Flooded basements. Extended power outages. Watermain breaks. Downtown districts at a standstill. Frozen or submerged transit. Major cities across Canada found themselves dealing with extreme weather events in 2013 while simultaneously trimming their budgets and facing renewed public questioning about the vulnerability of our infrastructure. These catastrophic events demonstrated the need for a firm grasp on risk management practices to better manage water infrastructure. The consequences of having the system compromised could be severe and even life-threatening in the worst cases.

For many years, utility managers managed risks the old-fashioned way: through gut feelings and intuition. Experienced managers eventually built up enough skills and knowledge that they became good at taking risks. However, this experience was not easily passed on to other staff. By formalizing effective risk management, a utility can improve its decision-making process by balancing levels of service and cost of service, helping them to make the best use of scarce resources. In Ontario, the Region of Peel undertook a comprehensive risk assessment as part of strategic planning for linear assets—transmission and sub-transmission infrastructure—to help it with the job of delivering drinking water services.

The Peel Risk Assessment Project: Linear Infrastructure

The Peel water supply system has a total of 4,500 watermains that cover 700 kilometres. Pipe diameters range from 300 to 2,100 millimetres with seven pressure zones. Meanwhile, Peel’s population is expected to grow from its current 1.3 million to approximately 2.5 million in the next two decades. The region needs to fund new infrastructure while also maintaining the existing aging pipes, all within the constraints of a rate-based water supply system that is supplemented with new development charges. In order to continue meeting customer expectations and to stay abreast of new regulations, it chose a risk-based approach to help prioritize capital expenditure.

To achieve this, there were four main project objectives: to characterize risk associated with transmission and sub-transmission watermains; to develop risk management plans for high risk/critical assets; to develop a long-term capital plan to reduce overall risk; and to develop a risk tool to repeat and update risk assessment.

The project approach included the following steps from the AWWA J100 standard:

1. Defining features such as size, flow rate, and location, and defining levels of service to establish asset characterization;

2. Defining risk scenarios like breaks, pressure, and demand to determine threat characterization and to articulate a consequence analysis;

3. Determining the likelihood of risks by using experience/judgment and historical data to conduct a vulnerability analysis and come up with a threat assessment;

4. Developing risk profiles/categories/classifications for your risk assessment;

5. Developing mitigation plans and strategies to manage risk.

Risk was defined as: Risk = (Likelihood x Vulnerability) x (Consequence x Resilience)

Figure 1: Project Approach – Risk Mapping and Decision Making. Credit: GHD.

An important part of the process was developing a risk map (See Figure 1) that juxtaposed the consequence of a failure (from “insignificant” to “catastrophic”) to the probability of the event occurring (from “rare” to “certain”). The red line represents the risk tolerance or threshold.

Leading global engineering, architecture, and environmental consulting company GHD is assisting the Peel Region to develop a systematic approach for risk management. Aman Singh, business consulting manager with GHD, explained that, “Typically, the red line is determined in part by political appetite for risk and also based on available funding and resources.”

Singh, who was project manager on the Peel Region project, added, “Every single day you are trying to push back the risks that are sitting above the line, but at the same time, all the risks and assets that sit below the line are continuing to age and are continuing to push up against the line, so your daily decisions revolve around this map and trying to keep risks above and below the line.”

Utilizing three technology tools

InfoWater water-distribution modelling software was used to update system hydraulics and to look at the impact of pipe breaks on the overall system. The ESRI geographic information system (GIS) tool was used for a spatial analysis of pipes to support the evaluation of probability and consequence of pipe failure. GIS data was then uploaded into a custom risk management tool that was developed to log and track pipe information. For example, each pipe was evaluated against 16 threat events such as corrosion, and given an overall risk score, with the user able to change the vulnerability/resilience and the probability of failure level. The user is also able to see the impact of implementing various risk-mitigation strategies.

Better spending

An important outcome of the project was translating the risk score into a dollar value. A consequence-of-failure matrix was developed, which considered the impact on service of each of the threat events. These impacts were quantified in dollar values on the continuum of “insignificant” to “catastrophic.”

“Once you have the cost consequence of a risk, you can use it to help make a business case to evaluate various mitigation strategies,” Singh explained.

“Before this, there were a lot of projects in our capital plan that were put in based on what we thought were high-priority projects, but this process helped us to validate those projects and to have a strong business case and justification for why these projects are in our capital plan,” said Imran Motala, manager of capital planning at the Region of Peel. “It also helped to identify projects that were not needed.”

Peel intends to extend this approach in the future to the region’s water distribution, as well as its storm and sanitary sewers, so that it can continue to use a consistent risk-management framework and tool. This will support informed decision making with respect to the region’s asset management and capital expenditure programs, and help allocate limited resources to the high-risk areas of its water system.

“The process that we went through […] was really helpful in giving us a strong footing and foundation for how we do risk management and risk mitigation planning for transmission mains,” Motala said. He added that the process was even more beneficial because it “gave us the ability to build a solid business case for investment in our infrastructure that could be presented to senior management and regional council.”  WC

Careesa Gee is a communications and events specialist at GHD and Roop Lutchman is the leader of business consulting at GHD. This article appears in Water Canada’s March/April 2014 issue.


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