Study examines utility practices

March 2013, Vol. 68 No. 3

Utilities are concerned about the state of their infrastructure, and these concerns are driving a need for greater use of asset management practices, according to preliminary findings released by McGraw-Hill Construction at the U.S. Conference of Mayors winter meeting in Washington, DC.

Initial results from the study developed in partnership with CH2M HILL, "Water Infrastructure Asset Management: Adopting Best Practices to Enable Better Investments," indicate that 75 percent of utilities practicing asset management report that aging infrastructure is an important factor in their decision to adopt this approach, and 42 percent began asset management practices because of the need to increase the reliability of their infrastructure systems.

Scott Haskins, director of technology, quality and innovation for CH2M HILL, underscores why these are important drivers for asset management. "Adoption of asset management practices by utilities throughout the U.S. and other countries, is saving ratepayers money, improving system reliability and reducing risk, and helping utilities increase service levels. These practices can be adopted by other infrastructure intensive organizations, such as transit departments, roads and facility departments, as well as ports and airports."

"The study also shows that once utilities adopt asset management practices, they more greatly value its ability to allow them to understand and better conduct business; 80 percent consider the fact that asset management allows them to better explain and defend their budgets and investment decisions to governing bodies, a valuable benefit of adopting the program," said Harvey Bernstein, vice president of Industry Insights and Alliances with McGraw-Hill Construction, "In addition, 67 percent report that asset management allows them to have a better focus on their priorities. Both of these benefits can be attributed to the greater focus on data, risk assessment and lifecycle evaluation associated with asset management decision making."

One surprising finding of the study is that utilities using a high level of asset management practices trend toward higher levels of planned rate increases by 2017. The survey also assesses the adoption and evaluation of 14 leading asset management practices, with implementation of technology and data practices as well as strategy and performance measurement ranking high in effectiveness.