In a previous post, I discussed the counter-intuitive notion that water utilities can gain more value from their tight budgets by increasing energy efficiency. A more straightforward approach to freeing up money is improving capital efficiency, of which situational intelligence plays a part.
Capital efficiency is much like energy efficiency—getting more results or value from the same resources. Capital efficiency questions a water utility might ask include
- Where in my distribution network can I get the most leak reduction for the least amount of construction cost?
- Considering demographics, land prices, construction budgets, and projected future demand, which site is best for a new water storage facility to cost effectively serve future demand?
- Can I postpone a new water treatment plant for 10 more years without jeopardizing safe, reliable and affordable service?
These complex questions regarding where and when to take action regarding water infrastructure are ideally suited for analysis using situational intelligence, due to three distinguishing features of situational intelligence:
- Data integration breaks down silos across the utility to represent the full range of capital-related challenges and considerations
- Spatial-temporal-nodal analytics accounts for the full context of capital investment decisions
- Intuitive visualizations present the results of analytics in ways that people across the utility can immediately grasp and act on
Capital efficiency is important because water utilities need to invest a lot of money, and soon, to maintain the services that customers expect.
In 2013, the American Society of Civil Engineers’ report card gave the United States a grade of D+ for drinking water and a D for waste water systems. They cite a 2007 report from the Environmental Protection Agency that the U.S. water system needs $334.8 billion invested over 20 years.
Saving just one percent of that amount through capital efficiency would yield $3.5 billion in savings. Those billions would go a long way to keeping water utility margins healthy and water rates affordable as capital expenditures rise to fund needed work. Situational intelligence can deliver that one percent savings by providing fast, reliable answers to specific capital efficiency questions related to repairing, refurbishing, replacing and expanding water infrastructure.