developing a new technology roadmap for bandera electric cooperative, inc. presented by: brian d....

Developing a Developing a New Technology Roadmap New Technology Roadmap for Bandera Electric for Bandera Electric Cooperative, Inc.Cooperative, Inc.Presented by:

Brian D. Bartos, P.E.Manager, Engineering & Operations

Leslie W. Kramer, CPAManager, Finance & Administration

Evaluating the Business Case for Smart Grid InvestmentsOrlando, FloridaOctober 21, 2011

2Evaluating the Business Case for Smart Grid Investments -- October 21, 2011

San Antonio

AustinBEC

Bandera Electric Cooperative, Inc.Bandera Electric Cooperative, Inc. Located in the Texas Hill

Country in all or parts of seven counties: Bandera, Bexar, Kerr, Kendall, Medina, Real, and Uvalde

104 miles of transmission ~4,435 miles of distribution

~32,000 meters ~24,000 Members 203 MW peak demand

(winter) 140 MW peak demand

(summer) 550.7 million kWh sales in

2010(~90% residential)

2.8-3.0% growth rate Over $159.1 million in total

assets


Texas Hill CountryTexas Hill Country


BEC’s MissionBEC’s Mission

We Enhance Quality of LifeWe Enhance Quality of Life

BEC’s VisionBEC’s Vision

BEC will be the trusted energy BEC will be the trusted energy solutions provider of choice for solutions provider of choice for

its Member-Ownersits Member-Owners


A Cooperative Undergoing A Cooperative Undergoing Change…Change…

In 2008, Looking Ahead Strategically, In 2008, Looking Ahead Strategically, BEC saw…BEC saw… An industry in unprecedented changeAn industry in unprecedented change Technology, regulation, expectations, reliability, aging

assets, security issues, national economy faltering

High natural gas prices High natural gas prices higher electricity higher electricity

costscosts BEC was negotiating a Power Supply Agreement (outcome uncertain at that time)

Increasing awareness of conservation, Increasing awareness of conservation, distributed generationdistributed generation Reliance on increasing kWh sales was questioned

Workforce in transitionWorkforce in transition Combination of valuable, experienced aging employees; and,

inexperienced, but very talented, young employees


While we still believed strongly in While we still believed strongly in the Cooperative business model, we the Cooperative business model, we

concluded….concluded….

BEC’s processes and infrastructure BEC’s processes and infrastructure were suited for success in the 1970-were suited for success in the 1970-

80s and not for 2010 and beyond 80s and not for 2010 and beyond

So We Went to Work…So We Went to Work… We assessed our financial situationWe assessed our financial situation

We concluded that while our current financial situation was good, without changes it would deteriorate over the next 5 years

We examined our reliabilityWe examined our reliability We concluded we did not have many outages, but when we did,

they tended to last longer than they should

We assessed our Member service programsWe assessed our Member service programs We concluded our members could not do business with us anytime

it was convenient for them or in the manner they wanted

We examined all of key business processesWe examined all of key business processes We concluded that we could not improve efficiency &

effectiveness without reinventing most of these processes utilizing technology

We assessed our data structureWe assessed our data structure We concluded that we could not go forward without a major

overhaul of our IT infrastructure—This would be a deal breaker if not completed



After a comprehensive strategic & After a comprehensive strategic & tactical assessment of every facet tactical assessment of every facet of the Cooperative’s operations, of the Cooperative’s operations, we continued to come to the we continued to come to the same conclusion:same conclusion:

Our current way of doing Our current way of doing business would not sustain the business would not sustain the

Cooperative or serve our Cooperative or serve our Members satisfactorily for the Members satisfactorily for the

long-termlong-term


We Knew Strategically, We Needed We Knew Strategically, We Needed To…To…

Strengthen our financial positionStrengthen our financial position Successfully conclude our Power Supply Agreement

negotiations

Automate & streamline as many business processes as Automate & streamline as many business processes as possiblepossible Begin the move toward a paperless organization

Reorganize & realign our business structure for success in Reorganize & realign our business structure for success in the 2010s, not the 1980s.the 2010s, not the 1980s. Engage every employee -- Empower & hold accountable

Develop a Technology Plan – Contract it, if necessaryDevelop a Technology Plan – Contract it, if necessary Completely rebuild our IT infrastructure to create a data

warehouse concept

Integrate Operational Data & create Business IntelligenceIntegrate Operational Data & create Business Intelligence Data needed to be viewed as a Cooperative asset

