PUBLIC POWER AND WATER SPECIALTY PRACTICE
SAGE Management Consultants, LLC (SAGE) has developed a specialty practice focused on public power and water enterprises. While much of SAGE’s work is with investor owned utilities (IOUs), the SAGE consulting staff’s combination of experience in consulting with and working for public power and water enterprises has given us a special insight into the publicly owned utility world. SAGE’s staff includes both former public power executives and engineers and professional management consultants with deep experience with public utility enterprises. Public power and water enterprises have unique governance, planning, and management challenges. SAGE consultants understand the public environment and are adept at developing practical solutions that work for enterprises in the public sector. SAGE consultants have developed a deep expertise in serving the unique needs of public utility enterprises. SAGE consultants understand the governance processes involved, the public scrutiny, and the challenges of managing businesses in the public sector.
The SAGE public utility management consulting services assist client enterprises improve reliability, customer service, and safety; contain costs; and mitigate risks.
PROJECT TEAMS
SAGE is a consortium model firm with a core of key staff members supplemented by associated independent consultants and specialty firms. The consortium members work together regularly and have long personal and professional relationships. SAGE has found that this is a highly effective and efficient model for clients. Each client receives exactly the right consulting team for its needs rather than whomever the consultancy has available at the moment.
As a consortium model firm, our partners’ wide network of consultants, specialists, and experts is available to each client. Our consulting teams are specifically tailored to each case and can include:
PUBLIC POWER AND WATER CLIENTELE
The SAGE partners have served a broad range of public power and water enterprises, including:
Publicly Owned Combination Utilities:
SAGE consultants have also worked extensively on consulting engagements involving numerous investor owned utilities, including: American Water (New Jersey), Emera/Nova Scotia Power and Bangor Hydro, CenterPoint Energy/Texas Genco, FirstEnergy/Jersey Central Power & Light, Xcel/Southwestern Public Service, PacifiCorp, Pacific Gas & Electric, Iberdrola/Central Maine Power, National Grid/Niagara Mohawk, El Paso Electric, Public Service Company of New Mexico, PHI/Atlantic City Electric, Southern California Edison, Eon/Kentucky Utilities, and AEP/Kentucky Power.
Many public power and water enterprises are part of combination utilities with affiliated wastewater and storm water utilities; natural gas utilities; and, other affiliated enterprises including broadband services, transit and railroads, airports, toll bridges, and solid waste. SAGE partners have experience in all of these arrangements, including:
EXPERIENCE
Following are examples of the SAGE's experience with public utilities, investor owned utilities, and other publicly owned enterprises in the following categories:
CAPITAL PROGRAM PLANNING AND MANAGEMENT
Capital Program Planning, Financing, and Ratemaking Process Integration
A SAGE consultants conducted a program to integrate the capital program planning process, the ratemaking process, and the financing process for a large municipal water and wastewater utility. Improvements included role definitions, a streamlined process flow, and synchronized timing of events.
Contractor Performance Audit
SAGE consultants assisted a client in a study of a contractor’s performance on a major construction project. This project involved the review and analysis of a multi-million dollar construction time and materials contract for a large Midwestern public power entity. The review examined contractor’s performance against the construction contract including billings, progress reporting, labor management practices, and materials and consumables management. The study also examined the client’s administrative controls of the contractor. The study recommended multiple improvements in the contracting and contractor management process.
Large Scale Capital Program Review
A SAGE partner conducted a thorough review of a large-scale capital improvement project for a billion dollar municipal electric, gas, water, and wastewater utility. The review of the project included recommendations on the project organization structure, staffing, and the management of consulting engineers and construction contractors. This multi-year project was completed on schedule and under budget.
ASSET MANAGEMENT
Asset Management and Capital Program Review
The SAGE consultants formed a project team on an engagement to assist a large Water and Wastewater Utility unit within a large public power combination utility in determining the effectiveness of its asset management, management and business processes, internal project control, and capital planning program. This publicly-owned, combination electric and water/wastewater utility provides electric generation, electric transmission, water/wastewater, and environmental stewardship services in a large region. The SAGE partners assisted the client in identifying improvements in its processes, project controls, cost allocation methodologies, and the manner by which impact fees are being applied to capital programs.
