Asset Management Plan

Transcription

1 MainPower New Zealand Limited ( MPNZ ) Asset Management Plan 1st April st March P age

2 CERTIFICATE FOR YEAR-BEGINNING DISCLOSURE Pursuant to Clause of section 2.9 We, WYNTON GILL COX and ALLAN BERGE, being Directors of MainPower New Zealand Limited, certify that, having made all reasonable enquiry, to the best of our knowledge: a) The following attached information of MainPower New Zealand Limited prepared for the purposes of clause and sub-clauses 2.6.3(4) and 2.6.5(3) of the Electricity Information Disclosure Determination 2012 in all material respects complies with that determination; and b) The prospective financial or non-financial information included in the attached information has been measured on a basis consistent with regulatory requirements or recognised industry standards Wynton Gill Cox Allan Berge 5 April April 2013

3 Contents EXECUTIVE SUMMARY Background and Objectives of the AMP Purpose Statement Planning Period Date Approved by Directors Description of Stakeholder Interests Identifying Stakeholders Stakeholder Interests Accommodating Stakeholder Interests Managing Conflicting Interests Accountabilities and Responsibilities for Asset Management Accountability at Ownership Level Accountability at Governance Level Accountability at Executive Level Accountability at Management Level Accountability at Works Implementation Level Summary of Accountability Mechanisms Key Reporting Lines Delegated Authorities Significant Assumptions Factors that may lead to Material Differences Overview of Asset Strategy and Delivery Overview of Systems and Information Integrated Management System Asset Management Information Systems Asset Management Processes Funding Strategy Limitations of Asset Management Data System Gaps Identified Description of Key Processes Overview of Documentation, Controls and Review Process Overview of Communication and Participation Process Assets Covered Details of Assets Load Characteristics Major Customers and Characteristics Wigram Network Description of Network Configuration Bulk Supply Configuration Subtransmission System Distribution System Distribution Substations Low Voltage Network Secondary assets Network Assets by Category Subtransmission Zone Substations P age

4 2.3.3 Distribution and LV Lines Distribution and LV Cables Distribution Substations and Transformers Distribution Switchgear Ripple Injection Systems (Load Control) Street Light Control SCADA Communications Protection and Metering Systems Power Factor Correction Plant Property and Buildings Mobile Substations and Generators Embedded / Distributed Generation Asset Justification Introduction Historical Development Supply Reliability and Quality Capacity and ODV Network Optimisation Service Levels Defined Performance Indicators Safety First Reliability of Supply Quality of Supply Customer Service Environmental Protection Economic Efficiency Consumer-Oriented Performance Indicators, Asset Performance Indicators Service Level Targets Basis of Performance Indicators Strategic Outcomes External Environment Customer Demand for Service Overall Customer Survey Results Setting Reliability Targets Setting Capacity Targets Setting Power Quality Targets Setting Safety Targets Setting Customer Service Targets Setting Environmental Targets Setting Economic Efficiency Targets Network Development Planning Planning Criteria and Assumptions Reliability Criteria Security Criteria Lost Customer Minutes Fund Voltage Regulation Fault Levels Strategies for Standardising Assets and Designs Strategies for Energy Efficiency Determining Capacity Conductors and Cables Transformers P age

5 4.4.3 Overload Ratings Prioritising Network Development Projects Process and Criteria for Prioritising Network Development Demand Forecasts Population Land Use Changes Known Major Load Developments Known Major Generation Developments Historical Data Energy sales GXP Demand Load Forecasts Total Load Forecast (including Kaikoura) Load Forecast by Individual GXP Subtransmission Line Load Forecast Zone Substation Load Forecast Wigram network load forecast Network Constraint Identification and Analysis Significant Development Options Available Network Development Program Transpower Transmission kv Transmission Development GXP Development Kaiapoi GXP Southbrook GXP Ashley GXP Waipara GXP Culverden GXP Kaikoura GXP Rangiora East GXP MPNZ Subtransmission and Zone Substation Development Waipara - Kaikoura 66 kv Rangiora West 66 KV Southbrook - Waipara 33 kv Waipara - Hawarden 33 kv Culverden - Hanmer 33 kv Mouse Point Substation Upgrade Substation Resonant Earthing Major Substation Upgrade Miscellaneous Minor Work kv and 33 kv Sub-transmission and Zone Substation Work Program Distribution Development Rangiora Eastern Feeder Rangiora West 22 kv Conversion Kaiapoi GXP Feeder Upgrades Johns Road Link Wetheral Feeder Upgrade Mouse Point P25 Upgrade Cheviot Greta Link Medbury 22 kv Conversion Kaikoura Peketa to Oaro 22 kv Conversion SWER Upgrades Ashley Feeder Establishment Woodend Distribution Development P age

