PNNL

Abstract

This study introduces a framework balancing hydraulic and economic consequence resilience using Modern Portfolio Theory (MPT). The study seeks to apply the MPT approach to asset management of a water distribution system (WDS), primarily to identify critical assets to minimize the risk of hydraulic loss and economic consequence. ECLIPS (Economic Consequence Linked to Interruption in Providing Service), set of conversion factors translating water usage to economic outcome, is used to measure economic consequence following to WDS failure. The framework is demonstrated using a hypothetical WDS and tested for pipe replacement and breakage scenarios using EPANET hydraulic simulations. First correlation between hydraulic and economic consequence resilience been investigated for pipe replacement and breakage scenarios to confirm different response of two resilience. The results indicate two resilience have a low covariance (= 0.2) illustrating that a replacement strategy oblivious to ECLIPS can cause unexpected economic consequences. Results of the MPT approach identified benefits of combination of hydraulic and economic consequence resilience and sharing yield to least risk is identified as well. This study provides a practical approach to gain useful planning, design, and research insight into the application of economic consequence for WDS critical asset identification using MPT.