DISTRIBUTION UNIT COST VEGETATION MANAGEMENT BENCHMARK STUDY
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1 Appendix 3. Presentation Slides DISTRIBUTION UNIT COST VEGETATION MANAGEMENT BENCHMARK STUDY INTRODUCTION AND FRAMEWORK 22 Oct 2015 William Porter Director of Research, Development and Industry Intelligence
2 PURPOSE OF BENCHMARKING STUDY The objectives of this study by CN Utility Consulting (CNUC), enabled by peer and longitudinal comparisons, are: To help Hydro One comply with Ontario Energy Board s (OEB) directives (EB ), To identify best management practices, To identify measurements to substantiate continuous improvement, and To recommend innovative approaches to ensure a successful and cost efficient utility vegetation management (UVM) program over the next seven to ten years and beyond
3 THE VEGETATION MANAGEMENT STUDY TEAM Project team members: William Porter: Director of Consulting of CNUC and Project Lead Nina Cohn: Statistical Analyst [CNUC s Senior Analyst] Stephen Cieslewicz: President of CNUC and Project and Expert Witness Advisor and Witness 60 years of experience in Utility Vegetation Management (UVM) Same project team that performed the 2009 UVM benchmark project for Hydro One CNUC team has provided expert testimony for numerous legal and regulatory cases CNUC team has produced several peer reviewed publications and scientific articles
4 CNUC BACKGROUND AND RELATED PROJECTS Projects relevant to the current Hydro One Benchmarking Study CNUC has been performing comprehensive benchmarking of UVM programs since 2002 and has data dating back to The team is comprised of the authors of the UVM Benchmark & Industry Intelligence publications in 2002, 2010, 2012 and Numerous projects for utilities in which UVM benchmarking was a key component, examples include: Hydro One, MidAmerican Energy, Connexus Energy, Ameren Illinois, Puget Sound Energy, BC Hydro, United Illuminating, and Avista Utilities
5 BENCHMARKING STUDY FRAMEWORK Hydro One Distribution UVM Benchmarking Study A Review of Hydro One s Program Survey Design, Participation, and Deployment Data Management Data Analysis Recommendations and Conclusions Regulatory and Literature Review
6 HYDRO ONE PROGRAM REVIEW Data is collected in five datasets, entire company and four zones: Hydro One Northern Southern Central Eastern Longitudinal internal study of the five datasets
7 2009 CRITERIA FOR CHOOSING APPROPRIATE COMPARATORS 2009 comparator locations based on climate conditions, growth, storm paths, and forest canopy cover: Around Ontario Northeastern North America Western North America Southeastern North America 2009 customer density: 30 customers per circuit kilometre
8 CHOOSING CURRENT STUDY COMPARATORS Peer comparators 2009 criteria Unit and categorical comparisons Total productivity factors General comparators Policies and procedures Best practices Regulatory drivers Workforce
9 COMPARATORS FOR The following two slides are select lists of North American companies that have participated in CNUC benchmark surveys and who are potential comparators for this study Additional companies may be invited
10 RECENT DISTRIBUTION BENCHMARKING PARTICIPANTS 31 COMPANIES Alabama Power Company [AL, USA] Ameren Illinois Company (AIC) [IL, USA] Appalachian Power Company [VA/WV, USA] Avista Utilities [WA/ID/OR, USA] Baltimore Gas and Electric Co (BG&E) [MD,USA] BC Hydro Distribution [BC, CAN] Commonwealth Edison [IL, USA] Connexus Energy [MN, USA] Consumers Energy Company [MI, USA] Entergy Corporation [LA/AR/MS, USA] EPB (Electric Power Board) [TN, USA] Hydro One Networks Inc. [ON, CAN] Hydro Québec [QC, CAN] Indiana Michigan Power Company [USA] Indianapolis Power & Light [IN, USA] Kentucky Power Company [KY, USA] Lincoln Electric System (LES) [NE, USA] MidAmerican Energy (MEC) [IL, USA] Northern Indiana Public Service Company [USA] Northern States Power MN [USA] Northern States