Workforce Training for the Electric Power Sector

1. Workforce Training for theElectric Power Sector 2009 CEWD Summit

2. Table of Contents • Introduction • Funding Opportunity Announcement (FOA) 152 • Key Elements of workforce Planning • Application Lessons Learned

3. Introduction • The workforce challenges faced by utilities are well documented • The utility industry faces an aging workforce preparing to retire and each year the problem grows more acute • Various factors in today’s economic and political environment will exacerbate workforce issues • Transmission and generation expansion • Smart grid implementation • The successful implementation of Smart Grid requires skill sets not normally found in traditional utilities (telecommunications experts, information technology specialists, etc.) • As part of the American Recovery and Reinvestment Act (ARRA), the DOE recently issued Funding Opportunity Announcement (FOA) 152 which focuses on training in the electric power sector. This FOA strives to assist the sector in • Developing training programs and strategies, with a focus on achieving a national, clean-energy smart grid • Providing training for electric power sector personnel • FOA 152 requires an assessment of workforce challenges and gaps in • Acquiring/hiring • Retaining • Training • A methodology for assessing the workforce and developing strategies to address hiring, retaining and training will be key for organizations both to manage their ongoing business and to apply for this federal funding

4. Demographics and Utilities Several factors, including high employee retention rates and historical periods of slow growth, have left the utility industry with significant numbers of highly skilled and deeply knowledgeable workers near retirement • The average age of workers in the utility industry is 48 years old. Out of a total of 54 industries, only real estate has a higher average age • The average age of an energy industry worker is steadily rising. Since 1995, the number of workers aged 45 – 54 has increased over 30 percent. Moreover, the number of workers aged 55 – 64 has more than doubled • In addition, since 1995, the 25 – 44 year old segment has contracted by nearly 30 percent • Nearly 20 percent of all energy industry workers are within five to seven years of retirement and the percentage is rapidly increasing • Slightly more than 70% of utilities report that they do not have a plan in place to address workforce gaps that will be created as positions are vacated. Of those with plans in place, only 8% are extremely confident of its effectiveness • In addition, many utilities lack formalized processes to transfer the in-depth technical knowledge of the long-tenured employees on the verge of retirement Electric Utility workforce Profile Sources: U.S. Bureau of Labor Statistics. American Public Power Association: workforce Planning for Public Power Utilities

5. Talent Pool Constraints 25,000 20,000 Chemical 15,000 Civil Electrical 10,000 Mechanical 5,000 0 1991 1993 1995 1997 1999 2001 2003 2005 As utilities mobilize to replace retiring workers, they are faced with a number of factors, including a tighter overall job market, a stagnant number of technical graduates, and a younger workforce with significantly different expectations, that complicate their efforts • Engineering degrees conferred in the 1990’s declined significantly. More recent data suggests the number of engineering degrees awarded is leveling, but that number remains stagnant • Traditional utility firms are beginning to compete with new and emerging energy technology, i.e., renewable energy, for the same, limited resources • The younger workforce does not tend to stay in one job or with one company, presenting challenges in finding and retaining talent • Younger workers demand more from their employers, including well defined career ladders, training opportunities, and leadership roles • Employment in the utility industry is not seen as desirable due to misconceptions about low pay, antiquated technology, and limited skill set requirements Number of Degrees (000’s) Sources: U.S. Bureau of Labor Statistics

6. Stimulus Opportunity for the Electric Power Sector Collaborative applications with academic organizations (universities, community colleges, technical schools) and other training organizations may best meet the criteria outlined in the FOA • A new Funding Opportunity Announcement (FOA) was issued by the DOE on September 21, 2009 • This FOA covers two broad topics: • Topic A – Developing and Enhancing workforce Training Programs for the Electric Power Sector • Topic B – Smart Grid workforce Training • This FOA supports the development and deployment of training programs, as well as the actual training of personnel • DOE seeks applications that will support and greatly expand job creation and career advancement opportunities within the utility industry and the electric power system equipment manufacturing sector • Job categories include: • Technicians and skilled workers • Utility energy efficiency program staff • Cyber security experts • Transmission planners • System operators • Applications shall address how they positively impact displaced workers, increase per capita income, build career ladders and training opportunities, expand domestic supply chains for smart grid technologies and services, and/or enhance sustainable economic growth in currently economically depressed regions and communities

7. Topic A: Developing and Enhancing workforce Training Programs for the Electric Power Sector Topic A focuses on the development of training strategies and programs • Background information • In Topic A, applications are sought that develop new training strategies and programs for the electric power sector, with focus on achieving a national, clean-energy smart grid • Applications shall identify specific job classifications that will be targeted for training, and the skills deficiencies that will be addressed through the workforce improvement efforts • New training programs must address identified gaps in training needs, with respect to any combination of curriculum, capacity, and accessibility of current training opportunities • Applications shall include a comprehensive overview of training practices in use today for the specified job classifications, and address how the new training strategy would enhance the training experience • The applicant shall discuss the considerations that were made in determining the geographic location for the training program

