Utilities
 Industry
Overview
The simple act of walking into a restroom, turning on the light, and
washing your hands, uses the products of perhaps four different
utilities. Electricity powers the light, water supply systems provide
water for washing, wastewater treatment plants treat the sewage, and
natural gas or electricity heats the water. The utilities industry
includes companies that generate, transmit, and distribute electrical
power, distribute natural gas, treat and distribute fresh water, and
treat wastewater. The Federal Government, as well as many state and
local governments, also provide electric, gas, water, and wastewater
treatment services and employ a significant number of workers in similar
jobs, but they are not included in this industry.
Industry
Organization
The utilities
sector comprises three distinctly different industries.
Electric
Power Generation, Transmission, and Distribution
This segment includes
firms engaged in the generation, transmission, and distribution of
electric power. Electric plants harness high-pressure steam, flowing
water, or some other force of nature to spin the blades of a turbine,
which is attached to an electric generator. Slightly less than half of
the nation’s electrical energy comes from coal. The majority of the rest
is produced by a combination of natural gas, nuclear energy, and
hydroelectric generators. Renewable sources of electric power—including
geothermal, wind, and solar energy—are expanding rapidly, but only make
up a small percentage of total generation.
Legislative changes and
industry competition have created new classes of firms that generate and
sell electricity. Traditionally, only companies that distribute and sell
energy to consumers were involved in producing electrical power.
Deregulation—a major legislative trend at both the Federal and State
levels during the 1990s—allowed other firms to produce electricity and
sell it to local utility companies, who resell that energy to consumers.
Such companies are called non-utility generators (NUGs).
When electricity leaves a
generating plant, its voltage is stepped up to the level of the power
grid. Transmission lines supported by huge towers connect generating
plants with industrial customers and substations. At substations, the
electricity's voltage is reduced and made available for household and
small business use via distribution lines, which usually are carried by
telephone poles.
Natural
Gas Distribution
Natural gas is a clear, odorless gas, found in underground deposits.
Exploration and extraction of natural gas is part of the
mining industry. Once extracted, it is
transported throughout the United States, Canada, and Mexico by gas
transmission companies using pressurized pipelines. Local distribution
companies take natural gas from the pipeline, depressurize it, add odor
to it, and deliver the gas from transmission pipelines to industrial,
residential, and commercial customers. Industrial customers, such as
chemical and paper manufacturing firms, account for almost a third of
total natural gas consumption. Electric power plants, residential
customers, who use gas for heating and cooking and commercial
businesses, such as hospitals and restaurants, account for most of the
remaining consumption.
Water,
Sewage, and Other Systems
Water
utilities treat and distribute tap water for use by business and
residential customers. Water is collected from rivers, lakes, and wells.
After collection, water is treated and sold for residential, industrial,
agricultural, commercial, and public use. Depending on the population
served by the water system, the utility may be a small plant in a rural
area that requires the occasional monitoring of a single operator or a
huge system of reservoirs, dams, pipelines, and treatment plants
requiring the coordinated efforts of hundreds of people. Sewage
treatment facilities operate sewer systems or plants that collect,
treat, and dispose of waste from homes and industries. Although
standards for sewage are not as high as those for tap water, these
utilities are responsible for removing harmful chemicals and microbes
from wastewater before it can be released into the environment.
Other systems include steam and air-conditioning supply utilities, which
produce and sell steam, heated air, and cooled air.
The services provided
by the utilities industry are heavily regulated. In most places, they
operate as monopolies because it is generally not desirable to have
several competing systems of pipes or power lines in a single area.
Public utility commissions ensure that companies act in the public
interest and often set the rates that utilities are allowed to charge.
In recent years, however, legislative changes have established and
promoted competition in parts of the utilities industry where it is
feasible. This is especially prevalent in the electric power industry,
where wholesale providers of electricity now face competition from a
number of non-utility generators.
