If any one word can sum up what makes a utility fleet distinctive, that word is diversity. No one knows this better than Niagara Mohawk, a combination gas and electric utility based in Syracuse, NY. For those challenged with spec'ing and maintaining the company's extensive range of equipment, this means having to be experts on everything from passenger cars to heavy-duty off-road equipment.
“Having such a diverse fleet gives us a whole different realm of maintenance requirements,” says Jack Young, director of fleet management. “Our technicians are expected to work on all types of mobile equipment, which makes them that much more valuable to us.
“Another thing that distinguishes a utility fleet is that we have a very high acquisition cost,” Young continues. “For example, the average cost of an aerial truck is $120,000, and we have 460 units in the fleet. In addition, we have 150 backhoes that support our natural gas business, as well as some very large-tracked off-road diggers that cost upwards of $300,000-400,000.”
In total, there are 4,205 pieces of equipment in the fleet. They include 1,800 light-duty vehicles, over 500 pieces of utility and construction equipment, and 800 trailers.
The fact that Niagara Mohawk is both an electric and natural gas utility is part of the reason for such a large and diverse fleet. The company provides electrical distribution service to about 1.5-million customers and natural gas to one-half million customers in upstate New York. The entire territory covers 24,000 sq. miles.
Change is in the wind, however, for Niagara Mohawk, which is at the forefront of the consolidation that's going on in the utility industry. On Jan. 31, 2002, the utility officially became a part of National Grid, an international conglomerate that specializes in managing electricity delivery systems. National Grid also owns Granite State Electric, Massachusetts Electric and Narragansett Electric. The combination of these companies, including Niagara Mohawk, makes National Grid the eighth largest utility in the country, according to Young.
“It's going to take a while for the details of our recent merger with National Grid to be worked out,” Young explains, “but when the dust settles, there will be basically three divisions: New York West, New York East and New England. Total vehicles in the system will number almost 7,000 and the fleet budget will be $70 million.”
Young points out that for a utility company, whose core business is the wires and pipes needed to deliver electricity and gas, the fleet has always tended to be viewed as a secondary support function. Since deregulation, however, the fleet has been recognized as a primary expense item, and one that contributes significantly to corporate image and worker productivity.
“We are now challenged to provide our services at a competitive cost, and to do that we must be better than our commercial equivalents. Having to be specialists in such a wide variety of equipment makes the task that much more difficult,” Young says. “We're expected to be cost-competitive in many different sectors of the mobile equipment industry.”
Young says Niagara Mohawk manages its fleet and costs aggressively, comparing its costs to outside industries. “As a result of deregulation, we've become increasingly aware of the value of information which drives our decision making,” he notes.
Niagara Mohawk has 20 maintenance facilities and 50 vehicle locations throughout upstate New York. When combined with National Grid, the fleet will cover 30,000 sq. miles of territory. “A current trend among utility companies is the centralization of fleet management. This enables us to focus better on bringing costs down,” Young explains.
Despite many challenges, Niagara Mohawk has been very successful in the cost management of its fleet. Young reports that since 1993, in fact, total fleet expenses, including the cost of ownership, fuel, parts and labor, have decreased by 26.5%, while total fleet count has gone down 18.9%.