uk utility vegetation management benchmarking: what it means to you will porter cn utility...
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UK UTILITY VEGETATION MANAGEMENT BENCHMARKING:WHAT IT MEANS TO YOU
WILL PORTERCN UTILITY CONSULTINGJUNE 2011
BENCHMARKING: WHAT IT MEANS TO YOU
OVERVIEW
I. WHY BENCHMARK? A BRIEF HISTORY OF BENCHMARKINGII. HOW REGULATORS CAN BENEFITIII. HOW DNOs CAN BENEFITIV. HOW VENDORS CAN BENEFITV. HOW FIELD PERSONNEL CAN BENEFITVI. HOW THE PUBLIC CAN BENEFITVII. CNUC ‘S ROLE
WHY BENCHMARK? A BRIEF HISTORY OF BENCHMARKING• “Those who always go it alone are doomed to perennially reinvent
the wheel, for they do not learn and benefit from others’ progress.” Bogan, CEO of Benchmarking Co., and English, Quality Manager of GTE
• In 1970’s the word “Benchmark” (surveying term for reference point) moved into the business lexicon meaning the measurement process for making comparisons.
• “[Benchmarking is] a process for rigorously measuring your performance versus the best-in-class companies and for using the analysis to meet and surpass the best-in class.” Kaiser Associates
• “Benchmarking is the search for industry best practices that lead to superior performance.” Robert Camp, Xerox Corp.
Communicated Internally
Research Is Still in Progress
Informally Shared with Peers at Other Companies
Results Were Used to Change Company UVM Practices
Presentation at an Industry Meeting
Research Was Inconclusive
Published in a Journal, Periodical or Trade Publication
Sponsors Have Exclusive Rights to Publication of Results
0% 10%
20%
30%
40%
50%
60%
70%
80%
90%
0%
0%
Communication of Research and Development in 2009
WHY BENCHMARKING? ALLOW INNOVATION TO REALIZE ITS FULL POTENTIAL
Benchmarking is an on-going process to promote continuous improvement and adaptive innovation. Benefits Gleaned from Practitioners of Benchmarking: • Paradigmatic Shifts or Buy-ins to Change • Teaches New Lessons in Competitiveness• Catalyst for Learning • Raises Level of Maximum Potential Performance • Creates a Culture Open to Change• Exposes People to New ideas• Improves Organizational Quality • Leads to Lower Costs
Bogan and English
Major Focus of Benchmarking for all entities will be toIdentify Best Practices and Continuous Improvement
WHY BENCHMARKING? OBJECTIVES AND BENEFITS
HOW REGULATORS CAN BENEFIT• Equips Subject Experts with Industry Knowledge
for Crafting Regulations• Measure Effectiveness of Regulations and Standards• Understand Individual DNOs Budget Issues and
Reasons for Variations in the Industry• Develop Public Awareness as to Why Utility
Vegetation Management is Important to Safety, Reliability and Compliance to Regulations--Makes Regulations Defensible
Large Decrease in Outages
8%Small De-
crease in
Out-ages20%
Out-ages Stayed the Same16%
No Ef-fect Be-
cause No
Out-ages56%
Effect of FAC-003-1 on Reli-ability
MEASURE EFFECTIVENESS OF STANDARDS AND REGULATIONS
Herbicide Usage
Aerial Inspections
Clearances at the Time of Maintenance (Clearance 1)
Ground Inspections
Minimum Clearance Requirement (Clearance 2)
Field Audits
Record Keeping
0% 20% 40% 60% 80%100%
Changes in UVM Program Due to Adoption of FAC-003-1
Not Applicable New Program Made Revisions Unchanged
33 45 32 XYZ 77 3 75 80 78 72 79 76 74 73£0
£10
£20
£30
£40
£50
£60
£7 £9 £10 £11 £13 £14£20
£27 £28£33 £34
£37£41
£52
Cost per Customer Calculated on Average for 2006 - 2008Average : £24 per Year XYZ Reporting 2007 - 2009 Data
Company Code
Cost
per
Cus
tom
er in
GBP
Companies Represented Have Low Density Customer Bases
WHAT IS THE COST OF UVM TO THE CUSTOMER?
