Orion New Zealand Limited Asset Management Plan Asset Management Plan 2021 10 Year Asset Management Plan Section 1 Summary i Cover: Oxford Lane in Christchurch’s central city, powered by new infrastructure installed by Orion. ii Orion New Zealand Limited This Asset Management Plan is our roadmap for delivering on our commitment to 210,000 customers in central Canterbury to provide one of the most safe, reliable and resilient electricity networks in New Zealand – one that’s ready for the future. It is an exhilarating period in our industry’s history. New technologies, changing customer expectations and local and international decarbonisation efforts are resulting in the energy sector facing more change than it has experienced over the last 50 years. To give our customers confidence in how Orion is meeting the promise of this new era, we share our new Group Strategy and the challenges we have set ourselves to deliver on our Group Purpose, the touchstone for this AMP: To power a cleaner and brighter future for our communities. These are exciting times at Orion. We are redefining our role in our communities, and taking a broader view of how the Orion Group can contribute to the future prosperity and sustainability of our region, and New Zealand. David Freeman-Greene Interim Network Chief Executive 10 Year Asset Management Plan Section 1 Summary 1 Liability disclaimer This Asset Management Plan (AMP) has been prepared and publicly disclosed in accordance with the Electricity Distribution Information Disclosure Determination 2012. Some of the information and statements contained in this AMP are comprised of, or are based on, assumptions, estimates, forecasts, predictions and projections made by Orion New Zealand Limited (Orion). In addition, some of the information and statements are based on actions that Orion currently intends to take in the future. Circumstances will change, assumptions and estimates may prove to be wrong, events may not occur as forecasted, predicted or projected, and Orion may at a later date decide to take different actions to those it currently intends to take. Except for any statutory liability which cannot be excluded, Orion will not be liable, whether in contract, tort (including negligence), equity or otherwise, to compensate or indemnify any person for any loss, injury or damage arising directly or indirectly from any person using, or relying on any content of, this AMP. When considering the content of this AMP, persons should take appropriate expert advice in relation to their own circumstances and must rely solely on their own judgement and expert advice obtained. Orion New Zealand Limited Contents 1 ExSummaryecutive summary 9 2 About our business 19 2.1 Purpose of our AMP 22 2.2 Our business 22 2.3 Our local context 23 2.4 Our Group Strategy 25 2.5 Asset Management Plan development process 27 2.6 Asset management framework 29 2.7 Asset management policy 30 2.8 Asset management strategy 30 2.9 Management Maturity Assessment Tool (AMMAT) 31 2.10 Stakeholder interests 32 2.11 Accountabilities and responsibilities 34 2.12 Systems, processes and data management 36 2.13 Significant business assumptions 39 3 Managing risk 41 3.1 Introduction 44 3.2 Our risk context 44 3.3 What our community wants from us 45 3.4 Our approach to risk management 45 3.5 Our risk management responsibilities 48 3.6 Our risk assessments and risk evaluations 50 3.7 Our key operational risks 52 3.8 Our resilience 60 4 Customer experience 63 4.1 Introduction 66 4.2 Customer engagement 66 4.3 What our customers have told us 68 4.4 Turning listening into action 71 4.5 Performance measures 72 5 About our network 85 5.1 Introduction 88 5.2 Transpower Grid Exit Points (GXP) 88 5.3 Network architecture 90 5.4 Major customers 91 5.5 Network development approach 92 5.6 Asset lifecycle asset management approach 93 5.7 Investment and business case framework 102 6 Planning our network 103 6.1 Introduction 106 6.2 Evolving our network 107 6.3 Preparing for growth 111 6.4 Planning criteria 124 6.5 Network gap analysis 130 6.6 Network development proposals 132 6.7 Value of Distributed Energy Resource Management alternatives 150 10 Year Asset Management Plan 3 Contents continued 7 Managing our assets 151 7.1 Introduction 156 7.2 How this section is structured 156 7.3 Network property 157 7.4 Overhead lines – subtransmission 163 7.5 Overhead lines – distribution 11kV 172 7.6 Overhead lines – distribution 400V 182 7.7 Underground cables – subtransmission 189 7.8 Underground cables – distribution 11kV 193 7.9 Underground cables – distribution 400V 197 7.10 Circuit breakers and switchgear 201 7.11 Power transformers and voltage regulations 212 7.12 Distribution transformers 218 7.13 Protection systems 222 7.14 Communication cables 226 