Data Collection guide

2015 Electric T&S Benchmarking

Updated versions of the Guidelines and recordings from the webinars are available at our website.

www.1qconsulting.com :: Benchmarking Community :: Data Entry Gateway

Introduction

Purpose of this document◼ The purpose of this Data Collection Guide is to provide guidance and

direction in how to complete the detailed questionnaire for the T&S benchmark study. It gives instructions regarding the types of answers expected, as well as errors to avoid. This Guide has been described as the “rules” for providing data.

◼ It provides the underlying process models around which the various sections of the questionnaire are organized, to help in understanding the purpose of some of the questions.

◼ The appropriate costs to include, and those to exclude, are highlighted, so that each member utility can provide accurate, comparable data for comparisons.

◼ A few key definitions are provided throughout the document. A comprehensive set of definitions is provided in a separate Glossary.

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Data Collection Guide Outline

The purpose of this Data Collection Guide is to describe the “rules” for providing data. The organization follows the Data Template outline: ◼ Statistics◼ Staffing/Outsourcing◼ Reliability◼ O&M (FERC)◼ ROW◼ Capital (FERC)◼ Capital Expenditures (Activity Based))◼ Capital Project & Portfolio Management◼ Transmission Line Projects◼ T&D Substation Projects◼ Lines Inventory◼ Safety

Injury Rate Motor Vehicle Accidents

◼ Strategy◼ Asset Management◼ Substation Practices ◼ Transmission Line Practices

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Working With the Process Model

◼ We have been evolving to our T&D process model over the last two years.   In 2014, we restructured much of the questionnaire to fit the model. For 2015, we have made some further modifications to flesh out the

model and to consolidate some areas based on learning from last year.◼ Benefits of a process view accrue where processes cut across multiple

functional silos.◼ By focusing attention on process steps across functions, we are able to:

Design questions that are specific enough to identify critical success factors in each process area.

Identify some operational metrics at the process/operating level

Develop System Strategy

Develop and Approve Asset Plans

Project/Portfolio Management

Expand System

A Process Model for Managing the T&S Business

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The T&S benchmarking survey is built around a process model of the T&S business. This model helps in analysis of the performance and practices of the member utilities, and gives a framework for deeper investigation.

Operate System

Sustain System

Indicates separate D, S, T components

Respond to Emergencies

Manage Interconnections

Statistics

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Statistics

Purpose of this section - Companies may need to identify new subject matter experts to furnish some of this data.◼ Statistics: to gather demographic information about the existing electric system

such as size, voltage, etc. This information is used in doing analysis of the results and for understanding the inherent advantages and limitations of the circumstances facing each utility.

◼ System Activity: to identify work load drivers associated with activity. There are a variety of questions designed to understand the amount of capital activity and that ask for capital unit additions. Other questions ask about selected O&M activities for the year.

◼ Changes for 2015: Several new questions have been added to collect information on existing [statistics] and new [system activity]: Distributed Generator penetration Current transmission interconnections Age profile of key asset components within Substations and Transmission. New/added Distributed Generator connections and new/added transmission

interconnections.

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Transmission versus Distribution

For purposes of this survey, we define distribution to be a voltage level of 45kV and below. The distinction is somewhat arbitrary, but picks a point between 69kV which is generally considered a transmission (or at least sub-transmission) level and 21kV which would generally be considered distribution.

It is unrealistic to ask utilities to redefine their cost or reliability reporting on the basis of these definitions. However, a utility that has very different definitions may want to restate these statistics to better compare their performance.

Distribution Voltage Classes

(Phase to Phase)◼ 5kV class (>1kV, <=9kV)◼ 15kV class (>9kV, <=15kV) ◼ 25kV class (>15kV to <=26kV) ◼ 35kV class (>26kV to <=36kV) ◼ 44kV class (>36kV to <=44kV)

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Transmission classes >=45kV

(Phase to Phase) <69kV class (>=45kV <69kV) 69kV class (>=69kV <100kV) 100kV class (>=100kV <200kV) 200kV Class (>=200kV <300kV) 300kV Class (>=300 kV <400 kV) 400kV and above

Substation Definitions

One way to determine whether a substation is Transmission vs. Distribution would be based upon usage.◼ For multi-purpose substations, you may either segregate costs or assign costs based

upon predominant use.

For purposes of this survey, we generally will recommend a low-side definition based upon a 45kV or below as a distribution substation.

It is unrealistic to ask utilities to redefine their cost or reliability reporting on the basis of these definitions. We will rely on each utility’s self-assigned definitions. However, a utility that has very different definitions may want to restate these statistics to better compare their performance.

