Utegration completes acquisition of HPC America

January 21, 2020: Houston, TX – Utegration, LLC announced today that it has completed the previously announced acquisition of HPC America (Heck & Partner Consulting). The acquisition supports Utegration’s focus on utility best practices in regulatory reporting, to help ensure their clients are able to address the everchanging regulatory landscape and increasing numbers of stakeholders and move successfully to the future.

Read the full press release here.

Reverse FERC Drill-Down in SAP

As cost flows become more complex, utilities today often find it challenging to trace costs in adequate granularity from sender to receiver—and in reverse to more easily explain costs to regulators. HPC America has pioneered an accounting approach that enables unmatched forward and reverse FERC drill-down transparency.

Our “CO-centric” design for utility financials leverages the Controlling module’s rich secondary cost

data, and our Utility Financials Accelerator and Cost Flow Forensics software provide the most detailed forward and reverse translation of costs. In a forward translation, an original charge is split to one or more FERC accounts. HPC CFF indicates which portions of these original transactions trace to each FERC account. Likewise, in reverse, HPC CFF traces each FERC account to the portions of the original transactions, thereby explaining each dollar amount in FERC accounts by the natural account amounts entered. Our CO-centric design creates a trail of sender/receiver handoffs, and HPC CFF plays this back in a FERC context.

Learn more about modern utility accounting on SAP, and contact us to discuss your own challenges around tracing costs and the FERC drill-down.

Thanks from SFSU student about HPC presentation

Last week, HPC CEO Jerry Cavalieri presented to the MBA candidates at SFSU. We received kind thanks from one student, who wrote, "It was such a great pleasure having you as a guest speaker in our Information Systems class last evening at SFSU DTC. You presented an interesting, rich, and invaluable presentation about Enterprise Resource Planning (ERP) and the significant contribution it can make to business processes and ROI. Thank you!"

PG&E SAP Design and Testing team new hires from SFSU

Earlier this year, we announced HPC CEO Jerry Cavalieri's addition to the SAP Advisory Board of San Francisco State University. We learned recently that Pacific Gas & Electric has recruited two students from the University's SAP program to join its SAP Design & Testing group full-time after graduation. This is obviously a real testament to the value the students brought during their PG&E internships, but also speaks to the benefits of learning SAP fundamentals in a classroom setting. Students in SFSFU's SAP program cover E-Commerce, Business Process Management, Business Intelligence, and IT Project Management. Learn more about PG&E's decision to recruit the students.

Replacing legacy CMMS with SAP Enterprise Asset Management (EAM)

A transmission utility company we work with has two separate legal entities, one for Operations and another for Administration. Operations uses ManagerPlus to manage the utility's assets and their maintenance. In order to integrate that data with Administration's SAP FI/CO solution running on ECC 6.0, we're migrating the ManagerPlus data to the SAP Plant Maintenance (PM) module. The end result will be a single, integrated system that enables Operations to manage its maintenance work through PM orders, which collect the hours and rates of the employees performing the maintenance work. The SAP EAM solution will enable maintenance planning, work scheduling and a complete functional location hierarchy for fully-integrated SAP EAM work management and logistics with SAP Financials. By leveraging SAP's deep integration, the utility plans to eliminate time-consuming re-allocations of invoiced O&M work from their separate operating company for streamlined and accurate costing for rate case support.

Adding new lines of business to SAP

We previously wrote about how ARRA has provided millions of dollars to utilities, which presents recipients with the challenge of accounting for those grants. Beyond that, many utilities in rural parts of the country are not only considering investing in their existing infrastructure, but also expanding into new lines of business, such as broadband services, which the FCC has specifically encouraged.

Adding a new business means that SAP will be asked to handle even more data, so its reach needs to be extended for both internal financial and external regulatory views. While every such project will entail customized steps, we see a few that are worth considering:

• Apply existing business processes to the new line of business. For example, in CCS (now CRB) add the new utility service to the customer's bill, while maintaining the existing services. Likewise, keep your existing reports, but simply add a new line to them covering the latest service offering.


• Turn on SAP's Business Area functionality, to subdivide the Chart of Accounts and create General Ledgers for each line of business


• Create dashboards for each line of business with Business Intelligence (BI) to put key financial and operational metrics within easy reach—including non-SAP data that management values for decision-making. Also consider pushing this information out to mobile devices for selected users who are often away from their desks.

We'll report further on this matter in the coming months as we assist HPC customers who are themselves expanding into new ventures.

Sustainability and SAP - Start Measuring Now

In June, we outlined three different sustainability-related products from SAP: Carbon Impact, Sustainability Performance Management (SuPM), and Environmental Health & Safety (EH&S). We're anticipating that regulatory, political, and community expectations will drive utilities to increasingly embrace carbon reduction, and the first step to doing that will be to establish benchmarks based on historical data. (You can't change what you don't measure!) Utilities therefore need to start tracking generation and spend, ideally on a functional department level, and then get that data into SAP. It's not unreasonable to expect that management will be evaluated on its sustainability performance, such that IT, Power Plant, Fleet, and other department heads will have a vested interest in measuring their respective carbon footprints.

