Optimal Management of Aging Assets in Electric Utility Systems

This paper presents a unified methodology for managing an inventory of aging assets in electric utility systems. The inventory may include spares. The methodology identifies the least-cost stationary policy over an infinite horizon. The stationary policy is a state-dependent decision about a particular asset. The choice is typically among the alternatives repair, rejuvenate, replace, test, and do nothing. The state of the asset is uncertain, as well as the outcomes of any tests, and the event that the asset fails at any particular age. The costs include failure cost, replacement cost, repair cost, test cost, and operating cost. The stationary policy is influenced by the presence of spares. The value of acquiring spares is given by the methodology. The structure of the methodology is stochastic optimal control.