Government Takeovers of Local Power Companies Pose New Risks, Costs for Hotels

By Steve Kiesner Director of National Accounts, Edison Electric Institute | October 28, 2008

When uncertainty develops in the nation's power industry, and it certainly has these past few years, the prospect of the local government taking over the power company is sometimes raised. Takeover proponents promise lower prices and greater reliability, questioning the local electric company's ability to deliver what hotels and other customers expect-a reliable and affordable electricity supply.

But government takeovers aren't the answer. In the end, government takeovers of the local power company bring with them new risks and potential costs for hotel executives and all electricity customers.

To assure your hotel of a competitively priced power supply that is there when you need it, we need a national approach that includes three elements:

Government Takeovers Pose Risks, New Costs

Besides Las Vegas, ballots in a number of other communities looked at whether or not the local government should take over the power company. The results were mixed. In Florida, the towns of Casselberry and Longwood saw candidates who support municipal efforts win four of five races. San Francisco voters rejected an effort to acquire the local power grid. In Montana, voters defeated by a two-to-one margin a referendum that would have allowed the state to buy 13 hydro dams. And in early December, the city council of Corona, California decided to condemn the assets of the local power provider so that it could begin distributing electricity within the city limits.

What government takeover proponents didn't mention in these referendums was that many factors affect the price of electricity. Government control-of and by itself-will have no bearing on the price of power.

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Human Resources: Value Creation

Businesses must evolve to stay competitive and this is also true of employment positions within those organizations. In the hotel industry, for example, the role that HR professionals perform continues to broaden and expand. Today, they are generally responsible for five key areas - government compliance; payroll and benefits; employee acquisition and retention; training and development; and organizational structure and culture. In this enlarged capacity, HR professionals are no longer seen as part of an administrative cost center, but rather as a member of the leadership team that creates strategic value within their organization. HR professionals help to define company policies and plans; enact and enforce systems of accountability; and utilize definable metrics to measure and justify outcomes. Of course, there are always new issues for HR professionals to address. Though seemingly safe for the moment, will the Affordable Care Act ultimately be repealed and replaced and, if so, what will the ramifications be? There are issues pertaining to Millennials in the workforce and women in leadership roles, as well as determining the appropriate use of social media within the organization. There are new onboarding processes and e-learning training platforms to evaluate, in addition to keeping abreast of political issues like the minimum wage hike movement, or the re-evaluation of overtime rules. Finally, there are genuine immigration and deportation issues that affect HR professionals, especially if they are located in Dreamer Cities, or employ a workforce that could be adversely impacted by federal government policies. The March Hotel Business Review will take a look at some of the issues, strategies and techniques that HR professionals are employing to create and sustain value in their organization.