Distribution Voltage Classes

(Phase to Phase)◼ 5kV class (>1kV, <=9kV)◼ 15kV class (>9kV, <=15kV) ◼ 25kV class (>15kV to <=26kV) ◼ 35kV class (>26kV to <=36kV) ◼ 44kV class (>36kV to <=44kV)

9Note: We will have transmission-only and combination T&D entities participating in this survey. Their voltage levels will not necessarily line up with the above definitions.

Transmission classes >=45kV

(Phase to Phase) <69kV class (>=45kV <69kV) 69kV class (>=69kV <100kV) 100kV class (>=100kV <200kV) 200kV Class (>=200kV <300kV) 300kV Class (>=300 kV <400 kV) 400kV and above

Substation Definitions (cont.)

◼ Because our benchmarking is done at a relatively high level, we want to include transmission substations that have auto-transformers, but not AC/DC converter stations. While these components aren’t all directly measurable, nor are the MVA

calculations comparable, we want to recognize the existence of these units of property to make the benchmarking as comparable as possible.

◼ Customer-owned or dedicated substations are an issue in making comparisons. If customers own and maintain their own stations, the reporting option for this

questionnaire is clear – please exclude both the O&M costs and the capacity for those stations..

In the event that you maintain one or more customer-owned stations, the answer may be different. The preferred approach to responding to this portion of the questionnaire is to exclude the costs of the customer-owned stations, and exclude the capacity as well. However, if you cannot practically exclude them, then be sure that both the O&M costs and the capacity are included in all your answers.

◼ Small, pole-mounted or pad-mounted mini-substations (e.g. transformers, protective devices and a switch) should not be counted as distribution substations.

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Substation Transformer Nameplate rating

◼ Generally speaking, we want to measure transformers by MVA rating at normal operating conditions.

◼ Since utilities have different operating conditions and different manufacturers have different ratings, we will rely on each utility to report their own conditions. Use the number you report in FERC Form 1.

◼ We recognize that autotransformers may have a different set of conditions and that the comparison is imprecise, however, we think this is a better solution than leaving them out entirely.

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Staffing

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Staffing

Staffing FTEs:◼ Count all company employees assigned full time to a function, including

direct labor, supervision, administrative support and technical support◼ Also count contract employees who work in company offices and/or on

company facilities and who are directly supervised by company employees (see Glossary definition for “Contract FTE”)

◼ Add in partial counts for part-time employees (seasonal employees or employees who work less than 40 hours per week) and for full-time employees who split their time across different functions When calculating FTE value use 2080 hours per year as the denominator. When counting FTEs we don’t expect companies to get total number of

employee hours and divide that by 2080. We do expect companies to look at changes in head count throughout the year and use that information to adjust final headcount to get an estimate of actual FTEs. So a person working ½ the year is only ½ an FTE. A person working 20/hrs per week is ½ FTE.

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Staffing

◼ We do want you to adjust somewhat for overtime, if you have particularly high levels of overtime. So if you have a group of people working a lot of overtime (for your company, not as foreign crews for someone else) please factor that in because if they weren’t working overtime you’d have another FTE on staff.

◼ 50% guideline: Include a person in a function if they spend at least 50% of their time on that function. If a person divides their time so that they don't spend 50% on any single function, count them in the “Other” category.

◼ Engineering should include engineering and design staffing.◼ FTEs to exclude from staffing:

Meter Shop; Meter technicians; Meter Reading Distribution Shop (Transformer Repairs, Rubber Goods Testing, Tool

Maintenance, etc.) Storerooms/Warehouse Fleet Land Management Street Light Maintenance (street light costs are excluded) Environmental Project Management

◼ Combined electric & gas distribution companies should prorate staffing in any of the functional areas that support both electric and gas, and exclude the gas portion in all four of the FTE count questions.  

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Staffing

Changes for 2015: ◼ The survey asks to include “Contract FTE” (non-company employees who

work on company property and who are supervised by company employees) as well as a company’s own full time employees in the functional staffing counts.

◼ In question SO20, IT staffing that is focused on T&S system support should be included in “Other” in the Technical Support column and noted as such in the text response to question SO21.

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Reliability

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Transmission Line Reliability

Statistics◼ In general, for transmission lines, we are interested in availability, as

impacted by sustained outages that may or may not have an impact on an end-use customer.

