Insights into the forces shaping our industry.



The annual Distributech conference begins in just three weeks. D-Tech is a conference dedicated to the utility market; attracting the largest players in T&D equipment. As I reviewed the exhibitor list, I was struck by the sheer number of exhibitors that are primarily software companies. While the big guys in T&D equipment are there in force (ABB, Schneider, Eaton, GE, Hubbell, S&C, G&W, etc.) the preponderance of the booths are directly based upon technology.

The utility industry is changing rapidly. Alternative energies are altering the balance of power generation and impacting the IOU regulatory market with the rush of ‘off-grid’ or reduced grid installations. Solar and wind power construction has grown exponentially and with the now long term governmental incentives in place, the uncertainty in investment in both solar and wind has largely been removed which will spur greater growth. While alternative generation is a huge benefit to the United States (reduced reliance on foreign energy sources, reduction in fossil fuel burning, reduced pollution, reduced global warming, etc. etc.) the near-term transition of rapid adoption of new energy sources is fraught with issues of great concern to the utility industry at large.

Homeowners buying solar rooftop systems slowly diminish the revenue provided to the IOU’s. The logical move would be for the IOU community to endorse solar as a provided power solution and in essence ‘own’ that market; i.e. assess and install solar and wind power production throughout the customer base of each IOU. The IOU could feasibly install and maintain every solar location (wind has limited commercial or industrial use) and build the installation and maintenance charges into the monthly power rate structure. Bu the challenge of revenues still remains… when the solar installation is in place, there is little to no ‘energy delivery’ service by the IOU to the customer. In short, the IOU becomes a rooftop installation service with little opportunity to do what they’ve done for generations; sell power. And the legacy investments of overhead and underground power delivery systems will remain, with diminishing returns on that investment as the power requirements on that system will lessen with time as the growth in distributed power systems increases.

And, Utility generation is heavily regulated. Their ability to get rate increases is challenged. At the same time, IOU’s face significant financial threats across a variety of issues: Security; Distributed power generation (micro-grids, alternative energy solutions); Coal power regulation (and ultimate elimination); DC power distribution. All add to the regulatory and rate pressures.  And then there’s technology.

Power generation is far more software dependent than at any time in its history. From security issues, demand management, energy management, smart grid, smart metering, control systems, maintenance monitoring, asset management, power quality monitoring, financial analysis and on to… big data analytics. The issues in Energy mirror the changes in the overall electrical industry… we have moved into smart systems and software communicating with myriad sensor and control systems such that the basics of manufacturing, installing and maintaining the core products of electrical systems has created a requirement for talent that transcends those basic functions.

The explosion of ‘smart’ energy companies in the past 10 years is unprecedented. The sheer task of assessing new technologies and determining the reliability and functionality of each of those systems challenges every purchasing, engineering or IT department. And yet, we have entered a period in history where that previously ‘very small’ percentage of malevolent people has now grown to an absolute number of individuals where we need to devote far more of our time on protection of assets; whether that’s our personal financial information or the large physical assets of our power generation system. Our successes in software and the attendant rise in productivity has now yielded a concomitant response to require additional software and physical protection measures to limit access to those productivity systems of the past.

The utility industry faces continual threats to their companies. They are a vital part of the infrastructure; highly visible and inherently symbolic of a country’s success and stature, and a notable target for every mal-adjusted social deviant. Technology growth has challenged the utility industry more than the electrical industry at large, with the competitive pressures of security, alternative energy and distributed generation.

Each of those challenges require specialized talent expertise that is hard to find, expensive and essential to the success and financial growth of the utility. The US economy is growing, the unemployment rate is under 5%, the unemployment rate for college-educated talent is now 2.2% and the retirement of the Baby Boomers is accelerating; all leading to a confluence of a rapid drain of legacy talent and a candidate driven market.

In short, the Utility industry is facing increasing costs to their business. Their business model is changing rapidly with a significant potential loss of revenue if they don’t take control of the alternative power generation market. All of those threats exist in a business that is publicly regulated by consumers who want lower energy costs and are unaware of the true hidden costs of security and software requirements to ensure a safe and uninterrupted delivery of power. DTech should provide significant insights into the health of the industry and approaches to solving their challenges.


Ted Konnerth, PhD

Ted Konnerth, Egret Consulting Group’s founder and CEO, recruits on a retained basis, helping leaders in the electrical and lighting industry identify their next C and V-level hire. He is also the executive director for the International Retained Search Associates, allowing him to liaise with skilled recruiters around the globe. To learn more about how Ted can help your company attract talent view his biography, check him out on LinkedIn or email him at

By |January 21st, 2016|Industry Commentary, Industry Events, Industry News, Newsletter|0 Comments