Demand It underscore directive, bossy, the feeling I am and self-centered going to get when am going to get when others the importance of subordinatein order to gain others comment comment about my leadership” centered leadership. The the respect of about my programs the mind to achieve authors’ research listed honesty, others” leadership.” what it is programmed to do— forward-looking, inspiring and receive comments regarding competency as the top four your newfound leadership style. things workers wanted from FIGURE 2: TOWARD AND AWAY THINKING Bottom line: Program your their leaders. Most important to mind to change a habit by our discussion of subordinatewriting a toward-success statement on a piece of paper centered leadership style were the things the workers cited that describes your future state. Make it powerful by using least often: unyielding ambition and fierce independence. verbs—and keep it short. The top and bottom of the list are polar opposites and speak loudly. If a leader is too ambitious, he/she may run over folVISUALIZATION FOR CRUCIAL lowers and, contrarily, if a leader is too independent, he/she CONVERSATIONS may not care to connect with followers. Changing habits inevitably involves having crucial conBottom line: Think process over product. Make sure to versations. Imagine subordinates trying to make sense of understand what drives your followers, how they react, how changes in your leadership style; some will embrace the they can help you and how you can help them. change while others will resist. One of the most powerLEARN TO CHANGE HABITS ful ways to manage these types of situations was taught to Preparing one’s mind by enacting all or at least some me by Dr. Charles Reinert at Southwest Minnesota State of the preparation strategies described will provide a solid University in 1986. As a journeyman lineman working on my foundation for embarking on habit change. In my consultbachelor degree, I found myself lying on the floor with other ing work, I am always surprised to find leaders who attempt students with lights out and Kitaro music playing softly, all to change habits associated with customer service attitudes this while Dr. Reinert taught biology by having us visualize or lineman attention to safety with one-day workshops on key topics of the class. I became a believer and have since attitudes of outstanding customer service representatives or used visualization, also referred to as “image streaming,” how to work safely as a lineman. These approaches are inefin anticipation of having crucial conversations. Try it for fective because they address a human performance issue, a yourself: Find a quiet room, play some Kitaro (if you are not habit, with a stepwise technical solution. familiar with Kitaro, you will thank me for the introduction) Habits are behaviors that are repeated and ultimately and visualize yourself engaging with the other person: what become part of the subconscious; the behavior is hardwired you say, his/her reactions and how the meeting ends. into the brain. Hardwiring is the mind’s way of budgeting the Bottom line: My Leading with Both Brains for Safety’s conscious mind by placing repeated behaviors in long-term Sake workshop introduces the concept of performing a prememory. Since hardwiring exists for any given behavior, it mortem analysis as a means to proactively unearth potential doesn’t take much mind-energy to do it. incidents. In the same sense, think of the crucial conversaWhen behaviors are hardwired, it takes significant cognitions you will have and prepare yourself for them by visualtive effort to break the cycle. Author Charles Duhigg (The izing how they actually play out. Power of Habit) provides a wonderful model that determines EMBRACE FOLLOWERSHIP the motivator for the habit (Cue), the behavior(s) engaged in Implicit in Ralph Nader’s quote, “The function of leader(Routine) and the benefit received (Reward). Once the comship is to produce more leaders, not more followers,” is a ponents of the habit loop are identified, one can work sysfocus on worker development more than seeing workers tematically to change the habit. For example, John wants to strictly as entities who work. Followers are no longer passive know why he gets a knot in his stomach often when meeting entities; they are complex and intelligent beings that have with his team. After all, on several occasions, he saves the a high-level need for acceptance. Attempting to change a day by making the decision for the team. Cues could be professional habit without a solid understanding of why or team members’ body language conveying distrust, meetings

