Development and Evolution of an Asset Management Organization

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1 Development and Evolution of an Asset Management Organization Art Kruppenbacher Manager Asset Management October 21, 2015

2 About the Iberdrola Group Headquartered in Spain 109-year history 28,000 employees in 40 countries Strategic focus on U.S., U.K., Spain and Latin America Leading wind producer with 6% of world s installed capacity

($Bn) 63 63 54 52 47 43 41 40 GDF Suez EDF Duke Enel IBE NextEra Dominion

3 Iberdrola today Iberdrola is one of the world s five largest utilities by market capitalization, with $47 Bn State-owned Top Utilities by market cap ($Bn) GDF Suez EDF Duke Enel IBE NextEra Dominion Southern First fully private European utility As of 22 Sept FX rate: 1.32 USD/Eur 3

4 About Iberdrola USA Network Operating Companies Central Maine Power New York State Electric & Gas Rochester Gas & Electric Customers served: 2.4 million Service area (square miles): 34,000 Employees: 4, Substations IUSA Operating Areas

Initiation of the IUSA AM Group July 2010 Goal assigned to create an asset management group Start an asset management organization Some guidance from Scottish Power OFGEM PAS 55 - IAM - IAM self

5 Initiation of the IUSA AM Group July 2010 Goal assigned to create an asset management group Start an asset management organization Some guidance from Scottish Power OFGEM PAS 55 - IAM - IAM self assessment tool Asset health scoring - One dimensional Staffed group (2 engineers / 2 analysts) Asset Management Policy Statement Initial training Reading Discussions with SP Training at Kinectrics IAM materials PAS 55 defines asset management as systematic and coordinated activities and practices through which an organization optimally and sustainably manages its assets and asset system, their associated performance, risks and expenditures over their life cycle for the purpose of achieving its organizational strategic plan. Strategic Asset Management: The Quest for Utility Excellence by Clive Deadman, 2010 From the IAM Draft Landscape Document 6/21/11 5

6 Initial Assessment Selections First health assessments completed in 2011 Breakers Only about 4,400 units / test data available / regular involvement Significant investment item in station Included an adjustment for criticality - Early definition of criticality - Used criticality as a multiplier against the health score Lessons learned IUSA Circuit Breaker Health Index by Age 11% IUSA Circuit Breaker Replacement Rating 10% % 29% Replace Consider for Replacement Monitor No Action Required No Action Required Population % Age HI = 1 HI = 2 HI = 3 HI = 4 HI = 5 6

replacement during 2008-2010 inspections 10.00% 9.00% 8.00% 7.00% percent 6.00% 5.00% 4.00% % Replaced 3.00% 2.00% 1.00% 0.

7 Initial Assessments First health assessments completed in 2011 Distribution poles lots of them (~1.4mil) and little data other than age / some treatment or species info Made some predictions of poles that would be found defective through inspection program % Identified for replacement during inspections 10.00% 9.00% 8.00% 7.00% percent 6.00% 5.00% 4.00% % Replaced 3.00% 2.00% 1.00% 0.00% <=10 >10& <=20 >20& <=30 >30& <=40 >40& <=50 >50& <=60 >60 Age of Poles NYSEG Distribution Poles by Construction Year 25,000 20,000 15,000 10,000 5, Total Pole Count

Other Early Assessments Next explored substation batteries and pad mounted switchgear Batteries Quick turnaround on replacements due to test results Run well up until indication of failures Move to

8 Other Early Assessments Next explored substation batteries and pad mounted switchgear Batteries Quick turnaround on replacements due to test results Run well up until indication of failures Move to nicad batteries / schedule driven by other considerations Pad mounted switchgear Most issues were corrosion related Some IR data but little other internal inspection data Maintainable for a period (painting) but not a high priority maintenance program Very few internal failures that impacted reliability 8

Helped with identification of parameters Set up data gathering and analysis

9 Substation Transformers This asset category chosen because S/S xfmrs are high dollar assets Decided to use a consultant to support our effort (Kinectrics) Helped with identification of parameters Set up data gathering and analysis algorithms Helped us understand assessment process Included an adjustment factor for risk 9