Asset Management Program Development
A SAGE partner was the project manager and principle consultant on an engagement to develop a combination municipal utility’s asset management program. The program includes the governance process, service levels, cost tracking, organization structure, asset management performance scorecards for each asset group, maintenance management, work management, information systems support, and integration with capital and O&M budgeting and rate making. A key component of the program is the identification of all environmental compliance requirements and the monitoring and reporting process.
WORKFORCE STRATEGY AND PLANNING
Workforce Optimization
A SAGE partner formed a team of consultants for an enterprise-wide labor resource optimization assignment for a large municipal combination utility. Although facing substantial customer and demand growth, the client’s labor costs were escalating faster than any other cost category. The objectives of the assignment were to achieve 200 position reductions without impacting service levels and without lay-offs. The consulting team confirmed that the client’s optimization objectives were reasonable, valid, and could be achieved within the desired five-year timeframe. Then a set of labor optimizing techniques were identified to achieve the client’s objectives. These included the introduction of labor saving technology, increasing spans of control, eliminating or reducing low value work, support service level reductions, process improvements, and increases in economic labor contracting while protecting core competencies. Finally, the team assisted the client in communicating the key features of the program internally to achieve broad organizational support. The client has achieved all of the targeted position reductions within the initial three years without layoffs.
Succession Planning and Talent Management
A SAGE partner assisted a large municipal combination utility with the development of its Succession Planning and Talent Management Program and associated organizational development activities. The engagement began with developing a comprehensive definition of the Succession Planning Program and Talent Development Project. Subsequently, additional program elements were developed including objectives, scope, integration with existing programs, identification of resource requirements, and overall program governance. The SAGE partner facilitated the dialogue and developed program materials for review by organizational stakeholders, including the Advisory Team and the senior management team.
PROCESS REENGINEERING AND IMPROVEMENT
Contracting and Contractor Management Process Reengineering
A SAGE partner directed the overhaul and modernization of the services contracting process for a large energy utility. The effort included the company’s contracting philosophy, contracting economics, contractor qualifications, labor relations issues, bid packaging, bidding and selection procedures, contract pricing, contract documents, internal controls, and audit requirements. The program resulted in substantial improvements in all phases of the contracting and contractor management process.
Contractor Inspection Process Reengineering
A SAGE partner led a cross-sectional team of engineers and inspectors to reengineer the contractor inspection process. The team developed dozens of practical recommendations to improve inspection, reduce risk exposure, and lower total costs.
System Integrity and Pressure Management Process Improvement
A SAGE partner directed two process improvement programs for a major southeastern gas utility. The first area was system integrity: leak survey, leak repair, valve maintenance, right of way maintenance, patrols and inspections, cathodic protection, and the pipe replacement program. The second area was pressure management: compressor stations, SCADA, metering, regulation, measurement, city gate stations, LNG plant, farm taps, odorization, and the gas operations center.
Maintenance and Damage Prevention Process Improvement
A SAGE partner facilitated two client process improvement teams for a major western gas transmission and distribution company. One team addressed compressor station operations and maintenance and the other team covered damage prevention. Improvements included lower costs, reduced downtime, and fewer damage incidents.
Utility Process Improvement
A SAGE partner directed a project to achieve cost reductions and customer service improvements through organization, work management, policy, and facility changes for a large energy company. Areas covered included engineering, customer service, construction, maintenance, warehousing, and business offices.
MANAGEMENT SYSTEMS
Maintenance Management System Selection
A SAGE partner facilitated an employee management team in the identification and selection of a Computerized Work Order and Maintenance Management System (CMMS). The partner assisted the client in identifying user needs, current system capabilities, future user needs, and selection of a new CMMS system as well as development of the system implementation plan.
Project Management System
A SAGE partner directed the planning for a large-scale, fully integrated project management system for a municipal light and power department. This system includes automated forecasting, material planning, project scheduling, workforce management, inventory control, fleet management, and project reporting components as well as all appropriate electronic interfaces to financial systems such as payroll, plant accounting, and the general ledger. This system is expected to reduce project costs by 10%, greatly enhance project estimating accuracy, and substantially improve project on-time completion performance and customer service.
