Today’s energy utilities are under constant pressure to improve performance. Often, this means looking outside their own organisations for an understanding of best practice in asset management. Analysing best practice can provide helpful insights, but implementing is often made difficult by varied state regulation, environmental considerations, labour factors, geography and weather.
Instead, utilities seeking to improve the way they manage assets should focus on the behaviours that define a top performer. Adopting a behaviour-based approach significantly enhances the chances of successful performance improvement.
At PA, we have spent over 20 years collecting performance information about energy utility operations through our Polaris benchmarking programme. As a result, we have developed a range of ‘top performer profiles’ that can help utilities improve performance. These profiles correspond to key components of the asset management process.
Managing assets through the asset life cycle
Our analysis of performance data shows that utilities that lead in managing assets from cradle to grave typically adopt the following behaviours. They:
- analyse and understand risk as it pertains to asset health, cost, and performance
- aggressively pursue new technologies based on a quantifiable cost/benefit analysis and an assessment of their impact on system reliability
- use real-time, condition-based diagnostic strategies coupled with historic operating performance to optimise maintenance practices and asset replacement strategies
- are rigorous in capturing data across their maintenance strategy, keep that data up to date and use it to inform decisions about assets
- base decisions on asset repair, replacement, upgrade, retirement and reliability on performance data and quantifiable cost/benefit criteria, including risk identification and mitigation
- focus on achieving an optimal balance between asset utilisation, losses and capacity in looking at long-term system operating and performance objectives.
Making smart decisions on investment
Our benchmarking programme shows that utilities that excel in making smart financial and risk-based decisions on capital and O&M spending tend to:
- have a formal and documented business case process in place to justify all potential capital and O&M projects in terms of cost, benefit, risk and resources
- include ongoing O&M expenses with new capital investments to evaluate total life-cycle costs
- quantify benefits of investment in terms of financial and non-financial risk
- have a dynamic process in place to evaluate adherence to budget and have the ability to alter spending scenarios based on changing business conditions.
Delivering exceptional reliability
Performance data from PA’s Polaris programme indicates that utilities that are best at managing outage frequency and duration and emergency outage restoration will:
- have a culture, mandated by senior management that clearly articulates the focus on reliability and supports it through a proactive reward system
- focus on discrete opportunities (by feeder, substation, geography and/or asset group) to improve their System Average Interruption Frequency Indicator (SAIFI) and Customer Average Interruption Duration Index (CAIDI) rating
- have data owners (individuals) in place who are responsible for the accuracy, timeliness and completeness of outage data
- adopt a clear mandate to restore first and fix later (make safe, isolate, restore and repair)
- make rigorous use of outage management system (OMS) data, analysing outages by root cause and sustained impact by time, cause and geography to understand outage profiles and staffing requirements.
Emulating PA’s top performer profiles allows energy companies that want to improve performance to focus on changing the way they manage assets from a people, culture and process perspective with a significantly better chance of success.