Asset Management Plan 2012-2022

Asset Management Plan 2012-2022 Asset Management Plan 2012 - 2022 Asset Management Plan 2012-2022 Approved 23 March 2012 Published 30 March 2012 © Copyright: Alpine Energy Limited 2011 Alpine Energy Limited Meadows Road PO Box 530 Timaru 7940 New Zealand Tel: +64 3 687 4300 Fax: +64 3 684 8261 Web: www.alpineenergy.co.nz G:\Engineers\AMP\2012\Final\HardCopy\Section 1 Summary.doc i Asset Management Plan 2012 - 2022 Contents 1. Summary 1-2 2. Background & Objectives 2-1 3. Assets Covered 3-1 4. Service Levels 4-1 5. Network Development Planning 5-1 6. Lifecycle Asset Management Planning 6-1 7. Risk Management 7-1 8. Evaluation of Performance 8-1 Appendix A – Summary of assets I Appendix B – Summary of 11kV feeders II Appendix C – Network CAPEX 10 year summary forecast V Appendix D – Area of supply XXII Appendix E – Transpower interconnections XXIII Appendix F – Timaru 11kV system XXVI Appendix G – Timaru central city LV distribution system XXVIII Appendix H – AEL’s Transpower Worksplan XXX ALPINE ENERGY LIMITED G:\Engineers\AMP\2012\Final\HardCopy\Section 1 Summary.doc 1-1 Asset Management Plan 2012 - 2022 1. Summary Foreword 1-3 Liability Disclaimer 1-4 Glossary 1-5 1.1 The Purpose of the Plan 1-7 1.2 Period Covered 1-7 1.3 Key Assumptions 1-7 1.4 Asset Management Systems 1-9 1.5 Network & Asset Description 1-10 1.6 Service Levels 1-10 1.7 Network Development Plans 1-10 1.8 Life Cycle Asset Management 1-11 1.9 Operation and Maintenance Expenditure 1-11 1.10 Risk Management 1-11 1.11 Evaluation of Performance 1-12 1.12 Expenditure Forecasts & Reconciliation 1-13 ALPINE ENERGY LIMITED G:\Engineers\AMP\2012\Final\HardCopy\Section 1 Summary.doc 1-2 Asset Management Plan 2012 - 2022 Foreword Alpine Energy Limited’s (AEL) 2012 Asset Management Plan (AMP) has been written to provide customers and stakeholders with insight and explanation on how AEL intends to manage and operate its distribution assets in a safe, reliable, and cost effective manner that will address required service levels and maintain a robust energy delivery system for South Canterbury consumers. AEL’s distribution network is in a fair condition and while a number of assets built in the 1950’s and 1960’s are nearing the end of their expected service life, for the majority of these assets, their general condition is such that they will be able to safely continue service for the next eight to ten years. Assets that have served their useful life or have developed defects to the point that it is uneconomic to prolong their service will be retired and replaced with alternative products. AEL continues its reinvestment phase by identifying and committing funds for a number of network developments. Developments that have been identified to best serve our customers for the next 50 years (the average life of an electricity distribution asset). AEL has restructured its tariffs and pricing methodology that allows it to stay within the default price path set by the Commerce Commission. Capacity increases at Transpower supply points will be through new investment agreements with a resulting price pass through to customers as is presently the case. Where sole beneficiaries are identified for additional capacity, AEL will insist on back-to-back agreements to minimise the risk to consumers of stranded assets. Comments are encouraged from our customers on our AMP and the approach taken to maintain a cost effective, safe and reliable supply to South Canterbury. The Directors Alpine Energy Limited ALPINE ENERGY LIMITED G:\Engineers\AMP\2012\Final\HardCopy\Section 1 Summary.doc 1-3 Asset Management Plan 2012 - 2022 Liability Disclaimer The information and statements made in this AMP are prepared on the assumptions, projections, and forecasts made by AEL and represents AEL’s intentions and opinions at the date of approval – 23 March 2012. Circumstances will change, assumptions and forecasts may prove to be wrong, events may occur that were not predicted, and AEL may, at a later date, decide to take different actions from those it currently intends to take as expressed in this AMP. AEL cannot be held liable for any loss, injury or damage arising directly or indirectly as a result of use or reliance on any information contained within this AMP. ALPINE ENERGY LIMITED G:\Engineers\AMP\2012\Final\HardCopy\Section 1 Summary.doc 1-4 Asset Management Plan 2012 - 2022 Glossary The following acronyms and abbreviations are used throughout the Asset Management Plan. A – Ampere (or “Amp”) AAC – All Aluminum Conductor AAAC – All Aluminium Alloy Conductor ABS – Air Break Switch ACSR – Aluminium Conductor Steel Reinforced ABY – Albury Transpower substation ADMD – After Diversity Maximum Demand AEL - Alpine Energy Limited (TP use ALP) AMP – Asset Management Plan BCL – Broadcasting Communications Ltd Bus – busbars CAPEX – Capital Expenditure CB – circuit breaker CBD – Central Business District CDEM Act – Civil Defence Emergency Management Act CFC – Greenhouse Gas CFL – Compact Fluorescent Lamp DCIU – Data Control & Interface Unit DGA – Dissolved Gas Analysis DNP – direct