Full Description

Utilities need to employ state of the art planning techniques to optimizetheir capital expenditures in light of a changing marketplace, an increasing demand on limited resources and an aging infrastructure. To stay, or become, competitive, utilities must allocate limited available capital to those projects that will yield the greatest benefit. Utility managers must also be able to demonstrate to the public how their planned capital expenditures will most effectively accomplish established, yet often competing, utility goals and objectives. Although prioritizing capital improvement project spending has always involved difficultdecisions, few utilities have engaged formal decision processes to select capital projects. Capital improvement program (CIP) planning has typically involved managerial debate, often without reference to organizational goals, that may be compromised by competing interests, uncertainties, and decision-making complexities. This paper describes an analytical approach to prioritization to aid utility managers in ensuring selection of appropriate, cost-effective capital improvement projects. The benefits of a structured analytical approach to CIP decision-making are discussed in terms of the ability to address the significant challenges presented by recent trends in the industry. The paper then outlines the application of Multi-attribute Utility Analysis (MUA), a proven, analytical approach to prioritization, to the prioritization of water utility capital improvement projects, and reviews: how MUA affords a means to develop appropriate project evaluation criteria; how individual criteria are weighted to ensure consistency with organizational goals; and, how methods for project scoring and ranking are used to assure development of cost-effective capital improvement programs. A simplified example of CIP prioritization is discussed to illustrate the analytical basis for an MUA. Individual analysis procedures are outlined, results are interpreted, and sensitivity analyses are described. Includes figures.

Product Details

Edition: Vol. - No. Published: 01/01/2001 Number of Pages: 18File Size: 1 file , 300 KB