Condition Health Indices

and Probabilities of
Failure

Thor Hjartarson
Principal Engineer, Asset
Management

5th Annual Weidmann-ACTI

Technical Conference
Albuquerque, New Mexico
13-15 Nov. 2006

Kinectrics Inc.

Formerly the R&D wing of Ontario Hydro, Canadas largest electrical

utility, for 90 years.
1999 province of Ontario started deregulation process of industry.
Established as a separate company on 8/2/00.

Kinectrics Businesses

Comprehensive Solutions in:

Generation
Transmission and Distribution
Environmental Solutions
Transmission Systems

Small Hydro

Electrical
Testing

Kinectrics Markets
North American
Energy Companies
Over 250 Large Utilities

North American Energy Users

Over 1000 Large Organizations

North American OEMs, Engineering

Services Companies
Over 50 Large Companies

Global Energy
Companies & OEMs
Over 20 Large Organizations

Electrical Systems Capability

Asset Management
Insulation Diagnostics & Condition
Assessment
Power System Performance
Power Quality Services
Protective Relaying & Telecommunications
Electromagnetic Compatibility, Radio & TV
Interference
Fiber Optic Cable & Hardware Testing
Design & Maintenance Optimization
Safety Equipment Insulation Testing
Electrical Systems Testing
Products

High Voltage and High Current Testing

Conduct testing for

certification, product
development, and
failure analysis
Identify if products
operate to
standard/nonstandard
requirements

Asset Management
Asset management is simply the optimal way of managing assets to achieve desired outcome
and is defined as:
Systematic and coordinated activities and practices through which an organization optimally manages its
assets, and their associated performance, risks and expenditures over their life cycle for the purpose
of achieving its organizational strategic plan

Holistic
Sustainable

Systematic
AM Approach

Optimal

Systemic
Risk Based

The successful implementation of asset management requires a multi-dimensional approach

BSI Standard PAS - 55

Health Indexing of Operational Assets

Establishes objective, verifiable, and

measurable condition criteria other than age
Provides data useful for trending asset
condition
Quantifies condition of all types of
operational assets
Describes single assets or populations of
widely-distributed assets

How Health Indexing has Evolved

Since Original Health Index Project
with Hydro One in 2002, over 20
companies have implemented the
methodology
About 10 technical papers
have been published on the
subject and presented at key
conferences
North America (examples)

Internationally (examples)

United Utilities, UK
ESB, Ireland
Central Networks , UK
Scottish and Southern Energy, UK
EDF Energy, UK
North Ireland Electricity
Western Power Distribution, UK
Hydro OGK, Russia
Yakutskenergo, Russia

Exelon
Idaho Power
Powerstream, Ontario
Toronto Hydro
Hydro One Inc, Ontario
British Columbia Transmission Company
BC Hydro
Hydro Ottawa, Ontario
New York Power Authority
Yukon Energy Corporation
Great Lakes Power, Ontario
Newfoundland and Labrador Hydro
ENMAX Corporation, Alberta
Pacificorp, Oregon, USA
CEATI, Utility Research Group

Implementation Where
Number of Companies in Canada, United States, United
Kingdom and Ireland that have implemented the
Health Index Methodology
40

35

Number of Companies

35
30
25
20
20
15
9

10
5

0
2002

2003

2004
Year

2005

2006

Health Index Formulation

Best Practice
Maintenance
Processes

Corporate Internal
Knowledge
Key Staff

Health Index
Knowledge and
Experience

Determination of
Measurable Asset
End-of-Life
Criteria

Health Index Formulation

Designated Subject
Matter Experts

Corporate
Maintenance
Standards

Transformer Health Index Formulation

Transformer Testing:
Weight

Transformer Inspections:
Transformer Visual
Inspection Criteria
Bushing Condition
Main Tank/ Controls
Conservator
Oil Leaks
Radiator/Cooling
Overall Physical

Weight
1
1
1
1
1
2

4
4

Transformer

Age Information

4
2
3
3
3

Health
Index

Tap Changer Criteria:

