Monitoring Organizational Performance for Utility Governing Boards

APPA National ConferenceJune 16, 2009Carl A. Mycoff

A headhunter discussing Monitoring Organizational Performance for Governing Boards?

It’s what we do.

Driving Metric: Stakeholder Value

Quantitative

Qualitative

It’s first and foremost about the money, but CEO’s can just as easily lose their jobs over tree trimming.

Quantitative: Balancing conflicting forces

PricePower SupplyFinance

ReturnCustomer relationsEconomic DevelopmentStaff Development

Price competitiveness

Regional

National

Global

Power supply: THE largest

component of price

Large and vertically integrated

Distribution/joint action agency

- All requirements

- Project

Financial condition• Debt/equity: Rating agency ratings optimized to minimize interest expense.• Life of asset• Customers deriving benefit• Debt service impact on price • Where should the equity reside? - Distribution - Joint action

ReturnCash transfer to general

fund; Payment- in-lieu of taxesShared service allocationFree servicesStreet paving

San Antonio City Public Service (CPS)

Annual electric revenue $1.2 BillionResidential Revenue $672 MillionResidential Revenue under AEP $882 MillionRevenue Saving $210 MillionTransfer to the General Fund $245 MillionFranchise Fee and Property Tax $57 Million

CPS customer residents save annually $398 Million

Tacoma Public Utilities

Annual Retail Electric Revenue $267 MillionAnnual Retail Electric Revenue Under

Puget Energy $404 Million

Retail Revenue Savings $137 Million

Gross Revenue Tax $30 Million

Support Service Allocation $6 Million

Franchise Fee and Property Tax $13 Million

Tacoma Public Utility Customers save annually $160 Million

Customer Relations

Customer satisfaction

Reliability; CAIDI/SAIDI

Power quality/price

Chip manufacturer/irrigator

Economic Development

Build load and revenue- Load factor- Incremental cost to serve.

Mitigate customer dependence

Local job creation

Tax base

Staff Development

Turnover

Successor development Internal promotions Cost/benefit

Safety OSHA Recordable Lost time

Unions Grievances Arbitrations

Quantitative and Qualitative factors

Green resources: College/capital city or coal mining town Subscription rate/premium price

Energy efficiency:

Community culture: High tech/packing house

Staff impact on community relations:

Local hires/market compensation forces:

Qualitative Factors

Relationships/Communication: NO SURPISES

Governing body

Customers

Staff

Joint venture partners

Community

Legislature, administration, and regulatory

Questions?