Quantifying Electrical Distribution Risk Canadian Airports Electrical Association – CANEW 2014 DateOctober 1 st, 2014 AuthorShawn BALDING

Shawn Balding Offer Manager for Schneider Electric Canada Field Services Journeyman Electrician Electrical Engineer Previously was the North American R&D Hardware manager for Power Logic and ION meter development, as well as chair and risk assessor of a global offer safety committee 2

How do you quantify and communicate your electrical distribution risk to management? 3

Risk Reaction Spectrum 4 Without a structure or framework in place, everyone will have their own interpretation of any given risk. The Challenge in Quantifying Risk

The Challenge in Communicating Risk 5

Enterprise Risk Management A framework for identifying, communicating, and managing risks and opportunities. 6

A Justification & Application Guide to Deploying ERM at Airports 7

Excerpt from example ERM Policy “…We will involve, empower, and give ownership to all of our staff in the identification and management of risk.” 8

Example Airport Risk Tolerance Map 9

Example Airport Risk Appetite Statements 10 “If it ain’t broke, don’t fix it.”

Example Airport Risk Tolerance Map 11

12 The aging infrastructure install base and the retiring generation of knowledge in maintaining it. This is particularly true in electrical distribution. Drivers in Operational Risk

Leading Cause of Unscheduled Downtime Aging equipment (45%) and insufficient maintenance (28%) are the leading causes of unscheduled downtime, according to respondents. 13 *Source: PLANT ENGINEERING Maintenance Study February 2014 (n=317)

Average Age of Installed Electrical Distribution Systems 39% of the installation base is more than 20 Years old* 14 *Source: ARC Strategies Survey March 2011

15 The aging infrastructure install base and the retiring generation of knowledge in maintaining it. This is particularly true in electrical distribution. Drivers in Operational Risk

Age Distribution of Canada’s Population 36% of the population base is over 50* 16 *Source: Stats Canada

Age Distribution of Canada’s Population For 2014, 1100 Canadians will turn 65 years old everyday* This will increase steadily over the next fourteen years to 1450 per day in *Extrapolation from Stats Canada Census Data

Example Age Distribution of the Labour Force – Public Service Knowledge Management challenges have never been greater and will continue to grow 18 *Source: Treasury Board of Canada Population

Industry Experience Q: For approximately how long have you worked in a plant or engineering-related position? 33% of plant maintenance staff have 30 or more years of experience* 19 *Source: PLANT ENGINEERING Maintenance Study February 2014 (n=317)

20 The equipment is going to keep getting older and the people with the bulk of the tacit knowledge in how to maintain it are going to keep retiring. Drivers in Operational Risk

Enterprise Risk Management A framework for identifying, communicating, and managing risks and opportunities. This may be how you decide to, or how you are asked to, manage these drivers of Operational Risk. 21

ERM Requires… A mature, robust, & sustainable method for risk identification & prioritization > Identification & Prioritization  Identified risks should be assessed in terms of financial and non-financial impact and likelihood to enable prioritization and focus of resources for mitigation and control. A breadth of functional expertise is critical to the risk identification and assessment process, incorporating operational excellence, strategic decision- making, technical knowledge, and the external operating environment. 22

ERM Requires… A mature, robust, & sustainable method for risk identification & prioritization > Sustainable means that it can survive the experience lost through retirement.. 23

24 What does this look like for my Airport? “Should risk assessment demand quantitative analysis, it is likely that additional expertise will be required.”

25 Operational Risk Identification IEEE Based Age and Stress Level Analysis Software Based Risk Assessment & Criticality Mapping Recommended Actions An Advantage Electrical Distribution Assessment (MP4) is:

26 How Mature is your Risk Identification and Prioritization? ACRP 74 Appendix B

Leading Cause of Unscheduled Downtime Aging equipment (45%) and insufficient maintenance (28%) are the leading causes of unscheduled downtime, according to respondents. 27 *Source: PLANT ENGINEERING Maintenance Study February 2014

How You Plan to Reduce Unscheduled Downtime Thirty-one percent of respondents mentioned implementing better preventive maintenance in order to decrease future unscheduled downtime. 28 *Source: PLANT ENGINEERING Maintenance Study February 2014

How You Plan to Reduce Unscheduled Downtime An Advantage Electrical Distribution Assessment (MP4) produces four plans Maintenance Plan Modernisation Plan Monitoring Plan Management Plan 29 *Source: PLANT ENGINEERING Maintenance Study February 2014

30 Step 1Step 3Step 2Step 4 Operational Risk Identification Identify Unwanted Events Map Critical Distribution Points Analyze the Distribution System Asset Life Cycle Operational Stress Safety/Regulatory/ Design Issues Operational Risk Assessment Reliability/ Unavailability Mapping Criticality Mapping Recommended Actions Addressing Deficiencies Four Plans for Improvement

Management Plan Assessment Recommendations Monitoring Plan System Productivity/ Reliability Time Initial Performance What you need from your system Maintenance Plan Modernisation Plan Date of Advantage Assessment (MP4) Original Installation Deficiency Corrections Performance Degradation 31

How do you quantify and communicate your electrical distribution risk to management? 32

33 Questions?