Numeric Protocol DO – Drop Out fuse Dyn – Transformer vector group EC – Electricity Commission EEA – Electricity Engineers’ Association EMF – Electro Magnetic Field FM – frequency modulation GEC – General Electric Company GIS – Geographic Information System GST – Goods and Services Tax GWh – giga Watt Hours GXP – Grid Exit Point Hz - Hertz ICP – Installation Control Point IED – Intelligent Electronic Device ISL-LIV – Islington Livingston kV – kilo Volt kVA – kilo Volt Amp LOS – Loss of supply LTNZ – Land Transport New Zealand LV – Low Voltage MDC – Mackenzie District Council ALPINE ENERGY LIMITED G:\Engineers\AMP\2012\Final\HardCopy\Section 1 Summary.doc 1-5 Asset Management Plan 2012 - 2022 MDI – Maximum Demand Indication MI – Mineral Insulated Cable MVA – Mega Volt Amp MW – Mega Watt N-1 – reliability measure, where n systems can lose 1 element and still NZDL – New Zealand Dairies Ltd OCB – Oil circuit breaker ODV – Optimised Deprival Valuation OCTC – Off Current Tap Changer OLTC – On Line Tap Changer OPEX – Operating Expenditure (including maintenance spend) PC’s – Desktop Computers Pd – Partial Discharge PIL – Paper Insulated Lead PILCSWA – Paper Insulated Lead Steel Wire Armoured cable POS – Point Of Supply pu – per unit PwC – Price Waterhouse Coopers RMA – Resource Management Act RMU – Ring Main Unit RTU – remote terminal unit SAIDI – System Average Interruption Duration Index SAIFI – System Average Interruption Frequency Index SCADA – Supervisory Control and Data Acquisition SCI – Statement of Corporate Intent SEL – Schweitzer Engineering Laboratories STU – Studholme Transpower substation SVC – Static VAr Compensation TDC – Timaru District Council THD – Total Harmonic Distortion TIM – Timaru Transpower substation TKA – Tekapo Transpower substation TMK – Temuka Transpower substation TPNZ – Transpower TWZ – Twizel Transpower substation UHF – Ultra high frequency VHF – very high frequency VLF – very low frequency WDC – Waimate District Council XLPE – cross linked polyethylene YNd9 – Transformer vector group ALPINE ENERGY LIMITED G:\Engineers\AMP\2012\Final\HardCopy\Section 1 Summary.doc 1-6 Asset Management Plan 2012 - 2022 1.1 The Purpose of the Plan The purpose of this Asset Management Plan (AMP) is to define how AEL will develop, manage and maintain its network equipment to provide a safe, reliable, efficient and cost effective energy delivery system. The AMP identifies the major initiatives and projects to be undertaken over the planning period to meet stakeholder and customer requirements. Preparation of the AMP in this format assists AEL to comply with the Commerce Commission’s “Electricity Distribution (Information Disclosure) Requirements 2008 (Requirements)” and the current version of the “Electricity Information Disclosure Handbook 2004 (Handbook)” as amended 31st October 2008. 1.2 Period Covered The planning period of the Asset Management Plan is from 1 April 2012 until 31 March 2022. The AMP is reviewed annually and has been approved by the Alpine Energy Directors on 23 March 2012. The planning period extends to the optimised lifetime of the present network equipment. However the main focus of the plan is the initial five year period following the plan’s review date, with particular emphasis on the first 12 months of this period. Beyond this time, analysis tends to be more indicative, based on long-term trends. It is likely that new developments that are not identified here will arise during the latter part of the planning period. In particular large blocks of new load such as dairy factories are difficult to predict more than a few years in advance and significantly alter demand projections because they are large relative to AEL’s demand. 1.3 Key Assumptions Each review of the Asset Management Plan is predicated upon a series of key assumptions that are made as a foundation for planning and forecasting of future activities, whether investing to maintain, replace or develop new assets. The key assumptions for the 2012-22 AMP are as follows: During the 2011/12 financial year, NZ 90 Day Bank Bill interest rates have fallen from around 3.25% to less than 2.8%. Both NZ and overseas sources suggest that these low interest rates are likely to rise only slowly during the 2012/13 financial year. These conditions should allow investment to continue at rates proposed in the AMP. Recent NZ business surveys indicate strong confidence in the NZ economy, with expected GDP growth in excess of 2%. This indicates a growth in new connection inquiries and increasing demand for additional load beyond that accumulated from consumer projects already underway. ALPINE ENERGY LIMITED G:\Engineers\AMP\2012\Final\HardCopy\Section 1 Summary.doc 1-7 Asset Management Plan 2012 - 2022 Shareholder structure of Consumer Trust and three District Councils will continue their investment in the business at current rates of return. Revenue streams from network investments, apart from seasonal variations, will increase as increasing electrical capacity will lead the load demand which will follow.

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