Risk Management for Buried Assets: Tapping the Triple Bottom Line Consequences of Failure into Asset Management

This manuscript describes research findings from recently published Water Research Foundation project 4451, “Managing Infrastructure Risk: The Consequence of Failure for Buried Assets” (Raucher et al., 2017). The material provided here was developed under research funding generously provided by the Water Research Foundation, and supplemented with cash and technical contributions from numerous utilities. WRF Research Manager, Frank Blaha, provided considerable and valuable input, as did the WRF Project Advisory Committee.The WRF report, and this manuscript, describe a pragmatic risk management framework to help water supply and wastewater agencies understand and manage the risks associated with their buried infrastructure. The approach casts buried asset management (BAM) within a “risk management” context that can be applied to help utilities make better informed decisions for justifying, prioritizing, and maximizing the value of their investments in buried infrastructure. Adding a focus on the “consequence” component of the risk equation (along with the traditional focus on the “probability” component of risk) provides utilities with considerable insight into how to justify their pipe related capital and operating programs, and prioritize the use of their available resources to focus on pipe segments and related risk mitigating strategies they are likely to provide the greatest value and risk reduction for the utility and the served community.The research included collecting data to develop empirical estimates of the Triple Bottom Line (TBL) Consequence of Failure (CoF) for 150 pipe breaks. The results indicate the average (geometric mean) CoF from the studied pipe breaks is $42,000. Given that there are an estimated 650 pipe breaks per day in the United States, the CoF results reveal that the total adverse impact of water main breaks in the U.S. is about $10 billion annually.The research also reveals that there is a very wide range in the CoF across breaks and associated pipe assets. Most breaks have a relatively “modest” CoF; However, there are between 10% to 15% of pipe breaks that impose significantly greater CoF, typically well in excess of $1 million in total TBL damages. This finding reinforces the value in identifying which buried assets in a utility system have a high potential CoF, so that proactive risk management strategies can be evaluated and applied to reduce the likelihood and/or consequences of failure in those assets.