Distribution Community Insights Conference August 20-22, 2013 Vail, Colorado 2014 Electric T&D...

Distribution

Community Insights Conference

August 20-22, 2013

Vail, Colorado

2014 Electric T&D Benchmarking

2

Agenda -- Distribution

◼ Overview

◼ 2014 Performance Results

◼ Process Model – Context Structure Modules Included

◼ Modules – Scope, Key Success Factors, Findings Asset Management New Business Construction & Work Management/Scheduling

◼ Next Steps

On-Sites Prep How to Use Results (Getting SMEs Involved)

3

Overview

Develop Network Strategy

Develop and Approve Asset Plans

Project/Portfolio Management

A Process Model for Managing the Network

4

Expand Network

Operate Network

Sustain Network

Add New Customers

Respond to Emergencies

We’ll present much of the information in the context of the process model shown below, with a number of the major process blocks broken into “modules” for analysis and discussion.

5

Insights Overview

Spending levels were significantly affected by the economic recession over the past four years.◼ Distribution O&M spending reached a low point at the depth of the

recession in 2009, and has been climbing for the past 5 years.◼ Distribution Capital spending began to recover 2 years ago. The

increase is driven by replacement capital spending more than new business, which continues to be slow.

Improvement initiatives cover a broad spectrum for our panel◼ O&M cost reduction is becoming an increasingly important focus,

because of the multi-year increases in spending and the rates pressure that creates.

◼ The continued low new business has enabled companies to increase investments in replacement/refurbishment spending for reliability improvement.

6

Profiles & Trends

Distribution Lines Demographic Profile

Min Mean Max # of BarsService Territory

Density: Customers per Square mile 1.90 338.90 975.02 16Density: Customers per Distribution Circuit mile 17.61 51.34 101.26 15

Percent of Distribution Circuit Miles Underground 13% 37% 63% 15Percent of Switches outside the substation remotely operated 0% 11% 62% 11

Managed Trees per OH Distribution Structure Mile 13.25 13.25 13.25 1

Wage Rate: Distribution Journey Level Line Worker $35.30 $39.13 $42.14 12

Distribution Staffing: FTEs per 100,000 Customers 39.19 79.94 143.02 11Percent of staffing group represented by a union/bargaining unit: Distribution Field 49% 86% 100% 10KWh Sold per Distribution End-Use Customer 18337 27036 35496 15Percent of Customers: Commercial/Industrial 9.01% 11.60% 18.28% 16Percent of Load: Commercial/Industrial 12.57% 56.19% 67.85% 14

System - DemographicsVoltage Levels

5kV class = >1kV, <=9kV0.0% 11.7% 57.0% 14

15kV class = >9kV, <=15kV0.0% 63.2% 99.0% 14

25kV class = >15kV to <=26kV0.0% 16.1% 86.7% 14

35kV class = >26kV to <=36kV0.0% 8.6% 53.9% 14

44kV class = >36kV to <=44kV0.00% 0.41% 5.80% 14

Financial - DemographicsDistribution Line Assets per Customer $1,672 $2,823 $4,102 15

2013YE 2012YE

Mean Q1 Q2 Q3# of Bars

Mean Q1 Q2 Q3# of Bars

O&M Cost Distribution O&M per customer $89.07 $67.90 $86.74 $115.43 15 $82.68 $71.07 $77.31 $99.31 18

Distribution O&M per circuit miles $4,358 $2,956 $3,782 $5,918 15 $4,001 $2,474 $3,157 $5,314 18

Distribution O&M per MWh $3.39 $2.63 $3.23 $4.26 15 $3.04 $2.50 $2.69 $3.76 17

Distribution O&M per Total Dist. Assets 3.34% 2.38% 3.01% 3.75% 15 2.86% 2.13% 2.94% 3.55% 18

Investment Rate

Distribution Line Capital Spending less New Lines per Asset [Activity Based] 4.75% 5.51% 3.83% 3.04% 12 4.17% 5.12% 3.50% 2.95% 15

Distribution line Cost Profile

8

O&M costs are higher than last year. Replacement capital spending is up from last year, continuing a trend over the past several years. Overall capital spending, however, is down.

