TXU Electric Delivery Restructure

Oncor Electric Delivery

Oncor Electric Delivery Restructure An Engineering & Construction Perspective

SWEDE ConferenceMay 11, 2007San Antonio

Mark Burt


The Overall Business Strategy

The overall strategy and Business Model looks at the business in three major segments:

• Asset Ownership

• Asset Management

• Asset Services/Operations


Asset Owner Function

Key Driver is Business Excellence

Focuses on overall business performance

Values business strategies that create opportunity & manage risk

Core competencies in forecasting & managing revenue & costs

Asset Owner expectations:• Return on assets• Earnings Growth

• Management of revenue/costs

• Responsiveness to stakeholders


Asset Manager Function

Key Driver is Asset Excellence

Strong focus on the performance of all Assets (financial, physical, human, etc.)

Core competencies in performance measurement, analysis, economic lifecycle & managing risk

Leverages information technology to manage accurate & timely information

The Asset Manager Drives:• Strategic asset planning

• Balancing the financial, technical, & sociopolitical components

• Holistic consideration of spending (Capital, O&M)

• Performance accountability


Asset Services Function

Key Driver is Service Excellence

Best-in-Class Implementation of Asset Plan(s)

Focuses on efficient & responsive service delivery

Values customer service & the quality of the work

Core competencies in work management & operating acumen

Asset Services drives:• Best in class processes

• Most effective use of resources

• Consumer/Customer Satisfaction


The Business Model

Asset Owner sets & directs Asset Manager to meet asset performance goals

Asset Manager develops asset plans for implementation by Asset Services

Asset Services implements Asset Plans, Policies, and Guidelines

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Key Accountabilities

Asset Owner

Develops overall business plans

Determines appropriate level of investment & spending for assets (capital & O&M)

Defines owner’s risk tolerance

Defines expected level of performance of

assets:

- Financial

- Technical (Reliability)

Asset Manager

Develops strategies, policies, & standards

Monitors implementation of

Asset Plans and key performance indicators

Asset Plans include:

- Asset expansion, augmentation and

replacement projects & programs.

- Materials, design, and construction standards

- Maintenance & operations guidelines

Asset Services

Implements Asset Plans according to predetermined

performance metrics

Designs & builds asset expansions and

replacements per standard

Maintains and operates assets in accordance with guidelines

Provides key feedback on asset condition & performance


Keys for Success

• Focus on accountabilities and key drivers for each business segment

• Continue process improvement and innovation in all aspects of business

• Performance excellence in each area of the enterprise

• Performance metrics to drive accountability & performance

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Organizational Alignment

Asset Manager• Regulatory• Rates• REP Relations• Community/Customer Relations• ERCOT Interface• Metering and Measurement

Services• Communications• Investment Strategy and Planning• Environmental Standards and

Policy• Electric Delivery HR• Asset Management & Engineering

Asset Services• T&D Operations• T&D Field Engineering• Storm/Trouble Response• Construction• Maintenance• Transformer Shop• Supply Chain and Sourcing• Fleet Management• Safety & Training• Work Management• Distribution Services • Environmental Lab and Waste Management

Asset Owner• Governmental Affairs• Business Operations• Economic Development• Business & Developer Management• Finance & Accounting

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• Engineering (T & D) – Engineering & Material Standards, Conceptual Designs, Policies & Procedures, Construction Standards, Performance Management

• System Operations – T&D Operating Centers

• System Planning – T&D Planning, System Expansion, System Protection & Coordination

• Asset Investment Strategy – Budgeting, Program/Project Funding, Plan Management

• Performance Management – T&D System Performance, Metric Analysis, Benchmarking

• Information Management – IT Systems Planning, Systems Applications

• Maintenance Strategy – Maintenance Program Strategy & Development

Oncor Electric DeliveryAsset Management & Engineering

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• Engineering (T & D) – Specific Project Design & Project Management, Easement & ROW Acquisition, Construction Coordination

