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The 7 R’s of Investment Recovery
Last month the second R, Reconditioned, was discussed. Rebuilding assets such as valves, pumps, transformers and motors is more economical than purchasing new.
This month we will consider the third R which is Return to supplier. In order to maximize the value of this option, it is suggested that a return clause be added to supplier contracts.
Companies often have assets, such as standard equipment and parts, in new condition in their original packaging. Although they are considered as obsolete within the company, they still have value on the market. If a pre-existing return clause is in the contract, these items can be returned to the supplier at a pre-arranged buy back price!
Occasionally it can be effective to use a third party to contact your supplier. The third party can discuss return options rather than making the product available to the public. Often, for competitive reasons, vendors will buy back the product in order to keep it off the marketplace.
So, before getting rid of surplus items, review the contract to determine if there are return options. If there are not, you may try to leverage upcoming purchases and have your supplier discount the new purchase with the return of old stock. You could also look for assistance from a third party.
Veracity brings on new clients!
Generation, transmission and distribution utility, 490,000 customers, $7 billion in assets
Distribution utility, 315,000 customers, 35,400 transformers
Transmission utility, serves 85% of Albertans, 280 substations
Generation utility, 36 energy facilities, serves 500,000 homes
Your Feedback
What our clients are saying!
“Veracity’s process not only helped us maximize the recovery value of the decommissioned assets, but saved us both administrative and removal expenses. Veracity’s service was seamless and added significant value to the substation decommissioning”.
Herbert Haller P.Eng.
Vice-President, Engineering & Stations
Waterloo North Hydro Inc.
Strategic Critical Spares Management
The development of a critical spares management strategy is no longer nice to have, but rather a must have to avoid the risks associated with large power transformer failures.
With aging infrastructure, threats of vandalism and extreme weather, utilities must assess their supply of critical spares. Utilities can no longer afford to take an internal approach and must focus on external collaboration to share risks and costs. Due to long lead times and cost of these units, it only makes sense to adopt an industry wide spares program.
The report “Large Power Transformers and the U.S. Electric Grid”, published in April 2014 by U.S. Department of Energy, shows how critical Large Power Transformers (LPTs) are, and exposes the risks of these units going down.
“LPTs have long been a concern for the U.S. Electricity Sector, because the failure of a single unit can cause temporary service interruption and lead to collateral damage […]. Key industry sources have identified the limited availability of spare LPTs as a potential issue for critical infrastructure resilience in the United States” and in North America in general.
A collaborative network such as Veracity Connect helps utilities share an effective service model. It allows them to access critical spares such as transformers and optimize buying rates and logistics to anticipate failure.
A glimpse of assets we manage for our clients
- Transformers (substations)
- Pad mount transformers
- Pole mount transformers
- Switchgear
- Valves
- Steam turbines
- Fleet vehicles, such as:
1997 “Reach All” Freightliner FL80 Double Bucket Aerial Truck – 45,600 K, last certified in February 2014
Interested in some of these assets? Contact us at 1-866-694-1252 or info@veracityamg.com.
Upcoming Conferences
2014 Canadian Utilities IT & Telecom Conference
Calgary, Alberta – September 23 – 26, 2014
Canadian Energy Supply Chain Forum
Calgary, Alberta – October 28 – 30, 2014
DistribuTECH
San Diego, California – February 3-5, 2014
Veracity Asset Services Inc 