Case Studies
Operations Analysis
Renewable Portfolio Standard Technical Assistance
MJB was selected to provide technical assistance to the New York State Energy Research and Development Authority (NYSERDA) under RFP for “Renewable Portfolio Standard (RPS) Technical Assistance”.
Under this contract, MJB is on-call to assist NYSERDA with the development of technical content on the RPS Program and projects, annual program reports, and website content. Also included under this relationship are education related activities regarding the RPS program, its goals, relation to voluntary markets and power markets in general, program accomplishments and future plans. MJB was selected for this project based in part on our in-house database of RPS programs and writings on the design challenges and impact of RPS programs in the US and overseas.
Electric Reliability Audit Preparation
MJB was engaged by Iberdrola USA to help prepare for a NYPSC audit of the electric reliability tracking and reporting processes of NYSEG and RG&E. The primary objective of the evaluation was to review the companies’ reliability and reporting processes, describe areas of compliance and non-compliance with PSC regulations, identify areas for improvement and perform a general risk assessment.
On this project, delivered on an accelerated four week schedule, MJB applied a multi-pronged approach that included (a) interviews with key employees, (b) statistical sampling & analysis of outage data, and (c) qualitative analysis of the companies’ processes & systems. The project team spent time on-site at NYSEG and RG&E locations to collect data and interview key individuals involved in the outage management and reporting function. For both companies, MJB undertook statistical sampling of outage records to determine both accuracy and completeness in the companies’ outage reporting. Additionally, the sampling process was used to verify that a ‘cradle-to-grave’ audit trail existed for outage data.
Project Management Support
A renewable technology company, seeking to develop a ~55MW power plant as a commercially viable flagship for its biomass gasification technology engaged MJB to assist in managing the project to financial close. Project specific challenges included multiple client and vendor locations, the use of a new technology, a tight timescale to meet DOE loan guarantee and cash grant deadlines and a corporate culture not accustomed to project based work.
MJB provided a senior consultant to support client staff with project schedules, risk and issues identification, running of project meetings and reporting to board. Doing so brought increased visibility and accountability to the project, improving the likelihood of success. In addition, the MJB consultant worked with senior staff to help implement a project culture and approach throughout the organization designed to increase the likelihood of success of future projects.
Knowledge Management Process Implementation
PJM Interconnection, the mid-Atlantic regional transmission organization (RTO) that coordinates the movement of wholesale electricity in all or parts of 13 states and the District of Columbia, retained MJB to develop a knowledge capture and knowledge management (i.e., KM) approach/system for its Compliance Management Department.
PJM wanted to quickly deploy a pilot KM system that could serve as a proving ground for the effective use of inexpensive Web 2.0 tools to improve knowledge/content management and retrieval, and capture, systematize, and incorporate existing expert knowledge as an offset to attrition and as a supplement to training. PJM wanted a low-budget solution requiring no additional headcount space and minimal capital. MJB reviewed the current KM tools/processes/systems used by or accessible to Compliance staff and worked with the Compliance staff to ascertain the degree of current use of systems and tools and identify deficiencies, gaps, and needs. MJB then suggested approaches and solutions, including redesigned processes and simple off-the-shelf tools (e.g., note capture, microblogs, collaboration tools, link tagging, that were rapidly adopted by Compliance staff.
Project Management of Nodal Pricing Implementation
Electric Reliability Council of Texas (ERCOT) undertook a multi-year project to convert from zonal to nodal (i.e., locational) pricing and required project management assistance during a critical stage of development.
ERCOT engaged MJB to work closely with the Executive Director – Nodal, responsible for all aspects of the $500+ million program implementation, during the lead up to the anticipated go-live implementation. MJB responsibilities included coordinating with all work groups, assessing and preparing progress reports, developing monthly updates for the ERCOT Board of Directors, and working with representatives of the Technical Advisory Committee to ensure that nodal protocols were being developed in accordance with procedures and schedules.
Capital Projects Group Management Review (Transmission)
The client, the Capital Projects organization of a large Mid-Atlantic utility responsible for a multi-year capital program exceeding $5 billion, required a detailed examination of pre-program implementation operational procedures and policies, organizational structure, reporting and communication protocols, and performance metrics and service agreements.
MJB conducted a detailed examination of operational procedures and policies, organizational structure concerns, and reporting and communication protocols, as well as performing a detailed analysis of the performance metrics and service agreements. MJB also conducted operational and performance benchmarking comparing the client’s staffing and project management approach to comparable utilities. MJB was further responsible for data analysis of the historical, current and projected capital projects portfolio, which included progress against metrics related to Schedule, Cost and Project Objectives. A final recommendation for the adoption of a Program Management Office (PMO) to oversee the project portfolio, as well as coordinate with Engineering Asset Management, and other corporate groups was accepted and rapidly implemented.
