The Official Publication of the Power & Communication Contractors Association 3rd Quarter 2015 Inside • PCCA Announces 2016 Project Manager Academy in Denver • Poll: Energy and Infrastructure Will Play a Key Role in 2016 Election • Survey Shows Rural Fiber Deployment, Higher Speed Broadband on the Rise • PCCA Mid-Year Meeting Heads to Historic Charleston Developing Your High-Potential Leaders
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Where Vision Meets Value. Industry Focus. Powerful Results. *Represented by FMI Capital Advisors FMI Capital Advisors, a subsidiary of FMI Corporation, is the leading investment banking firm exclusively serving the Engineering and Construction industry. With over 650 completed transactions, our industry focus enables us to provide our clients with valuable insight and advice. Clients gain access to our unparalleled network of industry contacts and relationships, deep market knowledge and technical expertise, based on decades of experience. W. Chris Daum | 919.785.9264 | CDaum@fminet.com Daniel Shumate | 919.785.9266 | DShumate@fminet.com WWW.FMINET.COM
3rd Quarter 2015 Officer Directors Official Publication of the Power & Communication Contractors Association Board of Directors Publication Staff 1908 Mt. Vernon Avenue, 2nd Floor Alexandria, Virginia 22301 (800) 542-PCCA • www.pccaweb.org ©2015 Power & Communication Contractors Association Garrett Akin Brooks Construction Craig Amerine Amerine Utilities Construction, Inc. Glen Amerine Amerine Utilities Construction, Inc. John Audi MasTec North America, Inc. Robert Breeden ElectriCom, Inc. Tony Briggs Vermeer Corporation Ed Campbell Henkels & McCoy, Inc. Marty Ferguson FS3, Inc. Matthew Gabrielse Gabe’s Construction Co., Inc. Robin Gilbertson J&R Underground, LLC Jerrod Henschel Michels Corporation Chase Lapcinski Push, Inc. Dan Levac Preformed Line Products Rob Pribyl MP Nexlevel, LLC Jameson Ringger NESCO, LLC Heath Sellenriek Sellenriek Construction Steve Sellenriek Sellenriek Construction Don Stephens Tjader & Highstrom Lindsley Thulin Michels Corporation Publisher Timothy Wagner Editor Michael Ancell Advertising Sales Stacy Bowdring Advertising Sales Dana Gilbertson Photography Steven Purcell Information Technology Greg Smela Accounting James Wagner President Timothy D. Killoren TelCom Construction President-Elect Todd Myers Kenneth G. Myers Construction 1st Vice President James Dillahunty Henkels & McCoy, Inc. 2nd Vice President Larry Pribyl MP Nexlevel, LLC Treasurer David Aubrey Okay Construction Secretary John Fluharty Mears Group, Inc. Winning the War for Talent: Developing Your High-Potential Leaders 9 By Emily Livorsi and Tim Tokarczyk To build long-term loyalty and deep levels of motivation, organizations must do more than simply offer monetary rewards for good work. Offering opportunities for highpotential employees to grow and develop is a more strategic and more effective tool for retaining top talent and for maximizing their potential. PCCA Announces 2016 Project Manager Academy in Denver 13 Continuing its mission to help members build strong project leaders, PCCA announced that it will hold the third PCCA Project Manager Academy January 11-14, 2016, in Denver, Colo. The Academy is four days of tough, no-nonsense, total immersion into the business of construction that will fastforward your people’s knowledge, decision-making skills, and leadership abilities. Cisco Visual Networking Index Predicts IP Traffic to Triple from 2014 to 2019 27 According to the 10th annual Cisco Visual Networking Index Forecast, annual Internet Protocol traffic will triple between 2014 and 2019, when it will reach a record 2 zettabytes. Factors expected to drive traffic growth include global increases in Internet users, personal devices and machine-to-machine connections, faster broadband speeds, and the adoption of advanced video services. Power News 19 RUS News 24 Telecom News 31 Safety News 39 2015 PCCA Mid-Year Meeting 41 PCCA Member News 47 PCCA New Members 54 Industry Calendar 54 Advertiser Index 54
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PCCA Journal|3rd Quarter 2015 9 The engineering and construction industry is notoriously competitive. You often hear people say, “We work harder,” or “We are more focused on our clients,” or “We can beat anyone’s cost.” A healthy sense of competition can characterize success throughout the industry. However, when it comes to winning in the war for talent, many organizations overlook the critical nature of beating their competition in this domain. The best organizations know that firms with the best people have a clear competitive advantage. To succeed over the next decade, organizations will need to not only attract great people, but also retain their existing, high-potential leaders. This requires an intentional effort to address two key issues. The highest performers want to (1) be recognized and rewarded for their contributions and (2) receive continuous opportunities to grow and develop. Many organizations tend to focus mostly on the first of the two and reward high potentials through raises or bonuses. While this may generate short-term motivation, a monetary-based strategy won’t help retain your employees if your competitors can offer more. To build long-term loyalty and deep levels of motivation, organizations must do more than simply offer monetary rewards for good work. Offering opportunities for high-potential employees to grow and develop is a more strategic and more effective tool for retaining top talent and maximizing their potential. A recent FMI survey found that only 43 percent of organizations surveyed in the construction industry are using a consistent process to identify and develop the next generation of leaders. That means the majority of organizations do this inconsistently, or not at all. To win the war for talent, organizations will need to master the art of identifying and developing high-potential talent, yet far too many have not even started the process. While less common, the best organizations in the industry have identified a clear and consistent process for identifying and developing high potentials. They have built the internal systems and structures needed to ensure that their next generation of leaders is continually developing its skills. This greatly contributes to longer-term loyalty because leaders who believe that you are investing in their long-term potential have a greater sense of commitment to your organization. By helping leaders clarify their short- and long-term developmental goals, you are sending a strong signal that you are interested in their career growth and potential to take on additional challenges and roles. This type of proactive development is an intentional, focused, and purposeful process that is planned out and implemented. This approach takes time Winning the War for Talent: Developing Your High-Potential Leaders By Emily Livorsi and Tim Tokarczyk Continued on page 10
