Facilitating Relationships:
“Cultivating Executive
Engagement”
A Bottom-up Approach
Eileen M. Buzzelli
Director, FE Technologies/Corp. METT
FE Technologies
Key Messages of Presentation
Successful Executive engagement can occur
when collaborative R&D is:
„
Clearly linked to business GOALS
„
Delivering measurable results/benefits from
APPLYING technology
„
COMMUNICATED in ongoing organizational
dialogue
„
Supported by PROCESSES and TOOLS to
engage executives in understanding VALUE
Not a buy-in, but a BELIEF . . .
2
Copyright © 2005 Electric Power Research Institute, Inc. All rights reserved.
Who is FirstEnergy?
» 5th largest IOU — $12.5B annual revenues, $33B in assets,
4.4 million customers
» 20 generating plants (13,600 MW)
» 135,000 T&D miles within 2 RTOs (MISO, PJM)
» 13,800 employees in electric utility operations and
over 2,100 employees in mechanical contracting operations
Integrated
3
Regional
Copyright © 2005 Electric Power Research Institute, Inc. All rights reserved.
Retail
Corp.
Regulated
T&D
Operations
Ohio Edison
Company
Pennsylvania
Power
Company
Pennsylvania
Electric
Company
The Cleveland
Electric
Illuminating
Company
The Toledo
Edison Company
Metropolitan
Edison
Company
Jersey Central
Power & Light
Company
FirstEnergy
Solutions
Corp.
FirstEnergy
Generation
Corp.
Commodity
Operations
Retail Sales
FirstEnergy
Nuclear Operating
Company
FirstEnergy
Service
Company
Includes the following
Shared-Services Organizations:
• Corp. Finance
• Legal
• IT
• Supply Chain
• Business Development
•
First
Communications,
LLC
FirstEnergy
Ventures
Corp.
American
Transmission
Systems
Incorporated
FirstEnergy
Facilities Services
Group, LLC
MYR Group Inc.
FirstEnergy
Telecom
Services, Inc.
Includes the following Plants:
• Davis-Besse
• Perry
• Beaver Valley
Technology Strategy addresses the DIVERSE needs of
FirstEnergy Operating Companies & Subsidiaries
4
Copyright © 2005 Electric Power Research Institute, Inc. All rights reserved.
FirstEnergy
Technologies
Group
Retail
Technologies
& Tech Transfer
„
„
„
„
„
„
„
Research Organizations
Technology Sourcing
Knowledge Management
Energy Products
Energy Management
Facilities Services
Commodity Operations
Director
FE Technologies
Energy Delivery
Technologies
„
„
„
„
Transmission Operations
Distribution Operations
Customer Services
Customer Call Center
Demand
Response
Programs
Energy Supply
Technologies
„
„
„
„
Fossil Generation
Nuclear Generation
Environmental
Fuel Cell Strategy
„
„
„
„
PA Demand Response
Programs
PJM/MISO DR
Committees
Interconnections
NJ Clean Energy
Programs
Strategic
Technologies
„
„
„
„
Venture Capital Funds
Direct Investments
Business Analysis
Long-term Regulatory
Issues
FET
FET Mission
Mission
FE
FE Technologies
Technologies is
is responsible
responsible for
for identifying,
identifying, and
and facilitating
facilitating the
the application
application of
of emerging
emerging
technologies
technologies that
that could
could materially
materially enhance
enhance the
the strategies
strategies of
of our
our businesses
businesses through
through
product
product and
and service
service innovation
innovation opportunities
opportunities and
and operational
operational enhancements
enhancements in
in delivery
delivery
and
and energy
energy supply
supply operations.
operations.
Driven
Driven by
by and
and aligned
aligned with
with the
the business
business unit
unit objectives,
objectives, FE
FE Technologies
Technologies will
will be
be an
an integral
integral
partner
partner to
to provide
provide strategic
strategic technology
technology solutions,
solutions, drawing
drawing from
from our
our existing
existing technology
technology
investments
investments and
and future
future additions
additions to
to the
the portfolio,
portfolio, to
to meet
meet both
both near-term
near-term business
business unit
unit
priorities
priorities and
and long-term
long-term corporate
corporate objectives.
objectives.
5
Copyright © 2005 Electric Power Research Institute, Inc. All rights reserved.
