How they do overseas?
An overview of some GIT Projects in Brazil Roberto Falco Sisgraph LTDA Rua Estados Unidos, 112 Sao Paulo, Brazil – 01427-000 Abstract Besides the globalization, that has the side effect to standardize techniques and procedures around the world, each national Utilities industry still has their particular requirements, caused mainly by the local regulatory environment, highly influenced by country requirements and/or regional business drivers. This paper will analyze this environment for Brazil, and describe some key differences in comparison with the US, that greatly impact GIT application development, and in some extent also core product development. This analysis will be developed using as example some projects that were implemented, or are undergoing, in Brazil. Introduction As a GIT professional involved in selling and implementing solutions for Brazilian utilities based on industry-leading GIS packages, the author have been faced in the last six years with the challenge to adapt product literature, marketing material and even data model templates originally developed for the US market to the local market. A set of key differences was identified during this period of time, in the areas of application functionality, data modeling, GIT core product characteristics, and interfaces requirements. Most of these differences can be connected to a same root, the historical drivers behind a regulatory environment evolution, which had opposite directions in both regions. This paper is a summary of the author’s experience in this area, and will try to trace how the regulatory commandments drove the evolution of GIT for certain application areas in the US market, and compare with the opposite path that occurred in Brazil. This will be used to explain why there are in Brazil more tight requirements for applications like Outage Management and Long Term Planning, for example, when in the other hand Work Management is almost an unknown application for the IT staffs of most Brazilian utilities. Regulatory Environment Comparisonbn US Case Since the early start of the Utilities industry in all countries there were a strong intervention of the government authority, in the form of a investor, owning companies, or as a regulatory entity (Krause, 1995). In the US, this intervention was developed over a strong legal apparatus put in place to support the FERC activity. In the 80’s, when the GIT industry was getting it’s first major grow, the FERC main responsible was in the area of economic regulation, setting energy rates between the various industry players and to the final electricity consumer. That rate regulation applied there was based on cost-of-service criteria. This criteria has the objective to keep the lowest consumer rate as possible, while guarantying the Return- Of-Investment (ROI) in an agreed level with the capitalist investor (Krause, 1995; Capeletto, 2001). The implementation of this rate regulation criteria is highly dependent on detailed, high quality information about Utility assets value and depreciation, amount of investments, maintenance costs and operational costs, at least. That “technical” information, together with information about level of energy sales, number of customers and other costs, are the basis for the accounting practices that support the rate evaluation. The requirement to generate that “technical” information and control the business processes that deal with that data was the key driver for GIT application development in the late 80’s and early 90’s, as will be showed forward in this paper. The rate regulation criteria based on cost-of-service is known to favor the overinvestment and the inefficiency of the system overall, named as the Averch-Johnson effect (Capeletto, 2001; Averch & Johnson, 1963). To counter that were developed models based on price caps fixed for a period of time, and adjusted in between by a factor that includes the inflation minus a productivity gain correction, mainly adopted in Europe. A variation of this approach is called the Performance Based Regulation, which has been in discussion by various states in the US. In this case, the capacity of the Utility to freely practice rates is conditioned to its ability to met regulator established performance goals. These goals covers various areas of the Utility activity and its customer relationship, but ones that are usually included and affects GIT applications directly are the service availability and continuity measurements, in the form of SAIDI and SAIFI numbers (or equivalents). This regulatory control over service quality aspects is relatively new, only recently being considered by GIT technology providers as an industry driver. As a matter of fact, until January 1998 the IEEE standards for these measurements (IEEE P1366/D18, 1998) were yet in a draft format. Brazilian Case The history of the government intervention in the Brazilian market is fairly different from the US one. Even if the Utility industry has its beginning through the creation of private owned companies (British and Canadian investments mainly), the major part of the electric utilities where owned by state governments during the 70’s and 80’s. These companies were vertical organizations covering Generation, Transmission and Distribution in the whole state geographic area. This environment, associated with the absurdly high inflation rates that were observed in the country during this period (over 100% per year), caused some distortions on the rate regulation, as follows:
As a consequence there were never tight regulatory controls over O&M costs, construction investments and network assets like there is in the US, and as a consequence not the need to develop IT support systems for these business processes (typically Work Management systems). As a matter of fact, the overall industry regulation until the 90’s was very loose, covering only a few aspects of the society/utility relationship. A department of the Energy Ministry played the regulatory role, instead of an autonomous entity like FERC. The Brazilian Electricity Regulation Agency (ANEEL) was created only in 1996, as part of the sector restructuring and privatization. Even being a loose regulatory environment, the area of service quality received a special attention in Brazil since the 70’s, as opposed to what happened in the US. This was caused by a series of factors, including:
Recently, these rules were revised and republished (Portaria ANEEL 024/00, 2000), creating new measurements to include not only system average indexes (DEC and FEC, very similar to SAIDI and SAIFI), but also individual service continuity indexes. The individual ones measure mean duration, frequency and maximum duration of outages (DIC, FIC and DMIC, respectively). The utility must calculate these individual indexes for each customer, and in a short run will need to publish it into the electricity bill, and provide automatic financial compensation in the following month bill to customers that had its limits violated. Summary of Regulatory Distinctions To summarize the differences that were appointed between the US and Brazilian regulatory environment since the 80’s, we have:
