risk governance and implementation - pnws-awwa...refinery of cosmo oil company was set on fire by...

© 2013 Water Research Foundation. ALL RIGHTS RESERVED.© 2013 Water Research Foundation. ALL RIGHTS RESERVED. No part of this presentation may be copied, reproduced, or otherwise utilized without permission.

Risk Governance and Implementation

Kim LintonSr. Account Manager

Pacific Northwest AWWA Section MeetingMay 8, 2013

© 2013 Water Research Foundation. ALL RIGHTS RESERVED.

OverviewAbout the Foundation

Climate Impact

Risk Perspective

Extreme Events Research

Risk Management Tools


Advancing the Science of Water

Research Cooperative Lead by Water Utilities• Underwritten by 900 utilities, 100 consultants & manufacturers • Topics source water, treatment, infrastructure, and management

One Water in 2014

Involvement & collaboration achieves knowledge development• Research is planned & guided by drinking water utilities

(only utilities are on BOT)• Collaboration with regulators, universities, research organizations• Utility in-kind participation required

Supporting utilities• Subscriber – participate in projects as a utility & steering committees as

individuals• Research ($500M U.S.) available includes all reports, apx. 15 webcasts/yr.,

website tools and content for both subscribers only and public info.


Climate Change Impacts in the United States

• Temperature changes over the past 22 years• Graph = average temperature changes for the U.S. by decade for 1901-2012

(relative to the 1901-1960 average). • 2001 to 2012 was warmer than any previous decade in every region.

Figure source: NOAA NCDC / CICS-NCU.S. National Climate Assessment

U.S. Global Change Research Program


Water Availability

• Decreased snowpack- Glaciers• Earlier and more intense snowmelt

runoff --- water storage challenges• In-stream flows • Reduced aquifer recharge• Periodic flooding• Warmer temperatures/peak demand


18 inches of rain in 36 hours

Changes in the amount of precipitation falling in very heavy events (heaviest 1%) from 1958 to 2012 for each region. (Figure source: updated from Karl et al. 2009c).


Water Quality

• Increasing sediment and pathogen loads• Urban stormwater runoff/CSOs• Widespread and persistent algal blooms• Changes in watershed vegetation• Temperature

• Increased eutrophication (with nutrients)• Disinfectant demand• Distribution system regrowth potential.

• Sea level rise ► increased salinity, flooding• Impact of fire & hurricanes

Schohari Reservoir after Hurricane Floyd. Source: Courtesy of New York City Department of Environmental Protection


Fires:watershed impacts / sediment transport

(Photos courtesy of Denver Water).

Debris flow into Denver’s Strontia Springs Reservoir on July 12,1996 as a result of the Buffalo Creek fire and flash flood.

Hayman Fire burn area –2002


9

U.S. Billion-Dollar Weather and Climate Disasters (1980-2011)

Hurricanes and Tropical Storms

Drought and Heat Wave Flooding

Severe Local Storms and Tornadoes

Winter Storm and Crop Freezes Wildfires

Source: www.ncdc.noaa.gov/oa/reports/billionz.html


Lessons Learned…Impacts, Responses, and Costs Vary

• Droughts: — Impacts: slow moving (ex. wildfire!)— Response: sustained over long period— Costs: reduced revenue, repairs,

new technologies— Dynamics: divisiveness

• Floods/storms: – Impacts: acute– Response: ER, recovery– Costs: damage, recovery– Dynamics: cooperation


RISK MANAGEMENT – ORGANIZATION WIDE…. most ‘events’ are unseen

‘Multi-barrier’ approach and ‘Swiss cheese’ model of organisational incidents – ‘mindful’ and ‘high reliability organisations’

Hrudey, S.E., Hrudey, E.J., Charrois, J.W.A. and Pollard, S.J.T. (2006) A ‘Swiss cheese’ model analysis of the risk management failures in the fatal Walkerton outbreak. Presented at the IWA world water congress and exhibition, September, 2006, Beijing.


