Diverse suppliers step up service to the energy industry
Diverse suppliers in the energy industry face high expectations
Big winners focus on excellence, innovation, safety, and tier 2 efforts of
By Angela M. Hutchinson
Suppliers’ diverse status may open doors, but it’s no guarantee of corporate contracts. Businesses owned or operated by women or minorities, like all suppliers, make their mark in the energy industry by offering high-quality products and services with competitive pricing and innovation. Today’s utility and energy-related companies expect their diverse suppliers to be technical leaders.
A common route for companies to find new suppliers is through partnerships with organizations that support supplier diversity. Once connected, corporations step up expectations by requiring prime suppliers to participate with tier 2 subcontractors through a structured program.
“To support diverse business enterprises, we have implemented a robust tier 2 program,” says Carla Hunter Ramsey, director of supplier diversity for National Grid (Waltham, MA). She works at the company’s Hicksville, NY site. “This program allows diverse suppliers additional opportunities to support projects on a subcontracting level. Through external and internal events, we meet with suppliers to identify qualified candidates for upcoming projects.”
What National Grid is looking for, and where
National Grid looks for quality service, outstanding products, competitiveness, certifications and evidence of strategic alliances or joint ventures from all its suppliers, diverse or not. Suppliers work for National Grid in the areas of buildings and facilities, professional, engineering and electrical services, energy efficiency, fleet and logistics, IT and construction, as well as gas heating equipment, tools and machinery, chemicals, oils and gas.
National Grid finds new suppliers at trade shows, matchmaker events and roundtable discussions. “To help increase our base of qualified vendors, National Grid has developed partnerships with numerous organizations through corporate sponsorships,” says Ramsey. The company is involved with the New York & New Jersey Supplier Development Council, the Greater New England Minority Supplier Development Council (GNEMSDC), the Edison Electric Institute’s supplier diversity program, the Women President’s Educational Organization (WPEO), and more.
National Grid’s diverse suppliers must have a certification from the U.S. Small Business Administration (SBA), the National Minority Supplier Development Council (NMSDC), the Women’s Business Enterprise National Council (WBENC), the Empire State Development Council (ESD) or the Massachusetts Supplier Diversity Office.
National Grid’s signature supplier diversity event, the annual Power of Connections, gives smaller suppliers a chance to meet with the National Grid procurement team and its prime contractors. Procurement directors and prime contractors serve as panelists and participate in matchmaking sessions and one-on-one discussions with diverse suppliers.
“Supplier diversity is critical to National Grid’s commitment to stewardship and helping customers control their energy costs. The industry relies on us to be experts in all areas of supplier diversity,” says Ramsey.
Noise Consulting Group works with energy companies and others
For seven years, Angelia Johnson has been owner and CEO of Noise Consulting Group (Tampa, FL). She works in Syracuse, NY. Noise Consulting provides strategy, management and technology consulting and services to companies in the energy and utilities industry, as well as the communications, healthcare and financial sectors.
As a small business owner, Johnson wears many hats. “I do executive-level management of the finance and accounting department, business development, client services and operations,” she says.
One of her most important roles is in market positioning and business development in the utilities and telecom sector. “I visit client sites to discuss their upcoming regulatory and operations goals, and provide proposals, insight and recommendations on how they can achieve them,” says Johnson. “I go to industry trade shows to promote our company’s brand recognition in the industry, and I keep abreast of best practices and industry trends so our clients can concentrate on their daily operations.”
Johnson is from Columbus, GA. She earned her bachelors in accounting and information science and masters in accounting from the University of South Florida (Tampa). She moved to Syracuse in 2000.
“I learned about diverse supplier programs from an outreach session held by the NY/NJ Supplier Development Council. After attending one of their events, I decided to proceed through the certification process,” says Johnson.
Making connections as a small business
In 2010, National Grid partnered with Noise Consulting Group to help with the web rollout of National Grid’s new electronic bill payment system. “The U.S. retail web billing is a key project for National Grid. It gives customers enhanced functionality when receiving and paying bills electronically, and was designed to lower operational costs,” says Johnson.
As the owner of a small diverse business, Johnson knows it’s sometimes difficult to get access to customers to pitch her company’s offerings. “It’s important to build strong relationships with the supplier diversity departments within your target organizations, as well as organizations like EEI that help bring together minority business enterprises with potential clients,” says Johnson.
Customer service, energy reliability and energy efficiency are priorities for energy companies, both domestically and internationally. “To serve their customer base well, energy companies can benefit from a labor force and supply chain that reflect their customer demographics,” says Johnson.
Alliant Energy shares core values with its suppliers
Safety is a core value for Alliant Energy, headquartered in Madison, WI. “Given the nature of our business, suppliers performing on-site services require an exceptional safety record,” says Dan Schoepke, business performance metrics manager. “Some of our suppliers also require very specialized skills to perform work in generation plants and on the turbines, boilers, transformers and gas lines of the energy distribution system.”
Diverse suppliers provide Alliant Energy with items like office products and IT services, and with specialized goods and services in engineering, line construction, environmental consulting, excavation and chemicals.
