3.5 What is the Remaining Life of My Assets?

All assets will eventually reach the end of their useful life. Some will reach this point sooner than others. In addition, depending on the type of asset, it will either reach that point through amount of use or length of service. For example, a pump will wear out sooner if it is used more and will last longer if it is used less. The actual age of the pump is not as important as the amount of work the pump has done. On the other hand, the life expectancy of pipe assets is based more on the length of time in the ground. If a pipe is in the ground for decades, it has had considerable time to contact the soil around it and the water within it and may start to corrode.

There are many additional factors that will affect how much life a given asset has. Factors such as poor installation, defective materials, poor maintenance, and corrosive environment will shorten an asset's life, while factors such as good installation practices, high quality materials, proper routine and preventative maintenance, and non-corrosive environment will tend to lengthen an asset's life. Because of these site-specific characteristics, asset life must be viewed within the local context and the particular conditions of that utility. Cast Iron pipe may last 100 years at one facility and 60 years at another. It is best to make judgments on asset life based on past experience, utility knowledge, existing and future conditions, prior and future operation and maintenance, and similar factors in determining useful life. In the absence of any better information, a utility can use standard default values as a starting point. These default values can be obtained from manufacturers and industry guides. However, over time, the utility should use its own experiences to refine the useful lives.

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For example, if a given water utility routinely replaced its chlorinator every 5 years because that was as long as that asset lasted, then 5 years should be used as chlorinator life, instead of a standard default value. However, if the utility has had its pipe in the ground for only 20 years and has no knowledge of how long it could be expected to last, it could use a standard default value of 50 to 75 years. However, as time goes on, if the utility did not notice any reduction in the integrity of the pipe after 40 years, the useful life could be increased from 50 years to 75 or 100 years. If the utility started seeing a reduction in the pipe integrity (numerous breaks due to corrosion) at 40 years, it would keep the useful life closer to 50.

Additional information regarding estimated default values for useful lives is contained in Appendix A.