Asset Management Plan 2021
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ASSET MANAGEMENT PLAN 2021 ALPINE ENERGY LIMITED ____________________________________ Planning Period: 1 April 2021 to 31 March 2031 ___________________________________________________________________ Disclosure date: 31 March 2021 _____________________________________________ 03 687 4300 alpineenergy.co.nz ____________________________________ LIABILITY DISCLAIMER Any information contained in this document is based on information available at the time of preparation. Numerous assumptions have been made to allow future resource requirements to be assessed. These assumptions may prove to be incorrect or inaccurate, consequently, many of the future actions identified in this document may not occur. Users of the information contained in this document do so at their own risk. Alpine Energy Limited will not be liable to compensate any persons for loss, injury, or damage resulting from the use of the contents of this document. If any person wishes to take any action on the basis of the content of this document, they should contact Alpine Energy Limited for advice and confirmation of all relevant details before acting. P a g e | 1 DIRECTORS’ STATEMENT We encourage consumers to comment on this document and the approach taken to maintain a safe, reliable, and cost-effective, electricity supply to South Canterbury. The purpose of our 2021 to 2031 Asset Management Plan (AMP) is to provide insight and explanation of how we intend to provide electricity distribution services. We are committed to managing our distribution assets in a safe, reliable, and cost-effective manner that addresses The Directors required service levels and maintains a robust energy delivery system for our stakeholders. Alpine Energy Limited The AMP has been published to meet our regulatory requirements for asset management under the Electricity Distribution Information Disclosure Determination 2012. Director Certification Our distribution network is in a good condition. The life of different electricity distribution assets ranges widely by asset type, from 25 to 100 years. Although some parts of our network that were Certification for Asset Management Plan 2021–2031. installed in the 1950s and 1960s, including poles, are now nearing the end of their expected service life according to the Commerce Commission’s optimised deprival valuation of Fixed Assets We, Jessie-Rose Chan and Richard David Ramsay, being directors of Alpine Energy Limited certify of Electricity Lines Businesses (ODV), on average these are consistent with planned replacement that, having made all reasonable enquiries, to the best of our knowledge— rates. a) the Asset Management Plan 2021–2031 of Alpine Energy Limited prepared for the We determine when to replace assets based on specific asset condition and risk. If replacing a purposes of clause 2.6.1 and sub clauses 2.6.3(4) and 2.6.5(3) of the Electricity retired asset like-for-like would be uneconomic we replace it with an appropriate alternative Distribution Information Disclosure Determination 2012 (consolidated in 2015) in all product. We continue to invest in network developments including new assets to serve changing material respects complies with that determination and growing consumer needs, and new technologies. We are also subject to regulatory b) the prospective financial or non-financial information included in the attached requirements that may affect our risk and economic assessments. information has been measured on a basis consistent with regulatory requirements or Just over sixty percent of our capital expenditure over the next ten years is targeted for recognised industry standards. replacement and renewal of existing infrastructure. Expenditure related to system growth increases in the DPP4 period (2025-2029) due to expected network augmentation related to address risks related to climate change. Network development capital expenditure accounts for forty percent of the investment in our network. This investment is specifically targeted for consumer connections, reliability safety and environment projects, and network augmentation. Developments are identified that best serve our consumers for the next 50 years or the average life of an electricity distribution asset. Our investment in the network is funded through our tariffs that are set in accordance with our pricing methodology and our allowances under the Commerce Commission’s revenue cap. It is Director Director our intention to continue to keep tariffs within the price path set by the Commerce Commission and have a pricing methodology that is consistent with the Electricity Authority’s pricing principles. 28 March 2021 28 March 2021 Capacity increases at grid exit points will be addressed through new investment agreements with Date Date Transpower, with a resulting price pass through to consumers as is the case now. Sole beneficiaries identified for additional capacity will have back-to-back agreements to minimise the risk of stranded assets. P a g e | 2 Mackenzie basin region ...................................................................................................... 20 CONTENTS Temuka region .................................................................................................................... 20 Timaru region ...................................................................................................................... 20 Studholme (Waimate) region .............................................................................................. 21 1. EXECUTIVE SUMMARY ................................................................................................................ 5 4. STAKEHOLDER INTERESTS ......................................................................................................... 23 GENERAL ...................................................................................................................................... 5 OUR AMP .................................................................................................................................... 5 OVERVIEW .................................................................................................................................. 23 OUR NETWORK .............................................................................................................................. 5 CONSUMERS ................................................................................................................................ 23 OUR INVESTMENT IN OUR NETWORK TO 2031 ...................................................................................... 6 CONSUMER SERVICE LEVELS ............................................................................................................. 23 EMERGING TECHNOLOGIES ................................................................................................................ 7 LARGE CONSUMERS ....................................................................................................................... 28 ELECTRIC VEHICLES .......................................................................................................................... 8 Dairy sector ......................................................................................................................... 28 Irrigation ............................................................................................................................. 28 INTRODUCTION ................................................................................................................................... 9 Meat works ......................................................................................................................... 28 2. INTRODUCTION ......................................................................................................................... 10 Industrial / Commercial sector ............................................................................................ 28 COMMUNITIES ............................................................................................................................. 29 THE PURPOSE OF THE PLAN ............................................................................................................. 10 RETAILERS ................................................................................................................................... 29 KEY FACTS AND ASSUMPTIONS ......................................................................................................... 10 THE COMMERCE COMMISSION ........................................................................................................ 29 Load forecast ...................................................................................................................... 10 LEGISLATIVE AND REGULATORY BODIES ............................................................................................... 29 Capital investment requirements ........................................................................................ 10 PERFORMANCE REQUIREMENTS ....................................................................................................... 30 New technologies ............................................................................................................... 10 Health & Safety and environment ....................................................................................... 30 Service delivery arrangements ...........................................................................................