ENTERPRISE PERFORMANCE MANAGEMENT
Planning and Performance Management System Improvement Program
A SAGE partner conducted a corporate planning and performance management system review and improvement program for a large combination IOU. The improvements covered strategic and business planning, financial forecasting, budgeting, key performance indicators, target setting, integration with employee performance planning and reviews, the planning and review calendar, and roles and responsibilities.
Balanced Scorecard
A SAGE partner directed a project to develop a “balanced scorecard” of key performance indicators for a large Midwest energy utility. The indicators chosen are used to guide the business planning process and for self-evaluation.
INTEGRATED RESOURCE PLANNING, GENERATION, AND FUEL PROCUREMENT
Integrated Resources Plan Review
A SAGE partner and expert team were retained to perform an independent review and audit of a draft IRP developed by a Midwestern public power district on behalf of this multi-member generation and transmission cooperative. The client is the power supplier’s largest wholesale customer and sought an independent review of the draft IRP to ensure accuracy of key assumptions and to validate the efficacy of the IRP results. The economic integration of renewable resources into the power supplier’s portfolio was a major point of focus for the review. The ultimate objective was to obtain an independent assessment of whether the power supplier had considered the optimum combination of supply and demand-side resource options to meet the forecasted demand, at an acceptable level of reliability, ensuring environmental preservation while achieving the lowest possible cost to the customer. The major assumptions and inputs considered in developing the IRP were identified and validated. Then the power supplier’s IRP model was examined to verify the accuracy of its outputs. The results of the review were iterated several times in presentations by SAGE to the client and other stakeholders. A final study report and a presentation were delivered to the client’s Board of Directors.
BENCHMARKING AND BEST PRACTICES
Benchmarking and Best Practices Studies
SAGE consultants have conducted benchmarking and best practices studies for individual clients or small groups of clients on topics including reliability, engineering, maintenance management, damage prevention, dispatching, and customer service.
SHARED AND SUPPORT SERVICES MANAGEMENT
Shared Services Management Process
A SAGE partner led a team for a large Western combination utility that examined all of its shared support services and recommended a new management process that improved internal client satisfaction and reduced costs. The new management process includes clear definition of roles, defined quality and service requirements, accurate costing, clear pricing and billing, and integrated business planning and performance appraisal.
Shared Services Management Review and Improvement Programs
SAGE consultants have conducted multiple shared services review and improvement programs for public power and other clients. The shared services covered have included: information technology and systems, engineering, fleet management, facilities management, environmental services, human resources, finance and accounting, labor relations, and supply chain management.
Engineering Department Review
A SAGE partner conducted a review of the fossil engineering department for a large generation, transmission, and distribution public power utility. The study involved a comprehensive analysis of the needs of internal customers of the department, the services provided, and an evaluation of the current state performance of this work. The recommendations contained in the study report provided numerous methods to improve the communications of this department with its internal customers and the means to establish clear lines of responsibility and accountability for engineering work, as well as proven methods to enhance the service levels and efficiency of the department.
Environmental Services Department Review
A SAGE partner led a thorough diagnostic review of a large combination municipal utility’s environmental services group. The study included environmental auditing, permitting, reporting, and risk assessment for electric, gas, water and wastewater utilities and general city services.
CONTACT:
Robert L. Rosenkoetter, CPA
Partner
SAGE Management Consultants, LLC
Direct: (678) 867-0784
Email: rosenkoetter@sageconsultants.org
SAGE Management Consultants, LLC (SAGE) has developed a specialty practice focused on public power and water enterprises. While much of SAGE’s work is with investor owned utilities (IOUs), the SAGE consulting staff’s combination of experience in consulting with and working for public power and water enterprises has given us a special insight into the publicly owned utility world. SAGE’s staff includes both former public power executives and engineers and professional management consultants with deep experience with public utility enterprises. Public power and water enterprises have unique governance, planning, and management challenges. SAGE consultants understand the public environment and are adept at developing practical solutions that work for enterprises in the public sector. SAGE consultants have developed a deep expertise in serving the unique needs of public utility enterprises. SAGE consultants understand the governance processes involved, the public scrutiny, and the challenges of managing businesses in the public sector.
