ML20112C104

Intervenor Exhibit I-JOINT-14,consisting of Transmitting Second Semiannual Rept on Status of Implementation of Recommendations from Cresap,Mccormick & Paget Mgt Audit

ML20112C104
Person / Time
Site:	Harris
Issue date:	09/06/1984
From:	Shawn Smith CAROLINA POWER & LIGHT CO.
To:	NORTH CAROLINA, STATE OF
References
OL-I-JOINT-014, OL-I-JOINT-14, NUDOCS 8501110022
Download: ML20112C104 (10)

Text

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h{U grofirma Poweru 1.ight Company _,

l P. o. Box 1551

• Ralesh. N. C. 27602 Q Y6Q C (,,,

SHERWooD H. SMITH. JR. '

Charman/ President

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North Carolina Utilities Commis'sion -

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Raleigh, NC 27602

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Dear Commissioners:

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( llc. UmfZr3c3,...n@f RE: . Docket No. E-2 Sub 428 We hereby submit the second semiannual report of Carolina Power & Light 1 Company (the " Company") on the status of implementation of the recommendations  !

made in the December 1982, management audit report rendered by Cresap, McCormick & Paget, Inc. ("Cresap"). The attached report, along with 32 copies, is submitted for filing pursuant to the Commission's Order in the above-referenced docket and conforms with the Company's February 14, 1983, filing entitled " Plan of Response to the Cresap, McCormick & Paget Management Audit." '

Vigorous efforts are continuing throughout the Company to achieve, boch promptly and efficiently, the improvements suggested in the recommendations made by Cresap. These efforts have led -to the implementation of twenty-nine recommendations as of May '1, 1984, the date through which information was obtained from Company project managers to compile this report.

As indicated by the schedules and details of this status report, the Company is progressing in a highly satisfactory manner on the overall implementation of the Cresap recommendations. It ' has been, and will continue to be, our intent to obtain maximum benefits from the audit for our customers and our shareholders.

Sincerely, 8501110022 840906 PDR ADOCK 05000400 z, O PDR ^ -

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Sherwood H. Smith, Jr. ,

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, g ow m u m m.rm w m msrm - m w y y y m g g 3 CAROLINA POWER 8 LIGHT COMPANY STATUS OF RECOMMENDATIONS FROM CRESAP, MCCORMICK & PAGET MANAGEMENT AUDIT Original Current Expected Expected Recommendation Completion Completion Status As Of Number Recommendation Description Date Date May 1, 1984 1 The Company should consider adding one or 1983 1983 Completed.

more outside directors to its Board who are experienced.in or knowledgeable about nuclear utility operations.

2 The Information Management Department 1984 1984 should develop and implement an office automation plan.

I y 3 CP&L should take further steps to reduce 1984 1984

, the time between meter reading and billing.

4 The Company should strengthen its efforts 1984 1985 Expected completion has to control energy diversion. been extended due to preparation of more sophisticated estimates of energy diversion.

5 Reports generated by the Constructfon 1983 1983 Completed.

Management System and the Meter Reading Management System should put more emphasis on productivity.

6 Line and service crews should be reduced 1983 1983 Completed.

in size, and crew location should be

, reassessed.

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CAROLINA POWER 8 LIGHT COMPANY STATUS OF RECOMMENDATIONS FROM CRESAP, MCCORMICK & PAGET MANAGEMENT AUDIT ,

Original Current Expected Expected Recommendation Completion Completion Number Recommendation Description Status As Of Date Date 'May 1, 1934 7 The process for contracting distribution 1984 1984 system construction and maintenance should be refined.

8 The Company should review its approach to 1983 1983 Completed.

substation and transmission maintenance.

9 The benefits of centralizing responsi- 1983 1983 Completed.

, bility for fleet management should be

, determined, i

10 Customer Service Operations Support 1984 1984 functional direction and oversight of Customer and Operating Services should be strengthened.