Capital Spending and O&M Expenses

9

Spending per Customer Spending per Asset

Distribution Financials Pg 3, 5Source: DF5, DF20, DF70, ST5

Most companies spend more on capital than O&M, although this year there are a few where that is reversed, and the overall totals for the group are closer.

Mean $216.52

Quartile 1 $180.99

Quartile 2: $215.70

Quartile 3: $230.53

Mean 7.929 %

Quartile 1 6.061 %

Quartile 2: 7.720 %

Quartile 3: 9.254 %

Distribution O&M Spending Trend

O&M costs have shown a slight increase over the past several years, with 2012 as the only year in which the average spending level went down.

10Source: DF20, DF70, ST5

Distribution Line O&M Spending

11

Inspection and Maintenance is the largest category of O&M cost, but vegetation management and service restoration are close.

O&M Expenses

12

Expenses per Customer Percentage of Expenses per Asset

Distribution Financials Pg 12, 14Source: DF20, DF70, ST5

The majority of companies spend between $50-$120 per customer, or roughly 2-5% per asset.

Mean $89.07Quartile 1 $67.90Quartile 2: $86.74Quartile 3: $115.43

Mean 3.34 %Quartile 1 2.38 %Quartile 2: 3.01 %Quartile 3: 3.75 %

O&M Expenses (Activity-Based)

13

Expenses per Asset Expenses per Asset, Excluding Vegetation

Distribution Financials Pg 35, 36Source: DF60, DF70,

Vegetation management, maintenance, and service restoration are the largest sources of expenses.



Vegetation Management Expense per “Unit”

14Distribution Financials Pg 16-19

Source: DF60, SA35

Expense per Tree Trimmed Expense per Structure Mile Trimmed

Expense per Tree Mile Managed Expense per Tree Managed

There is little consistency in the cost metrics used within the industry, and costs vary substantially between companies.

Mean $115.11

Quartile 1 $80.71

Quartile 2: $90.89

Quartile 3: $141.45

Mean $8,572

Quartile 1 $4,389

Quartile 2: $6,080

Quartile 3: $9,162

Mean $14.40

Quartile 1 $12.55

Quartile 2: $15.50

Quartile 3: $16.81

Mean $2,038.56

Quartile 1 $1,262.43

Quartile 2: $1,526.32

Quartile 3: $2,639.09

Distribution Line Capital Spending

15

Total capital investment was flat, or slightly increasing from the depths of the recession until 2013, when it dropped for most of the panel.

Source: DF5, DF70, ST5

Distribution Line Capital Spending

16

Capital to sustain the existing system exceeds the investment for growth and new business.

Source: DF50, DF70

Capital Spending (Activity-Based)

17

Spending per Asset Spending per Asset, Less Serve New

Distribution Financials Pg 25, 26Source: DF50, DF70,

Capital spending is higher than O&M, even with the new business removed. Meter & transformer purchases were substantial for a few companies



Replacement Capital Spending

Except at the lowest quartile, capital replacement investment has increased steadily for several years, despite the 2013 decline in total capital investment.

18

Spending Category

2010YEQ2

2011YEQ2

2012YEQ2

2013YEQ2

Total Capital Spending 4.56% 4.82% 4.33% 5.18%

Less Serve New 1.14% 1.34% 0.81% 1.84%

Subtotal Cap Add & Sustain 3.42% 3.48% 3.52% 3.84%

Less Capacity Adds 0.73% 0.97 0.51% 0.51%

Subtotal: Sustain 2.69% 2.51% 3.01% 3.14%

Median Values

Replacement Capital

19

New vs. Replacement Spending per Customer Spending per Asset, Less Serve New

Distribution Financials Pg 23, Source: DF50, DF70, ST5

Mean 4.0%

Quartile 1 5.1%

Quartile 2 3.5%

Quartile 3 2.9%

New business investment still hasn’t recovered since the recession. Capital investment for sustaining the system has grown over the past several years.


