Philadelphia Gas Works

Situation
This east coast gas utility has maintained the same facility footprint over the last 50 years while the employee base had declined by 50% during that time. The company wanted a real estate strategy that was aligned with its operations and business objectives.

Resolution
BREA and its partners assisted the client in assessing the value of its real estate assets, determined which properties could be monetized without negatively impacting operations and service, which functions could be consolidated, and developed a strategy for reducing occupancy costs.  We identified a variety of scenarios with respect to facilities consolidation as well as dispatch optimization.  Our team analyzed historical operations data to understand service center costs, workload patterns, crew staffing and customer service levels.

Our work resulted in generating $41.4 Million for the client. The NPV is based on a five year projection and incorporated a savings calculation that includes a sale of assets as well as a capital expenditure and O&M component. It also incorporated one- time capital expenditures, one time addition and relocation costs. Additional supplemental benefits not included in this calculation are FTE reduction, inventory reduction, fleet reduction and efficiency, fuel reduction and enhanced customer service.  It was determined that for every year a decision to move forward with the plan was delayed, it would cost the company $6 Million.