DISTRIBUTION EXPENSES OPERATIONS AND MAINTENANCE

Transcription

1 Page of DISTRIBUTION EXPENSES OPERATIONS AND MAINTENANCE 0 INTRODUCTION AND SUMMARY OF DISTRIBUTION OPERATIONS AND MAINTENANCE ( O&M ) EXPENDITURES The Distribution O&M expenditures covered in this exhibit represent all of THESL s expenses to plan, design, schedule, construct, maintain, operate and retire its electrical distribution assets. These costs include the expenditures needed to ensure that designs are developed to appropriate certified standards, that projects and programs for the distribution system are analytically sound, that required materials to carry out the projects and programs are available when needed and that the necessary vehicles and equipment are available and functional. They also include the operations support expenditures required to perform functions such as storing inventory and providing clerical support. The construction of new electrical distribution plant and the replacement of aging or failed equipment are capital expenditures, and are detailed in Exhibit D, Tabs and. The costs to maintain and operate existing plant during its useful life are operating expenditures, which are itemized and explained within this exhibit. 0 Table depicts the overall operations and maintenance program expenditures for THESL. Table : Summary of Distribution Costs ($ millions) Description 00 Historical 00 Bridge 00 Test Operation and Maintenance Costs...

2 Page of SUMMARY OF DISTRIBUTION O&M PROGRAMS Within the overall O&M cost structure, there are specific operating and maintenance programs which are outlined in subsequent tabs and schedules of this exhibit. These programs are based on the same business planning decision principles that drive THESL s capital plans. The Asset Condition Assessment and continuous asset performance monitoring provide a quantitative measure of grid health. The Reliability- Centered Maintenance ( RCM ) methodology forms the basis for THESL s maintenance decisions. This ensures that both capital and operating expenditures are cost-effective and focus on the critical elements of THESL s distribution plant. 0 0 THESL s asset maintenance programs are based on the Aladon method of Reliability- Centered Maintenance ( RCM II ) described in detail at, Schedule. This methodology is used in conjunction with the Asset Condition Assessment (filed at Exhibit Q, Tab, ) to determine the optimal maintenance approach (e.g., condition-based or cyclical, inspection or overhaul) for THESL s distribution assets based on their condition and their operating context. When asset replacement is warranted, the associated costs are incorporated into the capital program presented in Exhibit D, Tab, Schedules through. Distribution O&M programs are developed and implemented within the following seven functional areas: Maintenance Programs (Preventive, Predictive, Corrective, Emergency and Customer Driven); Fleet & Equipment Services; Facilities; Supply Chain Management; Control Center; Operations Support; and Customer Services. Table provides a summary of THESL s Distribution O&M expenditures for the historical, bridge and test years.

3 Page of Table : Summary of Distribution O&M Budget ($ millions) Description 00 Historical 00 Bridge 00 Test Maintenance Programs..0. Fleet and Equipment Services. 0.. Facilities Services... Supply Chain Services... Control Centre..0. Operations Support...0 Customer Services.0.. Customer Driven Operating Total... Distribution O&M expenditures totaled $. million in 00 and are forecast to be $. million in 00 and $. million in The major increases between 00 Bridge year and 00 Test year can be attributed to the Contact Voltage Scan in the Maintenance Program, Time-of-Use in Customer Services and work force staffing in Operations Support. The costs described here and detailed in the following Exhibits Tabs and Schedules are presented on a gross basis for each area. This means the costs include the relevant allocations for Fleet, Facilities and IT&S. Detailed explanations for the year-over-year variances are found in the specific Exhibits, Tabs and Schedules addressing each area.

