Utility Asset Research Articles

System dynamics modeling for municipal water demand estimation in an urban region under uncertain economic impacts

Accurate prediction of municipal water demand is critically important to water utilities in fast-growing urban regions for drinking water system planning, design, and water utility asset management. Achieving the desired prediction accuracy is challenging, however, because the forecasting model must simultaneously consider a variety of factors associated with climate changes, economic development, population growth and migration, and even consumer behavioral patterns. Traditional forecasting models such as multivariate regression and time series analysis, as well as advanced modeling techniques (e.g., expert systems and artificial neural networks), are often applied for either short- or long-term water demand projections, yet few can adequately manage the dynamics of a water supply system because of the limitations in modeling structures. Potential challenges also arise from a lack of long and continuous historical records of water demand and its dependent variables. The objectives of this study were to (1) thoroughly review water demand forecasting models over the past five decades, and (2) propose a new system dynamics model to reflect the intrinsic relationship between water demand and macroeconomic environment using out-of-sample estimation for long-term municipal water demand forecasts in a fast-growing urban region. This system dynamics model is based on a coupled modeling structure that takes into account the interactions among economic and social dimensions, offering a realistic platform for practical use. Practical implementation of this water demand forecasting tool was assessed by using a case study under the most recent alternate fluctuations of economic boom and downturn environments.

Review of Artificial Intelligence Techniques Application to Dissolved Gas Analysis on Power Transformer

 Abstract—Transformers are a critical part of an electrical utility's asset base. On-line monitoring and diagnostics is a useful tool to help operators to manage their assets and make decisions on continuing operation, maintenance or replacement. Dissolved Gas Analysis (DGA) is the heart of on-line monitoring as it is a well-established method of transformer diagnosis. DGA techniques are simple, inexpensive, and widely used to interpret gases dissolved due to the deterioration of the insulating oil of power transformers and hence to diagnosis, possibility of various type of faults in power transformer. Various diagnostic criteria based on gas analysis have been developed. In this paper, the application of many AI techniques have been presented such as Artificial Neural Network (AAN), Fuzzy Interface System (FIS), Genetic Algorithm (GA), Extended Relation Function (ERF), Bayesian Network (BN), Self Organizing Map (SOM) and Discrete Wavelet Network (WNs) Transforms, which can be used to increase the efficient and accurate diagnosis for off line and on line monitoring of power transformers.

If It Ain't Broke...

As requirements for service reliability have increased, many utility asset managers are also facing pressures to reduce maintenance costs while squeezing more performance from existing-and often aging-equipment. High-voltage circuit breakers provide a case in point. Not only are high-voltage breakers essential to the protection of other system components under fault conditions, their reliable switching operation is necessary for maintaining optimal system conditions. A breaker's failure to operate as required can result in equipment damage, increased system disturbance, and loss of load. With many years of experience, utilities have established programs for maintaining circuit breakers in good operating order. Because of their sheer numbers, however, breakers represent a significant portion of a utility's power delivery maintenance budget. The maintenance challenge is made more complicated by the fact that many breakers, including breakers that have been in service for decades, remain idle for extended periods during normal system conditions. In response to pressures to reduce maintenance expenses, many utilities have moved away from the original manufacturer's maintenance recommendaticondition-based approachesons, which were principally based on time in operation and number of operations, and toward reliability-centered maintenance (RCM) and condition-based approaches.

Indianapolis Expands Its Multifaceted Approach to Public Health Protection

In this article, the Veolia Water‐operated 24‐mgd T.W. Moses Water Treatment Plant in Indianapolis, Indiana, is presented as an example of how an integrated approach can be used to leverage internal utility personnel and assets with outside stakeholders to maximize public health protection. The article discusses the process through which a decision was made to combine ultraviolet (UV) disinfection with Actiflo Carb® (a high‐rate powdered activated carbon recirculation process) at the T.W. Moses plant to ensure compliance with upcoming regulations and position the facility to provide appropriate treatment for potential future source water contaminants. The article also discusses how frequent communication between various stakeholder groups and agencies provided a vehicle for stakeholder input and feedback on the public health issues facing the utility.

