Facilities Asset Preservation

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Facilities Asset Preservation

• IFMA Utility Council--Spring Meeting
• Phoenix, Arizona
• April 27-29, 2003
• Eddie Ingle, TVA

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TOP 10THINGS TO PONDER

• 8. Why is it that doctors call what they do
  practice?
• 9. Is it true that cannibals dont eat clowns
  because they taste funny?
• 10. Why dont you ever see the headline Psychic
  Wins Lottery?

3
TOP 10THINGS TO PONDER

• Why is the man who invests all your money called
  a broker?
• 6. Why is lemon juice made with artificial
  flavor, and dishwashing liquid made with real
  lemons?
• 7. If someone with multiple personalities
  threatens to kill himself, is it considered a
  hostage situation?

4
TOP 10THINGS TO PONDER

• 2. You know that indestructible black box that
  is used on airplanes? Why dont they make the
  whole plane out of that stuff?
• 3. When dog food is new and improved tasting,
  who tests it?
• 4. Why isnt there mouse-flavored cat food?

5
TOP 10THINGS TO PONDER

• 1. If its zero degrees outside today and its
  supposed to be twice as cold tomorrow, how cold
  is it going to be?

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Facilities Asset Preservation

• Aging assets A blessing in the past, a threat in
  the future
• We all know about the aging process

"The significant problems we face cannot be
solved at the same level of thinking we were at
when we created them." --Albert Einstein
(1879-1955)
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Facilities Asset Preservation-- Changing the
Culture
TVA STAR 7 -- shaping the culture Strategic
Teamwork for Action and Results 7 Values
integrityrespect for the individualaccountabili
tyteamworkinnovation and continuous
improvementhonest communicationsflexibility Goal
s supply low cost reliable powersupport a
thriving river systemstimulate economic
growth Strategic objectives --improve life in the
Tennessee Valley through integrated management of
the river system and environmental
stewardshipmeet customers needs with
affordable, reliable electric powerdemonstrate
leadership in supporting sustainable economic
development in the Tennessee Valleycontinue the
trend of debt reductionreduce TVAs delivered
cost of power relative to the marketstrengthen
working relationships with all of TVAs
stakeholders
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Facilities Asset Preservation-- Changing the
Culture
Standardization Across the Enterprise
Ike Zeringue, TVA COO

• Standardized processes will
• Promote most efficient use of company resources
• Allow TVA to develop and implement best practices
  
• Minimize variations in hardware and software
• Minimize training when employees change jobs

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Facilities Asset Preservation

• Contents
• Everything begins with strategic facilities plan
• Benefits of extending the useful life of core
  assets
• Renewal and replacement strategies and
  prioritiesthe model
• Ongoing maintenance repairs

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Strategic Facilities Plan

• Objectives
• Prepare and annually update a long-range
  strategic facilities plan aligned with corporate
  business planning
• Reduce overall square footage used by TVA
• Provide for future flexibility
• Minimize current and future costs of space
• Determine and implement the highest and best
  use of TVA facilities

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Strategic Facilities Plan

• Findings
• Facilities management operations, accountability,
  and responsibility are dispersed throughout TVA
• Across TVA, facility management processes are
  not standardized and workplace and building
  quality is inconsistent
• Due to budget constraints, facility upgrades
  have been deferred, resulting in mechanical
  failure and structural deterioration

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Strategic Planning Process
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Strategic Planning Process
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Strategic Planning Process
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Strategic Planning Process
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Strategic Planning Process
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Facilities Planning Process
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The Facilities Portfolio

• Fast Facts
• TVAs power system has a generating capacity of
  31,517 megawatts.
• TVA operates three nuclear plants, 11 fossil
  plants, 29 hydroelectric plants, six combustion
  turbine plants, and one pumped-storage plant.
• There are 158 locally owned distributors that
  sell TVA electricity to consumers and 62 large
  industrial and federal customers that receive TVA
  power directly.
• TVAs power-service region covers 80,000 square
  miles.

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The Facilities Portfolio
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The Facilities Portfolio

• Building locations About 130
• Square feet About 29.3 M

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Strategic Facilities Plan
There Are No Sacred Cows
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Facilities Asset Preservation

• What is Facilities Asset Preservation?
• TVA-wide initiative
• Outflow from the TVA Strategic Facilities Plan
• Program mission is to optimize TVAs core
  facilities by extending their useful lives
• Those projects and activities which must be done
  to maintain an asset in a condition to satisfy
  its intended operation capability
• Core assets must be properly maintained fully
  utilized
• Core assets must be kept in a condition that
  supports the intended service delivery

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Facilities Asset Preservation

• Five focus areas
• Building envelope (roofs, exterior siding, etc.)
• Building systems
• Architectural systems and finishes
• Roads, parking, and grounds
• Coatings and corrosion control

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Facilities Asset Preservation

• Background Information
• Asset inventory includes (estimates)
• 3,000 buildings/30 million square feet of space
• 250 miles of roads
• 335 acres of parking
• 31,500 acres of maintained grounds
• Nearly 300,000 acres of transmission line
  right-of-way
• Over 100 million square feet of structural
  surface areas to protect from corrosion

