Essential services is a term tossed around a lot during the pandemic. My mind immediately goes to utilities when the words are mentioned. Electric utilities are a bedrock of essential services.
Yet headlines about utilities in the past week have been about stress on the power utilities as the economy grinds down. As business slows, the use of electricity also declines. Revenues decline, which can strain some utilities.
It is more than just electricity. Much more nuanced. Utilities that makes and deliver power are more than a one-dimensional essential service; that may be more evident during and after this health and economic challenge.
This is one person’s thoughts about how to gauge the dimensions of your utility. Our readers might use this as a five-point test of the temperature of their utility.
ONE: Utilities stay healthy. As with a virus, you help your family most if you are also healthy. Same with the utility business. If the utility company is healthy – finance, planning, operations – it is healthy enough to serve its territory well. Customers are in a better place, too.
TWO: Technical achievement. Utilities that plan and execute energy projects, on-budget, on-time, and on-target with customer needs are the ones that strengthen a service territory. Electric systems that use the latest technology add resilience, reliability, green energy, and keep costs and debt down.
Technology costs. Last year U.S. utilities spent almost $60 billion on grid modernization alone. That is only a start of what will be needed. (Source)
THREE: Investments in people. A community is healthy when it invests in developing its members with the intellect and skills they need for the long term. Utilities with wise development plans for employees, broad opportunities for new experiences, and continuing education serve their communities well. Those employees fill important community roles well.
FOUR: Economic development. Real economic development, with metrics, financial depth, and a long-term plan. A plan based on research about what is necessary to help a region grow. Not “one-offs.” A plan for the community that is not a detriment to the utility’s health (see above).
Meaningful economic development is not press releases announcing a grant. It is the ability to plan and execute well. Insight. Management expertise. Activities with long-term impact on both community and utility.
Here, check-out the punch from the cumulative efforts of several big regional firms. $22 billion in facility investment by Dominion, Duke, NextEra and Southern. 67,000 jobs. The magnitude of investment and skill in managing make a difference in the service territories. (Source)
FIVE: Free enterprise. Being in business toughens up the participants. Always being tested sharpens the edge of companies because if they fail a stronger entity takes over. In the process, everyone benefits from a improved business environment.
The essential services of a utility certainly are the actual power delivered to a home or business. Think more broadly, though. A utility has a complex web of characteristics that impact the overall health of its service territory.