Utility owners find themselves at a time where customers have increasing reliability standards and there is increasing regulatory scrutiny on capital investments. This is all taking place while asset owners are managing an aging grid that saw heavy investment during the mid 1900s and many assets are now near or at end of life.
Effective asset management seeks to balance the competing factors of performance, cost, and risk in assuring optimal decisions in operating and maintaining critical assets. And though these factors have been ever-present in our quest to provide safe and reliable service to our customers, they have often been viewed as separate entities to be prioritized in contrast to being three perspectives to be integrated.
Cost and performance are largely deterministic variables to which constraints and objectives are typically assigned; and risk (defined in the ISO 55001 and ISO 31000 standards as “the effect of uncertainty on objectives”) provides a basis around which to effect trade-offs. Acknowledging that it is financially unviable to eliminate risk (i.e., it can only be managed), effective asset risk management:
- Assures transparency of all asset-related risks
- Communicates an organization’s tolerance for risk (thereby shaping capital investment and O&M spending priorities and driving communication protocols)
- Establishes intervention strategies and tactics to mitigate these risks.
Thus, the purpose of risk management is to provide utilities with the ability to identify and evaluate issues, risks, and opportunities within the business; and to do so applying a consistent approach for defining, cataloguing, and quantifying all the risks associated with the current assets and processes in alignment with the strategic objectives and success criteria of the business.
Optimizing risk management
Since risk managers require full transparency and access to data for a deeper understanding of key risk factors, they need tools that can incorporate all the concepts and key characteristics of effective Risk Management, which include:
- Intentional and structured
- Consistent and uniform
- Improved predictability
- Future oriented
The best tools should allow risk managers to integrate the three perspectives that drive asset management-related decisions, cost, performance, and risk, thus ensuring congruence with the ISO 55001 standard.
Russell Samasuwo is a professional engineer with wide-ranging experience in transmission and distribution systems with a focus on asset management, regulatory and capital planning, operations, and project management. Prior to joining Engineered Intelligence, Russell worked for a large utility and was responsible for managing several distribution assets including but not limited to poles, underground cable, overheard conductors, and transformers. As the Grid Analytics & Insights Lead at Engineered Intelligence, Russell supports clients in their planning processes and analytics, as they leverage ENGINTM insights to develop grid investment strategies, plans, and tactics to keep their grids reliable and resilient.