“So Many Projects, So Little Money – How to Build a Capital Program that Your Ratepayers and Decision-makers Will Support ”

摘要

Utilities across the United States are faced with the management and financial challenges of funding massive capital improvement programs (CIP) to address both aging infrastructure and growth related issues. On the aging infrastructure side, more and more organizations are starting to come to grips with the lack of adequate historical reinvestment in our water systems. Some have even prepared systematic, long-range projections of reinvestment requirements. This realization has also created a need for spending funds in the “right places”. But how does a poor Utility Manager know where the right places are? On the growth side, many utilities face competition between growth and sustainability in stretched capital funding plans. How does a Utility set priorities that balance growth and sustainable infrastructure? The answers to these challenging questions lay in the application of fundamental business principles to our capital programs. Case studies from utilities of various sizes facing differing challenges will be presented to illustrate these principles. Use of a rational methodology to prioritize CIP projects and convert this prioritization into an implementable schedule will be illustrated. The process for development and application of prioritization criteria will be explored and outcomes from systems presented to demonstrate use of the technique. These criteria involve a mixture of customer service, financial performance, risk and criticality and support for economic development. In addition, application of Business Case Evaluation (BCE) will be presented for a major water supply and treatment program in the southeastern United States. BCE establishes the underlying drivers for a project, identifies all feasible alternatives, uses life cycle costing (capital, refurbishment and replacement, and operations and maintenance) to compare alternatives and defines the risk and benefits of each to select the best outcome for the customer. Application of this methodology will be demonstrated using a case study. This approach has consistently shown that significant cost savings and effective risk mitigation can be achieved through use of this technique. Application of these principles is highly scalable to any utility and provides a sound business position for implementing a capital program. The rigor of using these techniques also provides the foundation to achieve political support for the necessary funding by demonstrating good stewardship of ratepayers funds. Coupling these principles with an effective stakeholder involvement and communications program captures valuable input and gets the message out that your program focuses on ratepayer interests. The outcome is that the right projects get built at the right times.