Full Title: How to Use Capital Funding to Build System Resilience, Reduce Risk, and Save Money
Author(s): Osmose
Publisher(s): Osmose
Publication Date: May 21, 2022
Full Text: Download Resource
Description (excerpt):
Steel does not last forever. A significant percentage of the steel utility structures in service are over 40 years old, an age at which
the cumulative effects of corrosion begin to take their toll. Traditionally, utilities have not included below-grade assessments in their maintenance programs, resulting in unseen and unidentified hazards. These facts, combined with environmental impacts, have put America’s steel transmission structures, and the country’s power grid, at increasing risk.
Steel structure assessment and remediation results in structures that are more resilient in weather events, last significantly longer, and cost less to maintain. The outcome is an improved and longer lasting asset that clearly meets the Generally Accepted Accounting Principles (GAAP) and IRS definitions of betterment. If investments result in betterment, the appropriate accounting approach is to capitalize the cost of those investments, and depreciate the capitalized costs over the life of the asset. Such programs are a very cost effective alternative to leaving structures in place to fail and then dealing with the huge replacement costs and necessary line outages that accompany such replacements.