Case study:

Helping utilities to apply optimisation techniques in regulatory business planning

At the applied maths end of the operational research spectrum, Hartley McMaster has been using optimisation techniques to support the regulatory business planning process in the water industry, and asset investment planning in other parts of the utilities sector, for over 20 years.

The latest incarnation of this is our most recent work for a regional UK water company, supporting their regulatory business planning process.

“The company has been using optimisation techniques to support the utilities sector for over 20 years.”

The extensive work in asset management and investment planning for utility companies has led to the development of three Hartley McMaster software tools:

Investment Optimisation Engine (IOE)
A portfolio selection component that users can embed in their own investment selection systems.

Investment Optimiser Plus (IO+)
An application that allows users to set up and solve portfolio optimisation problems using IOE to solve the optimisation problem.

IO Solution Manager
An application used to collect asset investment data (performance, costs, etc.) for subsequent processing by IO+.

These tools allow utilities companies to:

  • Calculate the monetary benefits of individual asset investments by combining predicted (modelled) or manually estimated service level improvements with Willingness-to-Pay and other valuation data
  • Combine monetary benefits and costs to determine overall values for individual investment options
  • Determine the optimum portfolio of investments that maximises net monetary value for a portfolio whilst meeting financial and performance constraints (targets)

Almost invariably these tools need to be customised, and for this particular UK water company it involved understanding their requirements, and customising and integrating the IO+ and IO Solution Manager into their systems and processes. Hartley McMaster have also trained the local users and provided general support during their planning exercise.

Learn more about Hartley McMaster’s solutions >>

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