Managing Risks, Lowering Costs, Heightening Efficiencies

ERTH Corporation

As inflation soars, supply chain issues continue, and concerns grow over a looming recession, utilities like so many other industries must find ways to do more with less. Coupled with the increasing pressure to improve operational efficiency, utilities face a growing labour crisis. Recruiting new talent to replace retirees who hold decades of knowledge, or to fill short-term vacancies, is becoming an increasing challenge.

Shared service arrangements are a model that many utilities are now turning to in order to improve operational efficiency, control costs, mitigate risks and bridge skills gaps. Under a shared service arrangement, two or more entities agree to deliver or share the costs of certain goods, services, resources or procurements, which they individually require. The key here is the idea of sharing services or resources amongst utilities to fill resource gaps, achieve savings or, more commonly, both.

By leveraging shared service arrangements, smaller utilities can achieve economies of scale, operational efficiencies and cost savings. A shared service model also addresses succession concerns and skills gaps that many utilities face. From a risk management perspective, shared services and resources spread the capital investment burden and risk among multiple parties. The shared services model also aligns with the Ontario Energy Board’s goals and expectations for smaller utilities to collaborate to achieve operational efficiencies.

Click here to read ERTH's feature cover story in the new fall issue of The Distributor.