We asked Ari Raivetz, our CEO, to put himself in the shoes of a water/wastewater utility director and explain why he’d use Transcend:
Put on your hat as Public Works Director of a public or private water/wastewater utility. You're responsible for the wastewater management plan. What is of interest to you? What are the outcomes you're looking for when you're doing this type of planning work?
I think about this like a financial investor, actually. Whether I'm a public utility or a private investor, it's a financial decision. I'm going to build a new asset or upgrade existing ones, and I have to look at what the financial return is going to be on that asset.
So what I want to do at the beginning of the process is to evaluate not just the capital cost of doing something, but the operating cost over the lifecycle of the asset. And very important in today's world, I also want to evaluate the carbon footprint embedded for the construction as well as throughout the operating cycle of that facility. That's the first piece of it.
Then, I want to include all the uncertainties that might impact the design and the options we have to address them. If we think about the world today - weather patterns, population growth, and lots of other rapidly changing things - versus five years ago, versus ten, versus 15, there's a lot of things today that we couldn't have predicted!
So, let's look at uncertainty analysis around those kinds of things. And in water terms, that's flow rate, it's the difference between average and peaks. And it's loading - not just about how contaminated the water is going in, but it's also new environmental regulations that come in about how much stuff I have to take out. I want to account for all those things in my uncertainty analysis. And those are the two critical factors I would say.
And I would say, well, that's why your consulting firms exist. That's what they do for you. So why use Transcend?
The typical way that a consulting firm bills for these kinds of things is based on billable hours. So, whether it's a fixed price contract or they're literally billing by the hour, that's how they think about it. And because of that, they're really limited in what they can evaluate. So, all of that breadth of uncertainty that I just talked about, that could be 40 or 50 different combinations of flows and loads and effluent requirements, temperatures... it could also be to find the optimal capital, operating cost, and carbon footprint solution you might want to evaluate 20 different design configurations.
And so now we're talking about 20 times 40 - 800 different potential options! Maybe you're going to get two or three in a typical feasibility study, but when you use a tool like Transcend, you can literally - and this is kind of extreme - but you could get 800 different options. 40 different combinations of flows and loads and temperatures for each one being a different process configuration, whether that's a technology or a different process set up, and many other options.
Well, if Transcend software is generating a preliminary study or preliminary analysis of those options, is it still valuable if you take it to the next step of the project? Is this data useful other than just saying, yeah, I think that's the one we want, now consulting firm do your work?
I would take a step back because I think that there is a lot of value that the engineering consultants bring to the process. This is a tool that can be used by them as the partner of me, as the asset owner or utility to do that same feasibility work and that same planning work much more efficiently with much greater breadth.
They can run the first 20 different scenarios, look at those results, drive some conclusions based on all their experience and their past history with this particular facility, and then now run a new set of scenarios on a narrower set and ultimately get to a better answer by leveraging their expertise combined with a software tool like this. This is what Transcend was built for.
And then it's exactly what you just got to, which is taking a step forward towards that continuity of design. So once I'm done and I've kind of narrowed in, I'm not starting from scratch again - which when you talk to utilities that are going through capital planning, they often lament this. We've heard this a lot, that after the planning is done, then they're starting over again.
With our software, you have a digital representation of the plant in a simulation model, in a 3D building information model (BIM model), a full equipment list, and a civil bill of quantities that you can then use and get into a more detailed design phases.
Got it. So back to the first statement that you made, which is you're thinking about it from a financial from an investment point of view, putting your investor hat on at the end of this process - when you compare how a master plan or feasibility study is done today, versus what happens at the end with Transcend, one for one, what are the biggest differences? What are the ultimate outcomes that the utility is getting when someone is using Transcend software versus the traditional process?
I think the first one is the most important. You're going to evaluate many more options for this plan than you would in the traditional process. So if I'm a public utility and I ultimately have to take this master plan to a rate case in order to justify my rates in the future, I can show them that I've evaluated a lot of different options, and that's why this is the best one.
The second is not just the options I've evaluated, but the uncertainty. In a traditional process, you're going to have a few different peaks and loading scenarios and environmental regulation changes that you might look at. But here we can have an exponentially greater number that we've looked at. And then when I go to justify my rates or justify my capital investments, to my board, if I'm private, I can say we've looked at all this uncertainty. We didn't do that in the past because we were doing it a more traditional way, and now we're doing it with software - a new way. So the future is now and we're evaluating all those options.
The third is I'm getting more detail, which is actually really important. If you think about it going back to the beginning, because you're a financial investor, you ultimately have to sell this investment to somebody.
Whether it's the public or a board if you're a private company, how you visually show this facility is critical, and the software is producing 3D models that give a visual representation, which is typically not done today. It's quite expensive and costs many engineering hours to do that, and those hours can be used in more valuable ways during the master planning and capital planning process.
The last question I have is around risk. How does this help in risk calculation or the reduction of potential risk for either the asset owner or the consulting firm?
That's where that uncertainty analysis comes in. Here's an example.
When treatment facilities are built engineers often add a buffer zone. So an extra 20 or 30% of volume, which is more concrete, more steel, and significant investment just to account for uncertainty. Actually, I think it was WEF who just completed a really big uncertainty analysis that had been going on for almost ten years - all this workaround how to measure uncertainty and wastewater treatment & plant design.
So you have all this uncertainty that's creating risk, and with Transcend you can actually get specific. So you can say with this process technology, at this flow rate, with this effluent requirement, would that amount of concrete be sufficient? Would that equipment be sufficient? And you don't have to overcompensate or undercompensate for those risks. You can get much more precise about it. So you can essentially de-risk the investment from both a non-compliance point of view and a cost point of view.
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