In assessing the overall consequences of asset failure, the utility should consider all the costs associated with the categories above. The assessment can be a simple ranking of the consequences from 1 to 5 or 1 to 10. In this type of structure, the assets can be ranked against each other, but a specific monetary amount does not need to be calculated for the failure of each asset. For example, a major distribution line that has the potential to cause major failures and social and collateral damage and legal consequences might be ranked "5" while a small valve serving a residential area that has low costs of repair and essentially little or no social or environmental consequence would be given a ranking of "1." In this way, there is a qualitative assessment of which assets have a greater consequence than others, but no specific quantitative assessment is performed.
An example of a rating scale using 1 to 5 is shown below.
Similar to probability of failure ratings, the consequence ratings can be developed by gathering people who are knowledgeable about the assets together in a room to determine the potential consequences of asset failure. This ranking does not have to be a long, time-consuming activity. A small utility should be able to complete this process by meeting a few times for a few hours. A larger utility may take a little longer.
Again, it is important to remember that the assets should be ranked relative to each other. The rankings should not be compared to other utilities; this ranking is meant as an internal tool only. The goal is to determine which of your assets will result in serious consequences for the utility if they fail.
Once the assets are ranked according to the chosen scale, the results can be reviewed to see if they make sense. If you believe the assets that are ranked highest in terms of consequence of failure are the ones for which the consequence is the greatest, then the results are fine for a starting point. If not, then adjustments can be made until the rankings make sense.
A more sophisticated approach can be used, but a simple ranking like 1 to 5 works very well and will not take a lot of time to accomplish. From an implementation perspective, it may be easiest to use the same scale for both consequence and probability of failure, but it is not necessary to do it this way. If the utility wishes to use a 1 to 5 ranking for probability of failure and a 1 to 10 ranking for consequence of failure, or vice versa, that is fine.