Announcing the all new Veracity Connect Platform!

Posted on October 14, 2015 by veracityamg

15 October 2015

We’re very excited to share the second generation of our cloud-based community for Utilities!

Today is a big day for all of us at Veracity. We have spent the last 18 months working with (and listening too) a wide array of Utility and Utility Associations. We have consolidated, analyzed and incorporated all of the feedback we received to develop a completely updated version of the Veracity Connect platform. The result is an amazing cloud-based community that unites all of the Veracity Connect features – Mutual Aid, Critical Spares, Surplus Management and Connect Services – into one collaborative community. The new version of Veracity Connect is available now via our new website.

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Second generation cloud-based community

We’re launching a fully revamped User Interface, new mobile capability features and many improvements to our Mutual Aid, Critical Spares Management and Surplus Management tools, as well as a new Connect Services feature and enhancements to the MapAnything and Collaboration Tools. In this blog post we highlight the major changes, so read on!

Brand New Interface

We listened to our members’ feedback and we relied on our many years of providing services to Utilities to build a new interface that balances ease of use with a rich feature set. It not only looks great, we made it work even better

Mobile Capability

If there is one message we heard loud and clear from all of our users, it’s the importance of mobile access and mobile capability in today’s 24-7, always on, always connected world. Mobile capability was priority number 1 in our development of the new Veracity Connect, to ensure all of the new and existing tools and features were optimized for smartphones and tablets.

Mutual Aid Management

The new version of Veracity Connect provides member utilities with instant access to diverse categories of service providers, contractors and equipment brokers that can provide personnel, resources and equipment. Emergency Coordinators have instant access to company profiles, available personnel and equipment to proactively prepare for and collaborate during disasters.

Critical Spares Management

The new Veracity Connect takes Critical Spares Management to a new level with member defined spare pooling. Assets and Equipment can be shared with a customized group, based on Association, Affiliation or Region. Ensure reliability, minimize risk and speed recovery with a pro-active collaborative approach to Critical Spares Management.

Surplus Management

The same great Surplus Management features that you’ve come to expect have been enhanced. The new Veracity Connect includes the ability for members to add, update and report on Surplus activity, view offer history, shipping details and payment status. Veracity Connect allows member utilities to “cast a wider net” with their surplus offerings, instantly connecting with thousands of utilities, brokers and end users.

Connect Services

MapAnything

Veracity Connect has enhanced our successful partnership with Cloudbilt, to provide the MapAnything visualization tool. MapAnything allows members to search and view information on Mutual Aid, Critical Spares and Connect Services to quickly locate the most effective and efficient result.

Collaboration

The improved collaboration features let you create, share and configure your information in real time. Share files, send instant messages and consolidated communication in as many groups as you like. Diverse teams from multiple utilities can work together in any number of ways.

What will the future bring?

We have put a lot of effort into this version and we can’t wait to continue to improve the new Veracity Connect day by day. You can look forward to regular releases and we would love to get your honest feedback – only through that we can really improve. For more news on Veracity Connect’s developments, follow us on LinkedIn, Twitter, and on our blog.

Try it now

The new version of Veracity Connect is available now via our new website at http://veracityamg.com. Did we mention that it’s free, give it a try!

We hope you enjoy the new version of Veracity Connect, and we look forward to your feedback.

The Veracity Connect team

CHEC Selects Veracity Connect for Collaboration Project

Posted on March 11, 2015 by veracityamg

March 9^th, 2015 – Veracity Asset Management Group, the category-defining Mutual Aid & Critical Spares Management solution provider, announced today that the Cornerstone Hydro Electric Concepts Association (CHEC) will conduct a pilot project utilizing Veracity Connect to foster collaboration and enable members to create effective shared services models.

The Veracity Connect solution provides utilities of all sizes with Emergency Preparedness tools to proactively prepare for and collaborate during disasters, both large and small. Veracity Connect was developed with input from a number of different public power utilities, State Associations and Joint Action Agencies.

The implementation of Veracity Connect will allow CHEC to enhance the benefits it provides to its members. The Veracity Connect features include Mutual Aid Management, Critical Spares Management, Collaboration Tools, Asset Management, Mapping Module and a Member Marketplace.

