From challenge to opportunity: Leading public power through change

Public power leaders reflect on what has changed in the industry over their tenures, what challenges lie ahead, and what advantages stem from the public power utility model. From maintaining a close connection with customers to changing the workplace culture, each leader offered insight into what will help public power thrive long-term.

A shifting culture

After beginning his career in 1989 as an engineer at Riviera Utilities in Alabama, Tom DeBell worked his way up within the organization and was named its president and CEO in 2014. He currently serves on the boards of the Alabama Municipal Electric Authority and the Baldwin County Economic Development Alliance. He has also served as chair of the South Alabama Public Power Association, Electric Cities of Alabama, and the South Baldwin Chamber of Commerce, and as a member of the City of Foley Planning Commission.

Riviera Utilities provides electric service to more than 52,000 customers and offers natural gas, water, wastewater, and television/broadband services.

In September 2020, a hurricane brought significant damage to the service territory and left about 51,000 customers without power — nearly the entire system. The public power utility called in mutual aid from crews throughout the region who worked tirelessly to clear downed trees and replace hundreds of poles and transformers. About a week after the storm hit, crews had restored service to more than 90% of customers. “Hurricane Sally showed us that we must be ready to restore service at a pace and scale unlike what we ever did in previous years,” said DeBell.

Extreme weather events are only one type of disruption that utilities must face.

In his time with public power, DeBell said the most significant change he’s seen has been in the cultural needs and expectations of both the people who work for and the people who are served by public power utilities. “Employees need more transparent and open leadership, and customers expect a quicker response and tailored solutions,” he said.

To prepare for changes from customer adoption of distributed energy resources and electric vehicles, DeBell said the industry should make space for unconventional thinking and creativity. “Everything new requires appropriate evaluation, but the ‘always done it that way’ thinking itself cannot justify sitting still,” he said.

He noted that the COVID-19 pandemic helped show that the industry can accommodate rapid changes.

For public power, it is not a lack of adapting to culture change, but rather, DeBell cites, a lack of resources that is the biggest barrier to change. “Lack of resources due to our average utility size may be one of the most significant factors hindering industry changes for public power,” he noted.

Despite public power utilities’ relatively smaller size, DeBell sees strength in the local governance and operations model, and in public power’s connectivity through association, at the state, regional, and national levels. “Even the smallest of our members can benefit by leveraging APPA’s resources and networking with other members,” he shared.

Plus, the public power business model allows for utilities to focus solely on what matters most — providing services that best meet the needs of customers on a cost-of-service basis.

“The best way to showcase this benefit is to create open communication channels with customers to reinforce this message constantly,” he added. 

Embrace multidisciplinary thinking

Elaina Ball became CEO and general manager of the Fayetteville Public Works Commission in North Carolina six months into the pandemic. “It really has been a challenge coming into a new organization as CEO under these conditions, getting to know everyone — the community and the team — with social distancing and all the COVID precautions,” she said.

Since arriving at the PWC, Ball has emphasized the need to build a strong connection with the staff and the community, even with COVID-19-era limitations. This has included holding an “Ask the CEO” event, where she answered more than 100 questions from staff, and finding opportunities to get plugged in with community members amid social distancing guidelines, whether as part of a running club or via philanthropic organizations.

Ball believes that the challenges created by COVID-19, including changing guidelines and restrictions, have been demanding but have brought her team together in enriching ways.

“This constant state of change has pulled us together as we’ve had to tackle things in real-time, keeping us working together and focused, and I’m seeing that from all the public power utilities,” she said.

This wasn’t the first time Ball came into a utility when it was facing challenges. Her first position with public power was as vice president for technical services at CPS Energy in San Antonio. She started the role in 2006, right when Texas utilities were preparing for retail competition.

“They were looking to bring in some Six Sigma Black Belts who could help with the process improvement required for changes that needed to be made to compete in the marketplace, including improving their profitability and improving their service,” she said. Ball had earned her Six Sigma Black Belt from previous work in the chemical industry.

“Wholesale competition was already around by the time I got to CPS Energy, but retail was just coming into scope,” she recalled. “Utilities had a mindset of generating to load and delivering power to a predictable customer base, all a very comfortable status quo. There were times then when people were saying, ‘Nothing’s going to change,’ … but it just keeps changing.”

Ball pointed to changes in how competitive different resources, including solar plus storage, have become on the wholesale market, and how smart meters and grid modernization have allowed utilities to offer a new set of products and services.