2013 results – need to update

Mean 4.75 %

Quartile 1: 5.51 %

Quartile 2: 3.83 %

Quartile 3: 3.04 %

Capital Spending

20

Spending per Customer Spending per Asset

Distribution Financials Pg 7, 9Source: DF5, DF70, ST5

Most organizations invest $75-$150 on capital projects per customer, which translates to between 3-6% per asset.



21

Storm Restoration

Restoration Spending per Interrupted Customer

The cost to restore customers during storms is not well understood as yet.

For most companies, costs are incurred for both capital and O&M.

For catastrophic storms, costs are captured in different accounts.

22

Practice Areas

Using the Process Model

Develop Network Strategy

Develop and Approve Asset Plans

Project/Portfolio Management

A Process Model for Managing the Network

23

Expand Network

Operate Network

Sustain Network

Add New Customers

Respond to Emergencies

The Modules we have prepared for discussion fall within the 3 identified processes: Asset Management, New Business, and Construction & Work Management/Scheduling.

24

Asset Management

25

Scope - Distribution ASSET MANAGEMENT

2014 QuestionsRole• Role of the AM organization in decision-making• Key responsibilities of Asset ManagersRisks• What keeps you up at night worrying about your

system?• New inspection programs added this year• Replacement programs underway• Classes of equipment that are becoming

problematicRegulatory Drivers• Regulatory drivers for inspection and

maintenancePredictive Tools• Use of specialized Asset Management software

tools • Use of condition-based maintenance techniquesPole and Cable Management• Pole inspection cycle• Pole reinforcement & treatment approaches

used• Cable Injection uses for life extension

Situation

• Capital investment has continued to climb since 2009, with the focus on replacement/ refurbishment, since new business hasn’t recovered

• O&M spending levels have also increased over the past 3 years

• Demands for system reliability are the highest they have ever been

Complication

• New business fluctuates substantially with the local and national economy.

• Continued increases in both capital and O&M budgets creates significant pressure to raise rates

• Electric systems are aging, and decisions to defer maintenance or replacement create future challenges

Question

• How can asset managers effectively balance risks versus investments?

• What is the best means of prioritizing capital investment?

Answer

• Effective use of analytic tools to evaluate failure risks

• Structured capital budgeting process to evaluate and prioritize projects

• Appropriate authority to oversee asset plans and their execution through operating groups

1QC Industry Perspective:Distribution Asset Management

26

Consistent long-term asset strategy, goals

Effective forecasting of new business and other system growth requirements

Failure / aging analysis for major equipment (poles, cable, transformers) to predict replacement requirements and manage risks

Organization structure that fosters cooperation between planning, engineering, project management, and construction

Ongoing monitoring of system performance, compliance with requirements

Close oversight of budgets and investment plans

27

Key Success Factors:Asset Management

28

Asset Management Roles

The primary roles are to develop strategy, optimize the use of assets, and manage risks.

Distribution Pg 19Source: DP60

Key Responsibilities of Asset Management Group

29Distribution Pg 20

Source: DP65

Asset management groups responsibilities focus on asset planning, investment prioritization, and system performance

Category Co. Responses

Asset Planning and Life-Cycle Analytics

38

31

21

33

1) Capital asset planning, 2) Improving maintenance strategy for assets, 3) Information distribution for assetsStrategy group provides asset life cycle analytics, data management, and investment prioritization including risk mitigation for T&D system operational assets. The program services group facilitates programs for replacement and maintenance of distribution and transmission facilities. Vegetation management provides cycle and as - need tree trimming services.Asset level directed maintenance strategy, performance monitoring, failure analysis/tracking, development and management of data analytics, establishment of targeted goals and KPI's, failure modes and effects analysis, life - cycle cost/benefit analysis.AM keys roles are Asset Life, Reliability, Capacity and Compliance

Investment Prioritization

31

24

30

Strategy group provides asset life cycle analytics, data management, and investment prioritization including risk mitigation for T&D system operational assets. The key responsibility for asset management is the governance of investments to achieve measurable improvements in reliability.Management of Capital Budget portfolio prioritization process

