Columbus DPU Asset Management Program Business Case Evaluations Kevin V. Campanella, P.E. - Columbus Department of Public Utilities

Transcription

1 Columbus DPU Asset Management Program Business Case Evaluations Kevin V. Campanella, P.E. - Columbus Department of Public Utilities Link to the on-line presentation:

2 Columbus DPU Public utility; Comprised of two divisions Sewerage and Drainage Power and Water Serve over 1 million customers with sewer / water Three WTPs, 240 MGD total capacity (900 ML/day) 3,700 miles (6,000 km) of water mains Two WWTPs, 480 MGD total capacity (1800 ML/day) 6,000 miles (9,500 km) of sewers and drains 57 booster / pump stations (W / WW) $530M Annual Operating Budget; $250M Annual Capital Impr. Budget

3 DPU s Asset Management Journey

4 The Aquamark Framework is designed to examine whole of business process capability and execution which underpin AM outcomes. The asset management aspects of the utility are subdivided into seven functions:

5 Functions divided into Processes, Sub-processes and Measures

6 Scoring approach

7 Business Case Evaluations (BCE) Project benefits must outweigh the costs: Level of Service Improvement Life-cycle Cost-reduction Risk Reduction

8 The Problem Capital decisions of the past: Conservative in nature Used multi-criteria analysis (no monetization ) for social, environmental, and even some financial factors Risk was not quantified and monetized Inconsistent application of life-cycle costing

9 Aquamark Scoring Approach

10 Extensive Process Development and Documentation

11 BCE Guidelines Manual

12 BCE Threshold Levels Graphic 5 KVC to clean up High Mid Low None Risk $ Range* > $500k $200k-$500k $50k-$200k <$50k Capital $ Range ~ Water > $5M $2M-$5M $1M-$2M < $1M ~ Sewer > $5M $2M-$5M $1M-$2M < $1M ~ Power > $1M $250k-$1M $75k-$250k < $75K ~ Storm > $3M $1.5M-$3M $500k-$1.5M < $500K Review Teams Director Administrators Administrators Assistant Administrators Directors Staff Assistant Administrators Section Managers N/A

13 BCE Process Diagram

14 Swim Lane Diagram

15 On-line Training

16 Live Staff and Consultant Training

17 TBL Cost Catalog

18 Complete Coverage and Frequency

19 Business Cases Required by Policy

20 Extraordinary Effectiveness and Results

21 The Business Case for BCE s

22 DOPW-Water Northwest Distribution System Transmission Improvements BCE

23 Problem Statement Configuration of the Columbus and Dublin water distribution systems presents a risk of not being able to provide an uninterrupted supply of safe drinking water and fire protection to customers in the northwest portion of the DOPW service area under numerous non-emergency (e.g. maximum day demand) and emergency (e.g. booster station failure) situations. Approximately 15,000 customer accounts are served in this area with a 2010 population of approximately 65,000 people (U.S. Census data). The area is primarily residential with a mix of retail and commercial uses. Dublin Methodist Hospital and numerous medical office facilities are within this area. The purpose of this BCE is to evaluate the risk posed to our customers and stakeholders and determine if there is a way to mitigate some or all the risk that provides our customers value for their money.

24 Background DOPW Service Area 2010 vs census shows significant growth Last transmission capacity increases across Scioto River to NW in 1981

25 Background Transmission System Blazer Tank is the canary in the coal mine

26 Emergency Storage (Pumping disruptions, fire fighting, etc. Equalization Storage (Normal Consumption) Problem NW System Shortage Blazer Tank Water Levels, June-August, Summer Emergency Storage Level Used emergency storage for nonemergency use 83% of time Daily Minimum

27 Problem NW System Shortage (cont.) Concerns during non-emergency (all assets operating) Not meeting demand on max days Low pressures in southern Post-North district Henderson Tanks not turning over Cleveland and Henderson Stations over-utilized

28 Problem NW System Shortage (cont.) Concerns during emergencies (unexpected demands or disruptions) Inability to fight fires Transmission main failures under Scioto River: Insufficient redundancy to avoid customer outages. Two week duration to repair during emergency. Shutdown of Henderson Booster Station Insufficient redundancy to avoid customer outages. Station in poor condition/at end of useful life Elevated likelihood of extended duration disruption days if switchgear or transformer fails catastrophically

29 Problem NW System Shortage (cont.) Concerns during emergencies (unexpected demands or disruptions) continued Loss of supply to the Fisher District No redundancy for Fisher Booster Station Transmission mains could shut down station for 48 hours 25,000 customers impacted

30 Alternatives - Griggs Originally proposed in 1999 New booster station and 10 miles of transmission main

31 Alternatives - Griggs Provides water to the NW service area Provides adequate emergency storage Adds redundancy to the river crossings Reduces reliance on Henderson and Cleveland Booster Stations Improves turnover at Henderson Tanks Additionally, provides redundant feed to the Fisher District Henderson Booster Station would be refurbished

32 Alternatives Griggs (cont.) Mid 2000 s Land was purchased and design was nearly completed Estimated to cost between $24-$26 million to construct. Project had conflicts with DOSD biofilter, issues with land acquisition, other uncertainties DOPW reevaluated to explore other options

