EnergyBiz - January/February 2008 - (Page 19) shortening of refueling outages at Exelon. “We plan for an outage two years ahead, and we know exactly what we want to do so we can marshal the right resources well ahead of time. Our average refueling outage today is 20 days. We do some in as few as 16 days, while others may take 23, depending on how much upgrading and maintenance needs to be done. That compares to 80 to 90 days before we went to a fleetwide structure.” Technology has contributed to increased efficiency and performance largely through more sophisticated tools for monitoring plant operations. “We’ve got better diagnostics,” Adrian Heymer says. “For example, using noninvasive vibration monitoring and sonography, it’s often possible to inspect pipes, valves and other components without actually breaking them apart, and early detection of problems allows for more timely repairs and preventive measures.” Computer models have been particularly valuable in helping perform risk assessment and anticipating the likely effects of various scenarios, such as how dropping power a given percentage would likely affect grid performance. These advances, of course, are available to small operators as well as to the fleets. Fleets have distinct advantages, however, when it comes to being able to stockpile parts and equipment. “We have a critical-component spare-part program, something you don’t see in smaller utilities,” says Exelon’s Amir Shahkarami. “We identify critical components and we buy them in bulk and keep them in inventory just in case we need them. Smaller utilities can’t afford that.” Nor can smaller entities bargain with the same clout as large fleets for the lowest price. But Don Hintz insists, it’s neither technology nor the purchasing clout enjoyed by large fleets that give them an edge. “It’s not the equipment that keeps a plant running, it’s the people. Everybody in this business deals with the same technology.” But going forward, it’s precisely the people part that gives pause to the fleet operators. The workforce is aging rapidly, and finding new workers has been a major challenge ever since the Three Mile Island accident in 1979. John Herron, Entergy Nuclear’s senior vice president for operations, notes that Entergy has active programs to work with colleges and junior colleges to stimulate interest in nuclear programs, and they’re even active at local tech-schools and high schools. Going forward, it’s likely that the movement toward large fleets will continue, with perhaps a half dozen ultimately operating all of the plants in the country. New nuclear construction will depend largely on lowering construction costs and convincing investors that nuclear plants over the long term can yield a reasonable ROI. That capacity factors have plateaued for several years at or above the 90 percent mark has gone a long way toward convincing Wall Street that nuclear plants can indeed be profitable over time. Don Hintz believes the future is definitely with the fleets. “I think you’re going to see fleet operators really grow with new plants. I don’t see any single-plant operators or a company that has one or two plants being part of this renaissance.” Mergers & Acquisitions Conference England & Company Save the date of April 21, 2008 to attend Energy Central’s and England & Company’s 1st Annual, Investing in the SmartGrid: How Corporations and Private Equity Investors are Changing the Landscape of the Utility Products and Services Industry, conference to be held in Chicago, Illinois. Investing in the SmartGrid is a unique half-day forum for leaders of solution providers serving the SmartGrid/intelligent utility enterprise market. The forum will include market insights from leading industry analyst Warren Causey, Vice President at Sierra Energy Group, the research and analysis division of Energy Central, plus a capital markets outlook from Glenn Tofil, Managing Director with England & Company, and a round table and industry forum with leading venture capital and private equity investors in the SmartGrid market. Who should attend? Executive leadership from small to large SmartGrid and transmission & distribution solution providers should attend. You will gain key insights into investment opportunities in the merger and acquisition marketplace and ability to network with leading investors in the SmartGrid market. Registration & Information For more information on sponsorship opportunities, participation and registration for the Investing in the SmartGrid conference, please contact Jana Koehn with Energy Central at 303.228.4735 or via e-mail at jkoehn@energycentral.com. www.energycentral.com E n E rgyB i z 19 http://www.energycentral.com http://www.energycentral.com
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