FirstEnergy Technologies Group
Key Roles in assisting Business Units
Business Unit
Focus
Tool Kit
Technology
Watch / Screen
Due Diligence
Experience
Development
Education /
Communication
Technology
Access
6
DISCOVER Business Unit needs in order to provide
appropriate solutions
Enhance Business Unit’s “tool kit” as a resource to
DISCOVER technology to address business needs
DECIDE what new technologies help to fulfill
Business Unit needs
DECIDE which technologies to pursue based on
technical criteria & detailed evaluations
DEVELOP focused pilot projects associated with
promising technologies
DEPLOY learnings, serving as technical resource for
what's on the horizon, and who the major players are
DEPLOY knowledge management database that
Business Units can access in the future
Copyright © 2005 Electric Power Research Institute, Inc. All rights reserved.
Six
Six Key
Key Elements
Elements of
of technology
management
management to
to produce
produce results:
results:
Technology Management Process
Apply Results through Discipline
1.
1.
2.
2.
3.
3.
4.
4.
5.
5.
6.
6.
Technology
Technology Strategy
Strategy
Executive
Executive Commitment
Commitment
Resource
Resource Commitment
Commitment
Process
Process Management
Management
Relationship
Relationship Management
Management
Communications
Communications
Technology Strategy
„
Align technology strategies with business objectives
„
Make technology an integral part of business planning
Executive Commitment
„
Establish top-bottom senior-management leadership and participation
„
Make technology acquisition planning & delivery process integral to
business unit and corporate management process
„
Establish cross-functional teams to implement technology initiatives
„
Communicate technology development process to all stakeholders
Resource Commitment
7
„
Implement highly visible technology acquisition organization
„
Ensure accountability of technology strategies to deliver business results
„
Fund technology acquisition endeavors sufficiently and continuously
Copyright © 2005 Electric Power Research Institute, Inc. All rights reserved.
Technology Management Process
Key Elements (continued)
Process Management
„
Use disciplined, business-managed process for technology integration
„
Develop clear and actionable performance measures
„
Execute an effective and efficient stage-gate process
Relationship Management
„
Establish disciplined, yet creative, relationship management process,
internally with business units and externally with technology sources
„
Leverage venture capital opportunities
Communications
„
8
Continuously communicate the corporate role and value of technology
acquisition in a clear, thorough and timely fashion
Copyright © 2005 Electric Power Research Institute, Inc. All rights reserved.
PROCESS and TOOLS
To Engage Executives
PROCESS AND TOOLS
for Executive Engagement
• Identify Executive Champion(s)
• Establish Common Technology Framework
Late
Early
Majority
• New Executive EPRI Orientation
Majority
Early
• Continuing Executive Briefings
Laggards
Adopters
Innovators
– Palo Alto, CA; Charlotte, NC
– On-site EPRI Executive Visits
• EPRI Topical Issue Briefings
– Advanced Coal Fleet for Tomorrow
– Climate Challenge
• Technical Advisory Group (TAG) Quarterly Meetings
10
Copyright © 2005 Electric Power Research Institute, Inc. All rights reserved.
PROCESS AND TOOLS
for Executive Engagement (Cont.)
• Executive Approval of Advisors
• Advisor Engagement & Accountability
– Active Program Management & Participation
– Transfer Deliverables & Knowledge into Organization
• Executive Recognition of Advisor Contributions
– Presentations to Management
– EPRI Awards
• Executive Participation on Business Sector Councils
• Access to Best Practices in Technology Application
– Peer-to-peer Learnings
– Co-Development with Key Suppliers & EPRI
11
Copyright © 2005 Electric Power Research Institute, Inc. All rights reserved.
PROCESS AND TOOLS
for Executive Engagement (Cont.)
• Partnership Plan Development & Discussion
• Alignment with Business Unit Objectives
• EPRI Program Membership Evaluations
• Membership Selection/Portfolio Review
• Specific Project Applications
– Emphasis on On-Site TC Projects at home
• EPRI Value Report
• Communications at ALL LEVELS
12
Copyright © 2005 Electric Power Research Institute, Inc. All rights reserved.
TOOLS for Executive Engagement
Partnership
Plans
Identify FE business direction/needs, set
goals, & align with EPRI R&D Programs
DISCOVERY PROCESS:
„
Engage with business units at all levels
„
Compile understanding of business unit
needs and objectives
„
Establish technology strategy based on
need assessment
„
Develop & implement Partnership Plans
Fossil, Nuclear, Energy Delivery, Retail,
Commodity Operations, Environmental, Corp.
„
13
Map appropriate EPRI R&D Programs
to FE direction, needs, and goals
Copyright © 2005 Electric Power Research Institute, Inc. All rights reserved.
