Xcel Energy Construction Inspection & Management and Material Management

Reducing Costs by Effective Inspections

Challenge: Xcel Energy SPS’s capital spend (Capex) increased from about $20M per year to about $300M per year at a rapid rate. This increase in Capex was due to several projects that were required to be completed to enhance regional transmission reliability, provide Utility infrastructure for the Oil Patch boom in the Southeast New Mexico and West Texas regions. Xcel Energy was looking to develop a comprehensive Material Management and Construction Management program for their transmission line substation construction projects. Xcel Energy wanted to achieve a simple goal that the project teams in the office and field teams needed to know what was happening in real-time. Their main needs for this program were:

Xcel Energy’s needs were as follows:

  • Reduce impact of material issues on construction by catching problems early and keeping vendors accountable. Xcel holds their material vendors contractually accountable to fabrication errors to less than 1%.  For several years, Xcel Energy never enforced the contract since their capital spend was relatively low.  As the Capex increased from $20M a year to more than $300M a year, this issue slowly crept up and created a multi-million-dollar extra expenditure (like for material returns, crew stand down time etc.) as the construction contractors issued change orders to Xcel for material issues in the field.
  • Improve collaboration of their field teams with their engineering department in a seamless manner.
  • Improve communication of issues related to material, right of way, permitting, and other construction challenges back to the design and project management teams and reduce impact of these issues on construction delays

Solution: Think Power Solutions was hired by Xcel Energy to resolve this problem.  Think Power performed construction management, material management and provided software services and addressed Xcel Energy’s problems as below:

  • Identified material actual defects to be about 20% - in effect a huge problem as contract enforcement standard was less than 1% in defects.  Based on our data collection in the field, construction management, and material management system, we brought down the material issues for Xcel by helping Xcel enforce their own contracts with actionable intelligence.  This was achieved by using an effective data collection system in the field using Think Power LOGS and automated analytics of collected data based on Xcel standards on Think Power ONE dashboards. 
  • Classified material issues (example:  NEMA pad issues, welding issues, seam grind issues, etc.) identified in the field providing valuable QA/QC feedback to the material vendors to improve their QC process in their manufacturing plants. 
  • Think Power personnel tracked real time project progress in the field using Think Power LOGS. The collected data was automatically fed into Think Power ONE dashboards that could then be viewed directly by project managers.

Resolution: A combination of Think Power ONE, LOGS, material management and construction management saved Xcel about $4.75M in the year 2015 through efficient field progress tracking and communication and ensuring company standards were met by outside contractors and vendors.

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