by Bob Krause, Public Utility Consultant
Everything we read about deregulation of the electric power industry touts the advantages that will come to consumers through lower rates due to competition. Presently, under regulation, customers pay average rates calculated over a specific historical period and all non-recurring anomalies are adjusted out. This system guarantees utilities a return, but protects customers from volatile market swings by paying only average rates.
Under competition, competitors bidding for customers will drive the price of power down in the open market. Although retail competition is coming along slowly in most states, the wholesale market has been open to competition for many years already. But, the over-capacity of generation within the industry has strongly influenced the downward movement of rates. What happens to the market price during periods of shortage?
The Midwest found out in late June, when generation shortages and market forces shot wholesale prices up from a few cents per kilowatt hour to $3 per kilowatt hour. Different events in the physical market and the market for so-called "financially firm" products, or "paper" market, resulted in a huge overload of buyers. A "financially firm" product is one in which the supplier may not control actual physical generation, but in effect promises to pay whatever price is necessary to procure supply. Electricity has become a financially traded commodity.
The market for short-term physical supplies to actually serve load was already tight during the last week of June because of the widespread heat wave across the eastern half of the country. Then an unusual number of unplanned outages in the Midwest, including the loss of several nuclear units, further reduced supply. This sent players into the market for physical power to serve load. Then one marketer reportedly defaulted, seriously disrupting the market for financially firm products.
Most financially firm transactions never go to actual delivery. Generally a long chain of companies have traded the same piece of power. When one company defaulted, everyone else in the chain was left holding an unfilled position, and dozens of companies rushed into the market to cover positions. At that point, there were far more buyers than sellers, with too many buyers saying they would buy at any price. Utilities and marketers controlling large blocks of power took advantage of the situation and the bidding war began. Although the price spike lasted a relatively short time, the price of power rose to over 100 times the normal rate.
The competitive market is a double-edged sword and prices can go up as well as down. Deregulation of the electric power industry will be a mixed bag, as it has been in other industries. Hopefully, the regulatory transition will put enough controls into the process to help manage the real world swings that are a part of the competitive market.
I am probably one of the most restructured/deregulated/downsized electrical engineers you have ever heard of, and I'm alive to tell the story. Here is a summary:
I graduated EEEE 1958, worked in aerospace at ITT, Bell Labs and other firms in communications and I served in many IEEE capacities. I am one of three engineers documented to have developed the first uplink communications for satellite communications and was named Outstanding Young Engineer by the IEEE Communications Group in 1963. I did all this by the age of 35.
When the moon program was over and the aerospace industry was being severely downsized in 1967, I left the industry and went to the airline industry, where I used my engineering experience to restructure the engineering department at Eastern Airlines successfully. During this career phase, I became known in the transportation industry as a technological leader and appeared on platforms along with such people as Sen. Barry Goldwater, and Dr. Grover Loening (both now deceased). By the time I was 40, I left behind my engineering duties to begin business duties in the transportation industry, my second major career. The end came abruptly years later as a result of airline deregulation.
But, by this time, I was 53 years old and after having sent out my resume for about a year to various industries, I concluded that I had been permanently restructured out of the "employed workforce." This was very difficult to accept, given my prior credentials and still being young, in good health and thinking I had a track record of excellent accomplishments. But the "wallpaper" was meaningless and I stopped sending out resumes.
And so, at age 55, I began yet a new, third and totally different career. I learned all there was to learn about the financial services industry and built a business which today is known as Discovery Group Inc. In this work, I used the principles of engineering, logic and technology knowledge, to create an independent equity research service. I wrote a book two years ago titled Thieves on Wall Street - Survival Guide for the Investor. In connection with this, I appeared several times on national TV, including on CNN, and am even today occasionally quoted within its context and the work I do on behalf of my company.
This year, I turned 65 and am now considering another career related to the prior. I gradually have been evolving into securities fraud investigations. I should also mention that just five years ago, we were wiped out by Hurricane Andrew, and spent one year and $100,000 rebuilding our house.