◼ We ask for raw data on outages by voltage class. We have aligned the definitions with TADS for all voltages (even though TADS only applies to 200kV and above) Cause codes for all voltages based upon TADS Cause code definitions are in the glossary, or at

http://www.nerc.com/docs/pc/tadswg/Appendix%207%2020101202a%20clean.pdf

◼ For Transmission reliability the term “outage” refers to a ‘component’ or line outage (most of which may not have any customer impact).  For instance, you might have had 10 transmission component outages last year but only 3 of them resulted in an outage to a customer.

◼ See the glossary for definitions of “automatic” and “non-automatic” outages

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Transmission Line Reliability

TADS Measures◼ The TADS framework (first used in 2008) introduced some slightly new and

different terminology, and has evolved some over the past couple of years. Elements are defined to be transmission circuits of 200kV and above, and

include AC/DC lines. For purposes of this survey, we are only interested in AC lines. Automatic outages replace the more common unplanned outages, and have

a few distinctions. TADS metric definitions can be found at

http://www.nerc.com/docs/pc/tadstf/TADS_Phase_II_Final_Report_091108.pdf

Note: if you have no exclusions, be sure to fill out both before and after exclusions sections – your answers will be the same in both sections.

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Substation Reliability

◼ The impact of substation components on system reliability (particularly if it results in a customer interruption) is of interest. These statistics include SAIDI and SAIFI. The Substation SAIDI and SAIFI here are from causes that originate “within the substation fence”. An example of this follows: A cable failure outside the substation occurs, the protecting feeder

breaker fails to trip due to a relay mis-operation, and the back-up device trips out the substation transformer, causing an interruption to the original feeder with the cable fault, as well as 3 additional feeders on the same transformer. The outage of the feeder with the cable failure is not counted in “substation” (its cause is “distribution equipment failure”), but the outage of the other 3 feeders is counted in “substation”.

◼ The impacts of substation components on transmission line reliability measures are all included in the Transmission Reliability section.

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Financials

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Financial Section Overview

◼ The Financial section of the questionnaire asks for the costs of running the business, separated into Capital investment and O&M expenses.

◼ There are two cost reporting systems: FERC (“Capital tab”): The overall cost model is based on the FERC system

of accounts, with a number of adjustments designed to make the cost reporting more consistent between the companies. Specific questions within the questionnaire ask for the data reported in individual FERC accounts, and then subsequent questions ask for the information required to make the desired adjustments.

ACTIVITY-BASED (“Capital Ex” tab): The guiding principle of the activity cost model is to capture the expenditures associated with the year in which they were made, regardless of when they were actually reported to FERC. The activities also are more aligned with typical budgetary categories, such as Growth/ New Load (capital) and ROW/Vegetation Management (O&M). While budget categories differ among utilities, we have developed a set of budget categories that most companies have been able to use.

◼ The Financial section also covers assets, depreciation and construction work In progress (CWIP).

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Substations

General Plant FERC Costs

Transmission

Capital

Trans Lines

Exclusions

Trans Substations

O&M

Trans Lines

Exclusions

Trans Substations

Distribution

Capital

Dist Lines

Exclusions

Dist Substations

O&M

Dist Lines

Exclusions

Dist Substations

A&G

FERC: The ADJUSTED FERC COST MODEL

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Certain costs are excluded to provide fair comparisons that focus on operations (see next pages)

Substation costs need to be allocated from Transmission and Distribution accounts

FERC Exclusions: general

The goal of the exclusions is to provide a fairer comparison of T&S operational performance, by excluding certain costs that relate to demographic differences not under the control of T&S management. ◼ A&G costs: exclude costs typically reported as A&G (e.g. pensions and benefits) from

their O&M data.◼ General plant costs: exclude costs typically reported as General Plant (e.g.

IT/communications infrastructure, capital cost of buildings) from their T&S Capital data.◼ Land acquisition costs or rents/leases: Land acquisition costs vary greatly by region

and also can occur at very different points in time, based upon land policies. Similarly, rents/leases are an alternative to ownership and have some of the same shortcomings from a benchmarking perspective.

◼ Extraordinary items: These can run the gamut and should be identified individually. To be considered "extraordinary", the O&M cost of the event or transaction should be more than 10% of budgeted T&S O&M expense less exclusions already noted. Major storms should be excluded as an extraordinary item if the total O&M spent on

the restoration (all O&M accounts combined) meets the above criteria. This is to account for the fact that some utilities utilize an “insurance reserve”, so that extraordinary storm expenses are charged to the “reserve” account, and are not “O&M” expenses. If your utility uses an “insurance reserve” account, you do not need to make any adjustment.

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FERC Exclusions: specific

Substation ◼ If you have O&M expenses for which you are reimbursed, such as

maintenance done for customers, do not include them.

