Asset risk management (ARM) within the monopoly network companies
Ofgem’s policy is to not become involved in the day to day asset management of each company as our view is that such decisions are best taken by network companies.
Therefore, Ofgem sought a process by which it could gain assurance about the practices and procedures being used by the companies in the management of their infrastructure assets. A survey to assess the processes of each company was completed in 2002 resulting in the development of Ofgem’s bespoke asset risk management survey (ARM survey). This was designed to probe and report across three key headline topics: business strategy, network strategy and asset life-cycle management. This survey provided valuable information in understanding how the companies carry out ARM and highlighted areas for future action.
The experience gained by Ofgem was subsequently fed into a parallel initiative being led by the Institute of Asset Management – to develop Publicly Available Specification (PAS) 55 published by the British Standards Institution (BSI).
In light of this and Ofgem’s desire to reduce the burden of regulation, the existing strategy was reviewed resulting in a preference for each network company to undertake independent PAS 55 certification on a voluntary basis and for their certification status to be made publicly known.
Each company has now reported on its progress towards certification and all are expected to be accredited to BSI-PAS 55 by April 2008.