3 October 2008

Injecting project management expertise and the technical training of project managers can help utility companies succeed with their critical and complex developments, says Tim Runcie, president of Advisicon.

Utility companies have come under pressure from the opening up of markets and, more recently, the ease with which consumers can compare prices and switch between energy and service providers. In order to compete, utilities have merged, acquired or been acquired. Many can now offer a range of services to their customers, including energy alternatives. This also requires investment in future energy sources.

Developing new energy sources is a major undertaking for these organisations and there are number of project management pain points created when growing to serve more customers and offer energy alternatives.

By way of example, PacifiCorp – a US utility with more than 1.6 million customers in six western states – recently made hydro relicensing for power generation a key initiative in its search for growth. Due to complex federal regulations, legal obligations and intense construction scheduling all required before, during and after a license issuing to generate power is granted, the company had to evaluate its project management scheduling methods.

There were several other key areas which needed to be addressed, including long lead times for contracting, tight budgets and limited internal resources to manage or perform the 50+ years of work involved.

There were also complex environmental restrictions – forest fire season (preventing in-forest work), endangered species mating season restrictions (preventing loud sounds and heavy equipment from being used) and spawning salmon season (which precluded in-water work). Added to this were the problems of coordinating overhaul, outage and maintenance schedules with new work, and the prospect of significant financial penalties for missed deliverables (potentially adding up to millions of dollars per day) and payment schedules with economic damages for missing deadlines.

The key to sustaining these results was to provide technology training to the project managers and to put regularly scheduled weekly updates into place that brought project and program management issu

Tim Runcie, Advisicon. PacifiCorp called in Advisicon to assist the company with these pain points and to identify solutions that would support the organisation’s growth. The Advisicon resolution was to blend the legal requirements with the resource workload forecast (both internal and external) while creating a project portfolio/program management solution that limited the risk.

The solution also created visibility of deliverables and interactive schedules between different project managers. The selected tool for this project was Microsoft Project due to its flexibility, scalability and capacity to manage large complex requirements without an imposing learning curve or the need for significant time dedicated to the tool. Notably, the organisation’s culture also played a role in the tool selection since employees were construction and engineering oriented rather than tool-focused.

Advisicon created a three-pronged approach to PacifiCorp’s situation. The success factor was to apply the right amount of technical solution, both scheduling and database, for searching and tracking. Mechanically, the tool had to be highly adaptable, highly extendable, very powerful and require little maintenance. From a user’s standpoint, all parties needed to work with the tool with confidence. There needed to be a comfort zone for research scientists, biologists and vendors alike. Using Microsoft Project was the fastest and most feasible tool to provide the right balance.

The project was so successful that the largest river system process was cloned and replicated for all river systems. This allowed the entire hydro relicensing programme to be rolled into cohesive real-time reported scheduling. This scheduling mapped out the next 50+ years of schedules with detailed work plans, resource workload forecasting and interactive schedules between maintenance, outage and overhaul planning. Additionally, the data could be exported out to the SAP compliance management system and used in many of the company’s ERP systems with little effort.

The key to sustaining these results was to provide technology training to the project managers and to put regularly scheduled weekly updates into place that brought project and program management issues to the surface for senior management attention. This visibility was critical to maintaining successful schedules and reaching milestones.

Tim Runcie is president of Advisicon, a project and portfolio management consulting company.

This article first appeared in issue 14 of Prime magazine.

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