New Cost Estimate Template Issued: December 11, 2014 Effective: January 5, 2015
Change Description The AESO has issued a revised Cost Estimate Template to be used for transmission projects for all project stages: • Long-term Transmission Plan (LTP) or Order Of Magnitude • Needs Identification Document (NID) • Proposal to Provide Service (PPS) • 180 day PPS • Approved Cost Estimate (ACE)
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Stakeholder Comments Stakeholders expressed general support of the AESO’s efforts to enhance cost estimating quality and reporting and indicated a desire to participate in such initiatives.
The AUC indicated “… any enhancements of the templates should consider information needs of the AESO, as well as the Commission, as well as the need for more meaningful and focused reporting of information.” Source: AESO Recommendation Paper – Transmission Cost Accountability
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Change Rationale The revised template will:
• improve consistency in all cost estimates as the project moves through the stages • increase the AESO’s understanding of the cost estimates and changes in the cost estimates as they occur
• provide detailed information that will be used to populate the AESO’s benchmarking database • reduce cost-related information requests sent to the TFOs during AESO review of the PPS and Change Proposals
• provide a basis for which final costs can be compared with the estimates • provide detailed cost estimate information and explanations to better inform decisions on cost reasonableness and prudency 4
What has Changed? • Additional tabs for: – – – –
Transmission Line - Underground Procurement, Project Management, Construction Management Escalation Contingency
• Additional columns for: – – – –
Quantity Types of Materials Subcontract Amount TFO Assumptions
• Other Considerations: – Greater detail for all project material and labour items – Additional category for supply and install (turnkey) sourcing – Industry wide use of a single template
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Change Management • The AESO will direct all TFOs to use the revised template on new projects going forward – TFOs may choose to use the revised template on projects that already have been directed
• TFOs should delete the previous version of the Cost Estimate Template and download the revised template from the AESO website • If the level of detail cannot be provided as requested, the TFO is expected to provide reasons why this information is not available and roll up costs – The AESO acknowledges the level of detail requested in the early stages of a project may not be available based on the level of project definition available
• Note that the Proposal to Provide Service guideline has also been updated and is available on the AESO web-site • In early 2015, the AESO will work to make related changes to the Monthly Report, Change Proposals and Final Cost Reports templates 6
Implementation Considerations • The revised cost estimate template is available on the AESO’s website; effective January 5, 2015
• No changes to directions letters are required • An instructional guideline has been provided with the template • Minor changes will be made to the Service Proposal template • The new template anticipates revisions to ISO Rule 9.1.2 which includes adoption of AACE practices
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Questions • If you have questions regarding the revised cost estimate template, please contact: –
[email protected] – Your assigned AESO Project Manager
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