Generation Performance Measurement

Are your power plant performance targets tailored for each unit or station?

Is your system of measuring plant performance quantifiable?

Are you sending the "right" performance signals to motivate your employees?

Vantage Consulting, Inc. introduces a state-of-the-art management process for identifying, quantifying, and displaying power plant performance results which target an individual unit’s mission and role within the Company.

Currently, many utilities use a set of standard performance measurement tools for each plant or unit that address a few common quantitative parameters. Unfortunately, many of these tools do not communicate the message necessary to succeed in a competitive environment. They are not tailored for each unit’s specific mission and lack balance between competing performance criteria.

As utilities begin to link unit performance to variable compensation plans and profit/loss financial reporting, appropriate measurement systems must be implemented. Each unit or power plant needs to have an overall performance measure that is based on valid criteria, comparable to peer groups, and adjustable on an annual basis as conditions change. Our consultants, based on work in over 250 power plants within the U.S., have developed a process that meets all the requirements needed in a competitive industry. Some of the key features of our system include:

Performance measures are directed toward a specific mission for each individual unit.	Targets are established by a representative team, leading to buy-in by plant personnel.
Measures are balanced between cost, safety and human resource areas.	Each measure is quantifiable, generally using existing data.
Critical performance areas are targeted, with flexibility to change.	Can be easily integrated into an incentive salary program.

Some of the product benefits that you and your team receive, include:

A direct way of communicating the corporate mission regarding competition.

Permits focus on the specific problems of individual units.

Minimizes gaming of the process.

Compares results over time and against competing units.

Employees focus on desired performance objectives.

Incentive compensation tie-in tells employees what you really want.

The VANTAGE IMPLEMENTATION APPROACH involves working directly with employees in power supply, generating station, and human resources to develop a comprehensive measurement system for each unit/station. Typical steps within the process include:

· Review current performance measurement tools, identifying systems that track targets and results. Determine statistical correlation of results from current systems.

· Determine mission/role of each unit/station. Establish specific details, if necessary.

· Identify potential performance measures for each unit/station, some of which include:

Heat Rate	Fuel Cost	Availability
Forced Outage Rate	Safety Record	Labor Relations
O&M Budget Performance	Capital Budget Performance	Off Cost Production Minimization
Auxiliary Power Use	Load Turn-down Ratio	Automatic Generation Control Performance
Air Emissions Compliance	Water Emissions Compliance	Solid Waste Compliance
Fuel Inventory	Outage Durations	Staffing
Startup Success Percentage	Incremental Cost	Busbar Cost

· Using a team approach, identify targets/goals for each performance measure based on historical results and required objectives. Use, as a minimum, five years of history.

· Identify stretch targets for measures that add definable economic benefits. Identify factors that must improve for corporate success in a competitive utility industry.

· Develop weighting for each performance measure, totaling 100% for full compliance, with possibility of higher results if stretch targets are met. Work with corporate and plant specific teams to achieve buy-in.

· Implement program, train plant supervision and coordinate integration with human resources/salary administration.

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Composed by Jackie Squillets