Social Impacts or Costs: When an asset fails, there may be an inconvenience to the customer. In some cases, this inconvenience may be minor, while in others it may be much higher. If a pipe must be repaired in a residential area, there may be a few customers who are out of water for a short period of time. This outage would constitute an inconvenience, but would not be a severe situation. On the other hand, if the utility has very few isolation valves so that any repair requires the whole utility to be shut down, the inconvenience to the customers is much greater. In the first case (simple repair in residential area that shuts off a few customers), the consequence of failure related to the social impact is low. In the second case where the whole utility must be shut down to make any repair, the social impact is much higher. When framed in terms of inconvenience, social costs appear insignificant, but to your customers, the inconvenience may be extremely important and may impact how they feel about the utility in general. If customers have a negative impression of the utility, it can impact the ability to raise revenue.

Social impacts may be hard to quantify in dollar terms, but they need to be included in the analysis of consequence of failure in some way, either quantitative or qualitative.

Costs or Impacts Related to Collateral Damage Caused by the Failure: In some cases, when an asset fails, damage may be caused to other assets within the utility or to assets unrelated to the water or wastewater utility. An example of this type of damage might include a water line failure causing a sinkhole which causes major sections of a road to collapse or damages the foundation of a building. In addition, cars may be damaged in the sinkhole. The damage from the pipe failure without the sinkhole would be fairly minimal. With the sinkhole, there is collateral damage including the road, the building, or cars. Another example would be a sewer pipe failure that leaks sewage into a home or yard or onto a schoolyard or playground. In this case, a significant amount of cleaning will be required to restore the property. The utility will be held responsible for this collateral damage, so the costs related to this type of failure need to be considered in the assessment of costs of failure. Collateral damage may also occur within a utility. If a sewer collapses, debris may be delivered to the wastewater treatment plant which may damage motors or other moving parts.

Legal Costs Associated with Failure: In some cases, individuals or businesses may sue the utility for damages or injuries caused by an asset failure. These costs would be in addition to the costs of repairing and replacing damaged property or other assets. For example, imagine a driver is driving down the road and his car falls into a sinkhole caused by a water line failure, and the driver sustains an injury. The driver may sue the utility to cover the costs associated with the injury and loss of work time. Utilities may also be sued for causing significant environmental damage.