asset management

A D V EE RR TT II SS E M E N T
TAKE BUDGET OUT OF PROJECTS,
[ C A S E S T U D Y ]
NOT PROJECTS OUT OF THE BUDGET
The best way to balance all these disparate issues is by using a
rigorous asset management approach to select the best matching
set of programs and strategies, says KEMA’s Willis. “But the
key point, based on the results I’ve seen, is that you can’t ignore
equipment aging trends if you’re trying to do effective asset management.
The two go hand in hand.”
Zac Hager, Strategy and Total Quality Engineer with OG&E’s
Asset Management team, notes that KEMA helped his team apply
two other features that further improve asset management. “First, we
think in terms of three budget areas, investment, maintenance, and
operations, rather than two.” On KEMA’s advice, the traditional O&M
area is viewed as two separate spending areas that buy different
types of performance. Inspection and maintenance extend equipment
lifetime and lower failure rate. Operations budget improves response
and restoration to lessen the effects of escalating failure rates. “It can
make better business sense to prepare and be able to react well,”
he says, “than to try to lower breakdown rates. The key, always, is to
balance and target spending and resources across those areas well.
Second, OG&E’s asset management framework uses an optionbased
approach which allows it create extra leverage as it balances
activities and investment areas.”
KEMA’s Willis notes that several utilities have reported rather
disappointing results from asset management. “In every case they
were using an asset management portfolio method to prioritize or
optimize projects defined and scoped in the traditional manner.
That just doesn’t work. If the traditional project paradigm goes
in, traditional results come out. You have to set up a system that
will take budget out of projects, not projects out of the budget.”
The secret is creating a set of flexible, performance-based project
options guidelines to replace the traditional engineering standards
approach to the assessment of needs and specification of project
design. “There are always several ways to do any project,”
Willis adds, each with different costs and different results. Halfmeasures
sometimes deliver far more than half results, and are
a preferred approach. Other times ‘gold-plating’ will be justified
based on what it brings. “The key is to let the portfolio optimization
see those options, their cost and results differences, and make the
decision about how to best balance all options from all considerations.”
Do that, Willis says, and the utility will get the big impacts
its upper management is expecting.
Doug Patterson, Senior Planner at OG&E, and project manager
for the effort, reports that a third of the project involved
determining how to construct project and program options objectively,
comprehensively, and efficiently. “Absolutely nothing can be
untouchable when it comes to cost reduction. Remember, if you’re
taking money from one place it’s because you want spend it where
it will provide more value. It’s all to make the greatest contribution
to overall company business goals.”
OG&E also uses its portfolio optimization to select the penetration
of maintenance and technology programs. “A big part
of our planned performance improvement is based on what you
might call optimized cherry picking,” Patterson adds. “We don’t
have to inspect all breakers if we can target the ones that need
service. Some feeder line switches produce six times the ‘bang’
when you automate them compared to others.” Patterson’s team
entered such programs in targeted 10 percent increments and let
the optimization determine penetration and timing.
“The key is to let the
portfolio optimization
see those options, their
cost and results
differences, and make
the decision about how to
best balance all options
from all considerations.”
GOOD RESULTS
“This project has gone a long way toward helping OG&E prepare
for the future,” OG&E’s Henry reports. The biggest impact may not
be the technical, but rather the institutional and team understanding
OG&E gained. “This project helps us take a business basis
in our decision-making and focus on coordinating our activities
so all decisions are coherent.” And OG&E gained a firm handle
on system aging and how to manage for the inevitable results of
wear and tear on its system. “We better understand what we face.
We know what we know and what we don’t know, along with the
priorities we should put on improving areas of our knowledge base
and our system. Most important, we have a good roadmap for the
future, for both IT and process improvements, and for how to invest
and manage our T&D system going forward.”
www.energybizmag.com ENERGYBIZ MAGAZINE 61