Failure Analysis/ Reliability Management

21

24

33

Performance monitoring, failure analysis/tracking, establishment of targeted goals and KPI's, failure modes and effects analysisThe key responsibility for asset management is the governance of investments to achieve measurable improvements in reliability.AM keys roles are Asset Life, Reliability, Capacity and Compliance

30

Key Responsibilities of Asset Management Group (continued)


Maintenance Strategy

21

38

Asset level directed maintenance strategy, performance monitoring, failure analysis/tracking, development and management of data analytics, establishment of targeted goals and KPI's, failure modes and effects analysis, life - cycle cost/benefit analysis.Capital asset planning, Improving maintenance strategy for assets, Information distribution for assets

Asset Data Management

31

38

Strategy group provides asset life cycle analytics, data management, and investment prioritization including risk mitigation for T&D system operational assets. Capital asset planning, Improving maintenance strategy for assets, Information distribution for assets

Work Planning & Execution

3732

Responsible to manage the work and execute the financial planWork plans, lineman labor requirements (to determine if contracting will be needed)

Labor Resource Planning

32 Work plans, lineman labor requirements (to determine if contracting will be needed)

Compliance 33 AM keys roles are Asset Life, Reliability, Capacity and Compliance

Additional responsibilities for Asset Management groups involve maintenance strategy, asset information tracking, and work and labor resource planning.

31

Concerns About the System


Primary concerns about electric systems involve age & deterioration of the assets, and assuring adequate funds to sustain the system.

32

Replacement Programs Underway


While different companies have different replacement programs in place, most have a focus on wood poles and UG cable, and some interest in transformer replacement and worst circuit programs

33

Problematic Equipment


There is less consistency in response regarding what equipment is becoming problematic. While cable and wood poles are still most mentioned, evidently the replacement programs are working to some degree.

34

Specialized Asset Management Software Tools

8 of 10 companies indicated they either have or are considering special-purpose Asset Management software.

Distribution Practices Pg 26Source: DP95

35

Regulatory Drivers


Reliability Performance

303337

Mandated reliability performance thresholds and asset inspectionReliability and safetyContact voltage, multiple device interruptions, distribution line clearance

Public Safety 283337

We are required to conduct annual safety patrols of all distribution assetsReliability and safetyContact voltage, multiple device interruptions, distribution line clearance

Maintenance Programs & Activities

21

24

30

Performing follow - up repairs on a portion of circuits being inspected as part of our ReliabiliTree efforts.Inspection of poles, posts, and towers or other structures for replacement or repair in order to ensure safe, adequate and proper service.Mandated reliability performance thresholds and asset inspection

Grid Hardening

31 Grid Hardening Program submitted to the PUC.

NESC Compliance

32 NESC section 12 item 121.

Regulatory Drivers for Asset Management groups include meeting targets for reliability, public safety, and specific maintenance activities.

36

Pole Inspection and Treatment

Mean 13Quartile 1 10Quartile 2:

10

Quartile 3:

12

The majority of utilities are on a 10-year cycle for pole inspection

Years Between Inspections

Of the 9 companies responding, all 9 capitalize pole reinforcement and bracing, while only one capitalizes pole treatment.

Distribution Practices Pg 27, 28Source: DP100, DP105

37

Cable Treatment for Life Extension

Of the 11 companies responding, 5 capitalize cable life extension activities/technologies, while 6 do not.

Companies Reasoning

Use cable injection

22, 23, 28, 38 Use for direct buried cable

Do Not use cable injection

21, 24, 30, 31, 32, 33, 34,

Most cables in conduit, not effective for EPR cable

System configuration and type of cable drive decisions on cable treatment. A majority of the respondents do not use cable injection regularly.