Alliant Energy is a corporate member of NMSDC and EEI’s supplier diversity initiative, as well as local councils of
the Urban League and Hispanic Chamber of Commerce.
“We attend more than a dozen events annually seeking new diverse suppliers, but finding the supplier is just the first step. Developing a mutually beneficial relationship with that supplier is just as important,” says Schoepke.
Alliant Energy accepts third-party certifications from NMSDC, WBENC and the National Women Business Owners Corporation (NWBOC). “We also accept self-certification affidavits from the supplier, verifying their diverse ownership status,” says Schoepke.
Since 2011, Alliant Energy has had a tier 2 program in place. The program has been particularly successful for large environmental controls projects. “We support networking events for some of our large prime contractors. We supply them with lists of known diverse suppliers that can provide the goods or services they require,” Schoepke says.
“Our supplier diversity program is based on our core values, specifically respect. We treat people and suppliers with respect, and strive to create a workplace and supply chain where people of diverse backgrounds, talents and perspectives feel like they belong. Developing and maintaining a strong supplier base is essential to the success of our company,” says Schoepke.
Arrowhead Contracting, Inc
In 1990, W. Curt Koutelas founded Arrowhead Contracting, Inc (Lenexa, KS). As its president, he is responsible for the company’s financial performance, operations, business development and health and safety performance.
Koutelas is from the Oklahoma Osage Indian tribe. He graduated from Pittsburg State University (KS) in 1983 with a bachelors in construction management.
Several years after founding his company, Koutelas became aware of the minority and small business programs offered by the SBA, municipalities and various industries. Arrowhead is certified by the SBA as a Native American-owned company and a small disadvantaged business, and participated in the SBA 8a program from 1993 to 2002. “We are also recognized as a disadvantaged business enterprise by the city of Kansas City, MO. All these programs helped our company during the early years by providing prime contract opportunities that were historically awarded to much larger organizations,” says Koutelas.
Chosen to provide services
Arrowhead has been involved in construction management and contracting projects for Alliant Energy since 2012. The company specializes in restoring industrial properties for beneficial reuse. Recent project locations include former Alliant-manufactured gas plants in Belle Plain, IA and Ripon, WI.
“We were selected to perform our first project following typical sales and marketing efforts,” says Koutelas. “Alliant Energy’s outreach and procurement practices are very small-business-friendly. We can monitor upcoming requirements and maintain the proper qualifications and capabilities to support their needs.”
According to Koutelas, “Our biggest challenges are similar to those of any business: finding and retaining a qualified workforce requires constant focus and attention. And breaking through the procurement process with large companies to receive a first opportunity can be tough.”
Koutelas believes the use of diverse suppliers allows the energy industry to reinvest in the local communities they serve. He says, “It also helps foster a locally based supply chain that can grow with the industry.”
PG&E; seeks diverse suppliers as partners
Pacific Gas and Electric Company (PG&E;, San Francisco, CA) has a long history in supplier diversity. The utility’s prime supplier program ensures that PG&E; suppliers develop their own supplier diversity plans and report their diversity business enterprise (DBE) subcontracting. “In addition to publishing a detailed prime supplier program guide and providing monthly training for DBEs, PG&E; conducts targeted DBE one-on-one business matchmakers between our prime suppliers and prospective diverse subcontractors,” says Joan Kerr, director of supplier diversity and sustainability.
According to Kerr, all suppliers need the technical expertise and business understanding to support the utility industry in areas like gas or electric transmission and distribution and energy procurement. In addition to technical skills, strong safety records are also critical. “We want to make sure the suppliers we work with take safety as seriously as we do,” says Kerr.
“Pacific Gas and Electric Company is a strong supporter of supplier diversity and supply chain sustainability. We ask suppliers competing for PG&E; projects to include robust supplier diversity and environmental sustainability plans in their bids.”
PG&E; supplies gas and electric service to more than fifteen million northern and central California customers. With the emergence of new and cleaner technologies, “PG&E; is also focused on helping DBEs prepare to compete in a changing supply chain environment,” says Kerr.
PG&E; works with diverse businesses that provide products and services in areas including gas transmission and distribution, electric transmission and distribution, environmental remediation, specialized utility and general construction services, transportation, energy generation and more.
Connecting with PG&E;
“One of the best ways for DBEs to connect with the PG&E; supplier diversity team, PG&E; sourcing and other representatives, is to participate in the many outreach events we attend throughout northern and central California,” says Kerr.
In some instances, the company’s participation in these events has resulted in an immediate connection. “In 2013, the supplier diversity team participated in more than a hundred outreach events, and our supplier diversity business calendar already lists more than fifty outreach events we’re planning to attend this year,” say Kerr.
“Our supplier diversity business calendar of events is one of the most valuable information tools on our external website,” says Kerr. The calendar is updated weekly, and events include matchmakers, business expos, conferences and other networking activities.
Diverse business owners who want to work with PG&E; should be certified by the California Public Utilities Commission (PUC) Supplier Clearinghouse. PG&E; also utilizes certification databases from the California Department of General Services, NMSDC, WBENC and WEConnect International.
