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Efficient Operations, Maintenance & Management of Rural Utilities

Efficient Operations, Maintenance & Management of Rural Utilities. Costs Management Structures Best Practices Staffing. Overview. Emerging Conclusions Costs Capital Intensity by Utility Sector Book vs. True Capital + Operating Management Structures Best Practices Staffing.

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Efficient Operations, Maintenance & Management of Rural Utilities

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  1. Efficient Operations, Maintenance & Management of Rural Utilities Costs Management Structures Best Practices Staffing

  2. Overview Emerging Conclusions • Costs • Capital Intensity by Utility Sector • Book vs. True • Capital + Operating • Management Structures • Best Practices • Staffing

  3. Costs – Capital Intensity by Sectorinvestment per $ of annual revenue

  4. Capital Intensity by Sector & Size

  5. Electric Costs – Book vs. True

  6. Electric Costs – Capital/Operating

  7. True Costs - Electric

  8. True Cost - Flush Tank Haul • Mekoryuk Estimate (Colt 1994) • O&M = $2,500 / Household / yr • Mekoryuk Actual • O&M = $502 /yr • Includes some vehicle depreciation • Excludes significant Self-hauling!

  9. W/S True Costs – Present Value Basis (3% real discount rate) • Mekoryuk FTH Estimated PV (Colt 1994): • Design = ?? • Capital = $21,000 / household • O&M = $34,000 / household • Mekoryuk “actual” (Colt 2000): • Design = ?? • Capital = $21,000 / household • O&M = $7,500 / household

  10. Electric True Costs • Next Steps • Need to correlate with reliability • Use condition surveys as surrogate where reliability data is not available

  11. Electric Revenues - Example

  12. Water & Sewer Revenue Examples • Tuntutuliak – Flush Haul*[Draw Picture] • Unable to sell board on $55 per month for water & sewer • Rates were redesigned and the board approved them: • $44 per sewer pump-out (300 gallons; 15c/gal) • $35 per water delivery (130 gallons; 27c/gal) • Rates appear to roughly recover flush haul O&M only ($900 per household per year)

  13. Water & Sewer True Costs – Flush Haul$ per household per year)

  14. True Costs – Water & Sewer • Alaska Data • $50-$150/household per month Operating • $75-$1500/household per month Capital

  15. True Cost - Flush Tank Haul • Mekoryuk Estimate (Colt 1994) • O&M = $2,500 / Household / yr • Mekoryuk Actual • O&M = $502 /yr • Includes some vehicle depreciation • Excludes significant Self-hauling!

  16. W/S True Costs – Present Value Basis (3% real discount rate) • Mekoryuk FTH Estimated PV (Colt 1994): • Design = ?? • Capital = $21,000 / household • O&M = $34,000 / household • Mekoryuk “actual” (Colt 2000): • Design = ?? • Capital = $21,000 / household • O&M = $7,500 / household

  17. FTH PV true cost$ / household over 20 yrs

  18. Costs – Bulk Fuel – Anecdotal • Capital Intensity • $8 net plant or more per $ of revenue (assuming revenue collected to reflect recovery of capital, modest operations) • Capital Cost per gallon • Ranging from 10 to 35 cents annualized per gallon • Annual O&M ?= 35-85 cents per gallon of capacity (Charlie)

  19. Management Structures • “Stand-Alone” • “Stand-Alone” + Government Program Support (RMW, RUBA, Circuit Rider) • Regional • Consolidated • For-Profit vs. Non-Profit

  20. Best Practices • Managerial • Technical • Financial

  21. Attract & Retain Good People • Managers • Operators • Administrative • Competitive Compensation Package • Salary • Retirement Benefits • Training, Back-Up • The “X” Factor

  22. X Factor • Key informants suggest major element of success is presence of women in mgmt and/or operations • Women are more attuned to costs of bad water (sick kids, laundry, cooking) – • reliable clean water saves traditionally female-related labor

  23. Example • An O&M consultant trained every male, then trained one woman who is still there (in Kodiak)

  24. Best Practices - Technical • Electrical • Sewer & Water • Bulk Fuel • Share Resources with School • Staff Assistance • Training Opportunities • Capital, O&M Backup

  25. Best Practices - Financial • Entertainment Taxes • Cable TV • Gaming (Bingo, Pull-Tabs) • Profits from Bulk Fuel • Employ Subsidy Hunter & Gatherer • True-cost rates and/or charge large customers more of the true cost • Consolidation of resources (funds, other) from tribes, city, recreational groups doing bingo (sled dog assoc.), church, ancsa corps, native nonprofits

  26. Staffing for <200 households • Electric • 1.5-2.0 FTE per village (4 persons) • Quality more important than quantity • 1.5 is a good number from AVEC (1 ANC + .5 in village) • Sewer & Water • 2.0 FTE per village (4-8 persons) • some overstaffing of low-skill positions vs. short-staffing of high-skill

  27. Emerging Conclusions • TANSTAAFL • Policy • Management Structures • Best Practices • Staffing

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