Benchmarking is a common business practice in which
organizations evaluate various aspects of their
processes and performance in relation to industry norms.
The information gathered allows them to develop plans to
adopt best practices as a way to improve overall
In some cases, regulatory or legal requirements drive
typical goal among regulatory agencies is to ensure the
protection of ratepayers. Our client -- a very large,
regulated electric utility -- was due for a commission
review of its teleprotection plans and needed to
document how the operating and capital expenses of its
network operation conformed to industry norms.
unique nature of the client’s service territory, which
included an expansive portion of very remote areas, made
comparison difficult with other electric utilities that
had very different service territory profiles. The
complication necessitated development of a new approach
that normalized the factors differentiating the utility
from its prospective benchmark peers in order to present
a viable argument to the commission.
order to establish a meaningful benchmarking effort so
that our client could make an 'apples-to-apples'
comparison, we gathered a significant amount of industry
data from other utilities and then made appropriate
translations. We ensured the validity of our methodology
by developing a detailed seven-step process,
establishing a number of key benchmark metrics.
collecting all of the data from the different utilities,
we developed benchmarks that recognized the actual data
at hand and accounted for the differences in operations
among the target utilities. By developing a technique
for our benchmarking approach, we were able to make
translations for the differences between our client and
the control companies. Our methodology -- cost-driver
analysis -- allowed us to develop meaningful metrics to
support the benchmarks sought by the commission.
Once all of the data was gathered and analyzed, we were
able to document and justify our client’s network
support activities, including network planning,
provisioning, engineering, maintenance, network
monitoring, construction, and others. Through the
development of a detailed benchmark methodology, a
complete report was delivered to the commission for
report was approved by the commission without need for
any further inquiries. The commission approved the plan
proposed by the utility and deemed all expenses covered
by the report as prudent and justified.
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