6 Kaiapoi Earthquake Work General Underground Conversion General 22 kv Conversion Rangiora East GXP Feeder Development DG Related Upgrades Distribution System Automation Snow Strengthening Customer Network Extensions Miscellaneous Distribution Upgrades Distribution System Work Program Total Capital Expenditure Embedded Generation Policies Non-Network Solutions Time of Use Metering Demand Side Management Lifecycle Planning Key Drivers and Assumptions Maintenance Practice Routine and Corrective Maintenance and Inspection Policies, Replacement and Renewal Policies Maintenance and Renewal Policies and Programs Reactive Maintenance Time Based Maintenance Condition Based Maintenance Reliability Based Maintenance Inspection Programs Inspection, Maintenance and Renewal by Asset Category Sub transmission, Distribution and LV Overhead Lines Sub-transmission, Distribution and Low Voltage Underground Cables Zone Substations Switchgear Distribution Substations and Transformers Other Life Cycle Maintenance Expenditure Total Operational Maintenance Expenditure Non-Network Development, Maintenance and Renewal Description of Non-Network Assets IT systems Asset Management Systems Office Buildings, Depots and Workshops Office Furniture and Equipment Vehicles Tools, Plant and Machinery Non-Network Asset Maintenance and Renewal Policies IT Systems Office Buildings, Depots and Workshops Office Furniture and Equipment Vehicles Tools, Plant and Machinery Material Non-Network CapEx Material Non-Network Maintenance and Renewal Risk Management P age

7 6.1 Risk Methods and Conclusions HILP Exposures and Assessments Exposure to Natural Disaster Risk Natural Disaster Hazards Identified Transpower GXP Stations Sub-transmission and Distribution Systems Zone Substations Kiosks and Building Substations Cabling Systems Communications / Control Systems The Impact of the 4 September 2010 Greendale Earthquake Exposure to Physical Risk Exposure to Asset Failure Risk Zone Substations kV and 33kV Sub-transmission System Distribution System Main Towns Communications / Control Systems Audit of Asset Failure Recovery Systems Transpower Roading Authorities Risk Mitigation Policies and Practices Risk Mitigation Measures Introduction Specific Development Projects to Mitigate Risk Specific Maintenance Programs to Mitigate Risk ISO and 9001 Policies Health and Safety Emergency Response Plans Emergency Response Plans Network Contingency Plans Business Continuity Plan Insurance Cover Performance Evaluation Physical Performance Compared to Plan Financial Performance Compared to Plan Service Level Performance Compared to Plan Reliability Performance Variance Analysis Capacity Performance Variance Analysis Quality Performance Variance Analysis Safety Performance Variance Analysis Customer Service Performance Variance Analysis Environmental Performance Variance Analysis Economic Efficiency Performance Variance Analysis Summary of AMMAT Assessment Improvements to Asset Management Planning Practices Capability to Deliver Confirmation AMP Can Be Delivered Overhead Line Work Underground Cable Work Workshop P age

8 8.1.4 Technical Services Operations Organisational Structure Schedule 11a CapEx Forecast Schedule 11b OpEx Forecast Schedule 12a Asset Condition Schedule 12b Capacity Forecast Schedule 12c Demand Forecast Schedule 12d Reliability Forecast Schedule 13 AMMAT P age

9 EXECUTIVE SUMMARY The Purpose of the Plan The primary purpose of the asset management process at MainPower New Zealand Limited ( MPNZ ) is to: deliver the required level of service to customers in an economically efficient manner that meets the expectations of stakeholders. This Asset Management Plan ( AMP ) forms an integral part of the asset management processes at MPNZ. The primary purpose is to systematically document the asset management programmes established by MPNZ to ensure the levels of service meet customer expectations consistent with MPNZ s Vision and Corporate Organisational Goals and Objectives. A secondary purpose is to achieve compliance with regulatory disclosure requirements. Interaction with Corporate Objectives, Business Plans and Business Processes The overall direction of MPNZ is guided by its Vision and Corporate Organisational Goals and Objectives. These are implemented by the specific plans and targets contained in the Statement of Corporate Intent (SCI) which are embodied in the AMP and operationalised in the annual Business Plan and Budget as illustrated below. Corporate Vision Organisational Objectives and Goals Statement of Corporate Intent Stakeholder Drivers Strategy Code of Sustainable Practice Targets Asset Management Plan Annual Business Plan and Budget MPNZ is owned by the MainPower Trust on behalf of electricity customers as defined in the MainPower Trust Deed. The business direction of MPNZ is guided by its Vision and Values: MainPower will be recognised by its community as a leading regional electricity distribution and electricity supply company Our Values are: Safety First, Teamwork, Loyalty, Pride, Fairness and Integrity. 9 P age

