• BWL STRATEGIC PLAN 2016-2020

    Background

    Nearly all utilities across the country, including the Lansing Board of Water & Light (BWL), face significant change over the next five years. The BWL General Manager and Board of Commissioners, working with BWL staff, have prepared an updated BWL Strategic Plan as a high-level tool, providing a “road map” of strategic goals and objectives to meet these changes while supporting the BWL Mission and Values.

    To develop this Strategic Plan, BWL staff interviewed BWL executive and senior staff, union leadership (IBEW 352), and subject matter experts across the organization. Each interview consisted of an evaluation of the BWL’s current mission and values statements and an assessment of the BWL’s strengths, weaknesses, opportunities, and challenges (SWOC).

    The evaluation and SWOC assessment processes allowed for refinements to be made to the Mission and Values statements that were reflective of the common feedback gathered during the interviews. The revised Mission and Value statements serve as the foundation for the Strategic Plan.

    The assessment processes also identified common challenges and opportunities, allowing the development of strategies and objectives to meet them. These strategies and objectives are the essence of the BWL’s strategic direction, allowing the BWL to addresses the challenges and opportunities while providing a common understanding of the strategic goals for communication and planning at all organizational levels.

    Mission Statement

    The BWL’s mission statement explains the purpose and priorities of the company. The mission statement also helps direct the work of the BWL Board and employees, provides guidance, and makes a commitment to exemplary customer service.

    The mission of the BWL is to provide safe, reliable, and affordable utility products and services to the Greater Lansing Region. Together, the BWL’s Board, management, and employees will plan for sustainable growth, be responsible environmental stewards, and be active participants in the Lansing Community’s economic and cultural initiatives.

    Value Statements

    The BWL’s values are the guiding principles to which its employees adhere in the conduct of the BWL’s business. They express the shared beliefs and behaviors that guide interactions with, customers, the community and each other.

    Exceptional Service: The BWL is dedicated to providing exemplary and reliable utility products and services.

    Competitive Rates: As a publicly owned utility, providing competitive and affordable rates is integral to the economic well-being of the Lansing region.

    Safety: The safety of employees and customers is a priority.

    Community Commitment: The BWL is committed to active corporate citizenship that advances the community’s economic and cultural well-being.

    Integrity: The BWL will instill community trust by conducting business in a manner that is open, honest, and fair.

    Inclusion and Equity: The BWL values and respects the individuality and diversity of our customers and employees, considers these an asset of the BWL and the community, and will strive to reflect that diversity in our workforce.

    Environmental Stewardship: BWL practices and policies will demonstrate our commitment to a healthy and sustainable environment.

    Challenges and Opportunities

    Some of the significant high level challenges and opportunities that were identified include:

    Retirement of BWL Eckert Station: In 2015 the Lansing Board of Water and Light (BWL) announced plans to close the coal-fired Eckert Station by January 2020. The retirement of Eckert will create a shortage in the energy and capacity available to serve the BWL’s customers thereby impacting affordability and reliability.

    Changing customer expectations: With the advances in digital technology, information availability, and mobile devices, BWL customers now expect more information and control over their services. In addition to immediate feedback on outages and restoration to mobile devices, the ability to monitor and control electric usage by remotely reading meters and remotely controlling thermostats, water heaters, and appliances is needed. Technology will allow for more closely tailored services to meet customer needs. In addition, the BWL’s customer service will become more efficient, with “real-time” turn-on and turn-off services, along with enhanced online options, such as payments immediately posted to accounts.

    Aging infrastructure: The BWL is in the beginning stages of an extensive five-year plan to upgrade and strengthen the resiliency of its electric transmission and distribution system. The last time extensive upgrades were made to this system was in the 1980s. In addition to the electric system, the BWL is also planning for extensive upgrades to its water and steam transmission and distribution systems and its chilled water infrastructure.

