Utilities are being pressured to maintain reliable, efficient and well supported asset infrastructures. Asset management systems do not meet core requirements of the new operating and economic environment in which utilities find themselves. Today’s asset management systems do not provide adequate tracking, change control and work safety management requirements, nor do they support the utility industry’s new asset valuation requirements. AMR Research has evaluated more than 20 major utilities’ asset management systems and discovered that there is no clear consensus on what core functions they must support.
Asset management has traditionally been a departmental responsibility, and the systems seldom interfaced with corporate systems. Consequently, core functionality necessary to manage utility company assets from a corporate perspective is often missing.
A recent Department of Energy (DOE) report faults transmission and distribution (T&D) asset valuations. The report concludes that these 30-plus-year-old infrastructures have exceeded their useful life and must be replaced. Failures that occurred in 1999 in New York City and Chicago were attributed in part to failure to manage the infrastructure assets and provide regulators with timely and accurate information about those assets. The study also concluded that software problems created or acerbated outages. The following problems were specifically mentioned:
- Dispatch software that caused inefficient use of energy resources;
- Load forecasting software that was unable to adjust for unusual weather conditions;
- Distribution management systems that did not adequately maintain real time and historical system condition records; and
- Load analysis software that did not predict voltage degradation during high loads.
Going forward, all asset management systems must support four core functions to overcome the problems highlighted in the DOE report. They are centralized asset tracking, centralized change control, tagout/lockout and market-based asset valuation. Centralized asset tracking is required to have an enterprise view of installed assets and data about those assets’ precise location. Centralized asset tracking helps ensure unit ratings are consistent with operating performance during periods of high loads and that maintenance information on best practices and equipment performance is shared across the enterprise. It also ensures accurate information for emergency replacement activities and accurate representation of installed infrastructure components.
Change control at the department level limits asset use optimization, maintenance and life-cycle management. Centralized change control ensures fast and efficient allocation of resources to adjust inventory and financial real time information to react to emergency situations. Centralized change control reduces delays in replacing failed critical equipment and improves emergency preparedness and management planning for distribution problems. It also provides more flexible substation configuration and protection and equipment configuration practices.
Lockout/tagout is a safety and compliance management function that ensures equipment is properly tagged-out of service to protect personnel and prevent damage to facilities and equipment. It helps ensure that planned distribution system upgrades are implemented on schedule. In addition, it enhances configuration control and improves job scheduling.
Asset replacement valuation is linked to the premise that energy generation, transmission and distribution infrastructure must be managed into perpetuity. Deregulation makes this premise inoperative. Going forward, asset valuation as well as decisions as to whether to replace or eliminate infrastructure must be based on market value. AMR Research is not satisfied that a single asset management system can fully support the ability to make asset maintenance and replacement decisions based on market valuation.
Utility companies must ensure that the core functions of centralized asset tracking, change control, lockout/ tagout and market based asset valuation are implemented in existing and purchased systems. They must have accurate and complete asset data for rate hearings and regulator and investment bank scrutiny.