About Cornerstone Hydro Electric Concepts

CHEC, an association of 15 local distribution companies (LDCs) is modeled after a cooperative to combine resources and competencies to best meet the requirements of the changing electrical industry and provide a high standard of locally supplied customer service.

CHEC has allowed members to exchange ideas on a variety of issues facing utilities, to initiate combined solutions and to share insights on what worked and what did not. The cooperative format allowed a “think tank” environment to be created between members.

About Veracity Asset Management Group

Veracity is a consulting, services and software firm focused on providing unique solutions to Utilities and Utility Associations across North America. Veracity has developed Veracity Connect, a proprietary technology that allows member Utilities and Associations to access and share information related to mutual aid management and critical spare equipment.

The 12 Blog Posts of 2014!

Posted on December 23, 2014 by veracityamg

Selected 2015 Utility Conferences & Trade Shows

9 Key Facts from the “Large Power Transformers and the U.S. Electric Grid” Study

Debunking 5 myths of Purchasing Reconditioned Electrical Assets – Infographic

Determine the best disposition solution for your surplus assets – Infographic

Investment Recovery: the Missing Link in the Supply Chain

The Transformer Problem

Why Using Speadsheets is a Risk for Your Supply Chain

Veracity Is Part of the CDMN’s Outbound Soft Landing Program

Decommissioning Projects: Why It Costs So Much And Takes So Much Time

Article Highlight: Sustainability, Investment Recovery and Supply Chain

Critical Spares Infographic

Veracity Connect Utility Critical Asset Veracity Asset Management Group Announces the Introduction of Veracity Connect

Learn more about our Mutual Aid & Critical Spares Management Solution for Utilities: Make electrical equipment procurement easy and efficient. Locate a matching power transformer before a failure occurs!

Stay updated through our social media platforms and our website:

Subscribe to our Veracity’s monthly newsletter: Critical Spares Management & Investment Recovery for Utilities http://eepurl.com/LVtY1 http://ow.ly/i/73Jj2

High-Impact, Low-Frequency Event Risk to the North American Bulk Power System

Posted on December 3, 2014 by veracityamg

Even though the report “High-Impact, Low-Frequency Event Risk to the North American Bulk Power System” from the North American Electric Reliability Corporation (NERC) and the U.S. Department of Energy (DOE) was released in 2010, its content is still valuable in 2014 as the utility sector is well determined to strengthen its electric infrastructure against high-impact events. The NERC and DOE have given guidelines which are slowly being implemented.

All the quotes are from the report.The full report can be accessed here.

Do not miss our resources blog section to find other relevant reports from the electric utility industry: Definition

High-Impact, Low-Frequency (HILF) events are “coordinated cyber, physical […] attacks, […] nuclear weapon, and major natural disasters” such as hurricanes, earthquakes, tsunami, pandemics and geomagnetic disturbances.

Their frequency is extremely low, but they have an impact at the regional, national or international level. Power generation, transmission and distribution, as well as health, transportation and other key sectors can easily be paralyzed.

The U.S. Department of Energy and the North American Electric Reliability Corporation have made grid resiliency a priority, with a focus on large equipment, such as power transformers.

“Today, the government and industry must recommit themselves to supporting one another to enhance the protection, resiliency, and response capabilities for the North American bulk power system in the face of these rare events.”

Mitigating such risks requires balanced investments between protection of the facilities, restoration plans and resilience efforts, as well as simply raising utilities’, industry partners’ and end users’ awareness.

Common Characteristics

Can occur very quickly with little warning;
Cause widespread impact to the sector (human and/or physical);
Originate from external sources outside of control;
Limits the extent of proactive measure;
Operational experience is still little.

***

3 types of High-Impact Low-Frequency risks

Coordinated Attack Risk such as cyber and/or physical attack: “The specific concern with respect to these threats is the targeting of multiple key nodes on the system that, if damaged, destroyed, or interrupted in a coordinated fashion, could bring the system outside the protection provided by traditional planning and operating criteria.” Thus the NERC has developed Critical Infrastructure Protection standards.

