ISE

Renewable Energy Project USC : 

Renewable Energy Project USC Team 3 November 24, 2009

Agenda (1of 2) : 

RES Inc., Proprietary Information Agenda (1of 2) Project Introduction Team Members Ground Rules and Assumptions Description Origination Chart Equipment, personnel and facilities Schedule Project Summary Schedule Critical Path Confidence Level Work Breakdown Structure (WBS) WBS WBS Dictionary Sample

Agenda (2 of 2) : 

RES Inc., Proprietary Information Agenda (2 of 2) Project Management Plans Earned Value Baseline/Plan Subcontract Management Plan Resource Plan Communication Plan Quality Management Plan Metrics Plan Bill of Materials (BOM) Verification & Validation Management Plan Risk, Issues, and Opportunities Management Plan Major Risks, Issues and Opportunities Cost Analysis Project Cost Project Cost Summary Recommendations

Slide 4: 

Project Introduction RES Inc., Proprietary Information

Team Members – RES Inc. : 

Team Members – RES Inc. Oscar Marin Karthik Balasubramanian Jorge Menjivar Hui-Ju Lu Hamid Hussain RES Inc., Proprietary Information

Ground Rules & Assumptions : 

RES Inc., Proprietary Information Ground Rules & Assumptions RES Inc. offers 20 years in renewable energy integration experience Procure/ Subcontract major system elements i.e. solar panels, mounting systems etc. Interfacing with USC Facilities Management Services (FMS) Use all major parking structure rooftops for solar panel mounting Use rooftop of new housing project (Figueroa & Jefferson) Use Dedeaux Field (Baseball) for solar trackers

Ground Rules & Assumptions : 

Ground Rules & Assumptions Cost Estimates and Trade studies are Rough Order Magnitude (ROM) estimates USC provides utilities i.e. power, water Use standard 5 day working week to determine project schedule Assume budget is $85 Million. RES Inc., Proprietary Information

Project Description : 

Project Description Support California green initiative Generate 10% - 15% of energy through solar panels Include all supporting tasks Completion December 2011 RES Inc., Proprietary Information

Slide 9: 

RES Inc., Proprietary Information Project Organization Chart

Equipment, Facilities and Personnel : 

RES Inc., Proprietary Information Equipment, Facilities and Personnel Equipment Construction equipment Cranes Trucks Wiring, elec. equip., & tools Computing systems Facilities Control facility Storage/Warehouse Onsite office Onsite security Transportation Personnel Engineers Systems Mechanical & Electrical Specialty Human Resources Project office Business office Security Field technicians

Slide 11: 

Work Breakdown Structure RES Inc., Proprietary Information

Work Breakdown Structure (1 of 2) : 

Work Breakdown Structure (1 of 2) RES Inc., Proprietary Information

Work Breakdown Structure (2 of 2) : 

Work Breakdown Structure (2 of 2) RES Inc., Proprietary Information

WBS Dictionary Sample : 

WBS Dictionary Sample RES Inc., Proprietary Information

Slide 15: 

Schedule RES Inc., Proprietary Information

Project Summary Schedule : 

Project Summary Schedule RES Inc., Proprietary Information

Critical Path : 

Critical Path RES Inc., Proprietary Information Start: 12/2/09 Total Slack: 33 ETC: 11/18/11 End: 12/2/11

Confidence Level (1 of 2) : 

Confidence Level (1 of 2) RES Inc., Proprietary Information References: Ursula Knopp-Mckendree, ISE 515, Lecture 4

Confidence Level (2 of 2) : 

Confidence Level (2 of 2) Net working days to deadline: 533 Expected days to completion: 490 Standard deviation of CP: 17.26 Z = 1.91 97.19% Confidence of completing the project within the scheduled completion date RES Inc., Proprietary Information

Slide 20: 

Project Management Plans RES Inc., Proprietary Information

Project Management Plans : 

RES Inc., Proprietary Information Project Management Plans Earned Value Baseline/Plan Subcontract Management Plan Resource Plan Communication Plan Quality Management Plan Metrics Plan Bill of Materials (BOM) Risk, Issues, and Opportunities Management Plan Verification & Validation Management Plan

Earned Value Management Plan : 

RES Inc., Proprietary Information Earned Value Management Plan A method which measures project performance by comparing work completed against work planned (at a given date in the project schedule) EVM has the ability to combine measurements of scope, schedule, and cost in a single integrated system. Enables the detection of early project performance problems

Subcontract Management Plan : 

RES Inc., Proprietary Information Subcontract Management Plan Outlines the relationship between the subcontractors in the Renewable Energy USC project Methods by which Renewable Energy Solutions Inc., as the prime contractor, will assure the production of quality deliverables from each of its subcontractors Assures the development of long term business relationships between the Companies.

Resource Plan : 

RES Inc., Proprietary Information Resource Plan Types of labor required for the project Roles and key responsibilities for each labor type Number of people required to fill each role Items of equipment to be used and their purposes Types and quantities of equipment needed Total amount of materials needed

Communication Plan : 

RES Inc., Proprietary Information Communication Plan Describes the mechanisms for communicating: Strategies Plans Actions to be taken Status Direction of the Renewable Energy USC Project with employees, customers, suppliers, Renewable Energy Solutions Inc. leadership and all other stakeholders.

Quality Management Plan : 

RES Inc., Proprietary Information Quality Management Plan An ongoing effort to provide services that meet or exceed customer expectations through a structured, systematic process for creating organizational participation in planning and implementing quality improvements through out the lifecycle of the project. Comprised but not be limited to quality assurance (QA) and parts, materials, and processes (PMP) control activities.