3 76 13 81 80 77 78 79 41 75 72 12 74 73 18 32 31 33 36£0.00
£1,000.00
£2,000.00
£3,000.00
£4,000.00
£5,000.00
£6,000.00
£7,000.00
£5,782
£3,635
£2,145£1,648
£1,498£1,327£1,078 £940
£607 £540£307 £249 £210 £185 £157 £70 £28 £25 £14
Average UVM Restoration Cost per Sustained Outage for 2006-2008Average: £1,076.09
Company Code
Ave
rage
Cos
t per
Out
age
in G
BPSIGNIFICANT VARIATION IN COST PER OUTAGE:
ALWAYS EXPENSIVE
HOW DNOS CAN BENEFIT• Measures UVM Program Success in Achieving Objectives• Provides Support for Budget Allocations Necessary for
DNOs to Meet Objectives• Analyzes the Rationale for Rate Increases• Explains Variations in Production Between DNOs and
Between Internal Regions or Districts• Continuous Improvement by Identifying Best Practices
and Communicating New Developments in the Industry• Designing and Establishing Defensible UVM Programs
CUSTOMER/PROPERTY OWNER SERVICE
LOWER COSTS
PREVENT FIRES DUE TO TREE-WIRE CONFLICTS
COMPLY WITH SPECIFIC LAWS
ELECTRIC RELIABILITY
SAFETY ISSUES - Prevent Accidents,Property Damage or Electrocutions Due to Tree-Powerline Proximity
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Six Reasons for Performing UVM, Ranked in Order of Im-portance
654321
UTILITY OBJECTIVES FOR PERFORMING UVM RANKED IN ORDER OF IMPORTANCE
1 2 3 4 5 6 7 9 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 27 29 30 34 37 38 39 40 41 42 43 45 46
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Percentage of Trees in Contact with Distribution Lines at Time of PruningAverage: 25% Companies with No Bar Reported 0%
Company Code
CAN THIS COMPANY CONTINUE TO MEET THEIR OBJECTIVES?
ANALYSIS OF VARIATION AT COMPANY Q
The Northern Territory Has the Lowest Customer Density The Northern Territory Has the Highest Cost per Managed KilometreLabour Hours per Managed Kilometre Follow Same Trends as CostThe Southern Territory Has the Lowest Cost per Kilometre
Company Q
: All T
errito
ries
South
ern Te
rrito
ry
Northern
Terri
tory
Easte
rn Te
rrito
ry9.5
10
10.5
11
11.5
12
12.5
13
13.5
11.68
11.04 10.92
12.96
Number of Customers per Managed Kilometre
Num
ber o
f Cus
tom
ers p
er C
ircui
t Kilo
met
er
Company Q
: All T
errito
ries
South
ern Te
rrito
ry
Northern
Terri
tory
Easte
rn Te
rrito
ry£0
£100
£200
£300
£400
£500
£600
£700
£558
£400
£617£580
Average for Total UVM Costs per System Kilometre for Distribution Without
Emergency Storm Costs for 2006 - 2008
Cost
per
Kilo
met
re
Company Q: All Territo-
ries
Southern Territory
Northern Territory
Eastern Territory
0
0.2
0.4
0.6
0.8
1
1.2
0.88
1.06
0.74
0.90
Average Labour Hours per Tree for 2006 - 2008
Labo
ur H
ours
per
Tre
eANALYSIS OF VARIATION AT COMPANY Q
Company Q
: All T
errito
ries
South
ern Te
rrito
ry
Northern
Terri
tory
Easte
rn Te
rrito
ry0
20
40
60
80
100
5743
87
63
Tree DensityTrees per Managed Kilometre
Tree
s pe
r M
anag
ed K
ilom
etre
The Northern Territory Has the Highest Tree DensityThe Northern Territory Has the Lowest Labour Hours per TreeThe Southern Territory Has the Highest Labour hours per TreeThe Southern Territory Has the Lowest Tree Density
DEFENSIBLE UVM PROGRAMS
“The PUD’s expert, Mr. Stephen Cieslewicz, …a national consultant on vegetation management practices for utility companies. …stated that the vast majority of companies, with the exception of some in California near fire areas, do not routinely inspect trees outside the clearance zone simply because the tree is tall enough to fall on the line.” [He further stated that], “ . . . the objective of line clearance inspections is to review the air space between the lines and along the lines for trees or limbs, and that unless the company knew of a problem tree, by direct observation or otherwise, it would have no duty to undertake tree inspection.” Connelly vs. PUD Summary Decisions
Defense of UVM Programs Using Evidence Derived from Benchmarking
• In 2006, only 31% of Surveyed Utilities Had a Hazard Tree Program• In 2009, 56% of the Utilities Had a Hazard Tree Program• In 2006, 29% Developed Specific Processes and Procedures for Hazard Tree
Evaluations• In 2006, 56% of Companies Had Pre-Inspection and Planning in their Contracts,
But Only 27% Hired Vendors Specifically for Pre-Inspection
HOW VENDORS CAN BENEFIT • Getting Safety Data Analyzed by Impartial Third
Party to Maintain Confidentiality• Safety Measurements Can Be Correlated with
UVM Program Attributes• Discovering Variables that Lead to Improvements
in Safety • Measuring and Understanding the Correlations
Between Methodology and Contract Structures
SAFETY STATISTICS
12 18 31 32 33 36 75 76 77 78 79 80 810
5
10
15
20
25
OSHA Recordable Incident Rates for Companies: 3 Year Average 2006 - 2008
Average: 6.77
Company Code
OSH
A R
ecor
dabl
e In
cide
nt R
ate
# of OSHA recordable injuries with or without lost time multiplied by 200,000 and divided by total of worker hours for the year
Only 13 Out of 25 Had Data for This QuestionQuestionable Responses
