Resource Allocation Redesign Reduces O&M Expenses
A major Midwestern US utility troubled by rapidly increasing operating and maintenance (O&M) expenses in its generation business and substandard plant performance engaged SDG to redesign its generation resource allocation process.
The project transformed the annual budget process, eliminated about 30 percent of the capital and O&M budget, and increased plant performance.
The resulting process enabled the company to compare all capital and O&M investments based on their impact on shareholder value, cash flow, earnings, and enhancements to plant performance.
The project transformed the annual budget process, eliminated about 30 percent of the capital and O&M budget, and increased plant performance over the next several years. The value-based resource allocation process is now the standard across the organization.