“The supplier clearinghouse will recognize certifications from NMSDC and WBENC,” says Kerr. Disabled veteran business enterprises located in California must obtain certification through the State of California Department of General Services. To be part of PG&E;’s supplier diversity program as an LGBT firm, a business should be certified by the National Gay & Lesbian Chamber of Commerce.
Kerr says, “Our inclusion of DBEs has led to new and innovative ideas, creative solutions to industry challenges and broader competition from within the supplier community.”
Energy Experts International Inc (EEI)
At Energy Experts International Inc (EEI, Redwood City, CA), Donald R. Murray is executive vice president and chief operating officer and a corporate board member. He’s been with the energy consulting and services company thirteen years.
“I help oversee the daily operation of both the domestic and international parts of the business. I also help with investment, business expansion and hiring decisions,” says Murray. He also identifies priorities, responds to personnel and client issues, helps ensure client-project deadlines are met, and works with the CEO to address corporate issues.
A native of Pascagoula, MS, Murray attended college at the University of California-Berkeley, and graduated in 1969 with a BSEE and an emphasis in systems and controls. He later received a postgraduate certificate in executive management from UC-Berkeley.
Murray and CEO Michael Watanabe, who is Asian American, own 100 percent of EEI. “After establishing joint ownership of EEI, we were certified by the CPUC Supplier Clearinghouse in 2000,” says Murray.
Eager to spread the word and the wealth
The partners are both PG&E; veterans, with a total of fifty-nine years of service between them. “What I appreciate most about working with PG&E; is that it has an ongoing commitment to supplier diversity and treats it as an essential part of the success of its business.”
One of the biggest challenges EEI and many diverse suppliers face is differentiating their small companies from other consulting firms. “EEI has the science and the practical experience that allows us to live up to the expectations of the industry. We are energy experts and qualified utility consultants. Safety, product quality and cost effectiveness are standard for us,” says Murray.
Xcel Energy: robust diversity program with high expectations
Xcel Energy (Minneapolis, MN) requires impeccable safety and environmental track records of its suppliers. “We use diverse suppliers for everything we procure, from office supplies to nuclear engineering services,” says Murugan Palani, manager of supplier diversity.
Xcel Energy finds new suppliers at local and national trade shows, local chamber events, and the company’s supplier locator portal. The company is a corporate member of WBENC, NMSDC, EEI’s supplier diversity initiative and other organizations. Xcel Energy requires its diverse suppliers to have third-party certification of their diverse status.
“We have an extremely robust tier 2 program. In 2013 we spent over $60 million with diverse suppliers through subcontracts with our primes,” says Palani. “We facilitate introductions between our large primes and potential diverse suppliers either through open house events or one-on-one connections.”
Xcel Energy’s supplier diversity program has developed a roster of well-qualified diverse suppliers. They make the utility more efficient and create a supplier base that reflects the demographics of its customer base.
Caddo Solutions: small diverse supplier with a can-do attitude
For eleven years, Dee St. Cyr has worked for office products company Caddo Solutions (Denver, CO). As chief business development officer, she focuses on customers, markets and relationships.
St. Cyr reaches out to customers and responds to special requests. She resolves customer problems or issues when they arise. “I communicate about new products and services to our customers. I attend conferences and trade fairs. I respond to bid opportunities. I build strategic alliances with our partners, like wholesalers and manufacturers. I even design and develop new marketing materials,” says St. Cyr.
St. Cyr is an American Indian from the Winnebago tribe of Nebraska. Caddo Solutions is certified as a diverse supplier by the NMSDC, the SBA, and the Colorado Department of Transportation. The company also has state certifications that provide unique access to specific buyers.
For more than ten years, Caddo has supplied office products to Xcel Energy. At a time when corporate America was just beginning to embrace supplier diversity, Xcel Energy implemented supplier diversity programs, St. Cyr says. “Xcel Energy is committed and accountable to supplier diversity. Supplier diversity programs are only as good as their leaders.”
Demonstrating value as a diverse supplier
Caddo’s number-one challenge, St. Cyr says, is the perception that a small, American Indian-owned company cannot compete against the giants in the office products industry. “The reality is, we can!” says St. Cyr. She credits Xcel Energy with believing in the company and taking its claims seriously.
“Because energy impacts all people, it is vital for the industry to implement a robust, sustainable program that reaches all people. Supplier diversity programs like Xcel’s ensure that all will be included,” she declares.
ENERGY COMPANIES SEEKING DIVERSE SUPPLIERS
Check websites for information.
|Company and location
|Alliant Energy (Madison, WI)
|Generates, purchases, distributes and sells electric energy and natural gas
|Hess Corporation (Houston, TX)
|Worldwide exploration for and production of crude oil and natural gas
|National Grid (Waltham, MA)
|Electricity and gas
|Pacific Gas and Electric Company
(San Francisco, CA)
|Electricity and natural gas generation and
|Xcel Energy (Minneapolis, MN)
|Electricity and natural gas generation and
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