Brain drain a problem for power build

By Michael Erman

NEW YORK (Reuters) - A dearth of engineers and building contractors could hamper what is expected to be a major build-up of the U.S. power industry's infrastructure, according to executives and regulators speaking at the Reuters Global Energy Summit this week.

U.S. utilities are looking to build 10 to 15 large coal-fired and anywhere from 5 to 10 nuclear power plants in order to meet an expected surge in demand for electricity in 2010 to 2015.

Only a handful of big coal plants have been built in the United States over the last decade. The last U.S. nuclear plant was built in 1996, and no new plants have been licensed to be built since the accident at Three Mile Island in 1979.

Summit attendees said the expected build could be slowed or become more expensive than projected due to the shortage of skilled labor, as well as competition from India and China for those resources.

"There's a shortage of engineering talent and building talent to build the power plants that so many of us think we'll need to build over the next 5 to 10 years," said American Electric Power Co. Inc. (AEP.N: Quote, Profile, Research, Stock Buzz) Chief Executive Michael Morris.

"It's tough to line the Bechtels and the Fluors (FLR.N: Quote, Profile, Research, Stock Buzz) up as well as the suppliers and builders for those kind of things," he said, referring to the U.S. engineering conglomerates that are industry leaders in building coal generation.

Employees in the industry are aging and nearing retirement. Duke Chief Executive Jim Rogers said that 25 percent of his company's regulated utilities business are eligible to retire in the next five years and 50 percent will reach retirement age in the next 10 years.

"If that's true for our companies, that's also true for the contractors that service us. So, we've got a demographic trend working against us," Rogers said.  Continued...