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Benchmarking is a common business practice in which organizations evaluate various aspects of their processes and performance in relation to industry norms. The information gathered allows them to develop plans to adopt best practices as a way to improve overall performance. In some cases, regulatory or legal requirements drive benchmarking efforts.

A typical goal among regulatory agencies is to ensure the protection of ratepayers. Our client -- a very large, regulated electric utility -- was due for a commission review of its teleprotection plans and needed to document how the operating and capital expenses of its network operation conformed to industry norms.

The unique nature of the client’s service territory, which included an expansive portion of very remote areas, made comparison difficult with other electric utilities that had very different service territory profiles. This complication necessitated development of a new approach that normalized the factors differentiating the utility from its prospective benchmark peers in order to present a viable argument to the commission.

In order to establish a meaningful benchmarking effort so that our client could make an 'apples-to-apples' comparison, we gathered a significant amount of industry data from other utilities and then made appropriate translations. We ensured the validity of our methodology by developing a detailed seven-step process, establishing a number of key benchmark metrics.

After collecting all of the data from the different utilities, we developed benchmarks that recognized the actual data at hand and accounted for the differences in operations among the target utilities. By developing a technique for our benchmarking approach, we were able to make translations for the differences between our client and the benchmark companies. Our methodology -- cost-driver analysis -- allowed us to develop meaningful metrics to support the benchmarks sought by the commission.

Problem Solved
Once all of the data was gathered and analyzed, we were able to document and justify our client’s network support activities, including network planning, provisioning, engineering, maintenance, network monitoring, construction, and others. Through the development of a detailed benchmark methodology, a complete report was delivered to the commission for review.


The report was approved by the commission without need for any further inquiries. The commission approved the plan proposed by the utility and deemed all expenses covered by the report as prudent and justified.

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