The SAGE public utility management consulting services assist client enterprises improve reliability, customer service, and safety; contain costs; and mitigate risks.
PROJECT TEAMS
SAGE is a consortium model firm with a core of key staff members supplemented by associated independent consultants and specialty firms. The consortium members work together regularly and have long personal and professional relationships. SAGE has found that this is a highly effective and efficient model for clients. Each client receives exactly the right consulting team for its needs rather than whomever the consultancy has available at the moment.
As a consortium model firm, our partners’ wide network of consultants, specialists, and experts is available to each client. Our consulting teams are specifically tailored to each case and can include:
- Professional Engineers
- Certified Public Accountants
- Information Technology Specialists
- Subject Matter Experts in Specialized Fields
- Certified Management Consultants
PUBLIC POWER AND WATER CLIENTELE
The SAGE partners have served a broad range of public power and water enterprises, including:
Publicly Owned Combination Utilities:
- Anaheim Public Utilities
- Colorado Springs Utilities
- Los Alamos Department of Public Utilities
- Los Angeles Department of Water and Power
- Lower Colorado River Authority
- Tacoma Public Utilities
- Anchorage Municipal Light and Power
- Florida Municipal Power Agency
- Guam Power Authority
- Nebraska Electric G&T Cooperative, Inc.
- Nebraska Public Power District
- Omaha Public Power District
- Sacramento Municipal Utility District
- Anchorage Water and Wastewater Utilities
- City and County of Denver
- Sugarland Texas Water and Wastewater Utilities
- The Metropolitan District Commission
- Metropolitan Water District of Southern California
SAGE consultants have also worked extensively on consulting engagements involving numerous investor owned utilities, including: American Water (New Jersey), Emera/Nova Scotia Power and Bangor Hydro, CenterPoint Energy/Texas Genco, FirstEnergy/Jersey Central Power & Light, Xcel/Southwestern Public Service, PacifiCorp, Pacific Gas & Electric, Iberdrola/Central Maine Power, National Grid/Niagara Mohawk, El Paso Electric, Public Service Company of New Mexico, PHI/Atlantic City Electric, Southern California Edison, Eon/Kentucky Utilities, and AEP/Kentucky Power.
Many public power and water enterprises are part of combination utilities with affiliated wastewater and storm water utilities; natural gas utilities; and, other affiliated enterprises including broadband services, transit and railroads, airports, toll bridges, and solid waste. SAGE partners have experience in all of these arrangements, including:
- Albuquerque Solid Waste Enterprise
- Corpus Christi Gas Utility
- Delaware River Port Authority
- Los Angeles World Airports
- Philadelphia Gas Works
- Tacoma Short Line Railroad
- Tacoma Broad Band Enterprise
EXPERIENCE
Following are examples of the SAGE's experience with public utilities, investor owned utilities, and other publicly owned enterprises in the following categories:
- Capital Program Planning and Management
- Asset Management
- Workforce Strategy and Planning
- Process Reengineering and Improvement
- Management Systems
- Enterprise Performance Management
- Integrated Resources Planning
- Benchmarking and Best Practices Studies
- Shared and Support Services Management
CAPITAL PROGRAM PLANNING AND MANAGEMENT
Capital Program Planning, Financing, and Ratemaking Process Integration
A SAGE consultants conducted a program to integrate the capital program planning process, the ratemaking process, and the financing process for a large municipal water and wastewater utility. Improvements included role definitions, a streamlined process flow, and synchronized timing of events.
Contractor Performance Audit
SAGE consultants assisted a client in a study of a contractor’s performance on a major construction project. This project involved the review and analysis of a multi-million dollar construction time and materials contract for a large Midwestern public power entity. The review examined contractor’s performance against the construction contract including billings, progress reporting, labor management practices, and materials and consumables management. The study also examined the client’s administrative controls of the contractor. The study recommended multiple improvements in the contracting and contractor management process.