ELECTRIC ENERGY | SUMMER 2014

What is that are held on Fridays at 3pm that impinge on weekend time and/or John’s suffering emotional state due to recent problems at home. Routines could include John going to the cafeteria and getting a large soda often, which has resulted in weight gain. The Reward could include John deriving the pleasure of a sugary drink. With this information, John can narrow down the reward that is responsible for his habit loop. Maybe it’s the energy rush from the soda; maybe it’s the solitude associated with the walk to the cafeteria, etc. As you test various rewards, jot down the first three things that come to mind when you get back to your office. They can be emotions, random thoughts or anything that comes to mind. Then, set an alarm for 15 minutes; when the REWARD CUE alarm sounds, determine if the urge to go to the cafeteria still exists. If so, the habit is ROUTINE not motivated by the soda (Duhigg, p. 279). Once the reward is linked to the routine and the cues are understood, it is a matter of changing the reward. In John’s case, it was the conversations he had with colleagues while walking to the soda machine that he craved. Armed with this information, he changed his habit from drinking soda to taking social breaks with colleagues. The challenge of changing leadership style is difficult because behaviors associated with habits are deeply ingrained. Overcoming the inertia of ingrained thinking requires high-level thinking, an important first step in changing habits. Tactics such as visualization and toward-success versus away-from-failure thinking were presented as effective means to position the mind to more readily determine and accept change. A well-prepared mind more readily identifies the Cues/Routines/ Rewards of habit loops to confidently take action and change leadership style. Jim Walters, EdD, is a former electric lineman and current owner of Power of Learning, Inc. He provides employee development services in the areas of safety, customer service and interpersonal communication, especially for utilities. More than 1,000 people have attended his workshops “Get to Know Your Brain for Safety’s Sake” and “Leading with Both Brains for Safety’s Sake.” He received an MBA from the University of Dubuque and graduated from Saint Mary’s University of Minnesota with a Doctorate of Education in leadership. Reach him at jimw@poweroflearning.org or http://poweroflearning.org or 507-990-8110.

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W W W. R M EL .O R G

The implications for power providers, including rural electric cooperatives, are significant. Utility-style business models built around steady, predictable growth will need to evolve if we really are moving into a new era of static, or even falling, electricity demand. Regulatory frameworks will also have to adjust. Fortunately, RECs continue to enjoy many inherent advantages that should help them adapt effectively to the challenges of the future.

ELECTRICITY DEMAND: BY THE NUMBERS

U.S. ELECTRICITY SALES:

DECOUPLED FROM GROWTH? By Paul Narduzzo, Sr. VP Electric Distribution, CoBank and Taylor Gunn, Economist, CoBank

Not long ago, managers of our nation’s electric utilities had a pretty reliable indicator at their disposal whenever they needed to project future demand for power in their service territories. All they had to do was look at economic growth. Traditionally, growth in total electricity sales and real GDP were highly correlated, expanding and contracting in similar fashion. In recent years, however, that longtime rule of thumb has not applied. Sometime around 2010, U.S. electricity consumption “decoupled” from the pace of overall economic activity, falling almost 1 percent, even despite average GDP growth of 2.2 percent over the same period. It’s not certain whether this break represents a transitory or a permanent shift. However, the evidence suggests that decoupling may well prove to be permanent due to changing customer preferences, rapid advancements in energy efficiency and distributed generation technology. 32

ELECTRIC ENERGY | SUMMER 2014

The downtrend in total electricity sales that began in 2008 has been driven by a significant decline in sales to the industrial sector, combined with flat sales to commercial and residential customers. The only year with positive growth across all three sectors was 2010, when the economy began to emerge from the Great Recession. (See Exhibit 1.) In the industrial sector, which includes the manufacturing, agriculture, forestry, fishing, construction and mining industries, share of total electricity consumption fell from 35 percent in 1990 to 26 percent in 2013. Industrial electricity sales shed 10 percent during the sharp economic downturn in 2008-09 and still continue to languish. In 2013, sales stood 6 percent below the cyclical peak reached in 2007. The residential sector accounted for about 37 percent of total electricity sales in 2013, the same percentage accounted for in 2007. Housing square footage is the main driver of long-term electricity demand across the sector, with space cooling being the single largest end use for electricity. The U.S. commercial building sector accounted for approximately 36 percent of total electricity sales in 2013, a slight increase from 35 percent in 2007. Commercial buildings include stores, offices, schools, warehouses, factories, restaurants, churches, gymnasiums, libraries, museums, hospitals,

