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Cutting Costs With Real-Time Mobile Data

All systems are Reddy.

Fortnightly Magazine - January 2006

An examination of FERC Form 1 data from the 100 largest U.S. electric utilities reveals that the “miscellaneous” is the largest expense category for 59 of the 100 investor-owned utilities (IOUs) studied, and a close second for the remaining 41 utilities (see Figure 1) .

For these 100 IOUs, miscellaneous distribution operations expenses totaled $878 million in 2004 and $835 million in 2003, representing the largest single element (between 31 and 32 percent) of their combined annual $2.7 billion distribution-operations expenditure.

If we shine some light on these expenditures, it appears that reduction in clerical workloads and paperwork through better integration of real-time data across the enterprise holds great promise for tangible benefits. And when it comes to reducing clerical workloads and paperwork, the integration of real-time data from mobile-data systems should be at the top of any good list of initiatives to improve efficiency while increasing system reliability and customer satisfaction.

One utility relatively far down the path of mobile-data system usage is Potomac Electric Power Co. (Pepco). They’ve reported that their implementation of a mobile-data system for Pepco field workers led to the elimination of 100,000 pieces of paper per year for this group alone.

Each of the 100,000 pieces of paper that Pepco eliminated represented a trouble ticket, work order, or service request, and due to legal requirements, each had to be stored for a period of seven years.

“In my experience, mobile-data systems typically result in major savings,” comments Leo Hagood, mobile-systems product manager at SPL WorldGroup. “When you don’t have to distribute and collect pieces of paper, you free up a lot of commuting time. That’s particularly significant for utilities serving congested urban areas or large, sparsely populated rural counties. One of our Western clients, for instance, added an hour and a half to each field worker’s productive day by eliminating the need to start and finish at a central location. That’s a 20 percent productivity improvement.”

Obviously, the miscellaneous category of expense, by definition, is a grab-bag for items not captured in the other categories shown on the chart. But when we look at the formal definition provided for FERC reporting purposes under the U.S. Uniform System of Accounts, it turns out that a total of seven specific labor items are involved, most of which are controllable in precisely the way that the Pepco example above illustrates:

U.S. Uniform System of Accounts Definition of Miscellaneous Distribution Operations Expenses

(Labor portion)

1. General records of physical characteristics of lines and substations, such as capacities, etc;

2. Ground resistance records;

3. Joint-pole maps and records;

4. Distribution-system voltage and load records;

5. Preparing maps and prints;

6. Service interruption and trouble records; and

7. General clerical and stenographic work except that chargeable to account 586, meter expenses.

Costs in a similar category, general and administrative (G&A), also are surprisingly large. Specifically, consider which of these three

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