Pandemic Risk: “The principal vulnerability with respect to a pandemic is the loss of staff critical to operating the electric power system.” The lack of qualified personnel would slow down operations and increase risks of failure. But the impact on the power supply is recognized as minor, as the resolution of this type of issues mainly relies on health authorities.

Geomagnetic/Electromagnetic Disturbances: caused by the solar weather, they can affect the transmission lines and large transformers. Certain areas are more affected than others. (MAP) The 1989 blackout of Hydro Québec was due to such a electromagnetic disturbance. This event led to new operational procedures for utilities whose substations are located in areas at risk.

***

Guidelines

The North American Electric Reliability Corporation and the U.S. Department of Energy have given guidelines to face such events:

Coordinated Attack Risk

Collaboration between U.S. and Canada with direct lines of communication and coordination with the electric sector.
Use scenario-based models for analysis, plans and procedures for restoration
Evaluation of the efficacy of current bulk power system planning and practices to improve the efficacy.
Implementation of restoration and recovery plans.
Increase security clearances.
Input from stakeholders, government and sector partners to identify areas of improvement and additional costs.
Improve the current spare equipment efforts for scarce/long-procurement-cycle assets, identification of inventory of critical spares.
Optimize the supply chain in terms of high-impact system components.
Develop a lexicon of cyber and physical attack risk terms to ensure clear communication
Encourage the development of technological and software solutions for network security tools.

Pandemic Risk

Incorporate previous pandemic crisis (A/H1N1) into current pandemic and business continuity plans.
Collaboration between NERC, Federal Electric Reliability Corporation (FERC) and state regulators through the National Association of Regulatory Utility Commissioners (NARUC), and the Federal Emergency Management Agency (FEMA) and all other involved entities.
Improve timeliness, granularity and quality of metrics used to measure and report on the emergence and spread of pandemic vectors.
Give U.S. and Canada health, transportation and utility services employees from critical sectors priority to access vaccines and travel.

Geomagnetic Disturbances, High Altitude Electromagnetic Pulse Events, Intentional Electromagnetic Interference Threats

Assess electromagnetic threats and initiate restoration plans.
Support industry efforts.
Design a road map for long-term research.

***

Questions

This report brings up the following questions:

How much risk is the private sector willing to accept?
How much risk is the public sector willing to accept?
How much are consumers (or society at large) willing to pay to reduce this risk?
Who makes the determination for society’s tolerance for risk and the cost of employing protections?
How should the costs of employing protections be paid for?
How is damage measured: cost to replace damaged equipment, number of people-hours without power, number of other critical infrastructure nodes affected?
Where are interdependencies most critical?

Go further

The following blog posts can help you learn more about critical equipment and grid resilience:

Equipment Criticality

Transformers: An Essential Link of the Electrical Grid

The Transformer Problem

Key points from “Economic Benefits of Increasing Electric Grid Resilience to Weather Outages”

9 Key Facts from the “Large Power Transformers and the U.S. Electric Grid” Study

Critical Spares Infographic

Your Veracity Connect Newsletter – Volume 6

Learn more about our Critical Spares Management Solution for Utilities: Make electrical equipment procurement easy and efficient. Locate a matching power transformer before a failure occurs, maximize your mutual aid efforts!

Stay updated through our social media platforms and our website:

Equipment Criticality

Posted on October 29, 2014 by veracityamg

What is Criticality?

Criticality is the quality or state of being of the highest importance. When it comes to industrial equipment, criticality focuses on the “business financial impact if an equipment failure was to happen”, according to Lifetime Reliability. Lifetime Reliability is an Australian consulting firm specialized in industrial business process optimization, reliability maintenance management and life cycle asset management.

The risk rating indicator can be calculated as followed:

Equipment Criticality = Failure Frequency (per year) x Cost Consequence ($) = Risk (in $ per year).

Cost Consequence usually includes the cost of lost production and what it takes to repair the equipment.

Why Determining the Criticality Level?

Heavy pieces of equipment, such as power transformers or industrial machinery, belong to the “low-risk, high-impact” category. Even though failure risks are low, the consequences on the company’s operations are significant.

Knowing when such a failure would occur and how much it would cost to fix it or replace it greatly helps planning operations.