• System Operations – Storm & Trouble Response, T&D Field Operations

• Construction (T&D) – Project & Maintenance Construction, Contractor Management, Work Management & Project Scheduling

• Customer Operations – Customer Outage & Informational Response

• Safety & Training – Safety Program Development & Training

• Fleet Management – Fleet Management Operations

• Materials Management – Supply Chain Operations & Materials Acquisition, Strategic Sourcing

Oncor Electric DeliveryAsset Services

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What’s Different And What’s Not

What's different:

Asset Management will be more focused on planning, strategy, policy

Asset Services will be more focused on superior Plan execution

What's not different:

Asset Services input and feedback on system planning, standards, plan development and other issues is just as critical as it ever has been

Clear, continuous, straightforward communication between groups is the key to shared success

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• New concept initiated for the performance of distribution field engineering and customer service activities “out of office”

• Concept based on the criteria to provide plan of service, design specific details, calculation of customer charges, and other project specifics (easement & vegetation management requirements, etc.) while “on location” with customer and potentially during first site visit

• Includes integration of new tools including non-graphic estimating tool and design programs into mobile computer system

• Future enhancements include mobile connectivity to System program to update databases and issue work requests & service orders

Engineering & Construction – What Changes?Field Engineering

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• Construction pricing developed to utilize “unit pricing” for performance of construction specific activities

• Goal is to “unitize” as much work as can effectively be captured with this type of pricing

• Expected that approximately 90% of all construction to be based on unit work

• Construction units are integrated into estimating systems such that system output includes quantity and type of construction units for that specific project (based on estimate by designer)

Engineering & Construction – What Changes?Construction Unit Pricing

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Engineering & Construction – What Changes?Construction Unit Pricing

• Example of construction unit is as follows:

Unit # Unit Description

CB2000

PRIMARY CABLE, SINGLE PHASE. INCLUDES: SET UP/BREAKDOWN, PULL ROPE, PULL CABLE IN CONDUIT, MAINTAIN MOISTURE SEAL AT CABLE ENDS AND CLEANUP. UNIT OF MEASURE = PER PULL (245' AVG PULL).

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• Audits of design & construction activities have been initiated to provide an “external” look at the quality of work

• Items include full range of design & construction activities

• Actions plans from audits to provide training and educate field personnel on design & construction standards

• Additional activity includes review of Standards of construction and material requirements for “real work” application

• Also includes review & revisions to design estimating units and associated material requirements driven by estimating system

Engineering & Construction – What Changes?Design & Construction Audits

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• Centralized development of maintenance programs to provide efficiencies on performance of work and also consistent approach to maintenance practices

• Maintenance programs developed and targeted to address specific items (facilities) or issues to derive maximum benefit from maintenance dollars

• Maintenance programs developed by Asset Manager organization with review of latest technology and practices available

• Field organizations charged with timely and cost-effective completion of specific maintenance work

• Both organizations judged by improvement in operating performance of distribution system

Engineering & Construction – What Changes?Program Development

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Engineering & Construction – What Changes?Program Development

A summary of the various types of maintenance programs are as follows:

• Visual & infrared inspection of feeders• Ground line pole inspection, treatment, reinforcement and

replacement• Underground cable testing & diagnostics• Cable rehabilitation (silicon injection)• Capital replacement programs (poles, crossarms, cable,

etc.)• Open-wire secondary replacement• Vegetation management activities

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• Performance Metrics developed to focus each organization on its specific activities and areas of control

• Metrics developed around design, construction, and operational items at a more “operational” level than before

• Metric owners and also data sources identified to provide ownership responsibility and consistency of data measurement & application

• Electronic “performance dashboard” developed to provide up-to-date picture of performance

• Timely reporting allows timely adjustment to developing trends as well as overall focus on organizational goals

Engineering & Construction – What Changes?Performance Metrics

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QUESTIONS?

Documents

TXU Electric Delivery Restructure