Mayors and electric utilities: natural partners in the COVID-19 crisis
The short-term impacts of the new Coronavirus for 2019 (COVID-19) are rippling through our communities and economy. Communities are facing unemployment at levels higher than the Great Recession, business and societal disruption, and some businesses that may never to return. This crisis calls for strong and compassionate leadership that brings all segments of the community together in collaboration and teamwork especially as some cities and states start the slow process of re-opening businesses and returning to normal.
Local electric utilities that provide safety, security and convenience are a foundational part of any community and will help communities cautiously recover. But, electric utilities have also been impacted by the healthcare crisis and city leaders need to consider the effects of COVID-19 upon their local partner, and then look for areas of collaboration that make sense.
Like tax revenues, revenues for electric and gas utilities are down. People are conserving energy to save money. Utilities and their regulators have agreed not to shut off power during the pandemic as they maintain the obligation to serve. The real cost to serve these customers remains and rate recovery, if it comes, will be years away.
Electricity sales to the city or community, usually one of the largest electric customers, are diminished as citizens shelter in place. The normal income from water and wastewater treatment facilities, typically one of the largest electric loads in the electric service territory, and city buildings is down due to dramatically reduced commercial activity. Electric load reductions at major electric customers like schools, hospitals, hotels, sporting venues, etc. place electric utilities at the beginning of a significant cashflow crunch. The Edison Electric Institute (EEI) stated that electric loads are already down 5 percent to10 percent depending on the region of the country.
Mayors and community leaders can meet their mutual healthcare and economic challenges if they work together with the local electric utility. This healthcare crisis provides a unique opportunity for collaboration especially for member-owned cooperatives and locally owned and managed public power.
Areas of collaboration could include consistent messaging to citizens and utility customers, shared best practices, focused hiring of local businesses, meeting the greatest needs through targeted philanthropy and finding creative ways to get high capacity broadband to everyone that needs it.
Government leaders will need to work with their many departments and key partners like electric utilities to make sure a clear and consistent message of the current healthcare directives or the process of re-opening the community is provided to all. Electric utilities have many frontline employees in direct contact with the community to include trouble-men, line workers, and call centers. Close coordination for clear communications amongst the city’s many stakeholders including the electric utility will help the community understand and implement the healthcare directives and restoration initiatives.
Shared Best Practices
Government leaders and utilities can share best practices that they develop as large segments of their workforce work from home. Home workers will require Increased IT support and cyber security for video conferencing, file transfer protocols, specialty software packages and producing required government/regulatory reports using confidential data.
Many best practices can be shared. In addition, utilities can share the new HR policies that apply to new work-at-home practices and how they cross train on site personnel in mission critical tasks so they can cover multiple jobs as needed. Metrics for quality and productivity will need to be developed and would be a great area for mutual collaboration.
Government leaders can work with utilities to identify some of the local businesses that may be at risk of failure. The electric utilities could exercise Force Majeure clauses in their contract, as applicable, to re-bid certain types of products and services that could be provided by local business. Office supplies, small scale vegetation management, certain types of engineering and contract labor could be locally sourced. Utilities may learn that these local providers offer great value and protect local jobs and customers.
Millions of Americans are out of work. Giving to local philanthropies at charitable events will be significantly reduced. Healthcare research, the arts and culture, children and family support, and local food pantries will suffer. Giving by the local electric utility, usually a great corporate citizen especially in public power communities, will be reduced. Giving to the community by utility personnel to churches, para-church organizations, The United Way and other frontline charitable organizations will be cut back. Mayors can work with utility leadership to identify the areas with the greatest unmet needs and target giving where it will do the most good.
Working from home, tele-medicine, tele-education, and new forms of home entertainment all require high capacity broadband. Those citizens that do not have access to broadband, or cannot afford it, will be at a distinct disadvantage in a new normal future. Some communities may decide to wait for a COVID-19 cure and take longer to fully recover from the societal impacts of COVID-19. Accordingly, solutions with longer development timeframes, like high capacity broadband, may be viable.
Cooperatives and public power can start immediately to work with local governments to offer reasonably priced broadband services. In the smaller, less dense communities served by investor owned utilities, mayors and local leaders can work with utility leadership to get regulatory and legislative permission to meet the community need for high capacity broadband.
Local government and utilities will collaborate when and where they can and start the slow process of re-opening businesses and returning to normal. Their collaborative efforts will benefit the communities they serve and strengthen the bonds of respect and trust amongst their respective leadership and staff for years to come.
Mike Beehler is a registered Professional Engineer in multiple states, a fellow in the American Society of Civil Engineers and a member in IEEE and CIGRE. He is the author of” The Science of the Sale” and the COO of Mike Beehler & Associates.