At the recent SAP for Utilities event in Huntington Beach, Canadian utility Hydro One were presented with a prize for the best SAP project implementation. After the prize giving, I caught up with Hydro One Chief Operating Officer Peter Gregg and he told me about their six year journey to modernize their utility.
Here is the transcription of our conversation:
Tom Raftery: Hey everyone! We are the SAP for Utilities event in Huntington Beach and I am here with —
Peter Gregg: Peter Gregg, Chief Operating Officer of HydroOne.
Tom Raftery: Peter, you won an award today, can you tell us about that?
Peter Gregg: Yeah, we won an award, it was the CIS Customer Information System Project that we have just been live with in May and we won best project from a Canadian perspective and it was an American project that won as well, but we have got one because we are special and we are Canadian.
Tom Raftery: And you mentioned that there were a number of projects you have done over the last couple of years?
Peter Gregg: Yeah, we have been on an SAP journey for about six years now where we have sort of done all of our HR, Pay, back office stuff, we have done investment management, workflow processes but this last one which we call our Phase four was the customer information system replacement.
We had a legacy system that had been built for us about 11 years ago, incredibly complex and purpose built rather than out of the box and it was unsupportable, we needed to change it, so we have gone live on May 24th of this year, and we have had excellent success so far.
Tom Raftery: Okay, and I mean apart from the fact that you had that legacy system, that was cobbled together as you say, what was the thinking behind the last six years investments?
Peter Gregg: It’s really — the theme of this event has been sort of modernization of the utilities, and I think we had the realization that to survive in this business, we needed to change our way of life, we had a real challenge where a lot of our assets were coming to end of life, there hadn’t been a major capital expansion in 50-60 years and our customer expectations were changing as well, the expectations of having better service, better information, a better company. So we took a step back, talked to a lot of professionals in the business and took what I think was a bold step to try to get ahead of that trend of modernizing utility, and we are proud to say that we had sort of been at the forefront of that modernization trend.
Tom Raftery: But that’s lot of money…
Peter Gregg: It’s an awful lot of money. And we have spent a lot of time discussing it with our regulator and customers, we have had wonderful regulatory support all the way throughout it, because they see the value of the business cases we put forward, I think the challenge for us now that we are taking a bit of a break from project time is now, how do we leverage all of that spend, all that investment to make sure that we are making better asset management decisions, we are making better investment decisions that we are getting more efficient processes to deliver the work to our customers and having that impact, that positive impact on rates that our customers see.
Tom Raftery: So long term, it should help, at least stabilize the price for a while.
Peter Gregg: It will stabilize the price, I think it will, we are having other pressures too in the Ontario market place outside of our own business but we don’t manage the commodity price, commodity price has been going up substantially and I think customers are saying we don’t really care who manages the price, you have all got to do your own part to keep prices down.
So I think the investment we have made is going to keep us on a flatter trajectory. Our challenge now, what we have given to our staff is to try to keep as flat rate increases as we possibly can and so we are going in for a distribution, we do a transmission at a distribution filing in our business and our challenge in our distribution five year rate case is to keep our average annual increase out at 1%, so less than inflation.
Tom Raftery: Excellent, fantastic! Thanks very much.
Peter Gregg: Great, thank you.