The power and utilities industry is evolving rapidly: hydrocarbon generation prices, emission targets, larger, more complex markets, and reduced customer switching costs pose major challenges.
Meanwhile, profit margins are being squeezed from both sides: better informed more nimble customers are becoming increasingly price sensitive, and regulators are pressuring for reduced operating costs.
Change brings new and complex opportunities, i.e. large mergers and acquisitions (such as Gaz de France / Suez; Enel / Ed Endesa; Kinder Morgan / Terasen; TransCanada / Ravenswood) as well as the entry of former nationalized companies in the developing world, Middle East, the Americas, or Europe.
To survive and thrive, organizations must be deeply knowledgeable about the competitive landscape. Kaiser Associates’ relentless focus on analyzing the external environment is regularly assisting clients to pro-actively sustain and create competitive advantage.
Kaiser Experience
Kaiser has a long history of working in many aspects of the energy and utilities industry – power generation, water, waste water, electricity, gas, crude oil, and waste.
More specifically, for utilities, Kaiser has in-depth experience in issues of competitive advantage such as: risk management; distribution; effluent collection, treatment and disposal; generation; transmission; workforce management systems [WMS]; vegetation management; Carbon Dioxide strategy development, customer service, customer operations, health safety & environment [HSE], back office support services rationalization, and metering.
Kaiser areas of expertise:
- Entry into new geographies, fuel or transmission types, market segments
- Penetration of new channels; further penetration of existing channels
- Identifying and qualifying acquisition targets, joint ventures or alliances
- Developing commercial innovation / idea-led innovation processes
- Productivity improvement:
- SG&A optimization
- Leveraging corporate scale and scope through Shared Services and other approaches
- Apples-to-apples comparisons of major functional activities, such as: power generation, customer service, customer operations,
- Optimizing pricing strategy and customer mix
Recent Engagement Examples:
WMS
In a multi-location setting, Kaiser determined that the client was not managing maintenance effectively. The client was close to implementing a WMS solution without fully understanding the implications of the proposed changes. Kaiser provided the client with deep insights into the complexities of a WMS installation. As a result, the client is restructuring its current approach in order to save time, money, and disruption to its current activities, while increasing controls on its maintenance operations.
Transmission technologies
One of the world’s largest pipeline operators was faced with a competitive threat – promising significantly lower operating costs and shipper tolls. Kaiser analyzed the threat against 5 key criteria: financial, technological (x2), customer support and go-to-market timing; and conclusively determined only one aspect of the competitive threat [a hard to understand technology solution] had any merit. As a result, the client was able to proceed with its market development program without fear of failure relative to this competitor.
Customer Operations
Kaiser recently benchmarked customer operations at a major electric PUC. The client did not know that its low reliability performance [SAIDI, SAIFI, and CAIDI scores] was due to inadequate vegetation management practices. The client is currently implementing Kaiser’s fact-based recommendations that will have direct benefits to customer service costs and satisfaction.