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The main consideration with all operation and maintenance activities and capital expenditures is how much risk the system is\u00a0willing to\u00a0tolerate. The\u00a0utility\u00a0will spend less if it is willing to accept more\u00a0risk\u00a0and\u00a0spend\u00a0more if it is willing to accept less risk.\u00a0It is important to use resources and data available to avoid\u00a0errors in life-cycle cost prediction. Errors can lead to higher costs than\u00a0anticipated, resulting in spending more\u00a0than\u00a0anticipated.\u00a0<\/span>\u00a0<\/span><\/p>\n The\u00a0utility\u00a0should invest money to reduce the failures it feels cannot be tolerated. This investment should be made in both\u00a0operational and\u00a0maintenance\u00a0capital\u00a0expenditures. Money should not be spent to prevent failures of\u00a0low-risk\u00a0assets, except for routine maintenance that keeps the\u00a0asset\u00a0operational. These assets should be replaced after they fail.<\/span>\u00a0<\/span><\/p>\n As a starting point, a\u00a0utility staff\u00a0can ask the following questions:<\/span>\u00a0<\/span><\/p>\n If\u00a0staff\u00a0can say that there were few\u00a0severe\u00a0consequences from failures, then perhaps the system is appropriately managing its risk from asset failures. If the system\u00a0experienced\u00a0many\u00a0negative consequences from failures and the customers are expressing concerns about failures, then perhaps the risk level is not well-managed. In that case, the next questions the system should ask include:<\/span>\u00a0<\/span><\/p>\n <\/span><\/p>\n [\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section]<\/p>\n","protected":false},"excerpt":{"rendered":" Risk Management The main consideration with all operation and maintenance activities and capital expenditures is how much risk the system is\u00a0willing to\u00a0tolerate. The\u00a0utility\u00a0will spend less if it is willing to accept more\u00a0risk\u00a0and\u00a0spend\u00a0more if it is willing to accept less risk.\u00a0It is important to use resources and data available to avoid\u00a0errors in life-cycle cost prediction. Errors can lead to higher costs than\u00a0anticipated, resulting in spending more\u00a0than\u00a0anticipated.\u00a0\u00a0 The\u00a0utility\u00a0should invest money to reduce the failures it feels cannot be tolerated. This investment should be made in both\u00a0operational and\u00a0maintenance\u00a0capital\u00a0expenditures. Money should not be spent to prevent failures of\u00a0low-risk\u00a0assets, except for routine maintenance that keeps the\u00a0asset\u00a0operational. These assets should be replaced after they fail.\u00a0 As a starting point, a\u00a0utility staff\u00a0can ask the following questions:\u00a0 Did we experience\u00a0negative\u00a0consequences from failures last year?\u00a0 How bad were they for customers or the community?\u00a0Was\u00a0anyone\u00a0injured?\u00a0Was\u00a0anyone\u2019s\u00a0health affected?\u00a0\u00a0 Did customers\u00a0or the\u00a0community complain about the consequences of\u00a0the failures?\u00a0 Did we incur\u00a0additional\u00a0costs from fines or legal expenses because of severe consequences?\u00a0 If\u00a0staff\u00a0can say that there were few\u00a0severe\u00a0consequences from failures, then perhaps the system is appropriately managing its risk from asset failures. If the system\u00a0experienced\u00a0many\u00a0negative consequences from failures and the customers are expressing concerns about failures, then perhaps the risk level is not well-managed. […]<\/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-6895","page","type-page","status-publish","hentry"],"yoast_head":"\n\n
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