Capital budgeting for electrical engineering projects: A practical methodology

Abstract

The paper presents the capital budgeting process and identifies key elements in the process. A standardized approach in capital budgeting by application of information technology resources for both proposal submission and documentation becomes key to success in handling large volumes. An electrical engineering distribution system design project involves the application of engineering codes and standards to stay compliant and provide safe design and construction. A model starting with proposals acceptance to evaluation and approval of capital projects was presented. The proposal stage was decoded further into assessments of the existing electrical infrastructure based on aging and engineering standards. Upon review of the standards, the proposals were accepted for evaluation and approval. For business professionals, there is a gap when working in an electrical engineering construction industry when it comes to knowing applicable engineering standards and their application. This research filled that gap by enlisting the intent of the standards review process. Although the focus was on understanding a holistic approach to electrical engineering projects, a detailed analysis of specific tasks may be designed based on the model presented in this paper. Additionally, the transmission side of projects will have a similar application of capital budgeting.