Distribution Practices Pg 29Source: DP100, DP110

38

New Business Process

39

New Business Process – Scope of Questions in 2014

Timeliness• Scheduling jobs to make sure the customer is ready• Timing requirements for installing:

• Service Only• Service plus Pole• Service plus Line Extensions

Process• Definition for New Business (Service) Process• New business customer satisfaction measure defined• Percent of new business work contracted• Activities for URD installations performed by

developers/customers: Residential va. Commercial• Customer contributions required• Initiatives undertaken to improve the new business

process

New Business Scenarios• People at Jobsite for each Trip by scenario• Work done & material installed by utility vs.

customers/developer by scenario• Capital Spending: Net of Customer Contributions by

scenario

Situation

• New Business is still down for most companies, although starting to pick up for a few.

• Technology (including mobile) tools for design and for work management have improved in recent years

Complication

• Significant economic changes have a large effect on capital requirements, particularly for new business.

• Demands for responsiveness continue to grow

• Large amounts of the work are conducted by developers or contractors, making utility control more difficult

Question

• How can companies successfully deliver new service responsively for customers?

• What is the best means of assuring accurate designs that are constructed correctly by field forces?

Answer

• A focused new business process, supported by the appropriate organization for the service territory

• The right design tools and mobile technology for work assignment and management

• Standards for design and construction that are both updated and followed.

1QC Industry Perspective:Distribution New Business

40

A well-designed, consistent process for the major steps of adding new customers, supported by the appropriate organization

Updated and appropriate design and construction standards

Work management approach and tools (including mobile data) to support the ongoing work, and manage the various required resources

Good communications between the customer-facing staff and the design / construction staff

Flexible workforce, including contractors, to allow modifications for fluctuations in new business demand

Good relationships with developers, and understandable procedures for them to work with

41

Key Success Factors:Distribution New Business

New Business Improvement Initiatives

42New Business Pg 4

Source: DP330

Several companies have major initiatives in the new business arena. Others are focused on more targeted process changes or consistency across the company.


Major Multi-faceted Improvement Initiative

28

24

34

Transformation project that is segmenting the customer management accountabilities. This includes the creation of roles, process and technology to support the project schedule of all customer work.There are several new business process improvements underway. They include documentation of every process within the new business process in its current state and identification of future state opportunities. Examples include service upgrades, temporary service, refunding agreements, meter set process, demolition process, assignment of work, etc.'Cycle time reduction: releasing material prior to site ready for short term construction jobs. Creation of a Call Center dedicated to Planning & Design New Business Customers to initiate requests. A number of initiatives are under way to improve areas of communication, cycle time, and cost.'

Ongoing Process Improvements

30

27

We continue using design process improvement teams to review all processes and determining key players to completeMobile Technology, replacement of our WMS, individual process updates

Implementing Consistent Processes

33

29

Developed a capital business process that is utilized across different parts of our service territory with the goal of consistency.Perform audits on a As Need basis to ensure processes are being worked as written. Maintained updated work processes

New Business Improvement Initiatives (Cont.)

43



Improved customer communications and interactions

21

31

22

Personal contacts to let the customer know the status changes on a job, from when the order goes out for a temporary or service install to when we are scheduling the job to send crews out to work the job.1.Field condition rating is incorporated in a job priority report. The rating is 1 - 5 and rates progress of customer construction to assist in job scheduling. 2. Customer call back - if receive a call before 5pm designer required to call back customer that day. After 5pm designer required to contact customer by 11am following day.Use of email for requests

No major changes recently

32 No recent changes

Improved customer communications is the focus for several companies.

New Business Pg 4Source: DP330

44

Organization Structure for New Business


Centralized for large jobs (e.g. subdivisions) and local for small jobs

293231

30

37

23

Centralized design for large developers; local design for smaller jobsSpecialized staking engineers for larger jobs. Small jobs done by regional staking engineer.Distribution Project Management is responsible for large projects over five poles. Service Center is responsible for small projectsCentral design does larger jobs and other work is determined by letter of understanding with the Bargaining UnitUpfront engineering and design is done by new business focused groups. Construction work is generally done by certain groups with customer orientation but can be done by any construction groupIn general, local design personnel provide turn-key design/project management for Serve New projects below 500 KW and small customer requested service projects. For Serve New projects greater than 500 KW, New Construction Managers provide project management and lead a team that may consist of Major Design, planning, ROW, work management and construction coordination personnel. Serve Existing Project Managers design their own projects and provide similar leadership for large relocaton or system improvement projects. Major Design is organized into three groups; Serve New (customer services related projects and includes a Central Design Group that specializes in Mulit-Family and Residential developments) , Serve Existing (roadway relocations and system improvement work) and Network (Vaults and duct structures, primarily in the larger downtown areas of our service territory).

