Public utilities turning private.

[marks1080]

I work for a public utility in Canada. Been here for about two years now in a field P&C position. When I was watching the news this morning I saw that the government is thinking about selling the utililty to the private sector.

Has anyone been in this situation before? Any experiences worth sharing?

Thanks,
Mark

 

[scottf]

I'm not Canadian, but the Canadian public utilities are some of the most over-blown bureaucratizes I've ever dealt with. The amount of money that could be saved by privatizing is staggering in my opinion.

 

[dpc]

If it occurs it would probably be a long process - valuation of all assets, negotiations, etc.

When it does occur, I'd expect it likely there could be significant reductions in staff almost across the board, but especially in engineering.

 

[redfurry]

Hydro One (Ontario) used to be incredibly overstaffed and bureaucratic. You could always count on Hydro One people outnumbering everybody else at any given meeting by about 4 to 1. However, over the last decade or two they have grown much smaller and leaner.

I've worked with a lot of other Ontario utilities (who went through the public -> private transition). Don't expect radical changes. Expect more of the same... i.e. attrition of retiring workers, less new hires, gradually increasing workload.

 

[naminorite]

The US Dept of Defense, specifically, the US Army has been privatizing the utilities (sewer, water, electricity) on all posts on the continental US and here in Hawaii. Each post, through a consultant, inventories the system to be privatized and a bid package put together for advertisement & award. The contract usually runs anywhere from 25 to 50 years. The awarding bidder is required to maintain the utility system and support build-outs, renovations, etc. at the post. If the competing bids appear to be cost prohibitive (costs more to go private than public) then it is deamed economically unfeasible and remains as a public works function. Some of the problems that we've faced are standards that may be different from privately runned companies or in the past our system infrastructure does not meet industry standards and requires $$ to bring things up to code. That's usually when bidders put in large bids to cover such costs, but it has to be noted in the bid documents.

 

[ScottyUK]

It happened in the UK in the late 80's and early 90's. It has been an absolute disaster in the long term: we have had little investment in transmission for nearly 20 years, although it is coming thick and fast at present. There has been no energy policy worthy of the name for two decades, so we are facing our baseload generating plants reaching the end of their life-extended lives with no proper plan of how to supply our energy other than building more taxpayer-subsidised wind turbines. De-nationalisation made a relatively few people wealthy and allowed foreign private companies and foreign national industries to take over key British infrastructure. During the same period our indigenous heavy manufacturing companies for the electrical industries were starved of orders and have gone to the wall.

Your government should study the British situation and learn from Thatcher's mistakes.


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If we learn from our mistakes I'm getting a great education!

 

[marks1080]

Thanks for all the input. Most of it was what I had expected to hear. I am with Hydro One in Ontario (as was specifically mentioned above). It is a massive bureaucracy. There is a lot of redundancy in the work force and there are a lot of meaningless work being done. I consider my own job in field P&C safe from being contracted for the short term, but I am an engineer in a technologists world and that might hurt me. Part of me thinks I could do better financially in a private company as right now it seems the people here with the highest education are the lowest paid - probably a product of the strong labour union.

 

[PHovnanian]

Consider yourself fortunate that the transfer is being done above board.

I've seen a few cases where a utility outsources its processes to private contractors to the point where nothing remains but its executive offices. Maintenance, operations and engineering are all done by outside contractors. These contractor derive an additional benefit from this relationship in that they (largely) escape regulation. They charge what the market will bear and its up to what remains of the utilities' management to take the heat from the public. While theoretically, its possible to put such services up for bid, the entry costs for a new supplier to come up to speed on that utilities engineering standards, GIS data, and processes is so high that eventually most work is done under sole source contracts.

 

[marks1080]

Most engineering design is already outsourced.

The end product we recieve is almost always subpar...

 

[edison123]

I'll give you the Indian experience. Private sector might pay you twice but would extract 4 times the work. I have seen lot of engineers leaving government run utilities to the private ones and later regretting it because of work load. At least in India, most of the power sector is stillin government control though many utilities have now been split into generation, transmission and distribution companies with individual "profit centers", whatever that means.

Muthu

http://www.edison.co.in

 

[QBplanner]

Private sector will screw the province and some of your workers may get benefits.

Think about it. The private sector may try to save money to not perform required maintenance (First energy company (??) in US 2003(??) black out) and may require raise the rates to triple or higher and others. Sooner or later it will lose the control like what happened in British.

The number one goal of these private sectors is making money but not to benefit the public.

Public sector will create monster of overstaffed and bureaucratic one like here in Canada but pubic got some benefits at least.

Payment issues: I am suffering too in the company I am working at (a public utility). Highest education/ engineers get lowest pay and managers get highest pay.

For example, my salary was increased $30000 in the past 6 years. The Sr. mangers level increased $150000 in the same period.

Over staff and Bureaucratic: And now they got more “process managers” which have no experience in electric utility before but simply their friends or big talkers even recent graduate students. Here the more you talk, the higher position and the higher pay you will get. (I still remember two years ago, A VP level person said “no problem we can build a 138kV switching station in $ half a million”)
6 years ago I have two direct report managers now 4.

Which one do you like?