1600000 Residential

Commercial

Industrial

1400000

1000000

800000

COMPOUNDED ANNUAL GROWTH RATES

600000

1990-2000 2000-2011 2011-2013 2.43% 1.76% -1.12% 3.41% 2.16% -0.66% 1.21% 0.39% -1.86% 2.28% 0.89% -0.78%

Residential Commercial Industrial Total Sales

400000

200000

2013

2011

2012

2010

2009

2007

2008

2005

2006

2003

2004

2001

2002

1999

2000

1997

1998

1995

1996

1993

1994

1991

1992

0 1990

GIGAWATT-HOURS

1200000

EXHIBIT 1: ELECTRICITY SALES BY END-USE SECTOR Source: U.S. Energy Information Administration

clinics and jails. The vast majority of electricity consumed by the commercial sector is used for lighting, space cooling and ventilation. Going forward, the U.S. industrial sector may be poised for a strong comeback while the residential and commercial sectors face continued stagnation or possible net reductions in energy usage, generally as a result of increased efficiencies. Recent studies suggest that the fastest-growing industrial segments in the United States over the next few years will be those that are energy-intensive and heavily dependent on natural gas. However, whether or not the prospective growth in these energy-intensive industries will be sufficient to put the total industrial sectorâ&#x20AC;&#x2122;s consumption of electricity on an upward trajectory remains to be seen.

CHANGING CORRELATION WITH GDP Based on historic data spanning 1990 to 2010, the year-over-year growth rates in real GDP and electricity sales generally moved in tandem. More precisely, the correlation coefficient between the two series measured plus 0.65. (See Exhibit 2.) This all changed after 2010. Since that year, real GDP has grown about 2 percent a year,

while total U.S. electricity sales have remained weak. From 2011 through 2013, the correlation coefficient between these two series was minus 0.99. The partial decoupling of growth in electricity sales from GDP growth coincides with accelerated adoption rates of energy efficiency across all end-use sectors. Ratepayer-funded energy-efficiency programs in the United States have expanded, and the number of states with energyresource standards rose from eight in 2006 to 24 in 2012. Energy efficiency will likely continue to erode the relationship between growth in electricity sales and GDP growth. Furthermore, technology that enables customers to control how they consume and generate their energy is quickly evolving. Distributed generation (DG) stole the show across the entire electric utility industry in 2013, and many industry analysts feel that last year was merely the opening act.

EMERGING TRENDS Fueled by federal and state incentives and declining costs, DG will continue to gain market share. Solar is the leading DG technology today, but natural gas has the potential to become another primary fuel for DG. There are 37 million homes in the

United States served by individual natural gas lines. Greater expansion of distributed micro-turbines, fuel cells, reciprocating engines and other devices will use natural gas at the local level to provide multiple services. Rooftop solar technology has emerged as one of the leading threats to the central generating station business model. With each passing year, this technology becomes increasingly affordable and economically attractive. According to Bloombergâ&#x20AC;&#x2122;s New Energy Finance, solar panel prices have dropped 77 percent since 2008 and currently cost $0.86 per watt. The steep decline in solar panel prices has been driven by the plunge in the price of polysilicon, and by Chinese manufacturersâ&#x20AC;&#x2122; dumping of cheap panels all over the world. The U.S. federal government is considering trade measures against China that could result in a 20 percent rise in the cost of solar panels, by some estimates. However, over the long run, solar panel prices are likely to remain very competitive due to a globally competitive solar market and rapidly improving manufacturing processes for solar panels, particularly among Chinese manufacturers. Falling solar panel prices are one of the main drivers of growth in DG, which represents about 40 percent of the total solar market and is the fastest-growing segment of the market. The Solar Energy Industries Association (SEIA) forecasts DG solar capacity to reach 5,000 MW in 2016, surpassing that of utilityscale solar capacity. Moreover, recent breakthroughs in battery-storage technology promise to greatly improve the economics of DG for users. A number of companies are reportedly on the verge of commercializing some very cost-effective battery technologies that could revolutionize the use of DG. The cost of battery storage has come down much faster than industry analysts had projected, suggesting that battery storage could compete with natural gas, even in a low gas price environment, as early as mid-2015.

