H. Lee Willis
Senior Vice President Emeritus, Quanta Technology
I began my career in 1968. As I look back on more than half a century in the power industry, there are three major long-term trends that stand out as the most significant. They played out over the last fifty-plus years and will all continue for decades to come.
Improved Workplace Efficiency and Education. The most important long–term trend over my career, that affected me, was the improvement of engineering workplace efficiency due to the gradual increase in the use of digital computers. Computerization drove the development of ever-more-comprehensive and detailed engineering computations, which permitted finer engineering and improved operation of power systems. But that trend is not nearly as significant in my mind as the impact digital computers had on the engineering workplace.
In 1968 reports and records were kept on paper, prepared on typewriters, indexed, cataloged, filed by hand, and kept in legions of cabinets that lined the hallways of the utility company headquarters building where I started my career. Data for engineering studies and operations management were collected, checked, transcribed, cataloged, indexed, and typed into records by hand, and then filed, again by hand, in those ubiquitous filing cabinets. Maps and engineering diagrams were drawn by hand and kept in hundreds of table-size map cabinets. All that work was done by engineering aids, file clerks, typists, secretaries, draftspersons, and technicians – jobs and job categories that do not exist in most engineering organizations today – at least not nearly as many of them. Added to them were the many clerks and typists needed to support the engineering managers and their admins in running the business. Cumulatively, these support positions slightly outnumbered the degreed engineers, by a ratio of about 1.25 to 1.
Today nearly all document, map, data and storage work are performed by small laptop computers assigned to each engineer and manager along with a network of servers that take up a closet or two, tended by a few IT specialists who keep it all running. As a result, far fewer people are needed in the engineering workplace. For example, Quanta Technology currently has about 160 degreed engineers and technical professionals doing front-line engineering work on electric power systems, supported by about six technical support staff. In 1968, to turn out the equivalent amount of engineering work (but only to the level of detail and completeness 1968 engineering methodology permitted) an organization would have had needed 160 engineers plus about 200 clerks, aids, draftsman, and technicians: a total of 360 personnel.
Although the number of people employed in the engineering workplace has dropped over 50% in the last half–century, the minimum level of education required for a career in engineering has more than doubled. The average post-high-school education of those 200 support personnel in 1968 was the equivalent of about two years of college. Among the 160 degreed engineers, MS and Ph.D. degrees were rare. The average education level for the entire organization would have been about three years of college. Today, Quanta Technology’s engineering staff has over twice as many degrees as people – the average employee has close to seven years of college.
The smaller, more skilled, and homogeneously educated workforce of 2020, coupled with the speed and efficiency of today’s computers, means that work is done at a lower cost, and more quickly. It also has enabled another change – that a workforce can be dispersed. In 1968, engineers and support personnel had to work together at a central engineering site. Engineers needed the close support of clerks and technicians to get their work done, and immediate and frequent access to the documents, maps, and diagrams available only at that central site. Without the need for a team of support clerks and technicians and aided by today’s near–instant data and video communication, a sizeable portion of Quanta Technology’s engineers have always worked from home, as I have for the last four years, teaming virtually with colleagues and clients on projects when needed. For the last six weeks during the pandemic, all of them have done so – with no measurable reduction in productivity. That never could have happened in 1968. I expect this trend and all its implications to continue. Artificial intelligence and continued automation will result in a workforce composed of fewer people with a higher average level of education working together in an even more distributed workspace.
Power System Technology and Operation. What astounds me most about change in electric power systems over the last half–century is how little there was. In 1968, an electric utility system was composed of a few large central generating stations feeding power into a high-voltage transmission network. Substations located throughout the utility service area channeled a portion of the power passing them onto medium-voltage radial distribution feeders that routed power through neighborhoods where service transformers and service lines delivered it to energy consumers. That describes America’s power systems in 1968 and describes it just as well today.
There have been advances in materials, design, monitoring and control, engineering technology, and management methods over the past half–century. These advances have led to noticeable reductions in emissions, and have significantly improved storm resiliency, but in all other areas, improvement seems modest at best. Electric utility systems are safer today than fifty years ago, but only a little bit safer. They are more efficient, but only a little bit efficient. Similarly, reliability, cost of service, equipment lifetimes, and inspection and service needs have improved, but only by small increments.
Meanwhile other industries delivered bit gains. During this same period the efficiency of my kitchen refrigerator and home AC system almost doubled while their inflation-adjusted cost slightly decreased. The amount of choice I have with respect to television entertainment, the size of the screen I watch it on, and the resolution of images on that screen, have all increased by over an order of magnitude. My family car outperforms mine of fifty years ago in every category, yet makes only 4% of the emissions, is far safer, gets between two- and three-times better fuel economy, and requires 85% less service and maintenance.