Develop & Implement a SMART electric infrastructure Develop & Implement a SMART electric infrastructure – – BEC’s Smart Grid VisionBEC’s Smart Grid Vision


Desired Outcomes of ChangeDesired Outcomes of Change

Improve Member ServiceImprove Member Service Rededication and focus on serving

members Facilitates ability to offer new

services

Improve ReliabilityImprove Reliability Improved utilization of line

personnel Standardization of training and

practices

Improve Employee Improve Employee DevelopmentDevelopment Reward contribution not tenure Focus on excellence not

mediocrity Facilitate continued Succession

Planning Ensure employees are on the

“right seat on bus” Ensure shared vision with Board

by entire BEC leadership team

Streamline Streamline decision decision makingmaking

Consolidate Consolidate functional functional positionspositions

Improve BEC’s Improve BEC’s CultureCulture

Position BEC for Position BEC for future successfuture success

So What Did We Do?So What Did We Do?


BEC’s Smart Grid VisionBEC’s Smart Grid Vision----Improve Reliability & Enhance Member Improve Reliability & Enhance Member

Satisfaction--Satisfaction--


BEC Data Architecture - 2008BEC Data Architecture - 2008


To Accomplish Our Goals, We To Accomplish Our Goals, We Instructed…Instructed…


There are no “There are no “Sacred CowsSacred Cows””

Focus on results, not specifications or Focus on results, not specifications or computer specs computer specs

Technology is moving too fastTechnology is moving too fast

Don’t fall back on “add a body”Don’t fall back on “add a body”

Get rid of processes that are of no valueGet rid of processes that are of no value

Don’t just automate doing the “same dumb Don’t just automate doing the “same dumb things we do, but only faster with more of things we do, but only faster with more of them”them”

Encourage creativityEncourage creativity

BEC Data Architecture - TodayBEC Data Architecture - Today

© ElectSolve Technology Solutions & Services, Inc.


Data Mapping LayerData Mapping Layer

Centralized Operational Data RepositoryCentralized Operational Data Repository

Data Access LayerData Access Layer

CISCIS AMIAMI SCADASCADA OMSOMS EA/GISEA/GIS OtherOther

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MDM PortalMDM PortalInternal UsersMDM PortalMDM Portal

Internal UsersMDM DashboardsMDM Dashboards

Internal MgmtMDM DashboardsMDM Dashboards

Internal MgmtCustomer PortalCustomer Portal

Optional ApplicationCustomer PortalCustomer Portal

Optional Application

VEE

Data Management

System Tools Optional ApplicationsLARS LARS

Demand Response Demand Response Power Billing Power Billing

Optional ApplicationsLARS LARS

Demand Response Demand Response Power Billing Power Billing

Alerting– Scheduling.NET WSInterfaces


What has BEC Accomplished Since What has BEC Accomplished Since 2009…2009…

Completed change-out program to a smart meterCompleted change-out program to a smart meterRebuilt entire IT infrastructure to include a MDMS as the Rebuilt entire IT infrastructure to include a MDMS as the data warehousedata warehouseIntroduced new Member services such as Smart WatchIntroduced new Member services such as Smart WatchImplemented an enhancement to our CIS systemImplemented an enhancement to our CIS systemImplemented a new Outage Management SystemImplemented a new Outage Management SystemIntegrated new Automatic Vehicle Locating with OMSIntegrated new Automatic Vehicle Locating with OMSCompleted a complete GIS audit – GPS every asset locationCompleted a complete GIS audit – GPS every asset locationImplemented a new GIS/Enterprise Asset Management systemImplemented a new GIS/Enterprise Asset Management systemImplemented a new SCADA systemImplemented a new SCADA systemImplemented a new computerized staking systemImplemented a new computerized staking systemImplementing a new Mobile Workforce Management systemImplementing a new Mobile Workforce Management systemImplemented automatic service disconnectsImplemented automatic service disconnectsPiloting new fault locating / auto-sectionalizing systemPiloting new fault locating / auto-sectionalizing systemPiloting new voltage control systemsPiloting new voltage control systemsCommissioned a new 24x7 state-of-the-art System Control Commissioned a new 24x7 state-of-the-art System Control CenterCenter

We Went From This…We Went From This…


BEC Operations in 2005


BEC’s 24x7 System Control Center BEC’s 24x7 System Control Center - 2010- 2010


So What Have Been the Results…So What Have Been the Results… We have restructured and realigned the We have restructured and realigned the

