The cost of modernizing electric, water, and natural gas infrastructure systems in the United States will exceed $4 trillion over the next 20 years, according to industry estimates and the National Association of Regulatory Utility Commissioners (NARUC).
That's why NARUC, a nonprofit organization based in Northwest, that represents state public service commissioners who regulate utilities that provide essential services such as electricity, telecommunications, water and gas discussed a wide array of issues that must be addressed before modernization can occur at their annual meeting last month at the Baltimore Hilton hotel in downtown Baltimore.
NARUC's members include commissioners from all 50 states, the District of Columbia, Puerto Rico, and the Virgin Islands. NARUC started a subcommittee in 1994, Utility Market Access (UMA), to serve as a vehicle to assist women, minority and service related disabled veteran-owned businesses (WMDvBEs) to conduct business in the utility industry and ensure that everyone gets a piece of the pie.
"When corporations include minority and women-owned firms that operate in high margin categories of service to corporations, the chances for wealth creation and increased economic returns to underserved communities increases as well," said Emmett T. Vaughn, director of Diverse Business Empowerment for Exelon Corporation headquartered in Chicago, Ill. Vaughn presented a compelling strategy for increasing WMDvBE business participation during the recent UMA subcommittee meeting.
Vaughn said that part of Exelon's strategy to expand business relationships with diverse suppliers was to provide opportunities in professional services. This opens the door for investment banking, legal, and a variety of business opportunities, not often available to smaller firms.
Exelon, the nation's largest competitive energy provider, recently purchased Baltimore Gas and Electric (BGE), the largest utility company in Maryland. Exelon is doing business in 47 states, the District of Columbia and Canada. BGE serves approximately 1.8 million customers in the Maryland – D.C. region.
Reginald McCauley, director of Supply Chain, said Pepco has just started a program to rebuild its infrastructure with its "Reliability Enhancement Plan." Pepco will spend more than $1 billion on the project over the next five years. Pepco has signed on to voluntary Memoranda of Understanding with NARUC in Maryland and the District to increase business with WMDvBEs, and is searching for qualified WMDvBEs to do business with.
Harold Williams, a public service commissioner for Maryland, is the chair of the subcommittee on UMA. Williams is working with other commissioners like Timothy A. Simon, from California, utility companies and WMDvBEs to develop a new strategic plan to "take the program to the next level," he said. Williams expects that the UMA program will have a significant effect on local WMDVBEs interested in doing business with the utility sector in the Baltimore -Washington region.
One initiative being considered is a mentor protégé program for WMDvBEs in the utility sector. The program would pair established and successful companies in the utility industry with WMDvBEs. Supporters of the mentor protégé initiative believe that guidance and assistance with relationship building and best practices could be one fundamental pillar of the UMA program objective.
An initiative currently underway by UMA is a project with the National Utilities Diversity Council (NUDC). "We are developing a supplier diversity toolkit," said Laurie Dowling, interim executive director of NUDC in Los Angeles, Calif. The toolkit will include comprehensive information designed to help utility companies and commissioners get WMDvBEs more business in the multi-billion dollar utility sector. The document is expected to be completed by February 2013.
How quickly any infrastructure modernization will roll out is the subject of much debate. Two major factors that will determine the time frames for development are the requirements of the new federal regulations on utility companies that deal with environmental concerns and the price of gas. The regulations are a "big issue" said Mayo Shattuck III, executive chairman of Exelon Corporation.
Most industry observers believe that the issues will be resolved given the reality that a continued crumbling utility infrastructure in this country will negatively impact the economy.
Long-time Minority Business Enterprise entrepreneurs like Will Johnson of Visage Energy Corp. believe that the time is right for WMDvBEs to pursue business in the utility sector. "I have been in the energy business for 20 years, and have seen many cycles," said Johnson. Any WMDvBE must be willing to "pay some dues" and "work with the companies to learn the business."
To learn more about the UMA program, go to http://www.naruc.org.