Part 1: Capital Expenditures and the FERC Module

This is the first of a three-part posting about tracing capital expenditures and the SAP IS-U/FERC module (which as you may know, HPC America originally developed in 1994). We recently helped a customer troubleshoot some mystery data, and thought our approach would be worth sharing.

When utilities build a new generation plant, overhaul an existing one, or make some other type of capital improvement, the associated work orders are of course capitalized in SAP. The IS-U/FERC module uses a special account to trace all the labor, materials, outside contracts, and employee expenses to a single expense account&mdashwhat we'll refer to here as the Holding Account. Then, to capitalize (i.e., reverse) the costs in the Holding Account, the order(s) are settled, meaning the expense is credited and the capital account on the balance sheet is debited. This happens once at the end of each month.

The order settlement action creates an offset to the Holding Account used by the trace for capital orders. So, in theory, the Holding Account has a zero balance at the close of each month. When that is not the case, it's a sign that something is wrong. Stay tuned for Part 2 for advice on handling such a scenario.

So why doesn't the FERC module just trace to the capital account in the first place and forget about having to clear the Holding Account? Well, the FERC module is not allowed to capitalize costs. Only the Controlling module (CO) can do this. By having only one source for capitalizing costs, the FERC ledger will show the same net income as the natural account ledger used for Generally Accepted Accounting Principles (GAAP) reporting.

As such, the true purpose of the Holding Account is to ensure the total expense dollars are EXACTLY the same between the natural and regulatory (FERC or RUS) chart of accounts. The Holding Account is comprised of two sources: traced costs to regulatory indicator 'CAPT' (usually debits); and direct post costs (usually credits) for all capital orders that settle externally to the balance sheet to either Construction in Progress (CIP) or Plant in Service (PIS). These two sources - trace and direct - happen at different times, hence the difference in the account is always the result of these two processes.

Next time: a real-world example.

SAP Business Warehouse Queries with Virtual Key Figures

Today we're going to discuss SAP Business Information Warehouse (BW) query techniques for BW users, consultants, and developers.

As you may know, Virtual Key Figures are used to handle complex algorithms and logic within a Bex query. In this linked white paper, we outline a solution that HPC America developed for one of our utility customers to split (i.e. allocate) the common administrative and general costs and common customer accounts expenses in the FERC 900 series of accounts to electric and gas lines of business based on the percentages derived from two look-up tables using FERC account and year/period. It's impossible to achieve this in a regular Bex query, but our solution worked very well.

Since the query does not use the cache when the virtual key figures are used, it can get slow at times. That depends, of course, on the data volume of the cube (or multi-cubes) and other variables, such as the usage of aggregates.

If you're facing a challenging BW coding issue, don't hesitate to get in touch with us directly for some advice. Download the HPC white paper on Virtual Key Figures.

Sustainability and SAP

Many utilities are well aware of the importance of walking the talk when it comes to being good environmental citizens. With so many green initiatives either in the works or already completed, it stands to reason that organizing, tracking, and reporting progress is as imperative as the actions going on to make a business green.

SAP has addressed this with three key products:

1. Carbon Impact


2. Sustainability Performance Management (SuPM)


3. Environmental, Health and Safety (EH&S)

Carbon Impact is all about tracking and reducing a business' carbon footprint. Utilities that want to set an example for their customers to encourage energy conservation and purchases from renewable sources need to show how they themselves are "being green." They can do this by deliberately tracking their progress on environmental issues. The old saying holds true, "You can't change what you don't measure." SAP Carbon Impact is designed with this goal in mind. SAP acquired a company called Clear Standards Inc. to serve as a Web framework for businesses to organize their progress and report it to internal and external stakeholders. At HPC America, we're looking into greater integration between this solution and SAP ERP and SAP Business Objects, to facilitate updates through better automation.

SAP Sustainability Performance Management (SuPM) is an application for the gathering of data from a variety of sources within an organization. This is a business system designed for middle managers tasked with the execution of their company's policies and objectives to cut CO2 emissions and reduce energy consumption overall, in order to set an example for other businesses as well as the end utility consumer. The application is intended to help measure sustainability-related data and make it actionable, such that managers can transition from analysis to execution more easily.

SAP Environmental, Health and Safety (EH&S) is already part of the Governance Risk and Compliance GRC solution. For many SAP customers, EH&S may be configured and running—but utilities can look to it with renewed interest in pushing the functionality deeper into the organization for more comprehensive coverage.

Within these three solutions, we're anticipating that SuPM will take the spotlight as SAP customers look for a comprehensive tracking and reporting system for sustainability objectives.