Tennessee Valley Authority · NYSE:TVC
Tennessee Valley Authority — 14th Annual Corporate Affiliates Workshop (January 2005)
49 slides from Tennessee Valley Authority's conference presentation, January 2005
Slide 1: Renovating a Complex Environmental Management System: Performance Innovation at TVA
Renovating a Complex Environmental Management System: Performance Innovation at TVA Warren Behlau AHC Group Sr. Manager 14th Annual Corporate Affiliates Workshop Performance Analysis and Reporting January 27-28 Environmental Policy and Planning Phoenix, Az Tennessee Valley Authority
Slide 2: The Early Days
The Early Days He asked Congress to create “a corporation clothed with the power of government but possessed of the flexibility and initiative of a private enterprise.” On May 18, 1933, Congress passed the TVA Act. - Franklin Delano Roosevelt 2
Slide 3: What Is TVA?
What Is TVA? Power generation – Nation’s largest public power system – 31,658 Megawatts Capacity – $7 Billion in Annual Revenue Transmission – 99.999 percent reliability – 80,000-square-mile service area Customers – 158 power distributors – 62 directly served customers – 11 power exchange arrangemen
Slide 4: Lessons Learned – TVA's EMS
Lessons Learned – TVA’s EMS • Keys to improved performance and sustainability: – Management commitment – Ownership and accountability – Include operations in development – ISO 14001 – Emphasis on prevention – Measure and report – EMS auditing, self-assessments, corrective action – Start with structu
Slide 5: Env. Performance Exceeds Target
Env. Performance Exceeds Target • Results: – Environmental impacts measured in the index are down 19% – Standardized training saved $3.5 million in 2004 – Reduced average internal audit findings per facility an additional 40% since 2000 – Reduced internal repeat audit findings an additional 77 % sin
Slide 6: How did TVA do it?
How did TVA do it? 6
Slide 7: What Is an EMS?
What Is an EMS? • Combination of components that may function well alone but better as a system • Think of an EMS as a collection of car parts that, only when assembled and working together as a system, enables you to get to your destination • This “vehicle” must be fueled by the governance systems
Slide 8: TVA EMS Evolution
TVA EMS Evolution • Pre-1996 – compliance processes • 1996 EMS – based on draft ISO 14001 • 2001 EMS – based on final ISO 14001 Sustainability & Performance 8
Slide 9: TVA's First EMS
TVA’s First EMS • What it did: – Policy – Processes – Environmental training – Process indicators and environmental goals – Performance reporting – Regulatory review and guidance process – Environmental compliance audits, self-assessments, and corrective action 9
Slide 10: TVA's First EMS (cont.)
TVA’s First EMS (cont.) • What it didn’t do: – Process to maintain and develop policy – Identify roles and responsibilities – Method to maintain EMS documents – Track the indicators or set goals – Report performance – Receive management review – Standardize environmental review (NEPA) 10
Slide 11: TVA's First EMS (cont.)
TVA’s First EMS (cont.) • What it didn’t do: – Leverage regulatory review and guidance – Audit EMS requirements or verify corrective actions – Communications and stakeholder involvement – Records management – Emergency response and notification – Recognition 11
Slide 12: TVA and the Principles of a Strategy-Focused Organization (SFO)
TVA and the Principles of a Strategy-Focused Organization (SFO) Principle 1: Mobilize Change Through Executive Leadership Principle 5: Principle 2: Govern to Make Strategy Translate the Strategy a Continual Process TVA: into Operational Terms Strategy-Focused Organization Principle 4: Principle 3: M
Slide 13: Principle 1: Mobilize Change Through Executive Leadership
Principle 1: Mobilize Change Through Executive Leadership “TVA’s Winning Performance Balanced Scorecard allows the men and women of TVA to establish priorities; measure and report performance in key areas; understand how individual activities are tied to company priorities; and link individual compe
Slide 14: Principle 1: Mobilize Change Through Executive Leadership
Principle 1: Mobilize Change Through Executive Leadership • Case for change established initially through Business Transformation effort – later through Strategic Plan • Existing vision and goals incorporated into methodology • President and COO served as executive sponsor • Every Officer personally
Slide 15: Obtain Executive Leadership
Obtain Executive Leadership Chairman Director Director President and COO Glenn L. McCullough, Jr. Skila Harris Bill Baxter Ike Zeringue Executive Sponsor 15
Slide 16: Performance Improvement: The Bottom Line
Principle 2: Translate the Strategy into Operational Terms Performance Improvement: The Bottom Line 16
Slide 17: Principle 2: Translate the Strategy into Operational Terms
Principle 2: Translate the Strategy into Operational Terms • Define strategic direction • Establish a process-based methodology • Leadership Standard was developed to begin translation of strategic intent • Critical Success Factors were incorporated into capital project justification process • EMS r
Slide 18: TVA's Current EMS
TVA’s Current EMS • What’s new: – Actionable corporate policy and a process to maintain and develop policies – Roles and responsibilities from TVA Board of Directors to technician – Standardized environmental processes with biennial review – Standardized environmental training and Web application 18
Slide 19: TVA's Current EMS (cont.)
