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8/6/2019 Presentation Final Plantech RevFinal
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Presented by Dr.Himadri Banerji Ex CEO inPresented by Dr.Himadri Banerji Ex CEO inReliance Energy and Leader GLG at theReliance Energy and Leader GLG at thePlanTech 2010 Mumbai, 4th and 5th FebPlanTech 2010 Mumbai, 4th and 5th Feb
11
Performance-Based Regulation in Electric Utilities: Reliability Improvement
Using Integrated Asset Management Standard PAS 55.
Dr. Himadri Banerji
PlanTech 2010
Mumbai
4th and 5th February
8/6/2019 Presentation Final Plantech RevFinal
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Presented by Dr.Himadri Banerji Ex CEO inPresented by Dr.Himadri Banerji Ex CEO inReliance Energy and Leader GLG at theReliance Energy and Leader GLG at thePlanTech 2010 Mumbai, 4th and 5th FebPlanTech 2010 Mumbai, 4th and 5th Feb
22
Presentation AgendaPresentation Agenda
Restructuring of Electricity IndustryRestructuring of Electricity Industry
What is Performance Based RegulationsWhat is Performance Based RegulationsWhy PBR:Why PBR: Moving away from Rate CaseMoving away from Rate Case
Major Structural Options for PBR,Major Structural Options for PBR, Targeted PBRTargeted PBR
Service Standards, Reliability , Penalties and Cost of ENSService Standards, Reliability , Penalties and Cost of ENS
Asset Management Defined Asset Management Defined
PAS 55 Asset Management BS StandardPAS 55 Asset Management BS Standard
Integrated SystemIntegrated System
Scope and InterfacesScope and Interfaces
Organizational Strategic PlanOrganizational Strategic Plan
Management System StructureManagement System Structure Asset Risk Analysis and Control Asset Risk Analysis and Control
Design and Development PhaseDesign and Development Phase
Operational Phase: Probabilistic Risk Assessment Operational Phase: Probabilistic Risk Assessment
Thank YouThank You
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Presented by Dr.Himadri Banerji Ex CEO inPresented by Dr.Himadri Banerji Ex CEO inReliance Energy and Leader GLG at theReliance Energy and Leader GLG at thePlanTech 2010 Mumbai, 4th and 5th FebPlanTech 2010 Mumbai, 4th and 5th Feb
33
Targeted PBR and Targeted Incentives: ServiceTargeted PBR and Targeted Incentives: ServiceStandardsStandards
If distribution were a competitive market, providers wouldcompete on the basis of price, service quality, and customerservice.
But there is no meaningful competition for distribution services.
Consequently, the quest for lower costs and higher profits willdrive utilities to cut service quality and customer service.
Setting standards with built-in incentives (rewards and penalties)will encourage utilities to find acceptable lower cost ways toprovide a specified level of service.
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Presented by Dr.Himadri Banerji Ex CEO inPresented by Dr.Himadri Banerji Ex CEO inReliance Energy and Leader GLG at theReliance Energy and Leader GLG at thePlanTech 2010 Mumbai, 4th and 5th FebPlanTech 2010 Mumbai, 4th and 5th Feb
44
Background: Electricity Industry RestructuringBackground: Electricity Industry Restructuring
The restructuring and liberalization of electricity industry worldwide haveincreased the incentives for a cost effective and efficient use of availableassets in all segments of the power industry.
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Presented by Dr.Himadri Banerji Ex CEO inPresented by Dr.Himadri Banerji Ex CEO inReliance Energy and Leader GLG at theReliance Energy and Leader GLG at thePlanTech 2010 Mumbai, 4th and 5th FebPlanTech 2010 Mumbai, 4th and 5th Feb
55
What is performanceWhat is performance--based regulationbased regulation
The term performance-based regulation is the most recent in a long lineof vocabulary used to describe regulatory approaches that rely on financialincentives and disincentives to induce desired behavior by a regulated firm.
The desired behaviors, or outcomes, are generally 1) lower costs, 2)improved service, and 3) more rational allocation of risks and rewards.
The renewed interest in PBR largely reflects dissatisfaction with cost-of-service or rate-of-return regulation, especially the perception that cost-of-service regulation stifles utility innovation and causes utility managers to bemore responsive to regulators than to customers.
PBR may also be pursued by utilities seeking higher profits, moreflexibility, or less risk.
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Presented by Dr.Himadri Banerji Ex CEO inPresented by Dr.Himadri Banerji Ex CEO inReliance Energy and Leader GLG at theReliance Energy and Leader GLG at thePlanTech 2010 Mumbai, 4th and 5th FebPlanTech 2010 Mumbai, 4th and 5th Feb
66
PBR Structures : Price and Revenue CapsPBR Structures : Price and Revenue Caps
The major structural options are price caps and revenue caps.
Both options create the same incentives to cut costs, butrevenue caps create much better incentives for investment indistributed resources.
Also, revenue and price caps merge as rate design fordistribution utilitiesmoves toward fixed monthly fees.
Revenue caps provide an opportunity to achieve many of the
purposes of fixed charge rate designs while avoiding thesubstantial economic and public acceptance problemsassociated with such rate designs.
