Nature of the Industry
Goods and services. 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. Some government establishments also provide electric, gas, water, and wastewater treatment services and employ a significant number of workers in similar jobs, but they are part of government and not included in this industry. Information concerning government employment in utilities is included in the Career Guide to Industries statements on Federal Government and State and local government, except education and health.
Industry organization. The utilities sector is comprised of 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 highly pressurized steam, flowing water, or some force of nature to spin the blades of a turbine, which is attached to an electric generator. Coal is the dominant fuel used to generate steam in electric power plants, followed by nuclear power, natural gas, petroleum, and other energy sources. Hydroelectric generators are powered by the release of the tremendous pressure of water existing at the bottom of a dam or near a waterfall. 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. Some industrial plants have their own electricity-generating facilities, capable of producing more power than they require. Those that sell their excess power to utilities or to other industrial plants are called non-utility generators (NUGs). Independent power producers are a type of NUG that are electricity-generating plants designed to take advantage of both industry deregulation and the latest generating technology to compete directly with utilities for industrial and other wholesale customers.
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, a clear odorless gas, is found underground, often near or associated with crude oil reserves. Exploration and extraction of natural gas is part of the oil and gas extraction industry, covered elsewhere in the Career Guide to Industries. Once found and brought to the surface, 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 its odor, and operate the system that delivers 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 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 nearly 34 billion gallons per day to customers nationwide. Water is collected from various sources such as 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. Other utilities include steam and air-conditioning supply utilities, which produce and sell steam, heated air, and cooled air.
Recent developments. Utilities and the services they provide are so vital to everyday life that they are considered public goods and are typically heavily regulated. Most utility companies that distribute to consumers operate as regulated monopolies because utility distribution tends to require a large investment in plant and equipment and it is generally not desirable to have several competing systems of pipes or power lines in most areas. Since these companies do not face competition, they are regulated by public utility commissions that ensure that companies act in the public interest and set the rates that are charged. However, legislative changes in recent years have established and promoted competition in some parts of the utilities industry. Wholesale providers of electricity now face competition from a number of non-utility generators.
Many utility companies are municipally owned. In the natural gas industry, for example, a majority of the distribution companies in the United States are municipally owned. However, they serve just a fraction of the nationwide customers. Historically, utilities serving large cities had sufficient numbers of customers to justify the large investment in infrastructure needed to run a utility, and so private, investor-owned companies established utility service. In rural areas, where the small number of customers in need of services did not provide an adequate return for private investors, the State or local government, or rural cooperative associations, established utility service.
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 52,349 community water systems in the United States in 2006 serving more than 281 million people. The 48,275 smallest water systems served only 52 million people while the 4,074 largest systems served more than 229 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 of the great difficulty in transporting electricity, freshwater, and natural gas. It is also 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.
In 2005, Congress passed a new Energy Policy Act, which is the first major legislation on energy since 1992. This will be a major force in the industry through 2016. It was designed to promote conservation and use of cleaner technologies in energy production through higher efficiency standards and tax credits. It is expected that several new power plants will be built as a result of this legislation, including new clean-burning coal and nuclear facilities.
Hours. Electricity, gas, and water are used continuously throughout each day. As a result, split, weekend, and night shifts are common for utility workers. The average workweek for production workers in utilities was 41.4 hours in 2006, compared with 33.4 hours for all trade, transportation, and utilities industries, and 33.9 hours for all private industries. Employees often 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, nonsparking maintenance equipment, and body suits with breathing devices designed to filter out any harmful fumes are mandatory for work in dangerous environs. Employees also undergo extensive training on working with hazardous materials and utility company safety measures.
In 2006, the utilities industry reported 4.1 cases of work-related injury or illness per 100 full-time workers, compared with an average of 4.4 cases for all private industries.
Utilities had 549,000 wage and salary jobs in 2006. Electric power generation, transmission, and distribution provided about 7 in 10 jobs, as shown in table 1.
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 2006, electric power generation, transmission, and distribution plants employed an average of about 49 workers per establishment. On the other hand, the water, sewage, and other systems sector employed an average of only 8 workers per establishment (table 2).
Although many establishments are small, the majority of utilities jobs were in establishments with 100 or more workers (chart 1).
Occupations in the Industry
About 226,000 jobs—approximately 41 percent of all wage and salary jobs in the utilities industry—were in production or installation, maintenance, and repair occupations in 2006 (table 3). About 21 percent of jobs were in office and administrative support occupations; 14 percent were in professional and related occupations; and 12 percent were in management, business, and financial occupations. The remaining jobs were in construction, transportation, sales, and service occupations.
