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Optimizing capital spending for a large nuclear fleet


“Over the past seven years, we have formalized a process around using the MCR project evaluation methodology and tools, and have applied it to our entire fleet.”

—Manager, Project Evaluation


Background

A large utility in the south had a strategic objective of becoming the best managed nuclear fleet in the nation as measured by its ability to achieve a rank of first or second among all US nuclear fleets in key performance indicators. The company’s nuclear organization identified the business case evaluation of major projects, to align safety and reliability with cost, as a cornerstone to achieve the strategic objective. The nuclear organization recognized MCR’s unique approach to developing business cases as a best practice and asked us to work with their staff for implementation.

Solution

We worked with our client’s engineering and business personnel to develop business cases for selected projects. Each business case identified alternatives and quantified risk through sensitivity, breakeven and probabilistic risk analysis. A key measure of success was the development of robust project alternatives with dollar and percentage savings from the baseline budget for the selected projects.

Results

Coordinating with our client’s staff, we developed 10 business cases and provided “hands-on” training on the approach. We created a desktop evaluation guide to document the business case process and to institutionalize the approach.

The 10 business cases resulted in savings of more than 20% of the original budgeted amounts, exceeding our client’s investment in the project by a factor of 40x.