TVA’s Current EMS (cont.) • What’s new: – Aspect and impact analysis, objectives and targets – Tracking and reporting to management and stakeholders – Collaborative teams of experts reviewing regulations and issuing guidance – Risk-based compliance and EMS audits with closure verification – Emphasis
Slide 20: TVA's Current EMS (cont.)
TVA’s Current EMS (cont.) • What’s new: – Standardized environmental review documents and Web- based record and tracking system – Communication and stakeholder involvement process to “speak with one voice” on environmental issues – Standardized recordkeeping emphasizing electronic storage – Emergenc
Slide 21: TVA's Current EMS (cont.)
TVA’s Current EMS (cont.) • What’s new: – Internal Web site devoted to the TVA EMS 21
Slide 22: TVA's Current EMS (cont.)
TVA’s Current EMS (cont.) Environmental Impact Index A composite of environmental performance factors in terms of beneficial and detrimental impacts (or precursors) on Air Quality, Water Quality, Land, Waste Production, and Energy Consumption. 22
Slide 23: Environmental Impact Index
Environmental Impact Index •Air Quality •Waste Production – NOx – Hazardous Waste Disposed – SO2 – Low Level Rad Waste – CO2 – Office recyclables •Water Quality – Scrap Metal Recycled – Water Discharges – Hazardous Waste Recycled – Spills to Water – Fly ash, bottom ash, and – Dissolved O2 gypsum uti
Slide 24: Environmental Impact Index
Environmental Impact Index Air Quality 40% Water Quality 25% Land 10% Waste Production 15% Energy Consumption 10% Baseline Score 100.0% 24
Slide 25: Environmental Impact Index
Environmental Impact Index Environmental Impact Index is the sum of performance scores for 26 elements. Each element’s performance score is based on a ratio of actual performance over the baseline performance in FY’02. The multiplier is based on significance of impact and our level of control. (Step
Slide 26: Environmental Impact Index
Environmental Impact Index Drivers: – Improve environmental performance – Employee awareness of operational impacts – Allow responsive modifications to operations – Line-of-Sight / Winning Performance at all levels – Support CSF 26
Slide 27: Strengthen the Line of Sight
Strengthen the Line of Sight Corporate Mission Defined Strategy TVA Strategy Map Leadership Standard TVA Scorecards Performance Plans Lin Fiscal Year 2005 Performance Plans eo Customer Service and Marketing fS Economic Development igh Fossil Power Group TVA Nuclear t River System Operations & Enviro
Slide 28: Establishing Measures & Targets For All Employees
Establishing Measures & Targets 4 S a m e The ard For c o rec y e es, S p lo m All E ing n c lu d i tiv es x ec u E 28
Slide 29: Keeping It All Aligned
Financial O&M Expense ($ millions Resource Management Contribution (¢ milllior Customer Environmental Impact Index number Operations Hydro EFOR - Total System (percent) TVA-Wide Technology Implementation umber People Accident Free** Diversity (percent) RSOE Balanced Scorecard for September 2004 20%
Slide 30: Principle 3: Align the Organization Around Its Strategy
Principle 3: Align the Organization Around Its Strategy “Winning Performance is driving continuous improvement. By focusing on what's really important and rewarding it, we the people at TVA, are achieving excellence.” Ike J. Zeringue President and Chief Operating Officer Tennessee Valley Authority 3
Slide 31: Principle 3: Align the Organization Around Its Strategy
Principle 3: Align the Organization Around Its Strategy • Develop Balanced Scorecard to measure success • Strategic Business Units (SBUs) and Business Units (BUs) demonstrate alignment through their performance plans • Key suppliers have joined in partnership • Strategic Objectives and Strategic Foc
Slide 32: Reinforce the Messages
