Applying Decision Theory to Utility Master Planning

Decision analysis requires use of methods and metrics for considering risk and competing tradeoffs. Utilities have a wide range of decisions spanning topics such as master planning, capital budgeting, plant expansion, rate design, and stakeholder involvement. Different decisions require systematic approaches to ensure they are sound, transparent, and defensible. Challenges, posed by environmental issues and shrinking budgets for example, make risks and uncertainties important considerations. We integrated decision analysis with engineering analysis to create an integrated project approach addressing relevant benefits and costs for the San Francisco Public Utility Commission (SFPUC) Sewer System Master Plan (SSMP). The analysis resulted in the recommendation of a project alternative to the SFPUC.