Management Strategies
Enterprise Risk Management Strategy - The Lite Program for Your Utility
Just because your utility or electric coop is small or mid-sized does not mean you cannot have a formal enterprise risk management (ERM) “lite” program. An ERM program merely formalizes things you do as a regular part of business and places a robust protocol around mitigating risk and documenting the approach.
Build your budget from the ground up with zero based budgeting
Zero-based budgeting (ZBB) is a budgeting method that starts from a "zero base," requiring every expense to be justified from scratch, regardless of past budgets. The goal is to allocate resources efficiently and identify cost-saving opportunities.
Would an “Enterprise Risk Management Lite” approach work in your co-op or utility?
Using an “ERM lite” program is an approach that any organization can use, whether you are a staff of one or twenty. The lite approach has many elements of a more formal program. Here are some insights into the elements that go into a program that can be a unique fit and help you sleep at night by planning for potential events. The lite approach, in many cases, puts a more formal touch on things you are doing already.
Trying to Increase Electric Rates but Your Board Says “No”? Here Are Options
If your electric utility board will not increase rates timely, then what areas of the budget can be adjusted without impacting reliability? A rate increase voted down opens the door for "Plan B", the fallback plan. But, what is the fallback plan? This article discusses some Plan B approaches to save your utility’s budget and maintain reliable service.
Hurricane Ian and Sanibel Island Power Grid Rebuild - An insider’s view of electric co-op and utility mutual aid
One of the beauties of the power and utilities industry is the eagerness to help fellow co-ops and utilities in times of need. Restoring power to customers is built into the utility psyche, which translates into the willingness to travel across the country or state to assist in restoration efforts. This is called mutual aid.
Hurricane Ian destroyed the power infrastructure on Sanibel Island in September, 2022. This article is a first hand account of the damage and rebuild of the electric transmission and distribution system.
Strategies for operating your co-op or utility in a high-interest rate and high inflation environment
We are now in the midst of an economic period we have not seen since the 1970s and early 1980s. Interest rates are moving higher for the foreseeable future, inflation is at a level not seen in 40 years, and economic growth is slowing. This was called "stagflation" in the '70s and '80s.
The point of this article is to discuss how this economic environment impacts management issues at power and utilities organizations. We'll touch on the large areas for consideration. There are not always straightforward answers in these areas, but many points for consideration.
Electric Cooperative Financial Strategies - Cash Reserves and Patronage Capital Policies
Electric cooperative financial strategies include operating cash flows, cash reserves, debt, and customer equity investments in the co-op, which are called patronage capital. What is patronage capital, and how can your cooperative establish a financial strategy that has a long-term balance of cash reserves, debt, and member equity. We discuss proven policies.
The “E” in ESG is Working Great! How to Mitigate the Budget Impact?
Environmental, Social, and Governance (ESG) and sustainable business practices are a key component of utility strategy. Success in moving the “E” factor towards reducing emissions can sometime put a dent in the utility or co-op electric budget. This article discusses the use of decoupling to mitigate budget damage and maximize budget recovery.
The Board's Role in Managing the Utility Bond Rating
Are lines blurred in your utility over financial responsibilities? The responsibility for the bond rating is part of the role of the utility's Board of Directors through the approval of budgets, electric rates, and short and long-term strategy. The better the bond rating, the lower the interest rate and more funds are retained by the utility vs. paid to bond holders. What are strategies to follow? Here are some insights.