Developing Robust Business Cases. A Proven Approach to Optimize G&T Capital Budgets in a Tight Credit Market (white paper)
G&T executives are facing increased pressure to reassess capital expenditure levels in response to the recent credit crunch and a slowing economy. However, requirements remain to build additional generation, new transmission and address environmental regulations. The challenge is to optimize and reduce capital spending in this environment in a systematic fashion that recognizes cost-risk tradeoffs. For many years, utilities have used some form of a business case to analyze and review projects before they receive funding. However, for most participants, this approach has become too much of a just go through the motions exercise. To be effective, the business case approach needs to become much more robust and useful to the engineers putting the cases together and to the senior management team needing to make the difficult capital allocation decisions.