METSCO & Asset Management

Category: 

Asset Management

November 11, 2021

 / 

5 Min read

SERVICE LINE: Asset Management

CLIENT: EPCOR

EPCOR wanted to gain a better understanding of its distribution assets’ lifespans, predicting when they might fail and the potential cost implications to put appropriate capital investment plans in place. METSCO’s expert asset management team came on board to help the Edmonton utility provider not only evaluate the current state of its assets, but also use an innovative risk methodology to establish a reliability projection for the next 10 years that would help EPCOR to continue serving its Albertan community.

The Challenge

EPCOR wanted to better predict when assets would need to be replaced. First, to ensure reliable energy supply to their customers, and secondly, to affirm their capital investment programs were optimized. With 15 years of historical data to analyze, EPCOR needed added analytical bench strength.

The Solution

METSCO established a risk-based methodology to predict when assets would need to be replaced by pinpointing an asset’s remaining life based on past, present, and future risk scenarios. This solution helped key decision-makers understand the cost implications of asset failures.

The Outcome

EPCOR applied METSCO’s methodology to its asset management program and developed a Reliability Projection Model, which helped the company evaluate and compare the reliability and capital-efficiency of its assets for the next decade. EPCOR saw a 15% sustained improvement in reliability since 2014.

Our approach

Aging assets are a concern for any business, especially utilities. EPCOR is an asset intensive company, and their operations heavily depend on the performance and reliability of the equipment that keeps lights on and taps flowing. With many of EPCOR’s assets installed in the late 1970s and early ‘80s, some were reaching end of life. The utility’s System Average Interruption Duration Index (SAIDI) was nearing its threshold. It was time to gain a deeper understanding of the utility’s asset lifespan, reliability, and how these factors might impact long-term capital investment.

When EPCOR came to METSCO, the utility was exploring the development of an Asset Risk-Based Framework that would help them do just that.

With this framework in place, EPCOR would be able to configure a condition assessment to better understand its assets’ lifespans, establish impact quantifications and plan for long-term and short-term life-cycle costing. METSCO’s first step was to dive into EPCOR’s 15 years of historical data to appraise the reliability of existing assets. Taking into account factors such as an asset’s age and condition, as well as external factors like adverse weather events, METSCO’s team and framework were able to compute an approximated expected lifetime of EPCOR’s assets and their probability of failure. Analyzing the assets’ failure impact was next on the list, which included quantifying the impacts in dollar amounts – whether in asset reliability or collateral damage.

By taking the product of the two items – the probability of an asset failing and the impact of asset failure – METSCO was able to quantify the risk cost of asset failure and also perform an Asset Condition Assessment that gave each its own “health index”, predicting the economic “end-of-life” point for each asset within the system.

With the new asset data insight, METSCO embarked on implementing a Reliability Projection Model to help EPCOR predict future reliability and risk, all with an advanced, data-driven, and granular approach. This model helped EPCOR gain a better understanding of long-term projections for system performance metrics and defective equipment, as well as yield long-term recommendations for future reliability data improvements. The utility could prioritize replacement for assets based on a balance between the risks of failure – like financial, customer, environmental, and collateral damage impacts – and the necessary costs to offset these.

This reliability projection work, combined with the robust capital and maintenance investment plans derived from the AM framework, led EPCOR to a deeper understanding of its assets’ lifespans and consequent reliability for its Edmonton community.

Why risk-based?

This kind of risk-based approach provides the foundations for continuous improvement – helping companies appropriately prioritize how time and money is spent in fixing critical problems. If not risk-based, companies could spend unnecessary dollars rectifying the symptoms of a problem, instead of unearthing the root cause.

However, putting an effective Risk Based Asset Management Framework and Reliability Projection Model in place requires a team of experts that are undaunted by problems, however complex, and take both physical assets and financial impacts into equal account. It also helps if they’ve worked in the roles of those dealing with said problems day-to-day.

METSCO’s team of former utility workers, engineers, and seasoned experts approached this project with EPCOR through a unique, blended lens of engineering and economics. Because of this, EPCOR has been able to find the balance between asset reliability, short term expenditure, and long-term capital investment planning.

Having gained an effective and data-driven Asset Management Framework and Reliability Projection Model from its work with METSCO, EPCOR now has the tools to continually improve its approach over time and stay one step ahead of the game when it comes to asset failure.

For more information on the work undertaken with EPCOR, we can share our whitepaper that delves more deeply into the technical aspects of the project.

Get in touch: Contact our Asset Management team at AM@METSCO.ca today and see why utilities rely on METSCO to make things possible.

The Team

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FEATURE TESTIMONIAL

Featured Testimonial

Following the implementation of METSCO’s Asset Risk Based Framework, EPCOR saw a 15% sustained improvement in reliability since 2014.Under this framework, METSCO saw EPCOR improve its defective equipment related outages by 43% in the first two years.