My life has been subject to restructuring since I was six when my father smuggled me out of Germany, in late 1939 to Sweden. That was the last time I saw any member of my family - I am the sole survivor. Subsequently, I went from foster homes to orphanages and, yes, I even served as a house slave for about four years. These were dramatic transitions and life changes and I call them "personal restructuring." However, I did survive.
I share this because there are many people who resist change, something they must not do. Change can be positive and productive if we approach it with the proper attitude.
- Gunther Karger, Chairman, Discovery Group Inc.
[reprinted from IEEE-USA This Week]
It all started with a 1970 article by the then-president of the IEEE, which appeared in Spectrum and which stated that the Institute should not be involved in the economic concerns and employment problems of the members. This article generated a larger response from the members than any other article, before or since. Most of the letters were very critical of that position.
Jim Mulligan, who was running as an unopposed candidate for president, took the letters very seriously and made a trip around the country to visit the larger sections and talk directly with the members. He found very hostile crowds everywhere he went and rumor has it that in Columbus, many of the attendees were prepared to greet him with overripe vegetables and other such items. Jim found an almost unanimous consensus that the IEEE should become involved in the economic concerns and needs of the members.
About that same time Vic Galindo, an active member of the Microwave Theories and Techniques Society, successfully circulated a petition to change the constitution, which would have converted the IEEE to an organization that would have as its primary interest the economic welfare of its members.
The IEEE Board did not feel this was in the best interests of the IEEE and vigorously and publicly opposed the petition. Regardless, Galindo's petition succeeded in getting a majority vote, but not the two-thirds required for passage. However, the Board got the message and proposed an alternative constitutional amendment to "permit" the IEEE to become involved in the economic welfare of the membership. This amendment passed with an all time record of 82% of the votes cast in favor, and an all time record voter turnout. For more information, see www.ieeeusa.org/usab/ANNIVERSARY.
On the morning of 17 June 1998, the Texas Board of Professional Engineers made history when they voted unanimously to change Board Rules in order to allow for the licensing of Professional Engineers (PEs) in the branch of software engineering, thus making it the first state in the US to do so.
For now, applications for a PE license in software engineering will only be available through a waiver of the Principles and Practice (P&P) and Fundamentals of Engineering (FE) Exams. The Texas Board will work with IEEE-CS and ACM to develop new exams, which may be available as early as 1999.
To be eligible for a possible waiver, an applicant must have an ABET-accredited degree and 12 years of experience, or a Board-approved non-accredited degree (CSAB-accredited degrees qualify) and 16 years of experience. Once appropriate FE and P&P exams are in place, the apprentice period shortens to 4 and 8 years for accredited and approved non-accredited programs, respectively. Complete information concerning applications can be found at www.main.org/peboard/sofupdt.htm.
One immediate effect of the Texas Board's decision will be on education programs. Not only will licensing help to legitimize SE within engineering colleges, but it will almost ensure some form of ABET accreditation for SE programs. The licensing requirements will drive the accreditation guidelines and therefore the curricula for SE degrees (and vice versa).
IEEE-USA URGED PRESIDENTIAL VETO OF H1-B DEAL - IEEE-USA opposed an agreement on high-tech guest-worker legislation announced on July 24 by Congressional Republican leaders, and called on President Clinton to carry through on an earlier threat to veto H-1B legislation that does not provide adequate safeguards for US workers.
IEEE-USA President John R. Reinert noted that the Congressional move to vastly expand the H1-B guest-worker program comes as the US job market for technical professionals is softening. "In the last few months, more than 150,000 jobs have been cut by technology companies and the unemployment rate for electrical engineers has nearly tripled," he said. "We urge Congress and the White House to forge legislation that accommodates the legitimate needs of industry without trampling on the career opportunities of US- and foreign-born technical professionals."
On July 30, a spokesperson for the President renewed the veto threat, saying the bill would not pass muster without a series of provisions the Administration proposed to beef up the worker protections. The amended House legislation was withdrawn on Aug. 6 after Republican leaders failed to muster enough votes to pass the bill over White House objections. The legislation may be taken up again after the House returns from recess in September.