Large Scale Capital Program Review
A SAGE partner conducted a thorough review of a large-scale capital improvement project for a billion dollar municipal electric, gas, water, and wastewater utility. The review of the project included recommendations on the project organization structure, staffing, and the management of consulting engineers and construction contractors. This multi-year project was completed on schedule and under budget.
ASSET MANAGEMENT
Asset Management and Capital Program Review
The SAGE consultants formed a project team on an engagement to assist a large Water and Wastewater Utility unit within a large public power combination utility in determining the effectiveness of its asset management, management and business processes, internal project control, and capital planning program. This publicly-owned, combination electric and water/wastewater utility provides electric generation, electric transmission, water/wastewater, and environmental stewardship services in a large region. The SAGE partners assisted the client in identifying improvements in its processes, project controls, cost allocation methodologies, and the manner by which impact fees are being applied to capital programs.
Asset Management Program Development
A SAGE partner was the project manager and principle consultant on an engagement to develop a combination municipal utility’s asset management program. The program includes the governance process, service levels, cost tracking, organization structure, asset management performance scorecards for each asset group, maintenance management, work management, information systems support, and integration with capital and O&M budgeting and rate making. A key component of the program is the identification of all environmental compliance requirements and the monitoring and reporting process.
WORKFORCE STRATEGY AND PLANNING
Workforce Optimization
A SAGE partner formed a team of consultants for an enterprise-wide labor resource optimization assignment for a large municipal combination utility. Although facing substantial customer and demand growth, the client’s labor costs were escalating faster than any other cost category. The objectives of the assignment were to achieve 200 position reductions without impacting service levels and without lay-offs. The consulting team confirmed that the client’s optimization objectives were reasonable, valid, and could be achieved within the desired five-year timeframe. Then a set of labor optimizing techniques were identified to achieve the client’s objectives. These included the introduction of labor saving technology, increasing spans of control, eliminating or reducing low value work, support service level reductions, process improvements, and increases in economic labor contracting while protecting core competencies. Finally, the team assisted the client in communicating the key features of the program internally to achieve broad organizational support. The client has achieved all of the targeted position reductions within the initial three years without layoffs.
Succession Planning and Talent Management
A SAGE partner assisted a large municipal combination utility with the development of its Succession Planning and Talent Management Program and associated organizational development activities. The engagement began with developing a comprehensive definition of the Succession Planning Program and Talent Development Project. Subsequently, additional program elements were developed including objectives, scope, integration with existing programs, identification of resource requirements, and overall program governance. The SAGE partner facilitated the dialogue and developed program materials for review by organizational stakeholders, including the Advisory Team and the senior management team.
PROCESS REENGINEERING AND IMPROVEMENT
Contracting and Contractor Management Process Reengineering
A SAGE partner directed the overhaul and modernization of the services contracting process for a large energy utility. The effort included the company’s contracting philosophy, contracting economics, contractor qualifications, labor relations issues, bid packaging, bidding and selection procedures, contract pricing, contract documents, internal controls, and audit requirements. The program resulted in substantial improvements in all phases of the contracting and contractor management process.
Contractor Inspection Process Reengineering
A SAGE partner led a cross-sectional team of engineers and inspectors to reengineer the contractor inspection process. The team developed dozens of practical recommendations to improve inspection, reduce risk exposure, and lower total costs.
System Integrity and Pressure Management Process Improvement
A SAGE partner directed two process improvement programs for a major southeastern gas utility. The first area was system integrity: leak survey, leak repair, valve maintenance, right of way maintenance, patrols and inspections, cathodic protection, and the pipe replacement program. The second area was pressure management: compressor stations, SCADA, metering, regulation, measurement, city gate stations, LNG plant, farm taps, odorization, and the gas operations center.
Maintenance and Damage Prevention Process Improvement
A SAGE partner facilitated two client process improvement teams for a major western gas transmission and distribution company. One team addressed compressor station operations and maintenance and the other team covered damage prevention. Improvements included lower costs, reduced downtime, and fewer damage incidents.
Utility Process Improvement
A SAGE partner directed a project to achieve cost reductions and customer service improvements through organization, work management, policy, and facility changes for a large energy company. Areas covered included engineering, customer service, construction, maintenance, warehousing, and business offices.