10 The Corporate Organisational Objectives consistent with the Vision are: MainPower will carry out its business activities in accordance with commercial and industry best practice and will give particular emphasis to safety, superior customers service, sustainability, and value creation ; MainPower will continue to operate and make available to its customers, a safe, secure and reliable electricity distribution network ; MainPower will ensure, through the management and operation of its electricity distribution network, technical support and field services contracting capability, a level of security and reliability of electrical supply that places MainPower in the upper quartile when compared to other regional line companies in New Zealand ; MainPower will be recognised within the electricity industry for the implementation of Smart Grid Technologies. The Statement of Corporate Intent ( SCI ) is approved by the MainPower Trust and is a statement of MPNZ s overall intentions and objectives agreed between the Board and the Trustees for MPNZ for the financial year commencing 1 April 2013 and the two succeeding financial years. The SCI is used to establish MPNZ s corporate strategy with regard to governance, asset management, the operating environment, major projects and reviews, and financial performance. The SCI contains objectives on providing network capacity, safety, reliability and pricing, and includes targets for the first three years of the AMP planning period. Thus the SCI provides a strategic framework for the AMP. The AMP is therefore the tool by which MPNZ meets its corporate objectives, specifically in the areas of network availability, capacity, security and meeting regional growth and associated demand for electricity. In addition to the SCI, an Annual Business Plan and Budget is prepared based on the capital expenditure projects and the network operations and maintenance activities outlined in the AMP. The AMP and SCI are also consistent with MPNZ s Code of Sustainable Practice. Date Completed and Period to Which the Plan Relates The AMP documents the likely development, maintenance and replacement requirements of the network assets over the next ten years, from 1 April 2013 to 31 March 2023, with a focus on specific projects that have been identified in the next five years. The plan was completed for asset management purposes in March 2013 and has been approved by the Board of Directors at the 5 th April meeting of the Board. Stakeholder Interests The main drivers of the Corporate Vision, Strategic Objectives, SCI and ultimately the AMP are the interests of the key stakeholders, expressly the MainPower Trust, Electricity Consumers and Retailers. The interests of additional stakeholders such as contractors, government, insurers, landowners, employees, property developers, territorial local authorities, Transit NZ and Transpower are also considered in developing the AMP. Asset Management Processes Asset management information systems have been developed at MPNZ to support all asset management processes, with asset management based around a continuous improvement cycle as depicted below. 10 P age

11 Establish business needs & Define levels of service Forecast Demand Existing Asset information Requirements Analysis Systems/Support Analysis Maintenance Plan Replacement Plan Development Plan Financial Forecasts Performance Monitoring Assets Covered by the AMP MPNZ owns and operates electricity networks in North Canterbury (including Kaikoura) and Wigram located in Christchurch. The North Canterbury network covers areas immediately south of the Waimakariri River through to Rakautara north of Kaikoura and west to the Lewis pass, Lees Valley and the Waimakariri Gorge. The North Canterbury network is connected to two Transpower 66kV lines at Southbrook supplied from Transpower s Islington substation, and two 220kV connections at each of Waipara and Culverden These lines supply five Grid Exit Point ( GXP ) stations at Southbrook, Kaiapoi, Ashley, Waipara and Culverden. MPNZ distributes electricity from these stations through a 66kV and 33kV overhead sub-transmission network, a number of zone substations, a complex 22kV and 11kV distribution system, and distribution transformers; supplying customers from a low voltage network. The small Wigram network is an underground network operated at 11kV, taking supply from the Orion New Zealand network and supplying customers at low voltage. The following table summarises the asset types, quantities and values for the entire MPNZ network. Asset Category Unit Quantity ODRC ($m) Sub-transmission Lines and Cables km Sub-transmission Switchgear Number Zone Substations Number Distribution Lines 22kV km Distribution Cables 22kV km Distribution Lines 11kV km Distribution Cables 11kV km MV Switchgear Number Distribution Transformers Number Distribution Substations Number LV Reticulation km Customer Service Connections Number Other System Fixed Assets Total P age

12 Service Levels A key objective of asset management planning is to match the level of service provided by the assets to the expectations of customers and other stakeholders. This is consistent with MPNZ s Vision and Corporate Organisational Objectives and Goals. Target levels of service for the planning period are set following consideration of the overall vision and corporate objectives, and following consultation with customers and other stakeholders. For the purpose of the AMP, the key service criteria are: Safety Reliability of supply Capacity of the network Quality of supply Customer service Environmental protection Economic efficiency. Service targets are used in the following ways: to inform customers of the proposed service standards, to develop asset management strategies appropriate to that level of service, as benchmarks against which performance will be measured, to identify the costs and benefits of the service options assessed and offered, and to enable customers to assess the suitability, affordability and equity of the services offered. The setting of level of service targets reflects MPNZ s commitment to continual improvement. The levels of service will increasingly reflect changing customer expectations as further information on customers and other stakeholders preferences and regulatory requirements are used to identify targets. The table on page 7 shows the service level forecast for the period 1 April March Risk Management The objectives of risk management include: safeguarding public and employee safety ensuring MPNZ is able to meet its service level targets protection and continuity of electricity supply fulfilment of legal obligations efficient protection and operation of assets protection of shareholder and commercial interests preparation of contingency plans for foreseeable emergencies. MPNZ first conducted a study of its exposure to major risks in The study focused on natural hazards, asset failure and compliance with the Resource Management Act. In 2005 a second, external study considered network risk assessment and network asset failure recovery. These studies have enabled MPNZ to put in place effective risk mitigation procedures and policies consistent with the objectives outlined above. 12 P age