Example: Subject to
Discussion with Client

Tap Changer Criteria

Tank Condition
Gaskets/Seals
Control & Mechanism
Tank Leaks
Overall Physical
DGA, Metal Content

Transformer Testing
Analysis Criteria
DGA Analysis
Furan Analysis

Weight
1
1
1
1
3
3

Winding Doble Test

Thermograph
Sound Signature
Frequency Response
Standard Oil Test

Typical Health Index Condition Rating

Condition
Rating

Description

Bushings/Support Insulators are not broken and are free of chips, radial cracks,
flashover burns, copper splash and copper wash. Cementing and fasteners are
secure.

Bushings/Support Insulators are not broken, however there are some minor
chips and cracks. No flashover burns or copper splash or copper wash.
Cementing and fasteners are secure.

Bushings/Support Insulators are not broken, however there are some major
chips and cracks. Some evidence of flashover burns or copper splash or copper
wash. Cementing and fasteners are secure.

Bushings/Support Insulators are broken/damaged, or cementing or fasteners are

not secure.

Bushings/Support Insulators, cementing or fasteners are broken/damaged

beyond repair.

Asset Evaluations Health Index

Example of DGA Scoring

Condition
Rating
A
B
C
D
E

Description
DGA overall factor is less than 1.2
DGA overall factor between 1.2 and 1.5
DGA overall factor is between 1.5 and 2.0
DGA overall factor is between 2.0 and 3.0
DGA overall factor is greater than 3.0

Where the DGA overall factor is the weighted average of the following gas scores:
Scores
H2
CH4
C2H6
C2H4
C2H2
CO
CO2

1
<=100
<=120
<=50
<=65
<=3
<=700
<=3000

2
<=200
<=150
<=100
<=100
<=10
<=800
<=3500

3
<=300
<=200
<=150
<=150
<=50
<=900
<=4000

4
<=500
<=400
<=250
<=250
<=100
<=1100
<=4500

5
<=700
<=600
<=500
<=500
<=200
<=1300
<=5000

6
>700
>600
>500
>500
>200
>1300
>5000

Weight
2
3
3
3
5
1
1

* See also IEEE standard C57.104-1991 ; IEEE Guide for the Interpretation of Gases Generated in Oil-Immersed
Transformers The above formulation is an advanced development from this standard.

Typical Health Index Results

Health Index Results

Asset Group

Number of Units

200

169

0.4% 4.2%

150

11.9%

89

100
37

50
1

13

54.7%

28.8%

0
Very Poor
0 - 30

Poor
30 - 50

Fair
50 - 70

Good
70 - 85

Very Good
85 - 100

Health Index Categories

Very Poor

Health
Index

Condition

85 - 100

Very
Good

As new

Normal maintenance

70 - 85

Good

More than 15 years

Normal maintenance

50 - 70

Fair

5 to 15 years

30 - 50

Poor

Less than 5 years

0 - 30

Very Poor

At end-of-life

Life remaining

Poor

Fair

Good

Very Good

Requirements

Increase diagnostic testing, possible remedial work

or replacement needed depending on criticality
Start planning process to replace or rebuild
considering risk and consequences of failure
Immediately assess risk; replace or rebuild based
on assessment

Typical Asset Life Curves

100.0%
Ratio of Failed (End-of-Life)
Assets

Based on:
Industry knowledge
Manufacturer Expectations
Benchmark Failure Data
Utility Specific Data

80.0%
60.0%

Mean Life of Asset

40.0%
20.0%
0.0%
0

10

20

30

40

50

60

70

80

Limitations:
Averages, not asset specific
Often limited failure data
Failure data may be irrelevant
Location, Environment etc.
may not be considered

Probability of Failure

Age (years)

20.0%
18.0%
16.0%
14.0%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
0

10

20

30

40
Age (years)

50

60

70

80

From Condition to Probability of Failure

Very Good

Ratio of Failed (End-of-Life)