PCCA Journal|3rd Quarter 2015 10 and energy, but the payoffs are great. The three main steps in building a high potential program with a clear strategy are: • Clarifying competencies, • Identifying high potentials, and • Building the high potential program. Clarifying Competencies When building a high potential program, organizations must first identify the specific competencies required for successful leadership. Competencies are different from the basic job duties that you might find in a job description. The most effective competency framework identifies the specific skills and traits that separate the highest performers from average performers. While it may seem like an easy step to skip, establishing clear criteria for success informs the rest of the high-potential program. If we truly understand what differentiates the success from average performance, then we can begin to evaluate and develop candidates in these key areas. Though every organization is different, competencies such as talent management, effective communication, selfawareness, and results-orientation might represent a few that are critical for a high-potential leader to master. For example, if an organization identifies the need for high potentials to provide deep and meaningful feedback, this guiding competency will help clarify expectations for what high potentials must master in their roles and beyond. Once competencies have been identified, organizations can start to develop these competencies in their high potentials (through executive coaching or training, for example). Achieving these competencies should define success in one’s role and future career trajectory. High-Potential Identification Top organizations expend a great deal of effort on effectively identifying their high potentials. Knowing that not every employee is a high potential, how can you identify these individuals? The most effective method is to assess candidates’ performance and potential objectively. This is critical because in the absence of an objective process with clearly identified criteria, subjectivity, and favoritism tend to creep in. An objective identification process allows firms to separate out current performance levels from future potential. Current high performers may be great contributors to the organization, for example, but they may have relatively low potential for future growth. Likewise, current midlevel performers may have great potential for future growth with the proper training and development. Without a close examination of different candidates, we could invest in developing the wrong people or miss an opportunity to develop a future star player. Indicators for potential often include learning agility, a passion for increased responsibility, and self-drive. Assessing high potentials also requires a closer look at how each individual aligns with the organization’s overall purpose and values. Many companies get into trouble by promoting individuals who may be great performers but are fundamentally misaligned with the organization’s stated purpose and values. This can demoralize other individuals who recognize the disconnect. To achieve success, organizations developing a high-potential program must ensure that the candidates closely align with the vision and culture of the organization. Having both current and future leaders who walk the walk is a foundational element of shaping a strong culture. High-Potential Program Once the organization clearly identifies the required competencies for each leadership position and identifies its highpotential leader group, the next step is to build a compelling and skill-enriching high-potential program. This program should be designed to move the participants from their current state to a desired future state. Many organizations create unnecessary issues for themselves by cloaking the highpotential program in secrecy. Instead, the program should be fully transparent across the company, including information about the participants and the selection process. When organizations invest a great deal of time clarifying competencies for success and identifying leaders based on clear and objective criteria, those who are/aren’t included in a high potential development program appreciate the rigor of the approach and tend to agree with participant decisions. Greater transparency can also be a great motivating tool to more individuals interested in what they need to do to be included in the high-potential group. This may inspire them to take a deeper look at their own levels of performance. Because high-potential programs face insurmountable challenges when top leaders aren’t involved, the programs must have the right levels of executive and senior leadership support. Senior leaders will need to assist in the process of identifying the high potentials, communicate the strategy of the program to the high-potential group and the broader organization, and play an integral role in the various stages of the progress. A high-potential program also requires commitment from key leaders, especially in the early stages. Internal champions must manage program logistics and ensure the Developing Your High-Potential Leaders Continued from page 9
PCCA Journal|3rd Quarter 2015 11 right content and learning opportunities are present. Each high-potential program will look different and be designed to support the larger initiatives and strategies of the organization. Most effective high-potential programs use a variety of developmental options. For example, they may send their high-potential group through formal training sessions (either internally or externally), pair high potentials up with an executive coach, or develop action-learning initiatives or stretch assignments. Regardless of the format, consistent, clear feedback is a hallmark of great high-potential programs. Preparing for the Future Developing an effective high-potential program requires an investment of time, energy, and resources, both initially and ongoing. Some organizations in the industry have delayed this first step, with the mindset that they’re too busy getting work to spend time on internal initiatives. Those organizations will face great challenges winning the war for talent and will play catch-up to those organizations that have already started. The most forward-looking companies recognize that to retain their top talent, they need to invest in developing the next generation of leaders. As the Baby Boomers continue to leave the industry, organizations will need to rely increasingly on younger workers to step up and take on levels of increased responsibility. If you aren’t preparing your next generation of leaders for that responsibility, you can expect to face great challenges in the not-too-distant future. The time to start developing your high potentials is now. Tim Tokarczyk is a consultant with FMI Corporation. He can be reached at (303) 398-7222 or ttokarczyk@fminet.com. Emily Livorsi is a staff consultant with FMI Corporation and can be reached at (303) 398-7216 or at elivorsi@fminet.com. Reprinted with permission from FMI Corporation, (919) 7878400. For more information, visit www.fminet.com. “NEW & IMPROVED” COMPACT DESIGN 10” x 13” x less than 2” thick THE “NEW” EV3 KIT INCLUDES: 1 - TRI-FOLD 36” RULER, 3 - FOLDABLE “MARK” MARKERS, 1 - FOLDABLE “HIT” MARKER WHITE BOARD, MARKER SET, ERASER - ALL STORED NEATLY IN A DRAWSTRING BACKPACK EXCAVATION VERIFICATION KIT with the ANNANDALE, MN | PH: 877-274-7223 | WWW.FS3INC.BIZ CYA EVK MAKE SURE TO *Helpful Hint* Take pictures before you dig! *Helpful Tools* Jobsite Sketches with color coded markers!
