Cheap gas, regulatory uncertainties, and a technology revolution are re-making the U.S. utility industry. Top executives at three very different companies—CMS, NRG, and the Midwest ISO—share their...
Analyzing Asset Failures
Simulation modeling can improve O&M and capital-planning processes.
asset class, while at the same time proactively replacing a certain portion of the total inventory each year and doing maintenance on yet another portion.
In evaluating possible strategies, the two measures that utilities are most concerned with are cost and reliability. The dynamic interplay among failures, replacements and maintenance merit a view of these measures over several years. When they incorporate adequate field data, asset-failure curves and Weibull distribution analysis can provide insight into O&M strategies and aid in predicting failure rates and capital costs. Simulation models can provide additional insights into the projected rise and fall of costs over time, the evolution of a utility’s asset age profile, and the consequent improvement or degradation of reliability parameters like SAIFI and SAIDI. Using such tools, utility operators can conduct a more precise evaluation of possible maintenance and replacement strategies.
Ultimately, asset life-cycle analysis supports rate-case strategies for cost recovery. An approach that incorporates knowledge of failure-frequency patterns and enables modeling of different asset replacement and life-extension strategies can allow utilities to better understand and explain the implications of implementing different strategies for maintaining and replacing their aging distribution assets—both in terms of financial and reliability risks.