Articles
As we head into our industry's largest trade show, DISTRIBUTECH, I find myself reflecting on the state of the industry and what can be accomplished. Now, more than ever, utilities are at an inflection point. The steady beat of change is a constant in the industry. But I've been in this industry for 25 years – at an innovative utility, in leadership roles at two energy technology companies, and now as CEO at 4Liberty – and I'm sensing a fundamental shift.
As we head into our industry's largest trade show, DISTRIBUTECH, I find myself reflecting on the state of the industry and what can be accomplished. Now, more than ever, utilities are at an inflection point. The steady beat of change is a constant in the industry. But I've been in this industry for 25 years – at an innovative utility, in leadership roles at two energy technology companies, and now as CEO at 4Liberty – and I'm sensing a fundamental shift.
That shift boils down to performance. The anticipation and excitement of smart everything, sustainability, AI, and renewables are being replaced with an underlying sense of urgency. We are no longer in that stage of "change is on the horizon." The change is here. We're replacing "Let's get ready" with "We better be ready." The time is now.
I'm seeing evidence of this shift in a few places. At EEI last year, the tone was one of determination, of let's roll up our sleeves and get to work. At the PG&E Innovation Summit – where Elon Musk called for a three-fold increase in electric power generation in 10 years– industry executives were transparent about a massive infrastructure upheaval and the importance of a partner ecosystem to collaborate on performance. At home with our own clients, we're having the same conversations. They are talking about investments in new and forthcoming capital projects at an all-time high. However, utilities can't hire enough of the right people needed to execute these capital budgets in the most effective way possible.
Being based in California, where new utility infrastructure investments are outpacing much of the country, I'll acknowledge that my view may be skewed. But it's illustrative of a broader issue.
Demand is increasing, and meeting it will be an ever-increasing challenge for utilities. There are indicators across the US, such as:
Major shifts in which resources we'll use to generate cleaner power, an increase in extreme weather events happening more often and in more places, and massive new load demands—all while keeping energy affordable—add further pressures on utilities everywhere.
All of this is happening at an interesting time in our country. New technological innovations are driving the economy, even our entire society. Massive investments are flowing into innovations in AI, cloud computing, and other digital services that improve how we live. The "Magnificent Seven" (Microsoft, Apple, Nvidia, Amazon, Alphabet, Meta Platforms, Tesla) companies make up nearly 40% of the S&P. There are more than 1,000 "unicorn companies" – those valued at more than $1 billion …. And $1 billion barely scratches the surface today.
Meanwhile, innovations are reshaping the utility industry too. We're modernizing power grids to improve resiliency while focusing on sustainability to reduce the effects of climate change. We're applying advanced technologies and business models to activate opportunities in renewables, carbon capture, smart grids, energy efficiency, and more.
And with innovation comes investment. Bloomberg recently reported that global investments in the clean-energy transition reached $2.8 trillion in 2023, with funding for electric vehicles, renewable energy, and power grids leading the investment surge, and policies like the Inflation Reduction Act catalyzing change.
But what separates utilities from VC-backed climate tech is stewardship. Instead of managing a portfolio of innovations from which only a fraction will deliver a financial return, the utility is accountable to a public that relies on affordable, reliable service. Unlike investors who understand acceptable risk, utilities are funded by you, me, and all the other end users who have a limited appetite for uncertainty. Utilities aren't investing in ideas but in outcomes that can benefit the communities they serve.
To reach those outcomes, utilities need out-of-the-box strategies for innovating in new ways. There is tremendous opportunity for utilities to improve performance. As rates increase, utilities are asked to be more effective and efficient while being held publicly accountable.
If the innovation opportunity is performance, the driving force will be a reimagined Project Management Office (PMO), specifically a newer, elevated PMO – the Performance-Built PMO.
Major utility projects require a huge amount of collaboration and coordination. Many stages and supporting tasks need to be managed, like procurement and permitting. Design and construction. The interplay between OT and IT. Security – both cyber and physical. Even those with the best-laid plans are going to be an intricate matrix of requirements, controls, data integration, and the physical process of getting large, complicated things built.
And that's just when everything is going right.
Anyone who's worked in this industry is well-acquainted with the organizational silos that can slow things down. IT and OT often aren't coordinated, or Finance and Accounting are stretched too thin.
Anyone who has worked in this industry knows that barriers can emerge anywhere or anytime. Weather can delay construction. Negotiations with a municipality or tribal entity can delay permitting. Backed-up supply chains can delay the delivery of critical materials.
When I think of the Performance-Built PMO, I think of a single entity managing the entire workflow of a significant project, assuming all accountability for delivering on performance and outcomes and serving as a force multiplier for success. It ups the game.
Imagine 100% visibility and insight into viability all the time and in real-time.
When it's in place, the Performance-Built PMO becomes a dynamic organism that integrates every aspect of a program, allowing for new levels of efficiency and efficacy.
It ensures that everyone is talking to each other, that every part of the program is working together, and that nothing gets overlooked, no matter where you are on a project timeline.
It can recognize an emerging problem early enough to address it head-on and if needed (and sometimes it's definitely needed), adjust the workflow to ensure the entire program moves ahead, even if one element needs to be paused.
Instead of the traditional PMO that manages the day-to-day workflow of separate divisions to deliver outputs, the elevated PMO breaks down silos, brings everyone together, and delivers measurable outcomes.
Instead of serving as an add-on service, whether added to a construction services or engineering contract or the regular workload of internal employees, the elevated PMO is integrated, specialized, focused, and accountable.
Instead of adding risk by taking away control and making tactical moves, the elevated PMO reduces risk by keeping scope, schedule, and budget strategic and disciplined.
The innovation opportunity for utilities is performance. And performance is the essential role of the Performance-Built PMO. The Performance-Built PMO signs up to deliver the outcomes and the business goals.
Utilities are getting significant – and much-needed – investments to modernize their infrastructure to better deliver gas, water, and electricity to the people they serve. Natural disasters and extreme weather events are increasing, making their work even harder. At the same time, consumers are facing rate increases and demanding affordability. This means more work, with finite resources and heightened scrutiny.
In the face of all these pressures, there's a better way.
This is what excites me, and not just as 4Liberty's CEO. I've spent my entire career in the energy industry, and I'm passionate about supporting utilities and ensuring everyone has access to reliable and affordable energy. This is what I do. This is why I'm here. This is why 4Liberty exists.
It's intriguing to talk about the macro issues impacting the industry. Thinking about the innovations that will change how we operate and live is exciting. It's reassuring that there is policy-level support for reinvention, though we sometimes feel the pace of approval for innovation could be faster.
But that's not all we're dealing with in the real world. Innovators are nothing without operators; that's where the rubber meets the road. For every developer coding software, a line worker is climbing a pole. For every car dealership selling EVs, there are charging stations that need power. We often think of innovations as pie-in-the-sky ideas when the reality is that the on-the-ground work makes everything possible. Engineering, design, construction, IT, OT, security, supply chain, and finance. It works together. We make it work together. That's what 4Liberty does. That's why we're here.
The utility of the future isn't in the future. It's here. It's now. We have the smarts. We have the tools. We have the responsibility. We can leave all the parts in silos and trudge ahead. Or we can bring everything together to accelerate performance and outcomes.
I'm choosing performance and outcomes. I'm sure you will, too.
Author
CEO, 4Liberty