13 Strategic Outcome Actual Actual Actual Actual Actual Measures SAIFI Total SAIDI Total CAIDI Total SAIFI planned (B) SAIFI unplanned (C) SAIDI planned (B) SAIDI unplanned (C) Reliability Faults/100km total Faults/100km 66kV Faults/100km 33kV Faults/100km 22kV Faults/100km 11kV Faults/100km SWER Total Interruptions Quality Number of proven voltage <20 <20 <20 <20 <20 <20 <20 <20 <20 <20 <20 Number of public injuries on Safety Number of OSH notifiable Number of employee injuries Customer Average rating from customer Service Deliverables Overall Satisfaction Number of excessive noise Number of environmental Environmental Percent of SF6 gas lost <1 % <1 % <1 % <1 % <1 % <1 % <1 % <1 % <1 % <1 % <1 % <1 % <1 % <1 % <1 % <1 % Number of uncontained oil spills Number of breaches of resource Load Factor 66.2% 70.4% 69.7% 71.1% 61.8% 65.0% 64.0% 64.0% 64.0% 65.0% 65.0% 66.0% 66.0% 67.0% 67.0% 68.0% Capacity Utilisation Factor 23.1% 22.7% 21.7% 21.5% 22.5% 21.5% 21.3% 21.1% 20.9% 20.7% 20.5% 20.4% 20.3% 20.2% 20.1% 20.0% Economic Loss Ratio 5.4% 5.3% 5.3% 5.6% 4.4% 5.6% 5.6% 5.6% 5.6% 5.6% 5.6% 5.6% 5.6% 5.6% 5.6% 5.6% Efficiency Capital cost per km $3,312 $3,529 $2,989 $2,659 $2,982 $2,933 $7,115 $4,649 $4,400 $3,856 $3,854 $3,761 $3,660 $3,787 $3,717 $3,987 Capital cost per ICP $440 $467 $400 $356 $392 $384 $957 $616 $577 $501 $495 $481 $465 $478 $467 $498 Operating cost per km $1,640 $2,032 $1,963 $2,206 $2,300 $2,340 $2,184 $2,248 $2,259 $2,278 $2,317 $2,327 $2,330 $2,334 $2,338 $2,342 Operating cost per ICP $218 $269 $262 $295 $300 $306 $294 $298 $296 $296 $298 $297 $296 $295 $294 $ P age

14 Demand and Growth The AMP forecasts likely demand at each GXP, zone substation and sub-transmission circuit over the next 10 years as a basis for planning future investment needs. These forecasts reflect consideration of historical growth trends, forecast economic activity and population growth, non network solutions such as demand management and potential embedded generation developments. This information, combined with target levels of service and asset life cycle planning, is used to determine the development plan. The AMP recognises that there is more certainty with short term projections, up to five years, and that significant individual load developments are difficult to predict and as a result, in some cases, they must be accommodated as they occur. The major growth in the region continues to come from new irrigation demand and dairy farm conversions in the Culverden and Rangiora west areas. The Waimakariri District Council is predicting rapid growth in the vicinity of Rangiora and Woodend as a result of the Christchurch earthquakes, and also a large redistribution of the load in Kaiapoi from earthquake affected areas to new subdivisions in the north and west. The load will shrink with Red Zoning in the Kaiapoi east and beach areas. Some rural residential developments in the neighbouring areas are also being fast tracked. MPNZ expects residential growth at Wigram to be static. 130 North Canterbury Forecast Load 120 Peak Load (MW) Actual Forecast Summer Winter USI Coincident The current trend of high levels of growth is predicted to continue throughout the forecast period as illustrated above. This will continue to require new assets to be developed well before they are due for renewal or refurbishment. Accordingly MPNZ expects that demand growth and capacity upgrades will continue to drive the lifecycle management plan with the core focus being development projects. Development Plan Network development planning is undertaken to identify asset enhancement and development programmes required to meet target levels of service, and is based on analysis of maximum demands, network power flows, specific customer requests and demographic estimates. Sub-transmission planning emphasises long range objectives associated with system expansion and increases in zone substation and GXP capacity to meet projected demand. It also takes into account key issues associated with reliability and security of supply. Distribution planning emphasises short run objectives associated with new customer connections, power quality improvement (such as voltage regulation and power factor correction), loss reduction and operating improvements. The key components of the development plan are: Transpower upgrade of the Kaiapoi GXP switchboard to provide additional higher rated feeders which was planned for 2012/13 but is now expected to be completed in March Transpower upgrade of the Ashley GXP to provide additional capacity for Rangiora, Loburn, and Ashley areas is expected to be completed by early P age

