Chelan PUD proposes $3 million design phase for business systems overhaul

WENATCHEE — Chelan County PUD is preparing to spend up to $3 million designing a modernization of its core business systems before commissioners are asked to decide whether to move forward with a potentially much larger implementation.

PUD staff presented commissioners Aug. 17 with the next phase of its Enterprise Resource Planning modernization effort, following an Aug. 3 presentation that outlined problems with fragmented systems, manual workarounds and aging technology.

The district has recommended moving toward Oracle and Maximo Cloud Services but has not committed to implementing the new systems. Instead, staff is proposing an enterprise-design phase intended to determine the scope, cost, schedule, staffing needs and risks before commissioners make that decision.

“The key message is that we’re not ready to implement right now,” Initiation Phase Lead Jacob Morgan said. “This is about [needing] to define the path carefully before committing to an implementation path.”

The district plans to seek proposals from firms specializing in large-scale system implementation to help conduct that work. Commissioners are scheduled to consider authorization to advertise the request for proposals Sept. 8.

The $3 million for enterprise design would be included as a non-labor operations and maintenance expense in the PUD’s 2027 annual budget process.

Initiation Phase Project Manager David Lodge said the PUD needs outside expertise before attempting an implementation of that scale.

“What Jacob just described is far too large and complex to do on our own,” Lodge said. “We bring our knowledge of the business, of the systems, and of the outcomes we hope to achieve, but we need to bring in an expert who understands the programs, the processes, and has the capacity to be able to implement this kind of a project.”

The initial contract would cover enterprise design, but the PUD intends to structure the solicitation so the selected firm could potentially continue working with the district during implementation.

“So, the selection is absolutely critical,” Lodge said.

Staff expects to return to commissioners in early 2027 for authorization to award the enterprise-design contract. The selected firm and PUD staff would then develop a business case and recommended implementation plan, with another commission decision anticipated later in 2027.

The design work is intended to determine how business processes, decisions, data, controls and responsibilities should function under the new system. It would also establish which elements should be included initially, phased in later or handled separately, while identifying staffing, integration, security, scheduling and organizational needs.

The resulting implementation proposal would include a cost range, timeline, resource requirements, expected benefits and identified risks.

PUD staff presented commissioners with cost information from five other organizations to illustrate the wide variation possible in ERP projects. Reported costs ranged from about $15 million for a municipal government project with a narrower scope to $138 million for a large investor-owned utility undertaking simultaneous ERP and customer-system modernization.

A regional utility with approximately 600 employees reported about $27 million for its initial phase and a potential total cost of approximately $57 million. A multi-service utility with approximately 875 employees reported costs of about $123 million.

Staff cautioned commissioners against treating any of those figures as an estimate for Chelan County PUD, saying differences in scope, sequencing, integrations, staffing and implementation methods can dramatically affect both cost and duration. Developing a reliable estimate for the district is one of the purposes of the proposed design work.

The planning process is also intended to address problems other utilities and organizations have encountered during ERP implementations, including expanding project scope, recreating existing inefficient processes in new software, underestimating data and integration requirements, inadequate staffing and establishing cost and schedule estimates too early.

While the larger modernization remains in development, the PUD is continuing to maintain the systems employees and customers currently use.

During manager items later in the meeting, Customer Utilities Technology Manager Katie Marshall said the district had completed an upgrade of its C2M customer information system over the weekend. The system manages customer account information, usage data, billing, payments and other processes used by employees serving customers.

Marshall said the upgrade keeps the system on a current, supported version while the PUD considers eventually moving the customer platform into the cloud.

“It helps us improve the stability, security, and long-term supportability of a system that is fundamental to our operations,” Marshall said.

Andrew Simpson: 509-433-7626 or andrew@ward.media