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PCCA Journal|3rd Quarter 2015 13 Continuing its mission to help members build strong project leaders, PCCA announced that it will hold the third PCCA Project Manager Academy (PMA) January 11-14, 2016, in Denver, Colo., at the Crowne Plaza Hotel - Denver International Airport. The PCCA Academy is four days of tough, no-nonsense, total immersion into the business of construction that will fast-forward your people’s knowledge, decision-making skills, and leadership abilities. But mostly, they will learn to think and act as if they have a personal stake in every project. By all accounts the first two PMAs were wildly successful, as participants, instructors, and the association came away enlightened, enriched, and energized. Each PMA has included construction professionals from companies around the country, and they all were fully engaged in the program and worked hard to better themselves and their companies. “I will highly recommend this academy to our organization on sending more managers. It was four days of high-level information but explained in simple terms. It allows you to better understand how the business is looked at by owners and the importance of the things they discuss about job closeouts, receivables, production, and planning,” wrote one participant on his program evaluation following the PMA. The PCCA Academy is based on FMI’s highly successful PMA, and FMI worked with a group of PCCA contractor and associate members to tailor the program specifically to our industry. The course materials include PCCA-specific PCCA Announces 2016 Project Manager Academy in Denver Continued on page 14
PCCA Journal|3rd Quarter 2015 14 case studies and samples of checklists, best practices, plans, specs, contracts, change orders, etc. Your people won’t be discussing homebuilding, general construction, or road building; they’ll be discussing plowing, drilling, fiber to the home, transmission & distribution lines, and substations. FMI has many years of experience teaching this program and admits that the techniques of managing projects are wellknown. Training in scheduling, budgeting, and cost tracking is available from many sources. But to graduate to the next level, your project staff must learn to think and act like business owners. When projects break down, they have to feel like they are bleeding their own money. When customers are dissatisfied, your managers and staff must take it personally. When jobs are running smoothly, they must remain vigilant. The three main FMI facilitators at the PCCA PMA—Andy Patron, Ethan Cowles, and Rick Reese—are very enthusiastic and engaging instructors. On the program evaluations, participants raved about the instructors’ knowledge and their ability to hold the group’s attention. “Coming from a hands-on environment to sitting in a classroom for 11 hours a day, I think all three presenters did a great job of keeping it a fun and exciting learning experience,” said one participant. “Thank you!” The PCCA Project Manager Academy is built around four core themes: • Profitable customer relationship development • Powerful, integrated project teams • Financial control of projects • Planning projects for profits and customer satisfaction During this high-level, immersion experience, your project delivery people will examine themselves, their organizations, and their processes. Our goal is to transform talented builders into true construction entrepreneurs. An entrepreneur is a self-directed person who corrals and coordinates diverse talents and resources to service customers and return profits. While this description may fit many “managers,” there is a key difference between an entrepreneur and a manager. While most managers are capable and dedicated to their jobs, entrepreneurs will always act as if they have a personal stake in the success or failure of the project. The Journey Begins Now The goal of this program is fundamental behavioral change. Stop your PMs from seeing themselves as just another employee or a witness to project outcomes. Turn them into virtual owners who have a personal stake in project outcomes and the tools necessary to succeed. The PCCA Project Manager Academy begins weeks before attendees arrive, as each participant completes ProScan and 360o personality surveys prior to the PMA and also has surveys completed by supervisors, co-workers, people who report to them, vendors, and customers. Once at the PMA, participants learn about the value of honest feedback, the qualities of effective feedback, how to best give it, how to best receive it, and its importance to the success of one’s company. During the PMA, each participant has an hourlong, one-on-one session with an FMI facilitator who reviews the specifics of their personal ProScan and 360o reports and helps them understand how the results relate to their work and their lives. PCCA PMA participants have been amazed by the survey tools’ ability to accurately describe their personality and appreciative of the assistance provided by the FMI facilitators. The participants’ comments were telling: “Wow! I am amazed on how dead on this report came out. It is as if someone had stepped into my life and lived it. To hear who I am and what to do with my faults and plusses is great! Good job!” “Thank you for helping me understand me,” said another participant. “Great exercise. Very eye-opening. I could have PCCA Project Manager Academy Continued from page 13 “I attended the first Project Manager Academy to see what it was all about and could not have been more impressed. We will continue sending our people. If they put 25 percent of what they learned to use on the job, we will get a return on our investment that is much more than the registration fee.” – Heath Sellenriek, Sellenriek Construction
