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Multiservice utilities: A one-stop shop for communities

Many public power utilities provide more than electric service for their communities; they might also manage the area’s water, wastewater, cable, internet, waste, gas, and telecommunications services. For these utilities, being a multiservice provider brings opportunities in streamlining how work gets done, organizing the workforce, and giving back to the communities they serve.

 

Finding efficiencies in the field

“Operationally, one advantage we see in being a multiservice utility is having the ability to coordinate our various activities,” said Ken Weber, chief executive officer of Harlan Municipal Utilities (HMU), which supplies electric, gas, water, and telecommunications services to some 5,100 people in Harlan, Iowa. Weber points to the convenience for customers that his utility can provide as a single point of contact for contractors and movers.

Coordination impacts field operations, too, said Gabriel Khalife, borough manager for Kutztown, Pennsylvania, a municipality about the same size as Harlan that also offers a gamut of services: water, wastewater, gas, electric, telecommunications, and waste management.

“If we’re opening up a street, all the services get a chance to look at what’s underneath and see if there is an opportunity to improve service,” noted Khalife. “We get a firsthand look at what we can do all at once.”

 

A well-connected workforce

Efficiencies accrue in utility offices just as readily as they appear in the field.

“We definitely benefit from economies of scale for increased efficiency and productivity,” said Kelly Simonsen, marketing and communications manager for Easton Utilities. The town of Easton is Maryland’s first municipality to own all of its utility services. Easton Utilities provides electric, water, wastewater, natural gas, cable television, and internet utility services for nearly 17,000 people in the Town of Easton and its surrounding area.

In Easton, shared services covering functions including accounting, information technology, human resources, and marketing support all seven business units. “We regularly call on each business to support another, and that brings talent that we would not be able to have on staff full-time if we were just one business,” she said.

Simonsen added that internal training, leadership development and corporate communications also benefit from the economies of scale inherent in offering multiple services to the community. For instance, in a recently implemented leadership program, the utility was able to bring in high-caliber training resources.

“Participants also grow from each other’s experiences,” she said. In fact, the utility is committed to cross training. “For example, our customer service team members will spend time in the field viewing what a lineworker does. They can better communicate with the customer when they understand a bit more what linework entails.”

In Kutztown, Khalife said safety education crosses department lines. “We have a very active workforce that goes through monthly training meetings,” he explained. With ongoing investments in safety equipment and instruction, the utility has recently experienced two accident-free years.

In addition to providing opportunities for savings, delivering several services also boosts employee retention. “It serves as a natural arena for career mobility,” said Khalife.

For instance, a couple of years ago when two jobs opened on the electric side of the utility, two public works employees jumped at the opportunity to change fields. The borough, Khalife said, supported their training, certifications, and transition. In return, the city “retained their skills and knowledge of the borough,” he said. “If another department needed help with heavy equipment or snow plowing, those skills are still with us.”

Harlan’s Weber sees similar value in the career mobility his utility can offer. “We had one of our cable television gentlemen go from the telecom department to the gas department,” he said. “If there’s anybody who knows where everybody lives in town, it’s going to either be a cable guy or a gas meter guy. This employee’s familiarity with the town, with the customers, and with the general operation of HMU made for a shorter training period.”

 

More ways to promote good citizenship

Employees of multiservice utilities aren’t just acquainted with a town, they’re part of it, so reinforcing community ties is a high priority. The many services these organizations offer provide plenty of opportunities for positive impact.

Kutztown’s utility has what Khalife called a “passion for natural resources” that shows up in “tremendous volunteerism.” For example, the town’s environmental advisory commission teamed up with volunteers through Berks Nature, a local nonprofit agency focused on conservation, and the U.S. Department of Agriculture’s Natural Resources Conservation Service to address high levels of nitrates in Sacony Creek, a vital watershed for the community.

The combined effort helped local farmers install fencing and animal crossings over the streambed to prevent contamination and adopt nutrient management practices that facilitated controlled and timely application of fertilizers. Both efforts limited pathogens from entering the water. Before this initiative, the city’s water treatment plant had been updated with nitrate-removal equipment, but two years after this undertaking, that equipment runs at minimum capacity because nitrate levels have dropped by half.

Along with supporting the nearby ecology, multiservice utilities support the economy. In Harlan, utility managers chose to invest in a new building associated with the local community college.

“They were building a kind of technology incubator,” Weber explained. “Not only did we see the big picture for improving the community college for education, we saw the big picture for the technology center.”

He adds that the utility was the leading provider in the area capable of supplying the kind of high-speed internet such a center would require. HMU made a donation to help college officials get that center built, and now HMU is the provider of choice for the facility.

Easton’s Simonsen said the utility’s many services help the organization “be a more significant partner in the community by supporting organizations or events as a sponsor.” As an example, as a cable provider, the utility is able to give non-profit organizations opportunities to share their messages on local TV broadcasts free of charge.
 

Challenges to consolidation

While there are many advantages to being a multiservice utility, there can be some challenges, too.

One is the complexity of training for customer service representatives. “It is a little bit more of a learning curve for a CSR,” said Weber. “They have to go across four different main services, and then the telecom CSR drills down into internet, cable TV, and telephone. But that’s just standard operating procedure for us.”

Another issue: the bigger bills when customers get invoiced for combined services. Weber compares his utility’s bills to those in other markets, where a customer might get one bill for electric, and another for gas, water, wastewater and telecommunications, all from different organizations.

“In Harlan, a customer gets electric, gas, [and] water and we also collect for the city on the garbage and sewer side. That’s one big bill,” he said.

Meanwhile, Harlan sometimes finds itself with an interesting problem: popularity. “We often have requests to expand our service territory, especially with respect to internet service,” said Simonsen. “With a mindset to always serve the customer, it is challenging for us to not accommodate these requests. Still, there are times when the cost of supplying such service is financially unattractive.”
 

Building trust, earning loyalty

Despite minor hiccups, multiservice utilities report that having more contact with the community also strengthens local support for the utility.

Kutztown’s Khalife noted that the same convenience customers find in acquiring all their utility services from one provider extends to the grievance process. “In a one-stop shop, there’s one place to thank and the same place to complain against,” he said.

Khalife said his utility maintains “door-to-door response.” That is, the utility helps customers onsite with energy assessments, cable TV troubleshooting, and more. “It’s a response that customers might not get from a different utility venue.”

Simonsen said such commitment encourages customer loyalty for Easton: “People who currently have some of our services are inclined to add other offerings we provide.”

In Harlan, commitment to the community has similarly translated into opportunity and fierce loyalty. “The electric and water divisions of our utility were established in 1891. In the 1950s, there was a push to add natural gas, and an investor-owned utility tried to come into town,” recounted Weber. “The community overwhelmingly approved a municipal gas utility over the competition.”

The same thing happened in the 1980s, when a co-op tried to wrestle away electric service, and again in the 1990s, when the town voted to let HMU add telecommunications to its offerings. Today, competitive providers struggle to gain a foothold against the municipal provider that people trust for just about every utility need.

“We’ve been invested and involved in our town for 125 years, and now it’s a back-and-forth arrangement,” Weber said. “Our customers trust us, support us, and rebuke outside interference.”