She said the biggest change has been the stability and proliferation of low-cost natural gas: “It has had a profound impact in wholesale market spaces worldwide while also creating opportunities and pressures on traditional generation like nuclear and coal.”

Ball believes public power is uniquely positioned to take on these changes because of its connection to the community. “We can move quicker than [investor-owned utilities] to meet the demands and wants of customers and are drawn to do that since they are our ‘customer-investors,’” she noted. “And that’s in addition to the local control, lower average rates, and responsiveness that we offer them.”

A major way in which these changes are getting successfully implemented and tackled has been thanks to another change affecting public power: the new workforce.

“If you had told me when I graduated from chemical engineering school that I’d spend a good portion of my career in utilities, I’d probably have asked, ‘What did I do wrong?’” she said with a laugh. “Working for a utility wasn’t a sexy job then, but it’s become one because of all the cool things that are happening in the industry. We have problems that have to be solved with a variety of skill sets, and that means creating exciting job opportunities that weren’t there for most of the history of power utilities.”

Having a multidisciplinary mindset will be required, said Ball. She sees young people coming in with new ideas and new skills as key to making it possible for utilities to thrive in the future, in particular as the industry tackles electrification and the influx of data — and as customers demand new products and services.

“Electric vehicles are coming faster than we ever thought as major automotive manufacturers announce the end of days for internal combustion engines,” she said. “We’re preparing and trying to recognize the upside that can come with this. It’s an exciting time for us to challenge ourselves and how we do business. The infrastructure needs to be ready, the rates need to be rethought, and we’ve got to be very bullish on these changes.”

And then there’s all the data that utilities get from new technologies. “Our systems are changing, we’re getting digital information not only on the generation and transmission of energy, but across all of our business processes,” Ball said. “We have to build skills with our existing team, find ways to leverage technology, and rely on third parties and new team members to grapple with the big data coming at us.”

“We have to shake out of our mental construct around how we’ve always produced energy, delivered it, and provided customer service, because we’ve seen the shake-up of many industries already, be it the taxi industry or the retail space or the automotive world,” she said. “We’re next, or, more precisely, it’s happening to us right now.”

Allow for innovation

Although Bill Schwandt was just recently named general manager of the Modesto Irrigation District in California, he previously worked for Moorhead Public Service, a public power and water utility in Minnesota, for 38 years, and 27 of those years he spent as general manager.

He pointed to the speed of technological change — both in computing power and better capital equipment — as having a significant impact on public power throughout his career. From changes in metering technology to the development of viable rooftop solar and protective system equipment, Schwandt listed a number of technologies that have changed operations, workforce needs, and power supply and demand. He also stressed how such changes have driven smaller municipalities to form joint action agencies and other alliances to reap the benefits of increased cooperation.

“Working together has helped us obtain economies of scale and political influence to compete with our investor-owned utility competitors,” he said.

Technological change has also led to fast-paced and abundant communication, which Schwandt described as bringing both benefits and challenges. 

While we are spending significant time communicating, I’m not sure we are spending an appropriate amount of time thinking about what we should be communicating today,” he cautioned. He recounted how the cost of long-distance calls in the 1980s meant that he and his then-fiancée (now wife), who lived 500 miles apart, only spoke for five minutes per week and wrote letters to each other to stay in contact. Now, he noted, the cost of communicating is negligible, and communication can be less structured.  

He is hopeful that current and future technological innovations “will help the utility industry to safely use, conserve, and protect our resources for our children.” 

Another challenge public power utilities face is in attracting and retaining skilled employees. This includes combating apathy by ensuring public sector employees both feel appreciated for the work they do in giving to their communities and are appropriately compensated. He called apathy the enemy of engagement. “You want excitement and debate — it’s a good dynamic to have,” he stressed, including among all levels of employees and at the board level. People need to be encouraged to keep asking good questions, to be proactive, and to “remember that our customers expect us to be working on the next great thing.” 

Attracting the best and brightest workers is also about showing how utilities can innovate. Schwandt lamented how three of his six children are electrical engineers, but he was unable to convince them to work in public power.

He added, “I’m passionate about utilities. The power field has become incredibly exciting. We’re talking climate change, the end of coal … all the new technology that will save the world.”

When it comes to innovating, Schwandt believes public power has some innate advantages.

“Innovation happens in smaller teams much more often than in large bureaucracies,” he said. “We [in] public power and water have a special advantage since we are, in many cases, very small ‘self-directed’ teams. This allows us to implement creative solutions to problems that larger, hierarchical organizations cannot.” 