Dynamic modeling and evaluation of solid oxide fuel cell – combined heat and power system operating strategies

Operating strategies of solid oxide fuel cell (SOFC) combined heat and power (CHP) systems are developed and evaluated from a utility, and end-user perspective using a fully integrated SOFC-CHP system dynamic model that resolves the physical states, thermal integration and overall efficiency of the system. The model can be modified for any SOFC-CHP system, but the present analysis is applied to a hotel in southern California based on measured electric and heating loads. Analysis indicates that combined heat and power systems can be operated to benefit both the end-users and the utility, providing more efficient electric generation as well as grid ancillary services, namely dispatchable urban power. Design and operating strategies considered in the paper include optimal sizing of the fuel cell, thermal energy storage to dispatch heat, and operating the fuel cell to provide flexible grid power. Analysis results indicate that with a 13.1% average increase in price-of-electricity (POE), the system can provide the grid with a 50% operating range of dispatchable urban power at an overall thermal efficiency of 80%. This grid-support operating mode increases the operational flexibility of the SOFC-CHP system, which may make the technology an important utility asset for accommodating the increased penetration of intermittent renewable power.

An international comparison of the institutional governance of water utility asset management and its implications for Finland

Concerns over the condition of water and sewerage networks and their facilities are especially topical as several countries, including Finland, are approaching a stage where their aging and deteriorating pipelines will demand extensive repair, renewal and replacement. Solving the problems related to the construction and, in particular, the maintenance of water service infrastructures requires the methods of long-term planning and strategic decision-making, which are often referred to as water utility asset management. Since maintaining the operational capacity of water service systems has a crucial role in preventing hazards to human health and to the environment, the policy-level consideration of issues related to asset management planning seems well justified. A review of the institutional governance of asset management and investment planning in countries that are facing similar challenges provides several replicable principles for the water sector in Finland. A combination of legal requirements and professionally established norms could be expected to set an appropriate balance between securing adequate service levels and allowing utilities to decide autonomously on additional improvements.

An Empirical Investigation of the Campbell‐Cochrane Habit Utility Model

Abstract: This paper tests whether the Campbell and Cochrane (1999) habit utility model generates a valid stochastic discount factor for the 25 Fama‐French size/book‐to‐market and size/momentum sorted portfolios. Campbell and Cochrane (1999) derive a consumption based habit utility asset pricing model and calibrate it to aggregate US stock market data. However, they do not test whether their model is consistent with a larger cross section of asset returns. We test their model using the methodology of Hansen and Jagannathan (1991) and Burnside (1994). In contrast to previous studies, we find that for reasonable parameter values, the model's stochastic discount factor is inside the Hansen‐Jagannathan bounds and therefore satisfies the necessary conditions for a valid stochastic discount factor. We trace the difference between our results and previous studies to the method used to estimate the model's parameters and the parameter values themselves.

Prospective utility and time-varying optimal asset allocation for the UK: 1803-1995

The equity risk premium has attracted considerable debate and various proposed explanations. We re-examine one approach based on myopic loss aversion, while incorporating time variation in returns distributions. We identify optimal asset allocations across a two-century period for the UK, in the context of a range of plausible investment evaluation periods. We demonstrate that both the frequency of evaluation which achieves indifference between equities and bonds, and the optimal asset allocation profile, vary significantly over time. Although equities dominate for long periods, it is evident that periods of low inflation lead to the prominence of bonds in optimal allocations.