Power WI, MI [USA] Ohio Power Company [USA] Omaha Public Power District (OPPD) USA] Pacific Gas & Electric (PG&E) [CA, USA] PacifiCorp [CA/OR/WA/ID/WY/UT, USA] Public Service Company of Colorado [USA] Public Service Company of Oklahoma [USA] Southwestern Electric Power Company [TX/AR/LA, USA] Southwestern Public Service Company [NM/TX, USA] Tampa Electric Company (TECO) [FL, USA] United Illuminating Company [CT, USA] [NE, Companies Names in Italics and Brown Fonts were in the 2009 Hydro One Rate Case CNUC Benchmarking Study 12 of the 14 comparators in the 2009 study are recent participants
11 ADDITIONAL RECENT BENCHMARKING PARTICIPANTS SPECIAL TOPICS 17 ADDITIONAL COMPANIES ATCO Electric [AB, CAN] Con Edison Inc. [NY, USA] Duke Energy Corporation [NC, USA] ENMAX Power Corporation [AB, CAN] Horizon Utilities [ON, CAN] KCPL [KS, USA] Manitoba Hydro [MB, CAN] National Grid [MA, USA] National Rural Electric Cooperative Association [VA, USA] New Brunswick Power [NB, CAN] Nova Scotia Power Inc. [NS, CAN] Puget Sound Energy Inc. [WA, USA] Saskatoon Light & Power [SK, CAN] SaskPower [SK, CAN] Southern Company [AL, USA] Toronto Hydro Electric System Limited [ON, CAN] We Energies [MI/WI, USA] Companies in 2009 Study not represented: Allegheny Power [WVA/PA/MD/VA, USA] Central Maine Power [ME/NY, USA]
12 SURVEY DESIGN AND STRATEGY Defining and Gathering Data: Utility characteristics Productivity Labour Hours, Work Types, Equipment, Costs, and Cycles UVM Practices Safety Reliability Workforce characteristics Regulatory Policies
13 METHODOLOGY FOR ANALYSIS Data Management and Analysis Normalizing measurements to reflect total productivity factors Identifying Trends and Best Management Practices Modeling Efficiencies Forecasting Workload
14 TOTAL PRODUCTIVITY AND EFFICIENCY FACTORS Tree density Customer density/customer service Weather/catastrophic events Cost of living indices Reliability measurements Terrain and site characteristics Forest composition and health Worker turnover Safety Environmental Quality
15 THE STATE OF THE UVM INDUSTRY IN NORTH AMERICA Is Reliability Centered Maintenance (RCM) a standard of care for UVM?
16 UNDERSTANDING THE UVM INDUSTRY UTILITY VEGETATION MANAGEMENT (UVM) PROGRAM DRIVERS Weighted Ranking of the Importance of Each UVM Objective 1. Reliability 2. Safety 3. Comply with Specific Laws 4. Cost Effectiveness 5. Customer Service 6. Prevent Fires 7. Preserve and Provide Environmental Quality Most Important at the Top Previous Studies Had Safety Ranked as the Number One Objective
17 SAFETY: HOW TO MEASURE SUCCESS Electrocutions in the public sector Average percent of trees in contact at time of maintenance The frequency and costs of fires caused by trees and power lines incident reporting is not a true measure of line clearance safety Tree and power line contacts are an unsafe condition Accidents are not reported to external stakeholders by the majority of companies
18 RISK TOLERANCE Percent of Trees in Contact 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 0% 1% 8% Trees in Contact at Time of Maintenance Sample Size: 17 Average: 40% Q1: 15% Median: 35% Q3: 60% 10% 15% 15% 35% 35% 35% BB BD AH AA AP AZ AF AO BE AN AE AW AR AG AI AD AJ 50% 60% 60% 60% 70% 70% 75% 80% Company Code
19 COST: WHAT IS THE VALUE OF EFFECTIVE UTILITY VEGETATION MANAGEMENT? The risk of electrical contacts, accidents, fires and increased customer interruptions has been significant enough to make a case for adopting best management practices in a UVM program Electric reliability has gained the most attention by regulators
20 PREFERRED VS. DEFERRED MAINTENANCE If a property owner, private tree company or worst of all, a child enters a tree that obscures the presence of a single phase primary tap and there is an injury or fatality, then the utility has suddenly lost all of the gain from taking a risk with trees that have low reliability impact.
