Water Distribution System Policies

WATER DISTRIBUTION SYSTEM POLICIES

SPU developed the follo wing new policy to describe SPU's decision-ma king process and criteria for addressing redundanc y in the distribution system.

Distribution System Redundanc y Policy Redundancy in the distribution system is one way that SPU can increase the reliability of water delivery to its retail service custom ers. Distribution system redundancy is provided by the network of water mains, appropriately spaced valves, stand-by pumps, and storage, all of which can help minimize customer outa ges. Increasing redundancy, however, adds cap ital and operation and maintenance (O&M) co sts that may not

necessarily be justified. This po licy was developed to incorporate asset management principles, primarily life-cycle benefit and cost analysis, into SPU's decision-making and clearly establish

the criteria that SPU will use for adding or retiring redundancy in its water distribution system. This policy ensures that service r eliability is considered along with costs when considering

retirement of existing redundant facilities or adding new redundancy. In devel oping this policy, SPU aimed to balance the conse quences and costs of failure with the benefits of redundancy.

It favors adding redundancy onl y when it is cost-justified - meaning the benefits outweigh the costs.

Policy Statement

Consider redundancy in the distr ibution system on a case-by-case basis, with d ecisions based on an evaluation of net present value.

1. For new developments or rede velopments within the distribution system, requ ire developers to install looped systems, intermed iate line valves, and/or additional shut-off valves for dead-end water mains when SPU determines that the improvement provides a positive net present value to the water system in the area.

2. Consider retiring existing redundant facilities within the distribution system when they are at the end of their economic life and the costs of a new facility exceeds the avoided risks

costs.

3. Consider adding redundancy within the distribution system when replacing existing facilities that have reached the end of their economic life or when performing repairs on existing

facilities that require retail customer outages.

4. To increase redundancy, consider installing temporary or permanent looped systems, cross-over valves, intermediate line valves, and/or additional shut-off valves in the distribution

system when the improvement provides positive net present value to the system.

5. When evaluating net present value of options over the life of the project, include the capital costs of installing the redundancy improvement and all O&M costs such as those to repair the new facilities or to flush any dead-end mains. Also include the benefits of any avoided risk costs, such as the costs of retail customer outages and temporary loss of fire flow.