The Hidden Cost of Deferred Maintenance

Moonshot team members working on an asset inventory during a site visit

This month’s blog is all about “The Hidden Costs of Deferred Maintenance” in the context of smaller utilities. Though paying for maintenance projects before they are needed can feel daunting or even unnecessary, getting maintenance projects taken care of now can ultimately save utilities lots of money in the future. We sat down with two of our key Moonshot team members to talk through the benefits of a preventative maintenance plan and how they might go about establishing one.  

The Consequences of Deferred Maintenance 

If there’s anything predictable about work at a utility, it’s that nothing is predictable. Smaller to mid-size utilities can struggle to keep up with preventative maintenance, or even have a complete list of the equipment they have and what sorts of repairs are needed. “When your system is breaking down every day, all you are doing is firefighting,” says Alex McPhail, who previously served as the Water and Sanitation Specialist at the World Bank and Board Director for DC Water. “You can’t plan ahead, you can’t communicate with your board, you can’t keep the plant running.”  

Deferred maintenance is also often extremely costly. The urgency of an emergency repair results in quick and pressured decision making, and can be up to 5X what it would have cost to simply purchase new equipment ahead of time. “There’s a lot of costs associated with waiting for things to break,” says Nick Meurer, PRESERVE’s technical expert. “Instead of saving that money for emergencies, allocate a certain amount per month towards preventative maintenance.”  

The Importance of Establishing a Preventative Maintenance Plan 

Both McPhail and Meurer agree that taking the time to establish a preventative maintenance plan saves money, headaches, and the opportunity for utility managers to get back to managing. Not only are preventative maintenance plans useful, in some cases they may be required. If you are working on getting out from under a consent order, you NEED to show that you have a preventative maintenance plan in order to move forward. Additionally, there are huge long-term environmental benefits to establishing a preventative maintenance plan. “The whole reason that we are in this business is that everyone deserves clean water, and to preserve the environment while we are here,” says McPhail. “Preventative maintenance plans allow you to think about the condition of your equipment, which ultimately serves the environmental goals of the utility.”  

Steps to Creating a Preventative Maintenance Plan 

Based on their experiences on site visits and in their own work with utilities, McPhail and Meurer recommended a few key steps smaller utilities might take when going about conducting a preventative maintenance plan.  

Step 1: Create an Asset Inventory: Make a list of what you have to maintain, where it is, a description of its use, its condition, date of installation, estimated remaining useful life, and identifying information like the manufacturer's information and serial number if needed. Meurer and our Moonshot facilitators are developing a spreadsheet template to help with this inventory. “The key to remember is to have it in writing,” says Meurer. “Don’t assume this information will just stay in your head.” McPhail also mentioned looking into resources like Automatic Metering Infrastructure (AMI), GPS marking of assets, or even asset management tools currently being developed with AI to make this process easier. “There’s a lot of value in knowing everything you own and where it all is,” says McPhail. “That allows you to know what to do with it.”  

Step 2: Create a Preventative Maintenance Plan: Once you have a list of everything you own and information about its use, your next step is creating a maintenance overview for each asset. McPhail and Meurer recommend that this includes a work description, an expected maintenance timeline and frequency, and then a maintenance date schedule and date completed, before ending with the next due date and who it should be assigned to. Be sure to review the manufacturer's recommendations for some of this information, though much of it is institutional knowledge as well. Moonshot has developed spreadsheets with these categories that allow you to easily review by date your next upcoming maintenance plans, and generally get a better handle on when and how these events should occur.  

A few critical steps to make sure these things happen:  

1. Someone has to be in charge of monitoring the plan to ensure it is getting done. As with Step 1, documentation MUST be present. If things aren’t in writing, it WILL be forgotten.  

2. Consider contracting some maintenance out: In the case of more specialized equipment that might not fall under traditional preventative maintenance (such as sensors, electrical equipment, generators and lab equipment) you might look into purchasing external maintenance plans. Service plans might also be a consideration as you evaluate your assets.  

3. Utilities really need to be an advocate for maintenance in their budget planning. The amounts that smaller utilities put in for maintenance are not often realistic. At the time of budgeting, it’s important to make a big push for maintenance now to save money later. 

Meurer and McPhail advise blocking a few days to make this a priority, ultimately saving a lot of money in the long term. And as always, Moonshot is here to help! We are developing interactive tools utilities can download, and with exciting emerging asset management technologies there are lots of possibilities for this process to be streamlined. 

As our cohorts continue to think about establishing a UPM mindset, we are all about quick wins and big picture solutions. A preventative maintenance plan to avoid deferred maintenance offers you both, and Moonshot has the resources to help. Please reach out if you’d like to talk further!