2005 PROGRESS REPORT

2005 was a year of significant accomplishment for UBEC and its electric and natural gas utility partners. Our progress addressed critical industry workforce development objectives and followed a comprehensive review by the Board of Directors of UBEC's strategic direction and its decision to focus resources on issues related to the industry's aging workforce.

Industry leaders from dozens of utilities and their associations along with our education and government partners teamed with the UBEC staff to help achieve these important results. We deeply appreciate their commitment to common objectives and their ongoing support.

2005 milestones highlights include:

• Creation of the Utility Workforce Planning Network in response to the growing concern that utilities face a severe shortage of skilled technical workers in the very near future. The Network is broadly engaging the industry in strategic, unified and results-oriented efforts to ensure a skilled workforce to meet future industry needs. More than 70 industry and partner organization leaders joined a Network committee or task force to help plan and implement skilled workforce development solutions.



• Development and launch of the Centers of Excellence initiative with the American Association of Community Colleges. The initiative was designed to meet local utility company need to create sustainable education and training programs with community colleges, high schools, other employers and economic and workforce development organizations. The project is facilitating the replication of effective models, lessons learned and best practices and will enable the transfer of skill credentials. More than 30 utility/community college partnerships applied for designation as a Center of Excellence in 2005.



• Facilitation of the Solutions for an Aging Workforce Planning Conference in June, where more than 80 electric and natural gas utility company human resource, operating and community affairs executives, met in Newark, NJ with other UBEC partners. Hosted by PSEG, the senior managers representing public, co-op and investor-owned utilities designed a set of solutions to addressed industry workforce development issues that now are being implemented by the Utility Workforce Planning Network.



• Completion of a Craft Skills Gap survey among electric and natural gas utility companies. Results confirmed that utilities are struggling to fill skilled technical and craft positions, and that without strong immediate action; the shortage is likely to continue over the next five years and beyond. The survey identified four major areas where utilities faced the greatest hiring needs in 2005, from 2007-2009, and 2010 and beyond. These areas include: maintenance and repair workers; electrical power line installers and repairers; first-line supervisors and managers; and power plant operators. The survey also found that current applicants lacked critical skills necessary to meet the industry's greatest employment needs.



• Development and launch of a comprehensive communications strategy that included updating the UBEC website, the bi-monthly publication of the Learning for the 21st Century and Issues Update newsletters, the design of a 'branding' strategy for the Network, publication and broad distribution of a Network brochure, development of a Network PowerPoint presentation, logo and other outreach tools, and regular reports to the industry, including presentations at more than a dozen industry conferences and meetings and the publication of articles in industry newsletters and magazines.



• Development of partnerships with key industry organizations, including the Energy Providers Coalition for Education (EPCE), the Electric Power Research Institute (EPRI), the National Rural Electric Cooperative Association (NRECA), the American Public Gas Association (APGA) and the Midwest Energy Association (MEA).



• Launch of a 13-state regional workforce development partnership between utilities and colleges in partnership with the Appalachian Regional Commission (ARC) and the Community Colleges of Appalachia (CCA). This effort included securing $250,000 in ARC funding support for partnership projects, including a Georgia Power/Lanier Technical College initiative in Georgia and a three-state, entry-level craft worker education and training project with American Electric Power, Zane State College (OH), West Virginia State Community College and Technical Institute (WV), and Ashland Community Technical College (KY).



• Submission of a grant application through the U.S. Department of Labor's High Growth Job Training Initiative and coordination of industry involvement in grant process. UBEC has been advised by the Department of Labor that it intends to award a $1.25 million, two-year grant to UBEC in early 2006 to support the Network's Securing America's Energy Future workforce development plan. The plan includes the accelerated development of the Centers of Excellence initiative, the development of replicable model high school and community college core curriculum addressing the fundamentals needed by skilled entry-level workers seeking utility employment, and the development of an on-line best practice clearinghouse and exchange to help meet industry information needs.

The achievement of these and other important milestones was the result of strong industry leadership and the commitment of our workforce development partners. Moving forward, there are important opportunities to further advance industry objectives and to leverage resources and opportunities to address emerging issues.

On behalf of UBEC, we thank all who have worked with us during 2005 on behalf of our industry and the long-term economic interests of our country. Your contributions are greatly appreciated.

Sincerely,

Steven C. Kussmann
Executive Director
December 30, 2005