CooperativeCooperative Our rates continue to be among the lowest against Our rates continue to be among the lowest against

our comparablesour comparables Our reliability has steadily been improving both in Our reliability has steadily been improving both in

terms of SAIFI and CAIDIterms of SAIFI and CAIDI Our safety record has dramatically improved Our safety record has dramatically improved

600,000 man-hours without a lost time accident600,000 man-hours without a lost time accident Our ACSI score is among the highest in the industryOur ACSI score is among the highest in the industry Our employee headcount has been reduced – yet Our employee headcount has been reduced – yet

added new functionsadded new functions Our O&M expenses have remained relatively flat Our O&M expenses have remained relatively flat

over the past 3 yearsover the past 3 years We have successfully renegotiated our Power We have successfully renegotiated our Power

Supply Agreement, Joint Use Agreements, most Supply Agreement, Joint Use Agreements, most contractor agreements and have received contractor agreements and have received regulatory approval on recovery of transmission regulatory approval on recovery of transmission cost of servicecost of service

Simple Facts - ResultsSimple Facts - Results Total FTE employees 89 Total FTE employees 89 had 97 in 2008 had 97 in 2008

38 or 43% less that 5 years Another 12 or 14% less than 10 years

Created three new departmentsCreated three new departments System Performance (8) Personnel (3) Billing & Banking (4)

Numerous reorganizations and are continuously Numerous reorganizations and are continuously changingchanging

Training, training and more training; primarily in Training, training and more training; primarily in technologytechnology

Benchmarking; by comparison and setting standardsBenchmarking; by comparison and setting standards Communication; board, employees and membersCommunication; board, employees and members Low interest rates = more capital credits back to Low interest rates = more capital credits back to

membersmembers Don’t sweat the small stuff – Focus on the $250,000+Don’t sweat the small stuff – Focus on the $250,000+


Future Plans – Strategic Human Future Plans – Strategic Human ResourcesResources


Identify strengths and target cultural Identify strengths and target cultural weaknessesweaknesses

Organizational alignment to map needed Organizational alignment to map needed employee and management skills to employee and management skills to existing and anticipated functionsexisting and anticipated functions

Sustain the Co-op through:Sustain the Co-op through: Employee development and leadership training Identifying and developing leaders Employee retention and recruitment planning

Identify and develop leadersIdentify and develop leaders Innovation = Ideas + Leadership

Controllable Expenses per MeterControllable Expenses per MeterHistorical & ProjectedHistorical & Projected


Average Consumers per EmployeeAverage Consumers per EmployeeHistorical & ProjectedHistorical & Projected


The Challenges of System The Challenges of System Integration…Integration…


Successful Smart Grid system integration requires that you…Demand Open systemsDemand Open systemsExpect difficulties in the Expect difficulties in the integrationintegrationHold vendors accountableHold vendors accountableExpect resistance to changeExpect resistance to changeUnderstand that these integrations Understand that these integrations are more complex than single are more complex than single technology integrationstechnology integrationsInstall & maintain new Install & maintain new sophisticated databasessophisticated databasesDemand cooperation among Demand cooperation among multiple departments to work multiple departments to work togethertogether

Some Lessons Learned, So Far…Some Lessons Learned, So Far…


Must have your Board of Directors and executive Must have your Board of Directors and executive management unwavering support.management unwavering support.

Must have a comprehensive Smart Grid vision & Must have a comprehensive Smart Grid vision & Technology Plan. Technology Plan. Do only what makes strategic business sense

Must review all business process – be Must review all business process – be unsympathetically prepared to jettison outdated unsympathetically prepared to jettison outdated processes that no longer bring enterprise valueprocesses that no longer bring enterprise value Make sure all sacred cows are looked at Seek benefits through advanced integration

Have a solid project management plan. Have a solid project management plan. Consistently evaluate progress – don’t be afraid Consistently evaluate progress – don’t be afraid to make changes;to make changes; Speed up, Slow down, or Exit Don’t neglect a change management process with your

employees

QUESTIONSQUESTIONS

Brian D. Bartos, [email protected]

Leslie W. Kramer, [email protected]

For more about Bandera Electric Cooperative, Inc.visit us at www.banderaelectric.com


developing a new technology roadmap for bandera electric cooperative, inc. presented by: brian d....

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