• An asset is anything that will add future value to a business
  • Different assets have different probabilities of failure
  • When an asset fails, it affects the whole utility process
  • Investment in assets (their acquisition, operation, maintenance, renewal and disposal) should be guided by the likelihood of failure and its consequence to the customer and regulator
  • Feasible renewal options of an asset are repair, refurbishment or replacement
  • Asset Management is a process for maintaining a desired level of customer service at the best appropriate cost
  • Asset management will help utilities to boost utility efficiency, save staff time and improve customer service
  • It’s important to remember not only the assets that we see above ground, but also the assets located underground
  • 5 aspects of Asset Management – Current state of the assets, level of service, critical assets, minimum life-cycle-cost and long-term funding strategy
  • Current state of the assets – What does the utility own?, where is it?, what is its condition?, what is its useful life? and what is its value?
  • The best practices in figuring out the current state of a utility’s assets – prepare an asset inventory and system map, develop condition assessment and rating system, assess remaining useful life & determine asset values and replacement costs
  • Level of service – The required sustainable level of service is the set of features that describe the utility’s short- and long-term performance standards as well as the customer’s expectations. The utility’s level of service “statement” can be updated to account for changes due to growth, regulatory requirements, and technology improvements
  • Monitor the performance indicators – failures, stoppages, energy usage and customer complaints
  • Critical assets – Not every asset presents the same failure risk, or is equally critical to the business operations. Therefore, it is important to know which assets are required to sustain the utility’s performance. Critical assets are those the utility decides have a high risk of failing (like if the asset is old or in poor condition) and major consequences if they do fail (major expense, system failure, safety concerns, etc.).
  • Best practices – listing assets according to how critical they are to system operations, conducting a failure analysis to understand how and why a failure happens, determining the probability of failure and listing assets by failure type & analysing failure risk and consequences
  • An asset management program helps a utility make risk-based decisions by choosing the right project, at the right time, for the right reason.
  • Developing an asset management plan can reduce unplanned and emergency repairs because it increases emphasis on preventive and predictive maintenance
  • Some strategies to consider in asset management – revising the rate structure, funding a dedicated reserve from current revenues & financing asset renewal and replacement through borrowing or other financial assistance

 

Back to newsletter home page