8. Topic A: Developing and Enhancing workforce Training Programs for the Electric Power Sector (Cont’d) • Requirements • Demonstrate familiarity with the electric power system and needed workforce skill sets • Explain why skills deficiencies exist and why they are not currently being met • Possess the necessary expertise and resources to support specialized training in smart grid technologies (if applicable), or clearly demonstrate a plan and ability to obtain these resources • Provide clear pathways for skill development and achieving industry-recognized credentialing, such as registered apprenticeships, degrees, or certificates • Demonstrate the ability to or discuss an approach or plan to: • enhance transportability of credentials geographically and within all segments of the industry • expand the training capacity to rapidly meet the demand for skilled smart grid workers • build awareness about the training programs and smart grid careers • establish and maintain strong partnerships with electric power companies and/or smart grid technology manufacturers and demonstrate how these partnerships will enhance national training efforts • maintain effective relationships with State agencies, local communities, and other stakeholders to help shape future training partnerships and opportunities

9. Strategic Training and Education in Power Systems (STEPS) The STEPS sub-topic is specifically focused on supporting educators at universities and colleges STEPS is a subtopic within Topic A; however, applications to STEPS will be separately evaluated • Building, operating, and maintaining a modern electricity system to integrate renewable energy sources and to address carbon and environmental concerns will require redefinition of the key elements of a foundational education in electric power systems • For example, more knowledge of power electronics, and information and communications technologies will be needed, in addition to subject areas such as policy and economics • The objective of STEPS is to support educators at universities and colleges (including community colleges) in developing new curricula and training activities in areas most relevant to the achievement of a next-generation electric power workforce • Applications are sought that develop cross-disciplinary electric power systems training programs at the university and college-level, that lead to degrees or certificates that span the breadth of science, engineering, social science, economics, and other topics needed by scientists, engineers, innovators, entrepreneurs, and industry leaders • Applicants may also include development of certificate programs for training technicians and teachers in science, technology, engineering and math (STEM) subjects, with a focus on electric power systems

10. Topic B: Smart Grid workforce Training Topic B focuses on providing training • In Topic B, applications are sought that provide training for electric power sector personnel, necessary for successful achievement of a national, clean-energy smart grid • Individuals eligible for training include workers that: • Increase the workforce capacity and capability of electric power companies and smart grid technology manufacturers • Address skills shortages in the power sector, especially in the areas of • Transmission planners • System operators • Utility energy efficiency staff • Line workers • Electricians • Technicians • Other skilled trades • Need updated training to support a national, clean-energy smart grid. • Applications must identify and quantify, where appropriate, the workforce challenges/gaps that need to be addressed in terms of acquiring/hiring, retaining, and training personnel • In addition, applications must assess the project’s economic impact over the life of the project period, and be based on quantitative data (e.g. nature and type of position; duration of employment; salary)

11. Topic B: Smart Grid workforce Training (Cont’d) • Applications must include commitment letters from: • Electric power companies, • Labor organizations (with qualified apprenticeship programs), and/or • Smart grid technology manufacturers • Electric power companies include, but are not limited to: • Investor-owned utilities • Municipal utilities and public utility districts • Electric cooperatives • Power Marketing Administrations (PMAs) and Tennessee Valley Authority • Transmission owners and operators; regional organizations such as independent system operators, transmission organizations, and electricity coordinating councils • Independent power producers • National-level utility organizations, associations and groups • Other types of load-serving entities.

12. Award and Cost Sharing Information • Approximately $100 million is expected to be available for new awards under this announcement • The period of award is up to three years • Cost share percentage • For Topic A, the applicant cost share must be at least 20% of the total allowable costs of the project (i.e., the sum of the recipient’s allowable costs and the Federal Government share equals the total allowable costs of the projects) and must come from non-Federal sources unless otherwise allowed by law. • DOE will accept cost share of 10% for academic institutions • For Topic B, the applicant cost share must be at least 50% and must come from non-Federal sources • The table below summarizes the estimated number of selected applications, award sizes and the federal share

13. Application Components

14. Application Components (Cont’d)

15. Summary of FOA-152 Application Approval Criteria Initial Review Criteria (Application Award Eligibility) • Prior to a comprehensive merit evaluation, DOE will perform an initial review to determine that (1) the applicant is eligible for an award; (2) the information required by the announcement has been submitted; (3) all mandatory requirements are satisfied; and (4) the proposed project is responsive to the objectives of the funding opportunity announcement Merit Review Criteria • Applications submitted in response to this FOA that pass the Initial Review shall be evaluated and scored for each Topic Area applied for in accordance with the criteria and weights listed below: CRITERION 1: ASSESSMENT OF NEED – 20% • Comprehensiveness of assessment conducted to clearly demonstrate the need for workforce training • Adequacy, completeness, and relevance of data sources and analysis to the targeted industry (e.g. manufacturing; utility) and occupations • Comprehensiveness of assessment to promote and enhance the objectives of the American Recovery and Reinvestment Act of 2009, especially job creation and preservation and economic recovery • Completeness of data and/or evidence to describe and support selection of local areas or communities where training programs will be established and/or participants will be trained and employed