Emergency Response ….. Developing Surveillance and Response Systems for Water Distribution Systems (#4430)


Perspective


Future Trends – 2013 perceptionsTrends in terms of Positive, Negative, Risk

0 10 20 30 40 50

10) Mass / social media explosion

9) Expanding technology application

8) Efficiency drivers, resource…

7) Increasing / epanding regulations

6) Climate uncertainty

5) Shifting water demands (per capita…

4) Changing workforce, dyamic talent…

3) Decreased availability/adequacy of…

2) Uncertain economy, financial instability

1) Aging water infrastructure / capital…

Risk

Negative

Positive

Financial Resiliency Project Webcast; WaterRF Project #4506


Six Major IT Trends Impact Utility Operations

Major Trends

• Virtualization

• Cloud Computing

• Web, Wireless, and Mobile

• Social Media and Consumerization

• Larger Enterprise Systems

• Data Deluge

Implications• Blurring Network and

Infrastructure Environment

• Cyber and Information Security

• Data Privacy• Technology Changing

Culture & Interactions• Advanced Analytics &

Data “Pull”• Technology Changing

Business Processes


Implications of a “Smart Water Grid”• Better system management

—Leak detection—Pressure surge—Energy management

• Reduced maintenance costs and liabilities• Detection of potential contamination• Utility and user controlled water

conservation• More information in the hands of the

customers• Reduce theft and non-payment issues


“Riskiest” projected trend (out of the six) for utilities participating in Forum

Aging infrastructure,

40%

Financial instability,

15%Increasing/expanding

regulations, 15%

Shifts in water demand, 5%

Climate uncertainty,

10%

Water resource scarcity,

15%


Hurricane Irene: Impacts to Drinking Water Systems

I d ff f ili i

Insufficient staff to repair damages and operate facility

Need to evacuate treatment plant(s)

Loss of well house or treatment plant

Contamination of distribution system

Flooded treatment plant(s)

Contamination of drinking water sources

Damage to distribution system pipes

Loss of radios/cell phones

Other

Loss of water

Flooded well field(s)

Physical damage to well house or treatment plant

Loss of pressure

Loss of electrical components

Difficulty reaching water system due to road damage

Loss of power

Number of Respondents 5 10 15 2520


Magnitude of Costs Reported by Drinking Water Systems

$0

$1

$2

$3

$4

$5

$6

$7

$8

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$30,000,000

Cos

t Per

Per

son

Tota

l Cos

ts

Type of Cost

$0

$1

$1

$2

$2

$3

$3

$4

$4

$5

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

Cos

t Per

Per

son

Tota

l Cos

ts

Total Costs Costs per Person

• Infrastructure replacement

• Labor• Loss of sales revenue


Interconnected Trends and Strategies

aging water infrastructure

/capital needs

uncertain economy/financial instability

shifting water

demand

decreased availability/

adequacy of water resources

climate uncertainty



• Partnership, Evaluation, and Redundancy—Water utilities—Electric utilities—State agencies—Federal agencies—Insurance companies—Scientists



climate uncertainty



• Planning, planning, and planning“All at risk infrastructure had been identified prior to Sandy. Emergency operation procedures in place. Water quality maintained during the event”“[We practice] long-term capital planning with appropriate rate structure to fund construction and depreciation”

Need for planning to be coordinated and scenario-based

climate uncertainty

aging water infrastructure

/capital needs



• Pricing and political will

• Political will achieved through —Shared decision making with funders, i.e.

governance & customers rates—Effective coordination & communication—Planned information based on modeling & data

“Don’t waste a crisis“

aging water

infrastructure/capital needs




• Mitigating pricing vulnerabilities

“[We] developed new rate-setting methodology with larger fixed-revenue component.”“[We] changed rate-setting methodology to generate more fixed revenue.”“[We] design rates that recover core costs regardless of consumption.”“[We’ve] increased non-water sales revenue.”


shifting water

demand



• Conservation and demand-side management strategies—Anticipation in financial, capital, and

resource planning is critical—Challenge is in accurate prediction—Hand-in-hand with supply-side strategies

shifting water

demand




Revenue & Risk� Understand business risk

� Adopt performance targets to drive financial decisions

� Re-examine sales projection methods

� Consider the repercussions of the message that customers are buying gallons of water when the cost side of the business model suggests they are buying access to water.

� Consider new pricing models.

Project #4366


4.0

4.5

5.0

5.5

6.0

6.57.0

7.5

8.0

8.5

9.0

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004

Bille

d W

ater

(M

GD

)Water Sales (1980-2009)

(Slide provided by Orange Water and Sewer Authority)

Lower than projected demands have resulted in cumulative net revenue reduction of about $7.3 million over last 3 years.


Revenue and Expenses for Charlotte-Mecklenburg Utilities in a Given Year

Source: CMU Director Doug Bean’s presentation to the Charlotte City Council on December 1, 2008.