W W W. R M EL .O R G

5% 4%

+ –

From 1990 to 2011, YoY growth in real GDP and electricity sales were positively correlated by +0.65.

3% 2% 1% 0% -1% -2%

From 2011 to 2013, YoY growth in real GDP and electricity sales were negatively correlated by -0.99.

-3% -4% -5% 2007

2008

2009

2010

YoY% Growth Total Electricity Sales

2011

2012

2013

YoY% Growth Real GDP

EXHIBIT 2: YOY % GROWTH IN REAL GDP AND ELECTRICITY SALES Source: U.S. Bureau of Economic Analysis and U.S. Energy Information Administration

BUSINESS MODEL IMPLICATIONS Flat load growth, greater energy efficiency and advances in DG technology are propelling the evolution of the traditional utility business model. Electric utilities will probably see more change over the next 10 years than they did over the previous 100 years. This is certainly not about the end of utilities, but rather a tough transition with many uncertainties. Regulators will continue to play a major role during this transition to ensure that the nation’s electric system is maintained in a reliable, efficient and cost-effective way. Market participants must adapt to the current low-growth environment. Over the short term, they will likely do so by increasing the deal flow involving unregulated assets that generate strong yields along with mergers and acquisitions on the regulated side. Through the end of this decade, utilities will also be forced to make lasting changes to their business models as average electricity demand growth remains below historic norms and customers exploit technologies that afford them more control over their energy use. Utilities’ mission will likely broaden from selling electricity to delivering a number of energy services. 34

ELECTRIC ENERGY | SUMMER 2014

Many of these energy services will be tied to technological advancements, which will offer customers greater control over the generation and use of their energy. Over the next three to five years, electric utilities will have fewer captive customers, so their business models will need to evolve and become more customer-centric. As the utility-customer relationship becomes more dynamic, utilities can leverage their position to own and operate DG systems, manage a smart grid or offer in-home energy management tools. These services go beyond simply delivering electricity, and provide customers greater control over their energy use without having to shoulder any of the burdens. To aid in this transition, regulators must allow utilities to compete with the entrepreneurs and various providers of disruptive technologies that are being sold to consumers. Utilities and regulators will have to work together to rethink how utilities’ costs can be recovered to make them financially whole while maximizing the benefits consumers receive from using new technologies. At the same time, technology could possibly create new opportunities for increased electricity demand among each end-use sector. For example,

expansion of the U.S. manufacturing base holds significant potential to transform the industrial sector’s electricity consumption habits. Increased proliferation of small electrical devices coupled with the transmission of massive amounts of data could provide a jolt to residential and commercial electricity sales. Accelerated adoption rates of electric cars could drastically shift energy consumption within the transportation sector away from fossil fuels and toward electricity. So while we appear from today’s vantage point to be entering a prolonged period of static power demand, the future may well surprise us.

MEETING THE CHALLENGE AND THE COOPERATIVE ADVANTAGE The transition of the electric utility industry over the next few years will be rocky as both providers and regulators try to keep pace with market changes. However, the nation’s rural electric cooperatives will also have a number of significant advantages to draw on that will be invaluable as their boards and management teams work together to meet these challenges. One will be the cooperative model itself, which creates strong, enduring alignment between the cooperative and the needs of its membership. Another will be the committed financial support of lenders like CoBank, whose mission is to serve the rural electric industry and other vital sectors of the rural economy. Yet another will be the credible voice that electric cooperatives have developed in Washington and in state capitals through the effective work of NRECA and statewide organizations like Colorado Rural Electric Association. All of these factors will serve as stabilizing forces for RECs in a future of increased uncertainty. And they will help ensure that cooperatives adapt effectively, remain operationally and financially sound, and continue to fulfill the needs of the members and communities they serve in years ahead.

