Case Study: HPC Real-Time FERC Solution at We Energies

We Energies (WE) provides electric service to 2.2 million customers in portions of Wisconsin and Michigan's Upper Peninsula, and maintains more than 45 thousand miles of electric distribution lines and over 350 substations. In 2012, WE wanted improve its regulatory reporting processes in order to satisfy regulators more easily, and to facilitate its eventual migration to the SAP New General Ledger. WE selected HPC America's Real-Time FERC Solution for the SAP New GL, which enables utilities running the New GL to generate real-time regulatory reporting data without using the "classic" FERC module. Read the complete case study to learn more about the benefits WE gained from HPC's latest groundbreaking FERC solution for utilities on SAP.

Five Benefits of the SAP New General Ledger

More utilities are exploring the impact of an SAP New GL migration on their financial and regulatory reporting. While HPC is agnostic in the Classic vs. New GL, FERC or no FERC debate (we've built effective solutions for every scenario), we recognize five key benefits to migrating:

1. Integrates external legal accounting with internal cost reporting
2. Provides a means to satisfy IFRS reporting (although convergence deadlines are still pending)
3. Allows for full balance sheets below company code level (e.g., by segment)
4. Provides extensibility to introduce new fields to the GL (e.g., FERC account)
5. Quickens the month-end close

Utilities on SAP can realize these benefits in part due to key features in the New GL that are not available in the Classic GL. Click the image below for a larger version:

New Project: Automated SAP FERC Processing

This week kicks off a new project for another utility company on SAP. We're going to assess the utility's SAP FERC processes, many of which have become manual and are now conducted outside of SAP over the years. Our customer understandably wants to automate these labor-intensive steps, so we'll be considering a number of different ways to optimize their current configuration of the SAP regulatory reporting module and streamline its processes. 

We'll also take into account some related initiatives the company may undertake in the future -- such as leveraging Plant Maintenance further, utilizing the HR module, and migrating to the SAP New General Ledger -- and factor these elements into our FERC automation recommendations.

The net result of HPC's assessment will be a highly actionable report for the utility company. It will lay out several optimization paths to automate currently manual processes and to manage labor, fleet, and cost center costs more effectively within SAP, thereby minimizing the use of external spreadsheets and applications.

In our experience, many utilities that have been running SAP for years benefit from this type of rapid evaluation and action plan. Over time, the configuration of their FERC module and related business processes morph into something less than ideal, and the best way forward is an outsider's fresh look. If your regulatory reporting processes aren't easily managed within SAP, such that management can't get the data it requires quickly and efficiently, contact us to talk about your own assessment. And if you're considering a New GL migration as well, let's talk about prototyping it for you.

SAP New GL Migration Benefits

HPC has implemented SAP's New General Ledger—a.k.a., the SAP New GL—at several utility companies, and we've noticed that it's under even greater consideration these days, as utilities seek to eliminate the reconciliation steps necessary under the Classic GL.

In our experience, the SAP New GL offers terrific benefits for utilities running the IS-U/FERC module and IS-Public Sector (PS-FM) in the same ECC 6.0 client—two modules common to the public power industry. Implemented properly, the SAP New GL can dramatically shorten the processing time for the month-end allocations such as distributions, assessments, and overheads

In many cases, existing SAP customers on the FERC module can migrate to the New GL with the delivered leading ledger (OL) by SAP without having to create a new parallel ledger. This process works because the FERC module is an FI-GL solution, as opposed to a special ledger solution as some other industry-specific solutions have been designed.

We also have good experience combining non-FERC company codes with FERC-relevant company codes to consolidate reporting for profit and loss (P&L) statements and balance sheets.

While some utilities are driven to migrate to the New GL because it speeds up month-end closing by reducing the number of updates required to keep FI and CO in sync, there are other reasons to undertake a New GL migration. Implementing the New GL with the FERC module is ideal, as it provides access to FERC data in real time; what you see in your orders will also appear in your FERC regulatory reports. You get "one version of the truth" as we like to say, with the same codes and no special month-end processes required.