CLIENT LOGO Monopolistic THIS SQUARE COULD GO IN Upheavals · CLIENT LOGO COULD GO IN THIS SQUARE Julie Ryan September 20, 2018 Lessons We Can Learn from Past Monopolistic Upheavals

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CLIENT LOGOCOULD GO IN THIS SQUARE

Julie RyanSeptember 20, 2018

Lessons We Can Learn from Past Monopolistic Upheavals

http://www.nwppa.org/

http://www.nwppa.org/

www.aetheradvisors.com2

SPEAKER BIOGRAPHY

Based in: Seattle, WA

Affiliations: APPA Affiliate Member

NWPPA Affiliate Member andInstructor

Willamette University “UMC” ProgramDirector

KEY FACTS

Julia M. RyanManaging Partner

Agile work flow

Aether is a management consulting firm

Founded in 2008

Strategy and risk management services

Utility clients

2

www.aetheradvisors.com

Learning From Others’ Mistakes and Successes

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MonopolyUtilities

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Several Historical Examples

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US Steel

Standard Oil

American Tobacco

International Harvester

Sears & Roebuck

“Ma Bell” AT&T

Often Monopolies are often ‘first mover’ companies, getting largest market share


United States Steel (US Steel) Was Large, But Lacked Efficiency and Innovation

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Founded by JP Morgan in 1901 After its founding, 67% of world

market share Prospered during WWII with

government contracts Today, only 8% of per domestic

steel consumption Smaller competitors were more

efficient and innovative Chequered labor history De-listed from the DJI in 1999

and the S&P 500 in 2014


Sears & Roebuck Was the Pre-Eminent Retailer

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Rural communities Late 1800s - catalogue

sales 1930s - opened retail stores Developed quality brands

like Craftsman Tools™ Exclusive retail

relationships like Whirlpool Appliances™


What Happened to Sears & Roebuck?

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Failed to update Shopping malls were aging Couldn’t compete with big

box stores Acquired by another

struggling retailer, K-Mart Sold off best subsidiaries, to

prop up failing core Shut most stores in 2017


Demise of a Regulated Service –Landline Telecomm

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Cellphone-only households include:

71 percent of millennials

55 percent of members of Generation X

40 percent of baby boomers


AT&T’s Early History

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Telephones popularized in early1900s

AT&T controlled 79% of national market by 1932

In 1985, AT&T had to divest of regional Bell carriers

Retained long distance Forced to offer the right to

freely connect devices to its network


Growing Mobile Market

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Mobile Data Usage by Subscriber (2010-2016)

http://scientists4wiredtech.com/2017/10/2017-fcc-wireless-competition-report/


AT&T Holding Its Own

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Market Share by Carrier

http://scientists4wiredtech.com/2017/10/2017-fcc-wireless-competition-report/


AT&T Adapts

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In 2001, AT&T Wireless spins off then merged with a former Bell subsidiary

Becomes huge media entity


Technology Giants’Common Characteristics

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Constant innovation and adaptation Developing products and services

customers feel they must have Focus on the “customer experience” Diversification Large investment in R&D and

development Acquisition of smaller innovative

firms with new technologies Focus on internal culture and

workforce Strong brands


How is Your Utility Monopoly Different?

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Defined physical territory Government support Community-owned utilities have no

profit motive Providing a critical (not optional)

service to customers Safety is a key issue Members of the community have

oversight

While these elements partly shield you from upheaval, you still must be “relevant”, mindful of changing technology and alert to customer preferences


Lessons Learned From Monopolistic Upheaval

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Changing Landscape Innovation Customer

Engagement People Government


Changing Landscape

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“Disruption”… or Transformation?

