Even in the best of times, construction of new pipelines, power plants, transmission or distribution lines, and other major infrastructure can be a challenge. Studies have found that as many as a third of new projects in the utility industry experience overruns.
One of the most highly regulated industries in the United States, the sector faces intense scrutiny and sometimes competing demands by federal and state officials, and environmental, business and consumer groups. But the challenges are about to increase significantly as the federal government and its partners in state capitols around the country issue mandates for the decarbonization of the energy and power sector over the coming decades.
Utilities across the country are faced with having to plan for an unprecedented escalation in capital spending and projects to meet those mandates, from the building of solar and wind farms to constructing miles of new transmission lines to ultimately connect these new renewable sources to the grid.
Add to that the increasing toll taken by more unpredictable and severe weather events, and the utility industry faces a perfect storm that threatens major delays to crucial projects and large cost overruns. As they scramble to meet these challenges, power and transmission companies across the country will need to ramp up their project planning capacities.
This will require a heightened focus on project controls and the use of data visualization tools that translate data into actionable insights. And it will also call for a defter approach to planning – one that strikes the right balance in terms of flexibility and oversight.
Managing a flood of new projects, expectations
At PFES, we work with clients on a range of projects, from gas pipelines, power generation, electric transmission and distribution line construction, grid modernization and renewable energy. Given the rising regulatory and market demands facing today’s utility industry, the project managers we work with are likely to be juggling many projects at the same time.
Too often, project managers in the utility sector are trying to do this all with outdated data analysis and tracking methods, using spreadsheets and other less efficient methods compared to a modern, digital business intelligence dashboard. Added to that is a loss of experience among project managers as some individuals reach retirement, and as others re-evaluate their careers.
Yet utilities and their project managers now face higher expectations and potentially more damaging consequences, on part of both state and federal regulators and investors and shareholders, in terms of meeting schedule and cost benchmarks.
We can extend a project manager’s reach, providing the additional personnel, project controls and latest business intelligence tools necessary to juggle several competing plans and active construction sites.
With effective project controls and tailored data visualization tools, we can also work with a project manager to develop the more sophisticated level of planning and oversight required to anticipate potential issues and provide the flexibility needed to deal with them.
Crafting a well-balanced plan
In our work with project managers, we focus on striking the right planning balance between an approach that is too high level that crucial issues are missed and one that is overly granular.
Many projects have an open-ended plan with a simple start and finish date. What these plans lack are sufficient details with check-ins and milestones along the way. The utility and its planning staff won’t truly know whether the project can be delivered on time until the completion date nears. And when projects span several years, as large-scale capital projects often do, this kind of open-ended planning can lead to some problematic results
However, the other extreme can be just as challenging. A plan that lists every significant activity down to a micro level is effectively a glorified task list. And instead of managing the new rollout of a new transmission line, for example, the project manager and support staff are overwhelmed simply managing the list.
How much detail is too much? A project plan that states that an engineer will be doing capacity calculations on Thursday is veering too far into the granular. It would be sufficient to say it is happening that week. Or the task might be listed as part of larger engineering package consisting of multiple disciplines that will be reviewed at the end of the month. Leave the granular task list to the individuals who own those specific processes.
A good, solid plan gives the organization flexibility to be proactive, rather than reactive when identified risks materialize and threaten a project’s timetable, and by extension, it’s budget. That means when the delivery of an expensive piece of equipment is delayed, the project manager can reshuffle some items and minimize the disruption to the construction schedule. With the right project controls in place, using the latest business intelligence tracking tools, a two-week project holdup need not turn into a major, four-month delay at the end of the project.
So, what’s your plan?
Do you have confidence that you truly know whether your project will be on time, and on budget, when it is delivered? Our team consists of industry heavyweights that bring substantial expertise to the table for our clients.
We partner with you to reduce risk and uncertainty in your capital projects, delivering initiatives on time with significant cost savings while meeting industry and safety standards. Contact us today to find out how we can help.
by Stephen Taipala, Director of Project Controls, PFES
