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OnSIte Power At Utility Plants?

March 6, 2013
Climate, Leadership, planning, power demands, power-water nexus, sustainability, Uncategorized
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Since Richard Nixon was President, the federal government has been talking about reducing our reliance of foreign oil.  Since 2008, our dependence has dropped from 57 to 42 percent.  The foreign oil has been replaced by domestic oil and gas, conversion of power plants to natural gas, and investments in renewable power like wind (4% US production and) and solar power.  Coal has remained a constant, although future regulations of coal plant emission may alter this.  Federal loans from DOE have included $13 billion for solar energy, 1.7 billion for wind and 10 billion for nuclear power.  All other renewables account for 1.2 billion.  Power companies have invested in the renewable technologies in part because of low loan rates from the federal government, and partly due to tax credits (2.2 cents/kW-hr), but power entities like NextEra Energy have made cleaner power a basis of their future.  So what does this have to do with water utilities?  First, water and wastewater plant are often the largest users on the power grind in communities.  This is why they are able to get load control agreements.  The peak demands are the load control agreements, which means power providers can construct fewer plants, and keep rates down.  At the same time water and wastewater utilities benefit fro reduced rates, but have construct backup systems (which are needed if the power grid fails anyway.  Benefit to both parties.  But as the demands for power on the grid increase, and as regional demands in areas that are substantially constructed already, locating new power is difficult.  Transmission losses are 6 or more percent, and involve complicated federal FERC regulations.  So the SMART grid issue is distributed power, and finding sites for distributed power might be tough.  Or maybe not.  Water and wastewater plants have land, so there is an obvious fit.  But the rub is that if the water and wastewater people own the facilities, it decreases the peak capacity, meaning the power entities must build more capacity.  So perhaps there is a means to get revenues (leases) to water folks, while helping the smart grid.  I am thinking about developing a project proposal for this.  Let me know if you are interested.  Meanwhile if you have a success story, I’d love to hear it.

What do you believe are the three biggest water challenges in the U.S.?

February 15, 2013
Climate, communciations, Environment, finance, funding, infrastructure, Leadership, management, Marketing water, planning, Uncategorized, water sewer management, water supplies
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This question has been asked a couple times on on-line discussion groups.  It usually results in a short list of answers.  The number one answer is usually getting a handle on failing infrastructure.  The US built fantastic infrastructure systems that allowed our economy to grow and use to be productive, but like all tools and equipment, it degrades, or wears out with time.  In addition, newer infrastructure is more efficient and works better. In many ways we are victims of our own success. People have grown used to the fact that water is abundant, cheap, and safe. Open the tap and here it comes. Flush the toilet and there it goes, without a thought as to what is involved to produce, treat and distribute potable water as well as to collect, treat, and discharge wastewater. Looking to the future, we should take education as one of our challenges.  Our economy and out way of life requires access to high quality water and waste water. So this will continue to be critical.  But utilities have not been proactive in explaining the condition of buried infrastructure in particular, and need more data. The same goes for roadways and many buildings.

Cities are sitting on crumbling systems that have suffered from lack of adequate funding to consistently maintain and upgrade.  In part this is because some believe that clean drinking water is a right instead of a privilege to be paid for. We gladly pay hundreds of dollars per month for cable television and cell phones, but scream at the costs for water delivered to out tap. The discussion usually continues along the lines of utilities are funding at less than half the level needed to meet the 30 year demands while relying on the federal government, which is trying to get out of funding for infrastructure for local utilities. Utilities are a local issue which is some ways makes this easier. Our local leaders to send help with the education (after we educate them), send less money going to the general funds and more retained by utilities.

Perhaps where we have failed is in educating the public. Public agencies are almost always reactive, as opposed to pro-active, which is why we continuously end up in defensive positions and at the lower end of the spending priorities. So we keep deferring needed maintenance. The life cycle analysis concepts used in business would help. A 20 year old truck, pump, backhoe, etc just aren’t cost effective to operate and maintain. We are not very successful at getting this point across.

Money is an issue, and will always be, but the fact that local officials are not stressed about infrastructure is in part because utility personnel are very good at our jobs, minimizing disruptions and keeping the public safe. We are not “squeaky wheels” and we don’t market our product at all. Afterall, is cable or your phone really more valuable that water and sewer?