Transmission◼ Wheeling expenses: Generally, the transmission metrics are geared to

operational performance of the infrastructure. So while an argument could be made that wheeling is a substitute for system ownership, it may also be simply an economic arrangement to purchase incremental or low-cost power.

◼ Regional Transmission Operators (ISO and RTO): These costs vary between regions and many utilities don’t even incur these costs, so they should be excluded.

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O&M (FERC)

◼ FERC O&M accounts tend to be more activity-oriented, but do not necessarily track important categories (e.g. ROW/vegetation management)

◼ While capital expenditures are split among several different processes from the overall process model, O&M expenses are almost entirely associated with sustaining or operating the network.

◼ Unlike Capital, we expect the O&M Expense should equal the amount reported as “Adjusted FERC”

◼ Allocations …..

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ROW

◼ As noted previously, FERC O&M accounts do not necessarily track important categories including, e.g., ROW/vegetation management costs which typically represent a very significant annual operating expense.

◼ Cost information related to both O&M and capital ROW management are collected separately in the data template.

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Capital (FERC)

Each portion of the financial section asks for the key FERC accounts and then asks for the information necessary to make the adjustments.

FERC capital costs are net of CIAC..

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FERC: CIAC

2. Electric Plant To Be Recorded at Cost.

A. All amounts included in the accounts for electric plant acquired as an operating unit or system, except as otherwise provided in the texts of the intangible plant accounts, shall be stated at the cost incurred by the person who first devoted the property to utility service. All other electric plant shall be included in the accounts at the cost incurred by the utility, except for property acquired by lease which qualifies as capital lease property under General Instruction 19. Criteria for Classifying Leases, and is recorded in Account 101.1, Property under Capital Leases, or Account 120.6, Nuclear Fuel under Capital Leases. Where the term cost is used in the detailed plant accounts, it shall have the meaning stated in this paragraph.

B. When the consideration given for property is other than cash, the value of such consideration shall be determined on a cash basis (see, however, definition 9). In the entry recording such transition, the actual consideration shall be described with sufficient particularity to identify it. The utility shall be prepared to furnish the Commission the particulars of its determination of the cash value of the consideration if other than cash.

C. When property is purchased under a plan involving deferred payments, no charge shall be made to the electric plant accounts for interest, insurance, or other expenditures occasioned solely by such form of payment.

D. The electric plant accounts shall not include the cost or other value of electric plant contributed to the company. Contributions in the form of money or its equivalent toward the construction of electric plant shall be credited to accounts charged with the cost of such construction. Plant constructed from contributions of cash or its equivalent shall be shown as a reduction to gross plant constructed when assembling cost data in work orders for posting to plant ledgers of accounts. The accumulated gross costs of plant accumulated in the work order shall be recorded as a debit in the plant ledger of accounts along with the related amount of contributions concurrently be recorded as a credit.

The actual expenditures, on the other hand, may or may not be net, depending on how the company accounting works.  When the company issues an invoice for the contribution, it should credit to the plant accounts when the invoice is issued, whether or not the invoice is ever collected, so the actual expenditures should also be net, unless they don ’t issue the invoice timely.  I believe that the way most companies do it, and the prudent business practice, would be to issue the invoice, and maybe collect it, before construction begins.

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Capital Expenditures (Activity Based)

While FERC has the benefit of being a uniform system of accounts, there are several important shortcomings:◼ FERC capital spending lags behind actual spending and costs for large

projects go into a Construction Work in Progress (CWIP) account and are not transferred until the assets are placed into service, sometimes a several year lag.

◼ For those reasons, a simplified Activity-Based Costing system was developed to get current year spending by activity. The diagram on the following page depicts the Activity-Based approach.

For reporting purposes:◼ The total capital activity is intended to be the amount actually spent during

the year, not necessarily what was reported to FERC (and not necessarily the “adjusted FERC capital” reported in this survey); we believe that this eliminates some of the perturbations caused by changes in CWIP accounts.

◼ FERC capital accounts generally follow plant accounts and units of property (e.g. poles, towers, and fixtures) – not the typical reasons why utilities spend (e.g. new business)

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Transmission And Substation Projects

Information related to recently constructed transmission lines provides some comparisons and insights relative to a company’s processes and costs.

The project information should be recorded for the year in which the project is considered to be complete and is in-service. Complete projects are those that are functional electrically and that effectively fulfill the planned system enhancement.

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Safety

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Safety Reporting

We’re asking for your company’s safety statistics for both injuries and motor vehicle accidents. Most of the statistics come directly from your OSHA form and definitions can be found at www.OSHA.gov.