11 Cash management policies in district and 1983 1984 Expected completion has area offices should be reviewed. been extended to allow time for the develop-ment of a more extensive review process to monitor cash management policies than originally planned.

12 The Company should continue to seek ways 1983 1983 Completed, to strengthen its public relations and communications program. -

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' CAROLINA POWER & LIGHT COMPANY, STATUS.OF' RECOMMENDATIONS FROM CRESAP, MCCORMICK & PAGET MANAGEMENT AUDIT Original - Current Expected Expected Recommendation Completion Completion Status As Of Number' Recommendation Description Date Date ' May 1, 1984 13 The Company should reevaluate its 1983 1983 Completed.

compensation practices for senior management.

14 CP&L should develop a system for publi- 1984 1984 cizing position openings more widely.

4 15 Changes should be made in documenting 1984 1984 i

performance appraisals.

1 vi 16: The Craft and Technical Development Unit 1984 1984 i

should provide stronger oversight of

' program development and implementation.

17 The Performance Review and Audit Services 1984 1984

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Department should edopt its draft method for evaluating relative engagement audit

risk and develop objective standards for l

evaluating risk variables.

18 The organization placement of the 1983 1983 Completed.

) ' Information Systems Audit Unit should be reassessed.

19 'The Company should accelerate preparations 1983 1983 Completed.

for the expanded operational audits of the Harris Project.

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4 CAROLINA POWER 8 LIGHT COMPANY STATUS OF RECOMMENDATIONS FROM CRESAP, MCCORMICK & PAGET MANAGEMENT AUDIT-Original Current-Expected Expected

Recosusendation Completion Completion Number Status As Of

, Recommendation Description Date Date Hay 1, 1984 20 Some aspects of CP&L's uranium procurement 1983 1963 Completed.

policy should be. reevaluated.

) 21 The Company should revise its fuel oil 1983 1983 Completed.

policy and establish one for propane.

22 .CP&L should aggressively continue to ** **

reduce the financial liability of its

, captive coal operations.

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! l 23 The Company should strengthen inventory 1985 1985 control in conjunction with implementation of the Corporate Materials Management 1

System.

24 The Company's approach to implementing the 1984 1984 Corporate Materials Management System

} should be refined to facilitate management control.

25 CP&L should continue to expand its stores 1984 1984 management training.

! 26 .The costs and benefits of the later phases 1986 1986 of the Corporate Materials Management I

System should be monitored and overall cost / benefit analyses updated as required.

'** Completion'date cannot be determined until a buyer for coal mines is identified, i

CAROLINA POWER 8 LIGHT COMPANY STATUS OF RECOMMENDATIONS FROM CRESAP, MCCORMICK 8 PAGET '

MANAGEMENT. AUDIT

- Original Current

• Expected Expected Recommendation Completion Number Completion Status As of Recommendation Description Date Date "May 1, 1984 27 CP&L should enhance and formalize vendor 1985 1985

. analysis.

28 CP&L should provide additional information 1983 1983 Completed.

to the North Carolina Utilities Commission on the status of the Company's major construction projects.

4 29 CP&L should expand and formalize its cost

' 1983 1983 Completed.

" assurance program to document causes of 8 budget and schedule changes for major construction projects.

30 Estimating and budgeting for major 1984 1985 Expected completion has ,

projects should be enhanced.

been extended due to changes resulting from the cancellation of Harris Unit 2.

I 31 Budget reporting for major projects should 1984 1984 be enhanced through additional information and analysis.

32 The company's project control systems at 1983 1983 Completed.

. the Harris Project should be strengthened.

33 Regular inspections should be conducted to i 1983 1983 Completed.

verify installed quantities of key bulk materials at the Harris Project. .,

CAROLINA POWER 8 LIGHT COMPANY STATUS OF RECOMMENDATIONS FROM CRESAP, MCCORMICK & PAGET KANAGEMENT AUDIT Original Current Expected Expected Recommendation 3 Completion Completion Status As Of Number Recommendation Description Date Date *May 1, 1984 i 34' The Harris Project's document control -

process should be examined for-practical Recommendation not accepted, ways to eliminate existing redundancy.

