Risk and opportunity in upgrading the US drinking water infrastructure system

Area of Science:

• Environmental Engineering
• Infrastructure Management
• Risk Assessment

Background:

• Drinking water infrastructure (DWI) decision-makers face challenges in managing financial uncertainty within capital improvement programs (CIP).
• Maintaining desired system reliability [r(f)] while controlling budgetary impacts is crucial for DWI.
• Existing methods may not adequately incorporate the probability of system failure [p(f)] into financial planning.

Purpose of the Study:

• To present a practical risk assessment methodology for DWI decision-makers.
• To demonstrate the value of an objective risk assessment tool for estimating sensitivity to system failure risk (R).
• To incorporate the probability of system failure [p(f)] into CIP budgetary analysis and evaluate its effects.

Main Methods:

• Development of a risk assessment methodology integrating probability of system failure [p(f)] into CIP analysis.
• Estimation of DWI decision-maker sensitivity to risk of system failure (R) using rate of reinvestment (RR).
• Evaluation of the impact of p(f) on expected CIP budgetary outcomes.

Main Results:

• The proposed tool helps manage the magnitude of expected budgetary impacts by adjusting sensitivity to risk (R) via the rate of reinvestment (RR).
• Proactively managing risk (R) to maintain desired system reliability [r(f)] effectively mitigates uncertainty in CIP budgetary outcomes.
• The methodology provides DWI decision-makers with a tool to reduce budgetary uncertainty in resource allocation for operational, repair, maintenance, and expansion activities.

Conclusions:

• DWI decision-makers can achieve positive budgetary outcomes by adopting risk-avoidance strategies.
• Proactive asset management (AM) is key to mitigating financial uncertainty and ensuring system reliability.
• The practical risk assessment methodology enhances objective decision-making for DWI within CIP constraints.