Long-Term Replacement Planning

As the utility works to develop Life Cycle Costing data on all the assets, there will be a point where the data will provide information on the costs of maintenance, repairs, and replacements for the assets. This information will be used to optimize the operation, maintenance, repair, rehabilitation, and replacement expenditures, which is the goal of Life Cycle Costing. However, the system does not have to wait for the database to be fully built and the costs optimized to begin utilizing it. 

As a system implements its asset management program, the available data can be used to begin developing long-term replacement plans. This allows the system to look at incomes and budgets and adjust in advance of a large expenditure or need. 

To develop these long-term plans utility staff and local decision-makers will want to develop a Capital Improvement Plan (CIP) and perform Business Case Evaluations. The CIP will allow the system to see what projects are needed when. The Business Case Evaluation allows the utility to have a deeper look at high dollar projects to ensure projects are needed and that all the options for project development have been fully considered, including options for non-asset solutions or alternatives that might not include replacing the asset with a similar asset. This process allows the utility to optimize construction funds.