    Aging and evolving workforce: Over 20 percent of the BWL workforce is eligible to retire, and within a couple years that number will grow to nearly 30 percent. It is imperative for the company to prepare for succession and transfer of knowledge from these employees. At the same time, the BWL must determine the best approach to train BWL employees that are either going to be displaced (e.g. those engaged in daily work at Eckert Station) or are going to be taking on new positions supporting technology that will be implemented as a result of following this strategic plan.

    Evolving environmental and regulatory requirements: The BWL faces many new environmental regulations, including those related to concern over climate change, such as the Clean Power Plan. These new regulations have the potential for a significant impact on existing plants such as Erickson. Compliance requirements are an increasingly important component of long-term planning. In addition to environmental regulations, to support reliability of the electric grid, the Federal Energy Regulatory Commission (FERC) and the National Electric Reliability Company (NERC) have implemented rigorous reliability and security standards with which utilities like the BWL must comply. These standards are continually changing, becoming more stringent and impacting nearly every aspect of operation from access to the grid to protection from cyber threats.

    Achieving financial performance targets: To address the significant challenges that have been identified, the BWL will make significant financial investments. Controlling the impact on customer rates and BWL competitiveness while supporting these investments will be an on-going challenge.

    Water Regionalization: The BWL is already the largest publicly-owned supplier of high quality drinking water in the Greater Lansing Region. As regulations and focus increases on drinking water systems across the state and country, the BWL can play a larger role in addressing the challenges facing existing systems in the Greater Lansing Region.

    Strategic Goals

    Seven strategic goals were created from common themes that arose from both the interviews and SWOC analysis. These goals are designed to address the areas where there will likely be challenges to the BWL’s ability to meet its mission. These are areas where the majority of the company’s resources should be focused for this plan. For each strategy there are one or more objectives that need to be met in in order to address the challenges and take advantage of opportunities.

    Strategy 1: Customer Experience

    Goal: Enhance the customer experience

    Unlike investor owned utilities, the BWL was created by the citizens of Lansing to serve their needs for water and electricity. The BWL has grown to offer additional services and to serve the greater Lansing community while continuing to be responsive to its community owners.

    As a customer owned utility, meeting customers’ needs and expectations is very important. With the growth in the use of mobile devices and the growing interest in online services, the BWL has identified four Objectives to continue to enhance our customer experience:

    Objective 1: Anticipate and meet customer expectations

    1. Routinely survey customers to assess their needs
    2. Customize and personalize products, services, and information access to address customer needs

     

    Objective 2: Improve customer interactions and communications through phone, web, and mobile devices

    1. Undertake a customer experience survey and determine best-in-class processes and technology
    2. Continue the implementation of advanced metering infrastructure (AMI) throughout the BWL system
    3. Implement new industry technologies that take advantage of AMI by giving customers access to their usage data and helping them manage their use, e.g. through access to thermostats and appliances
    4. Implement new technologies that provide customers with services more closely tailored to their needs, including better access to their account information, payments, and turn-on and turn-off services
    5. Provide best-in-class outage reporting, restoration, and communication

     

    Objective 3: Provide customer-focused rates

    1. Review and revise rate structures to respond to changing customer composition and needs, such as time-of-use rates
     

    Strategy 2: Community Involvement

    Goal: Enhance the well-being of our customers and community

    As a municipally owned utility, the BWL is an integral component of the social and economic fabric of the Greater Lansing Region. Through participation and collaboration in community initiatives, the BWL plays an important role in helping to make the Greater Lansing Region thrive and remain economically vibrant as well as culturally and socially desirable. Attracting residents and businesses to the community with reliable utility services at a competitive cost helps to promote the community’s growth. For over a century the BWL has fulfilled this mission and has continued to expand its products and services into surrounding communities. The BWL has identified two Objectives to help achieve the goal of enhancing the well-being of our customers and community:

    Objective 1: Be a catalyst for economic and community development

    1. Keep rates competitive
    2. Serve as a partner with regional economic development agencies to promote economic growth in the greater Lansing community

     

