Reliability spend has increased over 40% in the last decade
PASADENA, TEXAS (April 13, 2021) – Pinnacle, the world’s largest reliability analytics company, released its second Global Economics of Reliability Report today. The report, a follow up to Pinnacle’s Economics of Reliability Report for global refining, analyzes the impact that reliability has on the water and wastewater treatment industries.
“We’ve found that on average, 40% of operations and maintenance expenses at the largest US municipal and regional water and wastewater treatment districts are allocated to reliability-related activities,” said Jeff Krimmel, director of data and market analysis at Pinnacle. “Our analysis also revealed that as a whole, US water and wastewater operators spent $16.0 and $8.6 billion in reliability-related activities compared to $10.1 billion spent by US petroleum refiners in 2019, an interesting finding considering the heavy focus that the refining industry has historically had on reliability.”
The report’s analyses are based on direct operational and financial data from a variety of US water and wastewater operators, including water production volume, operating revenues and costs, and capital asset value net of depreciation. Among many insights extracted from this data, Pinnacle analysts found that operators’ spend on operations and maintenance is growing more quickly than capital expenditures, indicating that water and wastewater operators are underinvesting in assets today. As the industry continues to face future challenges, capital investments and the reliability of those assets will become even more crucial to the success of these industries.
“The water industry has historically taken a more reactive approach to the reliability and maintenance of assets, however, as infrastructure continues to age and facilities try to meet growing demand without increasing rates, proactive reliability will become an important factor in the long-term success of the industry,” said Paul Hughes, partner at Pinnacle. “While the direct comparison of data for water and wastewater treatment facilities can be somewhat challenging due to the unique geographical challenges of each district, we can clearly see that there is a lucrative reliability improvement opportunity for the industry.”