Metrics Plan (1of 2) : 

RES Inc., Proprietary Information Metrics Plan (1of 2) Evaluate project progress Provide control over the project Mitigate Risk Identify crisis in their early stages Management team performance Provide customer satisfaction feedback Reference: www.cvr-it.com

Metrics Plan (2 of 2) : 

RES Inc., Proprietary Information Metrics Plan (2 of 2) Earned Value Reporting Resource Efficiency Schedule Efficiency Quality Cost of rework, missed milestones doe to quality issues Scope Creep Reference: www.cvr-it.com

Bill of Materials (BOM) : 

RES Inc., Proprietary Information Bill of Materials (BOM) List of the raw materials, sub-assemblies, intermediate assemblies, sub-components, components, parts and the quantities of each needed to manufacture an end item (final product) The list of components that make up a system Usually organized in hierarchical view Reference: http://encyclopedia2.thefreedictionary.com/Bill+of+materials

Verification & Validation Management Plan : 

RES Inc., Proprietary Information Verification & Validation Management Plan Verification and Validation activities include: Development Qualification Acceptance of the products/components, sub-systems, and system. Robust V&V processes ensure the proper hardware/software product is built and delivered to the Customer Verification compliance is performed throughout the system architectural hierarchy i.e., product/component, sub-system, system

Verification Approach : 

Verification Approach RES Inc., Proprietary Information

Risk, Issues, & Opportunities Management Plan (1 of 2) : 

RES Inc., Proprietary Information Risk, Issues, & Opportunities Management Plan (1 of 2) A risk is defined as an uncertain event that has the impact on the objectives of the project. An opportunity is defined as a “condition or situation favorable to the project, a positive set of circumstances, a positive set of events, a risk that will have a positive impact on the project objectives, or possibility for positive changes”1 Reference: PMBOK Guide 3rd edition

Risk, Issues, & Opportunities Management Plan (2 of 2) : 

RES Inc., Proprietary Information Risk, Issues, & Opportunities Management Plan (2 of 2) An issue is defined as “a situation or event that has occurred, and which has an unfavorable consequence impacting the technical, schedule, or cost performance of the project”1 Reference: PMBOK Guide 3rd edition

Slide 34: 

Major Risks and Opportunities RES Inc., Proprietary Information

Risks, Issues and Opportunities : 

Risks, Issues and Opportunities Risk# 002 Increase in price of raw materials Responsible team: Contracting office; Business team Risk type: Cost Risk handling strategy: Monitor market prices Lifetime buy Procure (contract negotiation) RES Inc., Proprietary Information O T O – Original Level T – Target Level

Risks, Issues and Opportunities : 

Risks, Issues and Opportunities Risk# 005 Unexpected weather Responsible team: Installation Risk type: Scheduled Risk handling strategy: Create installation schedule based on historical data Parallel activities to reduce dependencies Focus on critical activities to lower weather impact likelihood RES Inc., Proprietary Information O T O – Original Level T – Target Level

Risks, Issues and Opportunities : 

Risks, Issues and Opportunities Risk# 008 Delay in permits Responsible team: Grid integration, Installation Risk type: Schedule Risk handling strategy: Prepare paper work in advance( consider as long lead item) Contract clauses for release of liability RES Inc., Proprietary Information O T O – Original Level T – Target Level

Sample Risk Assessment : 

Sample Risk Assessment RES Inc., Proprietary Information

Risks, Issues and Opportunities : 

Risks, Issues and Opportunities Opportunity# 001 Early Completion of Tasks Responsible team: Project Management Office Opportunity type: Schedule Risk handling strategy: RESInc will apply Lean initiatives Additional resources allocation Performance incentives to reach target. RES Inc., Proprietary Information O T T O O – Original Level T – Target Level

Risks, Issues and Opportunities : 

Risks, Issues and Opportunities Opportunity# 002 Complete Project at Reduced Cost Responsible team: Business Team (Finance Focal) Opportunity type: Cost Risk handling strategy: Trade studies will also be integral to achieving cost savings. Lean and Six Sigma to ensure a quality product RES Inc., Proprietary Information O T T O O – Original Level T – Target Level

Sample Opportunity Assessment : 

Sample Opportunity Assessment RES Inc., Proprietary Information

Slide 42: 

Cost Analysis RES Inc., Proprietary Information

Project Cost - Products : 

Project Cost - Products RES Inc., Proprietary Information

Project Cost – Resource and Labor : 

Project Cost – Resource and Labor RES Inc., Proprietary Information

RES Inc. Project Cost Summary : 

RES Inc. Project Cost Summary Total Cost: $73 Million RES Inc., Proprietary Information

Slide 46: 

Recommendation RES Inc., Proprietary Information

Cash Flow Analysis, Year 1 - 6 : 

Cash Flow Analysis, Year 1 - 6 RES Inc., Proprietary Information References: LADWP.com; solar-estimate.org

Return on Investment for USC : 

Return on Investment for USC Simple ROI(over 25 years) = (Gains – Investment )/ Investment =(143,347,594 – 122,195,330)/ 122,195,330 = 0.17 ROI > 0, therefore positive investment RES Inc., Proprietary Information

Break Even Analysis : 

Break Even Analysis RES Inc., Proprietary Information Break Even in 8 years Cumulative savings over 25 years $21 Million Over 400,000 tons of CO2 emissions averted Break Even

Slide 50: 

Questions? RES Inc., Proprietary Information