The various segments
of the utilities industry vary in the degree to which their workers are
involved in production activities, administration and management, or
research and development. Industries such as water supply, that employ
relatively few workers, employ more production workers and plant
operators. On the other hand, electric utilities generally operate
larger plants using very expensive, high technology equipment, and thus
employ more professional and technical personnel.
The
utilities industry is unique in that urban areas with many inhabitants
generally have relatively few utility companies. For example, there were
about 52,000 community water systems in the United States in 2008
serving more than 292.3 million people. The 29,100 smallest water
systems served only 4.9 million people while the 400 largest systems
served more than 133.1 million. This shows that economies of scale in
the utilities industry allow a few large companies to serve large
numbers of customers in metropolitan areas more efficiently than many
smaller companies. In fact, some utility companies, predominately
serving large metropolitan areas, offer more than one type of utility
service to their customers.
Unlike most
industries, the utilities industry imports and exports only a small
portion of its product. To some degree, this is because transporting
electricity, fresh water, and natural gas are somewhat challenging. It
also is the result of a national policy that utilities should be
self-sufficient, without dependence on imports for the basic services
our country requires. However, easing trade restrictions, increased
pipeline capacity, and shipping natural gas in liquefied form have made
international trade in utilities more feasible, especially with Canada
and Mexico.
Recent
Developments
Energy
policy is one of the key issues facing policy makers today. Issues such
as energy security, pollution, greenhouse gas emissions, and toxic waste
disposal are debated regularly in Congress. In both 2005 and 2007,
Congress promoted conservation by passing new energy legislation that
created subsidies for clean technologies. The expansion of nuclear power
also is a major topic of discussion, and several new plants have
received building permits, although none have began construction. The
fastest-growing segment of the electric power industry is renewable
energy. While renewables only make up a relatively small piece of the
Nation’s energy mix, both wind and solar energy are expanding rapidly
and, companies engaged in the production and installation of, are hiring
a significant number of new workers.
The natural gas
industry also is evolving. While the share of natural gas being consumed
by residential households and businesses has reached a near-term
plateau, consumption by other sectors continue to increase. Many new
natural gas power plants are being built, as natural gas is a cleaner
alternative to coal. Further, natural gas is being used by some
alternative fuel vehicles, although not enough to constitute a
significant source of demand yet. At the same time, industry has reduced
its share of overall natural gas usage over the last ten years. Though
natural gas prices have stayed volatile in the past decade, employment
has remained relatively stable as distributors earn their profits by
charging set monthly rates rather than charging by volume delivered.
The water and sewage
systems industry continues to face challenges. As urban areas continue
to grow and demand greater amounts of water, sources of fresh water are
being exhausted. At the same time, companies are having difficulty
complying with Federal and State water quality regulations. In many
areas, aging infrastructure is a significant problem, and will have to
be replaced during the projection period.
All utilities continue
to be affected by the anticipated baby boom retirements, which are
expected to dramatically reduce the supply of domestic utility workers.
As a result, the utilities industry is teaming up with universities,
community colleges, and trade schools to train new workers and prepare
the utility workforce of the future.
Working
Environment
Electricity, gas, and water are used continuously throughout each day.
As a result, split, weekend, and night shifts are common for many
utility workers. The average weekly hours worked for production workers
in utilities was 42.7 hours in 2008, compared with 33.2 hours for all
trade, transportation, and utilities industries, and 33.6 hours for all
private industries. At times, some employees must work overtime to
accommodate peaks in demand and to repair damage caused by storms, cold
weather, accidents, and other occurrences. The industry employs
relatively few part-time workers.
Work environment. The hazards of working with electricity, natural gas,
treatment chemicals, and wastes can be substantial, but generally are
avoided by following rigorous safety procedures. Protective gear such as
rubber gloves and rubber sleeves, non-sparking maintenance equipment,
and body suits with breathing devices designed to filter out any harmful
fumes are mandatory for work in dangerous environments. Employees also
undergo extensive training on working with hazardous materials and
utility company safety measures.
