Holistic asset management key for addressing aging infrastructure
The Black & Veatch 2013 Strategic Directions in the U.S. Water Industry report identified the top water industry issues as aging infrastructure and managing capital and operational costs. Cindy Wallis-Lage, president of Black & Veatch’s water business, recently spoke with WWD Managing Editor Elizabeth Lisican about the importance of redefining sustainability.
Elizabeth Lisican: How can the U.S. water industry redefine what it means to be sustainable? Why should it?
Cindy Wallis-Lage: The term “sustainability” has largely become synonymous with “being environmentally friendly.” This needs to change. Sustainability is about considering the future as well as the present and balancing the elements of the triple bottom line: financials, the community and the environment. The balance of these three elements should reflect the specific conditions of a community—what is sustainable for one community may not be sustainable for another.
An example of the need to fully consider financial aspects of sustainability is the U.S. water industry’s focus on the importance of current costs versus future costs. Deferring maintenance or patching problems as they surface is not a sustainable practice. We will all pay the price in exponential infrastructure failure and replacement costs in the long run.
Lisican: Why must the industry shift toward a more holistic asset management approach? How can utilities achieve this?
Wallis-Lage: The Black & Veatch 2013 Strategic Directions in the U.S. Water Industry report, which includes results from a survey of 397 utilities in addition to analysis and case studies, identified the top industry issues as aging infrastructure, managing capital costs and managing operational costs. Asset management frameworks are proven methodologies for effectively managing all of these issues and more.
Holistic asset management provides many benefits by increasing the quality and quantity of information on which to make data- and risk-based decisions. Improved risk management and asset lifecycle management; enhanced justification for project financing and rate increases; and optimization of capital, operations and maintenance are some of the benefits.
The U.S. water industry is largely in the infancy stages of implanting and using formal asset management frameworks and can benefit from lessons learned in the U.K. and Australia, where the internationally recognized Publicly Available Specification (PAS) 55 standards have been proven effective during the past 20 years.
The International Organization for Standardization’s ISO 55001—largely based on PAS 55—likely will be issued in early 2014. It will provide international guidance for integrated and effective asset management systems. The U.S. water industry has the opportunity to bypass a learning curve on the road to holistic asset management by applying proven international standards. In this way, utilities can benefit from those who learned the hard way what “good” looks like.
Lisican: Speaking of learning from others, why is the “people side” of sustainability also important, and how can it help utilities meet strategic goals?
Wallis-Lage: Addressing the people side of sustainability also is a proven method for meeting strategic goals. Investments in the community—or social—side of the water business can help address consumption challenges and educate consumers about the connection between rates and reliability. Informed end-users make better choices about consumption, and customer education programs create a public more likely to think in terms of value, rather than cost, of water. What’s more, a more informed and receptive public could ease the anxiety levels of elected bodies that must implement rate changes for their constituents.