PCCA Journal|3rd Quarter 2015 15 spent two hours with this info and hearing his feedback and suggestions,” said another. Bringing It All Back Home No seminar, course, or academy is worth much if the participants don’t effectively apply the knowledge and skills they learned to their actual work situation. At the PCCA PMA, participants develop a personal action plan with a vision, specific/detailed steps, follow-through, and accountability. In their comments about the program, the first PCCA PMA class was very confident about the on-the-job benefits the PMA provided: • I now know that project planning is very important in all stages of the project, not just in the early stages. • Scheduling is obviously very important, and I will instantly begin to do that. • This really made me stop and think about how I control my time. • Will treat the workers differently. We will do a pre- and post-job plan. • I think I will have crews that will better understand and work with one another. • Listen more than talk. Get better relationships with my crew as well as my foremen. • On customer-focused construction: A very important subject for me as well as one I need to work on, and I think I pulled several ways to improve from this section. • Huge part of our business that is sometimes not handled as well as it should be. Importance of understanding the customer and their needs, wants and concerns. • I expect to be able to manage time better, and to be able to tell what the customer is actually looking for. • Better time management and better relationships with customers. • I’ve never looked at cash flow before, but this helped illustrate why only looking at gross margin is a bad thing. • Run jobs more efficiently and in a less stressful environment. • Scheduling, planning and job tracking will be better. • Increased productivity and greater confidence. • When I’m higher up in the company, I’ll be sending two guys to this each year. Who Should Attend • Project Executives • Project Managers • Estimators There is benefit in having several team members experience the PCCA Project Managers Academy. Companies send their team members in groups to foster greater cohesion and accountability, and the principles multiply throughout the organization. Also, registration discounts are available for multiple registrants from the same company. Details of PCCA Project Managers Academy, January 11-14 in Denver, are being finalized and will be mailed to all PCCA members shortly and will be posted at www.pccaweb.org. PCCA Project Managers Academy Agenda Day 1 - January 11, 8 am - 6 pm Safety Focus Welcome & Introduction • Introduce individuals and articulate objectives • Link project management outcomes with corporate performance • Identify communication behaviors in a team-building exercise Management AND Leadership • Define a “good” project manager • Differentiate between leadership and management • Relate the importance of motivating and energizing your team to their performance Project Planning/Project Introduction • Have the ability to develop a complete end-to-end project delivery plan • Organize and structure project plan information for communicating with the project team • Effectively document the project plan • Identify, address, manage, and understand project plan atContinued on page 16
PCCA Journal|3rd Quarter 2015 16 tributes, qualitatively and quantitatively Project Start-Up • Generate and gain positive project momentum • Identify and share key project issues, strategies, methods and milestones • Make use of checklists • Initiate effective communication with the project team • Create and maintain a cooperative team environment Personal Feedback: ProScan & 360° Feedback • Understand the importance of feedback in personal and professional development • Understand the impact of organizational culture on honest feedback • Understand how PDP and 360° feedback are used at the PMA • Adjust working and communication strategies based on personal strengths and weaknesses Team Debriefing • Focus on completing PDP/360 feedback questions and preparation Day 2 - January 12, 8 am - 7:30 pm Safety Focus Customer-Focused Construction • Understand the value of the customer • Use tools to develop an appropriate, client-centered response to issues • Implement a customer-focused strategy for your project and firm Time Management • Understand that it’s about self-management more than time management • Discover the keys to delegation and prioritization • Understand the importance of life balance and its contribution to our overall productivity • Gain insight into personal strengths and weaknesses regarding your mastery of time Sample Project Preparation Build Sample Project and Owner Presentations Billings, Cash Flow, and Closeout * Continually monitor and act on the current cash situation * Billing accurately and promptly * Learn to drive everything on a project to closure Build Sample Project Team Debriefing • Focus on delivering plus/delta feedback to each other (participants) based on their performance on sample project and their PDP/360 feedback sessions Day 3 - January 13, 8 am - 7:30 pm Safety Focus Change Order Management Identify and evaluate all changes * Identify cost and schedule implications of changes * Use changes as an opportunity to sell increased value * Maintain an appropriate balance between capturing all changes and maintaining positive client relationships Build Sample Project Job Set-Up, Safety, and Logistics for Power and Communications Industry • Discuss the unique challenges of working in the power and communications industry; remote location and residential • Special equipment, tools, and materials • Plan for safety • Technical consideration Build Sample Project Standards and Best Practices • Explain the benefits of identifying and using standard procedures derived from best practices • Use flow-charting to understand, develop, and improve standard procedures on the project or in your company • Communicate standard procedures to project teams • Establish a team culture in which best practices are embraced and leveraged • Identify situations in which it is appropriate to use nonstandard procedures Build Sample Project Team Debriefing Day 4 - January 14, 8 am - 3 pm Safety Focus Ethics and Integrity in Project Management • Leverage the project management role into a key client relationship anchor • Build relationships with existing clients leading to repeat work opportunities Sample Project Closeout • Discuss lessons learned that can be applied back in the real world • Test the projects Stand and Deliver • As communicators, all project managers need to have exemplary presentation skills PCCA Project Manager Academy Continued from page 15
