Central Minnesota has the Power

By Cameron Macht
July 2010

With one-fifth of the power generation and supply employment in the state, central Minnesota is home to the second-largest absolute number but the highest concentration of jobs in power in Minnesota. Through 2009 40 power plants provided 2,460 jobs with an annual payroll of $191 million in the 13-county central Minnesota planning region (see Map 1).

As the region’s population and economy have grown, consumer and business needs for power have also grown. Power generation and supply added 395 net new jobs in the region so far this decade, an increase of nearly 20 percent from 2000 to 2009. In comparison, the state of Minnesota lost 83 jobs in power generation, a decline of less than 1 percent.

Unfortunately the recession has put a damper on regional population and business growth in the last year. But the power generation and supply industry has mostly held steady, fluctuating between 2,400 and 2,500 industry jobs in 2008 and 2009.

Power Surge

The future looks brighter with much of the current industry buzz related to the expanding alternative energy field. Renewable energy is projected to be the fastest growing segment of the utilities industry, and many of the job categories in the industry are considered “green.”

Minnesota is a national leader in renewable energy power generation and has an aggressive Renewable Portfolio Standard (RPS) requiring that 25 percent of the state’s electricity come from renewable sources by the year 2025. Already, almost 8 percent of Minnesota’s electricity is generated by wind power, and Minnesota is currently home to 21 ethanol plants generating more 1.1 billion gallons of the renewable fuel. However, just 6 percent of the state’s ethanol production capacity and less than .5 percent of the state’s 1,800 megawatts (MW) of wind power are generated in central Minnesota — most of the state’s wind farms and ethanol plants are located in the southwest region.

While the region is interested in expanding its renewable energy capacity, central Minnesota is currently home to several successful traditional utilities, including coal-fired power plants, natural gas facilities, a nuclear generating plant, and a garbage-burning plant. Xcel Energy’s Sherco coal-fired power plant located in Becker (Sherburne County) is the largest in the state, with a net generating capacity that is nearly twice as high as the state’s second largest power plant, the Prairie Island nuclear facility. The only other nuclear power plant in the state is located in Monticello (Wright County), and has the fifth-highest generating capacity in the state. Elk River (Sherburne County) used to be home to a nuclear energy plant as well, but it was decommissioned in the 1960s and was then converted to a waste-to-energy facility that is now run by Great River Energy.

Distribution of Power

In addition to the larger players like Xcel Energy and Great River Energy, there are also multiple power associations, electric cooperatives, and municipal power plants spread throughout the region, each serving specific geographies (see Table 1).

While many of these organizations rely on traditional coal-fired or natural-gas power plants, others are branching out into renewable fuels. According to a recent article in the West Central Tribune, Willmar Municipal Utilities tested the feasibility of burning corn cobs with coal at their power plant. The study showed “that cobs will provide sufficient heat value to make the co-combustion process efficient, and that cobs can be acquired locally at a volume and price sufficient to make co-combustion desirable.”[1]

The pilot project was supported by a grant from the Department of Energy as part of a larger power generation study. The cobs were harvested from local farms, stored through the winter and then injected into the furnace with the coal. The utilities in the region will have to continue to look at other sources in order to comply with the state RPS mandate, leading to more innovative solutions.

A Shift in Power

In addition to renewable energy, the electric power generation and supply industry is about to experience another significant shift in staffing. More than any other industry, utilities rely on an older workforce, many of whom are nearing retirement age. According to demographic data from the Minnesota Department of Employment and Economic Development (DEED) Local Employment Dynamics (LED) program, well over half (54.5 percent) of utilities workers in central Minnesota were 45 years and over. Through the second quarter of 2009, one in every five industry workers was between 55 and 64 years of age, most of whom could retire at any time (see Table 2).

As time marches on and the economy recovers, some of the largest utility companies in the region are bracing for a huge amount of turnover, which is not something they are used to. LED data also show that turnover rates in utilities are among the lowest of any industry in central Minnesota at 2.3 percent overall and as low as 0.9 percent for 45 to 54 year old workers.

In comparison, turnover rates were at about 9 percent for all industries in central Minnesota — nearly four times as high. The labor force contrasts don’t stop there. Nearly 20 percent (18.6 percent) of the region’s workers were between 14 and 24 years of age, but very few of them were working in utilities. Less than 4 percent of utilities’ workers were in the youngest age groups. A slight majority of workers in the region were female (53.1 percent), but nearly three-fourths (72.3 percent) of the workforce in utilities was male.

The Power of Money

Utilities have long been the highest-paying industry in the region, which should be attractive to new workers. In 2009 the average annual wage in utilities was $76,284, more than $40,000 higher than the total of all industries.

Workers might also be attracted to the wide range of career opportunities within the utilities industry, which require a wide range of technical skills. The training and education requirements for the top 10 occupations in the electric power generation, transmission, and distribution industry range from short-term on-the-job training to bachelor’s degrees.

According to data from DEED’s Occupational Employment Statistics (OES) program, seven of the top 10 occupations in the industry earn more than $50,000 per year in the region, led by electrical engineers at $72,946. Six of the top 10 occupations are projected to grow in demand over the next decade, led by electrical and electronics repairers (powerhouse, substation and relay) at 24.2 percent and customer service representatives at 14.8 percent.

Meter readers, which require just short-term on-the-job training, are expected to see the biggest decline in demand as they are replaced by technology. Still, they earned almost $41,000 a year in the region in the first quarter of 2010 (see Table 3).

The Power of Education

Although many of the jobs in the industry can be gained with on-the-job training, the state of Minnesota has been working to fuel demand for education to support the more technical jobs. Using funding from two Department of Labor grants, Minnesota’s energy careers website — www.MnEnergycareers.org — was created in June 2009 to help job seekers explore career pathways in energy (see Image 1).

Over the last year, the website has been updated to include details on energy jobs and careers and to help job seekers organize the options for education and training. Apprenticeship programs are a common way for workers to enter many energy careers, but once they get some experience, many now have the option to go back to school to train for higher-level positions. In some cases the energy companies will pay for their employees’ higher education.

The Minnesota energy website covers 42 fields of study in energy, ranging from applied mathematics to chemical engineering to heating, air conditioning, and refrigeration technology to occupational safety and health. Each energy field listed provides links to the Minnesota colleges and universities that offer that program, including various energy-related programs offered at Ridgewater College, St. Cloud Technical and Community College, St. Cloud State University, Anoka-Ramsey Community College in Cambridge and Pine Technical College, all of which are located in central Minnesota.

The site also offers an Energy Careers Match-up Assessment, which leads job seekers through a set of 12 questions that will help them see which energy careers best fit their preferences. In addition to detailed occupational data, job seekers will also find that the energy industry offers a lot of exciting opportunities for stable, high-paying careers.

[1] Little, David. (July 7, 2010) “Project finds corn cobs are a viable fuel opportunity for city MUC.” West Central Tribune. www.wctrib.com .

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