The Way of the Wolverine

January 30, 2013
Climate, communciations, Environment, finance, funding, infrastructure, Leadership, management, Marketing water, planning, sustainability, water sewer management
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Last week, the headline in the morning newspaper and on-line news outlets report the most recent suggestions from the House of Representatives to cut the federal budget deficit involves major cuts to domestic programs.  No surprise there.  Among those that are proposed to be cut significantly is infrastructure investments.  Infrastructure is what allows our country to thrive.  Without water, sewer, roads, airports, ports, etc, the economy could not be as robust as it has been, and will not achieve its greatest output.  The fact that our elected leaders don’t see infrastructure investment as a high priority is problematic.  More problematic is that this appears to be an ongoing position of some in Congress, meaning there is likely more of this view at other levels of government.  But it ignores that facts.  This country has always grown after investments in infrastructure, not before.  The federal government has been involved in infrastructure since the beginning of the country, and actually accelerated its involvement after WWII, including water and wastewater upgrades starting immediately after WWII.  The monies to improve water and sewer systems increased after the passage of the Clean Water and Safe Drinking Water Acts.  Recall that President Nixon, a conservative republican, sponsored the new federalism concept that greatly expanded the amount of federal block grants to local governments. In part this was due to the perceived need to help local governments catch up with improvements needed in connection with new federal rules, like the Clean Water Act and Safe Drinking Water act.  The high point in federal aid for infrastructure.

The trend was reversed in mid-1980s, when most of the grant programs were converted to loan programs, with the idea that the federal government would wean the utility industry off federal entitlements within 30 years.  The current concern over budget deficits and taxes further weakens the prospects of large scale federal flow –throughs to assist local governments with infrastructure upgrades, water and sewer included.  Given that the current water and sewer needs exceed over $1 billion in the next 30 years, and current funding levels are expected to derive half that amount, the infrastructure needs gaps will continue to widen, with potentially more common failures in piping systems, and impacts to local economies.  It is a viscous circle that needs to end, and one that can only have negative long-term effects for us.   In part the issue is political will, but also the failure of non-elected executives to fully grasp the issue, and adopting the way of the wolverine – to fight and scrap, climb, scramble and investigate new means to defend what is their’s.  The analogy is that utility personnel, and the upper management they report to, need to take “ownership” of their utilities infrastructure, and urge the decision-makers to do the same.  We need to defend our infrastructure, and we have the means to do it.  The time may be right to push this issue locally.  The economy is looking up.  Property values are starting to climb, and commercial activity is slowly creeping back.  The result will be more tax money available to general funds, many of which have been living large off the utility system.  Seems like this would be a good time to reverse that trend.

The failure to do so creates difficulties, not unlike those faced by wolverines today.  The wolverine suffers from effects placed on it by others.  There are only 500-1000 in the United States as opposed to the many that were here before hunting, farming and other development.  A second “way of the wolverine” is decline because they cannot fix the problems caused by others.  Unlike the wolverine, we have the power to prevent our decline.  We need to do so.

Leadership Part 3 Examples?

December 24, 2012
Climate, Environment, finance, funding, infrastructure, Leadership, management, Marketing water, planning, sustainability, Uncategorized, water sewer management, water supplies
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Leadership Part 3

One of the themes in the prior two posts on leadership was that leaders are defined by a vision, the people who follow the leader and the ability to market the vision.  We often fail on the marketing end, especially in dealing with water and sewer infrastructure issues.  We know the infrastructure is in poor condition and that billions, perhaps trillions are needed to upgrade the system to serve our needs.  But pipes are hidden and parks are far more glamorous, so guess what gets funded?  At least until a failure occurs.

I teach an elected officials class for water/wastewater issues.  The all acknowledge that a failure o f the utility system is a huge issue and the electorate and elected officials are often looking for “the cause” or someone who is responsible.  In other words, someone to fire.  It is every utility director’s nightmare, and a nightmare for many elected officials as well.  Yet a 4 hour outage in a year is a 99.96% success rate.  My students would be raising hell with the dean and president if I failed them for only 99.96% correct answers.  And rightly so.  Why are utilities any different?  Public health sure, but the systems can fail, and the condition that many are in warrants far more attention to potential to fail unless we can market to the public the need to invest.  Yet how many city managers, elected officials and finance director acknowledge any accountability for failures?  The investigation into the Walkerton Ontario failure indicated that the employees who falsified records, the governing body, the water advisory body and other officials all the way to the province had culpability in the failure of the system that made half the town sick and killed a number of residents.  Utility folks need to market the need to protect public health better, to make the public understand.

