Risk Analysis Strategies For Credible and Defensible Utility Decisions

In the 21st century, risk management has become a water utility manager's central function.

Beyond the preserves of public health protection and the maintenance of process performance, utility managers must also assess and manage legal, regulatory, financial, environmental, resource, and reputational risks in a complex and demanding business climate that is subject to an unprecedented pace of change.

The implications of their decisions stretch well beyond company structures to the public, regulators, consumers, elected officials, politicians, and shareholders.

The study adopted a range of methods incorporating a critical literature review, structured interviews, transcription and analysis, benchmarking, a self-assessment, and an audit.

This report provides a critical review of the risk analysis strategies used by water utilities for better decision-making.

The review was formed from an international workshop on risk analysis, several discussions with utility and risk managers, presentations, and structured interviews with utility staff.

The report summarizes the status of risk management in the water utility sector among the participating and collaborating utilities.

The research developed a capability maturity model for risk management (CMM-RM) in the utility sectors and used it to benchmark representatives of the international water utility sector.