Utility CapEx management

Optimizing capital expenditure to manage risk, return and reliability

utility capex management / capital expense strategy

Utilities worldwide are facing severe financial pressuresand recognize the need to optimize capital expenditure (CapEx) to address complex challenges.  Still, investment requirements continue to grow in areas such as: aging asset life extension or replacement; evolving emissions and reliability compliance requirements; automation and smart grid modernization; and, integrating renewables and energy efficiency measures.

 

Improving total return, reducing capital outlay

Issues relating to capital resource management are often difficult to identify or are revealed in subtle ways. KEMA understands the complex nature of utility capital operations. And we know which symptoms serve as warning signs that there may be capital inefficiencies in an organization.

 

KEMA assists utility clients focus on evaluating and improving their process for planning and executing capital expenditures. Our proven methodology optimizes client’s capital project portfolio through well-defined project objectives, better corporate governance, improved workflow and business processes, and company-wide technical enablement. The outcomes provide improved results and reduced process costs and total capital outlays.

 

Sound process, effective capital resource management

Establishing a sound capital resource management process is the starting point for making rational and value-driven capital allocation decisions. KEMA offers leading capital investment opportunity evaluation and prioritization solutions based on:

  • a systematic approach that leverages quantitative and qualitative information to evaluate the justification of an investment opportunity

  • use of relevant investment criteria that is aligned with your company’s overall business strategy and operating environment, and

  • a process that fosters engagement of business stakeholders to generate agreed upon investment priorities.

Capital project portfolio evaluation and selection

KEMA helps clients optimize their project selection processes to provide the most value to the organization by deploying scarce capital resources in the most efficient manner. Our process generally includes assessing the current budget process, performing gap analysis, applying the KEMA framework for identifying the process redesign tools required for implementation, and facilitating the adoption of the associated analytics in the budget process.  Our advisory and support services related to the evaluation and selection of capital projects include: 

  • project portfolio assessment

  • project portfolio evaluation methodology development

  • portfolio business case(s) review

  • project rate case support

  • development of commonly used tools to assess a project’s ROI

  • development of more sophisticated tools for assessment of investment risk.

Capital project management office optimization

KEMA also helps clients review and optimize, or establish, the Project Management Office (PMO) function for multiple or major capital asset classes. This increases the efficiency of the deployment and management of scare capital resources – enabling on-time, on-budget delivery of high quality projects in a consistent, predictable manner and that meet the original defined scope.  Our PMO process generally includes visioning for PMO, assessing the current and future state of PMO and implementing capital project PMO. Our advisory and support services related to the optimization of a capital Project Management Office (PMO) to include: 

  • program / project management office design and implementation

  • project management maturity diagnostic evaluation

  • third-party contract review

  • project Quality Assurance (QA) review

  • standardized project management methodology

  • standardized project portfolio communications (e.g., capital project dash board)

  • standardize project portfolio resource planning and scheduling.