However Most regulators start with Target Based PBR.
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Presented by Dr.Himadri Banerji Ex CEO inPresented by Dr.Himadri Banerji Ex CEO inReliance Energy and Leader GLG at theReliance Energy and Leader GLG at thePlanTech 2010 Mumbai, 4th and 5th FebPlanTech 2010 Mumbai, 4th and 5th Feb
77
Service Standards: Service ReliabilityService Standards: Service Reliability
1. Reliability. This includes a long list of specific standards including the extentand duration of outages, service restoration time, frequency of planned outages,
performance of worst circuits, and voltage variations.
2. Call Center Performance. This addresses how quickly and how fully calls to
the utility are answered and how well consumer questions or complaints are
resolved.
3. Field Service. This covers a wide range of situations in which utility employees
make visits to the customers location. Standards may include how well
appointments are kept and time to connect new service, test meters, and replace
street lights.
4. Billing and Complaints. This includes billing accuracy, metering accuracy,
complaint rates to the utility and regulator, overall customer satisfaction, and
power quality complaints.
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Presented by Dr.Himadri Banerji Ex CEO inPresented by Dr.Himadri Banerji Ex CEO inReliance Energy and Leader GLG at theReliance Energy and Leader GLG at thePlanTech 2010 Mumbai, 4th and 5th FebPlanTech 2010 Mumbai, 4th and 5th Feb
88
It is important to make the penalty large enough that it will receive andkeep management¶s attention PBR mechanisms may include servicequality penalties of no less than one percent (100 basis points) of equity.The calculations are based on cost of ENS or energy not served.
Service Reliability Cost of ENS and Penalties
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99
Service Reliability Measures Top US Utilities
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1010
�The financial services sector has long used the phrase to describe themanagement of a stock or investment portfolio - trying to find the best mix of capital
security/growth and interest rates/yield.
2. Main board (usually financial) directors and some city analysts use the term in
relation to mergers and acquisitions- buying and selling companies, re-organizing
them, divesting low value elements and trying to raise capital value and/or yields.
3. Equipment maintainers have also adopted the name (particularly in the US) in order
to gain greater credibility and visibility for their activities. As µmaintenance¶ has for so
long been treated as a necessary evil, and low on the budgeting priority list, whereas
µAsset Management¶ sounds more professional and value-adding?
Maintenance has an important part to play, but it¶s really only one of the variables in
managing assets (others include, for example, choosing the right assets in the first
place, using them appropriately, or trading short-term performance against long-term
sustainability etc).
Asset Management Myths and Realities
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Presented by Dr.Himadri Banerji Ex CEO inPresented by Dr.Himadri Banerji Ex CEO inReliance Energy and Leader GLG at theReliance Energy and Leader GLG at thePlanTech 2010 Mumbai, 4th and 5th FebPlanTech 2010 Mumbai, 4th and 5th Feb
1111
Asset Management Myths and Realities Asset Management Myths and Realities
4. In line with the maintainers seeking greater corporate credibility, the large
number of software vendors selling asset information management systems
(including asset registers, GIS systems, work management, history gathering,
materials control & cost reporting etc) have often relabeled their products as
³Enterprise Asset Management Systems´. This has given rise to a misconception
that Asset Management is an technology initiative to sort out the data and IT
infrastructure (often leading to great expense and the µtail wagging the dog¶).
5. If we dig deeper into the information systems world, we even find ³Asset
Management´ interpreted as simply the bar-code labeling of computers and
peripherals, and the tracking of their location/status (i.e. µasset tracking¶).
6. Finally, a few critical infrastructure or plant owners and operators haveadopted the term µAsset Management¶ to describe their core role in life - both
caring for, and making best sustained use of, physical plant, infrastructure and its
associated facilities. T his is the interpretation that the new British Standard, PAS-
55 is focused upon, and is the subject of this presentation.
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Why Asset Management? Asset Management is a business
discipline
X management of technicalinfrastructure
Where is the documentation
of this device?
Who is r esponsible
for this device?What is the
utilization of
this device?Who is the owner
of this device?
What is the
status of
this device?
Is there
exper iencewith
this device?
What is the total
cost of this device?
Machinery
Pipes
Operator
Equipment
Tools
Buildings
ASSETS
Tangibles that are used in theoperation of a drinking water orwastewater utility
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Executive Summary
asset perspective management information system
� Asset management deal with the left side of the
balance sheet.� Famous quotation about balance sheet on the
LEFT side there is nothing RIGHT; on the RIGHT
side there is nothing LEFT
� Asset management begins from selection, their
selection, maintenance, inspection and renewal
of the particular asset.
� It plays a key role in determining the operational
performance and profitability of industries that
operate assets as part of their core business.
� This emerging professional discipline deals with
the optimal management of physical asset
systems and their life cycles. It represents a
cross-disciplinary collaboration to achieve bestnet, sustained value-for-money in the selection,
design/ acquisition, operations, maintenance
and renewal/ disposal of physical infrastructure
and equipment.
