Have your fuel
procurement costs evolved to meet the challenges of a more
efficient, market driven price?
Does your organization
possess the skills to manage future partnerships and energy
Has your company
developed a strategy to maximize value by evaluating risk
Vantage Consulting, Inc. introduces an
evaluative management method which will identify and quantify
opportunities resulting in significant cost reductions and value
to your Companys fuel procurement practices.
Fuel management plays a much greater role at
utilities as competition begins to take place within the
industry. The management at many utilities took a position of
maintaining reasonably low fuel costs, while emphasizing security
of supply and minimizing disruptions. Electric utilities are now
faced with the task of reinventing themselves to deal with
inevitable, accelerating change.
Fuel adjustment clauses will be replaced with
alternate ratemaking mechanisms such as rate caps,
performance-based ratemaking, or market-based rates. Fuel costs
will be re-evaluated beyond the traditional supplier purchase
price to include the fuel quality operation and maintenance
expense. Fuel management will not only be driven by fuel cost,
but the value to the utility provided through energy service
integration and mutually beneficial alliances. Fuel departments
will be required to interface more effectively with their
customers and remain flexible in their strategies. Skill levels
must evolve to meet these challenges. There will be a paradigm
shift which will reap benefits to those utilities willing to
seize those opportunities thought to be inconceivable in the
The key features of this product which
provide an optimized strategy and advantages for the utility
Procurement process reengineered toward
Strategy developed based on core
Performance improvement areas are
Measures are balanced for risk versus
Corporate salary incentives can be
integrated into performance goals.
Product benefits and quantifiable
savings between one and five percent of total fuel costs can be
accrued in a number ways through the Vantage team evaluation
Mutually beneficial alliances reviewed.
Performance benchmarks developed
consistent with utility mission.
Risk analysis opportunities defined for
Incremental improvements are documented
over time and against other units.
Skill sets evaluated based on core
The Vantage Implementation Approach seeks to
optimize each area in the fuel procurement process by working
directly with the generating stations, fuel procurement, and
strategic planning departments. An initial overview analysis to
assess the process will include the following:
Review the organizational structure and
policies and procedures of the fuel procurement
Review all current contracts for price
escalations, contract amendments, and quality
Determine whether the utility obtains
current strategic information which is valuable to their
Evaluate the utilitys use of
models to optimize fuel procurement.
Assess the utilitys success in
forecasting loads and achieving procurement
Review performance monitoring programs
currently in place.
Determine the "total"
evaluated operating fuel expenses for each unit/station.
Integrate performance measures which
enhance fuel department interaction with the strategic
Develop stretch targets which add
definable economic benefits to fuel procurement.
Evaluate efforts to lower
transportation related fuel costs.
Visit a selected number of power plants
and review all aspects of fuel utilization, including the
- Type of fuel required
- Methods for delivery and storage
- Sampling and measurement methods
- Inventory and accounting methods
- Coal pile survey methods, results
For each power plant coal storage
- Total storage capacity
- Inventory at hand each month in
volume and cost