AWWA ACE61640

Black & Veatch has developed a decision-making process that consistently andtransparently evaluates a wide variety of projects and issues that confront utilities. Theanalysis uses a probabilistic approach utilizing Monte Carlo simulations and is quantifiedthrough Net Present Value tornado diagrams and probability distributions. The evaluations are accomplished by assessing the condition and failure probability ofcomponents; identifying and evaluating rehabilitation, repair, and replacement needs;developing cost estimates of necessary improvements; and producing a capitalimprovement program that is prioritized using a defendable and statistically-basedprocess.This paper examines the detailed cost, probability, and timing estimates within acustomized financial evaluation model in order to analyze the value and risk mitigationeffectiveness of proposed capital projects. In particular, this paper discusses:in-depth definition of issues, possible outcomes, and probabilities;fully quantified value-at-risk specification of the inter-relationships amongprojects and issues; and, identification of innovative capital action programs with improved expectedoutcomes and reduced exposures.This capital prioritization process provides water and wastewater utilities with the abilityto obtain a strategic direction in very uncertain environments and to develop proactivecapital plans and investments that are evaluated on a consistent basis. In addition, thisprocess provides an easy-to-understand framework that facilitates "buy-in" and support across all organizational units. Includes 2 references, table, figures.

Product Details

Edition:

Vol. - No.

Published:

06/17/2005

Number of Pages:

12

File Size:

1 file , 1 MB