Life Cycle Cost Using Triple Bottom Line Triple Bottom Line: Understanding Community Impacts Full Cost and Benefit Accounting: l Financial l Social l Environmental... Guide for TBL Valu
Trang 1Water System Adaptation
l Approach:
u Invest in actions that mitigate
uncertainty and enhance flexibility
and resiliency so that system
managers can continue to meet their
responsibilities.
l Identify potential impacts through downscaling and characterizing
system specific strengths and
vulnerabilities
l Adjust operations to test system
flexibility
l Develop portfolio of adaptation
options
l Engage in ongoing research &
collaborate
Trang 2Portfolio of Adaptation Options
l SPU identified a series of intra-system
modifications and new supply options – and grouped them into Tiers.
l Applied the effects on supply using Tier 1 intra-system modifications.
l Where Tier 1 modifications did not restore supply fully, identified the need for
subsequent Tiers.
Trang 3Tier 1 Solutions/Optimize
Existing Supply
l Modify storage level of Cedar Reservoir and replace overflow dike
l Change rule curve/operating procedures for the Tolt Reservoir
l Make modifications to Lake Young Reservoir
Next Tiers Available to SPU
l Tier 2 – Next Tier of Intra-System Modifications
u Include additional use of Lake Youngs Storage (402-497)
u Modified/optimized conjunctive use operations
u Additional conservation programs after 2030
l Tier 3 – Greater Use of Storage
u Higher refill levels at Chester Morse Lake (1566')
u Higher flood pool level at CML (assumes max level increased to 1575)
l Tier 4 – New Supply Alternatives
u Deeper drawdown of South Fork Tolt reservoir (1660’)
u Deeper drawdown of Lake Youngs (28’), Cedar Filtration
u Use of Dead Storage for normal supply, after pumping plant replacement
u Develop North Fork Tolt Diversion
u Develop Snoqualmie Aquifer Project
u Northshore and Woodinville develop Weyerhaeuser/Everett supply
u Reclaimed water projects in Retail Service Area
u Additional conservation programs
l Tier 5 – New Supply Concepts
u Reclaimed water projects in Wholesale Service Area
u Desalination plant
u Higher refill levels at Tolt reservoir (raising ring gate)
Etc.
Trang 5Life Cycle Cost Using Triple Bottom Line
Triple Bottom Line: Understanding
Community Impacts
Full Cost and Benefit Accounting:
l Financial
l Social
l Environmental
Trang 6TBL: Financial, Social, Environmental
Examples:
l Value of stream habitat
l Value of green space
l Cost of traffic delay
l Cost of service outage
l Cost of greenhouse gas emissions
l Value of natural landscaping practices
$-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
Years
Social and Environmental Risk Cost
Financial Cost
Discounted Present Value of Cost
Example #1: Triple Bottom Line Justifies Early Replacement of Plastic Service Pipes
Risk Category Probability Consequence Risk Cost
Service Interruption 10% 1 hr x 10 cust x $100/hr/cust $100 Property Use Impact 1% $2,000 $20 Surface Water Discharge 0.1% $1,000 $1 Traffic Delay 10% 1 hr x 400 cars/hr x $5/car $200
Trang 7Example #2: Value Model Helps Choose Best Triple
Bottom Line Value-for-Money Options
Environmental Impacts Social Impacts
c large woody debris transport
d aquatic invertebrate habitat
e presence of ambient light
Value Scores Assigned to Each
Option for:
Best Value-for-Money
Example #3: Triple Bottom Line “Reasonable Person” Test
Helps Choose Lowest Cost Option
Trang 8Guide for TBL Valuation
l When available, use agreed values for non-market (social and environmental) benefits and costs, otherwise:
l When justified, use agreed non-market
valuation techniques to estimate value,
otherwise:
l Use “reasonable person test” to determine
“break-even” value of non-market benefits or costs
Minimizing Life Cycle Costs
Optimal balancing of:
Operation
Performance
Maintenance
Repair
Rehab
Renewal
Risk
Over full life cycle of asset
Trang 9Replace Assets at end of Economic Life – Minimum Average Life Cycle
Cost
Age of Asset
Average Replacement Cost
Average Repair
Cost
Life Cycle Cost
Economic Life
Lifecycle Costing, and the Triple Bottom Line
100+ 90 80 70 60 50 40 30 20 10 5
Estimated Number of Sewer Backups per Year
$
100%
Reactive
100%
Proactive
A Sample “Bathtub Curve” for the Sewer Maintenance Program
Trang 10An Example: Tying Together Service Levels, Lifecycle Costing, and the Triple Bottom Line
100+ 90 80 70 60 50 40 30 20 10 5
Estimated Number of Sewer Backups per Year Labor and equip costs
$
100%
Reactive
100% Proactive
A Sample “Bathtub Curve” for the Sewer Maintenance Program
Lifecycle Costing, and the Triple Bottom Line
100+ 90 80 70 60 50 40 30 20 10 5
Estimated Number of Sewer Backups per Year
Claims costs
Labor and equip costs
$
100%
Reactive
100% Proactive
A Sample “Bathtub Curve” for the Sewer Maintenance Program
Trang 11An Example: Tying Together Service Levels, Lifecycle Costing, and the Triple Bottom Line
100+ 90 80 70 60 50 40 30 20 10 5
Estimated Number of Sewer Backups per Year
Environmental/
social costs
Claims costs
Labor and equip costs
$
100%
Reactive
100% Proactive
A Sample “Bathtub Curve” for the Sewer Maintenance Program
An Example: Tying Together Service Levels, Lifecycle Costing, and the Triple Bottom Line
100+ 90 80 70 60 50 40 30 20 10 5
Estimated Number of Sewer Backups per Year
Regulatory non-compliance
costs
Environmental/
social costs
Claims costs
Labor and equip costs
$
100%
Reactive
100% Proactive
A Sample “Bathtub Curve” for the Sewer Maintenance Program
Trang 12An Example: Tying Together Service Levels, Lifecycle Costing, and the Triple Bottom Line
100+ 90 80 70 60 50 40 30 20 10 5
Estimated Number of Sewer Backups per Year
Regulatory non-compliance
costs
Environmental/
social costs
Claims costs
Labor and equip costs
Chemical root treatment costs
$
100%
Reactive
100% Proactive
A Sample “Bathtub Curve” for the Sewer Maintenance Program
An Example: Tying Together Service Levels, Lifecycle Costing, and the Triple Bottom Line
100+ 90 80 70 60 50 40 30 20 10 5
Estimated Number of Sewer Backups per Year
Regulatory non-compliance
costs
Environmental/
social costs
Claims costs
Labor and equip costs
Chemical root treatment costs
Grease abatement costs
$
100%
Reactive
100% Proactive
A Sample “Bathtub Curve” for the Sewer Maintenance Program