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Utilities\u00a0should strive to achieve a balance between operation and maintenance costs and capital expenditures.\u00a0Spending more in one area can\u00a0impact\u00a0expenditure\u00a0in\u00a0the other.<\/span>\u00a0<\/span><\/p>\n Generally, spending more on operation and maintenance and less on capital is the least cost method of managing assets. However, the risk of failure is\u00a0somewhat higher\u00a0with this type of management. When the system favors replacement over maintenance and repair, costs will go up,\u00a0because replacement is\u00a0a\u00a0more expensive way to go. However, the risk of failure is\u00a0somewhat lower\u00a0with this type of management. The risk is one reason to shift the balance in one direction or the other.<\/span>\u00a0<\/span><\/p>\n Another factor affecting the balance between capital and O&M is the ability of the system staff to manage the maintenance\u00a0required\u00a0to keep the\u00a0asset\u00a0in service. If\u00a0all\u00a0the burden is placed on\u00a0the\u00a0maintenance staff, the maintenance backlog\u00a0might\u00a0grow too large, and assets\u00a0might\u00a0begin to fail due to untimely maintenance.<\/span>\u00a0<\/span><\/p>\n [\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section]<\/p>\n","protected":false},"excerpt":{"rendered":" Balancing O&M and Replacement Costs Utilities\u00a0should strive to achieve a balance between operation and maintenance costs and capital expenditures.\u00a0Spending more in one area can\u00a0impact\u00a0expenditure\u00a0in\u00a0the other.\u00a0 Generally, spending more on operation and maintenance and less on capital is the least cost method of managing assets. However, the risk of failure is\u00a0somewhat higher\u00a0with this type of management. When the system favors replacement over maintenance and repair, costs will go up,\u00a0because replacement is\u00a0a\u00a0more expensive way to go. However, the risk of failure is\u00a0somewhat lower\u00a0with this type of management. The risk is one reason to shift the balance in one direction or the other.\u00a0 Another factor affecting the balance between capital and O&M is the ability of the system staff to manage the maintenance\u00a0required\u00a0to keep the\u00a0asset\u00a0in service. If\u00a0all\u00a0the burden is placed on\u00a0the\u00a0maintenance staff, the maintenance backlog\u00a0might\u00a0grow too large, and assets\u00a0might\u00a0begin to fail due to untimely maintenance.\u00a0<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"class_list":["post-6891","page","type-page","status-publish","hentry"],"yoast_head":"\n