HomeLearnCase StudiesCase Study: Achieving a 26% Reduction in Annual O&M Costs Through Reliability Centered Maintenance

Case Study: Achieving a 26% Reduction in Annual O&M Costs Through Reliability Centered Maintenance

Learn how a wastewater facility was able to use RCM studies and O&M task selection to reduce annual O&M costs by 26 percent.

The Challenge

A ten-year-old wastewater and water distribution facility in California needed to optimize its Operations & Maintenance (O&M) program due to issues that were negatively affecting profitability and performance.

These challenges included:

  • A reactive maintenance strategy, which led to overstaffing
  • Design issues, including lack of adequate redundancy of critical systems
  • Too frequent and too early failure of assets
  • High O&M costs

The first challenge directly relates to facility management. Oftentimes, facilities operate reactively: When an incident occurs, facilities spring into corrective action. Reactively managed facilities usually end up overstaffing in order to quickly contain and correct recurring unplanned issues and emergencies. In theory, overstaffing may help to mitigate unexpected issues; however, over the long-term, overstaffing is an inefficient use of resources. Rather than functioning reactively, facilities should seek to proactively manage risk, which will optimize costs and resources.

The second challenge relates to design issues. O&M costs for water and wastewater treatment plants can run between 50 and 75 percent of the total lifecycle cost of the facility. When operating costs, maintenance supplies, labor, energy, and downtime are included, O&M costs over the lifetime of a facility can reach up to 85 percent of total lifecycle costs. These ongoing costs are often not considered during the design phase, where capital costs trump long-term planning. At this facility, reductions in capital costs during the design phase (also known as value engineering) had left the facility lacking redundant equipment for critical processes. These design issues made the facility more vulnerable to unexpected upsets, especially given the reactive maintenance program.

Combined, these issues led to frequent and early failure of critical assets and higher O&M costs than a well-run facility should require. Overstaffing also led to poor performance on the part of the operations team, who frequently had little to do and responded by doing little. To continue to meet its design intent and maintain performance with regulatory requirements, the facility needed a change.

Pinnacle's Solution

Using the concepts practiced and refined by Reliability Centered Maintenance (RCM), Pinnacle can reduce facility O&M costs dramatically, while also improving facility performance and reliability. Although O&M lifecycle costs are largely determined by design choices, RCM can provide O&M management strategies to offset these costs, improve reliability, and streamline O&M activities. In addition, RCM-based facility O&M strategies can improve employee performance by providing a better understanding of which tasks and activities are critical, and why they are critical.

Operations and maintenance are often regarded as separate teams with different initiatives: operators run the facility and manage the process, while maintenance staff repair and maintain the assets. Because of this assumption, RCM is often wrongly regarded as a solution focused on maintenance activities alone. However, RCM actually provides the basis for full-scale asset management and includes all of the crafts and groups that participate in facility management. Leveraging RCM principles and methods not only improves reliability, maintenance efficiency, and work order management, it also inherently improves how the operations staff interprets risk and the operational activities that manage those risks.

RCM provides a structure to manage operations that can result in significant changes to operations activities. For example, operator round duties can be focused and organized around equipment checks for critical equipment, rather than on the busywork associated with checking all equipment function, regardless of process importance. Non-critical equipment can be “checked” less frequently—or, systems can be put in place to identify non-critical failures without the need for frequent checks. With RCM programs in place, simple monitoring activities that may have once taken up the valuable time of skilled maintenance staff can be assigned to operations staff. Often, simple training can provide operators with the skills required to supplement maintenance monitoring, and in turn, free up maintenance staff to perform more complex repairs or maintenance activities.

An RCM study can significantly reduce labor hours required for plant operations by leveraging monitoring activities and privileging activities that are critical to plant performance. This is in addition to reduced maintenance labor required to manage RCM based maintenance programs. The key is to have operations and maintenance teams work together to provide oversight and monitoring of maintenance needs. For example, in a well-run facility, operations teams will perform up to 70 percent of maintenance tasks in the form of predictive maintenance checks and monitoring activities. These simple routine checks provide a critical frontline for maintenance by identifying maintenance needs during daily, weekly or monthly activities.

In addition, risk-based Standard Operating Procedures (SOPs), Lockout Tagout Verifications (LTVs), Operator Routine Duties and documented tool-kitting for specialized maintenance tasks can improve operating performance and reduce labor hours across O&M activities. Overall, RCM helps bring operations and maintenance staff together to work as a team. This improves communication between groups, provides better service to facility managers, and reduces unexpected failures and unplanned maintenance activities.



After sending out a Request for Proposal, the facility selected Pinnacle O&M services to provide staffing and oversight of the facility, replacing the previous service provider. The client’s decision was based on the added value provided by Pinnacle O&M services. Pinnacle’s RCM-based O&M program delivers high levels of service and reliability by balancing risk, performance, and cost for each and every critical asset at the facility.

Pinnacle’s O&M services include:

  • RCM study and RCM O&M Task Selections
  • Full safety review and program development
  • Full facility condition assessment and capital improvement recommendations
  • Energy and process audit
  • Streamlined RCM-based operations and maintenance strategy


Pinnacle reliability experts conducted an RCM study and O&M Task selections to proactively structure the O&M program activities based on risk and reliability, rather than reactive response. Pinnacle’s safety review and program development ensured compliance with state and federal safety regulations. Pinnacle also conducted a full facility condition assessment to confirm the client knew the condition and expected remaining lifespan of their assets, with capital improvement recommendations for better budgeting and long-term planning. Additionally, Pinnacle conducted an energy and process audit to provide further recommendations for cost savings and performance improvement.

By leveraging RCM strategies and programs, Pinnacle was able to improve quality of service while reducing staffing to just 3.5 full time equivalent operators and one maintenance technician—supporting the maintenance-centric philosophy. The RCM-based O&M approach will save the facility almost $250K annually, based on the previous contract, helping the facility to reduce annual O&M costs by 26 percent.

In addition to optimizing costs, Pinnacle strives to deliver unparalleled service. For example, Pinnacle maintains effective communication with the client, hosting monthly meetings to report on plant operations and provide other relevant updates. In regards to service, one month after Pinnacle officially took over O&M at the facility, the client conveyed happiness with the reporting, the service, and the professionalism of the Pinnacle team.

By remaining an active partner with this facility, Pinnacle continues to make recommendations to improve energy use and reduce costs through innovative strategies. In addition, by focusing on the reliability of the facility’s assets, Pinnacle’s RCM-based O&M maintains the highest regulatory compliance and environmental stewardship, while maximizing the value of each and every asset and optimizing facility performance.

Key Case Study Statistics

Previous O&M Staffing

6-7 operations staff +

1/2 time maintenance technician

Previous Annual Cost


Current O&M Staffing

3 operations staff +

1 maintenance technician

Current Annual Cost


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