    Objective 2: Contribute to Lansing’s social and cultural environment

    1. Continue to promote sustainability within the Lansing community through the BWL’s energy efficiency and renewable energy programs and partnership with the Mayor’s Live Green Lansing program
    2. Continue to sponsor cultural events that enrich the greater Lansing’s social fabric and make it an attractive place to live and work
    3. Continue to be environmental leaders
    4. Enhance communication and outreach to our customers, neighborhood associations, and community leaders
    5. Improve the hometown brand recognition
     

    Strategy 3: Effectively Acquire and Manage Resources

    Goal: Acquire and manage BWL assets in an efficient manner to ensure an adequate and reliable supply of utility services to the Greater Lansing community

    By owning its own production and distribution assets, the BWL has been able to fulfill its mission of providing reliable, affordable, and environmentally sound utility products. The BWL owns and operates a complex mix of production, distribution, and transmission assets. The BWL must continue to plan, construct, and maintain these assets in an efficient manner. To support the proper acquisition and management of physical assets, three Objectives are adopted:

    Objective 1: Improve transmission and distribution reliability and flexibility

    1. Continue the commitment to a five-year plan of intensive upgrades to the electric T&D system
    2. Invest in smart grid technology
    3. Complete the drinking water lead service replacement program
    4. Maintain a plan and implementation schedule to replace and upgrade sections of the water and steam distribution systems
    5. Develop automated interfaces between electric transmission and distribution system devices, customer meters, and our Outage Management System

     

    Objective 2: Fully integrate asset management principles for each utility

    1. Evaluate and implement improved business processes, standards, and certifications
    2. Implement utility industry best practices for asset management
    3. Develop appropriate asset management training for employees
    4. Create a team culture at the BWL that values and complies with asset management principles

     

    Objective 3: Maintain BWL’s status as a regional utility services provider

    1. Plan for and replace the Eckert energy and capacity with a balanced portfolio of generation resources that include renewable energy, energy efficiency investments, customer programs, and new generation
    2. Maintain local generation to ensure generation reliability
    3. Periodically review the IRP to ensure plans are up to date with modeling data, compliance expectations, and generation options
    4. Review the demand and production capacity of the BWL’s water, steam, and chilled water utilities
    5. Investigate new services and compete for new business
     

    Strategy 4: Implement New Technologies

    Goal: Support our customers and employees through enhanced use of technology

    Nearly all of the BWL strategic objectives depend on the use of technology to some degree. For example, technology is integral to enhancing the customer experience, asset management, transmission and distribution control systems, and systems that protect against cyber threats. The BWL has identified two Objectives to ensure the best use of technologies:

    Objective 1: Support existing and planned projects with IT infrastructure

    1. Update the Information Technology Strategic Plan to coordinate with both industry best practices and planned BWL strategic and capital initiatives
    2. Select and maintain reliable, well supported, redundant, secure, cost-effective, and efficient IT systems and communication networks
    3. Apply business process management methodologies to create and measure business value throughout the life cycle of each technology system implementation

     

    Objective 2: Enhance IT and communications technology

    1. Identify, prioritize, acquire, and implement technology enhancements to support business needs
    2. Continuously research and compare current best practices as well as state-of-the-art technologies being tested and deployed by best-in-class organizations
    3. Identify the necessary experience, skills, and education needed for management and use of new technologies
     

    Strategy 5: Workforce

    Goal: Maintain a strong and diverse workforce

    The BWL’s skilled and dedicated workforce is its strongest asset. To best serve our customers, the BWL must have a workforce that is motivated, has the skills necessary to safely and efficiently operate BWL assets, and is reflective of the cultural diversity of the greater Lansing region. Four workforce Objectives were adopted to emphasize the importance and value of “Hometown Power. Hometown People.”