Employment
Utilities
had 559,500 wage and salary jobs in 2008. Electric power generation,
transmission, and distribution provided about 404,700 jobs. The
diversity of production processes in the utilities industry was
reflected in the size of the establishments that made up the industry.
For example, the electric power and natural gas distribution sectors
consisted of relatively large plants. In 2008, electric power
generation, transmission, and distribution plants employed an average of
about 50 workers per establishment. On the other hand, the water,
sewage, and other systems sector employed an average of only 8 workers
per establishment. Although many establishments are small, the majority
of utilities jobs were in establishments with 100 or more workers.
STEM Degree
Paths into this Industry
Professional
and related occupations in this industry include engineers and computer
specialists. Engineers develop technologies that allow, for example,
utilities to produce and transmit gas and electricity more efficiently
and water more cleanly. They also may develop improved methods of
landfill or wastewater treatment operations in order to maintain
compliance with government regulations. Computer specialists develop
computer systems to automate utility processes; provide plant simulators
for operator training; and improve operator decision making. Engineering
technicians assist engineers in research activities and may conduct some
research independently.
Managers in the
utilities industry plan, organize, direct, and coordinate company
activities. They often are responsible for maintaining negotiations with
government regulators, labor organizations and suppliers.
Industry
Forecast
Employment
in utilities is expected to decline; nevertheless many job openings will
arise because large numbers of many workers in the industry are
approaching retirement age and will need to be replaced.
Wage and salary
employment in utilities is expected to decline 11 percent between 2008
and 2018, compared with an increase of 11 percent for all industries
combined. Projected employment change varies by industry segment, as
shown in table 4. Although electric power and natural gas continue to be
essential to everyday life, the increased size and efficiency of new
power plants will lead to an overall decline in employment. Water,
sewage, and other systems segment of the industry, however, will
continue to grow as the population of the country increases and urban
areas expand.
Employment in the
electric power generation, transmission, and distribution industry is
expected to decline by about 15 percent over the 2008-2018 period.
Although the demand for electricity continues to increase over time,
deregulation has led to greater cost-cutting measures that will allow
power generation companies to be profitable in a competitive
marketplace. As older, less efficient plants are retired, they are being
replaced with new plants that have higher capacities and require fewer
workers. Because the capacity of the new plants is higher, fewer are
needed to produce the same amount of electricity. Nevertheless, some
segments within electric power generation are likely to increase
employment, such as nuclear power, electric transmission, and renewable
energy. Should State and Federal Governments continue offering
incentives to companies utilizing these technologies, employment should
grow even more unimpeded.
The natural gas
distribution industry is expected to decline 6 percent over the
projections decade. Industry consolidation has significantly impacted
this industry, a trend that is expected to continue. Use of newer, more
automated equipment will result in fewer operators to monitor these
systems.
Water and sewage
systems services are projected to grow 13 percent, as water systems are
expanding rapidly and as the industry has not yet experienced the
efficiency gains seen among other utilities. Additionally, regulatory
changes have benefited this industry. While most water systems remain
locally-operated and fairly small in scale, water quality standards for
both drinking water and disposal of wastewater have been tightened for
public health and environmental reasons, requiring more workers. While
hiring freezes have been less common in water than in other parts of the
industry, much of the water workforce is nearing retirement age.
Despite overall
declining employment, job prospects for qualified applicants entering
the utilities industry are expected to be excellent during the next 10
years. As of 2008, about 53 percent of the utilities industry workforce
is age 45 or older (table 5). Many of these workers will either retire
or prepare to retire within the next 10 years. Because on-the-job
training is very intensive in many utilities industry occupations,
preparing a new workforce will be one of the industry’s highest
priorities during the next decade.
Related
Degree Fields
Professional
Associations
Note: Some resources in this section are provided by the US Department
of Labor, Bureau of Labor Statistics.
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