The Efficiency Imperative, Part 3: From Tracking Assets to Optimizing Value

Welcome back to our series on utility efficiency. In Part 1, we established the shift to predictive maintenance, and in Part 2, we covered how mobilizing your field force creates the data stream necessary for smarter operations. Now, we’ll explore how to use that data to address one of the most capital-intensive parts of your business: managing the entire lifecycle of your assets.

For many utilities, "asset management" has simply meant keeping a basic inventory—knowing what you have and where it is. But in today's environment, that's no longer enough. True optimization requires a strategic approach, one that leverages data to make the most cost-effective decisions about when to repair, refurbish, or replace your critical infrastructure.

The Problem: The "Run-to-Fail" or "Calendar-Based" Trap

Without a data-driven strategy, utilities often fall into two inefficient capital planning traps:

1. The Run-to-Fail Approach: This is the most basic (and costly) form of asset management. You simply use an asset until it breaks down, forcing an expensive, unplanned, and often dangerous emergency replacement.

2. The Calendar/Age-Based Approach: A slightly more advanced method where assets are replaced after a set number of years, regardless of their actual condition. While better than running to failure, this approach is still incredibly wasteful. It leads to replacing assets that have years of useful life left while leaving younger, but poorly performing, assets in the ground.

   
   

Both methods waste enormous amounts of capital that could be used for grid modernization, renewable integration, or other strategic priorities. The solution is to move toward a condition-based, predictive model for asset management.

The Solution: Data-Driven Enterprise Asset Management (EAM)

Modern Enterprise Asset Management (EAM) is about understanding the health and risk associated with every asset in your network. By combining the real-time data from your mobilized field crews with predictive analytics (as discussed in Parts 1 & 2), you can move beyond simple age-based metrics and make truly intelligent decisions.

A mature EAM strategy allows you to:

• Prioritize Capital Projects Objectively: Instead of relying on subjective opinions or outdated plans, you can rank potential projects based on quantifiable metrics like an asset's health score, its criticality to the network, and the risk of failure.

• Optimize Maintenance vs. Replacement: Data can tell you when a simple refurbishment will add ten years to an asset's life for a fraction of the cost of a full replacement.

• Improve Long-Range Planning: By accurately forecasting when assets will need replacement, you can create more stable, predictable, and defensible long-term capital plans.

  
  

Case in Point: Salt River Project's "Value Framework"

A powerful example of this shift comes from Salt River Project (SRP), one of the largest public power utilities in the U.S. SRP’s capital planning process was once highly subjective, with a staggering 85% of projects classified as "non-discretionary," leaving little room for strategic optimization [1].

To fix this, SRP’s leaders implemented a “Value Framework.” This new process required every proposed project—whether for maintenance, replacement, or new construction—to be evaluated against a consistent set of criteria that measured its value to the organization. This data-driven approach:

• Forced objective, evidence-based decision-making.

• Eliminated pet projects and low-value spending.

• Fostered collaboration between departments, who now had to work together to justify projects based on their collective value to the utility [2].

  
  

The result was a more strategic, transparent, and cost-effective capital plan that ensured every dollar was being invested for maximum impact. This is the power of a mature asset management strategy. It transforms capital planning from a reactive chore into a proactive, value-driving function.

Coming Up in Part 4: With a system in place to manage your assets, we'll dive deeper into the world of advanced analytics and how to harness its power to uncover even greater efficiencies across your entire organization.

References

[1] T&D World. SRP Creates a Framework for Value. Retrieved from https://www.tdworld.com/grid-innovations/article/20963969/srp-creates-a-framework-for-value

[2] Copperleaf. Salt River Project (SRP) Case Study. Retrieved from https://www.copperleaf.com/knowledge-hub/case-study-video-salt-river-project/