Risk-Management Process For Urban

Utilities
http://www.pipelineandgasjournal.com/riskmanagementprocessurbanutilities?page=show
Pipeline&GasJournalApril2009Vol.236No.4
ByJonesandJeffMeyers,PhiladelphiaGasWorks,andBrettBeaver,Advantica

The distribution of natural gas in an urban utility has inherent risks. Distribution networks are
located underground, out of sight and typically under pavement in close proximity to buildings,
residences and subsurface structures.
Urban customers in older cities are located in densely populated centers that have piping systems
dating back to the 1800s. These facilities vary widely in composition, pressure, age and type.
Many factors influence the risk of distributing natural gas in such an environment. Despite the
many risks, the natural gas distribution industry has an extremely safe and reliable record of
transporting gas to millions of consumers every day.
The industrys safety record is really a product of the due diligence demonstrated by the utilities
that transport the commodity. Since the Pipeline and Hazardous Materials Safety Administration
(PHMSA) enacted compliance regulations decades ago (CFR 49 Part 192), utilities have had
processes in place to assess the health and safety of their systems. While many of these processes
have been in place for many years, utilities are always looking to improve their procedures, and
in many cases, go above and beyond the federal and state requirements to create a safe and
reliable environment.
Philadelphia Gas Works (PGW) exemplifies one of these utilities that constantly looks for better
ways to operate and maintain its systems. PGW began distributing gas in 1836 in the oldest parts
of Philadelphia, PA. Through the years, the system has grown to encompass 6,000 miles of gas
mains and services under some of the busiest, oldest and most complex streets in the nation. The
system is comprised of a laundry list of pipe materials and fittings, with the highest percentage,
or more than 1,600 miles, cast iron. Much of this pipe dates back to the late 1800s.
The characteristics of PGWs distribution system create a daily challenge to the operators to
maintain a safe, reliable service to the community. This is a challenge that PGW takes seriously
and keeps managers constantly searching for new and innovative ways to improve. This
dedication of evolving and improving is evident upon evaluation of PGWs risk-management
process. Risk management, by that name, formally began in the 1980s at PGW and has evolved
through the decades into a sophisticated system today.
Historical Perspective
In the 1980s, as its distribution system began to show signs of aging, PGW implemented a
formal risk-based process to replace, rehabilitate or remove facilities that posed the highest risk
to public safety and its ability to reliably serve its customers. PGW then and now operates
predominantly an inches water column pressure gas distribution system.
The systems operators recognized that the highest risk for an incident was the break of a small-
diameter cast iron main whose escaping gas could migrate into a building basement. This type of
failure of a cast iron main introduces a significant amount of gas to the environment when
compared to a steel corrosion leak and presents a higher safety risk to the public. As a result,
PGW began to evaluate its cast iron mains on several factors, including incidents on the city
block in which the main is located, age of the main, number of failures of the main, failures of
the mains supporting media, mains within the slope of a parallel excavation, and mains within a
crossing excavation.
This type of manual process was effective in providing a focused effort on reducing main breaks
and an objective method for comparing one main to another. In the end, PGW used the
information gleaned from this method to identify, prioritize, budget and design the replacement
of more than 80,000 feet of its small-diameter cast iron main per year in the 1980s and early
1990s.
In the mid 1990s, PGW wanted to improve upon this process in favor of a better way to assess
the risk on its system. The goal was to create a qualitative and systematic method to support its
assessment of its cast iron main. In 1995, PGW implemented a semi-automated process that
relied on data it began to collect in its Block Information & Leak Tracking system (BILT).
The evaluation remained a risk-based approach that focused on small-diameter cast iron
incorporating parameters such as main size, break history, leak history, pre-1900 vintage pipe,
pipe age and service length (i.e. proximity to buildings), into the risk model. Each main in the
system was evaluated and given a risk score based on a weighting scheme assigned to each
parameter. The mains were then ranked by their risk score to determine those that should be
targeted first for replacement.
Similar to the earlier system, this new automated approach proved to be effective in evaluating
the overall risk of the system. However, PGW wanted to know how its risk profile fared against
industry peers. The utility was interested in learning if there were any areas that it could improve
upon. As a result, in 1999, PGW contracted with an independent consultant to perform a
benchmarking study that provided an analysis on how PGW statistically ranked among its peers
with respect to risk management.
The end result of the analysis showed that PGWs distribution system, particularly the cast iron
network, performed at or better than its peers. Two key statistical parameters, breaks per mile
and PGWs cast iron replacement rate, were in line with industry standards. The study also
affirmed PGWs focus on preventing cast iron breaks, since its peers agreed that these mains
pose the highest risk to distribution systems.