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Facilities Asset Preservation

• Background Information (continued)
• Industry rule of thumb
• Annual maintenance repair funding equals 2 to
  4 of CRV
• TVA past practice
• Significantly less than one-half of this funding
  level

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Facilities Asset Preservation
TVAs current estimated facilities condition
index rating is 9, or in the fair to poor range.
This graph shows how long it would take, with
different funding levels, to move to the good
range.
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Facilities Asset Preservation

• What assets are involved?
• Properties included in the TVA Strategic
  Facilities Plan and core to TVAs ongoing
  business need
• TVAN sites Outside protected areas (evaluated
  on a case-by-case basis)
• Power generation, transmission, flood control,
  and navigation assets which are outside the
  primary process areas/equipment
• Any asset that is subject to corrosion

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Facilities Asset Preservation

• Why is the Facilities Asset Preservation program
  important?
• Facilities and fixed assets have finite life
  cycles
• From the day a component of the facility or
  infrastructure is placed into service, a plan for
  its maintenance and replacement should be
  developed, monitored, and adhered to
• Failure to maintain an asset results in
• Deferred costs (pay me now or pay me later)
• Outages and other emergencies when assets fail
• Increased service disruption
• Increased repair/replacement costs
• Shortened useful life

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Facilities Asset Preservation
Adequate and timely maintenance, together with
timely renewal strategies, reduces the total cost
of ownership and increases the return on
investment.
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Facilities Asset Preservation

• Program Benefits to TVA
• Internal cooperation in allocating limited
  resources throughout TVA
• Better opportunity to leverage the buy across TVA
• Better decisions based on genuine need
• Better use of limited resources (correct high
  priority items first, defer low priority items)
• Improved operating conditions, extended useful
  life of assets
• Fewer and less severe service disruptions and
  outages

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Facilities Asset Preservation

• Program Benefits to SBUs
• Can focus on core business
• Fair and equitable allocation of
  preservation/maintenance resources
• Improved reliability of core assets

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Facilities Asset Preservation

• How will the Facilities Asset Preservation
  program be administered?
• Partnership among Administration and the other
  SBUs
• Cross-functional team approach
• Consistent application of preservation standards
  and goals
• Consistent prioritization of preservation needs
• Use limited resources to meet high priority
  preservation needs
• Defer expenditures on low priority preservation
  needs

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Facilities Asset Preservation

• Cross-functional Team Members
• Ike Zeringue, COO, executive co-sponsor
• LeAnne Stribley, Executive VP ADMIN, executive
  co-sponsor
• Terrell Burkhart, VP FM, team sponsor
• Eddie Ingle, team leader
• Lee Nash, Fossil Power Group
• Barry Gore, Transmission/Power Supply
• Craig Morris, River System Operations and
  Environment
• Eric Rauch, River System Operations and
  Environment
• Lynn Smith, TVA Nuclear
• Dennis McCorvie, Procurement
• Bryan Jones, Information Services
• Terry Nash, coatings and corrosion control
• Fred Wildman, building envelope
• David Smith, building systems
• Jim Vineyard, architectural systems
• Jim Morse, roads, parking, and grounds
• Marvin Johnston, technical specialist
• Jerry Blackburn, technical specialist

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Facilities Asset Preservation

• Overall Strategy
• Focus available resources on facilities assets
  that are in most need of repair and are most
  important to TVAs mission, improving those
  assets to good or better condition with little
  or no associated deferred maintenance backlog.
• Address assets that are in failed condition
  first
• Address next the assets in poor condition and
  the assets in fair condition with economic life
  extension benefits
• Address next all other assets in fair condition

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Facilities Asset Preservation

• Methodology/Process Steps
• Identify applicable assets
• Determine level of importance
• Assess current condition/identify existing
  deficiencies
• Develop and maintain information/inventory data
  base
• Identify and prioritize improvement needs
• Gain consensus on prioritization
• Present to PRC for budget approval
• Allocate available funds beginning with highest
  priority and continuing in descending order
• Develop long term spend plans based on remaining
  life of asset
• Coordinate planning with the implementing
  organization
• Identify required preventive maintenance
• Develop, monitor and report on shared measures
  for desired results

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Facilities Asset Preservation

• Three Categories of Criteria Used to Establish
  Priorities
• Importance to TVA
• Observed condition of the asset
• Impacts and probability of failure
• The following three pages contain more detailed
  descriptions of the criteria categories and
  ratings.

