Case Study: Transforming Capital Planning at SRP

Salt River Project (SRP) is a community-based, not-for-profit organization responsible for providing power and water to more than 1 million customers in Central Arizona. In 2017, SRP selected Copperleaf^® to help optimize its capital planning process for maximum value and efficiency. Since then, SRP has implemented the Copperleaf Decision Analytics Solution across the entire organization, beginning with electric generation, transmission, IT, fleet, and facilities, and expanding to electric distribution and water. Today, the Copperleaf solution is being used to evaluate all capital investments across SRP.

At the 2023 Copperleaf Summit, Kevin Nielsen, Senior Director, Power Generation, shared how SRP uses Copperleaf’s decision analytics solutions to manage a multi-billion-dollar annual budget and deliver on SRP’s pledge to provide sustainable, affordable, and reliable power and water to the Phoenix metropolitan area.

Before implementing Copperleaf in 2017, capital project prioritization at SRP was an arduous, siloed, and subjective process. Projects were presented and reviewed during annual planning meetings, with hallway conversations and offline bargaining often influencing investment decision making. More than 85% of projects were routinely deemed non-discretionary, leaving limited room for debate or year-over-year performance improvement.

Something had to change.

SRP recognized that in order to truly transform the capital planning process, the company needed a way to evaluate investment options objectively and select the combination of projects that delivers the highest value for every dollar spent. The team was able to win the support of senior leaders by presenting a clear business case that demonstrated how eliminating projects with low or negative value would more than cover the cost of the software as well as the investment of time and resources into improving the process.

Partnering with Copperleaf, Kevin and his team built out a value framework for SRP’s power generation business. While SRP’s previous process used a limited set of factors to prioritize projects, the Copperleaf Value Framework provided a way to incorporate additional metrics, such as public perception and environmental compliance—and quantify the value of all projects on a common economic scale.

We started to see with the Copperleaf tool that value is much more than just dollars. We started to look at all the different dimensions of what value comes from an investment. And with Copperleaf’s help, we figured out ways to effectively measure those and balance them against traditional cost and reliability metrics. So we end up with an evaluation platform that anybody can use for any investment.

Kevin Nielsen
Senior Director, Power Generation
SRP

Equipped with a sophisticated value framework, SRP’s capital planning team could quickly evaluate hundreds of projects and identify the optimal portfolio of investments to pursue. Investments that had historically been deemed non-discretionary could be viewed through a new lens and compared objectively alongside all other candidate projects, leading to more focused and productive discussions and a more holistic capital plan.

Today, SRP routinely meets all of its capital targets, and Kevin credits this success to a number of key factors:

• • Multi-dimensional value:  Measuring each investment’s contribution to reliability, affordability, and safety—along with other considerations, like compliance, legal, environmental, and community impact—provides a more complete understanding of value, and the ability to make trade-off decisions across dissimilar investments.
  • Organization-wide adoption:  Since first piloting Copperleaf in the power generation business, SRP has continued to evolve and expand the value framework to recognize the benefits that can come from projects across all lines of business.
  • Efficient reviews:  Copperleaf shines a light on projects that don’t provide value to the organization or its customers. Instead of spending time debating the merits of the top 10 projects, the team can focus attention on the low-to-no value projects and make informed decisions.
  • Continuous planning:  Since adopting Copperleaf, SRP has established an inter-departmental capital planning governance committee that meets regularly to review the process and provide ongoing operational support and guidance.
  • Transparent process:  Stakeholders across the organization have visibility into the capital planning process and how decisions are made, fostering greater collaboration and team cohesion.

We’ve met all our capital targets since implementing the Copperleaf solution. Now, we meet our targets, we spend our money, we do it in a way that’s best for the organization.

Kevin Nielsen
Senior Director, Power Generation
SRP

In this video, Kevin describes how SRP partnered with Copperleaf to transform its capital planning process, make more transparent, objective, and informed decisions, and deliver the most value for every dollar spent.

To learn more about how Copperleaf can help your organization transform your investment planning process and achieve similar results, please contact us today.