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In the ever-evolving landscape of the energy sector, electric utilities need to maintain reliable service, optimize costs, and adapt to regulatory changes and environmental considerations. Amidst these challenges, the role of asset management has become increasingly vital. Asset management, particularly in the context of the ISO 55001 standard, is not just about maintaining physical assets; it's about strategic planning and making informed decisions that align with the long-term objectives of the utility. The desire for a quick and low-cost solution for improved reliability, in the face of increasingly aged infrastructure, may be short sighted resulting in a missed opportunity to leverage asset and risk management capabilities to not only improve reliability, but to do it through an intensified lens of improved safety and decreased risk.
NiSource, being a combined utility, is unique in that the maturity if its electric asset management is directly related to a gas pipeline best practice adopted by its gas subsidiaries. The American Petroleum Institute (API) Recommended Practice (RP) 1173: Pipeline Safety Management System is part of NiSource’s core operating model regardless of utility type. This adaptation of pipeline utility practices to an electric utility is a critical pillar of NiSource’s asset management journey.
Safety Management System (SMS) Cultural Shift
API RP 1173 outlines the recommended practice that guides pipeline operators across the industry in the implementation of a safety management system (SMS). This best practice standard draws direct inspiration from ISO 55001, and provides a specific set of 231 requirements, ranging from Leadership/Management commitment to documentation and record keeping. Building upon existing industry safety requirements, API RP 1173 raises the bar on safety to further monitor and measure the effectiveness of pipeline activities with a ‘plan, do, check, act’ approach to systematically understanding, prioritizing and addressing risks.
Areas covered by API RP 1173 include:
1. Leadership & Management Commitment
2. Stakeholder Engagement
3. Risk Management
4. Operational Controls
5. Incident Investigation, Evaluation & Lessons Learned
6. Safety Assurance
7. Management Review & Continuous Improvement
8. Emergency Preparedness & Response
9. Competence, Awareness & Training
10. Documentation & Record Keeping
Adopting a standard with this level of specificity of requirements for an entire organization is not in most electric utilities’ typical management of change process, but it has proven beneficial to NiSource particularly on the electric side. Electric utilities, like most businesses, are more accustomed to changes in individual departments or processes. Many of the updates to industry standards or processes leave a lot of room for interpretation. For example, take NESC 214A rule, ‘Lines and equipment shall be inspected at such intervals as experience has shown to be necessary.’ While this type of guidance gives electric utilities an ability to deploy flexible inspection and maintenance plans, it also is a driving reason as to why many other utilities are facing a ‘wall of doom’ where large portions of aging asset portfolios are in need of repair or replacement at the same time.
While there are industry groups driving for standardization within electric asset life cycle management, the rate of adoption may be too slow to make meaningful changes in the near term.
Why Adopt more Stringent Practices
The question must be asked, why would electric utilities adopt practices that could possibly hinder their ability to be flexible in their capital and maintenance plans, especially when the outcome of a gas incident and an electric incident may be vastly different. The answer lies with the current expectations of all electric utilities, in that they need to be able to provide reliable service at an affordable cost. By not viewing the prioritization of its investments through the lens of reducing risk to its assets, employees and customers, electric utilities are susceptible to an asset related significant safety event. These are historically low probability, yet high consequence events, where companies failed to imagine what could happen. According to William Mojica, senior vice president of technical services & asset risk Management, there are three types of companies.
1. The company that has had their event and learned from it.
2. The company that has had their event and has NOT learned from it.
3. The company that has not had their event yet.
NiSource falls into that first category. In 2018 when one of its, then New England based, gas companies experienced such an event. While it may be easier to dismiss the potential of this scale event on the electric side, one only needs to look to our peers in California, or to the large-scale vegetation related grid collapse in the Northeast, to see that electric utilities are just as susceptible to experiencing that type of event.
Using API Rp 1173’s risk-informed approach is an opportunity for electric utilities to raise the bar by further elevating their focus on safety and preparedness.
Ensuring Reliability and Efficiency this Risk Reduction
By adopting a comprehensive asset management strategy, utilities can ensure the reliability and efficiency of their operations, thereby preventing outages and minimizing downtime. The two components of risk, being likelihood of an event and consequence of that event, can be tailored to not only place a focus on reducing risk, but do so while highlighting other areas critical to that utility (i.e. cost, impact to system, reliability, and environmental).
One of the most significant challenges for electric utilities is managing operational costs without compromising on service quality. Effective asset management involves not only maintaining existing infrastructure but also making strategic decisions about investments in new technologies and upgrades. By optimizing the use of assets and extending their life span, utilities can significantly reduce both capital and operational expenditures.
Adapting to Technological Advancements
The rapid advancement of technology, including smart grids, renewable energy sources and IoT devices, has transformed the utility landscape. Asset management enables utilities to seamlessly integrate these new technologies into their existing infrastructure. This integration is crucial for utilities to remain competitive and meet the evolving demands of consumers and regulatory bodies. This also invites an incredible opportunity for electric utilities to make meaningful impacts to their risks directly through mitigation programs but also indirectly through improving the data that being used as an input into their asset management systems and risk-based decision making.
With the addition of the Department of Energy’s (DOE) Grid Resilience and Innovation Partnerships (GRIP) program, utilities based in the U.S. have additional opportunities to modernize their assets and systems. This modernization can increase the quantity and quality of the asset data needed to make better informed decisions while reducing the impact to their customers rates.
In conclusion, adopting best practices from other industries, including other types of utilities, such as natural gas utilities, specifically pertaining to safety and risk, can maximum the value to the customer while also assisting utilities in making decisions that never lose sight of the threats that could disrupt their best laid plans. A key metric to measure this is risk reduction per dollar spent. By effectively managing their assets, utilities can ensure reliable service, optimize costs, comply with regulations, embrace new technologies and fulfill their environmental responsibilities, all while keeping safety at the forefront of the discussion. To quote William Mojica, “It all starts with placing people and safety at the heart of everything we do.” As the energy sector continues to evolve, the role of asset management will only grow in importance, underscoring its critical role in the sustainability and resilience of electric utilities.
