Energy markets and utilities have experienced significant turmoil in recent years. Deregulation has unfolded unevenly, in some cases leading to re-regulation. Market volatility remains a concern for most market participants.
PA provides the necessary expertise to manage in this volatile environment, and can assist utilities in selecting and applying a range of options to improve performance, increase competitive advantage and acquire or dispose of assets.
Client benefit
PA's broad energy industry and utility expertise is applied to projects in a collaborative way, coaching utility staff in new techniques and processes, and transferring skills to ensure sustainable change. PA's full range of performance improvement services and a comprehensive problem-solving approach means that measurable and lasting business benefits are delivered quickly.
PA's approach is differentiated by its independent views, unfettered by commercial relationships and reinforced by hands-on experience of the energy utility industry globally. PA understands the nuances of regulatory policy, economics and disclosure issues facing utilities, and can provide substantial insights to help utilities foster healthy relationships with their regulators. In addition, PA's experts ensure that any implemented changes are sustainable by focusing on each element involved within change while also delivering the measurable benefits, providing business benefits to shareholders and customers alike.
Utility privatization, competitiveness and sourcing
The issue of privatization continues to enjoy prominence as a means of improving competitiveness in energy supply organizations such as utilities, municipalities and military and public works centers.
From its years of experience in managing such assignments, PA has acquired a comprehensive understanding of electric, gas, water and wastewater supply assets, operations and maintenance and performance management, together with applicable law and regulations.
PA has extensive experience in supporting and advising companies embarking on the privatization path. PA advises on the most effective process to follow including system/infrastructure valuation, competitive assessment, financial modeling, tracking and reporting, RFP development and technical and commercial bid evaluation.
Utility M&A and post merger integration
Stakeholders demand that merged companies seek synergies specifically in dealing with different processes, organizational designs and models, systems and capabilities. A well considered, carefully planned approach is essential for both the merger or acquisition itself as well as for post merger activities. PA leverages our unique industry insights, driven by our industry leadership in benchmarking and best practices, to develop appropriate solutions that are change-management oriented to ensure the tracking and delivery of benefits.
PA offers objective, independent insight and counsel into the development of company’s structure, leadership framework and operating model, offering solutions comprised of some or all of the following approaches.
Performance improvement diagnostics
PA Consulting Group has years of experience in working with electric and gas utilities to improve service delivery and reduce associated costs. From operations, maintenance and asset management to customer service, call centers and credit management, we have developed focused diagnostic tools and processes to understand the areas of biggest opportunity. Such analyses usually require further in-depth work to fully define the opportunity, but they are very useful in understanding where improvements should be focused.
Mobile technologies
Utilities have dispersed field, customer service and corporate operations, creating significant cost, service, and communications challenges. Current and emerging voice and data technologies can enable applications that reduce cycle times, responsiveness, labor needs and overall operating costs.
In order to realize the available profitability improvement, utilities must radically alter their operating philosophy and processes, without also 'throwing away the rate base'. Utilities are slow adopters of technology because they require very high levels of reliability, have significant sunk costs or investments and remain complex corporate entities. Many still maintain long term hopes for using their regulated telecom assets to capitalize on telecom business opportunities
PA can help revise a company's operating principles and practices to capitalize on mobile applications. By reducing initial work volumes and re-work requirements, reducing infrastructure requirements, and enhancing revenue capabilities you could achieve 20-40% cost savings in T&D and customer service, optimize capital spending and increase revenue up to 5%.
Credit and collections
PA’s experience with most investor-owned utilities has yielded a suite of solutions for putting credit and cash management programs back on track. PA's solutions make it easier to measure and manage credit, cash management and collection processes; allowing utility operations to immediately recognize financial improvements.
Capital and opex project optimization
There is an implicit trade-off between CAPEX/OPEX and energy network performance that neither utilities nor regulators can easily quantify. Complexity modeling hinders explicit consideration of this trade-off in the asset management and cost/budget determination process.
PA provides an optimal balance between CAPEX and OPEX by utilizing objective tools to optimize the cost / performance trade-off and quantify expected network reliability while assessing different maintenance qualities and their impact on each network component's performance. As a result of linking preventative maintenance actions with expected failure rates, PA is able to determine what each maintenance action may cost and therefore able to link corrective maintenance policies with restoration time (quality of service)
PA’s energy clients benefit from improved network performance and reduced operations and maintenance costs. With the help of a proprietary PA model that becomes an integral part of the asset management process, a transparent capital expenditure prioritization process is created that addresses all stakeholders and provides a key step toward better shareholder value decisions.
Our reliability certification process helps clients understand the process of reporting their network performance in a comprehensive and objective manner and highlights areas for improvement yielding both client and customer benefits.
Regulatory requirements and performance measures
Regulatory, service and performance standards and measures are the basis for effective management in any utility. PA applies the balanced scorecard (BSC) top-down approach, adapted to suit the unique utility environment, to help provide management with the information it needs.
PA's comprehensive set of measures linked to the four axes of the BSC (Customer Service, Financial, Environmental and Employee), are designed to ensure a balanced view of business performance. This approach ties the performance of individuals and teams into the overall measurement system, helping utilities to meet their strategic, tactical and operational targets.
Environmental management (water, gas, electric)
There is increasing interest by many organizations in quantifying the air emission reductions associated with energy efficiency and renewable energy projects/programs, and recognizing these reductions on emission reduction registries.
PA has extensive experience with utilities and the government agencies in measuring the energy impacts of efficiency projects and co-ordinating these studies with state level voluntary emission reduction registries. These combined efforts add value for governmental or NGO project sponsors and lend credibility to the voluntary emission reduction registries – especially as credits attributable to these combined efforts become tradable.
Our expert assistance in evaluating energy efficiency projects meets registry requirements as well as national/international criteria for tradable credits, with specific attention to requirements for baseline and post-installation data.
Resource management strategy
PA evaluates people and staffing levels, organizational designs, models and processes and the use of information technology and systems to make step-change improvements in output, cost and customer satisfaction.
In working with clients, PA develops resource management strategies that equate to create long-term solutions by building a compelling case for change, engaging key stakeholders and leaders, defining a solution to deliver business objectives and driving delivery and change.