New Technology Determines Exact Spatial Location of Water and Sewer Pipes

This article presents mapping technology from Geospatial Corporation that can provide utility managers with three‐dimensional drawings that can help them manage and maintain their systems more efficiently and aid them in planning future system expansions, especially in situations where there are no as‐built drawings for water utility pipelines. The Smart Probe? technology from Geospacial Corporation can bolster the effectiveness of a water or wastewater utility's asset management system through an array of data collection instruments contained within several types of pipeline probes, as well as a proprietary software package that extracts the collected data and transfers it into various geographic information system (GIS) databases.

Expected Utility Asset Allocation

Most asset allocation analyses use the mean-variance approach for analyzing the trade-off between risk and expected return. Analysts use quadratic programming to find optimal asset mixes and the characteristics of the capital asset pricing model to determine reasonable optimization inputs. This article presents an alternative approach in which the goal of asset allocation is to maximize expected utility, where the utility function may be more complex than that associated with mean-variance analysis. Inputs for the analysis are based on the assumption of asset prices that would prevail if there were a single representative investor who desired to maximize expected utility.

Remote Implementation of a Utility Asset Management System: Internalizing Implementation and Configuration Costs to Obtain System Ownership and Reallocating Implementation Funding

Remote Implementation of a Utility Asset Management System: Internalizing Implementation and Configuration Costs to Obtain System Ownership and Reallocating Implementation Funding

Expected Utility Asset Allocation

Most asset allocation analyses use the mean–variance approach for analyzing the trade-off between risk and expected return. Analysts use quadratic programming to find optimal asset mixes and the characteristics of the capital asset pricing model to determine reasonable optimization inputs. This article presents an alternative approach in which the goal of asset allocation is to maximize expected utility, where the utility function may be more complex than that associated with mean–variance analysis. Inputs for the analysis are based on the assumption of asset prices that would prevail if there were a single representative investor who desired to maximize expected utility.

Using GPS and GIS for Distribution System Surveys

This article discusses combining the technologies of geographic information systems (GIS) and global positioning systems (GPS) to digitally document the position of utility assets in the field and allow agencies to incorporate the maintenance of their cathodic protection systems and other distribution system features with GIS. The article mentions how the information can be useful to owners, operators, engineers, and administrators for system planning, budgeting, and maintenance.

Expected Utility and Mean-Risk Asset Pricing Models

Many people find the mean-variance assumption of the CAPM hard to justify. This paper replaces the mean-variance assumption with a weaker assumption based on the class of consistent risk measures. This class of risk measures is chosen because there is a weak form of equivalence between the mean consistent risk and the expected utility approaches to portfolio optimization. The general form for mean-consistent risk asset pricing models is derived, and the generalized mean-risk beta provided. The CAPM and a number of other well-known mean-risk asset pricing models arise as special cases.

PD knowledge rules for insulation condition assessment of distribution power cables

This paper discusses practical experiences in the Netherlands with insulation condition assessment of distribution power cable networks by partial discharge diagnosis and database support. In particular, practical steps are discussed in collecting, analysing and processing the diagnostic data for decision support of utility asset management.

Capture or Contract?: The Early Years of Electric Utility Regulation

Jarrell (1978) found that electricity prices rose in states that adopted state regulation before 1917, suggesting that regulators were captured by the interests of the regulated electric utilities. An alternative explanation is that state regulation more credibly protected specialized utility assets from regulatory opportunism than did the municipal franchise contracting that preceded it. Using a panel of data from the U.S. Electrical Censuses of 1902-1937, I find that the relationship between capacity and prices shifted upward under state regulation, potentially consistent with either explanation. At the same time, the shift from municipal to state regulation was associated with an increase in generation capacity, a result inconsistent with the capture theory. Under state regulation, capacity increases more closely tracked population increases, suggesting that the obligation to serve was an important part of the regulatory contract. This is consistent with the hypothesis that the expanded scope of regulation allowed for cross-subsidization of high-cost customers not well represented in municipal politics.

