Asset Management Plan 2018 - 2028

ASSET MANAGEMENT PLAN 2018 - 2028 Asset Management Plan 2018 – 2028 Section 1 – Summary MainPower New Zealand Limited Section 1 Summary Summary MainPower New Zealand Limited (MainPower) is a consumer-trust owned electricity distribution business that builds, owns, operates and maintains the electricity network in the North Canterbury region - providing distribution services to over 39,000 residential and business connections and delivering electricity to a population base of around 65,000 people. We enable economic, social and cultural activities within the region through the facilitation of an energy supply that is safe, reliable, economically efficient and drives sustainable outcomes - creating a vibrant and prosperous region by connecting people and places and delivering value to our shareholders. MainPower is committed to contributing towards a bright future for our region by delivering an electricity network that’s ready for the future. Within the last reporting period, MainPower completed a strategic review of its business. A key outcome of this review included the development of a vision statement that reflects our strategic intent and demonstrates a clear link between the direction of our business, our business goals and our asset management practices. Our vision statement: “Partnering in our customers’ energy future” The intention for the Asset Management Plan is to deliver a document that is clear and easy to read by a wide audience. It provides the context to our approach to asset management, which is aligned with our business objectives. This plan ensures network performance, improves on our customer experience, and works towards creating a network for the future, whilst balancing the needs of our customers, community and other stakeholders. Our strategic focus for the past year has seen MainPower commence a journey to embed a customer-centric approach within our business, creating a better understanding of who our customers are and identifying unmet needs. In 2017, we successfully introduced an integrated customer relationship management (CRM) solution within the business, which ultimately means we will better manage interactions with customers and therefore support the evolving needs of the business. This initiative represents a new beginning of customer related service levels that over time will translate into the improved management of our assets and network performance. MainPower’s customer-centric approach is a reflection of the changing New Zealand electricity sector which is experiencing significant transformation, driven by new energy technologies, the movement to a low carbon footprint and changing customer behaviour. The challenge for MainPower is determining prudent investment in core infrastructure to achieve acceptable levels of service for the communities in which we serve, while providing fair pricing of our services. This is widely referred to as balancing the “energy trilemma” – delivering an energy supply that is secure, equitable (affordable and accessible) and sustainable. In response to this changing landscape, MainPower continues to review its approach. This year, we have taken a fresh look at our asset management practices, processes and systems. A key driver for this has been a review of previous assessments of our level of asset maturity, using the Commerce Commission’s Asset Management Maturity Assessment Tool (AMMAT). During this process, we came to the conclusion that as a business, we had remained constant and had “stood still” in terms of our asset management practices and processes. The unintended outcome is a misalignment in terms of managing asset risks and opportunities. A major factor when completing the review was assessing our asset maturity against perceived increased network requirements and the consequent requirements in asset management to deliver a network for the future. Asset Management Plan 2018-2028 Page 2 of 3 MainPower New Zealand Limited Section 1 Summary Our review was initially completed internally and then further assessed by an independent external auditor. It was determined that there was a need to increase our asset maturity within three broad areas: requirement definition; lifecycle decision making; and enabling systems. A complete gap analysis of the selected International Infrastructure Management Manual (IIMM) AMMAT, including improvement works was completed year to date, and is presented in the following document. This includes an implementation plan, detailing how MainPower aims to improve its asset management maturity over the next few years. To address these challenges, MainPower has introduced an asset lifecycle framework - providing line of sight between our everyday asset management activities, through to our corporate objectives, strategic business planning and goals. A key transformation within MainPower was the alignment of our people to the lifecycle of our assets. This has enhanced role definition, our capability within the organisation, and our ability to ensure that we can easily manage capacity - ultimately, delivering on our business objectives. A key enabler on our asset management journey, was the procurement of industry standard lifecycle asset plans. We now have individual asset plans for all our classes of assets, and are currently implementing these plans in our Computerised Maintenance Management System (CMMS). The perceived changing way our network will be used in the future and the services customer will require from the network influenced by: changing customer behaviours, new technologies and a national transition to a low carbon economy has also caused MainPower to review our Network Development policies and procedures. Simplistically we need to move from the traditional distribution network approach of demand based deterministic planning to scenario based planning; this work remains a focus for MainPower Another highlight for the year has been the implementation of the complete lifecycle management of our pole structures. All MainPower pole renewals are guided by inspection data, informing condition, assessed against asset criticality and consistent with industry best practice. Results, year to date, demonstrate that our failure rates for pole structures are below that expected considering that we are testing poles that present the highest risk to the business i.e., oldest stock in urban areas. This has provided confidence that our most critical asset is in good order and does not present a security of supply or safety risk to the business, our customers and the wider community. From a performance perspective, the review of our asset management practices, processes and systems has resulted in a more robust and sophisticated approach to the asset condition and criticality assessment of all our assets. Our focus going forward is the introduction of an asset health index meaning asset renewals in the future will also be directly linked to compliance or other influences beyond the condition and criticality of the asset. Taking all of the above into consideration has caused MainPower to pause, reflect and re-evaluate its Asset Management systems and processes. Emphasis has continued to ensure that current needs for customer service, safety and compliance have remained. We have deferred more future focussed network development plans until we develop our thinking on future needs through improved Asset Management and Network Development Planning. The most noticeable impact of this has been a reduction in both operational (61% of budget) and capital (38% of budget) spend over the financial year ending 2018. It is expected that future expenditure will meet and possibly exceed previous planned expenditure levels as we begin to understand, through better Asset Management systems what is required by our customers in the future. This will be reflected in future AMP’s. Asset Management Plan 2018-2028 Page 3 of 3 Asset Management Plan 2018 – 2028 Section 2 – Background and Objectives This section outlines the scope, purpose and strategic alignment of this Asset Management Plan which covers MainPower’s distribution network and associated systems that deliver energy to our customers in the Waimakariri, Hurunui and Kaikoura Districts. MainPower New Zealand Limited Section 2 Background and Objectives Contents 2. Background and Objective ......................................................................................................... 5 2.1 Introduction .............................................................................................................................. 5 2.2 Purpose and Alignment to Corporate Objectives ........................................................................ 5 2.2.1 Purpose of the AMP .................................................................................................................................................... 5 2.2.2 Strategic Alignment ..................................................................................................................................................... 5 2.2.3 Interaction of the AMP with Strategic and Business Planning .................................................................................... 6 2.3 Stakeholder Interests ................................................................................................................. 7 2.3.1 Stakeholder Engagement ............................................................................................................................................ 7 2.3.2 Summarising the Interest

Load more