Good help is hard to find
Material costs are one thing. Labor is another. Session moderator Stephen Greenwald, an attorney with Davis Wright Tremaine LLP, asked the panelists about aging workforce issues. Dean Bain, president of Primesouth Inc., a provider of O&M services to power plants and other industrial facilities, characterized the problem as "universal." "You can't steal talent from other industries." That's because virtually all energy infrastructure industries are firing on all cylinders right now. He conceded that the "talent pool will be very, very sparse in the future."
Saggau indicated that over 60% of his company's employees will retire in five years. What to do about this is one of six of his strategic imperatives. Another frightening stat: Most of the boilermakers on site during a recent six-week outage had to be brought out of retirement. Gorney believes his company lacks "bench strength." What's more, new workers don't necessarily like the work environment of a power plant and are willing to accept less pay for better surroundings.
The aging workforce issue isn't about replacing bodies, but rather about replacing expertise. Saggau said his company is hiring new employees before they are needed; then Great River Energy has the newbies shadow old hands to soak up their knowledge and experience before they depart. Gorney's Midwest Gen created an "assistant station director" position as a form of succession planning for the generating assets. Still, he said, we're "not as successful as we would like to be" in this area.
Of course, assuming that all workers will retire at 65 is necessary to play it safe, but it's overly conservative. Being eligible to retire, and actually retiring, are two different things, especially when you consider that people live much longer these days. Funding 20 to 30 years of retirement is daunting. Just as so many old fossil plants are staying on-line past their original retirement date, so too may many fossil plant workers.
Wind: Not ready for prime time
A diverse spectrum of responses followed when Greenwald asked panelists about the related topics of regional portfolio standards and transmission needs for wind. "People get irrationally exuberant about renewables," said Turner. Nonetheless, he seemed pretty exuberant about alternative sources of energy, like hog and turkey wastes, being counted as sources of renewable credits.
Bain urged the audience to envision the innovation that a national RPS could spur in the field of renewable energy. Saggau wasn't sanguine about the prospects for such a standard but said that "regional standards could work." Though wind turbines are more efficient today than they were 10 years ago, he said, 100 MW of wind still requires backup by 100 MW of a more-reliable type of generation. Also, he added, you can't avoid the reality that the source of wind energy is "indigenous." In that sense, wind potentially reduces energy imports.
Although wind energy is a large part of Midwest Gen's growth plan, Gorney said he worries about what will happen after the federal production tax credit (PTC) for wind expires. We still "have to make a bona-fide business" out of wind, he stressed. Gorney also characterized some of Midwest Gen's wind projects as "merchant," perhaps as an indication of the company's business strategy.
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