A new approach in GIS cost-benefit analysis

A new approach in GIS cost-benefit analysis

Luciand Azpiazu & J.A. Roldos
IT Distribution Manager, Iberdrola, S.A.
IT Developer Manager, Iberdrola Sistemas, S.A.
Gardoqui, 8,48008 BILBAO-SPAIN
luciano.azpiazuaiberdrola.es
juan.roldosaiberdrola.es

1. Background
Iberdrola is a private electrical utility in Spain, created by the merger of Hidroelectrica Esptiola and Iberduero in 1991. Iberdrola currently supplies energy to 7.9 million customers (38 percent of the Spanish market). The inventory distribution file was begun in the 1970s, and in the 1980s, the first AM/FM systems (based on Intergraph products) were installed in all the distribution territories.

Although we continue to collect data and develop applications, we are not obtaining all of the expected benefits. In January of 1997, the Vice President of Distribution recommended both an updated cost-benefit analysis, developed by internal users and external experts, and a new plan to optimize the software applications supported in the SIGRID system (Distribution Facilities Information System, inventory, and cartography).

2. Sigrid Functionalities

2.1 Cartography and inventory
The cartography facilities may be viewed as follows:

In a simplified form.
As orthogonal diagrams (to be integrated with SCADA and Computer Aided Distribution Operation Systems).
As detailed U.T.M drawings of the network with reference information (cataster, environmental restrictions, etc.)

The alphanumeric inventory includes all the items and attributes of the network equipment.

2.2 Applications
Existing applications support maintenance, design, distribution automation, service restoration, planning, and new engineering requests.

3. Cost-Benfit analysis

3.1 Scope of the analysis
The analysis considered:

The identification of the improvements benefits quantification for all processes of the Distribution Business Unit, derived from the SIGRID implementation.
The influence of the technical information for every individual process.

The analysis studied the profitability of the information for the different levels of voltage, depending on the characteristics and typology of the information (graphic or alphanumeric).

3.2 Quantitative global analysis of benefits for every business process
At the beginning, all the distribution business processes were identified, defined, and detailed by activities. Afterwards, their impact (high, medium, or low) on the AM/FM system SIGRID was assessed. The results of the analysis indicated that the high or medium impact corresponds to the following processes:

Satisfying and executing the new supply request.
Planning and developing the network, guaranteeing adequate operation.
Conducting preventive, corrective, and predictive maintenance.
Solving outages and breakdowns in the electrical supply (service restoration).
Detailing if the representative and critical information is graphic or alphanumeric, and what voltage level is involved.

3.3 General concepts of benefit to be considered
We have considered two types of benefits.

QwQi&d- specific Of a process Or multi-process (generic).
Qualitative - merely identified.

In detail, the specific benefits are:

By design and opportunity cost reduction.
By personnel cost reduction, in the activities:
- Obtaining the basic information.
- Processing and handling the information.
- Updating the information.
By exploitation (maintenance and operation) cost reduction.

To reduce the in-field data collection cost, Iberdrola is leading a European project called INTFO. The goal of INTFO is to create a new multi-utility software system that operates on standard hardware and provides superior data handling and validation.

3.4 Cost earned by business process
To evaluate earned cost, it’s important to know the previous and current costs and to forecast them in a future scenario where all the graphic and alphanumeric information would exist. The procedure for the cost-benefit analysis has been:

To calculate the cost earned of every process and activity (or group of them), evaluating the percent earned and comparing current and future situations.
To calculate the amount not invested (hardware, software, data, etc.) by each process.
To calculate the benefits as the difference.

The horizon of the analysis implies:
Year 3: Complete all the information (high and medium voltage).
Year 3: Complete all the alphanumeric information (low voltage).
Year 5: Complete all the graphic information (low voltage).

A summary of the benefits is described below.

Business Process	Cost earned
Business Process	HV/MV	LV	Global
New request	172	572	744
Plan and develop the network	588	170	758
Maintenance	35	401	436
Service restoration	44	238	282
TOTALS (10⁶ PTA)	839	1.381	2.220

3.5 Cost not invested (10⁶ pta)

References (cadastre) 259
High voltage network 56
Medium voltage network 384
Low voltage network 2.970
Software, hardware, and training 384
Global 4.053 (X10⁶ pta) (1$ = 150 pta)

3.6 Benefits assessment
Benefits refers to the difference between cost earned and cost not invested, grouped by voltage level and type of information. This presupposes that all the software will be implemented in the first year, as will the documentation and user training. Figures and drawings detailing the evaluation will be presented during the conference.

The distribution business processes with the higher optimization levels are “Plan and Develop the Network” and “New Request” and have the higher return on investment (ROI). The final analysis does not include qualitative benefits, such as whether the corporative information is more homogeneous and coherent, or if data reliability, customer service, and corporate image are improved.

4. Conclusions
The management is convinced that the AM/FM/GIS system is profitable for all the voltage levels. The time span on the return on investment is also important, corresponding to a three-year period.

The higher profitability can be grouped as follows:

By business process - plan and develop; new request; maintenance and operation.
BY voltage level - global benefits in low voltage is more important than in medium voltage.
By typolo~v of the data – the cartographic information implies more benefits than the alphanumerics that are associated.
BY network type (urban or rural) - the benefits in urban areas are more profitable than in rural areas.

5. Goals to be achieved

At high voltage and medium voltages levels:
- To complete the cartography in two years, implementing the applications related with planning, operation, design, construction, and maintenance.
- To complete the inventory with all the attributes (poles, junctions, etc.) in three years.
At low voltage level:
- To complete the alphanumeric data, guaranteeing the connectivity for network equipment.
- Low voltage boxes (junctions and protections), lines, and transformers finished in three years for the Low Voltage New Request and Low Voltage Service Restoration modules.
- Acquire the data and create the low voltage file in five years.