IEEE-USA HAS RELEASED A FREE CAREER VITALITY PACKET outlining its extensive career-development and employment-assistance services for professionals in the electrotechnology and information-technology communities. The packet's contents include detailed information on: the nation's number-one electrotechnology job listing service, an alliance of local consultants' networks, career workshops, resume-referral services, job fairs, free employment assistance for IEEE members, and a series of career-oriented papers, guides and resource materials for technical professionals and their employers, including Engineer's Guide to Lifelong Employability, the IEEE-USA Salary Survey and personal Salary Benchmarks workbook, the National Directory of Electrotechnology and Information Technology Consultants, plus a free copy of Today's Engineer magazine. Contact Mike Chaykovsky, 202-785-0017, m.chaykovsky@ieee.org or see www.ieeeusa.org.
IEEE-USA JOB LISTING SOLIDIFIES #1 RANKING - Only months after IEEE-USA's Job Listing Service (JLS) ranked number one in usage in an Electronic Engineering Times reader survey, the JLS has received fresh kudos in a new book for job seekers. In the "Top Job Databases on the Web" section of Pam Dixon's Job Searching Online for Dummies, the author cites the site's ease of use and "rich content." and an "absolutely top-of-the-line techie site. . .I found great jobs." Visit the JLS at www.ieeeusa.org/jobs.html.
PRESIDENTIAL EARLY CAREER AWARDS AVAILABLE TO OUTSTANDING YOUNG ENGINEERING RESEARCHERS - The President's National Science and Technology Council (NSTC) recently announced an award to recognize and support outstanding scientists and engineers at the outset of their independent research. The Presidential Award is the highest honor bestowed by the US government on beginning scientists and engineers and will be conferred annually at the White House following recommendations from participating agencies. Award requirements and application procedures vary by department/agency. For more details, consult www.nsf.gov/pubs/1998/pecase98/pecase98.htm.
WHITE HOUSE Y2K CAMPAIGN KICKS-OFF WITH FOCUS ON ELECTRIC POWER INDUSTRY - On July 28, John Koskinen, Chair of the President's Council on Year 2000 Conversion, joined by Elizabeth Moler, Acting Secretary of Energy, and Michehl Gent, President of the North American Electric Reliability Council, kicked off the Council's "National Campaign for Year 2000 Solutions" to promote public and private sector action on the year 2000 computer problem (Y2K) in key areas such as electric power, and foster information-sharing across organizations about Y2K solutions in the United States and around the world.
At DOE's request, NERC has assumed a leadership role and with the help of the regional reliability councils, will survey the Y2K preparedness of the Nation's 300 largest utility companies and develop a three-phase Y2K program that includes: regular status reports to DOE, the coordination of industry-wide contingency planning efforts, and the development of a "master checklist" with information equipment and systems compliance as well as best practices and solutions.
The electric power industry faces some key challenges, among them: liability that may arise from information-sharing, date-sensitive embedded chips in power production and energy management systems and relay protection devices, the stability of the interconnections between electric systems, and a reliance on telecommunications equipment that may be susceptible to year 2000-related failures.
EARLIER THIS SUMMER, THE US POSTAL SERVICE PROPOSED taking over the little used .us domain, as a residential e-mail service. Under the plan, every American could be issued an e-mail account, regardless of access. Each address would coincide with one's street address. See www.abcnews.com/sections /tech/DailyNews/dotus980807.html.
FTC SPOTLIGHTS E-MAIL SPAM SCAMS - In a July 14 press conference, the Federal Trade Commission (FTC) released a Consumer Alert describing the 12 most common scams found in unsolicited commercial e-mail - spam. The list was culled from a sampling of more than 250,000 junk e-mail messages that consumers have forwarded to a special FTC mailbox (uce@ftc.gov) set up to collect spam. See www.ieee.org/usab/FORUM/EYE/0716981.html.