PCCA Journal|3rd Quarter 2015 17 • Presentation skills are a life skill—you need them in your life, not just at work Develop Your Personal Action Plan • Write specific action items that will be tracked and monitored over a specified period of time • Differentiate between personal action items and items that will be addressed organizationally as suggestions for your firm • Require each participant to share one action item with the table Be a Project Leader, Not a Project Witness • Improve the use of your own personal style to lead others to make changes back on the job • Use the participant manual by adding to it and referring to it • Refer to the PCCA Handbook for articles that will guide you as you try out your toolbox • Understand and believe that each participant now has the tools and potential to not only lead projects, but to be recognized as a leader in his or her firm Program Evaluations About FMI FMI is a leading provider of management consulting, investment banking, and research to the engineering and construction industry. The firm works in all segments of the industry providing clients with value-added business solutions. FMI’s provides instructors to the PCCA Project Manager Academy who are committed to bringing their talents, energy, and passion together to develop world-class project delivery experts in the construction industry. The faculty includes senior-level FMI staff who possess both project management knowledge and direct construction experience. In addition to coaching at the Project Manager Academy, the instructors are highly respected consultants, authors and thought leaders in the construction industry around the world. Date January 11-14, 2016 Location Denver, Colorado Hotel Crowne Plaza Hotel - Denver International Airport 15500 E 40th Avenue Denver, CO 80239 (303) 371-9494 www.cpdenverairport.com $117 per night Registration Fees $5,495 First registrant from a company $5,295 Second registrant from a company What’s Included • All course materials and instruction • ProScan and 360o Feedback • PCCA PMA laptop bag • Breakfast and lunch on Monday • Breakfast, lunch, and dinner on Tuesday and Wednesday • Breakfast and lunch on Thursday Transportation Free shuttle service is available from Denver International Airport. To register, go to www.pccaweb.org or call (800) 542-PCCA 3030 24TH AVENUE SOUTH, MOORHEAD, MN 56560 218.284.9500 • AEVENIA.COM • PRIM.COM TRANSMISSION • DISTRIBUTION UNDERGROUND POWER • SUBSTATIONS EMERGENCY RESTORATION SERVICES
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PCCA Journal|3rd Quarter 2015 19 The Edison Electric Institute (EEI) is partnering with a number of federal government agencies and utility industry groups to form the Utility Industry Workforce Initiative, a multiyear effort dedicated to facilitating the recruitment, training, and retention of exiting service members, veterans, and their spouses into employment in the utility industry. According to the Center for Energy Workforce Development (CEWD), the electric utility industry will need to replace almost half of its current workforce over the next decade. “Our industry is facing significant retirements of our existing workforce, and we are working together to develop solutions and approaches to identify a talented, high-skilled, and innovative industry workforce for the future,” said EEI President Tom Kuhn. “The leadership abilities, mission focus, commitment to safety, and team orientation that military service members consistently demonstrate are exactly the skills our industry needs in its workers. We are pleased to work together with our government partners on the Utility Industry Workforce Initiative with the goal to provide veterans a path to rewarding energy careers.” Other participants in the initiative include the Departments of Energy, Defense, Labor, and Veterans Affairs; the Nuclear Energy Institute; the National Rural Electric Cooperative Association; and the American Gas Association. “Energy is America’s great economic advantage in the 21st century global economy, but we’ll need a 21st century energy infrastructure to keep that advantage, built by a 21st century workforce,” said U.S. Secretary of Energy Ernest Moniz. “New job-driven training strategies, reflecting a broader range of needed skills, will be required to meet the challenges of the future. America’s talented pool of veterans provides the leaders our utility industry needs to build a new energy future.” The initiative will work to identify and promote training and credentialing opportunities for veterans to facilitate their entry into the utility industry, share information on trends about exiting military members, promote opportunities for immediate recruitment of exiting service members, and assess how military training requirements align with job requirements throughout the utility industry. It will also work to improve existing tools that match service members and veterans with employment opportunities in the utility industry. This new initiative complements the Troops to Energy Jobs program, which was launched in 2011 by CEWD, in partnership with EEI and its member companies. Troops to Energy Jobs works to