The Value of Water – Courtesy of Charlotte-Mecklenburg Water Utility Department


Potential Regional Approaches• Potential Issues• Mutual Aid Arrangements• Sharing Arrangements• Water Purchase Arrangements• Collaborative Water Resource

Development• Contract Service Arrangements• ConsolidationSources: Regional Solutions to Water Supply Provision (project #91146), and Estimating Benefits of Regional Solutions for Water and Wastewater Service (#91225)

© 2013 Water Research Foundation. ALL RIGHTS RESERVED.© 2013 Water Research Foundation. ALL RIGHTS RESERVED.

Lessons Learned


Characteristics of damage to water supply facilities & liquifaction

• Damage to aged pipelines with small diameter

• Damage to air valves• Malfunction of

purification plants in flooded area

• No damage to earthquake-proofing pipeline

Courtesy of Kanazawa University, Japan


earthquake-proof pipe

Courtesy of Kanazawa University, Japan


0.00

0.05

0.10

0.15

0.20

0.25

0 20 40 60 80 100

Earthquake proofing rate (%)

Dam

age

rate

(lo

cations

/km

)

Ishinomaki,SI=6+

Iwaki, SI=6-

Miyagi Pref., SI=6+

Ichinoseki,SI=6-

Koriyama, SI=6-

Sendai, SI=6+

Earthquake proofing rate and damage rate


Damage to Energy Facilities• 220,000-barrel-per-day oil

refinery of Cosmo Oil Company was set on fire by the quake at Ichihara, Chiba Prefecture

• Others halted production due to safety checks and power loss.

• In Sendai, a 145,000-barrel -per-day refinery owned by the largest refiner in Japan, JX Nippon Oil & Energy, was also set ablaze by the quake.


Review of the Response to the Disaster

Future Priorities• Arranging fuel delivery and procurement.• Improving the chain of communications and public

notifications.• Reinforcing cooperation with community associations

and other organizations for water supply activities.• Supplying water to the elderly, possibly by mobilizing

volunteers etc.

Effectiveness of Activities• Designation of distribution blocks which will lead to early

service restoration.• Cooperation with other associations in Japan such as

the Japan Water Works Association.


Extreme Weather Case StudiesWaterRF Project #4116


Russian River Basin

Tidewater VirginiaLower

Missouri River Basin Appalachicola-

Chattahoochee-Flint Basin

Central Texas Area

National Capital Area

Case Study Sites and Number of 1980 – 2012 Billion-Dollar Weather/Climate Disasters


Operational and Economic Impacts of Hurricane Irene on

Drinking Water Systems Principle Investigator:

Rebecca Weidman, Cadmus, Inc.


Emergency Preparation ChecklistCompiled by: O&M GroupCompleted

byDate & Time Description

PersonnelCoordinate emergency staffing needs including food and other provisionsPrepare tentative emergency overtime schedule for business unites & Mgmt.Sufficient batteries, flash lights, rain hear, ect.

PowerList of organization's emergency generators & location scheduleTop off fuel tanks for all emergency generatorsMove generator # 22 to Lake Dam. Confirm cables available.Fill & deliver diesel caddy's to O&R powered facilities.Top off fuel storage for Solar gens & gasoline at plantConfirm generator and cables ready at booster stationPrep & test run Diesel Pump.

Water QualityPrepare water quality check list (in case of boil water notice)Prepare distribution sampling schedule Ensure adequate supply of BacT media and bottles.


CommunicationAssure Control Room base station & vehicular radios work properlyPrepare Standard Language Form for Control Room phone inquiries.Distribute Local and State OEM contacts and telephone numbersDistribute emergency activation policy and proceduresDistribute emergency response list and telephone numbersOrganize Police Chiefs / OEM meeting in advance of impending storm.

PlantCheck chemical storage for all essential treatment chemicals at all locations:Secure all doors and windows at plant(s) and remote stationsMove all loose equipment indoor at plant(s)Check remote operation of intake structure gates.Clean & Calibrate filter turbidimeters, flow & headloss gaugesPrep for jar testing to confirm coagulant dosages.

OperationsFill or top-off all distribution tanks & FW reservoirs.Identify - Cover & protect any outdoor electric control panels.Secure and top-off all remote chemical application facilities & equipConfirm accuracy of rain gauges, stream flow gauges, etc.


Lessons Learned and

Recommendations

An increased sampling regimen - most frequently stated safety precaution.— Prepare by having water sampling supplies on hand.