35~ The Company's Cost Analysis and Reporting 1984 1984 Completed.

System should be modified to fully exploit its capabilities.

, 36 The Company should develop a formal 1985 1985 *

o. Program for assessing intangible

, censiderations in bid valuations.

37 The framework for evaluating establish- 1982 1982 Completed.

ment of an in-house transmission line construction crew should be expanded.

l 38 CP&L should commit additional time of 1983 1983 Completed.

senior plant personnel to the Power P . ant l Reliability Program.

1 39 A formal predictive maintenance program 1984 1984 i should be developed and implemented.

40 The Company should periodically review the 1983 1984 Completed, i

overall deployment of power plant and maintenance support manpower.

! 41 The Company should increase its use of

' 1983 - 1984 Completed.

. competitive bidding in selecting con-

tractors for plant maintenance work. \

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CAROLINA POWER & LIGHT COMPANY STATUS OF RECOMMENDATIONS FROM CRESAP, MCCORMICK & PAGET MANAGEMENT AUDIT Original Current Expected Expected Recommendation Completion Completion Status As Of Number Recommendation Description Date Date 'May 1, 1984 42 Bonus / penalty provisions should be used 1983 1984 Completed, with selected maintenance contracts.

43 The plants should expand the use of work 1983 1984 Completed, sampling and other industrial engineering techniques.

44 The Company should further develop respon- 1983 1984 Completed.

, sibility accounting controls over generation

, maintenance expenditures.

45 The Company should expedite its schedule 1983 1984 Expected completion hai for developing a professional work been extended to management system in the power plant reevaluate the final engineering subunits. action plans for implementing work management systems in plant engineering subunits.

46 CP&L should reexa. .ne the organization and 1983 1984 Completed.

reporting relationships of the Generation Operation and Maintenance Section and the Assistant to the Vice President - Fossil Operations.

47 Methods for planning, scheduling and 1985 1985 controlling nuclear outages should be refined and enhanced, s w...--__ _____ - - _ _ _ _ _ _ . _ - - _ _ _ _ - .. _ . -- -

CAROLINA POOER & LIGHT COMPANY STATUS OF e~ COMMENDATIONS FROM CRESAP, MCCORMICK & PAGET MANAGEMENT AUDIT Original Current Expected Expected

. Recommendation Completion Completion Status As Of Number ,

Recommendation Description Date Date 'May ~ 1, 1984 48 The organization arrangements for executing 1984. 1984.

planned outages should be' strengthened.

49 A more comprehensive framework should be 1985 1985 established for controlling outage performance.

50 Eliminating the shortages of operating 1984 1983 Completed, s personnel at the Brunswick Plant should

- continue to be a senior management priority.

51 Better monitoring and reporting mech- 1984 1984 Completed.

anisms should be installed for the construction backlog at Brunswick.

52 Information available from the Nuclear 1983 1983 Completed.

Plant Reliability Data System (NPRDS) should be fully integrated int'o the

. Company's preventive maintenance program and. recommended predictive maintenance program.

53 The approach.to outage planning'and 1983 1984 Completed, scheduling at the fossil plants should be

-further refined.

CAROLINA POWER 8 LIGHT COMPANY STATUS OF RECOMMENDATIONS FROM CRESAP, MCCORMICK & PAGET MANAGEMENT AUDIT Original Current

, Expected Expected Recommendation Completion Completion Status As Of Number Recommendation Description Date Date *May 1, 1984 54 The work force management systems for 1984 1984 transmission substation maintenance and transmission line maintenance should be further developed.

55 The Quality Assurance Trending Analysis 1983 1983 Completed.

Program should reflect efficiency measures and provide for wider report distribution, e

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