make it easier for veterans to translate their skills and training, accelerate the time it takes to get required credentials or degrees, create a military-friendly environment within companies, and increase the number of veterans who are recruited, hired, and trained in the utility industry. POWER NEWS Continued on page 20 New Initiative Aims to Drive Military Veterans to Utility Industry Jobs Poll: Energy and Infrastructure Will Play a Key Role in 2016 Election Recent polling conducted for Consumer Energy Alliance (CEA) continues to examine what role the Atlantic Coast Pipeline, Keystone XL Pipeline, offshore production, and other energy issues could play in the 2016 presidential election. And as echoed in recent poll results from Iowa, New Hampshire, and South Carolina, voters in Virginia, North Carolina, and West Virginia reinforced that energy policy will be an important issue when they cast their votes for president next fall. Key findings: • Majorities of voters in North Carolina, Virginia, and West Virginia have heard about the Atlantic Coast Pipeline and support it. • Across states, more than 80 percent of voters say energy will be a significant factor on how they vote. • Presidential candidates will need to take a strong stance on
PCCA Journal|3rd Quarter 2015 20 Power News Continued from page 19 pipeline construction and energy development. • Voters overwhelmingly believe pipelines are the safest means to transport natural gas. • Voters support expanding offshore exploration, constructing the Keystone XL Pipeline, and generating electricity via coal-fired power plants. In its latest poll, CEA found that a large majority of voters in Virginia (56 percent), West Virginia (70 percent), and North Carolina (55 percent) support the construction of the Atlantic Coast Pipeline. Across all three states, voters support the project by more than 30 points. The poll also showed that voters of all political affiliations support expanding offshore exploration, constructing the Keystone XL pipeline, keeping coal power plants operational, and expanding shale production via hydraulic fracturing. Results from the poll indicate that citizens in North Carolina, West Virginia, and Virginia also support the development of energy infrastructure, especially in regards to the Atlantic Coast Pipeline. Voters pointed to a number of reasons for their position on the pipeline, with jobs being mentioned the most frequently (19 percent), followed by an anticipated reduction in the price of natural gas (18 percent). The contribution to U.S. energy independence and the general positive impact the pipeline will have on the economy were also cited as reasons for support. “As the primary season approaches, presidential candidates will need to take a strong stance on energy issues for the 2016 election,” CEA President David Holt said. “As we have seen in the past, the success of candidates in 2016 will hinge on their ability to promote issues that foster economic and job growth while ensuring safety and the protection of our environment. This can be achieved through the promotion of energy infrastructure and production, which will contribute to U.S. self-sufficiency, stimulate the economy, and create jobs.” GE Launches Digital Wind Farm GE announced in May the launch of its Digital Wind Farm, a dynamic, connected, and adaptable wind energy ecosystem that pairs world-class turbines with the digital infrastructure for the wind industry. The technology boosts a wind farm’s energy production by up to 20 percent and could help generate up to an estimated $50 billion of value for the wind industry. The Digital Wind Farm uses interconnected digital technology—often referred to as the Industrial Internet—to address a long-standing need for greater flexibility in renewable power. The technology will help integrate renewable power into the existing power grid more effectively. “Every business, including our own at GE, and every industry is being transformed by smarter digital technologies, and the greatest opportunity lies in energy,” said Steve Bolze, president and CEO of GE Power & Water. “The question is not whether to start down this path... it’s about knowing how to get the most out of your digital transformation. That’s what will separate industry leaders from those left behind.” The Digital Wind Farm ecosystem begins with the production of the turbines themselves. With the next generation of Brilliant wind turbines, GE’s new 2-megawatt platform utilizes a digital twin modeling system to build up to 20 different turbine configurations at every unique pad location across a wind farm to generate power at peak efficiency based on the surrounding environment. Additionally, each turbine will be connected to advanced networks that can analyze turbine operations in real time and make adjustments to boost operating efficiencies. Once the turbines are built, their embedded sensors are connected and the data gathered from them are analyzed in real time with GE’s Predix software, which allows operators to monitor performance from data across turbines, farms, or even entire industry fleets. The data provide information on temperature, turbine misalignments, or vibrations that can affect performance. As more data are collected, the system actually learns over time, becoming more predictive and “future-proofing” wind farms by maintaining top performance and avoiding the maintenance issues that typically occur as turbines age. It also reduces costs by customizing maintenance schedules to ensure that preventive maintenance is done only when needed. “Big data is worthless without the insight to take action, and our vision for the industry is to use today’s data to predict tomorrow’s outcomes,” Bolze said. “By harnessing the full power of the Industrial Internet, we can create a world where wind farms learn, adapt, and perform better tomorrow than they do today.”