Marketing is a difficult skill set.  I can tell you sales in not one of my skills.  Common among engineers who tend to be more technical in nature, letting the data guide us.  Even so, we have successes.  Think about the City of Los Angeles.  The only reason large numbers of people can live in LA is the aqueducts that were started back in 1900s by William Mulholland under the guidance of Mayor Fred Eaton.  The vision was to grow LA but the limitation was water supplies.  The aqueducts sparked water wars (think Chinatown, the movie), and developed through the 1930s.  Hetch Hetchy, over 100 miles east, was established as San Francisco’s water supply back in 1913 as well.  The reservoir system continues to supply San Francisco today.  Denver Water acquired and/or constructed reservoirs and tunnels to the west side of the Rockies for water supplies prior to 1940, realizing that sustained growth in the Denver area was not available east of the Rockies. .  Pinellas County and Orange County California started projects to reuse treated wastewater for irrigation of private yards, and aquifer recharge in the 1970s to sustain their supplies.  Sustainability of water supplies, management of water sources including wastewater and stormwater as a part of an integrated program and sustaining the financial and infrastructure condition of the utility are the long-term priorities.  We need to find those visionary projects and people today.

So here’s the assignment.  Let’s find where those leaders are today, and identify what makes them a leader.

Creating Expectations

November 7, 2012
communciations, finance, funding, infrastructure, Leadership, management, Marketing water, planning, sustainability, water sewer management, water supplies
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We hear the moniker about getting the most out of your employees and staff.  Business books will talk about accountability, as will politicians, but creating accountability requires a first step on the art of management.  In any organization there needs to be a vision of where the organization wants to be in 5, 10 or 20 years.  Then there needs to be  a team of managers who buy into the vision, and implement it by securing employees who can implement it.  But it does not stop there.  You need to set  expectations.  Sounds, easy, but it is one of the issues professional employees especially complain about.  Assigning work tasks and saying “get it done” is not an expectation.  That’s a command.  Commands work in the military, but not so much in private practice.  The command and control types are notoriously difficult to work with, especially in professional and/or creative environments.  Micro-managers fall into this same mode.  The creative/professionals are intelligent and are looking for freedom to solve problems, usually more effectively that they can be told.  Instead, what needs to be done is to create a set of expectations of what will be accomplished and timelines.  Let the creative types and professionals figure out how. Provide them with the resources they need.  If employees understand the expectations, and are given the ability to accomplish the goals, accomplishing them becomes an end in itself – that becomes the goal and their satisfaction.  But does it work?  Well, yes.  I have been in organizations where the stars aligned to have a small group of manager who created and bought into a vision. We set expectations and let people accomplish them.  Always faster, always less cost, and always effectively.  A degree of recognition follows them. The group was easy to spot because they were accomplishing things (I should note that this does come with the price of jealousy among those who prefer to sit on the sidelines and can create some degree of subterfuge there which requires a strong leader to deal with that problem).  Students work the same way – set expectations of the delivery and allow them to develop the methods to solve the problem.  It is easy to see who the good engineers are, and who perhaps will be less successful.

Even easier are city and county managers, general managers and the like.  New officials come into office and six month later they are complaining that the staff and manager don’t communicate with them.  First response is to give them more information, which compounds the problem.  Still not communicating.  Every manager has one of these stories. The problem is that the new folks never revised the expectations from the past.  As a result everyone operates on the last set of expectations, until new ones are established.  If that never happens, well, the conflict escalates.  Someone has to take the leadership role, which creates a quandary with governing boards like the ones utilities commonly deal with because these folks are generally not educated in the intricacies of the operation of the utility, and rarely have any management experience.  They simply do not understand how to set reasonable expectations, to identify what is important to them and what is not, how to delegate, etc.  Until a sitdown discussion of expectations of both manager and the board is developed, the potential for friction will exist.  Some managers are good at recognizing and making adaptation, but most governing bodies are not.  This is why it is important to develop education programs that will encourage the community, which often has better connections to the governing members than staff.  So as utilities, our infrastructure is vital to the long-term development of our communities and to the public health and productivity of our residents.  So how do we make governing bodies understand the need to invest in utility infrastructure when emergencies are not happening?  Realizing we are all busy, we need to keep in mind that outreach is a key to creating that coalition of leadership in the community to advance the utility agenda.  Again a leadership issue and the need to engage the community, something we all too often forget to do.

