Given the importance of electricity reliability to modern life, improvements to transmission and distribution grids are an essential element of the business. Large investor-owned utilities have a lot of experience planning and managing such projects, but smaller municipal utilities have miles of lines that need attention as well. Those smaller utilities generally have fewer resources to channel into those projects. Keeping their projects on target calls for careful management of numerous details.
The odds of successful outcomes are greatly enhanced through the application of project controls. Whereas some large utilities might have project controls specialists among their personnel, municipalities and other small utilities are more likely to rely on their consultants and contractors.
Value of Integrated EPC Partners
Increasingly, small utilities are seeing value in pursuing a turnkey approach through engineer-procure-construct (EPC) project delivery. Using EPC gives the utility the benefits of its partner’s lessons learned and best practices. It can also unlock access to project controls specialists to supplement internal resources.
Consultants with a full understanding of the capital projects model, like Burns & McDonnell, can “think like a client.” The cost of these projects can be recouped by the utility, but a lot of reporting is required to do so. The state public utilities commission typically wants detailed accounting of how the customers’ money was spent.
An experienced consultant will not only know what reporting is necessary but will build in the controls to capture the details as the project is being executed, enhancing both efficiency and transparency. The consultant should have a clear understanding from the outset of what project controls processes will be needed from a closeout and plant accounting perspective.
Whatever systems and platforms the small utility has in use, a seasoned consultant likely will already have experience with it. That means any project data captured can be set up to feed directly into the client’s systems, facilitating its use for direct reporting. As a result, the utility’s need to have staffers cleaning up and mapping the data is alleviated. Instead of leaving the utility to take blanket data from contractors, sort through it and then format it for use in reports, the EPC project partner aligns the inputs with the understanding of what the utility truly needs — not just what the contract states.
Benefits of Informed Project Controls
There are several ways in which project controls can help transmission and distribution projects, each offering weighty benefits to smaller utilities. The three prime areas for support are scheduling, cost management and document control.
The project execution schedule is established at the outset, creating the baseline. As a practical matter, the schedule needs regular updating to reflect how events unfold. Project controls specialists can regularly update the entire schedule through the end of the project, recognizing any delays that have occurred — or that could occur — and identifying solutions based on those assumptions that could pull the project back on track.
EPC consultants calculate cost estimates on a project from the expected usage of labor, materials and nonlabor resources in the schedule. From the utility perspective, what matters is how the total spend breaks out into the asset management system. For example, the utility wants to know how much it costs to pull a cable — how your work translates into its cable, which is its asset — and places less value on knowing how many hours are needed to pull the cable. Good project controls will understand the relationship of parts of the job with the asset management system, then break out and align invoices with that system.
In the EPC format, the risk lives with the contractor, which needs to complete the job within the contracted value. Project controls for cost management make the utility aware of how the money is being spent but also provide opportunities to point out the impact of scope changes, in terms of both schedule and cost.
Finally, establishing document control systems is essential because, at every step of the way, documents are among the key deliverables the utility looks for. Engineering drawings are a vital record for any future repair work. Utility line workers need to know what the design is and how it was established. Managing the documents of record for a project is an important responsibility. Handing them off to the client at various stages and upon completion calls for careful methodology, because keeping detailed and thorough documentation is so important to any future troubleshooting.
In each of these areas, smaller utilities stand to gain from working with a knowledgeable EPC partner with the scale and resources to manage and maintain all the details. With those project controls working in concert, this approach gives municipal utility advantages that have helped make their larger peers successful.
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