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145 Loup River Public Power District 146 Loveland Water & Power 147 Luminate, LLC 148 Magna IV Engineering Inc. 149 Marsulex Environmental Technologies 150 Missouri River Energy Services 151 Mitsubishi Hitachi Power Systems Americas, Inc. 152 Morgan County Rural Electric Assn. 153 Mountain Parks Electric, Inc. 154 Mountain States Utility Sales 155 Mountain View Electric Assn. 156 Mycoff, Fry & Prouse LLC 157 NAES Corp. 158 Navopache Electric Cooperative, Inc. 159 Nebraska Public Power District 160 NEI Electric Power Engineering, Inc. 161 New Mexico State University 162 Nol-Tec Systems, Inc. 163 Nooter/Eriksen, Inc. 164 Norris Public Power District 165 Northeast Community College 166 Northwest Rural Public Power District 167 Novinda Corporation 168 NRG Reliability Solutions LLC 169 NV Energy 170 Omaha Public Power District 171 Omnicon Technical Sales 172 Osmose Utilities Services, Inc. 173 Otero County Electric Cooperative 174 PacifiCorp 175 Panhandle Rural Electric Membership Assn. 176 PAR Electrical Contractors, Inc. 177 Peterson Co. 178 Pike Electric, LLC 179 Pine Valley Power, Inc. 180 Pioneer Electric Cooperative, Inc. 181 Pipefitters Local Union #208 182 Platte River Power Authority 183 PNM Resources 184 Poudre Valley Rural Electric Assn. 185 Powder River Energy Corp. 186 Power & Industrial Services Corp 187 POWER Engineers, Inc. 188 Power Equipment Specialists, Inc. 189 Power Pole Inspections 190 Power Product Services 191 PowerQuip Corporation 192 Precision Resource Company 193 Provo City Power 194 Quanta Services 195 REC Associates 196 Reliability Management Group (RMG)

ELECTRIC ENERGY | SUMMER 2014

197 Reliable Power Consultants, Inc. 198 Rkneal, Inc. 199 Sabre Tubular Structures 200 Safety One Inc. 201 San Isabel Electric Assn. 202 San Marcos Electric Utility 203 San Miguel Power Assn. 204 Sangre De Cristo Electric Assn. 205 Sargent & Lundy 206 Savage Services Corporation 207 Sega Inc. 208 Siemens Energy Inc. 209 Sierra Electric Cooperative, Inc. 210 Solomon Associates 211 South Central PPD 212 Southeast Colorado Power Assn. 213 Southeast Community College 214 Southern Pioneer Electric Company 215 Southwest Energy Systems LLC 216 Southwest Generation 217 Southwest Public Power District 218 Southwest Transmission Cooperative, Inc. 219 Southwire Company 220 Springfield Municipal Light & Power 221 SPX Cooling Technologies 222 SPX Transformer Solutions, Inc. 223 SRP 224 St. George Energy Services Department 225 Stanley Consultants, Inc. 226 Stantec Consulting 227 STEAG Energy Services LLC 228 Storm Technologies Inc. 229 Sturgeon Electric Co., Inc. 230 Sulphur Springs Valley Electric Cooperative 231 Sundt Construction 232 Sunflower Electric Power Corporation 233 Surveying And Mapping, Inc. 234 Switchgear Solutions, Inc. 235 T & R Electric Supply Co., Inc. 236 T&D PowerSkills, LLC 237 Technically Speaking, Inc. 238 TestAmerica Laboratories, Inc. 239 Tetra Tech 240 Thomas & Betts Steel Structures Division 241 Thomas & Betts, Utility 242 Timken Motor & Crane Services, dba Wazee a Timken Brand 243 Total-Western, Inc. 244 Towill, Inc. 245 Trachte, Inc. Buildings & Shelters 246 Trans American Power Products, Inc.

247 TRC Engineers, Inc. 248 Trees Inc 249 Tri-State Generation and Transmission Assn. 250 Trinidad Municipal Light & Power 251 U.S. Water Services 252 UC Synergetic 253 Ulteig Engineers, Inc. 254 United Power, Inc. 255 Universal Field Services, Inc. 256 University of Colorado 257 University of Idaho Utility Executive Course College of Business and Economics 258 UNS Energy Corporation 259 URS Energy & Construction Inc. 260 Utility Telecom Consulting Group, Inc. 261 Valmont Newmark, Valmont Industries, Inc. 262 Vickrey & Associates 263 Victaulic 264 W채rtsil채 North America, Inc. 265 Wave Engineering, Inc. 266 WESCO 267 Westar Energy 268 Western Area Power Administration 269 Western Electrical Services 270 Western Line Constructors Chapter, Inc. NECA 271 Western Nebraska Community College 272 Western United Electric Supply 273 Westmark Partners LLC 274 Westwood Professional Services 275 Wheat Belt Public Power District 276 Wheatland Electric Cooperative 277 Wheatland Rural Electric Assn. 278 White River Electric Assn., Inc. 279 White River Valley Electric Cooperative 280 WHPacific, Inc. 281 Willbros Engineers 282 William W. Rutherford & Associates 283 Wyoming Municipal Power Agency 284 Xcel Energy 285 Y-W Electric Association, Inc. 286 Yampa Valley Electric Association, Inc. 287 Zachry Holdings, Inc. TOTAL NUMBER OF MEMBERS: 287