TOOLS for Executive Engagement
BU
Alignment
„
Apply, link and communicate technology
SELECTIONS and EXPECTATIONS
DECISION PROCESS
EPRI Program
Membership
ALIGNMENT OF FE BU OBJECTIVES WITH EPRI 2005 SELECTIONS
PROGRAM DESCRIPTION
LINKED TO FE BU OBJECTIVES
NUCLEAR (FENOC)
Nuclear Base Program (41)
Jim Powers
Safe Plant Operations
People Development & Effectiveness
Improved Outage Performance
Nuclear Supplemental Programs
– Link to business unit
objectives
ENVIRONMENTAL
Air Toxics Health and Risk
Assessment (42)
Excellent Material Condition
– Advisor confirmation
for input to EPRI
14
BWR VIP: reduced P/M savings; SGMP: savings though
improved inspection methodology and operability evaluations;
MRP: improved inspections/regulatory compliance; FRP:
reduced fuel costs; NEI 03-08: Compliance w ith NEI 03-08
related to all of these Program
Numerous
Advisors for all
FENOC
Programs
Dan Steen
Ensure future emission reduction legislation Low er cost of Phase II mercury emissions reduction,
and regulations allow cost-effective
estimated at $300M-$1B, w ith changed mercury rule
compliance.
requirements. ($650M) Provides policy makers w ith sound
health-impact assessments for input on future regulations.
Protect environment and meet customer
Minimize cost of meeting hazardous w aste regulations for ash
needs for reliable and competitively priced and other combustion by-products. ($24M-$100M) Facilitates
electricity.
opportunities for community w aste management partnerships.
Fred Starheim
Hydropower Environmental Issues
(58)
Optimize diverse generating portfolio to
achieve cost-effective environmental
compliance.
Chuck
Mow bray/
Anthony Skicki
Mercury Package - Mercury Flue Gas
Characterization & PICES DB (PS59A)
Protect environment and meet customer
needs for reliable & competitively priced
electricity.
Ensure future emission reduction legislation
and regulations allow cost-effective
compliance.
Produce reliable electricity in a costcompetitive manner.
Ensure future emission reduction legislation
and regulations allow cost-effective
compliance.
Groundwater Protection/Coal
Combustion Management (49)
Integrated Environmental Control
Evaluations (PS75A)
Particulate and Opacity Control (76)
– Expected value
documented
FE SPONSOR
/FE Advisor
Fleet Efficiency/Effectiveness
– Corporate program
selection is
documented
EXPECTED VALUE
(Program, Project Set, Project No.)
Assessment Tools for Ozone,
Particulate Matter, and Haze (91)
Assessment of Air Quality Impacts
on Health & the Environment (92)
Global Climate Change Policy
Costs/Benefits (102)
Greenhouse Gas Reduction Options
(103)
Copyright © 2005 Electric Power Research Institute, Inc. All rights reserved.
Reduce cost of re-licensing hydro projects, natural resource
studies, & asset alternatives analysis (CAP EX);
Collaborative for innovative fish management approaches.
Reduce cost of developing mercury measurement & control
technologies. Access to extensive industry-w ide database
recognized as credible information source by regulators.
Influence future regulatory development & minimize future env.
compliance costs; Tech Assessments of integrated
environmental controls & costs for future business planning.
Reduce particulate & opacity, increase regulatory compliance,
restore plant capacity, reduce environmental control costs.
Develop air-quality management tools & transport models,
including mobile sources, to achieve cost-effective
environmental performance & compliance plans for emission
control requirements. (>$100M)
Ensure future emission reduction legislation Key data on ecological & health impacts of air pollution to
and regulations allow cost-effective
obtain cost-effective air quality policies and standards.
compliance.
($1.25B)
Ensure future emission reduction legislation Key data to influence policy makers & ensure environmentally
and regulations allow cost-effective
effective & efficient global climate policy decisions and energy
compliance.
regulatory programs to maintain coal in portfolio mix. Provides
economic impact assessments of various proposals on global,
nati
Protect environment and meet customer
Manage risks & reduce costs associated w ith global climate
needs for reliable & competitively priced
change policies. Assess compliance options & effectiveness
electricity.
of measures to mitigate risk.
Mike Horvath
Ray Evans/Fred
Starheim
Dale Kanary
Dale Kanary/
Morgan Jones
Fred Starheim
Fred Starheim
Mike G. Williams
Mike G. Williams
TOOLS for Executive Engagement
Program
Membership
Evaluation
„
Document membership selections, goals
and expected value
EPRI Program Membership
Evaluations
– Basis for program selection is
documented
– Advisor evaluation/input on EPRI
Programs
– Bottom-up process for R&D expected
value.