Additional staff/staff hours required….can be costly.— Prepare a staffing plan for emergencies— Establish clear expectations with vendors and contractors

Communication is key.— Establish clear channels of communication with regulators,

neighboring drinking water systems, other utilities, media outlets, and other local emergency responders.

• Road Blocks (literally) are inevitable— Include evacuation and alternate access routes to assist crews

during emergency situations in your emergency response plan.


Water Services as Critical Infrastructure

Water utilities depend on:- Electricity- Communication systems- Supply Chains (fuel, chlorine)- Transit- Emergency response

• During/after Emergencies Restoring access to potable water Controlling wastewater discharges


Networks & Relationships are Key

• Formal support and communication networks establish clear roles during emergencies

• Informal networks and relationships provide flexibility for problem solving


Community Decision-making within a Watershed

• The complex array of decisions needed to support resilience within a watershed requires coordination across water service areas and jurisdictional boundaries.

• Failure to understand inter-dependencies can undermine success of everyone’s actions

• Upstream / downstream


Communication and Cooperation• Context: unique local political, environmental, and

social context can facilitate or constrain community ability to address vulnerabilities

• Having the right messenger(s) matters

• A trusted, neutral party can convene and engage sectors in problem solving for locally viable solutions

• urban water use vs. agriculture needs• upstream rights vs. downstream needs• restoring coastal settlements vs. managed

retreat• flood risk communication vs. concern over

property values• public perceptions and values vs. hard realities


Financing an Emergency Medium-sized systems (3,301-10,000) - greatest per person

cost as a result of Hurricane Irene. Small systems (<3,301) - most vulnerable to increased

operating costs as a result of Hurricane Irene. FEMA reimbursements often take time;

business continuity plan /contingency plan Work with your FEMA representative ASAP photo log of your damages.

• Insurance coverage (actual and required) will impact your emergency response funding eligibility. Determine if your insurance coverage is appropriate.


Partnerships and Planning andNext Steps

• Strategic partnerships can provide drinking water systems with support and resources needed to address unexpected failures during an emergency.— Utilities, Department of Public Works, and Public Service providers

in neighboring towns can help supplement the local availability of emergency assistance.

— Regulators and local government officials— Utilities providers (electricity)

• After Action Report Document your lessons learned• Plan regularly and practice more often, including reviewing

safety measures with staff frequently.


Technology……People….

Risk Management – a combination of both


Strategies Are Developed and Implemented Based on Range of Control


RISK MANAGEMENT – ORGANIZATION WIDE…. most ‘events’ are unseen

‘Multi-barrier’ approach and ‘Swiss cheese’ model of organisational incidents – ‘mindful’ and ‘high reliability organisations’

Hrudey, S.E., Hrudey, E.J., Charrois, J.W.A. and Pollard, S.J.T. (2006) A ‘Swiss cheese’ model analysis of the risk management failures in the fatal Walkerton outbreak. Presented at the IWA world water congress and exhibition, September, 2006, Beijing.


Bow-Tie Analysis – “Reason’s Model” in action

Treatment =

• Stop threats

• Enhance opportunities

EVENT (uncertainty)

Cause A1

Cause A2

Cause B

Impact 1

Impact 2

Impact 3

Impact 4

+

-

Cause B2

CAUSES IMPACTS


Assurance and Risk Reporting to Directors & Leadership Teams

Integrated Risk Assessment & Assurance Map (iRAAM)

StrategicGovernance

StrategicGovernance

Creating the conditions for effective governance:• Relevant information for scrutiny• Hindsight, insight & foresight• Optioneering• Timely interventions to drive:

* Performance *Strategy* Compliance * Risk

Strategic

PerformanceRiskAssurance


Future: Murky waters?• The “New Normal” includes uncertainty as major

risk — Water demand, quality, environmental regulations— Impacts of climate change— Public and political will— Workforce— Economy and financial capacity

• Threats to fiscal performance— Visibility and transparency— Rates, costs, service levels, risks

• Industry commonalities vs. regional differences• Mitigation responses to uncertainties, risks, costs,

and innovative opportunities will help shape public perception


Future: Adaptation Strategies

• Adaptive management—Just-in-time approaches—Parallel and scenario planning

• Projections—Water use—Weather

• Public and political will—Improved and open dialogue; education—Decision choices


Thank YouKim Linton

Sr. Account [email protected]

303-734-3425

risk governance and implementation - pnws-awwa...refinery of cosmo oil company was set on fire by...

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