Following the benchmarking study, PGW continued to improve its ranking process by enhancing
its programs capabilities. In the years following the assessment, PGW focused on adding more
parameters to the ranking process, attempting to make it as comprehensive as possible.
Additional parameters incorporated into the prioritization process included mains with a history
of breaks as well as service history.
With a focus on cast iron mains, PGW developed an additional model that related average daily
temperature to frost depth. This model predicted main break rates and was used to predict
periods of accelerated cast iron main break activity. This allowed PGW to proactively schedule
resources to take preventive and mitigative operating measures. In addition to replacing cast iron
main, PGW was making a determined effort to remove deteriorating steel services.
Risk Management Today
PGWs trend, as is underscored by its history, is one of constant evaluation and improvement. In
2008, only nine years after the initial benchmarking study, PGW decided to have another
independent consultant review its risk-analysis processes and recommend areas of improvement.
Again, the first step was to rank PGW against its peers with respect to risk analysis and mains
replacement and repair practices.
Similar to the initial evaluations in 1999, 2002 and 2004, the study compared statistical
parameters such as leak rate per mile, percentage of the system replaced each year, number of
incidents, service lines replaced, leak causes and replacement and repair methodologies. In the
end, the report found that PGW was on a par with its urban peers. But there were still areas in
which PGW could improve.
One improvement PGW has made in conjunction with the benchmark analysis study is the
implementation of a comprehensive risk-management system that links its mapping systems, the
Underground Facilities Database (UFD). This is an updated and enhanced version of BILT. At
the core of the new solution is Advanticas Mains Replacement Prioritization (MRP) product
which provides PGW with a scientific methodology for assessing the condition and risk of its
metallic mains based on the pipe properties, leak and break history and other factors such as
proximity to building, gas ingression and numbers of services.
The initial risk factors are very similar to the previous methodology. However, MRP provides
the foundation to expand and enhance those system analysis capabilities. MRPs open ESRI
ArcGIS architecture enables PGW to incorporate information from a variety of additional
sources into the risk-and-condition assessment.
These sources now include the PGW leak-management system, its network analysis program
(SynerGEE), and the City of Philadelphias land base data which includes the street network,
waterways, building parcels, railroads, aerial photography, city parks and areas of recreation, and
the locations of critical buildings such as hospitals, schools, and municipal buildings. The MRP
condition and risk analysis methodology incorporates all of this extended information, and as a
result, provides PGW with a relative ranking of each cast iron main in the system.
With all the data feeding into one decision-support system, PGW can make risk-analysis
decisions based on a holistic view of the system. None of these decisions are more important
than dealing with aging cast iron infrastructure. With more than 1,600 miles of cast iron to
manage, having information readily accessible to assess each cast iron main in the system for
risk is a critical aspect of PGWs daily operations.
Once each of the mains in the network is ranked, PGW can determine the best approach for
mitigating the mains risk. Using additional functionality provided by MRP, the software will
assemble a set of recommended replacement projects that address the mains that are leading
candidates for replacements. This provides PGW with an objective means of quickly evaluating
and then commissioning replacement projects that optimize the use of the ratepayers money
while removing those assets that pose the most public risk.
Planned replacement projects along with risk and condition scores can then be mapped and
published from the MRP environment for other key decision makers in PGW to review and
provide valuable insight. This provides an avenue for sharing information with other PGW
departments, thus enabling them to better understand the system.
Future Improvements
As everyone in the industry has come to appreciate, the distribution integrity regulations will
transform the way risk is evaluated on local systems. Fortunately for PGW, it has always taken a
proactive approach in trying to learn more about its system and improve its processes.
Specifically, over recent history PGW has (1) taken the steps to develop a comprehensive risk-
management process that will provide the foundation for complying with the new regulations,
and has (2) developed a philosophy of constantly striving to perform better today than it did
yesterday. Over the next year, as the industry absorbs and responds to the new regulations, PGW
will look for new and improved ways to enhance its risk-management processes.
Authors
Michael J ones has worked for more than 27 years at PGW, much of that time in the Distribution
Departments Planning and Engineering group. As Director, Compliance and Technical Services,
he is responsible for field operations and environmentgal compliance with state and federal
regulations.
J eff Meyers is a professional engineer with more than 25 years of experience in the natural gas
industry. Seventeen of those years were devoted to work for major distribution companies and
the remainder for natural gas engineering firms.
Brett Beaver is a Business Development Manager for Advantica. He manages gas distribution
and transmission accounts in North America that are clients of Advanticas Stoner Software,
including MRP. 717-724-1925, Brett.Beaver@advanticagroup.com.