15
Copyright © 2005 Electric Power Research Institute, Inc. All rights reserved.
R&D
Portfolio
Summary
2004 FirstEnergy-EPRI Partnership Highlights
Working Together to Make a Difference
FE
FE Business
Business Plan
Plan &
& Management
Management Focus
Focus
Nuclear Fleet
Strategy for top industry performance
FE-EPRI
FE-EPRI Strategy,
Strategy, Technology,
Technology, Objectives
Objectives
„
„
„
Fossil Generation
Optimize portfolio, reduce wear and tear
from cycling, improve reliability, and
improve cost competitiveness
„
„
„
„
„
Environmental
„
Manage future environmental issues
including NSR, NOx, SO2, Hg, and CO2
„
„
„
16
Copyright © 2005 Electric Power Research Institute, Inc. All rights reserved.
Industry Collaborative – Resolve industry issues associated
with fuel failure, burn-up rates, and corrosion
Best Practices – Ensure the safe & reliable plant operation
through best practice maintenance and repair
Material Science – Ensure materials integrity for improved
reliability at FE and other nuclear plants worldwide
Availability –- Increase plant availability by reducing boiler
tube failures and improving plant chemistry
Outage Management – Reduce the cost and duration of
turbine-generator outages and extend the time between them
Compliance – Reduce costs of NOx controls (SCR, SNCR)
Burner Diagnostics – Demonstrate plant burner diagnostic
system to optimize performance and reduce emissions without
having to install costly commercial equipment
Particulate Control – Assess several low-cost particulate
control systems to regain load at opacity-limited plants
Air Quality – Manage air quality regulation risks (environmental & cost compliance - fine particulate, mercury emissions)
PowerSpan ECO – Evaluation/cost-sharing for novel multipollutant control technology
Climate Change – Assess strategic options associated with
climate change policies
Clean Water Act 316b – Identify cost-effective fish protection
compliance options
(continued)
2004 FirstEnergy-EPRI Partnership Highlights
Working Together to Make a Difference
FE
FE Business
Business Plan
Plan &
& Management
Management Focus
Focus
FE-EPRI
FE-EPRI Strategy,
Strategy, Technology,
Technology, Objectives
Objectives
Improve reliability by upgrading control
room computer systems, strengthening
operator training & procedures, and
aggressively managing transmission
vegetation
T&D Tools – Provide tools to improve reliability through:
„ Enhanced T&D system operator capabilities & training
„ Improved prediction capability for T-line line sag clearances
„ Enhanced outage management systems to more quickly
pinpoint outage events & locations
„ Development of uniform industry transmission reliability metrics
„ Analysis & support for system & customer power quality issues
Risk Reduction
„
Energy Delivery
Reduce commodity market exposure risk
Risk Management – Provide tools to help FE manage
commodity risk with an increased understanding of power
market directions and volatility
In addition, EPRI:
„
„
„
17
Helps FE identify emerging technology opportunities
Serves as an extension of FE’s in-house expertise
Provides insights on opportunities and trends in the electric power industry
Copyright © 2005 Electric Power Research Institute, Inc. All rights reserved.
PROCESS AND TOOLS
for Executive Engagement
TC
Projects
Realize value through applying
technology at home
DEPLOYMENT PROCESS:
18
„
Leveraged technology learnings at home
„
Actively participate in technology
solutions
„
Maximize co-funding opportunities
„
Communicate results across other
company facilities
„
Learn “What to do” and “What NOT to
do”, based on these projects
Copyright © 2005 Electric Power Research Institute, Inc. All rights reserved.
TOOLS for Executive Engagement
EPRI
Benefit
Report
„
Apply and communicate technology
strategy, goals, & RESULTS at all levels
Annual Benefit Report – highlights
benefits received based on:
– Corporate/Business Unit value as measured
in “eyes of beholder”
– Qualitative and quantitative basis
• Avoided costs, O&M or capital reduction,
strategic options, regulatory compliance
– Short- & long-term perspective
– Captures delivered value for executive
discussions
19
Copyright © 2005 Electric Power Research Institute, Inc. All rights reserved.
PROCESS AND TOOLS
for Executive Engagement
Communicate
„
COMMUNICATE technology strategy,
goals, & results frequently & at all levels
Communications Plan –
– Plan integrated with Corporate
Communications
– Meetings with business units on
technologies
– Employee newsletters
– Awards
• Seven EPRI Technology Transfer
Award winners in 2005 representing
multiple parts of FirstEnergy
– Technology Assessment Group
(TAG) Quarterly Updates
20
Copyright © 2005 Electric Power Research Institute, Inc. All rights reserved.