15 Transpower provision of two 66kV feeders out of Southbrook to supply the Rangiora West area is expected to be completed by March Completion of a new GXP at Rangiora East after 2018 depending on growth uptake at the Pegasus and Ravenswood developments. Completion of the 66kV upgrade of the Waipara-Kaikoura sub-transmission circuit by The upgrade of the 33kV sub-transmission to 66kV in the Swannanoa, Cust, Oxford and Bennetts areas over the period 2013 to 2015 to meet projected demand. Distribution development is driven by the need for additional capacity and security across the region and includes network reinforcement in a number of areas. Significant projects include the creation of two new Kaiapoi GXP feeders as other work progresses, a new Oaro 22kV line in the Kaikoura area as other work progresses, the construction of an 11kV link between John Street substation and the Rangiora West switching station, and the reconfiguration of the Rangiora East feeder during 2013/14. The further rebalancing of load between Oxford, Bennetts, Swannanoa and Cust zone substations during 2013 and 2014 including further 22kV conversion in this area. Conversion of overhead lines to underground reticulation throughout the region where high social dividends are achieved. Distribution automation investment throughout the planning period to ensure network reliability targets are met. Investments required to meet the demand for new connections throughout the planning period. A summary of the development plan forecast expenditure is included at the end of this Executive Summary. Maintenance and Renewals Plan Maintenance and renewal planning seeks to achieve the desired levels of service required by customers, while optimising the costs over the asset lifecycle. The main drivers of the maintenance and renewal plan are the results of asset condition surveys, condition based maintenance assessments, asset renewal programmes, asset obsolescence, safety considerations and regulatory compliance. In addition network development in response to growth helps to replace old technology by replacing assets that are not intelligent enough or assets that have their ratings exceeded. Over time there has been a significant contribution to the renewal of the system from the alterations needed to accommodate additional customer requirements or to meet changing customer needs. The Maintenance and Renewal Plan involves the following activities: Reactive maintenance or repair on breakdown Time based preventative maintenance Condition based maintenance Reliability based maintenance. MPNZ maintains excellent data about the quantity, condition and performance of its assets. This has been compiled from historical construction records, asset inspections, testing and field work. Asset failures and recurring fault causes are investigated and measures to eliminate or mitigate the problems are built into the maintenance plan. This information and the associated inspection and testing processes provide the basis for the maintenance and renewals plan. A summary of the maintenance and renewals plan forecast expenditure is included at the end of this Executive Summary. 15 P age

16 Asset Management Improvement MPNZ s asset management practices will follow a continuous improvement cycle in order to strive to achieve best practice, consistent with our corporate vision. Previous AMPs have been independently reviewed and a number of the recommendations have been incorporated into this current plan. The following major initiatives have been identified for improvement in the current plan: Implement a performance planning module in TechnologyOne to improve customer pricing and work management. Upgrade of SCADA system Variance Analysis The table below illustrates the actual asset management expenditure compared to the planned expenditure for the twelve month period ending 31 March The September and February earthquakes had a major impact on expenditure and reliability. Actual customer connections reduced significantly due to uncertainty over land and insurance. Fault and Emergency Maintenance, Refurbishment and Renewal Maintenance, and Reliability, Safety and Environmental work all increased due to earthquake repairs and replacements. BUDGET ACTUAL VARIANCE Capital Expenditure Customer Connections $3.357m $4.203m 12% System Growth $2.516m $2.542m 1% Reliability, Safety and Environment $1.848m $1.774m -4% Asset Replacement and Renewal $3.247m $2.701m -17% Asset Relocations $0 $0.117m Subtotal - Capital Expenditure on Asset Management $11.368m $11.338m -0.3% Operational Expenditure Routine and Preventative Maintenance $2.585m $2.168m -16% Refurbishment and Renewal Maintenance $0.053m $0.054m 3% Fault and Emergency Maintenance $0.747m $ % Subtotal - Operational Expenditure on Asset Management $3.385m $3.041m -10% Total Direct Expenditure on Distribution Network $14.753m $14.379m -0.3% Overhead to Underground Conversion Expenditure $0.469m $0.313m -33% 16 P age

17 MPNZ s aspirational reliability service targets were exceeded, however the regulatory limits for SAIDI and SAIFI were met. The basis for setting MPNZ s targets has been revised for the forecasts. Strategic Outcome Measures Target Actual Reliability SAIDI (Threshold 125) SAIFI (Threshold 1.6) CAIDI Faults/100km total Faults/100km 66kV Faults/100km 33kV Faults/100km 22kV Faults/100km 11kV Faults/100km SWER Total Interruptions Quality Number of proven voltage complaints <20 19 Safety Number of public injuries on MPNZ facilities or due to MPNZ network issues Number of OSH notifiable accidents Number of Employee injuries LTIFR Customer Service Average rating from customer survey Deliverables Customer Satisfaction >8 > Environmental Number of complaints of excessive noise from substation/distribution transformers Number of environmental complaints from staff/public Percent of SF6 gas lost Number of uncontained oil spills Number of breaches of resource consent requirements 0 0 <1 % % 0 0 Economic Efficiency Load Factor Capacity Utilisation Factor Loss Ratio Capital Cost per km Capital Cost per ICP Operating Cost per km * Operating Cost per ICP * 69.9% 21.2% 5.3% $2116 $273 $878 $ % 22.5% 4.4% $2982 $392 $2300 $300 Financial Summary The asset management expenditure forecast for the period 1 April 2013 through to 31 March 2023 is shown below in Table 5 by key expenditure category, in real terms. 17 P age

