Capital projects portfolio management
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2014 Transmission & Distribution Benchmarking Insights Conference. Capital Projects & Portfolio Management. June 24-27, 2014 Nashville, TN. Agenda. Portfolio Management Project Management Outcomes Practices. DILBERT. The Capital project process.

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Capital Projects & Portfolio Management

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Capital projects portfolio management

2014 Transmission & Distribution Benchmarking

Insights Conference

Capital Projects & Portfolio Management

June 24-27, 2014

Nashville, TN


Agenda

Agenda

  • Portfolio Management

  • Project Management

  • Outcomes

  • Practices

DILBERT


The capital project process

The Capital project process

Role of asset management is described in the individual practice sections

  • The capital project and portfolio management process is at the heart of a how a utility conducts business.

  • Phase 1: work plan development creates a feasible schedule for the year

  • Phase 2: executes the work plan through project and portfolio management


Portfolio management

Portfolio Management


T d projected capital spending

2013 Survey results

T&D Projected Capital Spending

Most companies are forecasting level capital spending

Note: compare to current year data

Source: Questions CP125, DF70, TF65, Page 36


Capital projects portfolio management

2014 Results

CAPITALPROJECTSPENDINGPERASSETNEXT3YEARS-T&D

MeanQuartile

Mean

26%

Comments

#35 Transmission Only. Very large scale increase in spending

Calculation used

( CP125.1 + CP125.2 + CP125.3 ) / ( DF70.1 + DF70.2 + TF65.1 + TF65.2 ) * 100 , ( CP125.4 + CP125.5 + CP125.6 ) / ( DF70.1 + DF70.2 + TF65.1 + TF65.2 ) * 100 , ( CP125.7 + CP125.8 + CP125.9 ) / ( DF70.1 + DF70.2 + TF65.1 + TF65.2 ) * 100

CP p36


Capital projects portfolio management

2014 Results

CAPITALPROJECTSPENDINGPERASSETNEXT3YEARS-DISTRIBUTION

MeanQuartile

Mean

15%

Comments

Calculation used

( CP125.3 ) / ( DF70.1 ) * 100 , ( CP125.6 ) / ( DF70.1 ) * 100 , ( CP125.9 ) / ( DF70.1 ) * 100

CP p37


Capital projects portfolio management

2014 Results

CAPITALPROJECTSPENDINGPERASSETNEXT3YEARS-SUBSTATION

MeanQuartile

Mean

22%

Comments

#35 Transmission sub only; very large increase projected.

Calculation used

( CP125.2 ) / ( DF70.2 + TF65.2 ) * 100 , ( CP125.5 ) / ( DF70.2 + TF65.2 ) * 100 , ( CP125.8 ) / ( DF70.2 + TF65.2 ) * 100

CP p39


Capital projects portfolio management

2014 Results

CAPITALPROJECTSPENDINGPERASSETNEXT3YEARS-TRANSMISSION

MeanQuartile

Mean

40%

Comments

#35 large scale transmission capital spending

Calculation used

( CP125.1 ) / ( TF65.1 ) * 100 , ( CP125.4 ) / ( TF65.1 ) * 100 , ( CP125.7 ) / ( TF65.1 ) * 100

CP p40


Capital projects portfolio management

PERCENTOFTHECOMPLETEDPROJECTSTHATAREWALKED-INDURINGTHEYEAR

Comments

“Walked in” is terminology from one of our clients that refers to projects that are not in the original annual budget (usually approved prior to January 1 or sooner), but are added during the year. Usually these rush

projects do not always get the same degree of planning and vetting.

Calculationused

CP46.4

CP p11


Key success factors portfolio management

Key Success Factors:Portfolio Management


Pm role

PM ROLE


Most utilities have pm s for all unique projects

2013 Results

Most utilities have PM’S for all unique projects

All projects (5)

37 Distribution Projects - 100%

22 Distribution: Major overhead, URD and Street Light have individual

Division managers. Substation: All projects have a project coordinator

35 All capital funded projects have PMs. Serve New > 500KVA, Serve

Existing such as large road widening & system improvement type projects.

26 All projects are assigned a PM.

17 PMs are assigned to all capital construction projects regardless of size.

Less complex capital projects may be assigned to engineers, designers

or planners to fill the role of PM

Complex projects (3)

38 Complex, cross -functional and/or highly political projects and programs that usually spend >$5M.

32 230 kV and 500kV and UG Transmission Projects; these are outside consultant PMs.

31 345kV transmission line builds

Projects >$1M

  • 34 Projects > $1,000,000 have PMP PM's, Projects <$100,000 do not require PM 's

    Projects > $500k

    39 Projects that have a budget greater than $500,000 and have an engineering component have Engineering PMs. Line construction projects driven by private new business, public agencies,

    system integrity and system reinforcement have RMT PMs.

    Projects >$100k

    27 Over $100,000

Source: Question, Page 12


Capital projects portfolio management

2014 Survey

SIZE/TYPESOFPROJECTSHAVEPROJECTMANAGERS

Comments

Calculationused

CP55.1


Capital projects portfolio management

2014 Results

FULL-TIMEPROJECTMANAGERS:T,D,&SPER$100MCAPITALADDITIONS

Comments

#32 reported a very high number of project managers

Calculation used

( CP60.1 ) / ( (Total T&D Capital FERC) / 100000000 ) , ( CP60.2 ) /

( (Total T&D Capital FERC) / 100000000 ) , ( CP60.3 ) / ( (Total T&D Capital FERC) / 100000000 ) , ( CP60.4 ) / ( (Total T&D Capital FERC) / 100000000 )

CP p13


Project managers per 100m capital spent

2013 Results

Project Managers per $100M Capital Spent

  • One measure of workload is the capital budget managed by PMs.

  • A simple ratio of capital additions to PMs is only a proxy, since not all of the projects have PMs. Another complication is that capital additions is a backward looking measure that only occurs once the project is in service.

Median

2013DRC = 3.5 FTEs/$100M

2012 = 5 FTEs/$100M

2011 = 3 FTEs/$100M

Note: the inverse is Budget Managed per PM

Source: Question CP60, page 13


Key success factors project management

Key Success Factors:Project Management


Key success factors project managers

Key Success Factors:Project Managers


Outcomes

outcomes


Capital projects portfolio management

CAPITALPROJECTS:AVERAGE"ACTUALASA%OFESTIMATE"

Comments

Calculationused

CP46.1

CP p8


Capital projects portfolio management

PERCENTOFTHEPROJECTSTHATARETYPICALLYCOMPLETEDONTIME

Comments

Calculationused

CP46.2

CP p9


Capital projects portfolio management

PROJECTSTHATARETYPICALLYCOMPLETEDONORUNDERBUDGET

Comments

Calculationused

CP46.3

CP p10


Practices and initiatives

Practices and initiatives


Issues found capital projects

Issues found: capital projects


Thank you for your input and participation

Thank you for your Input and Participation!

Your Presenters

Ken Buckstaff [email protected]

Dave Canon

[email protected]

817-980-7909

Dave Carter

[email protected]

414-881-8641

Debi McLain [email protected]

Tim. [email protected]

301-535-0590

About 1QC

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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