InsideT VA AUGUST 2004 Afier nine months of measuring, environmental goal beteveen mid and stretch he Environmental Impact Index is one of the eight Win. ning Performance goals for fiscal year 204. The index measures TVA's performance in five categories: air quality water quality, land stewarlship,
Slide 33: Principle 4: Make Strategy Everyone's Job
Principle 4: Make Strategy Everyone’s Job “I always wondered why somebody didn’t do something about that…Then I realized I was somebody.” - Lily Tomlin 33
Slide 34: Principle 4: Make Strategy Everyone's Job
Principle 4: Make Strategy Everyone’s Job • Winning Performance Results tied to compensation • Intranet site developed for Winning Performance – Monthly scorecard results reported – Variance analysis and action plans shared – Payout calculator available • Extensive employee training and education (1
Slide 35: Getting 13,000 Employees Going in the Same Direction
Getting 13,000 Employees Going in the Same Direction 35
Slide 36: Winning Performance is a Continual Improvement Process
Principle 5: Govern to Make Strategy a Continual Process Winning Performance is a Continual Improvement Process 36
Slide 37: Principle 5: Govern to Make Strategy a Continual Process
Principle 5: Govern to Make Strategy a Continual Process • Process-based methodology needed to sustain continuous improvement • Overall results reviewed monthly by Board and Management Committee • Capital expenditures supportive of overall TVA strategic direction • Winning Performance governed at hi
Slide 38: Getting Results With a Strategy-Focused Organization (SFO)
Getting Results With a Strategy-Focused Organization (SFO) Principle 1: Mobilize Change Through Executive Leadership Principle 5: Principle 2: Govern to Make Strategy Translate the Strategy a Continual Process TVA: into Operational Terms Strategy-Focused Organization Principle 4: Principle 3: Make S
Slide 39: Env. Performance Exceeds Expectation
Env. Performance Exceeds Expectation Environmental Impact Index Air 100 Water 91 Waste 90 Energy 81 78 Land 40 37 70 28 30 50 25 31 25 29 30 15 17 10 14 13 10 7 10 9 7 4 -1 -10 2002 Actual 2003 Actual 2004 Actual 2005 Target 39
Slide 40: Employees Share in the Success
Employees Share in the Success Fiscal Year 2004 Total Employee Payout: $42 Million 40
Slide 41: Questions and Discussion
Questions and Discussion 41
Slide 42: Addendum
Addendum 42
Slide 43: TVA Fiscal Year 2004 TVA's Best Integrated System Performance
TVA Fiscal Year 2004 TVA’s Best Integrated System Performance 43
Slide 44: 2004 - All Time Peak Met
2004 - All Time Peak Met JULY 2004 TVA Meets All Time Summer Peak Megawatts: 8 Million People 44
Slide 45: FY04 TVA's Best System Performance
FY04 TVA’s Best System Performance F e r ry o w n s M o st R 20 04 a n d Br N a t i ons SEPTEM BER 200 OCTOBE o y a h d t h e 4 ’ s S equ R a n ke TVA Ra TV A a n t s nks Amo a r P l t o r s America ng Top 1 l e r a n 00 Nuc nt Gene Innovati Compan ies in f f i c ie v e U se of Info E Technolo rmati
Slide 46: Fossil Improves Forced Outages
Fossil Improves Forced Outages SEPTEMBER 2004 04 BER 20 OCTO n its Fossil Power Improves Forced Outages: s s i l U 12 Fo uous Worth over $123M o n t i n Set C n R e c ords Ru Wid ow T V A s Creek ’ s Ol – Sets d est L U R e c o o n g e s t R n it rd! un 46
Slide 47: Transmission Peaks in Performance
Transmission Peaks in Performance OCTOBER 2004 TVA’s Transmission Accident Free Rate In Top 5% of Nation’s Largest Utilities 47
Slide 48: Emphasize individual ownership and accountability
Emphasize individual ownership and accountability 48
Slide 49: What Is an EMS?
What Is an EMS? A structured approach that incorporates environmental considerations into day-to-day operations throughout the organization, and is designed to promote continual improvement—OFEE A continual cycle of planning, implementing, reviewing and improving the processes and actions that an or
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