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Administrator delivers keynote address at Utility Energy Forum

 Mark Gabriel delivers keynote address at Utility Energy Forum
    Administrator Mark Gabriel, right, speaks at the Utility Energy Forum, May 14, in
    Tahoe City, California.

By Randy Wilkerson

Every year, utility professionals from across the West convene at the Utility Energy Forum to exchange information about current and emerging industry issues while more detailed talks focus on developing and implementing customer programs related to energy efficiency, renewable energy, key account management and customer service.

On May 14, Administrator Mark Gabriel delivered the keynote address on Powering the Energy Frontier to more than 110 attendees in Tahoe City, California. The diverse audience included staff from some of Western’s customers, as well as many not so familiar with Western. So Gabriel began by providing some background information about what Western is and the variety of services Western provides, including being among the top ten largest transmission providers in the United States.

Challenges in the energy frontier

Gabriel outlined the challenges in the energy frontier that all utilities, large or small, public or investor-owned, face and how Western is addressing those challenges. He said, "The energy landscape today is being changed by a number of drivers including increasing intermittent generation, increasing behind-the-meter generation, aging infrastructure and the need to re-invest in the replacement or upgrading of that infrastructure, as well as lower demands resulting from changes in our energy use profile and the introduction of new technologies."

He noted that we continue to see increased regulation related to security, reliability and the environment increasing the cost and complexity of doing business. While, in the developing low-carbon economy, with increased air quality regulations, the retirement of coal plants across the country and low gas prices, there is a shift toward natural gas as a significant fuel source.

Gabriel told the attendees, "The energy frontier will change the way we all do business, from small co-ops to large investor-owned utilities. The Energy Information Agency projects wind-powered generation will grow another 8 percent in 2014 and solar is projected to grow another 49 percent this year. Exponential growth of PV capacity has occurred in both new and existing construction during recent years as a result of utility incentives and new financing options. This increased behind-the-meter generation has the potential to radically alter business models."

In addition, the energy future will be a dynamic energy system. The market is moving to a low-carbon economy, and the mix of fuels for power generation is changing and interrelated, including coal, natural gas, hydro, wind and solar. At different times and places, each can be a primary fuel source or used to back up another fuel. The energy infrastructure must support this diversity.

"Customer expectations are changing as well, and they expect more choices and more control. As the customer begins to have more control over their energy choices and use, the issue of relevance becomes more and more important. To remain relevant to our customers, whether they are at the end of a distribution line, a major industrial operation, or other utilities, we all must ensure that the product and services we provide add value to the customer. We need to continue to engage in dialog with our customers to understand their needs and work together with them. We have moved far beyond the monolithic utility monopoly." Gabriel said.

Western looks to the future

Gabriel went on to describe the approach Western is taking. "As Western looks to help power the energy frontier, we will work with our customers to create and define our role in the industry. Since the summer of 2013, we have actively collaborated with customers, stakeholders, the Department of Energy and our employees to develop a Strategic Roadmap that will serve as the guide to our mission in a changing industry through 2024 and beyond."

While the Strategic Roadmap is an independent document, it is one of four critical pieces that make up Western’s State of the Assets. It is joined by the Physical Asset Management Plan, Human Capital Management Plan and our Sustainable Funding Initiative. Gabriel made the connection between the components saying, "The process for each of these informs the other. What we learned from customers in the Access to Capital meetings was included in the Roadmapping activity; what we heard in preparation for Physical Asset Management planning rolled into the 10-year plans and, in turn, the Sustainable Funding Initiative. All of these efforts have been combined in an evolving and recursive process."

As we move forward, Gabriel said, "Our greatest responsibility is to manage the assets, some $4 billion strong, that are entrusted to us and ensure they are deployed wisely for our Nation and for our customers to keep the power flowing safely and reliably to more than 40 million Americans. Western customers benefit with reasonable rates today from investments made yesterday. They will benefit from reasonable rates tomorrow due to investments we are making with them today. Managing resources effectively forms the cornerstone of Western’s service to its customers over the near- and long-term."

Gabriel then highlighted some of Western’s significant accomplishments during the past year, including the decision for Upper Great Plains to join the Southwest Power Pool; developing the final marketing criteria to allocate the Boulder Canyon Project Post-2017 Resource Pool; rate stability with the development of new contracts for the Loveland Area Projects and collaboration with the Bureau of Reclamation to maintain stable Colorado River Storage Project rates for the last seven years; and working with the Hoover contractors and Reclamation to save millions of dollars at the Hoover Visitor Center

Gabriel concluded, "We look forward to realizing our Roadmap together with our customers as we work to deliver on our mission, manage resources effectively and operate safely, securely and reliably."