Why utilities struggle to implement service levels (and how to actually do it)

To assist utilities in better understanding, developing, and implementing service levels, AWWA has released two technical reports to guide utilities in structuring a practical service level system.

“Elevating Levels of Service: From Development to Maturity” presents seven case studies of utilities at various stages of service level maturity, while “Levels of Service Metrics – Guidance for Water Sector Utilities” outlines a practical framework utilities can use to define service levels and measure performance.

“Levels of Service give utilities a practical way to connect daily operations, maintenance, and capital planning to clear service expectations,” said Erin McLachlan Sanchez, principal asset manager at Stantec Consulting and chair of the Levels of Service Subcommittee of the Asset Management Committee at AWWA. “When used as part of an asset management program, they help staff prioritize work, manage risk and costs, and consistently deliver the level of service customers and stakeholders expect.”

Developing meaningful service levels — often referred to as Levels of Service or LoS — requires understanding what customers and stakeholders value. Service levels are an integral part of utility operations and asset management; and they support a utility’s ability to communicate, make decisions, and continuously improve performance.

“Elevating Levels of Service: From Development to Maturity” features case studies of utilities that capture current service level metrics, their plan for improving maturity, and what they have learned along the way. This report, developed by the Levels of Service Subcommittee, encourages utilities to identify, establish, commit to, and mature their service levels.

One of the case studies features Minneapolis Water Works, which developed its service levels in 2020. The utility integrates service levels into its daily work and decision-making. During the budget process, Minneapolis uses its service level metrics to communicate with leadership about the impact of budget requests. They also use their monthly financial meetings to review and discuss service level measures related to the utility’s financial sustainability and customer affordability.

Minneapolis has identified and documented service levels for six categories of service and tracks progress through 30 performance measures. For each category, Minneapolis uses one or two externally facing measures that are used to communicate progress with stakeholders and its governing body. The other performance measures are internally facing; they may provide information on an aspect of the service level or they are technical, making them well-suited for utility staff to understand how to achieve the performance measure targets in the six service level categories. Minneapolis uses many of the AWWA Benchmarking Survey’s performance indicators to track its service level performance.

“Greater transparency can grow community involvement and build support for the decision-making process and future system priorities,” said Brett Anderson, business operations manager at Minneapolis Water Works.

“Levels of Service Metrics – Guidance for Water Sector Utilities” shows how engaging customers, aligning staff, and tracking performance help turn strategic goals into clear service targets. These targets support better asset management decisions, more effective use of resources, and consistent service delivery aligned with customer expectations. The Levels of Service Subcommittee also provided input on this guidance.

Service levels describe the outcomes customers receive, but they can sometimes be confused with internal processes or activities. For example, a utility might define “inspect all fire hydrants annually” as a service level, when in reality, a service level is the outcome that the customer receives from this regular inspection schedule — which, in this example, would be “maintain reliable fire protection infrastructure with 95% hydrant availability.”

A micro-learning course from AWWA can help utility staff learn and apply the service level concepts. For successful implementation, utilities should start with a few critical service levels tied to high-priority customer concerns or regulatory requirements. In order to track progress, they can identify measures that can influence decisions and improve outcomes. Building quick wins demonstrates value and creates momentum for expanding the framework over time.