21 GETTING TO KNOW THE CUSTOMER Recorded Data about Customers Who Own Properties That Require UVM The UVM dept knows percent of overhead customers have trees that routinely require UVM 10% A record is kept on customers that have vegetation near overhead lines on their property 25% Vegetation data and permissions collected by the UVM program is stored in the CSS 5% The CSS information is available to the forestry notifiers/planners 40% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% Percent of Companies
22 INDUSTRY PERCEPTION OF WORKLOAD The UVM customer base is a subset of the utility customer population How many customers (meters) have UVM performed on their property? Question asked in survey 45% of utilities perceive their workload as 100% of their electric customers Is UVM is viewed as a system correction more than a customer transaction?
23 SYSTEM RELIABILITY The efficacy of a program isn t just measured by how long it has gone without an outage but rather how well it can prove the conditions that cause an outage won t happen in the future.
24 RELIABILITY: A CHANGE IN UVM PRACTICES In the past, the UVM goal was to create enduring airspace between trees and conductors Current UVM objectives have been realigned to fit budget constraints, realistic schedules and greater tolerance for tree/wire conflicts Reliability metrics have been used to measure performance and direct UVM programs Changing reliability expectations has led to a shift in the primary purposes for performing UVM UVM has shifted from the singular endeavor to keep all vegetation away from the conductor to a reduction of outage consequences
25 RELIABILITY CENTERED (RC) UVM CHALLENGES What causes the system to fail the most often? What kind of outages have the longest duration? Which outages impact the most customers? Which outages interrupt the most load?
26 TRENDS IN THE UVM INDUSTRY VEGETATION RELATED SAIDI/SAIFI TO MEASURE UVM EFFICACY Reliability Metrics Used for Utility Vegetation Management Planning and Evaluation Sample Size: 27 MAIFI 4% CAIFI 4% CAIDI 48% SAIDI 59% SAIFI 70% 0% 10% 20% 30% 40% 50% 60% 70% 80% Percent of Companies that Use Each Metric for UVM
27 PROBLEMS WITH UVM RELIABILITY CENTERED MANAGEMENT Less emphasis on safety Increased cost of reactive maintenance Unpredictable reliability once trees are in contact with conductors Down stream customers experience more tree related outages Inadequate emphasis on grid resiliency to high intensity, major, or widespread events that cause trees to fail into power lines
28 DESIGNATING MAJOR EVENT DAYS Major versus Non Major Event Tree Related Outages: Average Annual Percent in Each Category for Years Sample Size: 19 Averages: Non Major Event: 69%, Major Event: 31% Median: 72% Percent of Tree Related Outages 100% 90% 80% 70% 60% 50% 40% 30% 20% 7% 93% 11% 89% 15% 85% 16% 84% 18% 82% 20% 80% 22% 78% 25% 75% 27% 73% 28% 72% 31% 69% 32% 68% 32% 68% 43% 57% 51% 49% 53% 47% 55% 45% 56% 44% 56% 44% 10% 0% AP AW AD AF BD AE AA AI AC AG AJ BB AZ AK BG AR AO AH BE Company Code Non Major Event Major Event
29 ARE INDUSTRY RELIABILITY METRICS A GOOD MEASURE OF VEGETATION CONDITIONS? ACOMPARISON OF COMPANIES X, Y AND Z X is a large UVM reliability centered maintenance company with best in class electric reliability performance Y is a large compliance centered, multiple objectives performance company with best inclass UVM performance Z is a small company with best in class reliability, but an underfunded UVM program with increasing levels of liability risk
30 TREE RELATED SAIFI COMPARISON Tree Related Non Major Event Day SAIFI Five Year Average Average: Q1: Median: Q3: Tree Related Non MED SAIFI J C T S Y Z X O R E Q N K G H A I B L M Company Code
31 TREE RELATED SAIDI Tree Related Non Major Event SAIDI Five Year Average Average: 51.3 Q1: 14.0 Median: 24.9 A3: 60.0 Tree Related Non MED SAIDI in Minutes J C S Z X O Y R T Q H E K N G I A B L M Company Code
32 TOTAL NUMBER OF TREE RELATED OUTAGES Non MED Tree Related Outages Per Pole Kilometre Non MED Tree Related Outages per Distribution Pole Kilometre Five Year Average Average: Q1: Median: Q3: (0.024 /mile) (0.131/mile) (0.168/mile) 0.00 Y S B H J T A C Z Q G O K E R N L I M X Company Code
33 RELIABILITY CAN IMPROVE WHILE THE NUMBER OF TREE RELATED OUTAGES INCREASE Comparison of Non Major Event Outages and SAIFI for Company X , Number of Non Major Event Outages 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2, Non Major Event SAIFI Outages 8,906 12,194 13,918 14,865 16,197 SAIFI
