RiskManagementinWaterUtilities-CollegeofEngineering.docVIP

Risk Management in Water Utilities Neil S. Grigg, July 27, 2000 Purpose and background As Levitt (1997) pointed out, “An integrated, comprehensive strategy for disaster planning and recovery is undoubtably of greater import in assuring the continuance and ultimate survival of any enterprise or organization than any other single factor.” Clearly, this applies to water supply utilities because their product—a safe and adequate water supply—is a critical component for the functioning of society. The need for effective strategies for contingencies is increasing. Many disasters do not make it to the front pages of newspapers or television news. Much organizational concern focuses on computer systems, but risk management programs should deal with the entire organization. Some reasons why risks are increasing are: size and complexity of systems and use of and reliance on technology is increasing, competitiveness and cost efficiency are decreasing margins and reserves, and buildings and infrastructure are deteriorating in many places due to deferred maintenance. Risk management programs cut across all kinds of organizations. According to Levitt (1997), who operates a firm in the area, railways have compiled perhaps the greatest experience base in disaster planning. The defense industry also has significant experience in disaster planning, and (Gigliotti and Jason, 1991) is another good book with steps and examples about emergency planning. Obviously, utilities also have a wide range of collective experiences. This working paper presents a background discussion of risk management programs for water utilities. The goal of the paper is to review existing knowledge about risk management and related topics such as disaster planning and management, contingency planning, and emergency management. As is the case in other cross–cutting fields, risk management has overlapping and confusing terminology. For a convention, I will use risk management as the overall term