� MIS is the big picture of information system flow,while asset management is part of the system
that monitor corporate assets; covering several
areas
1. Policy Development
2. Strategy Development
3. Asset Management Planning
4. Implement Asset Management Plans5. Asset Management Capability Development
6. Risk Management and Performance
Improvement
7. Asset Knowledge Management
� A well-defined Standard of service (SoS) is the
foundation of Infrastructure Asset Management.
The SoS states, in objective and measurable
terms, how an asset will perform, including a
suitable minimum condition grade in line with
the impact of asset failure.
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5 core questions of Asset Management
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1515
For the purposes of this PAS, asset management is defined in 3.2
Systematic and Coordinated Activities and Practices
Through which an organization
optimally and sustainably manages it¶s
1.Assets and asset systems,2.Asset associated performance,
3.Risks4.Expenditures over their life cycles
for the purpose of achieving itsorganizational strategic plan
Definition of Asset ManagementDefinition of Asset Management
PAS 55 BS StandardPAS 55 BS Standard
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Characteristics of P AS 55 Asset Management BSCharacteristics of P AS 55 Asset Management BSStandard: Integrated and Life Cycle CenteredStandard: Integrated and Life Cycle Centered
It requires a life cycle view and optimal mixture of
investments
operations
maintenance
resourcing,
risks
performance
sustainability
Source: BSI PAS 55:2008
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Degree of implementation: Degree to which asset management strategies,
objectives and plans are in place.
Source: BSI PAS 55:2008
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Presented by Dr.Himadri Banerji Ex CEO inPresented by Dr.Himadri Banerji Ex CEO in
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Characteristics of PAS 55Characteristics of PAS 55 Levels of an AssetManagement System
Source: BSI PAS 55:2008
Part 1 contains the corerequirements against which anorganization's AssetManagement capabilities can beassessed.
Part 2 expands on these requirements with examples and guidance designedto aid the understanding of the intent of the Part 1 requirements.
PAS 55 is a two-part specification.
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Presented by Dr.Himadri Banerji Ex CEO inPresented by Dr.Himadri Banerji Ex CEO in
Reliance Energy and Leader GLG at theReliance Energy and Leader GLG at thePlanTech 2010 Mumbai, 4th and 5th FebPlanTech 2010 Mumbai, 4th and 5th Feb
1919
Characteristics of PAS 55 Asset Management BS Standard: IntegratedCharacteristics of PAS 55 Asset Management BS Standard: Integrated
Source: BSI PAS 55:2008
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Presented by Dr.Himadri Banerji Ex CEO inPresented by Dr.Himadri Banerji Ex CEO in
Reliance Energy and Leader GLG at theReliance Energy and Leader GLG at thePlanTech 2010 Mumbai, 4th and 5th FebPlanTech 2010 Mumbai, 4th and 5th Feb
2020
PAS 55 Asset Management BS Standard: Scope and InterfacesPAS 55 Asset Management BS Standard: Scope and Interfaces
Source: BSI PAS 55:2008
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Presented by Dr.Himadri Banerji Ex CEO inPresented by Dr.Himadri Banerji Ex CEO in
Reliance Energy and Leader GLG at theReliance Energy and Leader GLG at thePlanTech 2010 Mumbai, 4th and 5th FebPlanTech 2010 Mumbai, 4th and 5th Feb
2121
PAS 55 Asset Management BS Standard: Stakeholder RequirementsPAS 55 Asset Management BS Standard: Stakeholder Requirements
Source: BSI PAS 55:2008
Source: BSI PAS 55:2008
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2222
PAS 55 Asset Management BS Standard: OSP, Planning and ImplementationPAS 55 Asset Management BS Standard: OSP, Planning and Implementation
Source: BSI PAS 55:2008
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2323
PAS 55 Asset Management BS Standard: Management System StructurePAS 55 Asset Management BS Standard: Management System Structure
Source: BSI PAS 55:2008
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Asset Manager : Work Control To Life Cycle Analysis
Source: BSI PAS 55:2008
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Asset Management Process
Asset Manager: Work Control To Evaluations, Investigation, Problem Identification
Analysis
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Development in Asset Management Processes
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Information Systems Development in Asset ManagementInformation Systems Development in Asset Management
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Risk Management Processes
Design and Development Phase
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Risk Management Processes
Compliance to Standards, Procedures, Culture
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Probabilistic Risk ManagementProbabilistic Risk ManagementOperational PhaseOperational Phase
Probabilistic risk assessments have the following characteristics:
� explicitly consider a broad set of potential challenges to safety;
� logically prioritize these challenges;
� consider a wide range of options to mitigate these challenges;
� assess sensitivity of results to key assumptions;
�
identify and potentially quantify uncertainties in results.
Performance requirements have the following characteristics:
� based on measurable, quantifiable parameters that are directly related to safety;
� timing of measurements is specified;
� numerical performance criteria are set for each parameter;
� corrective actions are required to be taken if performance criteria are not met;
� performance trends are monitored;
� performance criteria and/or corrective actions are adjusted based on
performance trends.
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Questions
Discussions
Thank You