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AEP Case Study

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The Client:

  • One of the largest U.S. electric utilities, serving over 5 million customers in 11 states.
  • Nearly 38,000 megawatts of generating capacity and more than 40,000-miles of electricity transmission network –the largest in the nation.
  • More 765-kilovolt extra-high voltage transmission lines than all other U.S. transmission systems combined.\
  • Major businesses include:
    • Regulated Utility Operations
    Seven regional electric utilities serving customers across 11 states.
    • Transmission
    The nation's strongest transmission network, with a national vision for the nation's power grid.
    • Power Generation
    One of the nation's largest, most efficient, and most innovative generation fleets.
    • AEP Energy Partners
    Providing electric supply to customers in deregulated electricity markets.
    • River Operations
    One of the nation's largest barge companies, transporting coal and other cargoes.

 

  • Transmission system supplies about 10 percent of the demand in the Eastern Interconnection, the transmission system serving 38 U.S. states and eastern Canada, and 11 percent of the demand in ERCOT, covering much of Texas.
  • Annual capital budget of approximately $1.5B.
  • Over 2,200 employees within the Transmission Organization, including Engineering, Project Management, Operations, Right of Way, Procurement, Construction, and Transmission Field Services.

The Goal:

  • DESIRE to better complete projects on-time, on budget and within scope for one of the largest investor-owned utilities in the world, completing more of the work in house.
  • CREATE a stratification strategy, standard work processes, metrics for measuring process effectiveness and efficiency, and instill a culture of accountability.
  • IMPLEMENT process and behavior changes supporting the process redesign and systematic modifications.

The Climate:

  • Like many utilities, AEP is under financial pressure to reduce costs and increase revenue to remain competitive. In addition, capital spending is forecasted to increase to meet demand and maintain infrastructure.
  • The Transmission Capital budget is approximately $1.5B and is expected to remain at these levels for the next several years. This increase in activity will have a significant impact on the organization.
  • Identifying ways to improve the Project Lifecycle Management Process (PLMP) will be critical to keep up with this anticipated growth.

The Scope:

The scope of the project was divided into four (4) work-streams across three (3) geographic regions (Columbus, OH–Tulsa, OK– Roanoke, VA).

  • Recalibrate the existing Full PLMP utilizing LEAN Six Sigma methodologies. This will simplify the existing PLMP and remove any non-value added activities for large-scale projects.
  • Develop a streamlined PLMP. This work-stream will focus on medium-sized projects with medium risk.
  • Design a workflow for small scale projects that account for work being completed within Project Management and Field Services.
  • Revise the P6 Project Management application to account for large, medium and small scale projects, and develop standard templates for each. In addition, establish the governance and change management process to ensure the integrity of the templates and standard project reporting.

Training will be provided for each work-stream as changes to process are made. A separate training plan will be provided at a later time.

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