Analysis of Internal Service Organization
The client, a large power producer, required an organizational assessment of the need for and scope of an internal service organization providing a variety of field support functions for its nuclear and fossil operations.
MJB developed a highly confidential solution to the right-sizing and cost structure of the organization in question. This included presentation and cost analytics development, and regular client interfacing. Results were presented to client senior management up to and including the president of the multi-billion dollar company. Client elected to maintain and re-size internal service organization in accordance with MJB recommendations.
Market Policies
US PowerGen (USPG), a merchant generator with almost 3000 MWs of capacity in New York City, was interested in a detailed review of the NYISO’s Load Forecasting Task Force’s (LFTF) development of the official coincident peak load forecast, particularly as it pertained to Zone J (i.e., New York City).
MJB’s primary objective was to review the LFTF process supporting the development of the coincident peak load forecast and to suggest enhancements to the process to better reflect more sophisticated econometric considerations, as well as other market conditions. The load forecast has a direct impact on the Installed Capacity (ICAP) requirements for NYC, hence on capacity prices. MJB tested many of the assumptions used to establish the coincident peak load forecast, specifically peak demand for Zone J (i.e., the location of USPG’s facilities), examined the processes by which the final values were derived, and recommended enhancements to those processes.
Industry Standards Development – Market Clearing
The Committee of Chief Risk Officers (CCRO), an independent non-profit corporation of member companies dedicated to the advancement of a broad range of best practices in the field of risk management, regularly develops and issues White Papers on a variety of topical areas of interest relevant to the energy industry, facilitated by consulting expertise.
The CCRO, whose members include companies of all types and sizes engaged in the energy industry, engaged MJB to facilitate the development of a White Paper on Market Clearing in the Energy Industry. The purpose of this paper was to advance the use of financial as well as physical clearing in the energy industry by: contributing to a common understanding and definition of clearing; identifying its benefits to the market; identifying hurdles and challenges still present; and presenting recommendations that promote its appropriate application and development. The paper also provided a summary description of each of the major vendors offering clearing solutions and a side-by-side comparison of them versus desired clearing attributes. The paper has been one of the more widely quoted White Papers that the CCRO has issued.
Program Management for Corporate Separation
For a global financial institution, MJB in conjunction with a partner firm provided project management support for the separation of its Global Merchant Services Division. Within the Program Management Office, MJB managed the weekly reporting and tracking of actual versus budget performance for 10 work streams and over 40 projects, totaling >$10MM. The role required coordinating with project managers to track performance against cost and schedule and report on progress on a weekly basis.
As a result of MJB’s and our partner’s involvement, client senior management regained visibility into separation-related cost and schedule activity and forecasts. Overall, the corporate separation occurred under-budget by approximately $3MM.
Project Management Support
In conjunction with a partner firm, MJB provided Project Management support to a Financial Services company seeking to complete a complex and high profile internal project that involved both organizational and technology change. The client was looking to extend its existing U.S. Corporate Actions processing business to support a new Algorithmic Trading Business. An MJB consultant acted as a full time on-site project manager, successfully driving the project to meet its objectives.
The project required the project manager to oversee the following, (a) Gather and document functional requirements from client employees and stakeholders (b) Construct an IT architecture that satisfies multiple business units (c) Put together and execute a project plan that delivers all functional requirements (project team across three time zones) (d) Prepare a plan to outsource much of the day-to-day work to a third party, and write supervisory procedures around this.
Strategic Options Review
MJB, in partnership with The Brattle Group, prepared a strategic assessment of the Long Island Power Authority’s (LIPA’s) options regarding its long-term organizational structure.
LIPA outsources much of its transmission and distribution operations and management to National Grid under a comprehensive Management Services Agreement (MSA). With the MSA due to expire in 2013, LIPA requested a review of its available organizational options; Privatization, full Municipalization, or a continuation, under a more self-contained organizational contract, of its existing structure. The MJB/Brattle team conducted a quantitative and qualitative analysis of these options, including the development of detailed financial model, and specific operational impacts attendant to each alternative. This project included the analysis of historic performance reports, financial statements, benchmarking, and the review of MSA contract documents to understand the impact on cost and performance of moving away from the status quo. Regular presentations and reports were delivered to the Operating Committee of LIPA Board of Trustees, as well as to the full Board.
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The pace of change in the energy industry is accelerating. New technologies are being developed and deployed, environmental considerations are paramount, market conditions are more uncertain and volatile, and capital market pressures can be daunting. A challenging environment? Certainly. But one also laden with opportunity for those entities aware of and positioned to take advantage of the changes. We offer a range of services to meet clients’ needs in this dynamic environment.