Fully Centralized

28 Customer Connect is the single point of accountability for the customer, coordinating their requests through the construction & connection lifecycle from a centralized operating model.

6 companies have centralized design for large projects, with decentralized delivery. 6 others have fully decentralized new business operations.

Source: DP335

45

Organization for New Business (cont.)


Decentralized – all new business in local areas

27

40

33

21

22

34

The service territory is broken up into areas. These areas are staffed with a designer and one or more field technicians. Designers handle all new business three phase and subdivision development, and three phase service inspection. Field technicians handle all civil inspection, single phase line extensions, and single phase service work. System integrity work is also handled by the area staff, single phase by field technicians, and three phase by designers. System Reinforcement projects are handled by a dedicated SR designer. Public Improvement projects are handled by a team of two designers and one field technician. All our workforce is centrally staffed at our operations headquarters.All design regardless of size or type is divided between 5 different geographic areas of service territoryThere is a construction mgr located in each of our large divisions who oversees a capital business process for their area.One designer takes care of every job in their territory. Each designer will talk to every customer on every facet of the job, except the services that get City Inspected and are sent out by the Clerks.Receipt of customer/contractor requests, account administration, design, estimating, planning, scheduling are contained within the New Business are regional-based, to provide close customer support. Gas New Business and Residential development work have one organization for entire territory.Services Centers are Regional. New business designed by service planners are assigned to areas within the region. Services are issued by office field coordinators assigned to areas within the region.'

Structured by Customer Type

24 The new business process is organized based on field operations and customer order fulfillment departments. Within field operations, there is new construction overhead and underground. Within customer order fulfillment, there are office and field associates broken into three segments, residential, commercial and large customers

Source: DP335

46

Timing Requirements for Installations

Half of the companies deliver basic services within 5 days. Adding poles or line extensions can add up to 60 days

Company Service Only Service Plus Pole Service Plus Line Extension30 3 days 3 days 3 days40 3 days 6 weeks 8 weeks31 3 - 5 BUSINESS DAYS Timing based on customer readiness Timing based on customer readiness

21 Service Delivery Standards = 5 Days

Service Delivery Standards = 24 Days + Customer Responsibility days used + Permit Days for pole install

Service Delivery Standards = 8 to? Days depending on nature of job, Customer Responsibility days used, Permit Days required, etc.

27 5 days 60 days 120 days

29 5 working days after all customer obligations are met

5 working days after all customer obligations are met

5 working days after all customer obligations are met

22 generally within 2 weeks of underwriter's certificate 5 - 6 weeks

8 - 12 depending on scope of work required

34 10 business days or lessAs negotiated with customer - rule of thumb 6 weeks for Overhead, 4 weeks for Underground

As negotiated with customer - rule of thumb 6 weeks for Overhead, 4 weeks for Underground

28 On or Before 10 days from customer ready, permits in

20 days from customer ready, paid, permits in Varies based on scope of work.

33Electric from the time customer signs up - overhead 2 - 3 weeks, underground 4 - 5 weeks. Underground requires a crew

4 - 5 weeks both overhead and underground requires a crew 4 - 5 weeks

24 21 Days

23 Customer to provide clear path for service.Customer to provide clear path for service and clearance pole on his property.

Customer to provide clear path for service and poles on his property.