Comments by Participants About Safety Statistics:• Contractor unwilling to share safety stats• Vehicle accident rate & outages per crew hour• Contractor lost time incidents [only]• [Statistics] Not Available
TREE PRUNING AND TREE REMOVAL CONTRACT STRUCTURES
T&M53%U
nit Price22%
Lump Sum17%
Other8%
Contract Structure in 2006
Grid
Other
Circuit
Mile of Line
Tree
0% 10% 20% 30% 40% 50% 60%
Typical Unit of Work
Used for Contract Reviews and Could be Correlated to Discover Best Practices
HOW FIELD PERSONNEL MIGHT BENEFIT
• Provide Best Practices for Performing UVM• Benchmark Discoveries that Could Lead to
Improvement in Safety• Review New Technology and Equipment for
Performance in the Field
FIELD PERSONNEL ESSENTIAL TO PROCESS•Ultimately the People in the Field Should Be the Benefactors of a
More Efficient and Safer System that Strives TowardsConstant Improvement
•Field Personnel Are Essential in Collecting Data that ultimately becomes a part of Benchmarking
•Field Personnel Know More About Specific Conditions Present than Any Other Entity
•Field Personnel Have More Direct Contact with the Public than Any Other Entity
•Sharing Strategic Benchmark Knowledge Between Field Personnel, the DNOs, Regulators, and the Public Is a Strategy to Leadthe Industry in a Direction that Benefits All
HOW THE PUBLIC CAN BENEFIT• Statistics that Demonstrate the Importance
of UVM to Public Safety and Electrical Reliability
• Educate the Public with These Statistics To Aid in Acceptance of UVM
• Acceptance Could Lead to a Safer and More Reliable Electrical System
BEST PRACTICES FOR EDUCATING THE PUBLIC
• The Use of Focus Groups Has Decreased From 35% to 25% From 2002 to 2006
• 75% of Companies That Used Focus Groups Resulted in Changes to UVM Programs
• Changes Included (Comments by Benchmark Participants):• We were able to remove previously trimmed trees in towns and replace with
low growing species as well. • We changed our distribution notification process• Customer survey [of] recent tree trimming projects to get feedback on
contractor performance. Contractors are more PR engaged.• In the early years of directional pruning a focus group decision process
helped ease our established neighborhood’s [adjustment] to the new pruning method.
• Only One Company out of 48 Used Customer Focus Groups Routinely
Effective Practice That Is Underused in the Vegetation Management Industry
As One Benchmark Participant Said, “. . . our activities directly impact customers more than any other activity at our utility.”
CNUC’S ROLE
• CNUC’s Background and Use of Benchmarking in the UVM Industry
• Historical Data with Large Sample Size• Confidentiality Options• Survey Design • Survey Quality Management• Survey Analysis• On-Going Program –Continuous Improvement
CONFIDENTIALITY FOR DNOsCN Utility Consulting has practiced the following Confidentiality Rules in the past and current North American Benchmarks:• All participating companies have their name published with the Benchmark
reports and publications.• The information supplied by the participants is confidential and is
represented in the publications by a coded number.• Code number for each company is only supplied to that utility.• Companies can reveal themselves to another company and CNUC will act as
the intermediary.
Confidentiality Options for United Kingdom DNOs:• Open Benchmarking• Can divide DNOs into regions, like Company Q in earlier example, to increase
sample set. The regions would be randomly mixed to make DNOs identities more confidential.
• Mix DNOs with North American companies that compare well geographically, economically and have similar vegetation densities and customer densities. Unfortunately, the regulatory drivers will be different.
Confidentiality for Vendors :
Safety #1 Objective for UVM in North America• Need reliable statistics for correlations• Need standard definitions for safety metrics• Need access to data from each entity who performs UVM –DNO,
contractor and subcontractor• Accident data, safety education and safety Initiatives• Compare elements of different safety cultures
Confidential Collection of Data Options:• Confidential Data Collection (Preferable)• Double Blind Collection • Only Statistical Metrics Will Be Shown, No Raw Data • Separate Survey for Contractors on Safety
CONFIDENTIALITY FOR VENDORS
SURVEY DESIGN, QUALITY MANAGEMENT AND ANALYSIS
•Survey Design is Continually Changing to Meet the Needs of the Participants
•Benchmarking Participants Can Create, Revise, Edit or Comment on Survey Questions in Development
•Question Development Is a Function of Previous Survey Responses , Previous Analysis and Changes in the Industry
•Responses are Verified if Data Is Questionable – Survey Follow-ups
•Years of Experience Have Improved Survey Design and Ability to Recognize the Accuracy of Data
•Continually Discovering New Ways to Correlate Data for Analysis
•New Correlations Help in the Search for Best Practices and Adaptive Improvements
•Shorter In-Depth Surveys Keep Benchmarking an On-Going Process
WORK IS SOMETIMES A WALK IN THE WOODS