34 AN EFFECTIVE UVM PROGRAM HAS TO LOOK BEYOND THE CURRENT RELIABILITY PICTURE 6 Average Number of Tree Related Outages per Circuit versus Number of Years Since Vegetation Was Managed Average Number of Outages per Circuit Rural: r = 0.960, p < Suburban: r = 0.868, p < Number of Years Since Vegetation Was Managed Suburban Averages Outages Rural Averages Outages
35 WHAT DO CUSTOMERS PAY FOR UVM? RESIDENTIAL 38% AND INDUSTRIAL/COMMERCIAL 62% OF ELECTRICITY SALES $160 Average Annual Cost of UVM per Customer Sample Size: 30 Average: $35.88 Q1: $17.01 Median: $26.98 Q3: $54.60 $140 Cost per Customer in CAD $120 $100 $80 $60 $40 $20 $16.38 $37.14 $39.00 $0 C U R O V H W X AA AB AC E AD AE AF G S AG AI Z Y I T AJ N L J K B M Company Code If 33% of all electric customers receive UVM on average every 4 years the Median at time of work cost per UVM customer is estimated to be $298
36 UVM FUNDING: A PERENNIAL PROBLEM Percent of Companies with Highly Adequate, Somewhat Adequate or Inadequate Budgets in % Not Adequate 31% Adequate 10% Somewhat Adequate Inadequate budgets were characterized as follows: Significant annual fluctuations Lower than the needs of the approved program No where close to meeting program needs Unpredictable
37 INDUSTRY RELIABILITY INDICES ARE INADEQUATE FOR ACCESSING THE RELATIVE EFFICIENCY OF A PROGRAM Outages per kilometre is a better indicator of vegetation conditions Measurement of program efficiency should not rely primarily on reliability Program efficiency should include other stated objectives of UVM
38 KEY TO A SUCCESSFUL UVM PROGRAM, ADEQUATE FUNDING AND CUSTOMER ACCEPTANCE Utilities can facilitate the relationship between the utility, the regulator and the customer by improving the data they collect and by providing clear analysis that proves compliance to UVM regulations and shows improvements in performance.
39 HYDRO ONE STUDY HORIZONS Best management practices and opportunities for gaining efficiency Balanced objectives and risk tolerances Measurable performance against industry trends Modeling the system for various scenarios Forecasting costs, including cost of deferred maintenance Opportunities for capitalization of UVM
40 QUESTIONS?
41 Distribution Total Factor Productivity Study Stakeholder Engagement Meeting STEVE FENRICK OCTOBER 22, 2015
42 PSE Services Utility Automation Technology Work Plans Integration, Testing, Training and Support Cyber Security & IT Assessments Substation and Distribution Automation Strategic Planning Consulting and Procurement services on SCADA, AMI/AMR, OMS, GIS, CIS, and others 2 Load Forecasting Statistical Performance Measurement (Productivity & Benchmarking) Market & Load Research Alternative Regulation Demand-Side Management (DSM) Value of Service Other Economic Studies Communications Rates & Financial Planning Economics & Research Strategic Communications Planning Technology Assessments: Private vs. Commercial Land Mobile Radio Design Radio Path & Propagation Studies Fiber WAN Design & Procurement GIS Mapping & Integration of Communication Assets Microwave & Fixed Data Design & Procurement Revenue Requirement Studies Class Cost of Service Studies Rate Design Key Account Services Rate Comparisons & Competitive Assessments Strategic & Financial Planning Engineering & Design System Planning Studies Distributed Generation Strategies Transmission Studies Power Factor Correction Studies System Loss Evaluation Substation Design Line Design
43 My Experience 3 Steve Fenrick (Leader, Economics & Market Research) Worked on empirical TFP and benchmarking research for 3rd Generation IR (while at Pacific Economics Group) Engaged by the Ontario Energy Board to produce the OM&A annual stretch factor updates ( ) Peer group benchmarking update Econometric benchmarking update Provided TFP research in Enbridge Gas (2013) case Benchmarking and TFP expert on behalf of the Coalition of Large Distributors during the 4th Generation IR proceeding (2013) Benchmarking expert on behalf of Toronto Hydro ICM (2013/2014) Custom IR (2014/2015) Benchmarking expert on behalf of Hydro Ottawa Custom IR (2015)
44 Agenda 4 Section 1: Project Overview Section 2: Empirical Approach Section 3: Incorporating TFP Drivers into the TFP Measure Section 4: Project Next Steps
45 Project Overview 5 Board s March 12, 2015 Decision in EB , page 17: The OEB sees value in Hydro One measuring its own total factor productivity over time to be able to demonstrate improvement in productivity to its customers and the OEB. The OEB leaves it to Hydro One to determine its preferred total factor productivity study method. However, the period of the study should include years at least going back to The results of the study must be filed as part of Hydro One s next rates application.
