Risk Governance and Implementation - PNWS-AWWA...refinery of Cosmo Oil Company was set on fire by...
Transcript of 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
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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.
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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
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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
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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).
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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
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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
© 2013 Water Research Foundation. ALL RIGHTS RESERVED.
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
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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
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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.
© 2013 Water Research Foundation. ALL RIGHTS RESERVED.
Emergency Response ….. Developing Surveillance and Response Systems for Water Distribution Systems (#4430)
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Perspective
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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
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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
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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
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“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%
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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
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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
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Interconnected Trends and Strategies
aging water infrastructure
/capital needs
uncertain economy/financial instability
shifting water
demand
decreased availability/
adequacy of water resources
climate uncertainty
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Interconnected Trends and Strategies
• Partnership, Evaluation, and Redundancy—Water utilities—Electric utilities—State agencies—Federal agencies—Insurance companies—Scientists
decreased availability/
adequacy of water resources
climate uncertainty
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Interconnected Trends and Strategies
• 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
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Interconnected Trends and Strategies
• 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
uncertain economy/financial instability
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Interconnected Trends and Strategies
• 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.”
uncertain economy/financial instability
shifting water
demand
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Interconnected Trends and Strategies
• 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
decreased availability/
adequacy of water resources
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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
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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.
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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.
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The Value of Water – Courtesy of Charlotte-Mecklenburg Water Utility Department
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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)
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Lessons Learned
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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
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earthquake-proof pipe
Courtesy of Kanazawa University, Japan
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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
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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.
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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.
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Extreme Weather Case StudiesWaterRF Project #4116
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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
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Operational and Economic Impacts of Hurricane Irene on
Drinking Water Systems Principle Investigator:
Rebecca Weidman, Cadmus, Inc.
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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.
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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.
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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.
© 2013 Water Research Foundation. ALL RIGHTS RESERVED.
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
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Networks & Relationships are Key
• Formal support and communication networks establish clear roles during emergencies
• Informal networks and relationships provide flexibility for problem solving
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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
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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
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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.
© 2013 Water Research Foundation. ALL RIGHTS RESERVED.
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.
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Technology……People….
Risk Management – a combination of both
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Strategies Are Developed and Implemented Based on Range of Control
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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.
© 2013 Water Research Foundation. ALL RIGHTS RESERVED.
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
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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
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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
© 2013 Water Research Foundation. ALL RIGHTS RESERVED.
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
© 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.
Thank YouKim Linton
Sr. Account [email protected]
303-734-3425