Project Selection & Prioritization

Transcription

1 Project Selection & Prioritization

2 In the Beginning.. Project Ideas led to Officer Priority Goals List of IT projects for a Fiscal Year was maintained No holistic view of projects Competing priorities Competing resources Goal Create enterprise model for intake and prioritization

3 Model Development Cross departmental team managers, directors & officer representatives (PPC Project Prioritization Committee) Began with traditional Project Evaluation methodology Criteria, weighting and scores Tested projects through scoring process Developed model that would work for NWN and our way of doing business More subjective and very collaborative

4 Progression x year long range outlook mid point review x year long range outlook x year short term outlook

5 Current Model Conduct process three times a year Feb, June, Oct Call for projects is time bound 4 mo outlook Continually manage current business needs with three lists In Process those in Planning or Execution (also those about to submit charter) In Queue those scheduled to begin within the next 4+ mos Backlog those that are not approved to move forward in the next 4 mos Exception requests are still accommodated

6 Advantages Just in Time project prioritization Time projects with available resources Better able to manage changing priorities Better able to commit to approved projects Better chance to utilize capital budget for projects that are ready to execute More opportunity for the business to request projects Less exceptions

7 How are we doing? Better Staff likes the opportunity to submit throughout the year Resourcing outlook is smaller and a bit easier to forecast Continuing challenges We still take on too many projects We still get exceptions Run the business needs slow down project schedules

8 Questions?

9 Thompson Falls Capital Prioritization Update WEI August Blain Nicholls PM Director

10 Infrastructure CAPEX Plan Blueprint Distribution Base includes Reactive and Normal Maintenance Transmission Base includes Reactive and Normal Maintenance Electric and Gas Infrastructure Transmission, Distribution and Substations Capacity (CP)* Reliability (RE) Asset Life (AL) Compliance (CO) The necessary delivery capabilities of the system necessary to meet operations, reliability, and growth parameters Define delivery systems expectations verses actual performance Life of an asset based on a set level of performance of a delivery system The adherence to established norms Technology and Automation 10 *Note: Capacity is broken down into Capacity Growth (CP_G) and Capacity Reliability (CP_RE)

11 Infrastructure Vision and Mission Defining a Common Language for managing our delivery systems* Align with Corporate Drivers Optimizing Investment Portfolio Project Strategic Value Analysis Meet Delivery System s Performanc e Targets 11 *Delivery systems are comprised of: Electric & Gas Transmission & Distribution and Substations & Gate/Compressor Stations

12 Corporate Portfolio Goals Portfolio Concept Improve Customer Satisfaction Positive Financial Impact Reduce Risk System Level Goals Preserve reliability Maintain adequate capacity Achieve acceptable risk tolerances Optimize asset health Project Level Goals Value positive 12

13 Capital Budget Five Year Plan $1.1B of Capital Investment over 5 years for NWE T&D YR Total Total $234,619, $237,895, $236,817, $214,315, $184,778, $1,108,426, MT Total $194,857, $177,894, $199,979, $184,147, $155,049, $911,928, MT T Gas $18,958, $24,449, $26,785, $20,153, $17,038, $107,385, MT T Electric $51,595, $51,177, $73,004, $82,330, $44,676, $302,785, MT D Gas $9,809, $17,183, $17,071, $17,417, $17,585, $79,067, MT D Electric $72,882, $80,184, $82,248, $64,045, $75,549, $374,910, DSIP $38,500, $0.00 $0.00 $0.00 $0.00 $38,500, SDNE Total $39,761, $59,639, $36,629, $30,723, $30,167, $196,497, SDNE Gas $4,730, $6,398, $4,628, $4,561, $4,146, $24,464, SD T Electric $4,934, $22,010, $5,283, $8,068, $3,209, $43,505, SD D Electric $18,225, $15,032, $26,927, $17,538, $22,373, $100,096,

14 Evaluating Projects Scoring Matrix- Electric Distribution Strategic Alignment Asset Life Reliability Compliance Capacity Company Approved Performance Target Asset Age CMI Saved Level of Risk Expected Growth System impacts if event occurs Asset Health Customers Probability of Consequence N-1 Condition and Improvement History of the asset Equipment Condition Level of Service Frequency of Event Time Exceeding Capacity Targets Operational Issues O&M Cost Consequence of Failure Safety Percent Loaded Total Score: need of the project Total Asset Life Score Total Reliability Score Total Compliance Score Total Capacity Score Total Benefit: financial value for B/C Total Asset Life Benefit Total Reliability Benefit Total Corporate Risk Benefit Total Capacity Benefit Performance Metrics: system goals Asset Life Performance Reliability Performance (SAIDI min) Corporate Risk Performance (Risk Category Driver) Capacity Performance Lines (MVA added)

15 Strategic Yield Concept Benefit Cost Ratio used to rank and sort projects Benefit tool to use similar data as 16-grid scoring Annualized Project Benefit is the sum of four categories Reliability Benefit = loss of revenue + customer satisfaction + restoration expense ($/CMI or SAIDI) Capacity Benefit = potential increase in revenue earnings ($/MVA) Asset Life Benefit = depreciation + inspection and maintenance ($/asset quantity) Corporate Risk Benefit = corporate risk category x probability x occurrence ($/corporate risk avoidance) B = $/CMI + $/MVA + $/Asset + $/Risk

16 NWE Corporate Risk Categories Compliance Operational Financial Reputational Strategic Federal Regulation State Statutes National Standards National Guidelines Local Ordinances NWE Standards NWE Guidelines Industry Best Practices Environmental Safety Property Loss Multiple Systems Isolated System Emergency Response System Capacity Impacts: Expenses, Revenues, Customers, Employees Equipment Obsolescence Fines Litigation Regulatory Expenses Revenues Market/Sales Regulatory Customer Satisfaction Corporate Image Community Perception Litigation Emerging Technology Company Values Company Initiatives Growth Initiatives Diversification Governance Utility Infrastructure

17 Calculation Corporate Risk Corporate Risk = (Compliance + Operational + Financial + Reputational + Strategic) x Probability x # of violations Compliance = level of risk Probability Operational = extreme safety + level of response + asset health Financial = extreme property or financial impacts (only if level 1) + level of risk + operational cost Reputational = CMI Impact (distribution) = GAP + load impacted (transmission) Strategic Risk = expected growth potential + long term risk exposure 17 # of Occurrences

18 Strategic Yield Outputs Corporate Driver Indicators System Performance Goals Annual Budget Impact Prioritization Values Corporate Risk Levels

19 Prioritization in PowerPlan Rank sorted by total score, $20M threshold Rank sorted by B/C, $10M threshold

20 Asset Management Strategies and Infrastructure QUESTIONS?