Brian K. Schimmoller, Chief Editor
The new year, both literally and figuratively, acts as a fulcrum for those of us who follow any sort of calendar-based existence. It’s a time of celebration, of hope, of promise, of new beginnings. It’s a time to leave behind the previous year’s struggles, to discard bad habits, and to make a fresh start without any accumulated baggage. At a personal and business level, it’s an opportunity to establish goals and map out a strategy for achieving those goals in the new year. In short, it’s a time for looking forward, both to the coming year and to where the future may take you.
I’m particularly sensitive to the whole idea of looking forward, of vision and seeing. I’m acutely near-sighted – bespectacled since kindergarten – and have heard my fair share of taunts: “four-eyes,” “the Coke-Bottle Kid,” etc. I’m also approaching the age where bifocals are a distinct possibility. Bifocals simultaneously amaze me and scare me. I’m amazed at the ability of such lenses to enable wearers to see both close up and far away with simply a tilt of the head and without having to switch glasses. I’m scared because I wonder if and how my extremely near-sighted brain and optic nerve will adjust to a bifocal world.
I’m leery of this looming world of uncertainty, and yet the tools are there – my brain and some new glasses – to overcome the uncertainty and enable me to see near and far without enduring crippling headaches and without mistakenly stepping in front of moving vehicles. What does this have to do with the power industry? Well, I believe the industry must find its equivalent pair of bifocals to address its set of near and long-term challenges.
Often, these challenges have contradictory objectives, which makes the job of the lens-maker all that more difficult. Consider the following examples:
Near-term goal: Paring the workforce to enhance competitiveness.
Long-term goal: Planning for knowledge transfer and replacing an aging workforce with a new generation of power industry professionals.
Near-term goal: Ensuring unit, plant and fleet compliance with daily, monthly and annual emission limits.
Long-term goal: Evaluating the company’s overall strategy for addressing possible CO2 regulations, including shutdowns of some fossil facilities.
Near-term goal: Replacing dwindling coal stockpiles, hedging gas purchases, reducing and/or optimizing fuel acquisition costs.
Long-term goal: Devising the most appropriate fuel diversification strategy that optimizes competitiveness while complying with environmental regulations.
Near-term goal: Delivering electricity to customers at the lowest possible cost, consistent with making a reasonable return.
Long-term goal: Incorporating sustainability provisions (renewable energy, energy conservation, etc.) into company policies and operations without endangering fiscal and shareholder performance.
Near-term goal: Arranging fleet operations to capitalize on favorable market conditions.
Long-term goal: Determining which model – full deregulation, partial deregulation, a return to full regulation – fits best with the company’s strengths and weaknesses, and then acting to bring that model to fruition.
Reconciling the inherent conflict in these objectives will be a difficult, complex task. Unlike for personal vision, you can’t run down to the local drugstore and buy a pair of universal bifocals. Each company will have to craft and shape its own lens, cognizant of the values, business objectives and core competencies unique to its corporate culture.
Corporate leadership will be essential, but the complexity of these types of issues will require input and involvement from across the entire organization. And while the lenses have no set blueprint, a number of characteristics will likely be common to successful design and manufacturing: an appreciation of the dynamic interplay between a competitive marketplace and the surviving regulatory framework; an increasing responsiveness to public and shareholder interests, including global climate change; greater investment in training and developing the industry workforce; and a commitment to diversification that recognizes the value and stability afforded by multiple energy sources.
In the end, one thing is certain. The companies that passively wait for the lens to appear will not succeed. Only those that proactively shape the lens to fit their individual “eyes” – unique in every way – will construct the bifocals necessary to succeed in an increasingly complex industry.
Happy New Year and happy lens-making!