TAG’s asset management services for utilities now spreading across globe

BROOMFIELD — Proper management of capital assets is obviously a key aspect of running most any business. Bringing a business approach to some of the world’s most crucial and expensive assets is the No 1. goal of The Asset Group (TAG) of Broomfield.

“One of the major issues that face water and wastewater treatment is developing well thought-out maintenance programs, and well thought-out and (financially) efficient capital improvement programs,´ said Ed Carter, the managing executive of TAG. “What our business model says is you can’t have either unless you are running your business effectively. There’s a huge unmet need surrounding running these businesses efficiently, and all of our products are geared toward creating a business utility that runs effectively.”

In the world of water and wastewater utility management, sound asset management is the buzzword and acronym of the year. Across the nation, the U.S. Environmental Protection Agency is holding workshops stressing the need for water and wastewater utilities to plan and fund infrastructure maintenance efficiently through a more profound use of the information management applications available today.

SPONSORED CONTENT

How Platte River Power Authority is accelerating its energy transition

Platte River Power Authority, the community-owned wholesale electricity provider for Northern Colorado, has a history of bold initiatives.

“It is clear that only through such efforts will this country be able to provide the sustained performance from its water infrastructure investment that our prosperity and quality of life have come to depend upon,´ said G. Tracy Mehan III, the assistant administrator for water at the EPA, before a Denver workshop this summer.

The proof of this particular pudding often isn’t hard to see. Cities that maintain fund accounting — where public utilities have separate accounting from general funds — typically carry large surplus balances in water and wastewater funds. These surpluses are often necessary because of the risk that a major part of the infrastructure could fail and need immediate repair.

“There are some public water or wastewater treatment organizations that are proactive and very well run, but they tend to be the type that are not run by municipalities,” Carter said. Municipalities, he continued, tend to follow a program of “Break and Fix.”

“They haven’t stepped back and looked at the condition of their assets, and they haven’t taken asset types and looked at the frequency of failures of assets by type. They haven’t stepped back and looked at the consequences of the failure of those assets,” Carter said. So, if the fund is in sound financial shape, “they have to have a big pot of money to fix what breaks.”

In what Carter considers TAG’s launch year of 2003, the company already has made huge inroads into this developing market with ongoing consulting and software package sales in the United States, Europe and the Pacific Rim — especially Australia where public utilities are generally ahead of their American counterparts in asset management. Carter estimates the 40-person firm (most of the employees are headquartered in Broomfield) will realize revenues of $17 million in 2004: $9 million in pre-configured software sales and $8 million in consulting fees.

The basic idea behind asset management is, of course, knowing exactly when and where to spend money to minimize risk and maximize the lifetime of infrastructure. TAG begins with global information systems (GIS) that identify infrastructure components, their location and their relation to the functioning utility, but the idea is to go well beyond that point.

Using the “best-of-breed” database applications that are available off the shelf, TAG offers six pre-configured software solutions for varying aspects of running such utilities. Consulting services range from a needs assessment, often the first step toward proactive asset management, to providing a full-blown system tweaked for the individual needs of the utility.

“When the system is integrated properly with business processes, you can then synchronize data across the utility,” Carter said. “When you change information on an asset in one database, our solutions will then populate all databases that assess that utility. We implement solutions that update data uniformly.”

TAG is wholly owned by MWH, a large international company dating back more than 150 years with operations in water, wastewater, energy and environmental services. While TAG’s efforts in its first two years have focused on American sales, the company has completed projects for Jemalong Irrigation Ltd. and the Sydney Water Corp. in Australia, as well as the Waimakariri District Council in New Zealand.

International clientele

TAG recently was selected to create a comprehensive GIS system design and implementation plan for the city of Pasadena, Calif., Water and Power. The company has also provided strategic planning, asset management gap analysis, risk management evaluation, and an asset management implementation strategy for Union Sanitary District in California, which has wastewater collection and treatment assets valued at $800 million.

“We are starting to get close to the top of the curve in terms of expansion and growth (at Union Sanitary),´ said Business Services Manager Richard Cortes. “We’re now looking forward into maintaining our existing infrastructure and having to do that with less money.”

While Union already had extensive programs to look after maintenance in its buried collection pipes, Cortes said, it’s much more difficult to create asset management programs — other than routine maintenance and diligence programs — for treatment facilities, Cortes said.

“They definitely walked us through a process of finding what pieces of the puzzle were missing,” he said. “For instance, where it might be more important to replace one pump before another.”

Carter said the company’s clients include private and public utilities with customer bases ranging from 75,000 to 500,000, including work for Forth Worth, Texas. and Cleveland. The company forecasts growing by 20 employees in 2005, extending its work force into international markets and reaching revenues of $35 million.

Much of that work may be conducted in the Europe, where two of the founding companies of MWH have been based since the 1800s. The European Union is preparing to enhance water quality by assessing water and wastewater treatment on basinwide initiatives that cross international boundaries, much as the United States hopes to cross state and local boundaries.

“The basinwide work (for asset management) is huge,” Carter said. “In Europe they are laying out the foundation for standards they will set in four to five years.”