Study: Aging water infrastructure drives greater use of asset management

NEW YORK — 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, D.C.

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, Technology, Quality & Innovation, 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.

The 2013 Water Infrastructure Asset Management study, prepared by McGraw-Hill Construction in partnership with CH2M HILL, was completed in conjunction with five industry associations who reviewed the survey and distributed it to their members: American Public Works Association, American Water Works Association, National Association of Clean Water Agencies, National Association of Water Companies and Water Environment Federation. The study included 451 respondents from the U.S. and Canada, from utilities ranging from those serving a minimum population of 3,300 to a population of over 500,000.