46 Project Overview 6 In 4th Generation IR, the Board Staff s expert developed industry TFP trends The Board s method was based on developing an X-factor for rate adjustments, not for providing a comprehensive view of performance Board s November 21, 2013 Decision in EB stated on page 17: The Board acknowledges that achieved industry TFP may be negative due to unforeseen events and/or situations in which costs may be incurred with no corresponding increase in output. A more comprehensive TFP measure is needed to properly demonstrate the performance of Hydro One
47 Project Overview Project Objectives include: 1. Provide the Board and stakeholders with Hydro One s own TFP trends starting in 2002 through 2022 Variable projections estimated by Hydro One will be used to calculate TFP projections from 2015 and beyond 2. Build upon the 4th Generation IR TFP methodology by incorporating additional cost drivers into the analysis 3. Clearly explain the basis for weighting and incorporating these additional TFP drivers 4. Wherever possible, use empirically-derived evidence Provide high-level recommendations that Hydro One can use to inform its future planning or reporting processes 7
48 Empirical Approach 8 From the Staff s consultant PEG in 4th Generation IR proceeding: Outputs = customers, total kwh deliveries, system capacity peak demand Inputs = Capital & OM&A Output choice was logical when setting a TFP trend for a rate setting application, because revenues are primarily driven by these three outputs However, in demonstrating the trend in performance of a particular distributor, the fact that input quantities (i.e. cost trends) are a function of other possible outputs must be recognized and incorporated into the study
49 Empirical Approach 9 Other possible TFP drivers that the TFP study will investigate: Changes in reliability (SAIFI & SAIDI) during the period Changes in customer service levels Environmental output Regulatory outputs and costs Input price inflation of Hydro One Other drivers as they may be uncovered during the course of the project
50 Incorporating TFP Drivers Two possible approaches: 1. Empirical modeling 2. Hydro One internal added cost estimates Wherever possible, PSE will prefer empirical modeling based on externally-derived evidence in incorporating TFP drivers If no model can be developed, Hydro One added cost estimates will be used if: 1. PSE is convinced the variable in question is crucial to properly demonstrating Hydro One s TFP performance trend, and 2. Reasonable estimates can be obtained 10
51 Incorporating TFP Drivers Working Assumptions: 1. Reliability is an output of an electric distributor and is positively correlated with cost (i.e., if reliability improves then cost is likely to increase) 2. Customer service is an output and is positively correlated with cost 3. Meeting more stringent environmental or regulatory requirements is an output and is positively correlated with cost 11
52 Project Next Steps 1. Modify TFP study plan based on feedback 2. Data and information gathering 3. Hydro One interviews on possible TFP drivers Hydro One data and information gathering Industry sample data gathering Analysis on incorporating TFP variables Reliability, customer service, environmental & regulatory, input price, other 4. Finalize TFP estimates and write report 5. TFP report to be filed in Hydro One s next rate case 12
53 13 Steve Fenrick Leader, Economics & Market Research Group Thank You: (mobile)
54 Distribution Pole Replacement and Station Refurbishment Unit Cost Benchmarking Studies Stakeholder Session #1 October 22, 2015 DISPUTES & I NVESTI GATI O N S ECONOMICS FINANCIAL ADVISORY MANAGEM E N T CONSULT I NG
55 Agenda Section 1» Overview Section 2» Approach Section 3» Process and Metrics Section 4» Next Steps Section 5» 2
56 Overview Navigant» A global and independent consulting firm, Navigant s reputation is for assisting our clients across core industries to address the critical opportunities and challenges of new markets, evolving customer demands, regulation and business model changes, new technologies, risk, and disputes» With more than 400 consultants, Navigant s Global Energy Practice is the largest energy management consulting team in the industry. Our team of experienced professionals serves leading energy companies to address their most complex business opportunities and challenges 3
