ASSET PRESERVATION AND RISK MANAGEMENT FOR COLLECTION SYSTEMS

Collection system managers are faced with regulations and financial reporting expectations that will place new demands on their utilities. These include the maximum utilization of their collection systems, a structured and documented practice for preserving asset life and function, and the documentation and disclosure of asset preservation needs and expenditures. In addition, collection system managers continue to be faced with competitive pressures and the demand for good management practices. These pressures require them to set priorities for limited resources, plan further into the future, and optimize operations and maintenance costs. In the future, the use by a utility of a systematic and ongoing asset management program is expected to heavily influence evaluations by bond rating agencies, budget allocations by funding decision-makers, decisions by enforcement authorities, and acceptance of rate increases by the public.Collection systems are long-lived and out-of-sight, yet generally provide good service. These factors often result in limited and sporadic attention to the need for rehabilitation, renewal and replacement. Practicalities limit the frequency and extent of detailed inspections that can give routine information on a collection system's condition. Because failures are few and infrequent, scant historical experience is available on which to plan rehabilitation and renewal. Even when funding can be obtained, managers have little information on which to prioritize renewal projects. However, the impacts of a collection system failure can be great, resulting in health threats, property damage, compliance failures, service disruptions, and major inconvenience to the public. As a result of all this, collection system managers need a systematic approach to determining deficiencies, projecting resource requirements, and understanding and communicating risks associated with collection system deterioration.This presentation will discuss the application of an integrated and comprehensive approach for managing infrastructure assets to a 56-mile system of collectors, interceptors and pumping stations. This asset management program was implemented to determine anticipated future capital renewal needs and quantify the effect on the future condition of the collection system components under alternative funding assumptions. The quantified assessment results were compared to internal and external benchmarks, allowing the utility to target a future condition level and to control current and future risks associated with system deficiencies. This information was linked to financial projection tools to evaluate various funding strategies and the resulting rate impacts.