From the previous analysis, we see an obvious distinction between the main business drivers of the industry in both countries during the last decade, affecting directly GIT application requirements. As we can see from the GITA Special Achievements Awards to Illinois Power (1996) and Texas Utilities (1997), the hot issue of the GIT industry in the US at the beginning of the 90’s was the integration between AM/FM applications and Work Management tools. This integration was focused on streamlining the construction and maintenance processes, allowing for more complete, accurate and accessible data over construction investments, network assets and O&M costs. In Brazil the GIT industry was just starting at that time, and facing other issues. The main requirements were associated with outage management, due the regulatory pressure, and engineering tools. This second driver, although not related with the regulatory environment, was common to most RFP and public bids published so, and related with another characteristic of the electric utility industry in Brazil. The country went through a long economic crisis during the 80’s and 90’s, with inflation and high level of government debt. The investment capacity of the state-owned electric utilities was very low, when compared with the existing expansion needs. The penetration index of the electricity service was low when compared with developed countries, mostly in rural areas, and even in poor urban areas. Although, the demand growth rates in some big cities, highly urbanized, was as high as 10% to 15% a year. This environment lead to a need to optimize investments as much as possible, as opposite to the overbuild tradition of most US electric utilities. To the GIT providers, this meant integration with engineering tools to support design and development of long term planning tools and functionality. In a visit from a Brazilian electric utility to Texas Utilities in 1998, the differences between the business drivers’ priorities in both countries become clear. They decided to visit TU because its award-winning system is based on the same GIS platform that this company used to develop a Long-Term Planning tool. But their main interest was over engineering functions to support the design process, that in fact were absent of TU implementation, instead of the estimating and work order life-cycle management support that was the main feature of the system. Another curiosity about this visit was that, after going through the scheduled program, the Brazilian manager asked about the possibility to visit a Distribution Operations Center and know what type of system was used there. At that time, the visited DOC (at Forth Worth area) had only printed paper maps of the feeders it was responsible for, and the trouble analysis was done manually, over paper trouble tickets printed at the DOC room. The Brazilian company already had at that time an automated trouble analysis system implemented since 1995, integrated with the CIS system, an IVR unit and the facilities database, this last one running at a mainframe based system. The evolution of the Brazilian electric utility industry on the last few years, with privatizations and restructuring, did not change the scenario in terms of GIT application needs. The new sector model is focusing competition, through the separation between Generation, Transmission, Distribution and Commercialization business, creation of an independent Regulatory Agency (ANNEL), establishment of a spot energy market, and creation of the status of “Free Customer”, initially for high demand/high voltage customers, but to be expanded to low voltage costumers until 2005. The end-user customer rates are based in a price-cap model, subjected to a five-year revision where a factor of productivity will be taken into account to reduce rates in favor of the customer. The service quality regulation become more rigid and detailed, and the service continuity indexes limits have been reduced from year to year, forcing the utilities to improve quality continually. The recent GIT projects undergone in Brazil show how these drivers affect application requirements. The typical list includes:
The project descriptions provided hereafter are non-official, and based on the author’s involvement with each one, and personal discretion. For confidentially purposes, the companies will be referred by fictitious names, and details that could lead to its identification, like region served for instance, will be omitted. Company A is one of the five biggest utilities in Brazil, serving a few million customers, and also a GIT pioneer in the Country. Their initiatives goes back to the early 80’s, when they tied their paper maps with their mainframe based facilities database through the addition of UTM X and Y coordinates as attributes to the feeders conductor segments description. In the late 80’s they started researching the application of graphic technology to support distribution management processes like network design and planning. During the early 90’s, they accelerated these studies, and attended AM/FM International Conferences before doing the technology selection. They purchased an industry-leading GIS package in the end of 1994, and started an internal development project, supported by some external consulting service, with the goals of:
Company A started in parallel another project to develop its own core geospatial functionality, in the form of a very customized and proprietary data model and a library to be used with low-level programming languages. After a lot discussion, the product of this effort was elected as the main platform for its GIT initiatives in 1998. The new platform was used to replace the facilities database with a geospatial database during 1999 and 2000, including the improvement of data, support to landbase maintenance and some electric analysis capabilities (load curve analysis, voltage drop calculations, etc.). The support to the design process was postponed, mostly due difficulties to add long term transaction support to the core library. Company A also had a trouble analysis system in place, that used the connected model of the mainframe facilities database to analyze incoming trouble calls and generate emergency crew services to probable outage devices. Using the proprietary core libraries, this system was replaced by a GIT based outage management and dispatch system, integrated with the Call Center, the IVR unit and a satellite AVL (Automated Vehicle Location) and Mobile Data Communications system, for crew tracking and data communication. This system is implemented through the companies Distribution Operation Centers, and generates all information needed for regulatory outage reporting. Company B Company B is a medium size electric utility that was formed by the split of the former statewide company. As a young company, it started building its IT infrastructure almost from scratch, and decided to invest in GIT to support distribution management processes. They selected an industry-leading platform and an implementation partner to built a system that covers the following functionality:
The second phase was done in 2001, being the more critical in terms of gaps between the local requirements and the resources offered by the choose COTS application, what clearly reflects the distinction between the US and Brazilian regulatory requirements in the service quality area. The major gaps were found in the following functional areas:
Company C is one of the five big electric utilities in the country, serving a few million customers also. Even being recognized by its leadership in various technologic areas, the company does not have any GIT application implemented till now. The company started to evaluate the use of geospatial technology with consultants from one of the “Big Fives” consulting firms in 1999. During 2000, they contracted a recognized GIT consulting firm from the US to help them build their RFP. Although the selection process was not yet finished when this paper was wrote, some very interesting aspects of it must be highlighted:
The experience shows us that even if at a first sight the procedures and processes of the electric utilities are the same around the world, there are important details, great part of them influenced by the regulatory environment, that causes significant distinctions in GIT application requirements between countries. Specifically in the Brazilian case, the main distinctions are in the area of outage management and emergency service dispatch, since the regulatory requirements in this area are much more developed in Brazil than in the US, were the industry-leading products are developed and have their major marketplace. References
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