If equipment is then known for a high-risk profile, the company can set “resources, engineering effort, operations practices, maintenance and training” to reduce the risks. The action plan should be the verso of its product sheet: you know the potential problems, you know what to do.

The criticality assessment should logically be led by an experimented team. For a further detailed assessment of the criticality level of equipment, the model Defect and Failure True (DAFT) Costs can be used. A DAFT database is developed in a spreadsheet database (if you have software better than Excel, use it!).

Assessment Team

Let’s focus on the team who will assess your equipment’s criticality. They should know:

the design, and how to operate and maintain the equipment;
the impact of equipment failure on the production;
the financial loss for the company due to a production interruption, and on the clients;
They should use all information available from the upper level and workers in order to determine an accurate and up-to-date equipment profile.
In the frame of implementing a risk control methodology, they should be familiar with international risk management standards, ISO 31000 being the most common.

One more time, knowledge is power. With a dedicated team and allotted time, assessing the risk profile of your heavy equipment will become a real asset, saving you costs and time in the long-run.

***

Risk Matrix

Lifetime Reliability has designed a series of matrices which helps determine the potential consequences, the failure frequency, the risk identification and assessment and the risk treatment schedule and action plan. Clear and easy to use, they can be the basis of risk assessment.

Business-Wide Consequence

The additional factors can help determine the consequences:

Type of industry
Lack of equipment standardization
Service level and required time
Availability of spares and investment
Avoiding “just-in-case” model
Supply chain network
Logistics
Available qualified personnel
Holistic approach, strong communication and cooperation between operations, purchasing and executive teams.

Historical Frequency

Risk Identification and Assessment

Risk Treatment Schedule and Action Plan

***

Let’s talk about YOUR equipment. The following questions can be asked:

Do you know the risk profiles?
Does your equipment belong to the low-frequency/high-power category?
What would happen if a failure occurs and requires the replacement of the unit?
How difficult is it to source a replacement?
Do you use a buddy system (numerous phone calls, emails to your colleagues or acquaintances) which proves to be not so effective?
Would you accept the help from a specialized third-party like Veracity Asset Management Group?

We specialize in critical spares management and asset disposition. We help companies like utilities on a daily basis to source or dispose of critical equipment.

Contact us at 866-694-1252 or info@veracityamg.com. We are located in Sault Ste. Marie, Ontario, with solutions available for the North American market.

Learn more about our Critical Spares Management Solution for Utilities: Make electrical equipment procurement easy and efficient. Locate a matching power transformer before a failure occurs!

Stay updated through our social media platforms and our website:

Go further:

6 Tips to Improve Your Spare Parts Management

The Management of Critical Spares in the Electric & Gas Utility Industry

Strategic Asset Management

Veracity Connect: Critical Asset Management Solution

Equipment Criticality Tutorial, by Lifetime Reliability – Solutions

The Transformer Problem

Posted on September 24, 2014 by veracityamg

The consequences of any transformer failure are important, from a 20-minute outage, to a black-out of several days, resulting in hundreds or thousands of customers in the dark and significant loss revenue.

Transformers are the essential links between power generation, transmission and distribution systems.

Electric Grid Representation by Texas Alliance of Energy Producers

According to Willis North America, “transformers have for decades been ranked in the top five by equipment insurers in terms of claims”. The U.S. Department of Energy states that “the average age of installed Large Power Transformers (LPTs) in the U.S. is approximately 38 to 40 years”.

Utilities have to deal with high pressure. Deregulation, increasing demand for electricity and shortage of skilled workers have prevented utilities to invest in capital infrastructure.

Prices of the main materials, copper and steel, have skyrocketed. The price of transformers has doubled. “A large transformer that cost $500,000 in 1960, now has a replacement cost of about $4,000,000.” “Projections of capital required to maintain reliable service across the system are simply beyond the financial capacity of many of the relatively new transmission and distribution (T&D) companies.” (Willis North America). Also, the average lead time for a new unit is …750 days.