10 Transmission Assessments NY Transmission Assessment First time working with a composite asset A breaker vs. a line composed of poles / conductors / static / insulators / steel & wood construction types Sufficient understanding had been gained to scope and bid out the consultant work Data sources Inspections (foot, fast fly, CVI, IR) SME visited every region in the state to get input from field staff Data issues Difficulty linking FLOCS to sections Breaking up sections into relatively homogeneous asset groups Difficulty linking data because of different identification mechanisms (line/pole vs. FLOC) Developed a listing of lines sorted by health and criticality that was reviewed with the SME s. They concurred with a very few exceptions. The exceptions provided feedback on items for next assessment Additional Steps SME s were asked what interventions it would take to bring the line up to good or very good condition An estimate of the dollars required to address the higher risk lines that had been identified. 10

11 Transmission Parameters Used 11

12 Transmission Using in house resources, the CMP transmission system was assessed next Modeled closely after the NY transmission assessment Made a few minor adjustments to the structure of the assessment but tried to keep them as close as possible (operating company names removed) 12

13 UG Transmission Worked on RG&E UG transmission Data issues were a significant challenge Very little recent data on lines / limited opportunity for inspection Recent failures Paper Lead Cable 13

very sensitive to making condition assessments too age based Have worked to try different means of visualize and communicate

14 General Comments Have tried to only include age as a minor parameter unless it merits more or is one of the only pieces of data available Age is easy Level of correlation depends on asset type Depreciation link Regulators made it clear they are very sensitive to making condition assessments too age based Have worked to try different means of visualize and communicate the results to make them easily understandable Have updated the breaker and transformer assessments this year with more recent data 14

15 Substation Survey Mid level view What shape is that substation in? Reliability / Site Issues / Condition SME s from Substation Operations and Maintenance Engineering 15

trending Support for targeting of replacement activity Suspicion of additional defective or

16 Defective Equipment Tracking Getting additional details from field crews Comparing against outages attributed to defective equipment (Reliability Reporting Group) Looking for trending Support for targeting of replacement activity Suspicion of additional defective or degraded equipment issues buried in tree or storm outage cause codes. (strength vs. stress curve) 16

address the risk Connect risk with investment planning Encourage people

17 Risk Register Identify and assess risks to the T&D assets Associate risks with a risk owner Determine what mitigation plans are in place to address the risk Connect risk with investment planning Encourage people to think in terms of what risk is being addressed in justifying projects 17

18 Asset Tallies Reporting for governmental requirements Internal reporting Tracking the assumptions and making the responses repeatable For example; simple question how many substations? - Has a xfmr / switching / H frame mounted / taps off subtransmission / fence - Two yard stations - Company equipment in customer subs 18

19 Rate Cases Central Maine Power S/S xfmrs, breakers UG XLP distribution cable Old overhead copper conductor New York General description of AM approach Incorporation of longer term, data based condition assessments into decision making 19

people to think in terms of risks being mitigated by a given proposed project Prioritization

20 Linkage to Investment Prioritization Health x Criticality Risk Risk will evolve so it ties with resource commitments Pre and post investment risk profiles Cultural change needed to get people to think in terms of risks being mitigated by a given proposed project Prioritization of condition based projects vs. project initiated due to other factors such as planning constraints 20

21 Linkage to Investment Prioritization Challenging the organization to quantify how it sees criticality Scaling Weighting 21

22 Linkage to Investment Prioritization Sample Data 22

23 Future Challenges Further integration of asset management concepts into the functional organizations Developing better understanding of organizational technical risk appetite and linkage with programs and initiatives Calibration of health classifications so that the descriptions reflect the company s approach to management of the assets. How degraded does something get to be considered in very poor condition? What is acceptable? How does this align with the stated maintenance policies? How does this align with what maintenance is actually getting done? What is being budgeted for? Adjustment of criticality matrix to align with company s performance metrics. Ex. Reliability what is a big outage vs. a small outage? How do we compare transmission impacts vs. distribution? Most transmission has redundancy so customers may see at most a momentary interruption How does the criticality matrix allow for non wires assets such as fleet and IT? 23

Future Challenges Working on how to characterize the health of a distribution circuit Lots of pieces (not a single asset like a breaker) Different constructions and quality of workmanship Not a

24 Future Challenges Working on how to characterize the health of a distribution circuit Lots of pieces (not a single asset like a breaker) Different constructions and quality of workmanship Not a homogenous set of components like a transmission line would be All different ages and conditions Various repairs and modifications Data Line inspections IR Hammer tests Outage record Trimming records Some age information 24

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Value of Data Quality for Asset Management Decisions Western Energy Institute April 17-20, 2017

Value of Data Quality for Asset Management Decisions Western Energy Institute April 17-20, 2017 Introduction Value of Data Quality for AM Decisions .04 Good data is required to make good decisions Enterprise