4 Page of MAINTENANCE PROGRAMS THESL has adopted an asset management philosophy of replacing critical assets based on asset health indices. These indices predict the remaining useful life of the equipment and anticipated maintenance costs. This approach supports the replacement of assets when maintenance is no longer cost effective or when replacement is required to ensure employee and public safety or protect the environment. 0 Asset replacements are incorporated into the capital programs discussed in Exhibit D, Tab. THESL has embarked on a major long term infrastructure modernization and replacement program which includes rehabilitation of THESL s underground distribution system, overhead system and both Terminal Substations ( TS ) and Municipal Substations ( MS ). 0 When asset replacement is not warranted (for example, when an asset is within its useful life), maintenance tasks must be performed on the asset to ensure optimal performance, safety and reliability. The Maintenance Program budget funds the detailed planning, design, execution and management required to accomplish the maintenance programs. Details of the Maintenance Program expenditures are filed at,, Schedules through. FLEET AND EQUIPMENT SERVICES Fleet and Equipment Services ( FES ) provides the vehicles and equipment necessary to operate THESL s business efficiently. FES acquires, services and repairs the vehicles and equipment required to construct, maintain and operate THESL s distribution system. Details of FES expenditures are filed at, Tab,.

5 Page of FACILITIES SERVICES Facilities Services constructs and maintains THESL s offices, operations centres and transformer station buildings. In addition to capital expenditures for new and renovated facilities (see Exhibit D, Tab, Schedule -), funds are also required to maintain these facilities in good working order and to provide a safe, functional and efficient work environment for THESL s employees. Details of the Facilities O&M expenditures are filed at, Tab,. 0 SUPPLY CHAIN SERVICES Supply Chain Services forecasts, acquires and distributes the materials necessary to support THESL s operations. This process ensures that all required goods and services are available when needed while optimizing inventory size and handling costs. Details of the Supply Chain expenditures are filed at, Tab,. 0 CONTROL CENTRE Control Centre Operations is the Control Authority for THESL and is responsible for the real-time operation of THESL s distribution system. Control Centre Operations administers all work protection activities and planned equipment isolations and controls and coordinates the response to system contingencies. The actions of the Grid Response (emergency) crews are directed by the System Operators and Trouble Dispatchers within Control Centre Operations. Details of the Control Centre O&M expenditures are filed at, Tab,. OPERATIONS SUPPORT Operations Support expenditures are the costs incurred in support of THESL s annual Capital and Operating programs. The costs in this area include the administrative labour required to support these programs and non-labour costs such as Information Technology, Facilities and employee related expenses (i.e., clothing, tools, communications etc.). The

6 Page of administrative labour includes supervision of design and field staff, work management (scheduling) clerical support, trades training and asset management support. 0 THESL strives to improve efficiency and reduce capital and operating costs through centralized scheduling of planned construction and maintenance work. The work management function enables THESL to manage the execution of capital and operating programs through the efficient scheduling of work and resource balancing across the organization, appropriate assignment of construction crews and material planning. All planned capital, maintenance and customer connection work is scheduled in this manner. Details of the Operations Support O&M expenditures are filed at, Tab,. 0 CUSTOMER SERVICES Customer Services embodies the work activities that are required to provide services to customers connected to THESL s distribution system and to meet the service levels mandated by the OEB. This group communicates with customers through various means about issues that impact their service and bills. Customer Services addresses all customers including those receiving electricity under the Regulated Price Plan, spot prices and retailer contracts. Customer Services also manages THESL s relationships with retailers. Customer Services consists of three main operating areas: Meter-to-Cash, Customer Relationships and Field Services. The Meter-to-Cash processes include Meter Services, Billing and Collections. These processes ensure that the meters are safe and correctly installed, meter readings are accurately recorded and processed for billing and accounts are billed and collected in a timely manner. The Customer Relationship processes ensure that all customer inquiries, requests for service and escalated issues are handled in a timely and efficient manner. The Field Services processes include the first level of

7 Page of emergency response, checking service connections and underground plant locates. Details of the Customer Services O&M expenditures are filed at, Tab, Schedules through. 0 CUSTOMER DRIVEN OPERATING COSTS Customer Driven Operating Costs are operating costs associated with customer requested connections, upgrades, enhancements and service cancellations handled by the Customer Connections and Maintenance Department ( CCM ). Work involved in this program is driven by customer requests rather than THESL plans. The work also includes isolations, disconnects and any expensed design costs. Details of the Customer Driven Operating O&M expenditures are filed at,, Schedule.