A&P WEB COURSE - The IEEE and the University of Illinois at Urbana-Champaign (UIUC), Urbana, Il. will offer a Web-delivered course on antennas and propagation that will run from 1-30 November 1998. Enrollment is open though 31 October 1998 at www.ieee.org/eab. This course, designed as a refresher, will provide an analytical and intuitive understanding of antenna physics, exposure to antenna computer-aided design software, and an introduction to a variety of antenna structures of practical interest. The course will also cover recent developments in the wireless and personal communication systems. Participants should have a basic knowledge of electromagnetic wave theory outlining the general plane wave solution of Maxwell's equations, phenomena involving reflection and transmission of plane waves, transmission lines, and impedance matching techniques. 3.6 CEUs. IEEE member price is $350; list price is $400. For course information, contact Prof. Michielssen, michiels@decwa.ece.uiuc.edu.
IEEE JOURNALS HIGHLY CITED IN SCIENTIFIC LITERATURE - Seventeen of the top 20 cited journals in electrical engineering are published by the IEEE according to the Institute of Scientific Information annual report. There were 175 electrical engineering journals ranked in all. Over all, IEEE's most highly cited journal was the Journal of Quantum Electronics, which placed second only to IEE's Electronic Letters. The report also ranked journals according to subject categories and within the computer science and electrical engineering categories, six IEEE Journals were ranked first in citations: Transactions on Communication, Transactions on Automatic Control, Transactions in Vehicular Technology, Transactions in Computing, Transactions on Systems, Man, and Cybernetics, and Transactions on Pattern Analysis. Contact Darla Wagner, IEEE Library, 732-562-3974, d.wagner@ieee.org, or Jonathan Dahl, IEEE Marketing, 732-562-3997, j.dahl@ieee.org.
TWO IEEE CONTINUING EDUCATION PRODUCTS
Educational Activities is now offering Continuing Education Units
(CEUs) for video tutorials. For more information, see www.ieee.org/eab/.
To order: contact IEEE Customer Service, 800-678-IEEE.
Greetings from your new Section Executive Committee! It is both a pleasure and an honor to represent you for the 1998/99 term and I thank you for the opportunity. Over the next 12 months I hope to take this piece of space to share some section information and thoughts with you as we continue to grow and develop the section for prosperity in the next millennium.
Introductions first however. The Executive Committee (ExCom) consists of 5 voting members. My name is Alan Triggs and I am privileged to serve you as the new Chair of the section. I work for Ericsson as an RF Engineer on GSM and CDMA systems. I have served IEEE in various roles within the Fort Worth Section and UNT student branch over the last 5 years.
Stepping into the role of Vice-Chairman this year is Jeff Carrell. Jeff is a Consulting Systems Engineer for Foundry Networks, working mainly on Gigabit Ethernet. Jeff has done a lot of electronic communications work for numerous IEEE entities in recent years and was the section Secretary last year. Jeff has also been the section Webmaster since the birth of our site.
Our Secretary is a new member to the ExCom, Robert Krause. 'Bob' has been a Consultant in the utility industry for a number of years, and has given much of his experience to IEEE in recent years as the Chairman of our local Consultant's Network.
Also joining the ExCom for the first time is our new Treasurer, Dr. Robert Hayes. 'Bob' is the Dean of the EET department at our local DeVry campus in Irving. Although new to the ExCom, Bob is no stranger to IEEE activities, having served as Branch Counselor at both UNT and DeVry in recent years.
Rounding out the "Bobs" is our outgoing Chairman, Bob Geisel. Bob is an Account Manager at Microsoft, and remains on the ExCom as Past-Chairman. I would like to take this opportunity to thank Bob for leading us through a very successful year in which we increased our revenue and exposure, and for turning over a very stable ship. Thanks Bob!
In invite all of you to contact me anytime with questions or comments about IEEE or volunteer opportunities with the Section. Next month we'll take a look at some goals and plans for the year ahead.
-- Alan Triggs
Recognizing our Section members for their long-time commitment to the profession on the anniversary of their joining IEEE.
20 yrs
What is the next number in the sequence?
1, 2, 6,12, 60, 60, 420, 840, ?
Answer to May's Brainbuster:
Jean Eason, Editor