Evaluation of Ash Management Processes

Abstract

In the spring of 2001, Vectren announced an intensive campaign to improve business processes and reduce costs throughout the organization to achieve aggressive financial goals. In alignment with Vectren's campaign goals, this project was undertaken to find cost reduction opportunities at F.B. Culley Generating Station. This project focused on the area of ash management processes. As such, this project is entitled "Evaluation of Ash Management Processes Seeking Cost Reduction Opportunities at Vectren's F.B. Culley Generating Station." To begin the evaluation, primary emphasis was placed on the dry fly ash system processes, as these processes account for the majority of ash activities at Culley. Secondary consideration was given to wet system process, such as, ash pond activities. The project utilized two different approaches relative to reducing overall costs. The first approach was to evaluate and reduce the direct costs associated with the dry ash system processes. This included items, such as, trucking ash back to the mine, fees associated with ash placed at the mine, and the ash silo unloading process at the plant. The second approach, in contrast to the first, was to evaluate and implement processes which could generate revenue or avoid costs to offset operating expenses. The basis of this approach was expanding the current scope of "beneficial use" applications for Culley ash products. With the first approach, the evaluation of the dry ash system processes was successful in identifying three cost reduction opportunities. In the Load Out area, eliminating or significantly reducing the operator's overtime was the key issue. In the Trucking area, the base haul rate and fuel surcharge components were the important issues. In the Tipping area, the Moisture Adjustment Factor for ash placement at the mine was the key item. Regarding these opportunities, cost reductions of approximately $____ and $____ are anticipated in the areas of Load Out and Tipping, respectively, as a result of the evaluation. With the second approach, the evaluation of processes to generate revenue and avoid cost was successful in identifying various opportunities that appeared very feasible for the Culley ash products. In the fly ash applications area, increasing the utilization of fly ash in the redi-mix concrete market was the key element. In the bottom ash applications area, the key issue was evaluation of applications such as, grit blasting, roofing granules, and several aggregate replacement applications. In the other ash applications area, the key issue was ash pond cleaning in conjunction with the utilization of ponded ash materials in a structural fill application for _____ site reclamation. The evaluation revealed potential savings of approximately $____with regard to using a particular vendor, _____, for the ash pond cleaning activity in combination with a structural fill application. Thus, the Strategic Sourcing Team recommended _____ and undertook an effort to implement the opportunity. Although implementation in 2002 was not possible, Vectren continues to pursue this opportunity for a 2003 implementation.