Risk-based prioritization: an approach for small- and medium-sized utilities

MIKE HIGGINS P.E. | Guest columnist Vice President of Engineering Services, Pure TechnologiesW ater utilities across the United States
face a major funding gap related to buried pipeline infrastructure. The U.S. Environmental Protection Agency estimates that the difference between what’s needed for infrastructure renewal — the majority of it associated with buried pipe — and what utilities can afford to spend is between $200 billion and $1 trillion over the next 25 years. In addition, an increased number of pipeline failures are disrupting everyday life and are expensive to mitigate. This adds to the scrutiny of utilities, despite the fact that they often do not have sufficient funding to implement traditional pipeline management strategies to renew or replace the aging infrastructure.

…even if one of these options is not pursued, operators will at least know which are their most critical pipelinesThis new reality has forced utilities to squeeze more remaining life out of existing assets, creating more demand for condition assessment programs and proactive management of pipelines.

While larger utilities typically have a portion of their capital budget dedicated to pipeline-focused management and rehabilitation programs, small- and medium-sized utilities often do not have the funding for these programs. As a result, some are forced to run their assets to failure.

Another common practice is completing annual pipe replacement based on age; however, this approach isn’t a responsible use of capital because a pipe’s condition is rarely reflected in its age. Pipes don’t deteriorate or fail systematically across their entire length, nor do they automatically deteriorate with age. Pipe condition is usually related to localized problems caused by design, manufacturing, installation, environmental, operational or maintenance factors.

Another option that works within a limited capital budget is risk-based prioritization. In most cases, small and medium utilities can cost-effectively manage buried water and wastewater pipelines through this process.

This basic pipeline management approach allows for more intelligent decision making with regard to future rehabilitation, annual replacement or condition assessment programs. It also identifies which assets have a high consequence of failure, providing operators with immediate direction for capital planning.
Equipped with the information from a risk-based prioritization, utilities can make informed decisions that enable intelligent management of their most valuable asset: buried infrastructure. Ultimately, this can help address the EPA funding gap and challenges with aging infrastructure.

The Basics of Determining Pipeline Risk

Determining risk is a measure of the probability and consequence of uncertain future events, like a potential pipeline failure. A basic approach can be used to define risk, even in complex systems. Simply, risk is a product of the combination of consequence of failure and likelihood of failure. Consequence of failure refers to the damage a failure would cause based on factors like its location, the amount of users the pipeline supplies, its size and operating pressure. Likelihood of failure refers to the probability of a failure occurring based on factors such as age, pipe material, soil conditions, operating pressure and failure history.

Generally, the consequence of failure is well defined by the potential damage a pipeline failure would cause on the surrounding environment and is usually fairly static. With this in mind, the key to managing risk, or the uncertainty that a pipeline could fail, is in understanding the likelihood of failure. This can be achieved by quantifying the physical condition of the pipeline in addition to understanding and quantifying the factors that affect the potential for deterioration of the assets.

Once risk is defined then pipeline inventory can be prioritized, which helps with capital planning for condition assessment, rehabilitation or replacement programs.

When defining risk, a utility can take either a qualitative or quantitative approach. Qualitative approaches can be as simple as an internal meeting where each pipeline is listed and given a priority.

Detailed analytical risk analysis involves establishing a defensible and repeatable scoring system that quantifies COF and LOF variables. Some variables will require subjectivity to provide a score, while other variables can be scored quantitatively. After an initial COF and LOF are determined for each pipeline, the risk can change with time. A proper pipeline management program should lower risk with time, as with the example of a pipeline initially identified with a high LOF — but which is reduced to a low LOF after a condition assessment identifies that 95 percent of the pipeline is in good condition and isolated repairs are made.

Using Risk to Move Forward

By prioritizing all pipeline assets, operators of small- and medium-sized utilities are equipped with the baseline information needed to move forward with a condition assessment or replacement program. However, even if one of these options is not pursued, operators will at least know which are their most critical pipelines.

Although this baseline knowledge is beneficial, it is often prudent for utilities to complete condition assessment after prioritizing their assets. This approach often results in the selective renewal of assets, which can restore pipeline reliability within a tight capital budget.

A study of more than 8,000 miles of condition assessment data on large-diameter pipe found that the majority of pipelines have significant remaining useful life, leaving only a small percentage that require immediate action. Proactively locating and repairing individual, distressed pipe sections is proving to be a cost-effective method of addressing the infrastructure gap associated with buried pipelines.

However, proactive utilities have realized that when implementing any management program — whether condition assessment or annual replacement — taking a risk-based approach is the most effective way to ensure resources are invested in an intelligent, defensible and repeatable manner that maximizes the benefit of a program.


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