PCCA Journal|3rd Quarter 2015 21 s 0ERFECT FOR &44( !PPLICATIONS s 2EDUCE 0EDESTALS AND "OXES s $ROPS $IRECTLY TO THE (OUSE s %ASY 4ECHNOLOGY 5PGRADES s %MPTY 0ATHWAYS !VAILABLE FOR &UTURE 'ROWTH ,EARN ABOUT THE ENTIRE &UTURE0ATH &AMILY OF 0RODUCTS AT &UTURE0ATH 7AY WWW DURALINE COM 11400 Parkside Dr., Suite 300 Knoxville, TN 37934 800.847.7661 4HE "EST 7AY TO 'ET (OME Analyst Says U.S. 2015 Coal Production at Lowest Level Since 1987 U.S. coal production in 2015 is expected to be down 7.5 percent from 2014 and will be the lowest total since 1987, a coal analyst for the Energy Information Administration said in July. Production totals could get pulled down further as a mild summer and continued low natural gas prices weaken domestic coal demand, said Elias Johnson, who co-authored the Short-Term Energy Outlook for July. “If demand doesn’t really rebound because of a warm summer, we could see consumption go even lower and that could lead to production going down,” Johnson said. Production is expected to drop in each of the three coal producing regions. The Appalachian region will be down 12.1 percent from 2014, the Interior region will drop by 2.7 percent, and the West will drop by 6.9 percent, according to the EIA. Coal exports are expected to drop by 10.2 percent. The EIA also projects coal consumption for electricity generation will decline by 6.6 percent from 2014 and forecasts that it will increase slightly in 2016, up 1.3 percent from this year. Factors behind the drop in consumption include low natural gas prices and less demand due to a mild winter. A mild summer could bring down those totals further, Johnson said. The recent Supreme Court ruling that remanded the Environmental Protection Agency’s Mercury and Air Toxic Standards (MATS) back to lower courts is not expected to help as the EIA has not heard of any generator changing course on retiring coal plants, Johnson said. One bright spot for the coal industry in the report shows that as production and consumption for electricity generation are expected to drop in 2015, both are expected to have modest upticks in 2016. “We’re expecting gas prices to rise and expect a little more demand for electricity,” Johnson said. “Even though we are expecting more retirements for MATS, were making the assumption that the remaining generators will be used at a higher capacity.” Continued on page 22
PCCA Journal|3rd Quarter 2015 22 Power News Continued from page 21 Study Shows States with Carbon (PLVVLRQV &DSV 6HH (FRQRPLF %HQHÀWV States participating in the Regional Greenhouse Gas Initiative (RGGI) have found that regulating carbon emissions from power plants through market-based mechanisms goes hand-in-hand with economic benefits. That’s the conclusion of a new report from Analysis Group, released in July at the National Association of Regulatory Utility Commissioners conference in New York, N.Y. The report findings provide valuable lessons for states across the country now evaluating their options under the Clean Power Plan, the EPA’s proposed effort to limit carbon emissions from power plants across the country. “Based on an analysis of years of hard data, RGGI shows that multi-state, market-based carbon control mechanisms work and can deliver positive economic benefits,” said Analysis Group Vice President Paul Hibbard. “That’s not to say programs designed to cut greenhouse gas emissions are economic development programs—their goals are different. But the data clearly show that cutting carbon emissions can be a net positive for the economy.” The report, “The Economic Impacts Solar Heats Up Ahead of ITC Deadline There has been a noticeable increase in the number of photovoltaic (PV) projects in the United States aiming to be operational before the expiration of the 30 percent federal energy investment tax credit (ITC) on December 31, 2016. According to IHS, a leading global source of critical information and insight, more than 32 gigawatts (GW) of projects greater than 5 megawatts (MW) in size are still in development or under construction. Not surprisingly, the main bulk of projects is in California, but several other states have many large utility projects in development aiming for completion this year or next. Based on the latest information from the IHS Solar Deal Tracker database, NextEra has indicated that 1.5 GW of Hanwha Q Cells modules will be installed by the end of 2016. This purchase will cover projects in several states, including California, Georgia, Florida, and Hawaii. “Canadian Solar dramatically increased its project pipeline in the United States, with the company’s recent acquisition of Recurrent Energy,” said Christine Beadle, senior analyst for IHS Technology. “Many of these projects are set to be completed prior to the 2016 deadline, including a 150 MW project for Austin Energy in Texas and several other projects in California.” Lengthy delays in permitting and approval—or the inability to secure a power off-taker—could be critical, as developers strive to complete projects in all states in time to be operational and to qualify for the federal ITC. Some areas in California are plagued with contentious environmental issues, from Native American Tribes fearing the removal or destruction of artifacts from their ancestral homeland to environmental issues. One project, Imperial Solar Energy Center West, was already under construction when work was halted for a few weeks earlier this year because the flat-tailed horned lizard became a possible candidate for protection under the California Endangered Species Act. “Newly proposed projects appear to be primarily located in less contentious areas and developed at sizes that are likely to promote a high potential for success in a short time,” Beadle said. “Recent project approvals by the Bureau of Land Management encourage installations in designated Solar Energy Zones.” The most recent wave of proposed projects is in the 20 MW to 100 MW range. Some projects have been in development for a long time, but when size and location are optimal, there is a greater likelihood of success. Other projects in less optimal areas will eventually be completed, but possibly not before the deadline, which seems to have affected priorities and caused a saturation of PV projects in certain areas. If no bill to extend the deadline is enacted, the federal ITC for commercial and utility solar projects will drop to 10 percent in 2017. Completion of these projects prior to the deadline could be crucial to ensure financial viability. Any extension of the 30 percent federal ITC into 2017 or beyond would certainly be a positive driver for U.S. solar growth after 2016, as these early-stage projects will be ready to go into construction; however, at this time an extension looks unlikely.