One can argue that power systems were, by 1968, good in all respects, so there was not much room for improvement. Looking back, I am disappointed in how little progress the industry made in half a century.
Utility Industry Structure. By far the biggest change I have seen over the last half–century from the standpoint of affecting the power industry, is the in regulation and business structure. In 1968, there were two ubiquitous nationwide utility infrastructures that involved electrical engineering: telephone and power. Both were vertically integrated, monopoly-franchise industries. In every city, town, and rural area across North America, there was one company that owned the phone system, all its equipment and operated as the sole vendor of phone service for the region: buy from them and take what they offer or don’t get phone service. It was that simple. Similarly, in every city, town, or rural area throughout North America, one company–owned all generation, transmission, and distribution equipment (vertical integration). A person or business had no choice but to buy electric power from that one local power company and only that company (monopoly franchise).
In both industries, that regulatory and business structure had been in place for seven decades and had resulted in nationwide electric and phone networks providing ubiquitous service. Competition and customer choice did not exist – people had to buy from their local phone and electric companies – and customer choice was very limited – basically you had to take the phone service and electric power plan the companies offered, no questions asked. Regulatory scrutiny kept the service quality acceptable, and prices reasonable. Overall, industry performance was deemed satisfactory.
Today the phone industry is no longer vertically integrated or a monopoly franchise. There are multiple nationwide and local phone networks, with many different owners and in every locale, numerous providers offering a wide range of customizable plans to meet a diverse range of needs and tastes. Many people point to the development of cell phones as the driving force behind this change. It was a “disruptive technology” that did not depend on the vertically integrated network owned by the monopoly franchise holder to operate, which provided direct competition to the traditional phone industry that led to rapid change.
But the move away from vertical integration and monopoly operation of telephone service began long before the cell phone’s introduction – in the 1980s. Evolving digital computer technology permitted multiple networks and owners to work in combination, and companies like Sprint and others pushed for and won a piece of the long-distance phone business. Even without cell phones, the distance they operated over would has shrunk gradually until the industry was completely competitive at both the long–distance and local-call level. Cell phones merely added to and accelerated the change.
This trend is slower, but otherwise no different in the power industry, which began in 1978, with the Public Utilities Regulatory Policies Act (PURPA) that ended monopoly ownership of power generation. From there the industry saw a gradual relaxation of vertical integration, monopoly ownership and operation, so that a decade or two later regional transmission grids, too, had multiple owners. While the power industry started to move away from vertical integration and monopoly operation earlier than the phone industry, today it lags significantly. Any homeowner or business buying power at the retail level must still deal with a local monopoly franchise electric service provider that basically provides very little choice in service, price, of billing – exactly like it was in 1968.
That is about to change, due to the power industry’s disruptive technology with the combination of distributed generation such as rooftop PV power, and battery electric storage systems (BESS). As these technologies mature and performance/price improves, it seems inevitable that their modular packaging will outperform traditional power delivery in many cases, particularly when offering more customer choice. Competitive retail electric services will offer it as convenient packages, installed, maintained and operated with no hassle to the owner (just like home or building HVAC systems now) in a wider array of pricing and service plans than utilities offer their customers today. These stand-alone independent systems will not meet everyone’s needs, but probably will for the majority of energy consumers. As a result, electric utilities and the “grid” will be in a similar position like the traditional phone companies and their land-line systems: still there, still important, but just another player in an industry where they now have to play by competitive, not monopoly-franchise rules.
Thus, as I retire after half a century in the power industry, I can look back on a lot of change, and know that those who remain will see even more in the future. Competition will soon come to the retail electric level whether today’s electric utilities want it or not. It might not be welcomed, but I think energy consumers, and government regulators, will, and only the companies that adapt will survive. “The grid” and the traditional electric service it provides will continue to exist, but like traditional phone companies and their service, co-exist with competing distributed resources and systems that often are the bigger part of the industry in a region. Although fewer engineers will be needed in the future, they will need a higher level of education and broader range of skills to do their jobs. On the plus side, they will have a wider choice of companies to work for and types of jobs to apply for, which has also occurred in the telecommunications industry over the past two decades. And most important, consumers will have more choice and much better service and satisfaction with that service: just ask anyone who had a telephone in 1968, if they don’t think all that change led to better service and a higher satisfied customer.