The Design Behind Power for 40 Years Since 1973, Sega Inc. has been a dedicated provider of quality engineering and technical services to the power industry, specializing in areas of: Electrical and Steam Generation Plant Betterment Controls Upgrades Power Delivery Field Services Plant Information Management

Stay Connected Our energized professionals share powerful knowledge at the click of a mouse or touch of a screen: • The Burns & McDonnell Blog www.burnsmcdblog.com • Advanced Substation Webinars www.burnsmcd.com/substationwebinars

Sega Inc.

www.segainc.com

Engineering, Architecture, Construction, Environmental and Consulting Solutions

Offices Worldwide

913-681-2881 • 16041 Foster • Overland Park, KS • 66085

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W W W. R M EL .O R G

RMEL 2014 CALENDAR

2014 Calendar of Events January 14, 2014

March 14, 2014

July 30, 2014

San Antonio Introduction to the Electric Utility Workshop San Antonio, Texas

Distribution Vital Issues Roundtable Lone Tree, CO

Generation Vital Issues Roundtable Salt Lake City, UT

January 15, 2014

March 27, 2014

August 2014

Austin Introduction to the Electric Utility Workshop Austin, Texas

Electric Utility Workforce Management Conference and Roundtable Lone Tree, CO

Safety Roundtable August 2014 Kansas City, MO

January 21-22, 2014 Utility Financing for NonFinancial Personnel Workshop Lone Tree, CO

February 13-14, 2014 Distribution Engineers Workshop Lone Tree, CO

February 21, 2014 Safety Roundtable February 2014 Westminster, CO

April 10-11, 2014 Advanced Substation Design Workshop Lone Tree, CO

April 23-25, 2014

September 25, 2014 2015 Spring Management, Engineering and Operations Conference Planning Session Lone Tree, CO

April 25, 2014

October 9, 2014

Safety Roundtable - April 2014 Lone Tree, CO

Asset Management Conference Lone Tree, CO

May 18-20, 2014

Power Supply Planning and Projects Conference Lone Tree, CO

Spring Management, Engineering and Operations Conference Austin, TX

March 7, 2014

June 12, 2014

Generation Vital Issues Roundtable Lone Tree, CO

NERC Training Conference and Roundtable Lone Tree, CO

March 11-12, 2014

June 26, 2014

Transmission Planning and Operations Conference Lone Tree, CO

Transmission Operations and Maintenance Conference Omaha, NE

March 12, 2014

July 29-30, 2014

Transmission Vital Issues Roundtable Lone Tree, CO

Plant Management, Engineering and Operations Conference Salt Lake City, UT

Distribution Overhead and Underground Operations and Maintenance Conference Lone Tree, CO

Fall Executive Leadership and Management Convention San Antonio, TX

Health, Safety and Training Conference Lone Tree, CO

March 6-7, 2014

March 13-14, 2014

September 14-16, 2014

October 16, 2014 Renewable Planning and Operations Conference Lone Tree, CO

November 6, 2014 Review of Industry Standards for Distribution Workshop Lone Tree, CO

November 14, 2014 Safety Roundtable November 2014 Fort Collins, CO

CONTINUING EDUCATION CERTIFICATES Continuing education certificates awarding Professional Development Hours are provided to attendees at all RMEL education events. Check the event brochure for details on the number of hours offered at each event.