Democratic control of public enterprise in the United States: a history of regulation and liberalisation in the electricity sector

The system of democratic regulation of privately owned utilities that has evolved in the United States over the past century includes five main elements: participation; transparency; a standard of justice and reasonableness; protection against confiscation of utility assets; and prices that are related to costs. After setting these elements forth and explaining how they are balanced, we describe how the system failed in a series of relatively small but highly visible experiments with deregulation in California and elsewhere in the US. Finally, we outline the history of how democratic regulation evolved in the US and how democracy is reversing the failed experiment with deregulation in California.

Benchmark Tools Available From Other Countries and Industries Can Help Water and Waste Water Utilities Manage Assets More Effectively

Benchmark Tools Available From Other Countries and Industries Can Help Water and Waste Water Utilities Manage Assets More EffectivelyWastewater and water utilities in the United States are challenged by increasing costs and escalating demands from customers and regulatory agencies to reduce risks and improve service. In addition, there is a growing realization that utility assets such as pipelines, no matter how long-lived, must be proactively managed. In the United States, asset management concepts and processes are rapidly...Author(s)John RogersElisa SperanzaVince YeeSourceProceedings of the Water Environment FederationSubjectSession 86 - Management Symposium: Communications, EMS and BenchmarkingDocument typeConference PaperPublisherWater Environment FederationPrint publication date Jan, 2002ISSN1938-6478SICI1938-6478(20020101)2002:9L.356;1-DOI10.2175/193864702784162606Volume / Issue2002 / 9Content sourceWEFTECFirst / last page(s)356 - 360Copyright2002Word count176

Optimal consumption of a divisible durable good

Abstract We examine the intertemporal optimal consumption and investment problem in a continuous-time economy with a divisible durable good. Consumption services are assumed to be proportional to the stock of the good held and adjustment of the stock is costly, in that it involves the payment of a proportional transaction cost. For the case in which the investor has an isoelastic utility function and asset prices follow a geometric Brownian motion, we establish the existence of an optimal policy and provide an explicit representation for the value function. We show that the investor acts so as to maintain the ratio of the stock of the durable to total wealth in a fixed (nonstochastic) range and that the optimal investment policy involves stochastic portfolio weights. The dependence of the optimal policies on the parameters of the model is also discussed.

The Structure of Sunspot Equilibria: The Role of Multiplicity

This paper examines the structure of sunspot equilibria in a standard two period exchange economy with real assets. We show that for a generic choice of utility functions and endowments, there exists an open set of real asset structures whose payoffs are independent of sunspots such that the economy with this asset structure has a regular sunspot equilibrium. An important implication of our result is that the multiplicity of non-sunspot equilibria is not necessary for the existence of sunspot equilibria. Our technique is general and can be applied to show the existence of sunspot equilibria in other frameworks. This paper analyses the structure of sunspot equilibria in a standard two period competitive exchange economy, with more than one consumption good in each period and a real asset which pays a bundle of commodities. There is no uncertainty except for sunspots. We show that for an open and dense subset of the set of utility functions and endowments, there exists an open set of real asset structures, with payoffs independent of sunspots, such that the resulting economy with an asset structure in this set has a regular sunspot equilibrium. We also show that this result is tight: in the space of utility functions, endowments and asset structures there is in fact an open set of economies for which sunspot equilibria do not exist. Moreover, our argument provides a systematic method which allows us to find, generically, all the sunspot equilibria of a given economy. Thus it can be used as a tool for studying the global structure of the set of sunspot equilibria, not just the existence of a sunspot equilibrium. The dependence of the existence of sunspot equilibria on the particular specification of the payoff of the asset provides an interesting contrast with the fact that the set of equilibrium allocations of the underlying certainty economy does not depend on the asset structure. Recall that when markets are complete, preferences and endowments completely determine the set of competitive equilibria. In our setting, markets are complete in the underlying certainty economy. So if payoffs change, the price of the asset will change accordingly but there is no effect on the equilibrium consumption of the certainty economy. Thus the fundamentals of the certainty economy are the distribution of endowments and preferences among consumers, and our result implies that the existence of sunspot