This is why Veracity Asset Management Group has designed Veracity Connect, a critical spares management solution. Veracity Connect connects utilities, cooperatives, OEMs and leading transformer brokers, to leverage a pool of available critical spares. Utilities can quickly locate matching spare transformers and capital equipment across North America and take advantage of economies of scale.

Learn more at www.veracityamg.com. Contact us today at 866-694-1252 or info@veracityamg.com to become a Veracity Connect member.

The Trade Show Season Is Open

Posted on September 3, 2014 by veracityamg

The trade show season is about to start again! You will find below a list of the most pertinent events in the procurement & supply chain field and the energy sector in North America.

Power Grid Resilience Summit

September 8 – 11, 2014, Hyatt Regency, San Francisco, California, U.S.

Back in April of 2013 there were two physical attacks on the grid. The first targeted PG&E’s Metcalf power substation in San Jose, the second was at TVA Watts Bar Nuclear Plant in Spring City, Tennessee. In the first instance PG&E lost functionality on 17 transformers, recovering operations in less than 4 weeks. Four weeks is actually remarkably quick…critical components such as transformers can take 3 months to 2 years to be manufactured and shipped, depending on the size and requirements.

Couple these challenges with new risks of unprecedented catastrophe from long-duration electric grid disruption… and the need for crafting and implementing practical, coherent, no-nonsense, nuts-and bolts disaster prevention, response and recovery plans also becomes a compelling priority.

IQPC’s Power Grid Resilience Summit for the first time, brings together top utility executives to share best practices with respect to immediate implementation of near-term and relatively low-cost steps to make our grid significantly more resilient.

This summit delivers “here’s how-to-do-it” methodologies to help you implement, manage and lead disaster prevention/recovery efforts in your utility.

Program: http://ow.ly/ydOIX

http://www.powergridresilience.com

83^rd Annual Utility Purchasing Management Group Conference

September 21-23, 2014, Orlando, Florida, U.S.

Over the years, Institute of Supply Management’s Utility Purchasing Management Group (UPMG) has grown significantly and its annual conference continues to be recognized as of the premier educational events within the utility supply chain industry. The event is hosted by Duke Energy.

Key Industry Topic Discussions from Duke Energy Senior Executives
Chief Procurement Office and Chief Financial Officer Panel Discussion
Change Management Techniques: Supply Chain Focus
Best Practices in Utility Supply Chain Focus
Best Practice in Utility Supply Chain Organizations
Talent Management
Futurist General Session
Buy America General Session
Disney Executive Addresses Attendees

http://www.upmg.org/

Contact: Marlon Merritt at Marlon.Merrit@duke-energy.com

International Council on Large Electric Systems (CIGRE) Canada Conference

September 22-24, 2014, Toronto, International Center, Canada

Electric utilities with transmission and distribution systems face tough challenges: planning, connecting and operating systems with radically different generation, including large solar and wind generation, and more power electronics-controlled loads. Concurrently, utilities must ensure reliability and adequate power quality, reduce carbon emissions, minimize visibility of new builds, improve customer service, moderate electricity rates, manage aging infrastructure, and address climate changes and extreme weather concerns.

At this conference, deepen your understanding of these utility issues, the solutions, approaches, methods, and tools which have worked successfully, and seek answers to specific emerging issues at your utility.

http://www.cigre.ca/

Contact: Conference.2014CIGRE@HydroOne.com

Smartgrid Canada Conference Montreal 2014

October 1-3, 2014, Westin Hotel, Montreal, Québec, Canada

For its fourth annual conference, SmartGrid Canada has partnered with the Smart Grid RoadShow to create the single leading event for the electricity industry. Between October 1-3 at the Westin Hotel in Montreal, utility representatives, industry members, policy makers and regulators will come together to discuss the challenges and opportunities in modernizing Canada’s electricity infrastructure.

The conference will explore the leading topics of the day, focusing on grid resiliency, the active customer and how smart grid technologies enable them. Extreme weather and other natural disasters can threaten lives, disable communities, and devastate electric utilities’ operations. With greater reliability demanded by the general public, utilities must respond with new strategies, resources and adaptation techniques to strengthen the electric grid.