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Facilities Asset Preservation

• Criteria Used to Establish Priorities
  Importance
• High Importance
• Mission critical asset failure will impact
  power generation, power transmission, or river
  operations unavailable or unreliable asset could
  result in inability to conduct business
• Appearance reflects poorly on TVA, resulting in
  adverse public image
• Serious accident or near miss has already
  occurred or is highly probable
• Regulatory fines or negative political
  consequences already exist
• Medium Importance
• Asset failure will be costly and disruptive to
  business
• Appearance could result in adverse public image
• Medium potential for serious accident or
  near-miss incident
• Asset failure may result in regulatory
  non-compliance and/or negative political
  consequences
• Low Importance
• Asset failure will create an inconvenience and
  some additional cost
• Appearance results in little or no image impacts
• Risk/failure results in hardship to comply with
  regulations

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Facilities Asset Preservation

• Criteria Used to Establish Priorities - Observed
  Conditions
• Failed condition
• Non-functioning
• No longer working
• Poor condition
• Excessive wear and tear
• Somewhat functional
• Fair condition
• Normal wear and tear
• Still fully functional
• Good condition
• Some signs of minor wear and tear
• Excellent condition
• New or like new

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Facilities Asset Preservation

• Criteria Used to Establish Priorities Impacts
  and Probability of Failure
• Failure will have impacts on the health and
  safety of people
• 300 points high potential for serious accident
• 180 points medium potential for serious
  accident
• 80 points low potential for serious accident
• Failure will have impacts on generation,
  transmission, or river operations or ability to
  conduct business
• 280 points high probability of failure
• 160 points medium probability of failure
• 60 points low probability of failure
• Failure will have impacts on productivity of
  people
• 260 points impacts more than 100 people
• 140 points impacts 50 to 100 people
• 40 points impacts 0 to 50 people
• Failure will have environmental impacts or result
  in a recordable environmental event
• 240 points high probability
• 120 points medium probability
• 20 points low probability
• Failure will have impacts on TVAs image

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Facilities Asset Preservation

• Ongoing maintenance repair (baseline)

The construction of new facilities attracts far
greater attention than the maintenance and repair
of existing ones.
It is the capacity for maintenance which is the
best test for the vigor and stamina of a society
Anyone can be galvanized for awhile to building
something, but the will to keep things in good
repair day-in, day-out is fairly rare.
Ownership requires not only money but vision,
resolve, experience, and expertise to sustain the
investment. Recognizing this is the essence of
stewardship.
Extending the useful life of core facilities and
related assets, thereby optimizing their value to
the enterprise is a primary role of the Facility
Manager Eddie Ingle
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Facilities Asset Preservation

• What is the program status?
• Action Status
• Enterprise-wide Roofing program in FM ? Oct. 02
• Enterprise-wide SPP developed ? Oct. 02
• Develop Phase II Communication Plan ? Nov. 02
• Complete roofs and coatings assessments ? 95
• Complete R/P/G condition assessments ? 85
• Complete assessments of remaining assets ? 20

? - complete ? - underway
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Facilities Asset Preservation

• What are the next steps?
• Near term
• Continue communicating coordinating program
  across TVA
• Implement approved TVA SPP across all SBUs
• Continue to completion all condition assessments
• Continue correcting deficiencies
• Consolidate into FM budget
• Begin education campaign regarding the management
  of depreciation
• Long term
• Continue to gather asset condition information
  across TVA (ongoing)
• Build comprehensive data base for use in
  strategic decision making
• Establish long term spend plan to strategically
  reduce the deferred maintenance backlog and
  improve the overall facilities condition index

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Management Quiz

• The following short quiz consists of 4
  questions and tells whether you are qualified to
  be a "manager".  The questions are not that
  difficult.
• How do you put a giraffe into a refrigerator?
• How do you put an elephant into a refrigerator?
• The Lion King is hosting an animal conference,
  all the animals attend except one. Which animal
  does not attend?
• There is a river you must cross. But it is
  inhabited by crocodiles. How do you manage it?

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Management Quiz

• How do you put a giraffe into a
  refrigerator?
• The correct answer is Open the refrigerator, put
  in the giraffe and close the door.  This question
  tests whether you tend to do simple things in an
  overly complicated way.

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Management Quiz

• How do you put an elephant into a
  refrigerator?
• Wrong Answer   Open the refrigerator, put
  in the elephant and close the refrigerator.
• Correct Answer Open the refrigerator, take
  out the giraffe, put in the elephant and close
  the door.This tests your ability to think
  through the repercussions of your previous
  actions.

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Management Quiz

• The Lion King is hosting an animal
  conference, all the animals attend except one.
  Which animal does not attend?
• Correct Answer   The Elephant.  The Elephant
  is in the refrigerator. This tests your memory.

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Management Quiz

• OK, even if you did not answer the first three
  questions correctly, you still have one more
  chance to show your abilities.

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Management Quiz

• There is a river you must cross. But it is
  inhabited by crocodiles. How do you manage it?
• Correct Answer  You swim across. All the
  Crocodiles are attending the Animal Meeting! This
  tests whether you learn quickly from your
  mistakes.

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Management Quiz

• According to Andersen Consulting World wide,
  around 90 of the professionals they tested got
  all questions wrong.  But many preschoolers got
  several correct answers. Andersen Consulting says
  this conclusively disproves the theory that most
  managers and management consultants have the
  brains of a four year old.

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Facilities Asset Preservation

• More Information
• Eddie Ingle
• TVA 1101 Market St. EB 3G-C Chatt., Tn.
  37402-2801
• deingle_at_tva.gov
• 423-751-2530 (W)
• 423-751-6197 (fax)
• 423-667-7519 (cell)