32 Connected in the order received. Connected in the order received. Connected in the order received.

New Business Pg 5-7Source: DP340

47

Activities Performed By Developers/Customers

Developers/customers are expected to do substantial amounts of the work for residential new business for UG, and much less of the work for OH services

21 22 23 24 27 28 29 30 31 32 33 34 37 40 %Meter socket ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ 79%UG trenching ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ 79%UG conduit ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ 71%ROW clearance ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ 57%Transformer pads ♦ ♦ ♦ ♦ ♦ ♦ ♦ 50%Concrete pads ♦ ♦ ♦ ♦ ♦ ♦ 43%UG substructures ♦ ♦ ♦ ♦ ♦ 36%Structures for future expansion

♦ ♦

♦ 21%

Secondary conductors ♦ ♦ 14%UG wire installation ♦ ♦ 14%UG connection ♦ 7%Engineering Design ♦ 7%OH service ♦ 7%

New Business Pg 8-9Source: DP345

48

Contracting of New Business

Mean 22 %Quartile 1 0 %Quartile 2: 4 %Quartile 3: 44 %

New Business Pg 18Source: DP350

% of New Business Work Contracted

New business contracting varies by company. Utilities with higher growth rates tend to use more contractors, with company 40 as the notable exception.

Scenario ATTRIBUTES

49

Meter Service Transformer Primary Run Pole

#1 100A240/120V

75’OH Existing OH NA Existing

#2 200A240/120V

100’UG Existing OH NA New

#3 200A240/120V

50’UG New Padmount

200’ UG Existing

#4 200 kW120/208V

75’UG New Padmount

200’ 3-phase UG

New Riser Pole

Source: DP345b

Scenarios: Schematics

50

75’OH Service line Scenario #1; new OH service drop

100’ UG Service line

75’ UG Service line 100’ UG primary

Scenario 2; new pole, transformer & UG service line

Scenario 3; new UG primary run; padmount transformer & UG service line

50’ 3 phase UG Service line 200’ UG primary

Scenario 4; new riser pole, UG primary run; padmount transformer & UG service line

100A240/120V

200A240/120V

200A240/120V

200 kW120/208V

Existing

Existing

New

New

Meter

Meter

Meter

Meter

51

Staffing Approach for each Scenario

Companies use quite different staffing approaches for new business

New Business Pg 14-17Source: DP355b

52

Costs for New Services

Mean $388Quartile 1 $293Quartile 2: $395Quartile 3: $480

Mean $5,026Quartile 1 $3,813Quartile 2: $4,542Quartile 3: $5,285



•Costs vary substantially by scenario, and by company.

•Some is due to customer contributions, while some is due to operating efficiencies.

•Labor costs increase with each scenario, while transformers become ever-larger parts of the costs.

Scenario 1

Scenario 2 Scenario 4

Scenario 3

New Business Pg 27-30Source: DP350b

53

Scenario 2 – Installed by Utility

Co. Cable Pole Transformer Meter

21 4/0 ATP w Sc 80 PVC riser 40 25KVA Meter & base

22 Secondary, no primary

24 2/0 wire 35/4 25KVA Meter

27 4/0 UG conductor, 2-10’ sections of steel riser

45’ steel S3 25KVA

30 From xformer to meter Yes Yes

31 From xformer to weatherhead

Yes Yes Set meter

33 URD triplex, 2 in. conduit 40/5 15KVA

34 45/5, 96” crossarm

25KVA

Policies for new service are relatively consistent across companies for poles and transformers. Cable specifications vary.

New Business Pg 21Source: DP345b

54

Scenario 2 – Installed by Customer/Developer

Co. Cable Riser Meter

21 200 amp service w ground, wiring & conduit to the bottom side of meter base.

Meter base provided by utility, installed by customer

27 Trench, 2.5 inch conduit First 10’ section of steel pole riser

Meter base

30 Conduit to new pole for secondaries

Meter and service mast

31 UG secondary in conduit Riser & weather head

Meter can inspected by city

33 200 A bus type meter base

34 Customer pays $4.00 per foot for service to meter

Customers are generally expected to install conduit and meter base, while utilities install the cable and meter.

