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Energy Industry Facing Mega Changes, Says Exec

Energy Industry Facing Mega Changes, Says Exec

The coming decade promises to reveal a different utility industry than the one today, which already is bursting around the edges from the speed-of-light changes, according to Victor A. Burk, a managing partner in Arthur Andersen's energy and utilities industry sector. Burk offered what he termed his "megatrends" at his company's energy symposium last week in Houston.

Convergence, he said, would be the biggest trend, something that already has occurred in the gas and electric industries. Next, the merging will occur in the electric and power industries, as more companies take advantage of their infrastructures to build out their markets.

Also high on Burk's list is the overwhelming presence of ebusiness and the Internet, which he said has transformed all sectors and led to globalization.

"More companies are going outside of their home countries for the first time and have to deal with new risks now," said Burk. With that move internationally comes a more liberal market, he said, including restructuring, deregulation, re-regulation and unbundling of services. In these emerging markets, Burk noted that companies would face parallel challenges with "environmental imperatives."

Not to be forgotten is the "war for talent," not only on the executive level but also through the ranks. With an aging workforce --- most energy executives fit in the 40-something range, Burk noted that companies should know that most former employees are not leaving their companies, but their bosses. "Hiring and retaining talent is a challenge for all of us."

Companies also will be placing a renewed focus on value creation instead of only looking at earnings. Burk said that companies would be able to achieve recognition in the market if they can show a strong share price performance.

Carolyn Davis, Houston

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