18 Ten yearly Forecasts of Expenditure ($000) Capital Expenditure Customer Connection 7,720 7,000 7,200 6,750 6,750 5,170 5,170 5,170 5,170 5,170 System Growth 11,345 7,109 4,450 3,100 3,000 5,000 4,400 5,200 4,900 6,400 Asset Replacement and Renewal 3,174 3,240 4,080 3,969 3,949 4,319 4,319 4,319 4,319 4,319 Asset Relocations Reliability, Safety and Environment 1,000 2,525 3,050 2,200 2,650 1,400 1,400 1,400 1,400 1,000 Total - Capital Expenditure on Asset Management 23,359 19,875 18,780 16,019 16,349 15,889 15,289 16,089 15,789 16,889 Operational Expenditure Fault and Emergency Maintenance Vegetation ,008 1,028 Routine and Preventative Maintenance 1,018 1,128 1,183 1,215 1,410 1,431 1,452 1,474 1,497 1,520 Refurbishment and Renewal Maintenance Total - Operational Expenditure 2,557 2,888 2,960 3,074 3,287 3,356 3,396 3,438 3,480 3,523 25,916 22,762 21,740 19,094 19,636 19,245 18,686 19,527 19,269 20,412 Underground Conversion P age

19 1. Background and Objectives of the AMP 1 This AMP has been prepared to provide interested people with the information to assess whether assets are being managed for the long term and delivering the required performance in an efficient manner. Some effort has been made to avoid industry jargon where possible to aid general understanding. The plan places significant focus on transmission, subtransmission and zone substation assets where the major high impact risks lie. The AMP covers all MPNZ distribution assets and associated systems which transport power delivered at Transpower points of supply to customers within the service area shown on the location map below. The AMP also covers MPNZ s assets located in the Christchurch Wigram area. Figure 1 MPNZ Distribution Area In addition to MPNZ distribution network assets, this AMP also considers Transpower s transmission system and development program where it impacts on service level objectives. The AMP documents the likely development, maintenance and replacement requirements of the network assets over the next ten years, from 1 st April 2013 to 31 st March Fulfils requirement P age

20 Developments identified in the latter half of the planning period should be considered indicative only, and are likely to be subject to changing market conditions and trends in customer demand. This AMP is not, in itself, an approved program for specific work but summarises the general programs and specific projects that MPNZ believes will be required. Although it is a valid indication of requirements based on current knowledge, actual projects and programs will inevitably differ from this plan, particularly where they are driven by specific customer requirements. This AMP does not represent an authorization by MPNZ to commit expenditure, nor does it represent a commitment to proceed with any of the specific projects or programs. Authorization will result from approval of the annual budget by the Board and from specific project approvals. MPNZ s approach to capital budgeting is set out in Section 4. A summary of the assets included in this AMP and their associated fair value based on optimised depreciated replacement cost methodology as at 31 March Asset Category Unit Quantity ODRC ($m) Sub-transmission Lines and Cables km Sub-transmission Switchgear Number Zone Substations Number Distribution Lines 22kV km Distribution Cables 22kV km Distribution Lines 11kV km Distribution Cables 11kV km MV Switchgear Number Distribution Transformers Number Distribution Substations Number LV Reticulation km Customer Service Connections Number Other System Fixed Assets Total Table 1 - Summary of Assets and Regulatory Asset Value 1.1 Purpose Statement 2 The primary purpose of the asset management process at MPNZ is to: deliver the required level of service to customers in an economically efficient manner that meets the expectations of stakeholders. This Asset Management Plan ( AMP ) forms an integral part of the asset management processes at MPNZ. The primary purpose is to systematically document the asset management programs established by MPNZ to ensure the levels of service meet customer expectations consistent with MPNZ s Vision and Corporate Organisational Goals and Objectives. A secondary purpose is to achieve compliance with regulatory disclosure requirements. The overall direction of MPNZ is guided by its Vision and Corporate Organisational Goals and Objectives. These are implemented by the specific plans and targets contained in the Statement of Corporate Intent (SCI) which are embodied in the AMP and operationalised in the annual Business Plan and Budget as illustrated in below. 2 Fulfils requirement P age