33 Alternatives Bethel-Full Modify Bethel Booster Station and construct 5 miles of transmission mains. Abandon Henderson Booster Station

34 Alternatives Bethel-Full Bethel-Full alternative proposed in 2009 Utilizes capacity of the current Bethel Station Reconfigured to pump from either DRWP or HCWP Henderson Booster Station is at the end of its useful life Allows Henderson to be de-commissioned instead of refurbished

35 Alternatives Bethel-Full Provides water to the NW service area Provides adequate emergency storage Improves turnover at Henderson Tanks Adds redundancy to the river crossings Reduces reliance on Cleveland Booster Station Much lower capital cost than Griggs alternative Estimated at $17.1 million to construct

36 Alternatives Bethel-Full (cont.) Bethel-Full increases the criticality of the Bethel Booster Station and reduces redundancy to NW service area. Does not address lack of redundancy to Fisher District

37 Alternatives Bethel-Full (cont.) Studied extensively for 2009 Water Distribution System Master Plan functionality confirmed DOPW was ready to proceed with RFP, and then BCE process was introduced Early estimates of risk cost suggested that B/C ratio for Bethel-Full option would be less than one.

38 Pre-BCE Prior to development of the BCE process it was difficult to determine which risks were significant Projects were focused on consequence avoidance Risks were identified then lowest cost alternative to eliminate risks were explored Does the risk reduction justify the use of customers money? Risk Breakdown Status Quo Alt. 1 Alt. 2 Peak demand N Y Y Water quality N Y Y Adequate pressure N Y Y Fire fighting N Y Y River crossing redundancy N Y Y Fisher B.S. redundancy N Y N Henderson or Bethel Booster redundancy Y Y Y Henderson transmission redundancy N Y Y Financial Cost $26M $18M

39 BCE Framework BCE use of risk = likelihood x consequence and monetized triple bottom line provides structure to estimate value of proposed risk reduction. Projects now focused on Risk Management We can now show whether or not project provides customers value for their money!

40 Monetized Social Risk $4,500,000 $4,000,000 $25,000,000 $3,500,000 $20,000,000 $3,000,000 $15,000,000 $2,500,000 $10,000,000 $5,000,000 $2,000,000 $1,500,000 $0 Status Quo Griggs Bethel - Full Net costs Benefits $1,000,000 $500,000 $0 Status Quo Griggs Bethel - Full Henderson or Bethel B.S. redundancy Peak demand Fisher B.S. redundancy Adequate pressure Henderson transmission redundancy Water quality River crossing redundancy Fire fighting Determined that costs exceeded benefits for both alternatives

41 Search for Solutions that Provide $4,500,000 Value Henderson or Bethel B.S. redundancy Net costs Benefits Residual Risk $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 Peak demand Fisher B.S. redundancy Adequate pressure Henderson transmission redundancy Water quality River crossing redundancy Fire fighting

42 Alternatives Bethel-Partial Looked at how to reduce cost of Bethel-Full Almost all of the cost was in transmission mains Provides new capacity and redundancy across Scioto River

43 Alternatives Bethel-Partial Provides water to the NW service area Provides adequate emergency storage Adds redundancy to the river crossings Reduces reliance on Cleveland Booster Station Much lower capital cost than Griggs and Bethel- Full alternatives Estimated at $9.2 million

44 Alternatives Bethel-Partial Requires new pump at Henderson Tanks to improve turnover Required additional hydraulic modeling to verify effectiveness of filling Blazer Tank Requires refurbishment of Henderson Booster Station

45 Alternatives Operational Changes Modeling effort suggests that transmission improvements are not necessary. Utilization of Bethel Booster Station with current transmission mains can increase supply to the northwest Requires additional supply from DRWP Modifications to Bethel Booster Station would improve efficiency/effectiveness of Bethel Estimated costs are $3.4 million

46 Alternatives Operational Changes Henderson Booster Station must be refurbished Criticality of Henderson Booster Station extremely high during peak demands Requires new pump at Henderson Tanks to improve turnover May create turnover issues at Smoky Row Tanks Installation of two 24 diameter isolation valves on supply side of Smoky Row Tanks would address issue Increased discharge pressures from Bethel Booster Station may increase breaks/leaks in portions of Cleveland and Henderson Pressure Districts

47 Alternatives Operational Changes

48 Triple Bottom Line NPV $25,000,000 Financial Factors Residual Risk $20,000,000 $15,000,000 $10,000,000 $5,000,000 $0

49 Recommendations Alternative #4 - Operational Changes 1. Refurbish the Henderson Booster Station. 2. Perform a condition assessment on the 20 river crossing at Henderson Road. 3. Communicate with Dublin regarding the criticality of their 24 river crossing at S.R Evaluate during engineering design costs and benefits of jockey pump at Henderson Tanks 5. Evaluate during engineering design costs and benefits of splitting Bethel Booster Station

50 Recommendations (cont.) 6. Modify operational procedures to utilize Bethel Booster Station more frequently 7. Following other improvements, monitor turnover at Smoky Row Tanks. Install isolation valves if turnover becomes a recurring issue.

51 Thank you! Kevin Campanella Columbus Dept. of Public Utilities Assistant Director - Asset Management Phone: kvcampanella@columbus.gov