Stirring the pot

Had a nice round of laughter this morning while reading the Phoenix Business Journal's "Morning Call" posts. Seems the chairman of the Arizona Corporation Commission requested drug-sniffing dogs after the discovery of a "small amount" of marijuana in a private bathroom at commission headquarters. My laughter quickly transformed to a facepalm, and I allowed to resurface my considerations of risk management.

I used to possess some rather complicated spreadsheets that had formulas for calculating risk probability in terms of damage and loss values weighed against mitigation costs. So I formed an internal dialogue where I questioned what risks the ACC might be facing and whether the cost of using drug dogs was an effective mitigation tactic.

I'm having some difficulty assigning a dollar value to the risk. First, we need to consider what the ACC is. In many other states, we would call it the public utility commission, that mindful body that adopts rules and regulations regarding rates that energy and water companies charge. But Arizona's commission takes in a much broader scope than other states' commissions. It is allowed to behave not only in an executive capacity, but legislative and judicial as well (check out its "History and Mission" link).

So I imagine there can be some sort of strange logic that goes something like this: A stoned commissioner might space out during a discussion of whether to allow a gas utility to move forward with installing safer underground valves, and subsequently vote against such a move. Months later, the older-style valve malfunctions underground...the dirt filters out the rotten-egg smell...a gas pocket builds up...a spark leads to combustion...and Glendale goes bye-bye, taking Luke AFB with it.

In the spreadsheet, I would have assigned an extremely high value to that risk damage. But the other part of the formula requires assigning a probability that the risk will actually occur. In the crudest terms, you multiply those values and compare the result against the cost of mitigation. It has scientific aspects to it, but risk management is more art than science.

My art shows me that paper-pushing commissioners effectively present no more risk stoned versus sober, whatever the intoxicant might be. The mitigation cost that the ACC chairman brought to the commission surmounted the risk's value, in my opinion. Now that in itself is a risk to be considered.