ELECTRIC ENERGY | SUMMER 2014

In-house Design and Engineering Full Scale Structure Testing

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Energy

COLLABORATE. CONNECT. COMPLETE. Global Engineering Service Provider Energy. Environmental. Transportation. Water.

• • • • • •

www.stanleyconsultants.com 800.878.6806

• • •

Feasibility Studies Siting & Permitting Power Plant Design Plant Upgrades & Retrofits Air Quality Control Services Transmission & Distribution Substations & Switchyards Construction Management & Inspection Services Owner’s Engineer

Since 1912, we have built the transmission lines, distribution systems and substations that power our nation. This legacy, coupled with an extensive collection of resources, a strong financial backing and industry-leading safety programs provide clients with the expertise and stability they demand. Connecting Power to People for Over a Century.

An MYR Group Company

Visit myrgroup.com

W W W. R M EL .O R G

ADVERTISER INDEX

Advanced Motor Controls AMEC

13 Inside Front Cover

Border States Electric Burns & McDonnell

15 & 39

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www.amec.com

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CoBank

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DIS-TRAN Packaged Substations, LLC

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Fuel Tech

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Great Southwestern Construction, Inc.

www.gswc.us

(303) 688-5816

HDR, Inc.

www.hdrinc.com

(402) 399-1000

Back Cover

www.kiewit.com

(913) 928-7000

Laminated Wood Systems, Inc.

www.lwsinc.com

(402) 643-4708

Lauren Solar

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(325) 670-9660

Mitsubishi Hitachi Power Systems

www.psa.mhps.com

(908) 605-2800

Nebraska Public Power District

www.nppd.com

(402) 564-8561

Kiewit

POWER Engineers

www.powereng.com

(208) 788-3456

Sabre Tubular Structures

www.SabreTubularStructures.com

(817) 852-1700

Sega, Inc.

www.segainc.com

(913) 681-2881

Inside Back Cover

www.siemens.com

(303) 696-8446

Southeastern Community College

www.southeast.edu

(402) 761-8394

Stanley Consultants, Inc.

www.stanleygroup.com

(303) 799-6806

Sturgeon Electric Co. Inc.

www.myrgroup.com

(303) 286-8000

T & R Electric Supply Co., Inc.

www.t-r.com

(800) 843-7994

Total-Western, Inc.

www.totalwestern.com

(562) 220-1450

Trees Inc.

www.treesinc.com

(866) 865-9617

Ulteig Engineers, Inc.

www.ulteig.com

(877) 858-3449

Young & Franklin

www.yf.com

(315) 457-3110

Zachry Holdings, Inc.

www.zhi.com

(210) 588-5000

Siemens

www.advancedmotorcontrols.com

ELECTRIC ENERGY | SUMMER 2014

Connecting mankind Balancing transmission grids means powering the world Plant-wide Power Transmission Integrated Automation Solutions for Glass & Solar

Various factors are transforming the power transmission business: the drive toward renewable energy, the expansion and interconnection of grid systems, and the need to gradually replace and upgrade aging grid infrastructures. Reliably balancing load and demand is becoming even more important with the increasing share of renewables in the energy mix and the growing importance of distributed generation.

Siemens expertly supports this transformation with power transmission products, solutions, and services designed to contribute to the development of a highperforming and sustainable global transmission infrastructure. Our solutions make it possible to master the complexity of todayâ&#x20AC;&#x2122;s transmission systems, keep them in perfect balance, manage all interfaces, and make power available wherever and whenever it is required.

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Powering the Future. An industry innovator, Kiewit Power has extensive experience in the gas-fired, air quality control systems, power delivery, renewable and nuclear markets. Kiewit serves the power industry through a number of its subsidiaries, such as Kiewit Power Constructors Co., Kiewit Power Engineers Co. and TIC-The Industrial Company (TIC). As a full EPC provider, our in-depth market knowledge and industry-leading projects show how Kiewit is committed to clients and to remaining a power pioneer.

Kiewit Power Group Inc. 9401 Renner Boulevard Lenexa, KS 66219 (913) 928-7000

Leader in EPC installations for

TODAYâ&#x20AC;&#x2122;S ADVANCED GENERATION TECHNOLOGIES