Asset Management of Public Utility Networks (Network Asset Management)
The past decade has brought about fundamental changes in the life of companies operating public utilities: in a changed socio-political situation, privatization and liberalization have provided the companies’ business strategy and relation to network assets with a new basis. A previous communal (state) ownership-oriented approach has been replaced by an unambiguously investment-centered attitude of share-holders. Investors, who mainly come from Western Europe, have initially set up a corporate structure resembling that of their own companies, what has, besides modernization, also entailed significant downsizing. Initially this resulted in serious cost-savings however such opportunities are running out.

A significant share of companies participating in privatization consists of professional investors, thus their business strategy carries a long-term approach i.e. they plan to recover their investments in the longer term but with relatively low risks. A profitable operation is, on the one hand, guaranteed by privatization contracts themselves, and new industry laws (VET, GET), having entered into effect simultaneously, on the other hand. In a positive sense, this implies a low risk regarding investment, in a negative sense however, it limits the profits achievable. The only way of further increasing profits is an optimum network asset management and a more efficient operation.

Accession to the European Union has been another challenge, as it is an EU requirement, and even a regulation to liberalize the public utility market. A direct consequence of liberalization is a separation of the companies’ trading and network operating activities. The profits of (part)companies carrying out a commercial activity is, besides an officially regulated commercial margin, limited by an actual market competition pursued for winning over consumers. However, to control the monopoly of a (part) company with network property, sector-specific offices performing supervision of the public utility service providing activity are entitled. In the long term, an ever stricter attitude of such offices is expected, first of all, with regard to servicing standards and price regulation, therefore an increasing attention is being focused on the efficient operation of the technical network as a profit-generating asset property.

Thus, in the near future, a priority for the management of companies will be an ability to comply with the economic expectations defined by proprietors along a specific business strategy, in the given consumer, social, official and political environment, with its asset-related decisions. Such an expectation is generally called network asset management , which is aimed at optimizing at a corporate level a financial and technical performance of the networks, through a complex approach to technical and economic processes related to the maintenance and operation of the network.

The most important features of a network asset management strategy are as follows:

  • Long-term approach, what is result of a high lifetime of assets, and a relatively low revenue rate of network investments (as compared to other investments areas);
  • Expense-sensitive, i.e. the running costs (OPEX) and costs of investment (CAPEX) are optimized jointly for the whole lifecycle of the network facilities;
  • Risk-based, what means that it does not evaluate the technical performance of network elements purely through its reliability and availability hours, but also takes into account its role and importance in network topology;
  • Performance-controlled, i.e. it plans network interventions based on a difference between the expected and actual technical performances of network elements, with a comparison of the numerical consequences of a failure or implementation of interventions;
  • Adaptive, i.e. it requires a continuous updating and specification, as a consequence of an evaluation of network interventions performed in the meantime, the appearance of new technologies, the change of business strategies, furthermore an improvement of the IT model.

An efficient asset management requires such an IT strategy , which is capable of coordinating and integrating the large corporate IT systems with various purposes and different architectures. Further results cannot be expected from the previous one-sided financial-economic approach. The result of all financial expenditures can only be evaluated through the technical performance achieved by it. Therefore financial-economic and technical data should be managed jointly, what does not mean a merge of different data bases, but it does mean a coordination of the structure of data models.

It is absolutely necessary that financial-economic data concern the same network asset, on which an appropriate technical performance can be measured or registered. This is a fundamental condition for a performance-oriented asset management, where financial expenditures are always optimized in order to achieve an expected technical performance. Thus it is not about the introduction of a new IT system or application, but a method, a process, using which decisions more efficient and established than the previous ones can be made relying on comprehensive analyses. The most important IT systems required for the support of corporate asset management are as follows:

The new IT conception most of all affects the field of technical IT , which today is not only a collective noun for applications supporting a strictly defined operation, but such a significant IT segment, which has an independent IEC standard system elaborated for public utility networks, and a common data model based on this standard system. The CIM ( C ommon I nformation M odel ) data model makes no provisions as to where and in what data files the data of technical objects should be stored, and what applications should maintain them, but it does provide as to what components it should have in relation to the relevant business processes, and what information they should contain.

In that, up-to-date and historical (time sequence) data are indispensable for the application of expert’s systems evaluating technical performances as well as determining the manner of interventions and preparing decisions. The business processes relevant in terms of the asset management of public utility companies are as follows:

When selecting an IT technology to be applied in the above outlined technical IT environment, the following aspects shall be taken into account:

  • The application of Platform-independent modeling techniques;
  • Redundancy-free, i.e. all data enter the system closest to the place of its generation, and a single process is responsible for keeping the change;
  • Consistent, i.e. all data carry the same information for all business processes;
  • The use of a uniform data model for all systems affected;
  • Open architecture, modular structure;
  • Application of a standard, factory-supported basic software and data base management system;
  • System integration with other application and the IT environment;

The architecture of IT systems supporting network asset management can be as follows:

In summary of the above ideas it should be emphasized that the conception outlined does not concentrate merely on individual distinct tasks, but the totality of business processes related to the operation of public utility networks. Thus network asset management, in the course of introduction, may force reconsideration and re-planning of processes, what may eventually entail a demand for a modification of the organizational structure, as well.