21 Corporate Vision Organizational Objectives and Goals Statement of Corporate Intent Stakeholder Drivers Strategy Targets Code of Sustainable Practice Asset Management Plan Annual Business Plan and Budget Figure 2 Interaction of Key Planning Documents MPNZ is owned by the MPNZ Trust on behalf of electricity customers as defined in the MPNZ Trust Deed. The business direction of MPNZ is guided by its Vision and Values: MPNZ will be recognised by its community as a leading regional electricity distribution and electricity supply company Our Values are: Safety First, Teamwork, Loyalty, Pride, Fairness and Integrity. The Corporate Organisational Objectives consistent with the Vision are: MPNZ will carry out its business activities in accordance with commercial and industry best practice and will give particular emphasis to safety, superior customers service, sustainability, and value creation ; MPNZ will continue to operate and make available to its customers, a safe, secure and reliable electricity distribution network ; MPNZ will ensure, through the management and operation of its electricity distribution network, technical support and field services contracting capability, a level of security and reliability of electrical supply that places MPNZ in the upper quartile when compared to other regional line companies in New Zealand ; MPNZ will be recognised within the electricity industry for the implementation of Smart Grid Technologies. The Statement of Corporate Intent ( SCI ) is approved by the MPNZ Trust and is a statement of MPNZ s overall intentions and objectives agreed between the Board and the Trustees for MPNZ for the financial year commencing 1st April 2013 and the two succeeding financial years. The SCI is used to establish MPNZ s corporate strategy with regard 21 P age

22 to governance, asset management, the operating environment, major projects and reviews, and financial performance. The SCI contains objectives on providing network capacity, safety, reliability and pricing, and includes targets for the first three years of the AMP planning period. Thus the SCI provides a strategic framework for the AMP. The AMP is therefore the tool by which MPNZ meets its corporate objectives, specifically in the areas of network availability, capacity, security and meeting regional growth and associated demand for electricity. In addition to the SCI, an Annual Business Plan and Budget is prepared based on the capital expenditure projects and the network operations and maintenance activities outlined in the AMP. The AMP and SCI are also consistent with MPNZ s Code of Sustainable Practice. This AMP manages MPNZ assets for the long term by maintaining their ability to provide the required service levels over their lifecycle. The AMP ensures that customers are able to provide feedback on their level of comfort with MPNZ s service levels. Customers have indicated in customer surveys that current levels of system reliability are acceptable. The AMP provides a measure of the capital and operating costs on a per customer and per kilometre basis, and attempts to compare these results nationally. The AMP also documents the management and mitigation of asset related risk. 1.2 Planning Period 3 The AMP documents the likely development, maintenance and replacement requirements of the network assets over the next ten years, from 1 April 2013 to 31 March 2023, with a focus on specific projects that have been identified in the next five years. There is an obvious degree of uncertainty in any predictions of the future, and accordingly the AMP is uncertain. Consumer demand driven by turbulent commodity markets, public policy trends and possible generation opportunities within MPNZ s demand profile means the future is perhaps less certain than many other infrastructure businesses that have greater scale. Population redistribution following the Christchurch earthquakes is a major factor with the timing, location and full extent of this uncertain. Accordingly MPNZ has attached the following certainties to the timeframes of the AMP: Timeframe Residential and Commercial Large Industrial Intending Generators Year 1 Reasonable certainty Reasonably certain Reasonable certainty Years 2 and 3 Some certainty Little if any certainty Some certainty Years 4 to 6 Some certainty Little if any certainty Some certainty Years 7 to 10 Some certainty Little if any certainty Little if any certainty Table 2 - AMP Timeframe Certainties MPNZ notes that many generation and technology issues increase the uncertainty of the planning environment. 1.3 Date Approved by Directors 4 The plan was completed for asset management purposes in March 2013 and has been approved by the Board of Directors at the March 2013 meeting of the Board. 3 Fulfils requirement Fulfils requirement P age

23 1.4 Description of Stakeholder Interests 5 The main drivers of the Corporate Vision, Objectives and Goals, SCI and ultimately the AMP are the interests of the key stakeholders, expressly the MPNZ Trust, Electricity Consumers and Retailers. Feedback from all stakeholders through surveys, direct communication and the complaints process is used to establish objectives, plans and specifically target levels of service. MPNZ also enters into contracts with end use customers that determine level of service drivers for this AMP. The MPNZ Trust agrees MPNZ s overall intentions and objectives with the MPNZ Board of Directors and agrees on performance targets and other measures in relation to its objectives through the SCI process Identifying Stakeholders MPNZ defines its stakeholders as any person or class of persons that does or may do one or more of the following: Has a financial interest in MPNZ (be it equity or debt). Pays money to MPNZ (either directly or through an intermediary) for delivering service levels. Be physically connected to the network. Use the network for conveying electricity. Supplies MPNZ with goods or services (including full-time labour). Is affected by the existence, nature or condition of the network (especially if it is in an unsafe condition). Has a statutory obligation to perform an activity in relation to the network s existence or operation (such as request disclosure data, regulate prices, investigate accidents, include in a District Plan etc). 5 Fulfils requirement P age