    Objective 1: Attract and retain a diverse and highly skilled workforce

    1. Continue to invest in training and development programs for potential and existing employees
    2. Ensure our workforce reflects the diversity of our community
    3. Maintain a competitive total compensation package for all positions
    4. Creatively use a diverse portfolio of tools such as social media to attract potential applicants

     

    Objective 2: Prepare for transformation of our workforce

    1. Ensure the BWL has the ability to effectively manage the loss of human capital and institutional knowledge by utilizing succession planning
    2. Transition BWL employees who are directly or indirectly impacted by BWL change (e.g. implementation of technology and Eckert retirement)
    3. For each area, determine a balance between internal resources needed to meet on-going work load and external resources needed during peak demand periods

     

    Objective 3: Provide more opportunities for a custom work experience that benefits both the employer and employee

    1. Update and improve job progression plans and job descriptions to incorporate the new technologies and required skillsets
    2. Consider more flexible fringe benefits and work schedule options
    3. Continue to promote health and wellness programs

     

    Objective 4: Pursue excellence by creating a work place environment that seeks to enhance current practices with the intention of adding value, making improvements, and increasing efficiency

    1. Define, establish, and maintain effective quality assurance processes and systems
    2. Encourage employee engagement
    3. Assign responsibility and accountability to employees utilizing a system to analyze and measure the process in terms of risk to assets, safety, and customers
     

    Strategy 6: Financial Stability

    Goal: Maintain the financial stability of the BWL

    All of the BWLs ongoing efforts and strategic initiatives require funding. The balance between providing this funding and its impact on rates requires a comprehensive financial plan and rate strategy. One Objective has been included in this plan to address Financial Stability:

    Objective 1: Practice good financial stewardship

    1. Develop a Financial Plan that includes a rate strategy that provides financing for the BWL’s capital program, replacement generation needs, while maintaining competitive rates
    2. Maintain an above average bond rating for municipal utilities
    3. Identify cost savings through process improvement initiatives and return on investments with minimal impact on operations or employees
    4. Commit to reviewing and consistently achieving targeted rate of return
     

    Strategy 7: BWL Leadership

    Goal: Continuous improvement

    BWL Leadership recognizes that in a changing world the BWL needs to not only change, but continually improve. Improvements to the BWL’s emergency resiliency plan helped the Company overcome hardships such as the 2016 cyber-intrusion and have made the company an emergency management hub for the region. Improvements in our renewable energy portfolio and energy efficiency have helped the BWL to become a leader in these areas as well. This culture of continuous improvement needs to not only continue, but be reinforced in order for the BWL to maintain its leadership role among municipal utilities. Our processes, revenues, energy portfolio, safety practices, compliance programs, and even our leadership and organizational structures need to evolve to meet the changing needs of the BWL and our community.

    Objective 1: Increase organizational efficiency and strength

    1. Evaluate organizational reporting structure and the ability to efficiently and productively meet current and near-future organizational requirements
    2. Evaluate, prioritize, and improve business practices and processes

     

    Objective 2: Enhance organizational resiliency

    1. Coordinate with other regional entities, and enhance resiliency to external events, such as storms, accidents, cyber incidents, and terrorist attacks

     

    Objective 3: Reinforce safety practices

    1. Complete Phase II of the BWL’s safety assessment

     

    Objective 4: Enhance the team culture

    1. Communicate the connection between the Mission, Values, and Strategic Plan
    2. Effectively communicate corporate objectives and priorities and their status
    3. Continue to support the Balanced Scorecard approach as a tool to balance financial, customer service, operational, and personnel initiatives

     

    Objective 5: Lead in Clean-Energy and Demand Response

    1. Develop a cost-effective demand response program
    2. Increase the BWL’s energy efficiency and renewable energy (Clean-Energy) programs to reach 30 percent or greater of its energy requirements in 2020, and implement a plan to expand these options as components of BWL’s resource portfolio thereafter
    3. Continue to examine opportunities for distributed generation

     

    Objective 6: Ensure Regulatory Compliance

    1. Continue to develop and update plans to ensure compliance with all applicable regulations, including environmental, electric reliability grid, drinking water, security (physical and information), and safety

     

    Objective 7: Develop New Leaders

    1. Identify potential leaders and develop a senior management succession plan
     
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