Managing life‐cycle costs: Applications and lessons learned at leading utilities

摘要

AbstractLife‐cycle cost management (LCCM) provides electric utility staff with a structured process for making decisions based on the true cost of the products and processes they use, rather than on purchase price alone or on other partial life‐cycle costs. Several utilities have used LCCM to evaluate a range of product substitution and process improvement decisions and to implement cost‐saving actions. This article summarizes some of these applications. Each utility applied the LCCM tools and techniques in a way that met their individual needs, such as selecting cost‐effective specific pollution prevention options, making product purchase decisions, making process improvement decisions, managing commodities, and setting priorities for further evaluation. LCCM has helped utilities save millions of dollars by considering the true costs of the materials, products, and processes they use. This article examines the LCCM techniques and tools that help organizations evaluate their options and make decisions with minimum effort.The authors wish to thank our utility partners for their contributions to developing the LCCM tools and techniques and for their participation in applying these tools and techniques to important decisions: Duke Power Company, Entergy Services Inc., Florida Power Corporation, Niagara Mohawk Power Company, Pacific GasElectric Company, and Potomac Electric Power Company. The authors thank the following utility representatives for their valuable contributions: Amy Crews Baxter, Reggie Black, Jay Eingold, Shireen Fahey, Tom Fox, Tom Rooney, and Tyrone Williams. The authors also thank key members of the DFI project team: Nathan Chan, Gillian Lam, Mia Morsy, Jim Mullin, and Valerie