Schwandt views public power as a benchmark for the electric industry, in how the utilities stay connected with customers and how they find efficiencies.

“Every book I read about organizational structure seems to have our business model as the ideal: nonprofit, community owned, locally controlled, wholeness of purpose — it’s customer focused,” he said.

Learn from challenges

“One hundred forty years have passed since Edison invented central station electricity, and most of that time span has been, to put it bluntly, boring, at least in terms of how business was done,” said John Twitty, president and CEO of the Missouri Public Utility Alliance, a joint action agency serving 120 community-owned utilities in Missouri, Arkansas, Illinois, Mississippi, and Nebraska. “You built an asset, made electricity, delivered it, read a meter, and collected a bill.” Now, said Twitty, “the very underpinnings of the industry are in question, so you have to figure out how you go forward.”

Twitty started with MPUA in August 2020, capping off a career that began in 1983, when he transitioned from being a teacher to a business manager at Rolla Municipal Utilities in Missouri. After working up to become general manager of Rolla, Twitty returned to his hometown of Springfield, Missouri, to work for City Utilities of Springfield in 1991. He also served as executive director for the Transmission Access Policy Study Group.

One of the biggest issues he has faced wearing his many hats — as a utility manager, as a transmission policy advocate, and as the head of a joint action agency — has been deregulation.

“The disconnect between making electricity and actually delivering it to retail customers has really caused a lot of change in the last few decades,” he said. He acknowledged that Missouri utilities faced less change than others, since the state is not deregulated.

“Even if you own your generating assets, it’s not really you making the decision about how that generating asset gets operated,” he added. He believes this kind of situation will affect how public power adapts to the changing generation mix and in deploying storage.

Twitty expects that priorities laid out by the Biden administration will create an environment for rapid movement on the energy storage front, which will necessitate “the next big bang in battery technology,” so that utilities will require less space to house them while also being able to use more wind and solar resources.

He noted that an added challenge will be preparing for the proliferation of electric vehicles, which he said might require four times the output that generating sources provide today.

Twitty believes that public power is better positioned than other actors in the electric sector to make this happen thanks in large measure to its close connection to its customers.

He shared an encounter from when he was with City Utilities of Springfield. In 2007, when a major ice storm knocked out power for some customers for as long as two weeks, he made a concerted effort as general manager to be responsive and communicative with the community about restoration efforts.

“One day, toward the end of it, a guy walked up to me at the car wash and said, ‘You’re John Twitty, right?’” he recounted. “I’d been in the paper and on television a lot at that time and was prepared to have my arms torn off. And he said, ‘I called you during the ice storm … and you called me back!’”

“That’s the essence of public power: He’s my neighbor, so of course I’d call him back — and all the others who wanted to know when life might go back to normal.”

“Customer expectations matter so much because, as public power, the customer is the central reason we exist,” he said. And, in public power, “the customer and the owner are the same people, and that’s a really powerful model to work from. You have the advantage of a direct link with those customers, a direct link to what they are paying, and they’re the ones making some key decisions about what you are supposed to be doing on their behalf.”

He advised public power leaders to be agile and “active and aggressive” in communicating with customers and policymakers to get buy-in on changes and to shore up understanding from them when a challenge inevitably comes up.

A core example of this agility came during the winter storms that hammered much of the middle of the country early in 2021, with Missouri facing historic low temperatures and resulting historic increases in demand on electric and natural gas systems, which led to unimaginable prices.

He cited how some MPUA members were able to garner understanding from customers — and counter a bit of the sticker shock — by providing information within the bill about how the cold weather and market factors affected wholesale prices. “When you put actual data in front of people, they start to get why it happened,” he said.

He also pointed to public power’s efforts to help customers through payment arrangements and relief programs.

“There are challenges ahead, and some of them [will] come by surprise — others we can prepare for — but the public power model is well suited to that,” he said.

In a very unpredictable 12-month span, Twitty, a 38-year veteran of the public power industry, has had no shortage of challenges.

“To be in a business when there is a pace of change that sometimes seems pretty staggering, and to do that while taking on a pandemic, working remotely, and seeing weather that is historic or near-historic, has made for an interesting year,” he said. “We got tested and stretched but found a way to make it work. I’m glad that we had an opportunity to show we could recover from these types of events, but I sure don’t need to do it again.”