Program: http://smartgridcanadaconf.ca/2014/programme/

http://smartgridcanadaconf.ca/2014/

Steven Desrochers | steven@smartgridroadshow.com
Sponsorships & Exhibition
1-(888) 332-3749 (x222)

Anne-Marie Enns | anne-marie.enns@sgcanada.org
Communications
1-(604) 313-3831

October 28-30, 2014 – Calgary, Alberta, Canada

Produced in partnership with the Supply Chain Management Association of Alberta, Canadian Manufacturers & Exporters and the Government of Alberta, the Canadian Energy Supply Chain Forum is a two and a half day conference and trade show focused on helping and enabling Canadian energy companies build a world-class supply chain.

This event will provide a number of world-class examples of supply chain management excellence and deliver guidance on how to think, interact and approach your daily work in new and innovative ways. The CESCF will provide insights on how Canadian energy companies can achieve supply chain excellence by re-evaluating communication practices, scope preparation, contract negotiation, risk management, integrated project delivery and more.

http://www.supplychainforum.ca/index.php/schedule

Federation of Alberta Gas-Co-ops Ltd. Annual General Meeting & Trade Fair

November 24-27, 2014, Delta Edmonton South Hotel/Radisson Edmonton South Hotel, Alberta, Canada

For 50 years, the Federation of Alberta Gas Co-ops Ltd. and its 81 Member Utilities have been proud to have helped build Rural Alberta. The supply of natural gas to remote areas of our province has been essential to the development of Alberta, and has ensured all Albertans have access to a great quality of life no matter where they are. From a small collection of farmers to now the world’s largest rural gas distribution system, we are proud of our story and will celebrate it at our Annual General Meeting and Trade Fair this November.

Program: http://www.fedgas.com/public/data/documents/01TradeFairBrochure14pdf.pdf

http://www.fedgas.com/admin/contentx/default.cfm?h=2&PageId=11163

For more information, contact Dawn Dietz at the Federation Office
(780) 416-6543 or ddietz@fedgas.com

NET 2015 – Touchstone Energy Annual New and Emerging Technologies

January 26-29, 2015, Tucson, Arizona, U.S.

NET 2015 is Touchstone Energy’s premiere B2B conference connecting national energy managers and key account personnel from around the nation. Hear and see what new technologies and topics are shaping our industry from national speakers and experts. View new products and services from our valued sponsors and exhibitors and network with beautiful Tucson as your backdrop.

Contact: Kathryn Momot, Program Manager, Kathryn.Momot@nreca.coop, (703) 907-5707

http://net.touchstoneenergy.com/content/net-2015

TechAdvantage Expo

February 23-26, 2015, Orlando, Florida, U.S.

TechAdvantage is at the forefront of innovation, delivering critical technologies that are transforming the world of engineering, information technology, energy services, operations, supply management and business. Join everyone for four days of leading-edge strategies and best practices created to share and demonstrate advantages in science, technology and other industry areas that will benefit Co-op Nation well into the 21st century.

Who comes to TechAdvantage?

Engineers eager to leverage new applications and existing technologies to do their jobs well and do their jobs right
Sharp operations professionals wanting to keep pace with new technologies who are ready to execute results and fire on all cylinders
IT professionals targeting new skills and analyzing practical information to manage infrastructure, security and strategy
Frontline supply managers attentive to new ideas and innovative products that they can maneuver and apply at their co-ops
National co-op leaders wanting to hear from technology experts about what they see coming to determine how their co-ops will meet new challenges
Smart co-op insiders, hungry for what comes next and re-energized by new ideas that will elevate their efforts to new levels

Eric Commodore, NRECA
Telephone: 703.907.5577, Fax: 703.907.5521, eric.commodore@nreca.coop

Mary Novack, Kenworthy Management, Inc., NRECA Show Management
Telephone: 718.578.4658, Fax: 718.848.5095mary@kenworthymanagement.com

http://www.techadvantage.org

Supply Chain Management Association National Conference

June 10 to 12, 2015, Halifax, Nova Scotia

Canada’s premier event for supply chain management professionals is also its largest. Each year, 500 top procurement and supply chain decision-makers from across Canada come together at the SCMA National Conference to discover the latest developments and best practices in the profession.

http://www.scmanational.ca/nationalconference/

Email: info@scmanational.ca

Stay updated through our social media platforms and our website:

9 Key Facts from the “Large Power Transformers and the U.S. Electric Grid” Study

Posted on June 25, 2014 by veracityamg

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 physical vandalism and extreme weather events 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 both risks and costs associated with transformer failures. Due to long lead times and cost of these units, it only makes sense to adopt an industry wide spares program.

