Asset Management Risk Planning and Project Prioritization
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Transcript of Asset Management Risk Planning and Project Prioritization
Asset Management Risk Planning and Project PrioritizationBringing PacifiCorp to the Next Level in Asset Management
Presented at the EEI TD&M
Conference in Charlotte, NC April 20, 2004
2
PacifiCorp is the USA-based subsidiary of Scottish PowerAnd is one of the West’s largest and lowest-cost electric utilities
A little history and some basic statistics1881 – Salt Lake City is 5th city in US with central
station electricity1910 - Pacific Power & Light in OR & WA1912 - Utah Power & Light in UT & ID 1989 - PacifiCorp merger1999 - Scottish Power merger Headquarters: Portland, OR Employees: 6,400Territory: More than 135,000 square miles Line-miles: Transmission: 15,000
Overhead distribution: 44,000 Underground distribution: 12,000
Generation capacity: 8,300 megawatts Customers: Total 1,544,895
Utah 689,709 Oregon 510,254 Wyoming 122,493 Washington 120,094 Idaho 59,407 California 42,895
3
T&D is a significant part of PacifiCorp’s CAPEX With a projection for declining T&D CAPEX in the next few years
PacifiCorp CAPEX Actual & Estimated
0
100
200
300
400
500
600
700
800
2003 2004 2005 2006
FY Ending March 31
$M
illio
ns
Other
Generation & Mining
Transmission & Distribution
Judi JohansenPresident & CEO
Matthew WrightEVP Power Delivery
Darrell GerrardVP T&D Engineering & Asset Management
Alec Burden (ret.)MD Asset Management
Tom WatersDir. Asset Planning
Tom EyfordRisk Manager
4
Option Development Developing cost-effective alternatives for possible funding
- Additions- Upgrades- Replacement- Maintenance- Standards- Systems
Results Monitoring
Measuring & managing the drivers of the funded projects and processes
- Benchmarking- Unit costs- Failure rates- Event impacts- Value added
Recall the context within which prioritization is donePrioritization is only a part of asset management and risk planning
10-Year Present Value Project Cost and Value Funding Curve
$
$500
$1000
$1500
$2000
$2500
$ $200 $400 $600 $800 $1000 $1200 $1400
Cumulative PV of Project Cost ($ Millions)
Cum
ulat
ive
PV o
f Pro
ject
Val
ue ($
Mill
ions
) Funding Curve
2005 Project Cost and Value Funding Curve (Capital)
-$200
$
$200
$400
$600
$800
$1000
$1200
$ $50 $100 $150 $200 $250 $300 $350 $400
2005 Project Cost ($ Millions)
2005
Pro
ject
Val
ue ($
Mill
ions
)
5
2005 Project Cost and Value Funding Curve (Capital)
-$200
$
$200
$400
$600
$800
$1000
$1200
$ $50 $100 $150 $200 $250 $300 $350 $400
2005 Project Cost ($ Millions)
2005
Pro
ject
Val
ue
($ M
illio
ns)
‘Must Do’ is limited at about half the budget These categories need to be forecast well, and then fully funded
Po
ssib
le F
ina
nci
al T
arg
et
Pro
ject
s w
ith V
alu
e/C
ost
> 1
.0
Illustrative
6
Today’s utility has to have a different story to tell investorsThe shift is from global energy traders to regional asset owner/managers
Load relief is a major part of the capital budgetRecommended funding reduces risk to acceptable levels
Load Relief Funding Curve and Risk Measure
0
50
100
150
200
250
300
350
400
450
0 10 20 30 40 50 60 70
Load Relief Spending ($Millions)
Val
ue
($M
il), R
isk
(Exp
MV
AH
rs) ExpMVAHrs at Risk
Cumulative Value Added
Load Relief Cost and Value Drivers
0
50
100
150
200
250
300
350
400
450
0 10 20 30 40 50 60 70
Load Relief Spending ($Millions)
MV
A
Capacity Added (MVA)
Load Relief: (n-1) MVA at Risk 2006
Load Relief: (n-0) MVA at Risk 2009
Load Relief: (n-0) MVA at Risk 2006
Load Relief Sensitivity Analysis
0 2 4 6 8 10 12 14 16 18
Percent Field Tie
Mobile Time/Restorationtime
XFMR Failure Rate
Total Cost
Load Growth Rate
Peak Load
Ratio
0
10
20
30
40
50
60
70
80
90
100
2005 2006 2007 2008 2009
0
50
100
150
200
250
300
350
400
450
Original SpendingSpending @ 1.0Capacity AddedRisk Avoided @ 1.0
7
Today’s utility has to have a different story to tell investorsThe shift is from global energy traders to regional asset owner/managers
Feeder reliability has a direct impact on SAIDI-SAIFIRecommended funding reduces risk to acceptable levels
Feeder Reliability Cost Effectiveness
$- $200 $400 $600 $800 $1,000
$1,200
$1,400
$1,600
$1,800
Wasatch Front Distribution AutomationWorst Circuit Program Tier 1Worst Circuit Program Tier 2Worst Circuit Program Tier 3Worst Circuit Program Tier 4Worst Circuit Program Tier 5
Tree Trimming (UT/ID/WA/WY)Tree Trimming Oregon and California
Storm HardeningOH Three ph Structure PM Replacement
OH Single-phase Structure PM ReplacementLine inspection and repair- Backbone
Line inspection and repair- LateralsUG Sw itches(G&W) in Vaults PM
URD Tier 1 PM ReplacementURD Tier 2 PM Replacement
Feeder Overload Tier 1Feeder Overload Tier 2Feeder Overload Tier 3
Feeder Undervoltage Tier 1Feeder Undervoltage Tier 2
Pole Replacement
$ Per Customer Interruption Avoided
Vegetation Management
0.8 0.9 1 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8
Mitigation Deterioration Rate
Restoration colst
Cycle
CI per outage
Value of Avoided Interruption
Mitigation Effectiveness
Cost Per mile
Total Cost
Ratio
Feeder Funding Curve & Risk Measure
0
50
100
150
200
250
300
350
400
0 10 20 30 40 50 60 70 80
Feeder Reliability Spending 2005
Val
ue
($M
il),
Avo
ided
CIs
(ks
)
Impact of Spending on SAIFI
1.0
1.2
1.4
1.6
1.8
2.0
2.2
2005 2006 2007 2008 2009
SA
IFI
Cutoff = 2.0
Cutoff = 1.5
Cutoff = 1.0
0 200 400 600 800 1000 1200 1400 1600
$ Per Customer Interruption Avoided
8
The capital prioritization process has become a board-level issueBoards want to see what is driving the business’ needs for cash
Substation reliability addresses selected assetsWith programs to replace the most trouble-prone assets
CB Replacement Sensitivity Analysis
1.5 1.55 1.6 1.65 1.7 1.75 1.8 1.85 1.9 1.95 2
Total Cost
Addition to Tgt Population
CI per CB outage
Collateral Damage
PM Unit Cost
% CB causing XFMR Outage
Avg Duration
Avg XFMR MVA
Failure Rate
New Breaker Cost
Ratio
Substation Reliability Funding Curve & Risk Measure
0
20
40
60
80
100
120
140
0 5 10 15 20
Substation Reliability Spending 2005 ($Mil)
Va
lue
($
Mil)
, Ex
pM
VA
Hrs
Weibull Curve - MV Circuit Breakers
0.0%
0.1%
0.2%
0.3%
0.4%
0.5%
0.6%
0.7%
0.8%
0.9%
0% 20% 40% 60% 80% 100%
Annual Percent Maintained
An
nu
al F
ailu
re R
ate
Inventory of Failure-Prone Devices
-
50
100
150
200
250
300
350
400
2005 2006 2007 2008 2009
# o
f D
evic
es
MV CBs
Battery Banks
Regulators
HV CBs
LTCs
9
Each project is modeled from cost to impacts to valueThe process has brought some key insights Which will allow PacifiCorp to save money and reduce risk
• Optimal timing of load relief projects
- Model shows that some should be deferred, some accelerated
- Emphasizes the need for exploration of cost-effective alternatives
• Identifies critical data based on sensitivity analysis
- Failure rates, condition of certain assets, load growth rates, unit costs
• Quantifies how reliability value can drive allocation
- $25,000/MWH, $25/CI are good baselines for further refinement
• Causal relationships built in
- Weibull curves and condition-state models address key questions on PM
• Good feedback for planners
- Gives an early indication of project value versus cost
• Improved cost-effectiveness
- ‘Sharper pencil’ on URD, worst circuits, etc. from analysis of failure rates
10
Next StepsWhile initial estimates are satisfactory, more can be learned
• 10-year plan
• 2006 Plan and Budget
• Transmission grid
• Model and data refinements (continuous)