by Terence Leung, NRX

A technician is repairing a pump that needs to be operational immediately. Some of the parts are broken, and two bolts are missing. He's 80 percent sure which parts he needs, but the team familiar with the equipment isn't working this shift, and he can't find the manual. Should the technician attempt to replace the parts despite being unsure, wait until his colleagues call back or break down cabinet doors looking for documentation?

Organizations invest billions in physical assets but largely ignore the information that keeps them running. Utilities are continually investing in new capital projects to meet customer demand, satisfy environmental regulations and increase asset reliability and efficiency. To reduce schedule and cost in capital projects and ensure the integrity of operating assets, organizations must significantly upgrade the information foundation that enables safety and business improvement. What are the steps?

Putting the information asset to work

American Electric Power (AEP) and Conectiv Energy are deploying asset information management (AIM) solutions to manage the design, construction and commissioning of capital projects, as well as the ongoing operations and maintenance (O&M) stages of the asset lifecycle. AEP has deployed the NRX Asset Hub in eight of its largest plants. The company will continue fleetwide in four plants a year.

"For existing operations, we are improving work efficiencies by providing up-to-date information to multiple levels of plant users through a much easier interface," Christopher Donofrio, generation IT planning systems analyst at AEP, said. "For capital projects, we are reducing the ?content handover' cycle between capital project stages and the operation and maintenance stages through automation of the content and data collection and conversion process."

Information about specific equipment?pictures and diagrams, manuals, parts lists with catalog information, job safety analyses, calibration data and even notes from employees who worked on the equipment?now exists in one place, Donofrio said. Instead of trying to find information in a filing cabinet or locker, an employee may click a few times with a mouse to reach a location accessible to all employees.

"Putting an AIM system in place not only saves time; it can reduce uncertainty and the redundant ordering of parts when there are debates about which part is needed," Denofrio said. "An employee can identify the correct part and create a materials request that will go directly into the purchasing system.

"(In capital projects) an AIM system can eliminate the need to manually convert content from engineering-procurement-construction companies to hard copy format and back to electronic form. We can achieve great efficiencies through automation. We still need to transform design-oriented data and content into what O&M needs, like operating procedures and maintenance strategies. But now the process is much simpler and our domain experts can focus on value-add initiatives instead of ad-hoc processes to manage massive amounts of data and content."

Conectiv Energy, a competitive subsidiary of Pepco Holdings Inc., is a merchant generation business that uses regional expertise and intellectual capital to optimize the value of its plants in the wholesale energy marketplace. Conectiv deployed AIM solutions to optimize operations and maintenance. IT manager George Muller and his team worked closely with the plants to implement Asset Center, a version of Asset Hub that integrates with SAP Enterprise Asset Management, and VIP solutions from NRX.

"Asset Center allowed us to quickly and cost-effectively capture asset information required for the maintenance program, and concurrently to gather additional content including photographs, manuals and parts diagrams," Muller said. "VIP provides an integrated and user-friendly interface to asset and maintenance information, reducing training time and speeding information access."

How is the new paradigm received by the plant community?

At plants, improving asset information management is mission-critical, according to Tim Jenkins, maintenance superintendent at a major AEP plant. He's part of the project team implementing AIM solutions.

"Several years ago, a fire damaged or destroyed various components and equipment. I estimated that in the past, it could have taken up to a day-and-a-half to gather all the information relative to that equipment," Jenkins said. "Instead, with an AIM system, employees had the needed components list and parts numbers in about 15 minutes. A day of research time was saved and the conveyor was back in service faster than was previously possible."

For ongoing operations, he said, "The 24/7 availability of an AIM system is another substantial benefit. If a maintenance crew is working on a piece of equipment at 2 a.m. and the ?expert' on that equipment is not working that shift, information is still accessible."

Improvement in knowledge retention is also appreciated, said J.T. Davis, senior coordinator of AEP's Plant Engineering Programs.

"We talk a lot about the volume of knowledge that will be walking out the door as so many of our employees prepare to retire," Davis said. "As an experienced employee works on a piece of equipment with which he has particular expertise, he or she can make notes about ways to do things, things to avoid, and capture this vital information in an AIM system. That note can be scanned into the system and the worker's expertise will be available to anyone who works on that equipment going forward."

Conectiv Energy's post-implementation results illustrate improvements in managing asset information:

10 percent to 20 percent reduction in emergency and urgent work orders;
90 percent time reduction to gather information during work processes;
accelerated operational readiness for new plants and assets;
lower risk of safety and environmental issues and equipment failure;
24/7 work-order prioritization and tracking now possible; and
ability to sustain the integrity of asset information foundation.

AIM deployment lessons

Deploying AIM solutions is similar to deploying many information systems, Muller said. The system is just a tool; the important part is addressing business processes and people. Considerations include:

involving plant management and end users from the start to establish ownership and advocates;
the system must support people working in real, every-day processes. Understand how people will use the solution and the difference between casual and power users;
understand and cleanse the data you are loading into the new system and assure that processes to maintain that data exist. Otherwise, you will start or end with poor information and reduce business value.

Prerequisite to improving performance

Utilities and other asset-intensive companies are finding that good AIM is a prerequisite to improved operations, maintenance and capital projects, said Sid Snitkin, vice president and general manager of enterprise services at ARC Advisory Group.

A worker examines a critical asset in the field. Click here to enlarge image

"The current costs of poor asset information management are staggering, and we see these problems throughout the complete asset lifecycle. To rectify this, asset-intensive organizations need to gain better control of their asset information and enable easy access to information by all asset management stakeholders," Snitkin said. "Good AIM is complete, accurate, consistent, accessible and timely, and these characteristics are prerequisites to better safety and compliance and better asset performance. AEP and Conectiv Energy are great examples of what can be done when an organization accepts responsibility for good AIM and leverages leading technology to ensure that asset information is properly collected, transformed and distributed to all stakeholders. And they show that savings are real. With a tidal wave of new capital projects around the globe, it is imperative that utilities and asset-intensive companies take action now to improve collaboration across their global design and build teams and gain better control of the processes needed for effective handover of information from all partners and vendors."

The savings of companies implementing AIM solutions to improve operational readiness in capital projects and operating assets are compelling. Savings are up to 2 percent of capital spend and up to $5 million annually in the typical 1,000-MW power plant.

AIM is also a key enabler of plant safety and ensures that all information required for safe operations is easily accessible. This transcends economic benefits and should position AIM initiatives as a prerequisite, rather than a "nice to have" in minds of corporate executives.

Author

Terence Leung is vice president of marketing and solutions at NRX. Reach him at tleung@nrx.com.

Credit Crunch Hits Home Quickly

The credit crunch has driven down the value of companies involved in electricity and natural gas trading, and utilities do not need to have significant trading operations to be impacted by the the credit crisis.

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Reliant Energy was able to secure a $650 million senior secured loan with Goldman Sachs at Libor +4.5 percent and another $350 million of convertible preferred debt with First Reserve at an interest rate of 14 percent. Duke drew down $1 billion from its master credit agreement. Others that have gone out, such as PECO, UGI and WE Energies have found the spread between Treasury securities has increased significantly during the past few weeks.

Utilities have historically been the largest issuer of debt only behind the U.S. Government and financial institutions. Costs have gone up and those with less than stellar credit ratings will have to pay dearly.