Production and installation, maintenance, and repair occupations. Workers in these occupations install and maintain pipelines and powerlines, operate and fix plant machinery, and monitor treatment processes. For example, electrical powerline installers and repairers install and repair cables or wires used in electrical power or distribution systems. They install insulators, wooden poles, transformers, and light- or heavy-duty transmission towers. First-line supervisors and managers directly supervise and coordinate the activities of production and repair workers. These supervisors coordinate workload and work assignments and help to ensure a safe and productive work environment.
Production occupations include power plant operators, power distributors and dispatchers, and water and liquid waste treatment plant operators. Power plant operators control or operate machinery, such as stream-driven turbine generators, to generate electric power, often using control boards or semi-automatic equipment. Power distributors and dispatchers coordinate, regulate, or distribute electricity or steam in generating stations, over transmission lines to substations, and over electric power lines. Water and liquid waste treatment plant and system operators control the process of treating water or wastewater, take samples of water for testing, and may perform maintenance of treatment plants.
Industrial machinery mechanics install, repair, and maintain machinery in power generating stations, gas plants, and water treatment plants. They repair and maintain the mechanical components of generators, waterwheels, water-inlet controls, and piping in generating stations; steam boilers, condensers, pumps, compressors, and similar equipment in gas manufacturing plants; and equipment used to process and distribute water for public and industrial uses.
General maintenance and repair workers perform work involving a variety of maintenance skills to keep machines, mechanical equipment, and the structure of an establishment in repair. Generally found in small establishments, these workers have duties that may involve pipefitting, boilermaking, electrical work, carpentry, welding, and installing new equipment.
Office and administrative support occupations. These occupations account for about a quarter of jobs in the utilities industry. Customer service representatives interview applicants for water, gas, and electric service. They talk with customers by phone or in person and receive orders for installation, activation, discontinuance, or change in service. General office clerks may do bookkeeping, typing, office machine operation, and filing. Utilities meter readers read electric, gas, water, or steam consumption meters visually or remotely using radio transmitters and record the volume used by residential and industrial customers. Financial clerks, such as bookkeeping, accounting, and auditing clerks, compute, classify, and record numerical data to keep financial records complete. They perform any combination of routine calculating, posting, and verifying duties to obtain primary financial data for use in maintaining accounting records.
Professional and managerial occupations. 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 and administrators in the utilities industry plan, organize, direct, and coordinate management activities. They often are responsible for maintaining an adequate supply of electricity, gas, water, steam, or sanitation service.
Training and Advancement
Utilities provide career opportunities for persons with varying levels of experience and education. However, because the utilities industry consists of many different companies and products, skills developed in one segment of the industry may not be transferable to other segments.
High school graduates qualify for many entry-level production jobs. In some cases, however, safety and security regulations require higher standards for employment, such as documented proof of the skills and abilities necessary to complete the work. As a result, a degree from a college, university, or technical school may be required. Production workers may start as laborers or in other unskilled jobs and, by going through an apprenticeship program and gaining on-the-job experience, advance into better-paying positions that require greater skills or have greater responsibility.
Substantial advancement is possible even within a single occupation. For example, power plant operators may move up through several levels of responsibility until they reach the highest paying operator jobs. Advancement in production occupations generally requires mastery of advanced skills on the job, usually with some formal training provided by the employer or through additional vocational training at a 2-year technical college or trade school.
Most computer, engineering, and technician jobs require technical education after high school, although opportunities exist for persons with degrees ranging from an associate degree to a doctorate. These workers are usually familiar with company objectives and production methods which, combined with college education, equip them with many of the tools necessary for advancement to management positions. Graduates of 2-year technical institutes usually fill technician positions. Sometimes, graduates of engineering programs will start as technicians until an opportunity to advance into an engineering position arises.
Managerial jobs generally require a 4-year college degree, although a 2-year technical degree may be sufficient in smaller plants. Managers usually can advance into higher level management jobs without additional formal training outside the workplace.
Employment in utilities is expected to decline, but many job openings will arise because large numbers of many workers in the industry are approaching retirement age and will need to be replaced.
Employment change. Wage and salary employment in utilities is expected to decline 6 percent between 2006 and 2016, compared with an increase of about 11 percent for all industries combined. Projected employment change varies by industry segment, as shown in table 4. Although electric power, natural gas and water continue to be essential to everyday life, employment declines will result from the retirement of much of the industry’s workforce. While utilities are doing what they can to replace these workers, the wide variety of careers open to people with technical skills will make it difficult for companies to find enough applicants to fill these openings. Utilities will be forced to further automate their systems, negotiate part-time status with retirees and contract with employment services to make up for the difference between the desired number of employees and the number of workers actually available.