New Business Pg 22Source: DP345b

55

Construction and Work Management/Scheduling

56

Scope - Construction & Work Management/Scheduling

2014 QuestionsConstruction Practices• Most important initiative to improve productivity of construction • Measuring crew productivityMobile Data• Experience with implementing mobile data systems for field crews Construction Methods• Successes in eliminating restrictive work practicesScheduling Practices• Process for scheduling and assigning crews on a weekly/daily basis • People at Jobsite by activity

Situation

• Utilities are working to effectively utilize field workforces to execute construction and refurbishment activities.

• Replacement spending exceeded new business spending in 2013

• Work management tools are full-featured and highly functional

Complication

• Resource management is complex because of lean workforces and use of contractors.

• Skills for scheduling and tracking work reside with analysts, who must coordinate with field supervisors to execute the work.

Question

• How can distribution operators meet the needs for efficient field work in the face of multiple constraints ?

• Can the process be streamlined to meet the needs of the business?

Answer

• Structuring the organization and assignments to have Schedulers schedule and Supervisors supervise.

• Coordinating work to most efficiently integrate new construction with refurbishment activities

1QC Industry Perspective:Construction Work Management/Scheduling

57

A well-designed, consistent process for the major steps in executing construction work, so they can be effectively planned

Appropriate resource management tools to assure availability of the necessary resources

Defined roles and responsibilities for field supervisors and work management/scheduling analysts

Work management approach and software tools to support the ongoing work, and manage the various required resources

Effective estimating tools so jobs can be planned accurately

Flexibiiity in the workforce and work rules to enable productive use of the available workers

58

Key Success Factors:Construction Work Management/Scheduling

MOST IMPORTANT INITIATIVE UNDERWAY TO IMPROVE PRODUCTIVITY OF DISTRIBUTION CONSTRUCTION


Source: DP170

Category Responses

Competitive Contracting

31 Contract construction is performed on a competive unit based compensation.

Graphic work design software

2833

Graphic work design toolDeveloping new engineering design software.

Mobile Data For Crews

37 Mobile Data Terminal system and the Distribution Automation system

Improved Crew Routing/Scheduling

24

27

Design accuracy and crew efficiency; Increase productive time through more efficient crew routing and use of available resourcesIncrease productive time through more efficient crew routing and resource scheduling.

Work Management Software

38 MSOC and Scheduling; Management Systems and Operating Controls (MSOC) is the development, implementation, and consistent application of standardized processes, practices, procedures, metrics, and measurement tools to enhance operational performance, employee skills, environmental stewardship and safety, and communication with management and customers.

Coordinate Design and Construction

21

30

Pre design, final design and pre - construction meetings. Safety and removing bad practices and habits from actual construction.Design accuracy and crew efficiency are measured through STORMS with variance reporting done by both designers and management to improve on lessons learned

Improved coordination between design and construction and improved design processes were mentioned several times

MEASURING CREW PRODUCTIVITY


Source: DP170

Category Responses

31 We have standards set annd crews are compared against the standard

Estimated vs actual

21 Comparison of actual man -hours to estimated manhours Contractor effective rate.

23 Crew utilization, number of jobs completed, actual vs. estimated time and cost, and safety.

24 Comparison of actual man hours to estimated manhours; ability to work safely28 estimated vs. actual hours for work completion30 Man - hours are set in STORMS for each task. Estimated hours to actual hours are

compared when the jobs are closed37 Cost pers faults, poles, cables. Actual vs Estimated hours for capital work

Worked hours vs paid hrs

38 Productivity is the product of our crew efficiency and our crew utilization that is also the number of hours worked divided by the total earned hours.

Don’t Track 33 We do not measure and track crew productivity currently.

Most popular by far is Estimated vs Actual

Thank you for your Input and Participation!

61

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Ken Buckstaff [email protected]

David [email protected]

Dave [email protected]

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Debi McLain [email protected]

Tim [email protected]

Your Presenters

First Quartile Consulting is a utility-focused consultancy providing a full range of consulting services including continuous process improvement, change management, benchmarking and more. You can count on a proven process that assesses and optimizes your resources, processes, leadership management and technology to align your business needs with your customer’s needs.

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