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Emerging Issues – Utilities

External Environment

Market dynamics

New technologies

Increasing regulation

Cyber and physical threats

Customers

“Internet of Things”/ Energy

usageLooking for a

positive experience

Self-generation

“Smart Cities”

Utility - Internal

Changing workforce

Revenue flat or declining

Increasing costs/ Rate pressure

Aging assets

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2018 Outlook Power and Utilities

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Changing Generation Fuel Mix

Declining power prices off-set other cost increases in customer bills

DER penetration

Public generally support renewable energies and it is dropping in cost

Natural disasters have put utility infrastructure in the spotlight

Increase focus on cyber and physical security

Source: https://www2.deloitte.com/us/en/pages/energy-and-resources/articles/power-and-utilities-industry-outlook.html

https://www2.deloitte.com/us/en/pages/energy-and-resources/articles/power-and-utilities-industry-outlook.html


Solar, Wind and Energy Storage Growth

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Bright Opportunities on the Horizon

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Additional electrification

Digital transformation


Digital Transformation & Modern Grid

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Electrification New load (home heating, water, transportation)

Reducing carbon footprint (hydro/renewable rich region)

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Innovation

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Green Mountain Power

Green Mountain Power is the first publicly-traded energy company to become a “B Corp”

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Austin Energy

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Austin Energy

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SMUD

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SMUD Residential “Go Green”

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Customer Engagement

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Don’t Be On the “Wall of Shame”

Comcast

Bank of America

Wells Fargo

Sprint

AT&T

DirectTV

DISH Network

Cox Communications

Spirit Airlines

United Airlines

Verizon Fios

T-Mobile

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Consider What “Wall of Fame” Companies Do Well

Amazon

Apple

Costco

Netflix

You Tube

FedEx

UPS

American Express

Chick-Fil-A

Marriott

Google

Publix

Hilton

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Exceptional Customer Service

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Employees are empowered to help you

Multiple options to get assistance –no waiting

Customer service rep greets youby name

Quick resolution of your problem

You never hear “we can’t do that”

You can tell employees like their job

You are smiling, not frowning, after the call


Customers’ Perceptions

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Customers have a value equation in mind:

Value of the service Vs. the Cost

Ex: Customers may be angrywith cable company bills andlove Netflix

Scandal and public relationsdisasters can haunt a company

Customer satisfaction tied to expectations being met and experience with the product or service


People

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Technology Impact In Telecomm

Operators at the Roseburg Telephone and Telegraph Co. in Oregon, c. 1910

AT&T’s Global Network Operations Center in Bedminster NJ

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Our Industry Will Always Requires People

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OperationsSafetyRestorationConstructionRepairsService Reliability

Customer EngagementService requests

Billing questions

Energy savings ideas

Connection to the grid


Utility Dive Article on Energy Jobs

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Changing Utility Jobs

Information technology Low carbon generation

and emissions Electric vehicle charging

infrastructure Energy efficiency Energy advisors to

customers Finance/ regulatory

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With the increasing customer data and “IoT” connectivity, jobs will expand or be added in other areas:


New Training Tools Emerging

Data in the field

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Augmented Reality

Virtual Reality


Government

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Smart Communities

Municipal and grass-roots initiatives: Transportation Energy and water usage Reducing carbon footprint Smart adaptive street lighting Public safety communications Complex telecommunications Data management

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Utility Customers Unaware of Public Power’s Roots Utility retail customers

are diverse

Few customers remember the rural electrification act

Few customers (or employees) know what makes public power different

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Opportunities for Public Power Raise awareness of public power

Stay relevant to your customers

Monitor trends elsewhere

Be an energy services provider

Be innovative Discover new electrification

opportunities Explore “IoT” and your system Review vendors/products for customers Consider a ‘smarter’ grid system

Invest in your people

Wrap-Up

Change is coming to the utility sector

Community owned utilities have a unique position

Prior monopolistic failures illustrate the need for: Innovation Efficiency Awareness of changing technology and customer

needs

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Documents

CLIENT LOGO Monopolistic THIS SQUARE COULD GO IN Upheavals · CLIENT LOGO COULD GO IN THIS SQUARE Julie Ryan September 20, 2018 Lessons We Can Learn from Past Monopolistic Upheavals