PG&E's Kuzirian Documents Climate of Rapid Change, Gazes Into His Crystal Ball
It would be nice if fleet management were a cookie-cutter process. Just plug in the numbers, order the trucks, manage the ones you have, and watch everything unfold with precision and grace.
But it's not like that. Kirk Kuzirian, director of fleet operations for Pacific Gas & Electric in California, calls fleet forecasting "planning in the midst of confusion." He calls it "an art, not a science." He says it is a "dynamic, changing environment."
Kuzirian, who presented the Utility Truck Fleet Outlook seminar at the NTEA Economic Outlook Conference in Dearborn, Michigan, manages a 13,640-unit fleet that is one of the largest in the US and traverses a territory that encompasses two-thirds of the nation's most populous state. He deals with 500 employees, 70 garages, and a vehicle list that includes heavy line trucks, gas crew trucks, cranes, construction equipment, trailers, pickups, and passenger cars. While he's doing that, he's juggling a $55-million budget, working with a yearly capital replacement allotment of $40-50 million.
He said PG&E is now taking a more "sophisticated" approach by breaking the units down to mini-fleets, classifying them not on the type of truck but by the job it performs. But there are still innumerable factors that influence every decision.
"Is your operations department ramping up or down? You have to stay close to them to understand that," he said. "What kind of technical advancements are coming? What business needs are we competing with? We may have to share some of our capital to help build a secure center or a substation because of the growth in the industry. What's happening with deregulation, CPUC decisions, the level and timing of funding?
"You still get the call from a department manager who's very demanding and says, `I want a new truck. I need a new truck. And here are the reasons why.'"
And then there are directives from the CFO.
"Our CFO is more interested in having a much longer-term plan: three to five years," he says. "Our goal is to try to get out of our annual budget cycle, which makes it difficult for us to coordinate buildout times with the manufacturer and have an approach where we can have longer-term commitments and provide you with information: `Hey, here's what our needs are going to be over this period of time.'"
He said he has been under "extreme pressure" to reduce costs not only from PG&E but also from consumers, because if he can minimize costs, that will drive down their rates. PG&E has had to become more skilled at maintaining equipment because maintenance costs are overhead that get passed on to consumers. PG&E's capital fleet replacement budget increased from $30 million in 1998 to $55 million this year but is projected to be reduced to under $50 million for the next two years.
For the past three years, PG&E has aggressively revamped its infrastructure to deal with maintenance issues, which has increased the workload.
Other driving forces include increasing labor costs and an aging workforce (the average age of a technician is 48), general rate-case pressures, the deregulated environment and dealings with the Public Utilities Commission, and higher customer satisfaction thresholds.
Customers Demanding More He said he was at a meeting during which the company's CEO described how a 2 am power outage 20 years ago would hardly have been noticed and how, even 10 years ago, there might only have been a few aggravated customers because their VCR light was flashing and they had to reset their digital clocks.
"Now, you have a brief outage at 2 am and these Silicon Valley factories, where they're going round the clock, can blow a whole set of wafer fabs," he said. "And on an individual basis, you have some guy in his study who is doing trading halfway across the world. We're going to hear about it."
The challenge is heightened by the daunting diversity of the geographical area (70,000 sq miles in Northern and Central California, with a population of 13 million) and customer base (4.5 million electric, 3.7 million gas, everything from wineries to car washes).
PG&E's fleet is handled by 70 garages, including one major repair facility that houses 40 mechanics. Eighty percent of the 500 employees are union skilled labor, the other 20% are management, technical/engineering, and administrative support.
Services provided include vehicle management (replacement planning, vehicle design and specifications, purchase and inspection, registration, legal compliance, vehicle disposition, and rental vehicle contracting) and maintenance (preventive maintenance, regulated inspections, general repairs and modifications, major repair and rebuilding, and emergency response).
Describing the increased importance of rental vehicle contracting, Kuzirian said "we've tried to design a fleet that allows for those peaks and valleys. Those peak times are when we rely on partners in the rental industry."
Gazing Into the Crystal Ball What does the future hold?
Well, Kuzirian's crystal ball is full of images:
- The fuel base will change. "What it's going to be, I don't know," he said. "But you are aware of the pressure we're under, whether it's compressed natural gas, electric vehicles, diesel, whatever."
- There will be equipment-specific certification. "In California, you need a certificate and a certain training level to operate a forklift. I envision that to become more prevalent with different equipment."
- Equipment design will be lighter, faster, and more efficient.
- Training will become even more critical. "We have three technical advisor trainers on staff - two that provide ongoing training to our journeymen and coordinate training from our manufacturing vendors and outside schools, and one dedicated to the apprentice-training program. I believe it's a competitive advantage to keep on people fully trained, because this equipment is getting so sophisticated and the market is becoming more difficult in terms of attracting folks."
- Onboard diagnostics will be more sophisticated.
- Regulations will get tougher.
- Manufacturers and customers will have to share information. "It's a different environment for us. We have a couple of alliances or value-managed relationships that we've got with some of our manufacturers. It's a different way of doing business. There's a trust level you need to build. But in order to achieve success, you need to have that relationship."
- There will be wireless communication for vehicles and drivers involving labor reporting, inventory control, work management, and vehicle/equipment maintenance.
- A troubleman will start his truck engine from inside the bull room during the pre-work tailboard meeting. At that time, his work orders will be automatically scheduled by the onboard computer and climate control, and seat settings will also be adjusted.
- The driver of a line-crew truck, responding to outages during heavy storms or emergency situations, will utilize his enhanced driver vision systems (via computer-aided visibility).
- Collision-avoidance systems will be on all equipment, preventing accidents.
- Crane crews will utilize the equipment's smart technology to enhance their inspection process. This technology will automatically and continuously monitor all functionality and structural integrity, such as hydraulic levels, pressure, welds, and metal fatigue.
- A gas-boring crew, or an electric crew, will utilize voice-activation systems to control underground directional boring equipment or a digger-derrick setting a pole or lifting a transformer for electric restoration.
- Upon an electrical contact, an enclosed-space gas exposure, or any accident where a driver or operator is incapacitated, 911 or emergency services will be contacted automatically.
"The future looks very bright for us," he said. "We have a healthy economy and a lot of growth and development. We have a lot of innovation and creativity, a lot of excitement, and an entrepreneurial attitude."