Construction industry says it’s looking up? What does that say for utilities?

October 27, 2012
communciations, finance, funding, infrastructure, Leadership, management, Marketing water, sustainability, water sewer management
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The most recent discussions in trade journals, on-line and within the industry is that construction starts have begun to trend upward, a good sign that the economy is moving forward.  Since 2008 when the market crashed just after the election as a result of 2005/2006 packaged loan deals (read The Big Short by Michael Lewis if you really want to understand what happened, but be prepared to be irritated that no one has yet to go to jail), the stock market has crept steadily upward.  The problem is that the returns on investments have not trickled down to the majority of Americans except in low wage jobs (no wonder people can’t pay their mortgage and the IRS collects no income taxes from so many people).  But the tide does seem to be turning according to the construction journals.  In part we can thank low interest rates, but more perhaps more importantly it seems that much of the excess housing and commercial space may be decreasing so investors and owners that are looking to a spurt in economic growth in the coming years.  We see rising house prices in hard hit areas like south Florida.  With luck that will translate to jobs (maybe even decent wage jobs), increased tax revenues for local governments, and increased water revenues form of new or redeveloped users.  While the trend may not hold everywhere, the fact that the construction industry is talking about increases in new starts in the coming year, is a clear sign of things to come.  But are we ready?  That’s the big question.

Down here where I live, the 2007-2009 period was one where utilities ere struggling to find water supplies, with many investing in expensive alternative supplies.  Then reality struck and the 2020 demands are more like 2030 or 2040 demands.  The impetus for investment went away (it did not help that the burden was on the current ratepayers).  Those who invested in the 2008-2011 period got the benefit of much lower construction costs (typically about 70% of 2007 costs), but many sat on the sidelines as a result of political demands not to increase rates on current residents, resulting in lots of deferred maintenance.  While few utilities invested on growth related infrastructure, how many invested on replacement and rehabilitation at the lower costs?  Unfortunately, catching up on the backlog did not happen for many of us, which is why ASCE’s annual report card for water and sewer infrastructure continues to show very low grades (D- in 2009 for water and wastewater, a grade that has not improved).  As a result the legacy of the 2008 recession is that an opportunity to improve the condition of our infrastructure while creating local jobs was lost.  Now we will play catch up at higher prices, and higher interest rates (0.25% since June).

So where is the failure?  We complain about leadership at the federal level, but leadership starts at home (to use a cliché).  Local officials were not persuaded by utility personnel to invest in their future.  Aren’t these the same officials that often move to state and then the federal level?  Our failure to persuade them is an indication that our marketing approach to built consensus is not working.  Our ability to coalesce the community to improve itself is lacking, which readily translate to elected officials.  We can cast the blame upon them, but it starts much earlier than the time they make decisions.  In difficult economic times, we need a better approach to selling our product and the need to maintain the systems that deliver our product.  We need our customer to demand the improvements to protect their health.  People just don’t understand the link.  Water is there, so all is good.  When I flush it goes away.  No problem.  But what separates the US form the Third World is our infrastructure, especially our water and power infrastructure.  Maintaining our place in the world requires that we continuously upgrade and maintain this infrastructure.  That means planning ahead, building reserves, and taking advantage of economic conditions favorable to getting the most for our money.  How many of us missed this last opportunity?  We should be looking in the mirror and asking why…

 

PS  Today would be my Dad’s 90th.  We miss you!!

Engaging the Community – Going Beyond the Cheap Steps

October 8, 2012
communciations, Leadership, management, Marketing water, sustainability
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In a prior blog, I raised the question about marketing your water to your community.  The issue resulted from a comment that public dollars should not be spent on advertising.  There were several comments about this and we perhaps need to explore that option further.  One question raised was “how do we engage our community?”  There are a variety of ways to engage the community, but most utilities pursue only superficial, and inexpensive solutions, if pursued at all.  The typical solutions include speaker’s bureaus, mailers, flyers, notes on water bills, the consumer confidence report, press releases, presentations at commission meetings and water conservation efforts.  But how well do these work?  Certainly every utility should pursue many if not all of these options.  Getting positive information out to the community is needed, but does it change the perception of the community toward the utility?  Hard to say, but if that is the goal, you may be surprised how limited the impact of these efforts may be.  For one thing, most mailers, etc are viewed as junk mail so are not read by the customers.  Likewise most people do not pay attention to commission meetings, or read the paper (assuming the paper publishes the press release).  So many of these well intended, and time consuming efforts may be create limited engagement.  More proactive and maybe time consuming efforts are often needed to create an impact.