Reorganization of electric utilities has increased competition and provided incentives for improved efficiency. This has resulted in extensive cost-cutting and a number of mergers, which have led to a decline in employment over the past several years. This has been accomplished by a combination of layoffs and hiring freezes, which have resulted in an older workforce than in most other industries. Because electric utilities tend to be particularly labor intensive and require technically-minded people who are in high demand in other industries, they will have the most difficulty recruiting enough replacements. Worker attrition will be managed by further automation of systems and more responsibility for workers.
In the gas transmission and distribution industry, regulatory changes have made it possible for wholesale and even some retail buyers to choose their own natural gas providers. While distributors still maintain local monopolies, they are highly regulated and are not allowed to mark up the wholesale price of natural gas. Their revenues are based on distribution fees, which vary based on infrastructure needs rather than actual use of natural gas. These regulatory changes have resulted in several mergers and an emphasis on cost-cutting. As in the area of electric power, this has led to hiring freezes which have resulted in an older workforce. As these people retire, there will not be enough applicants to replace them, forcing the industry to find new ways to fill its needs.
In the water and sewage systems industries, regulatory changes have had the opposite impact. 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 increased for public health and environmental reasons. 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. Water and sewage systems services are projected to grow slightly, as water systems are expanding rapidly despite the difficulty in securing workers. Employment is projected to increase 18.7 percent from 2006 to 2016.
Job prospects. Job prospects for qualified applicants entering the utilities industry are expected to be excellent during the next 10 years. As of 2006, about 55 percent of the utilities industry workforce is over the age of 45 (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.
In general, persons with college training in advanced technology will have the best opportunities in the utilities industry. Computer systems analysts and network systems and data communications analysts are expected to be among the fastest growing occupations in the professional and related occupations group, as plants emphasize automation and productivity. Some office and administrative support workers, such as utilities meter readers and bookkeeping, accounting, and auditing clerks, are among those adversely affected by increasing automation and outsourcing. Technologies including radio-transmitted meter reading and computerized billing procedures are expected to decrease employment.
New and continuing energy policies also provide investment tax credits for research and development of renewable sources of energy and ways to improve the efficiency of equipment used in electric utilities. As a result, electric utilities will continue to increase the productivity of their plants and workers, resulting in a slowdown in new employment. This slowdown will lead to keen competition for some jobs in the industry. However, at the same time, these new technologies will create jobs for highly skilled technical personnel with the education and experience to take advantage of these developments in electric utilities.
Earnings [About this section] Back to Top
Industry earnings. Overall, production workers in the utilities industry had average weekly earnings of $27.42 in 2006. Earnings varied by industry segment within utilities (table 6). Average weekly earnings for production workers were higher in natural gas distribution and in electric power generation than in water, sewage, and other systems.
Benefits and union membership. Most full-time workers in the utilities industry receive substantial benefits in addition to their salaries or hourly wages. This is particularly true for those workers covered by a collective bargaining agreement. In 2006, about 27.4 percent of workers in utilities were union members or covered by union contracts, more than double the proportion for all industries.
Sources of Additional Information
Disclaimer:Links to non-JA Internet sites are provided for your convenience and do not constitute an endorsement.
General information on employment in the utilities industry is available from local utilities and:
Center for Energy Workforce Development, 701 Pennsylvania Ave. NW, Washington, DC 20004-2696. Internet: http://www.cewd.org
Information on employment in electric power generation and distribution is available from:
American Public Power Association, 2301 M St. NW, Washington, DC 20037-1484. Internet: http://www.appanet.org
International Brotherhood of Electrical Workers, 900 7th St. NW, Washington, DC 20001.
Information on employment in natural gas transmission and distribution is available from:
American Public Gas Association, 201 Massachusetts Ave. NE, Suite C-4, Washington, DC 20002. Internet: http://www.apga.org
Information on employment in water and wastewater treatment is available from:
American Water Works Association, 6666 West Quincy, Denver, CO 80235. Internet: http://www.awwa.org
Water Environment Federation, 601 Wythe St., Alexandria, VA 22314. Internet: http://www.wef.org
Detailed information on many key occupations in the utilities industry, including the following, may be found in the 2008-09 edition of the Occupational Outlook Handbook.
Computer scientists and database administrators
Industrial machinery mechanics and maintenance workers
Line installers and repairers
Power plant operators, distributors, and dispatchers
Stationary engineers and boiler operators
Water and liquid waste treatment plant and system operators
Bureau of Labor Statistics, U.S. Department of Labor, Career Guide to Industries, 2008-09 Edition, Utilities