PCCA Journal|3rd Quarter 2015 23 of the Regional Greenhouse Gas Initiative on Nine Northeast and Mid-Atlantic States,” found that implementing RGGI from 2012-2014 adds $1.3 billion in economic value to the nine-state RGGI region, leads to the creation of more than 14,000 new jobs, and cuts electricity and heating bills, saving consumers $460 million. Each individual state sees economic benefits as the region cuts annual carbon emissions by about a third from 2008 (140 million metric tons) to 2014 (90 million metric tons). Under RGGI, six New England states plus New York, Delaware, and Maryland establish a regional cap for carbon emissions. States then create their own individual plans to cut carbon and offer a declining number of carbon emission allowances for sale through regional auctions. Power plant owners buy those allowances at auction—which gives them the right to emit specific amounts of carbon dioxide—or find ways to clean up carbon emissions. Auction proceeds go back to the states, which have reinvested billions of dollars back into their economies. Each state decides how to spend that money. The report examined individual state strategies to invest that revenue, including funding energy efficiency programs, building community-based renewable power projects, helping low-income customers pay their electricity bills, putting greenhouse-gas reduction measures in place, educating consumers, and offering training for clean-energy jobs. “RGGI is a job creator. Investments made during the last three years will lead to 14,200 new jobs,” said Analysis Group Senior Advisor Susan Tierney. “And while electric rates can increase as power plants recover compliance costs, total electric bills have gone down, thanks largely to the states’ investment in energy efficiency increases. Over time, the past three years of RGGI’s operations helps families, businesses, and institutions save $460 million on electricity bills.” The report also found that RGGI has helped keep more dollars circulating in the local economy, as the amount of money sent outside the region to pay for imported energy has dropped. RGGI reduced dollars flowing out of state to pay for fossil fuels imported from outside the region by more than $1.27 billion, from 2012 to 2014. Meanwhile, the states’ use of RGGI auction proceeds has boosted the purchase of goods and services in the regional economy for everything from solar panels and insulation to engineering services for energy audits to labor for efficiency retrofits.
PCCA Journal|3rd Quarter 2015 24 RUS NEWS In July, Agriculture Secretary Tom Vilsack announced the availability of loans to build broadband in rural areas, along with changes to the program required by the 2014 Farm Bill. “USDA is committed to providing broadband to rural areas,” Vilsack said. “Broadband is as vital as electricity was 80 years ago. Since 2009, USDA investments have delivered broadband service to 1.5 million households, businesses, schools, libraries and community facilities. But our work is not done. With program improvements and available funding made possible by the Farm Bill, we can continue our work to make broadband more accessible to those who live and work in rural areas.” In a rule published in the July 30 Federal Register, USDA is establishing two funding cycles to review and prioritize applications for the Rural Broadband Access Loan and Loan Guarantee program. USDA also is setting a minimum level of acceptable broadband service at 4 megabits downstream and 1 megabit upstream. USDA urges applicants to design systems that allow for 25 megabits downstream and 3 megabits upstream to meet future needs. USDA is accepting comments on these changes through September 28. To be eligible for funding, an applicant must serve an area where at least 15 percent of the households are unserved. Applications with the most unserved households will be processed first. The maximum loan amount under the announcement is $20 million. Applications will be accepted through September 30, 2015. USDA Announces $349 Million in Funding for Rural Electric Infrastructure Agriculture Secretary Tom Vilsack in July announced $349 million in funding for 15 rural electric infrastructure projects to build or improve more than 1,844 miles of transmission and distribution lines for rural electric cooperatives and utilities in 13 states. The funding is being provided through USDA Rural Development’s Electric Program, which makes insured loans and loan guarantees to non-profit and cooperative associations, public bodies, and other utilities. The loans primarily finance the construction of electric distribution facilities in rural areas. Following are the loan recipients included in the announcement. Georgia The Central Georgia Electric Membership Corp.- $26,176,000 Idaho, Oregon, Washington Clearwater Power Co. $13,572,000 Iowa Eastern Iowa Light & Power Cooperative $44,000,000 Indiana Harrison County Rural Electric Membership Corporation $14,500,000 Kentucky Grayson Rural Electric Cooperative Corporation $20,000,000 Minnesota, Iowa Tri-County Electric Cooperative $28,895,000 Minnesota Minnesota Valley Electric Cooperative $25,535,000 Minnesota Lake Country Power $52,337,000 Missouri Ozark Border Electric Cooperative $51,000,000 Missouri Macon Electric Cooperative $15,200,000 North Carolina North Carolina Electric Membership Corporation $29,106,000 Ohio Mid-Ohio Energy Cooperative, Inc. $6,000,000 South Carolina Marlboro Electric Cooperative, Inc. $14,804,000 South Dakota Douglas Electric Cooperative, Inc. $1,380,000 Washington Benton Rural Electric Association $6,516,000 Vilsack Announces Available Funding for Farm Bill Broadband Loan Program
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