2012 Strategic Directions in the U.S. Water Utility Industry

Black and Veatch, a leading engineering, consulting, and construction company and a top-10 water engineering firm commissioned a report as a part of its Strategic Directions in the U.S. Water Utility Industry series. The survey data in the study came from utility managers in 45 states and the District of Columbia. The authors reported that the "represented results have a 95 percent confidence level" (p. 4). The composition of the respondents included municipal departments (40.4%), special districts (21.7%), municipal utility commissions/authorities (18.7%), counties (10.3%), utility districts (3.0%), water districts (2.8%), investor owned utilities (2.8%), and state utilities (0.3%). More than 75% of respondents had customer service populations of over 100,000 and geographically covered all regions of the United States, with a preponderance of respondents from the West (38%), 34% from the South, 22.1% from the Midwest, and an underrepresentation from the Northeast (5.9%).  The survey focused on three areas, "financial issues, sustainability and optimized asset management practices" (p.2).

The report confirmed popular perceptions of the state of the nation's water infrastructure: much of the assets have out-lived their useful life, organizations lack sufficient funds for upgrades, and increased efficiencies in energy and resource conservation can improve sustainability. By prioritizing capital projects and applying asset management practices and systems, utilities can find solutions to slow the decline of their infrastructure.

In the Asset Management section of the report, the author, Will Williams, listed key asset management questions:
"What assets it owns
What condition its assets are in
How these assets are performing
What service it currently delivers and what it needs to deliver in the future
What risk there is to the services
What assets will cost over their planned life
When assets need to be repaired or replaced and how
What may need to be done differently in the future" (p. 26)

A comprehensive asset management improvement program or an asset management maturity assessment gives utilities the framework and structure to systematically answer these questions. Fundamental to these initiatives is an inventory of assets with quality data, storing, "the number of assets, type, size, capacity and age" (p. 29). Additionally, quality information helps in assessing risk, the correlation between cost and performance. Finally, data allows utilities to identify their levels of service indicators, determined by stakeholder requirements.

The survey results revealed that smaller utilities with populations of less than 50,000 lag in systems and processes and do not have level of service indicators or perform risk assessments. Medium-sized utilities acknowledged their difficulties in improving systems and processes. Fortunately, larger utilities progress in their development of asset management systems and processes, their data quality, risk assessment to prioritize investment, and in monitoring their level of service.