How utilities can outsource essential functions or services

BY ASBURY GAULT, Zenius LLC

In today’s business world with ever-increasing employee benefit costs, regulated utilities are challenged with reducing their costs for the benefit of all stakeholders. This force is driving utility managers to re-examine every function of their departments for cost cutting opportunities including functions and services that are essential to the operation of a utility.

In a regulated utility operating a distribution company, functional work falls into three basic categories: (1) the core competencies of generating, transmitting, and distributing electricity, (2) variable or incremental work or projects such as power plant and infrastructure improvements, and (3) essential services or functions such as facilities management, IT (information technology) support, tool testing, and rubber goods testing. This feature will address the strategic questions behind the due diligence necessary to determine if outsourcing is the best long-term management strategy for specific essential services or functions.