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Cutting Costs With Real-Time Mobile Data

All systems are Reddy.

Fortnightly Magazine - January 2006

broad (and non-redundant) categories of electric utility O&M expense is the largest:

1. Transmission O&M;

2. Distribution O&M; or

3. General & Administrative (G&A).

Once again, counter-intuitive though it may seem, the “grab bag” expense category of G&A is the largest for the 100 IOUs reporting to FERC:

For the IOUs under consideration, in each of the last two FERC Form 1 reporting years (2004 and 2003), G&A expenses totaled more than $10 billion per year.

This sum could represent an industry unto itself. More tellingly, this $10 billion in annual G&A spend also exceeds the expenditures of these 100 utilities for their T&D operations and maintenance (O&M) by a significant margin (See Table 1).

When we run year-to-year correlation studies for each of the 100 IOUs across these spending categories over the last 10 years, the correlations for each of the 100 utilities’ pairs of numbers in adjacent years ( i.e., not just the smoothness of the totals) are high—in the range of 90 percent—and are similar to the high year-to-year correlation levels found for more tangible items such as distribution plant in service. This suggests that the miscellaneous and G&A categories are not comprised of a large proportion of unique “one-time event” expenses but, like the other O&M and capital items, are run-of-the-mill elements of a utility’s ongoing cost structure.

Granted, G&A includes certain fixed costs that are not simply going to go away, but other elements certainly can be improved upon. For example, the $11.7 billion in G&A in 2004 for the 100 IOUs includes $2.1 billion in G&A-related salaries and wages, a number of similar order of magnitude to the $2.9 billion in distribution and $1.7 billion in customer-service and informational related salaries and wages spent by these 100 IOUs for the same year.

A concrete example of the type of clerical workload that can ensue from lack of integration of field operations with back-office functions comes from a mid-sized electric utility in the New England region, which commenced the first few years of this decade with an 18-month backlog in updating its asset model based on electric distribution system construction work. By creating an integration between a new GIS model and field operations/design engineering functions, this backlog (and full-time workload for 28 clerks) eventually was eliminated.

Pepco’s implementation of its mobile workforce management (MWM) solution actually began in the early 1990s with metering-related work, and was rolled out across the entire distribution system in 2001. It included integration of more than 1,400 feeder maps from its GIS so that crews no longer rely on paper maps, which were much more difficult to update, according to Sean Kelly, senior project manager at Pepco. More important, according to Kelly, is the EAI (Enterprise Application Integration) architecture Pepco employed to link its MWM system to its customer informtion system. Pepco’s MWM, as well as its outage management system, are both from SPL, and the workflows between these two systems and their customer information system have provided a significant improvement in operational efficiency.

Before implementing its MWM, during severe storm