Utility Management Challenges for the 21
st
Century: Managing in an Era of Uncertainty
April 2009
Uncertainty Challenges
l Economy: What Does the Future Hold
l Demand and Supply Forecasting
l Infrastructure Repair and Replacement
l Climate Change/Variability
l Finances/Rates/Affordability
l Workforce Challenges
Asset Management as a Framework to
Address Uncertainty
“Meeting agreed
customer and
environmental
service levels
while minimizing
life cycle costs”.
To Become an Asset Management Based
Organization You Need To Address
1. Customer and environmental service levels
2. Risk assessment and quantification
3. Life Cycle costs analysis using triple bottom line
4. Long Range Planning
5. Asset and data systems
6. Rational Rates and Affordability
7. Clarity of Organizational Roles and Responsibilities
8. Formal Capital Decision Making Processes
9. Track and Measure Results
10. Benchmarking

caused by a problem with the
SPU sewer system.
SPU sewer system.
Number of annual
Number of annual
SSOs
SSOs
as reported by
as reported by
location.
location.
Wet Weather
Wet Weather
Combined Sewer
Combined Sewer
Overflows
Overflows
By 2020,
By 2020,
CSOs
CSOs
shall be limited
shall be limited
to an average of one untreated
to an average of one untreated
discharge per CSO per site per
discharge per CSO per site per
year.
year.
Number of precipitation

s
system.
system.
Problem
Problem
Response
Response
SPU shall respond quickly and
SPU shall respond quickly and
effectively to problems with
effectively to problems with
potential health consequences.
potential health consequences.


80% of high priority sewer
80% of high priority sewer
backup/overflow problems responded
backup/overflow problems responded
to within 1 hour.
to within 1 hour.


80% of high priority sewer
80% of high priority sewer
backup/overflow problems have service
backup/overflow problems have service
reinstated within 6 hours.
reinstated within 6 hours.
Performance Indicators

6000
7000
8000
JF MAMJ J ASOND
# customer
s
Monthly A c tual Cumulative A c tual
Cumulative Target Max


Performance Indicators
% Drinking Water Emergency Responses
Within Targeted Times
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
JF MAMJ JASOND
% Compliance
Target Min


Performance Indicators

mitigate risk
l Reduce asset risk through capital
investments or changed maintenance
practices and response protocols
1. Define failure.
1. Define failure.
Consequence
Consequence
of
of
Failure
Failure
3. Determine Risk
3. Determine Risk
…
…
Risk
Risk
Cost
Cost
=
=
Likelihood
Likelihood
of
of
Failure
Failure
x
x

Conservation
Baseline
Strategies Description and Performance Measure
Public Trust Risk
Regulatory Risk
Asset and Service
Reliability Risk
Legal Risk
Environmental
Risk
Workforce Risk
Financial Risk
Public Health
Do Nothing
No messa
g
in
g
or incentives. No performance
measure.
Awareness
Campaign
Messaging; no incentives. Less intense than
1% program. Customer survey to assess
effectiveness. Results estimated <.3 MGD
annual savings.
Program to Shave
Peak
Investment
Variable

Risk is Minimized by
Concentrating Limited
Concentrating Limited
Resources on Sewer Pipes
Resources on Sewer Pipes
with the Highest Risk Cost of
with the Highest Risk Cost of
Failure
Failure
0.0000
0.0050
0.0100
0.0150
0.0200
0.0250
0 102030405060708090100
Years Since Installation
Probability of First
Failure Occuring in
Given Year
Asset Risk Assessment
Asset Risk Assessment
Asset Risk Assessment
Long Term Supply and Demand
Planning
l One thing we know about demand forecasting
is as soon as we do a new forecast it is
wrong!
l Demand forecasting is both art and science
l Demand forecasting needs to be dynamic (i.e.

1997 Revised Forecast
2001 WSP Forecast
2003 Official Forecast
2006 Draft Forecast