57 Overview First Quartile Consulting» First Quartile Consulting is the leading provider of benchmarking services in the transmission and distribution and customer service areas for utilities» Established in 2007, the leadership team has was together for 20 years prior to founding of 1QC The 1QC team began conducting large-scale transmission and distribution benchmarking studies in 1989 Annual studies under the First Quartile Consulting name began in 2008» Beyond the annual studies, the firm conducts many different tailored benchmarking studies each year for individual clients, designed to meet specific needs, be it deep concentration on a particular area (e.g. work management approaches, capital planning, field construction, etc.), or a broader view across geographies or outside the utility industry 4
58 Overview Goals and Objectives Design and implement a robust benchmarking study of Hydro One s distribution costs The benchmarking study will:» Include an appropriate group of businesses to use as comparators/peers to Hydro One, taking into account a number of characteristics, including asset demographics, geography, customer characteristics, etc.;» Quantify and evaluate Hydro One s practices and unit costs for distribution pole replacement and distribution substation refurbishment work relative to the peer group, taking into account cost drivers and differentiating characteristics;» Ensure a common understanding of the comparison criteria through the use of clear definitions;» Explore cost variations and associated practices and methods;» Make recommendations on practices that could be augmented or adopted to realize efficiency gains;» Engage stakeholders in regards to the peer group selection criteria, comparison metrics, and preliminary findings and recommendations. 5
59 Approach Project Plan 6
60 Approach Panel Design Approaches to creating a pool of companies for a benchmarking study Approach 1: Approach 2: Concentrate only on comparing overall performance outcomes Panel 1: Select a homogeneous panel Investigate operating practices in order to find the best practices Panel 2: Select a panel of different utilities Approach recommended for Hydro One: a. Study goal is to look at both performance and practices b. Select a balanced panel to include like companies as well as different companies c. Some factors to consider in selecting peers for Hydro One: Size of company Density of the territory Regulatory regime Ownership structure Weather and storm patterns Ability to collect financial, operating, and practice data 7
61 Approach Peer Group Selection Step 1: Identify demographics (e.g., volume, type and age of Dx poles, number and type of Dx substation projects, climate, geography, customer density.) Step 2: Establish appropriate sample size Step 3: Filter Existing Benchmarking Community Step 4: Identify and Recruit Additional Participants Benchmark Sample 8
62 Approach Targeted Companies 8 Ontario Distribution Companies: PowerStream (GTA) Veridian (GTA) Horizon (Niagara Peninsula) Greater Sudbury and/or Thunder Bay (Northern Ontario) Algoma Power (Central Ontario) Entegrus (South-western Ontario) Essex and/or EnWin (Southwestern Ontario) Oshawa and/or Kingston and/or Peterborough (Eastern Ontario) B.C. Hydro Southern California UES Electric Edison Tucson Electric Power SaskPower Manitoba Hydro Oncor Electric Delivery KCP&L Westar Energy ComEd DTE EKPC Hydro-Québec New York State E&G Rochester G&E PECO Energy PSE&G PPL Electric Utilities BGE Nova Scotia Power Central Maine Power CPS Energy Austin Energy CenterPoint Energy 9
63 Process and Metrics Pole Replacement Strategy Develop Pole Infrastructure Program Evaluation Execute Inspection Routine Information Document / Archive Inspection Results Improvement Perform Follow Up Or Emergency Treatment Documentation Archive Treatment Results Measures Materials Methods # Of poles Pole demographics (type, height, number of circuits, footings, etc.) Begin inspect % inspected Unit cost per pole All / targeted Visual / sound & bore / excavation / sonic Rotation years Number archived Serviceable / rejects / reinforce / replace Maintenance follow up months Wood / steel / composite / concrete Remedial treatment or replacement Manpower Internal / Vendor Internal / Vendor Unit cost per pole Urban-suburban / circuit / pole Program cost 10
64 Process and Metrics Substation Refurbishment Strategy Develop the program Evaluation Execute substation evaluation routines Information Document / archive inspection and evaluation results Preparation Design The solution Improvement Perform construction Documentation Record new asset information Measures # of stations, Station demographics Component demographics # of stations evaluated, Specific components evaluated Inspection cycles by component, Number of inspections archived Station demographics per project Design and construction costs per project Months to complete design Months to complete construction Units of property recorded Unit cost / kva Materials Types and number of components replaced / refurbished for each project Methods Refurbishment strategy component based vs. station centric Evaluation methods by component Project initiation criteria Component replacement criteria imds vs traditional substation rebuild at existing site Manpower Internal/vendor Program cost 11