7.15 Communication systems 228 7.16 Distribution Management System (DMS) 233 7.17 Load management systems 237 7.18 Information systems 240 7.19 Generators 242 7.20 Monitoring and power quality 246 8 Supporting our business 249 8.1 Introduction 252 8.2 Gearing up for the future 252 8.3 System operations and network support 253 8.4 Future Capability Development 256 8.4 Business support 257 8.5 Corporate properties 259 8.6 Corporate information systems 260 8.7 Vehicles 261 9 Financial forecasting 263 9.1 Network expenditure forecasts 266 9.2 Non-network expenditure forecasts 271 9.3 Total captial and operations expenditure 272 9.4 Changes from our previous forecasts 273 9.5 Expenditure variation 274 10 Ability to deliver 275 10.1 Introduction 278 10.2 Service providers 278 10.3 Contract delivery 278 Appendices 283 4 Orion New Zealand Limited Figures Executive summary Planning our network 1.1 Total network capex (real) forecast ($000) 13 6.2.1 Projected residential distribution transformer 109 1.2 Total network opex (real) forecast ($000) 14 constraints 6.2.2 Projected residential LV network constraints 110 About our business 6.3.1 Overall maximum demand trends on the 113 Orion network 2.4.1 Group Strategy framework 25 6.3.2 Number and capacity of battery installations 114 2.4.2 Orion Group Strategy strategic theme and 26 6.3.3 Electric vehicle uptakes in Canterbury 115 the related project drivers 6.3.4 Current level of solar PV uptake on our network 116 2.5.1 AMP development process 28 6.3.5 Rolling 12 month increase in solar PV 116 2.6.1 Orion’s asset management framework 29 connections 2.9.1 AMMAT maturity levels 31 6.3.6 System energy throughput 117 2.9.2 Orion’s maturity level scores 31 6.3.7 Region B maximum demand 118 2.10.1 Stakeholders and their interests 32 6.3.8 Zone substations – Region A (FY20 maximum 119 2.10.2 Process for identifying stakeholder interests 33 demand as a percentage of firm capacity) 2.11.1 Asset management structure 34 6.3.9 Zone substations – Region B (FY20 maximum 120 demand as a percentage of firm capacity) Managing risk 6.4.1 Example of a winter peak day demand profile 129 6.6.1 Region A subtransmission 66kV and 33kV 133 3.4.1 Our risk management process 45 – existing and proposed 3.4.2 Our risk management culture 46 6.6.2 Region B subtransmission 66kV and 33kV 134 3.5.1 Our HILP and crisis risk management 49 – existing and proposed responsibilities 3.6.1 Our five main risk evaluation options 51 Managing our assets Customer experience 7.3.1 Substation buildings age profile by zone sub 159 and distribution substation 4.2.1 Our customer engagement helps Orion 73 7.3.2 Kiosk age profile 159 4.3.1 Key results from our Annual Residential 69 7.4.1 Subtransmission support structure age profile 164 Customer Satisfaction survey, 2020, 7.4.2 Subtransmission conductor age profile 165 and Customer Calls research, 2020 7.4.3 Subtransmission pole condition profile 165 4.5.1 SAIDI 10 year history and 10 year target, 75 including SAIDI forecast 7.4.4 Subtransmission conductor condition profile 166 4.5.2 SAIFI 10 year history and 10 year target, 75 7.4.5 Subtransmission line faults per 100km 166 including SAIFI forecast 7.4.6 Subtransmission pole risk matrix 170 4.5.3 FY20 SAIDI and SAIFI by asset class and 76 7.4.7 Subtransmission pole health scenarios 170 by cause 7.5.1 11kV pole age profile 173 4.5.4 5 year (FY15-FY19) SAIDI and SAIFI by asset 76 7.5.2 11kV conductor age profile 174 class and by cause 7.5.3 11kV pole condition profile 174 4.5.5 Unplanned interruptions - % restored in 77 7.5.4 11kV line faults per 100km 175 under three hours 7.5.5 Pole failure rate (all voltage classes) 176 4.5.65 Comparing Capex per MWh and industry 80 7.5.6 11kV pole risk matrix 179 performance 7.5.7 11kV pole risk scenarios 180 4.5.7 Comparing Opex per MWh and industry 81 performance 7.5.8 11kV pole replacement plan 180 4.5.8 Comparing Opex per ICP and industry 82 7.6.1 400V pole age profile 182 Performance 7.6.2 400V conductor age profile 184 4.5.9 Forecast for SF6 circuit breakers 83 7.6.3 400V pole condition profile 184 7.6.4 400V pole risk matrix 186 About our network 7.6.5 400V pole risk scenarios 187 7.6.6 400V pole replacement plan 187 5.2.1 Region A and Region B 89 7.7.1 Subtransmission cable network age profile 190 5.3.1 Network voltage level and asset relationships 90 7.7.2 Subtransmission underground cable faults 191 5.5.1 Process for network development 92 per 100km 5.6.1 Asset lifecycle management approach 93 7.8.1 11kV cable age profile 193 5.6.2 Process for performance measurement 94 7.8.2 Number of 11kV underground cable failures 194 5.6.3 CBRM score conversion table 96 and the corresponding SAIDI and SAIFI 5.6.4 Replacement decision making process 98 7.9.1 LV cable age profile 197 5.6.5 Process