Sherman, R; Gibson, G E; Merrow, E and Parrish, K (2021) Examining the impact of rate-of-return regulation on capital project planning. Journal of Construction Engineering and Management, 147(8): 04021080, ISSN 0733-9364
Abstract
As the United States' population grows and power delivery needs continue to expand, utility companies are presented with a unique opportunity to improve reliability, increase capacity, and provide innovations to power and pipeline production and delivery infrastructure. While there is research dedicated to the impacts of the regulatory environment on project performance and the profitability of power and pipeline projects, there has been no research dedicated to identifying the differences in planning processes for such projects. Therefore, this paper contributes to the construction body of knowledge by explicitly documenting how the regulatory environment impacts the planning metrics involved in power and pipeline utility projects. This paper explores how capital project planning varies for power and pipeline projects in both regulated and nonregulated environments through an analysis of 770 projects in the Independent Project Analysis (IPA), project database. This paper presents a statistical comparison of pipeline and power project planning indicators - front-end loading (FEL) score, budget spent on front-end planning, and stakeholders engaged in front-end planning - to understand the impact of the regulatory environment on project planning. The results suggest that for some planning indicators studied, regulated projects outperform nonregulated projects, and for other indicators, the reverse is true. In particular, results show that regulated pipeline projects have better a project definition at the time of project authorization than nonregulated pipeline projects based on the FEL score; the reverse is true for power projects. Regulated pipeline and power projects spend more in a budget on front-end planning than nonregulated pipeline and power projects. Lastly, key stakeholders are represented in both regulatory environments with little difference between nonregulated and regulated environments in both pipeline projects, but power projects in regulated environments engage the key stakeholders for more time.
| Item Type: | Article |
|---|---|
| Index terms: | pipeline, body of knowledge, loading, capital project, database, profitability, pipeline construction, regulation, planning process, United States, project planning, project performance, population |
| Subjects: | infrastructure and transport systems, Geography, civil engineering, project management theory and practice, strategic project management, control systems, demography, data management, political science, construction operations, project controls, knowledge management, economic analysis |
| Topics: | Geographical Context, Digital Applications, Governance, Engineering Principles, Information Management, Project Management, Urban Studies, Business Strategy, Site Management, Time Control |
| Descriptive scope: | 2 PC |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here