65 Next Steps Several short-term and some long-term activities to prepare the comparisons» Follow-up from the stakeholder session Respond to inputs Modify the process and metrics as necessary» Data gathering Hydro One internal data gathering Interviews Complete a questionnaire Peer group Recruit Canadian and US utilities to participate Work with participating utilities to validate their data for accuracy and comparability» Summary and reporting Initial draft of data comparisons for data validation and analysis Analysis and normalization Draft report» Analysis expected to be complete in Q1 2016, next stakeholder session planned for Q
66 Appendix
67 Glossary Pole Replacement Term Pole replacement Definition Pertains to all the activates related to managing the wood pole assets # of poles Approximate number of poles, in thousands, owned by the utility Pole demographics Begin inspect Segmentation of the population of poles based on age (in service) The age of a pole or circuit area that inspections will begin % inspected The number of actual inspections performed divided by the scheduled number of inspections Unit cost Rotation years The actual cost divided by the number of pieces of work / circuits The number of years between inspections # archived How many past inspections are recorded in the database Maintenance follow up months Wood / steel / composite / concrete All / targeted Visual / sound & bore / excavation / sonic Serviceable / rejects / reinforce / replace Remedial treatment / replacement Urban-suburban / circuit / pole Internal / vendor Program cost The number of months after the inspection in which all non-urgent repairs or maintenance was completed Common types of poles replaced The scope of the inspection program. All, the program is across the entire system. Targeted, the program is aimed at specific areas (usually older) Methods of pole inspections Common categorization of poles post inspection Methods of treatment based on pole inspection results Method of retaining past inspection and maintenance records, either for non-rural areas, by poles on a circuit or individual pole The categorization of the actual resources utilized to perform the work The total dollar amount spent, by the utility, on inspection and maintenance of their wooden pole assets 14
68 Glossary Substation Refurbishment Term Distribution substation refurbishments Definition Projects that result in the replacement of multiple substation equipment components at an existing distribution substation site # of stations Number of distribution substations in service at the company Substation demographics Component demographics Segmentation of substation population by location (urban/suburban/rural), basic design type (e.g., single transformer versus multiple transformer), voltage levels and size (MVA) Age profile of major substation components # stations evaluated The number of stations evaluated as potential refurbishment candidates Specific components evaluated Evaluation methods Inspection cycles by component Number of inspections archived Project initiation criteria Component replacement criteria imds Traditional substation rebuild Internal / vendor Program cost Listing of the specific substation components that are evaluated when determining whether a refurbishment project should be initiated at a specific substation site Description of the methods used to evaluate inspection results and other condition data on specific substation components The months between formal inspections of various substation components The number of inspection results that are archived and evaluated for each major substation component The specific asset condition criteria which cause a refurbishment project to be initiated The specific asset condition criteria which cause a specific component to be replaced during a substation refurbishment project Integrated Modular Distribution Station a prefabricated station containing a transformer and switchgear mounted on a platform Projects that involve replacement of individual substation components (with no integrated modules) The categorization of the actual resources utilized to perform the work The total dollar amount spent, by the utility, on their distribution substation refurbishment programs 15
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