Assets

Correlating Health Index results to

Probability of Failure:
HI Formulation Design
Estimate Effective Age
Estimate Probability of Failure
Adjust with Increasing Data

100.0%
90.0%
80.0%
70.0%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%

Probability of Failure

25.0%

Fair

Poor

Very Poor

Mean Life of Asset

Furthermore:
Rate of Deterioration
Remaining Life Determinations
Effect of Intervention Options
Asset Class Future Condition
Predictions

Good

10

Very Good

20

Good

30

40
50
Age (years)

Fair

60

Poor

70

80

Very Poor

20.0%
15.0%
10.0%
5.0%
0.0%
100

90

80

70

60

50

40

Health Index Score

30

20

10

Experience Health Index and Failure Rates

The original Health Index analysis and
experience 2-years later

Bi-Annual Failure Rate versus Age

Very Good
85 - 100

Good
70 - 85

46

60

Fair
50 - 70

Poor
30 - 50

Very Poor
0 - 30

Health Index

5%

Actual Failure Rate

4%

Fitted Curve

3%
2%
1%
0%
11-20

21-30

31-40

41-50

>50

Age Group

Bi-Annual Failure Rate versus Condition Category

Bi-Annual Failure Rate

239

1400
1200
1000
800
600
400
200
0

6%

0-10

Number of transformers

1321

Bi-Annual Failure Rate

The transformers found in Fair and Poor

condition were closely supervised immediately
following the original study
One-Third (33% - 20 units) of them failed or
reached end-of-life in the two year period and
had to be replaced some of the transformers
were not old at all
By planning these replacements instead of
waiting for them to fail had significant cost
savings and avoided large customer
interruptions

80%
70%
60%
50%
40%
30%
20%
10%
0%

Actual Failure Rate

Fitted Curve

100-85

84-70

69-50
Condition Category

49-30

29-0

Maintenance and The Life Curve

What is the Economic Life of an Asset?

Replacement asset

Existing asset

Replace when cost of existing asset

exceeds cost of new
Program Development Methodology

Optimizing Replacement Timing

Period of
Replacement
1
2
3
4
5
6
7
8
9
10

Total Annualized
Cost
$507,396
$263,231
$190,200
$165,670
$167,359
$189,597
$230,988
$291,146
$369,628
$465,646

Defining Costs
Capital and risk costs are expressed on an
annualized basis.
Risk cost is the probability of failure times the
consequence cost.
Probability increases with age
Consequence cost includes outage effects, repair cost,
etc.

The Asset Based Process

Risk Analysis

Asset
Demographics

Asset Condition

Consequence
Cost

Asset Life

Condition/Failure
Correlation

Asset Functionality

High
System Issues

Med

INCREASING
RISK-COST

Low

Asset Criticality

Good

Fair

Poor

Condition
Health
IndexIndex

Consequence
Costs

Intermediate Programs
Corporate Considerations
Corporate Values
Economic/Financial
Constraints
Environmental and Safety
Resource Capabilities
Regulatory Requirements
Superseding Programs
Benchmarking