There are, however, some safety reporting issues:◼ Vehicular accidents – Most utilities report all reportable accidents whether

preventable or not and regardless of fault. In general, we want utilities to include personal vehicles when used on company business.

◼ There are some differences in how utilities treat limited duty work which will not be resolved as part of this benchmarking.

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Safety: Where the Data comes from

Statistic Columns Used

Recordable Incidence Rate: Sum (G, H, I, J)

Non-Fatal “Incidence” Rate: Sum (H, I, J)

DART rate Sum (H & I)

Lost Time Severity Rate: K

Lost Work Day Case Rate aka (Lost Time Case Rate or Lost Time Incidence Rate)

Sum (G, H)

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All of the data should come from the OSHA form. We need total hours worked by all employees for normalization and the total numbers of each type of case, as well as the days away and days restricted totals.

Strategy, Asset Management, Capital Project and Portfolio Management and

Practice Sections

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Strategy, Asset Management, Capital Project and Portfolio Management and Practice Sections

Guidelines for Responses:In the strategy, asset management, capital project/portfolio management and practice sections of the questionnaire there are many open-ended questions in which we are looking for insights about how you operate. Your answers should be:◼ Brief and succinct – so that the reader will not need to read through an extensive

volume of material to understand the message; ◼ Anonymous: don't mention your company name or other company identifying

information (e,g. city or state names) in your replies◼ Complete enough to be understood in terms of the practice you are describing◼ Practically speaking, this translates to 2-3 sentence answers to most of the text

questionsFor our purposes:◼ Practices are current activities, programs or processes that have been around for a

while. For these, sufficient time has passed in which to assess their success or failure. We mostly ask about practices that have proven successful in accomplishing a specific goal.

◼ Initiatives are new activities, programs or processes that have been enacted recently with the goal of improvement. These are so recent (1 to 2 years) that insufficient time has passed in which to assess their success.

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T&D Strategy, Asset Management and Capital Portfolio & Project Management

◼ Transmission & Substation Strategy (SG): This is a new section that consolidates strategy questions that were presented in the Substation Practices (SP) and Transmission Practices (TP) sections.

◼ Asset Management (AM): This is a new section that consolidates the asset management questions that were presented in the Substation Practices (SP) and Transmission Practices (TP) sections. A few existing questions have been deleted and several identical questions that were in the previous separate practice sections about asset management roles and responsibilities, concerns, software tools and use of life cycle costing concepts have been consolidated into a smaller set of questions that encompass distribution, substations and transmission. Also, check-off lists have been added to several of the questions to make it easier for the subject matter experts to quickly respond.

◼ Capital Projects and Portfolio Management (CP): Questions are included about the capital work plan development phase. Several questions are included in the work plan execution phase which request information on KPI’s used to measure overall project and program success.

 

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Transmission and Substation Practice Sections

◼ Substation Practices (SP): Answering questions in this section might require a different company subject matter expert. Note in particular the series of questions presented in the “Serve New and Capacity Additions” and “Construction Contractor Performance Management” subsections.

◼ Transmission Practices (TP): Answering questions in this section might also require a different company subject matter expert. Note in particular the series of questions presented in the “Serve New and Capacity Additions”, “Construction Contractor Performance Management” and “Customer Interconnection Practices” subsections. Questions have been included covering the Transmission Operations Center (TOC).

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Substation Practices

This section is organized around the following topics:

Expand System: ◼ Planning/Engineering/Design – Improvement initiatives and changes to

standards ◼ Serve New / Capacity Requirements◼ Construction Contractor Management

Sustain System:◼ Maintain the System:

Field Maintenance Activities – Initiatives underway, degree of crew specialization, work management systems, inspections, impact of deferred maintenance, initiatives to reduce outages

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Transmission Line Practices

This section is organized around the following topics:New Interconnections/Customers:◼ Customer Interconnection Practices

Expand System:◼ Planning/Engineering/Design: Improvement initiatives and changes to

standards◼ Construction Practices◼ Contractor Productivity – Challenges, measures and initiatives

Sustain System:◼ Maintenance – Regulatory drivers, inspections, programs◼ Right of Way – Growth inhibitors, ROW uses, challenges and practices.◼ Work Management Systems – WMS vendor and efforts to improve

usefulnessOperate System:◼ Transmission Operations Center (TOC) – Changes and challenges.

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About 1QC

Satellite Offices

Debi CookDebi.Cook@1QConsulting.com760-272-7277

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Thank You for Your Input and Participation!