16. Summary of FOA-152 Application Criteria (Cont’d) CRITERION 2: TECHNICAL APPROACH – 35% • Adequacy to which the proposed project will address the stated need or problem • Comprehensiveness of the project to adequately address all areas identified in the applicable Topic • Completeness of the work plan to outline the training strategy and describe how the proposed project will fully address the needs of workers and employers in the industry • Degree to which the proposed project can expeditiously begin or expand training and employment opportunities • Viability of the proposed project and likelihood of success • For Topic A applications, degree of innovation as compared to training practices in use today CRITERION 3: ROLES, RESPONSIBILITIES AND CAPABILITIES – 15% • Degree to which the applicant demonstrates sound project management principles and plans for project oversight in its Project Management Plan • Quality and relevance of the capabilities, experience, qualifications and credentials of key personnel to support the proposed project • Adequacy of the letters of commitment for each team member’s participation and/or cost share • Adequacy of infrastructure and resources, including the capabilities of the Applicant and Participants, to comprehensively address all aspects of the proposed work

17. Summary of FOA-152 Application Criteria (Cont’d) CRITERION 4: SIGNIFICANCE AND OUTCOME – 30% • Likelihood of the applicant to attract, retain, and/or place workers in jobs after training • Adequacy of partnerships with utilities and/or manufacturers to enhance training programs, training experience, and/or job placement • Extent to which the expected project outcomes are clearly identified, and measurable, realistic and consistent with the objectives of the project • Appropriateness of the outcomes with respect to the requested level of funding • Likelihood of the applicant to achieve the stated outcomes and report results within the stated timeframe • Extent to which the project supports the objectives of the American Recovery and Reinvestment Act of 2009 in an expeditious manner • Degree to which training activities, and related employment opportunities, will be sustainable beyond the project period of performance • Ability and comprehensiveness of applicant’s plan to assess project results, and make recommendations for program improvements to affect future training/employment outcomes in the industry • Extent to which the applicant plans to disseminate lessons learned and work collaboratively with others (non-project partners) • For Topic B, completeness of the assessment of economic impact

18. Workforce Planning Model workforce planning is a systematic process to identify gaps between the workforce of today and the needs of tomorrow. Utilities should have a model to assess and address workforce needs in order to manage their business. FOA 152 requires this as part of the application Step 1: Set Strategic Direction • Set organizational and group direction • Define goals and measurable objectives Step 2: Conduct workforce Analysis Step 4: Monitor, Evaluate, Revise • Forecast future workforce demands • Analyze current workforce supply • Determine gaps • Develop strategies to close gaps • Address new workforce and organizational needs • Determine what plans and strategies and working well and/or not working well • Adjust plan as needed Step 3: Implement workforce Plan • Communicate workforce plan • Implement strategies to close gaps, such as targeted recruitment, training programs, and succession planning 17

19. Conduct Workforce Analysis FOA 152 requires an analysis of workforce gaps – this should be a systematic assessment of requirements and future needs Employee Demographics Analyze age, gender, and ethnicity trends company-wide and drill down by division and position grouping Retirement Projections and Eligibility Calculate retirement eligibility and project future retirements using current employee data and historical retirement trends

20. Conduct Workforce Analysis (Cont’d) Employee Attrition Analyze overall attrition rates and investigate trends by age, tenure, and position grouping Performance and Competency Ratings Review performance and competency trends by division and position grouping to identify gaps and potential training/developmental needs

21. Match Identified Gaps to the Stimulus Application Future Outlook • Are there projects on the horizon that may influence staffing needs? • Will skilled labor be available locally in 3 – 5 years? • Are universities or vocational institutions offering programs pertinent to the organization? • Does the organization have partnerships with institutions to ensure the required talent will be available? • What industry trends may influence our current practices? • Are there legislative changes that may impact the organizational structure, funding, talent availability, etc.? • Is the organization able to fill critical positions in a timely manner? The analysis of workforce supply and demand highlights critical gaps and quantifies replacement workers by group over a specified timeframe – a critical component of the application Current Analysis • Are there deficiencies in the current staffing needs? • Is the talent pool, both internal and external, sufficient to meet short-term needs of the organization? • Is the current staffing mix cost-effective and appropriate for the organization? • Do employee competencies match their role in the organization? • Are there employment satisfaction issues that may be driving attrition? • How does the organization’s compensation structure measure-up against the competition? • What costs are associated with attrition and hiring?

22. Lessons Learned – Keys to Application Success • Don’t procrastinate – plan enough time for the application process • Ensure upper management is on board with the application strategy early • Complete the administrative process early (DUNS number, Central Contractor Registration (CCR), and registration with FedConnect) • Form an application development team – there are many components and many functional inputs • Prepare to manage the application preparation like a project, complete with assignments, due dates and follow up points • Establish the applicant and sub-applicant hierarchy early on • Develop the list of required attachments early and pursue vigorously (letters of commitment, resumes, etc.) • Fill out all sections as stated in the FOA, even if redundant with other sections of the FOA • File ahead of the deadline • Plan with the end in mind • Build the application budget as you will track it when approved • Assemble the project management team prior to approval