Wood Poles

List

Underground Cables

List

Forestry
Stations

List
List

Metering
Demand Programs
Other

List
List
List

Optimal
Multi-Year
Overall
Sustainment
Program

Risk Matrix Example

Consequence
Costs

Circuit Breakers
HIGH

146

1,200,000

12

900,000

600,000

MEDIUM

350

24

8
300,000

LOW

150

12

High Risk-Cost,
Replace Immediately
-

GOOD /
FAIR
POOR /
VERY GOOD
VERY POOR
Health Index

15

30

800,000

600,000

600,000
400,000

400,000

200,000

200,000

15

30

45

Low Risk-Cost,
Delay Replacement

15

30

45

Medium Risk-Cost,
Plan Replacement

45

Example of Risk Matrix

Transformers
Risk Matrix
$7 million

Consequence Cost

$6 million
$5 million
$4 million
$3 million
$2 million

Transformer Population
Three-year program

$1 million
$0 million
0%

2%

4%

6%

8%

10%

Near-Term Failure Probability

12%

14%

Asset Sustainability

INCREASING
RISK-COST

Med

Outage

Low
Good

Fair

Poor

Condition
Health
IndexIndex

Failure History

Optimized Asset Program

Transformer Replacement/Rewind Program

$0

Year

10
5
0

Year of Spending

20
24

-4
-5
-6
-7

$200,000

15

20
16

$400,000

20

20
14

1
0
-1
-2
-3

20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25

Capital Cost

$600,000

Asset
Asset
Asset
Asset
Asset

30
25

20
12

Levelized Quantity
$800,000

40
35

20
10

6
5
4
3
2

20
08

Optimized Quantity

45

$M

Average Cost of Levelized program

$1,000,000

20
06

Optimized Cost

9
8
7

Quantity

$1,200,000

Safety

Environment
Image

20
22

Maintenance
Obsolescence

High

20
20

Age

Asset Criticality
Consequence Cost

20
18

Asset Condition
Health Index

Consequence
Cost

Risk Matrix

5
4
3
2
1

Implementation The 9 Steps

1.

The Company Vision

Understanding the Requirements

5.

Benchmark and industry data; facilitated

assessments with company experts, sample
surveys.

Every company is different. Where does the

company want to go? What are the main
concerns and challenges?

2.

6.

Methodology Customization
Company Buy-In

7.

Produce Results
Long term Asset Management Plan produced,
report, presentation of findings.

Assessment of Information
Requirements
8.

Map what type of information is required for

successful implementation

4.

Model According to Methodology Decided

Application of the methodology. Data and
assessments used to produce first set of results review with company

Adjust the methodology to the specific

vision and challenges of the company get
agreement on approach

3.

Devise Methods to Bridge Data Gaps

On-Going Process Implementation

Planning the future implementing the process so
it becomes a part of the operation projects to
improve information.

Collect the Attainable Data

Available data collected from company
sources and databases

9.

Software Modules/Tools Adaptation

Evaluate what tools will be needed and acquire
them.

The Tasks
1. , 2. and 3.

Timeline Months

4. and 5.

6. and 7.

8. and 9.
4

What are the Benefits?

1.

Defendable Asset Management Plan

Optimized life cycle plan developed based on
the real asset sustainability
This has proven essential for rate application
support
E.g. Results for a company showed that
expenditures needed for an asset group would
greatly increase in 5 years this need was
identified in rate application allowing for timely
and adequate income adjustments to face
these unavoidable costs.

2.

3.

Asset management plan based on set reliability

targets, and with successful implementation these
targets should be reached.
Drivers for plan based on current and projected
condition allowing for timely interventions before
failures occur instead of looking solely at past
performance statistics.
E.g. Results for a company showed a number of
power transformers in bad condition half of
them were replaced within the next 2-3 years
avoiding imminent failures with significant
customer interruptions.

Costs and Income

More planned and less unplanned costs
resulting in significantly lower overall
expenditures.
When increased expenditures are needed they
are foreseen allowing for better defined income
requirements.
Costs are driven by asset needs not by
historical needs or resource availability needs.
E.g. Company examining their maintenance
policies was able to decrease costs by 10%
without affecting performance.

Increasingly standards on asset management

planning have been implemented the most
notable is British Standard PAS 55

Performance and Reliability

4.

On-Going Operation and Management

Long term resource needs are known and
potential over-staffing or under-staffing can be
addressed in a timely manner
Gaps are addressed and plans put in place to
start collecting information during regular
maintenance activities
Process is kept live and with increasingly better
information it will become a vital executive tool.
E.g. Company that has implemented this process
has seen their asset and system needs better
identified and been able to prioritize projects and
resources resulting in more efficient management
and understanding.

Thank You!
Thor Hjartarson
Asset Management
Phone:
416.207.5944
Mobile: 289.242.5454
thor.hjartarson@kinectrics.com

Russell Pennington
Director, Business Development
Phone:
704.948.4118
Mobile: 704.773.0737
russell.pennington@kinectrics.com

www.kinectrics.com