THE ASSET MANAGEMENT PROMISE: SEVEN STEPS TO REDUCE O&M COSTS THROUGH CAPITAL INVESTMENT
Abstract:Asset management programs for water and wastewater treatment plants typically focus on a wide range of business and engineering optimization techniques. One technique to reduce overall costs to the agency is to optimize capital costs and operations and maintenance (O&M) costs through a life cycle cost analysis (LCCA). Once life cycle costs have been developed, operations and maintenance costs can be compared to capital costs to estimate future savings for the agency. A thorough understanding of these costs and savings enables an agency to meet their desired level of service (LOS) goals while minimizing risks, such as performance, failure, and financial risks.
The City and County of Honolulu's Department of Environmental Services (Department) owns and operates a number of pump stations and seven of the eight wastewater treatment plants on the island of Oahu, Hawaii. Through implementation of a seven-step Asset Management Program (Program), the Department has developed an inventory of their assets, evaluated the condition, criticality, vulnerability, and risk of these assets, and developed various financial valuations. In order to improve their overall cost-effectiveness, capital projects and O&M activities have been integrated and evaluated using LCCAs to enable the Department to make optimal decisions. The Program establishes a framework for optimizing Capital Improvement Program (CIP) project need and timing and on-going operations, maintenance, and repair and replacement (R&R) decisions to achieve the targeted LOS goals and operating performance. In an effort to meet their desired LOS goals while minimizing risks and costs, O&M costs were compared to capital costs to evaluate future savings. By optimizing these cost savings through management decisions, the Department expects to save on power, labor, and chemical/supply costs.
Document Type: Research Article
Publication date: January 1, 2004
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