Xcel Energy distributes electricity to 3.4 million customers and natural gas to 1.9 million in eight Midwestern and Western states, through four regulated utilities, which have the combined capacity to produce more than 17,000 megawatts of electricity. The company also owns transmission and distribution lines, as well as natural gas pipelines, and it is the top wind power provider in the United States.
Xcel Energy’s transmission business is growing rapidly―and its investment in transmission projects grew tenfold in 10 years. The energy provider is in the midst of one of the largest transmission construction projects in the Midwest―CapX2020. The joint transmission expansion initiative involves 11 partner utilities, of which Xcel Energy is contributing nearly half of its approximate budget of US$2 billion.
To effectively manage the CapX2020 project, as well as the company’s growing portfolio of more than 2,500 projects with a budget of more than US$4 billion over the next five years, Xcel Energy relies on Oracle’s Primavera P6 Enterprise Project Portfolio Management. Using the solution, Xcel Energy can predict the future by using Primavera P6 to forecast detailed resource utilization five years ahead. This capability enables it to plan for and make resource allocation and staffing decisions well in advance to avoid delays and potential overages. As a result, the company has predicted within plus or minus 2% of its forecast for the last five years’ capital spend, avoiding significant carryover and ensuring executive management’s confidence.
As the company’s capital project budget grew rapidly to nearly US$1 billion annually from the low hundreds of millions, Xcel Energy found that it could no longer rely on a disparate, spreadsheet-based approach to project management. For example, the project management team could not accurately project capital spend. In addition, the company had made a series of strategic acquisitions―with each company using its own project management model―which further hindered project visibility across the enterprise.
It was time for Xcel Energy to rethink its approach to project management, and the company began the search for a replacement to its legacy Microsoft-based solution. Xcel Energy required a highly scalable solution on which it could standardize to achieve enterprise visibility and manage a growing budget and upwards of 100,000 activities associated with 2,500 annual projects. The company selected and standardized, companywide, on Primavera P6 Enterprise Project Portfolio Management and created a project controls group to gain better visibility into and control over future resource needs.
When the project team started to look at transmission infrastructure build-out projections, it faced a daunting growth curve. To meet project deadlines and budget targets, the company required extensive visibility into resource requirements, detailed task timelines and the ability to share them with key stakeholders and partners, and advanced budget-tracking capabilities. Primavera P6 delivered on all of these requirements and has enabled Xcel Energy to rise to the challenge and effectively plan and resource the build out.
The first CapX2020 project has been completed on time. In addition, construction is underway on the other three projects. The company is projecting that it will meet in-service dates and budgets for all the projects, which is significant for the multiyear initiative, which began in 2007 with regulatory filings.
“At the highest level, Primavera P6 Enterprise Project Portfolio Management enables us to strategically plan for growth,” said Greg Chamberlain, director of transmission portfolio delivery, Xcel Energy. “Specifically, the resource analysis that we can conduct with the solution is vital. We can identify construction and engineering resources and other material requirements well into the future, giving us to time to plan and source. We can also better understand internal resource availability and requirements and can plan accordingly to avoid delays and overruns.”
The solution has been so effective in helping the company to determine its resource requirements that it has been able to project within plus or minus 2% of forecasted capital spend for the last five years. “Prior to using Primavera P6, the company had a very difficult time projecting capital spend. This uncertainty resulted in unwanted overages or carryovers―especially during critical and resource-intensive construction phases―and this had a negative impact on governing board confidence. Those days are well behind us now, thanks to our unified project management approach and Primavera P6.”
The company historically used a distributed approach to project management, using dedicated teams and small groups to manage individual projects. This approach worked for the company until it began to experience dramatic growth in its capital project budget. The project team grew rapidly as well, and the need to schedule activities in a more structured manner across all initiatives became apparent.
Xcel Energy uses Primavera P6 Enterprise Project Portfolio Management to create an integrated schedule that it shares with internal resources as well as external partners, who also use the system. This approach enables Xcel Energy to effectively manage service days and ensures visibility into progress, as well as possible conflicts and delays.
“We generate a six-month’s look ahead that goes down to the individual task level,” said Greg Roof, manager of transmission project controls, Xcel Energy. “This enables us to inform teams months ahead that tasks are due on a specific date. They can then alert us if there is a need to revise the baseline, and there is a defined process to manage change control. This approach has been quite effective in preventing delays.”
As the company’s project load increased, it also began to see its resources decline, creating a new challenge. Nearly half of Xcel Energy’s employees are eligible for retirement, and the company faced losing experience and enterprise intelligence.
Using Primavera’s integrated scheduling and resource loading capabilities, Xcel Energy’s project management team identified well in advance that it would require 1,000 resources over the next five years―and the specific types of resources required in engineering, siting, permitting, controls, construction, and more.
The company has its entire portfolio of projects scheduled over the next five years, including a projection of the number of hours for each phase and trade, giving a clear line of site for future requirements.
“With Primavera P6, we can predict the future in terms of our resource needs, and we use the solution to forecast resource utilization five years in advance,” Chamberlain said.
To create its five-year resource forecasts, Xcel Energy developed a series of 75 project templates (such as a five-mile-line project template) that define a project’s activities, durations, and resource roles. The team then assigns each project a template based on its type, which, when completed, forms the basis for the company’s detailed plans of internal and external resource requirements.
The ability to project and secure resources is particularly important in the construction phase of a transmission infrastructure project, which typically represents the most resource-intensive part of such an initiative. Therefore, it is critical to have resources in place to avoid delays and expensive overtime costs. With Primavera P6 Enterprise Project Portfolio Management, project managers now can make an effective and accurate resource requirement projection, defend it to executive management, and plan ahead to have the resources they need in place―either by hiring or contracting to external organizations.
When working on projects that expand transmission capacity, Xcel Energy needs to carefully coordinate planned outages on the grid. Primavera P6 Enterprise Portfolio Management plays a critical role in this process. The team conducts a monthly review, which is driven by information from Primavera P6, to identify potential outage conflicts months in advance. This advance information gives the team sufficient time to prioritize and reschedule outages as needed.
“We can use information from Primavera P6 and place it geospatially to give operators and others a visual of what outages will occur, when and where,” Chamberlain said.
Xcel Energy continues to extend its Primavera P6 environment. It is upgrading to version 8.2 and looks to benefit from several new features that will deliver greater visibility and efficiency. For example, Xcel Energy plans to take advantage of Web client capabilities that will enable users to display a Gantt chart to view their activities and how they fit into the overall schedule. The company also expects to streamline status updates and enable team members to use smart phones to update activity status.
Xcel Energy selected Primavera P6 Enterprise Project Portfolio Management because the industry standard best met its requirements for a robust solution that could span multiple operating companies and provide visibility into projects, enterprisewide. The solution also delivers advanced resource load and management capabilities, which were also essential to Xcel Energy. Further, many of the company’s partners were already using the industry-leading system, accelerating onboarding and collaboration.