ADDITIONAL AREAS
for Executive Engagement
• Technology Strategy/Roadmapping
• Technology Showcase/Fair
• R&D Program Performance Metrics
• Financial implications of technology alternatives:
– Regulatory cost recovery
– Capital vs. O&M Expense
– R&D Tax Credits
– Collaboration vs. “Going it alone”
21
Copyright © 2005 Electric Power Research Institute, Inc. All rights reserved.
CONCLUSION
Executives engaged in collaborative R&D demonstrate:
LEADERSHIP, A VISION OF THE FUTURE, AND A
CLEAR RECOGNITION OF THE VALUE OF
TECHNOLOGY TO ADDRESS KEY BUSINESS
CHALLENGES
NOT A “BUY-IN” TO CHANGE, BUT COMMITMENT TO
A PROCESS THAT DELIVERS VALUE
22
Copyright © 2005 Electric Power Research Institute, Inc. All rights reserved.
TDC PARTICIPATION
VALUE SHARED
QUESTIONS?
23
Copyright © 2005 Electric Power Research Institute, Inc. All rights reserved.
APPENDIX
Additional Information
24
Copyright © 2005 Electric Power Research Institute, Inc. All rights reserved.
Our Business Focus
Integrated
–
–
–
–
Seven regulated distribution companies
75% of revenues derived from regulated businesses
13,387 MW of fuel-diverse owned generation capacity
Competitive energy businesses related to core competencies
Regional
– Focused primarily in our three state region
– Serve 30% of distribution customers in OH, PA and NJ
Retail
– Focused on end-use customers who can be served by FE
generation
– Over 90% of generation output committed to retail customers
at fixed prices
25
Copyright © 2005 Electric Power Research Institute, Inc. All rights reserved.
FirstEnergy
System
FE operates a portfolio of diversified, centrally-located generation
assets used to manage risk and meet retail pricing expectations.
Ohio
Eastlake
1,262 MW
Sumpter (Michigan)
340 MW
Bay Shore
Stryker
18 MW
648 MW
Toledo
Pennsylvania
Ashtabula
Perry
244 MW
Seneca
1,266 MW
435 MW
New Jersey
Erie
Lake Shore
249 MW
Towanda
Yards Creek
200 MW
Cleveland
Richland
432 MW
Edgewater
48 MW Akron
Davis-Besse
883 MW
West Lorain
545 MW
New Castle
Morristown
Johnstown
Reading
Harrisburg
Newark
Allenhurst
Trenton
W. H. Sammis
2,233 MW
Columbus
Mad River
60 MW
R. E. Burger
413 MW
Beaver Valley
1,630 MW
Operating Companies
Customers
Ohio Edison
26
York Haven
19 MW
Bruce Mansfield
2,360 MW
Square Miles
1,019,000
7,000
Illuminating Company
753,000
1,600
Toledo Edison
308,000
2,300
FirstEnergy Power Plants:
Met-Ed
516,000
3,300
C
H
N
G
O
Penelec
585,000
17,600
Pennsylvania Power
156,000
1,100
1,050,000
3,200
4,387,000
36,100
Coal – 7,339 MW (55%)
Hydro – 654 MW (5%)
Nuclear – 3,795 MW (28%)
Gas – 1,269 MW (10%)
Oil – 330 MW (2%)
Jersey Central Power & Light
Copyright © 2005 Electric Power Research Institute, Inc. All rights reserved.
Total
Forked River
86 MW
FE/EPRI Success Stories
Program/Project Engagement Identification of key
FirstEnergy needs has translated into successful
program engagement and site-specific project activities
PROGRAMS:
• NMAC
Successful plant maintenance strategies
• Forward Price Forecasting
• Global Climate Change
FastForward Software
Strategy/Tech Support
PROJECTS:
• Powerspan Multi-Pollutant Control Technology
• FENOC Switchyard Preventive/Predictive Maintenance
• NEV Harmonics Study
27
Advanced PQ Modeling
Copyright © 2005 Electric Power Research Institute, Inc. All rights reserved.
FE/EPRI Success Stories
Program/Project Engagement Identification of key
FirstEnergy needs has translated into successful
program engagement and site-specific project activities
PROJECTS: (continued)
• Gorge Ballpark “Ashes to Diamonds”
• Ohio River Ecological Research CWA Section 316(b)
• Richland CT Low Frequency Noise Abatement
• Mansfield SCR/SBS Opacity Control Technology
• Resin Tester Resin
28
Field Diagnostic Tool
Copyright © 2005 Electric Power Research Institute, Inc. All rights reserved.