So what might work better?  If trying to change perception of the utility, more hands-on engagement may be needed.  It may mean reaching targeted audiences that can change current or long-term perceptions.  This can occur in a number of ways.  Here are a few:

  • School competitions for water conservation, hydrant painting, model water tanks – the concept here is to provide fun to elementary and middle school kids while encouraging them to learn about a given topic.  Normally involves teachers and parents, which enhances the message and spreads the “word.”  There are state and national competitions that students can participate in as well.  Utility management support is required, as and some resources and some devotion of time from staff to coordinate efforts among students and teachers.  But it puts the utility in front of an impressionable audience and provides a learning opportunity very different from the normal classroom.  How would that not be memorable?
  • Middle school programs with utility staff – the concept here is to encourage utility staff to communicate directly with middle school kids about what they do.  The key is to get younger kids interested in pursuing jobs in the field.  One of the ongoing issues in the utility industry is “graying,” and the potential for almost 50% of the workforce to retire in the near future.  Getting students to change their careers in college is too late.  Often high school is as well.  Middle school kids have rarely given much thought to their careers.  What better way to recruit that to put the utility in front of kids and get them thinking about going into the water field.?
  • Tours of facilities for school kids – most students learn visually, so tours of the facility are useful to create interest and enhance learning. Security is an issue, but they are kids.  It is always useful to know what goes on with water and wastewater. And it’s normally a positive, out of the classroom experience.  What kid doesn’t like a field trip?
  • Summer internships for high school students – this is another effort to engage and educate students, while perhaps setting the stage for a future employee who understands what win needed to do the work.  Teachers and parents are required to be part of the process – otherwise who recommends the students ad how do they get to work?  It helps if this is coupled with earlier introductions to the utility, so kids have become interested in the career prior to the job opportunities.  Think about the kid who learns about and tours the utility in middle school, knowing internships might be available in a couple years.
  • Partner with local universities on research issues – The focus is universities, not trade schools or community colleges, because universities do research and this capacity is often underutilized in the business work.  In part this is because their mission is misunderstood – they teach students to think as opposed to technical skills, which means things might take a little longer.  But universities have lots of technical resources, literature and skills that can be useful to utility systems.  Often the cost is less than consultants, and the access to data and knowledge is usually beyond that of consultants as well.  The utility needs to find the right person to connect with for small projects as some university folks avoid small projects, but many engineering professors welcome the opportunities.  Also many universities are public entities, which means bid laws may not apply for public agencies.  That makes it easier….
  • Sponsoring research projects for graduate students – graduate students need projects to complete their thesis.  They need real data and utility projects and research are generally beneficial.  And they need jobs so research is like an extended interview.  Professors are looking for research to collaborate on.  Utilities often need testing of pilot projects before design is initiated or completed.  As a result, utility sponsored research is a win-win for everyone.
  • Offering paid internships for undergraduate students – college students need money to pay tuition and experience to get a job.  The utility can engage and educate students, while perhaps setting the stage for a future employee if they do the job well.  Internships are extended interviews to gauge student skills.  And universities can help recommend good students.  Another win-win.
  • College scholarships – scholarships recognize good students, while creating the potential to attract future talent.  AWWA has found that most students who receive scholarships in from the water industry, stay in the field.
  • Co-hosting conferences – many conferences are looking for sponsors, money and locations.  Local conferences normally get some press, which helps the water profession.  Another win-win.
  • Hosting training programs- like conference, training is something all engineers, finance people, and operations and field personnel need.  Like conferences, many training programs are looking for sponsors, money and locations.
  • Participation in activities like Habitat for Humanity – utilities have tools and skilled labor.  They can help with community based activities.  Management needs to be engaged and show leadership for such projects to be successful, but there can be no losers in activities like this.
  • Awards – Apply for them.  They are noteworthy, and publishable!
  • Newspaper advertisements about events or accolades – some elected officials are opposed to self-laudatory commentary or marketing.  But in the competitive environment we operate in, we need to maximize revenue opportunities.

There are more, how many utilities actually engage in these efforts.  Money is often used as a reason not to, but if long-term engagement is what is desired, perhaps spending limited dollars to pursued these options could present a positive benefit:cost ratio to the utility.  That would make it worthwhile.