MANAGEMENT SYSTEMS
Maintenance Management System Selection
A SAGE partner facilitated an employee management team in the identification and selection of a Computerized Work Order and Maintenance Management System (CMMS). The partner assisted the client in identifying user needs, current system capabilities, future user needs, and selection of a new CMMS system as well as development of the system implementation plan.
Project Management System
A SAGE partner directed the planning for a large-scale, fully integrated project management system for a municipal light and power department. This system includes automated forecasting, material planning, project scheduling, workforce management, inventory control, fleet management, and project reporting components as well as all appropriate electronic interfaces to financial systems such as payroll, plant accounting, and the general ledger. This system is expected to reduce project costs by 10%, greatly enhance project estimating accuracy, and substantially improve project on-time completion performance and customer service.
ENTERPRISE PERFORMANCE MANAGEMENT
Planning and Performance Management System Improvement Program
A SAGE partner conducted a corporate planning and performance management system review and improvement program for a large combination IOU. The improvements covered strategic and business planning, financial forecasting, budgeting, key performance indicators, target setting, integration with employee performance planning and reviews, the planning and review calendar, and roles and responsibilities.
Balanced Scorecard
A SAGE partner directed a project to develop a “balanced scorecard” of key performance indicators for a large Midwest energy utility. The indicators chosen are used to guide the business planning process and for self-evaluation.
INTEGRATED RESOURCE PLANNING, GENERATION, AND FUEL PROCUREMENT
Integrated Resources Plan Review
A SAGE partner and expert team were retained to perform an independent review and audit of a draft IRP developed by a Midwestern public power district on behalf of this multi-member generation and transmission cooperative. The client is the power supplier’s largest wholesale customer and sought an independent review of the draft IRP to ensure accuracy of key assumptions and to validate the efficacy of the IRP results. The economic integration of renewable resources into the power supplier’s portfolio was a major point of focus for the review. The ultimate objective was to obtain an independent assessment of whether the power supplier had considered the optimum combination of supply and demand-side resource options to meet the forecasted demand, at an acceptable level of reliability, ensuring environmental preservation while achieving the lowest possible cost to the customer. The major assumptions and inputs considered in developing the IRP were identified and validated. Then the power supplier’s IRP model was examined to verify the accuracy of its outputs. The results of the review were iterated several times in presentations by SAGE to the client and other stakeholders. A final study report and a presentation were delivered to the client’s Board of Directors.
BENCHMARKING AND BEST PRACTICES
Benchmarking and Best Practices Studies
SAGE consultants have conducted benchmarking and best practices studies for individual clients or small groups of clients on topics including reliability, engineering, maintenance management, damage prevention, dispatching, and customer service.
SHARED AND SUPPORT SERVICES MANAGEMENT
Shared Services Management Process
A SAGE partner led a team for a large Western combination utility that examined all of its shared support services and recommended a new management process that improved internal client satisfaction and reduced costs. The new management process includes clear definition of roles, defined quality and service requirements, accurate costing, clear pricing and billing, and integrated business planning and performance appraisal.
Shared Services Management Review and Improvement Programs
SAGE consultants have conducted multiple shared services review and improvement programs for public power and other clients. The shared services covered have included: information technology and systems, engineering, fleet management, facilities management, environmental services, human resources, finance and accounting, labor relations, and supply chain management.
Engineering Department Review
A SAGE partner conducted a review of the fossil engineering department for a large generation, transmission, and distribution public power utility. The study involved a comprehensive analysis of the needs of internal customers of the department, the services provided, and an evaluation of the current state performance of this work. The recommendations contained in the study report provided numerous methods to improve the communications of this department with its internal customers and the means to establish clear lines of responsibility and accountability for engineering work, as well as proven methods to enhance the service levels and efficiency of the department.
Environmental Services Department Review
A SAGE partner led a thorough diagnostic review of a large combination municipal utility’s environmental services group. The study included environmental auditing, permitting, reporting, and risk assessment for electric, gas, water and wastewater utilities and general city services.
CONTACT:
Robert L. Rosenkoetter, CPA
Partner
SAGE Management Consultants, LLC
Direct: (678) 867-0784
Email: rosenkoetter@sageconsultants.org