An updated report, “Large Power Transformers and the U.S. Electric Grid” has been published in April 2014, by the Infrastructure Security and Energy Restoration Office of Electricity Delivery and Energy Reliability U.S. Department of Energy. This report not only shows how critical Large Power Transformers are but also exposes the real risks of these units going down.

The 52-page report points out the critical role played by large power transformers (LPTs): “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, and it could be difficult to quickly replace it. Key industry sources have identified the limited availability of spare LPTs as a potential issue for critical infrastructure resilience in the United States”. You can find the full report here.

“The limited availability of [spare] extra-high-voltage transformers in crisis situations presents potential supply chain vulnerability.” – A Framework for Establishing Critical Infrastructure Resilience Goals, National Infrastructure Advisory Council, 2010

9 key facts about LPTs:

Large Power Transformers are custom-designed, with a wide magnitude of features:

Manufacturing a LPT is a difficult, lengthy and costly process. “The procurement and manufacturing of LPTs is a complex process that includes prequalification of manufacturers, a competitive bidding process, the purchase of raw materials, and special modes of transportation due to its size and weight. The result is the possibility of an extended lead time that could stretch beyond 20 months if the manufacturer has difficulty obtaining certain key parts or materials.”
Copper and steel for the electrical industry represent more than 50% of the cost of an LPT. Their increasing price negatively affects the manufacturing and the procurement process.

LPTs are aging: “The average age of installed LPTs in the United States is approximately 38 to 40 years, with 70 percent of LPTs being 25 years or older. While the life expectancy of a power transformer varies depending on how it is used, aging power transformers are potentially subject to an increased risk of failure.”
Less than 12 companies manufacture LPTs in North America and sourcing abroad brings bigger challenges: “the potential for an extended lead time due to unexpected global events or difficulty in transportation; the fluctuation of currency exchange rates and material prices; and cultural differences and communication barriers. The utility industry is also facing the challenge of maintaining an experienced in-house workforce that is able to address procurement and maintenance issues.”
Redundancy helps, but is not enough: “although reliability and redundancy are built into the system, the electricity industry identified that the limited domestic manufacturing capacity of high-voltage power transformers could present a potential supply issue in the event that many LPTs failed simultaneously.”

By 2040, China will be leading in terms of power generation.
Electrical disturbances are the first cause of failures, followed by lightning and insulation defect.
Physical attacks on LPTs are increasing. “On March 7 2014, the Federal Energy Regulatory Commission (FERC) directed NERC to develop mandatory physical security standards within 90 days in the wake of attacks on transmission facilities in the United States in 2013. Owners and operators are to first identify critical facilities, and then develop and implement plans to protect against physical attacks that may compromise the operability or recovery of such facilities.” Read more about the FERC study: http://ow.ly/ymsG5.

Critical Spares Programs will be progressively implemented: “EEI’s Spare Transformer Equipment Program and NERC’s Spare Equipment Database Program are designed to provide ways in which utilities may identify and share spare transformers across North America during an emergency. As this information becomes available, this will help decision makers understand what additional programs or incentives may be needed to increase the number of available spares.”

In this way, Veracity Asset Management Group has designed Veracity Connect, a cloud-based platform for utilities that consolidates spare inventories – especially transformers – of utilities, brokers, resellers, industry and Origin Equipment Manufacturers in North America. Distribution, transmission and generation companies can access available equipment and have a proactive approach to transformer failures. Veracity Connect helps utilities enhance risk mitigation strategies, sharing/pooling strategies, capital budgeting; and answers challenges highlighted by “Large Power Transformers and the U.S. Electric Grid” study by making critical spares available to its utility members.

Learn more about our Critical Spares Management Services: http://ow.ly/ymqFP and by clicking here: