Portland Water Bureau Briefing for the Portland Utility

Portland Water Bureau Briefing for the Portland Utility Board Asset Management at the Portland Water Bureau May 3, 2016 Nick Fish, Commissioner | Michael Stuhr, P. E. , Director

Water System Major Assets Bull Run Watershed 2 Water Sources Columbia South Shore Well Field 41 Pump Stations 66 Tanks and Covered Reservoirs 2, 330 Miles of Pipe 14, 350 Hydrants 130 Drinking Fountains 178, 500 Meters Estimated replacement value is $8. 0 billion. Portland Water Bureau | Portland Utility Board 2

Condition of Assets • Total water system asset value is $8. 0 billion • About 9% of the assets are in very poor to poor condition, representing about $0. 7 billion. • About 5% of the Distribution System is in poor or very poor condition, representing about $250 million. $8. 0 billion Very Good Fair Poor Portland Water Bureau | Portland Utility Board Very Poor To Be Determined 3

What is Asset Management? A combination of … business practices Applied to physical assets With the objective of providing the required level of service In the most cost effective manner Portland Water Bureau | Portland Utility Board 4

What is Asset Management? • Planning— Document current condition, risks, and practices; recommend strategic improvements in an asset management plan • Decision Support—Use economic tools like business cases to evaluate projects and programs • Identifying Service Levels— Measure performance against the goals for the services the bureau provides. • Risk Management—Reducing the likelihood the asset will fail or the consequences of failure. • Forecasting—Analyzing available information to determine future needs. Portland Water Bureau | Portland Utility Board 5

PWB Uses Leading-Practices in AM • American Water Works Association National Asset Management Committee—Chair is Jeff Leighton, Senior Engineer at the Water Bureau. • Provide Training and Advice to Others—Invited to share bureau’s risk-management, business-case, and asset-management plan development effort at conferences and events. Served on over 20 Advisory Committees for asset management • Practice Survey—National AWWA survey on the level of practice of AM among North American utilities Portland Water Bureau | Portland Utility Board 6

What drives the CIP? • Regulatory Compliance • Public Health Protection • Risk Mitigation • Projects in Construction • Public Expectations • Cost-to-Benefit Analyses • Stewardship and Partnership • Council Direction LESS DISCRETION MORE DISCRETION Portland Water Bureau | Portland Utility Board

Capital Improvement Planning Portland Water Bureau | Portland Utility Board 8

Project Planning and Design Portland Water Bureau | Portland Utility Board 9

Asset Management Plans (AMPs) Levels of Service Asset Inventory and Valuation Asset Condition and Performance Failure Modes and Useful Life Business Risk Exposure Maintenance, Repair, and Replacement Strategies • Budget Forecasting • • • Portland Water Bureau | Portland Utility Board 10

AWWA Survey—AMP Benchmark Water Bureau now Water Bureau in 2005 Large utilities All utilities Portland Water Bureau | Portland Utility Board Data source: American Water Works Association, 2015 Establishing the Level of Progress in Utility Asset Management Survey Results. Denver, Colorado. 11

Supporting Decision-Making 54 business cases in 2014 and 2015 • 19 business cases as part of Planning process • 35 additional business cases conducted by Asset Management estimated to reduce risks and avoid costs of more than $18 million Portland Water Bureau | Portland Utility Board 12

AWWA Survey—Business Case Benchmark Water Bureau now Water Bureau in 2005 Large utilities All utilities Portland Water Bureau | Portland Utility Board Data source: American Water Works Association, 2015 Establishing the Level of Progress in Utility Asset Management Survey Results. Denver, Colorado. 13

Service Level Targets and Performance Portland Water Bureau | Portland Utility Board 14

AWWA Survey—Service Level Benchmark Targets reevaluated and adjusted periodically based on customer expectations and/or ability to provide service level Water Bureau now Water Bureau in 2005 Large utilities All utilities Portland Water Bureau | Portland Utility Board Data source: American Water Works Association, 2015 Establishing the Level of Progress in Utility Asset Management Survey Results. Denver, Colorado. 15

Service Level Improvement • Consulting Customers about Service Levels—Online survey starts in May; final report in fall 2016. • Service Level Improvement Project— Cross-functional team will tackle improving service levels using recommendations from customers, AM plans, and subject-matter experts in the bureau. Portland Water Bureau | Portland Utility Board 16

Managing Risk • Putting effort into highconsequence mains and valves next to or crossing major roads or railroads SW Lane Street @ I-5 24" Freeway Crossing Leak Down Test 80 70 60 50 40 30 20 10 0 5: 41: 17 A 12/P 12 5: 55: 41 A 12/P 12 6: 10: 05 A 12/P 12 6: 24: 29 A 12/P 12 6: 38: 53 A 12/P 12 6: 53: 17 A 12/P 12 7: 07: 41 A 12/P 12 7: 22: 05 A 12/P 12 Pressure (psi) • Addressing high risks part of bureau’s highest-level performance measures, reported in budget Portland Water Bureau | Portland Utility Board 17

Catastrophic Failure Avoided—NE Grand Ave • Major highway crossing and pipe badly out of alignment above • Estimated to cost at least $10 million if pipe had failed. • Triple-bottom-line benefits: • Avoid disruption of traffic on major road • Avoid potential safety issue (social) • Identified early and repaired when ODOT had already planned a closure Portland Water Bureau | Portland Utility Board 18

Forecasting—Evaluating Useful Life Failure Curve (Weibull Curve)—Statistical Estimate of Failure Based on Failure of Similar Pipe Portland Water Bureau | Portland Utility Board 19

Estimating Annual Replacement Rate Able to Estimate Replacement Needs in Miles per Year, Based on Weibull Curve Data Portland Water Bureau | Portland Utility Board 20

Quantified Benefits of AM • Avoiding risks to major transportation corridors, human health and safety, and property • Eliminate annual hydrant overhauls. Net benefit: $400, 000 a year in avoided costs • Reduce maintenance on redundant pumps. Net benefit: $20, 000 a year in avoided costs Portland Water Bureau | Portland Utility Board 21

Progress in Implementing AM Portland Water Bureau | Portland Utility Board 22

Two-Year Plan for Asset Management Portland Water Bureau | Portland Utility Board 23

Major Tactical Goals and Objectives • • • Levels of Service and Customer Consultation Asset Management Plans and Strategy Implementation Manage Risk of Asset Failure Business Case Evaluations Implement Reliability Centered Maintenance Water Loss and Outages Forecast Infrastructure Replacement Needs Capitalization Policy Technology Systems and Business Workflows Benchmarking Developing Asset Management Competency Alignment with International Standards Portland Water Bureau | Portland Utility Board 24

Questions Portland Water Bureau | Portland Utility Board 25