24 1.4.2 Stakeholder Interests The interests of stakeholders are defined below: Stakeholder Interests Viability Price Supply quality Safety Compliance MPNZ Trust Bankers Connected customers Connected generators Energy retailers Mass-market representative groups Insurers Industry representative groups Staff & contractors Suppliers of goods & services Public (as distinct from customers) Land owners Councils (as regulators) Transport Agency (TANZ) Ministry of Economic Development Energy Safety Service Commerce Commission Electricity Commission Electricity Complaints Commission Ministry of Consumer Affairs Table 3 - Stakeholder Interests The relationships between MPNZ s key stakeholders are as follows: GENERAL PUBLIC LANDOWNERS CONSUMERS ELECTRICITY RETAILERS CONTRACTORS AND SUPPLIERS Consumers elect Trustees MAINPOWER TRUST holds shares on behalf of consumers Trustees appoint Directors GOVERNMENT AND REGULATORY AGENCIES TRANSPOWER BOARD OF DIRECTORS MAINPOWER NEW ZEALAND LIMITED STAFF Figure 3 Stakeholder Linkages 24 P age

25 Stakeholder expectations and demands are identified as follows: Stakeholder How Expectations are Identified MPNZ Trust By their approval or required amendment of the SCI. Regular meetings between the directors and the trustees. Bankers Regular meetings between the bankers and MPNZ s Managing Director. By adhering to MPNZ s treasury procedure. By adhering to banking covenants. Connected customers Regular discussions with large industrial consumers as part of their on-going development needs. Independent survey of 600 customers every year from Residential, Commercial and Major User categories. Connected or intending generators Discussions with intending generators after they have made contact with MPNZ. Energy retailers Annual consultation with retailers. Mass-market representative groups Informal contact with group representatives. Formal independent survey of representative community groups such as Federated Farmers and Grey Power every 2 years. Industry representative groups Informal contact with group representatives. Staff & contractors Regular staff briefings. Regular contractor meetings. Negotiations with relevant unions. Suppliers of goods & services Regular supply meetings. Newsletters. Public (as distinct from customers) Informal talk and gossip around the district. Feedback from the Trust s public meetings. Informal comments made to trustees, directors and staff. Land owners Individual discussions as required. Councils (as regulators) Formally as necessary to discuss issues such as assets on Council land. Transport Agency Formally as required. Ministry of Economic Development Regular bulletins on various matters Release of discussion papers Analysis of submissions on discussion papers Energy Safety Service Promulgated regulations and codes of practice Audits of MPNZ s activities Audit reports from other lines businesses Commerce Commission Regular bulletins on various matters Release of discussion papers Analysis of submissions on discussion papers Conferences following submission process Electricity Authority Weekly update Release of discussion papers Briefing sessions Analysis of submissions on discussion papers Conferences following submission process General information on their website Electricity Complaints Commission Reviewing their decisions in regard to other lines companies Table 4 - Stakeholder Expectations and Demands 25 P age

26 1.4.3 Accommodating Stakeholder Interests Stakeholder interests are accommodated as follows: Interest Description How interests are accommodated Viability Viability is necessary to ensure MPNZ will accommodate stakeholders needs for longterm that shareholders and other providers of finance such as bankers have sufficient reason to keep investing in MPNZ (and to retain ownership). viability by delivering earnings that are sustainable and reflect an appropriate risk-adjusted return on employed capital. In general terms this will need to be at least as good as the Trust could obtain from a term deposit at the bank plus a margin to reflect the risks to capital in an ever-increasingly regulated lines sector. Price Supply Quality Price is a key means of both gathering revenue and signalling underlying costs. Getting prices wrong could result in levels of supply reliability that are less than or greater than MPNZ s customers want. Emphasis on continuity, restoration and reducing flicker is essential to minimising interruptions to customers businesses. MPNZ s total revenue is constrained through recognition of the beneficial ownership arrangement. Failure to gather sufficient revenue to fund reliable assets will interfere with consumer s business activities, and conversely gathering too much revenue will result in an unjustified transfer of wealth from consumers to shareholders. MPNZ s pricing methodology is expected to be costreflective, but issues such as the Low Fixed Charges requirements can distort this. MPNZ will accommodate stakeholders needs for supply quality by focusing resources firstly on continuity and restoration. Safety Compliance Staff, contractors and the public at large must be able to move around and work on our network in total safety. MPNZ needs to comply with many statutory requirements ranging from safety to disclosing information. Table 5 - Accommodating Stakeholder Interests MPNZ will ensure that the public at large are kept safe by ensuring that all above-ground assets are structurally sound, live conductors are well out of reach, all enclosures are kept locked, and all exposed metal is securely earthed. MPNZ will ensure the safety of its staff and contractors by providing all necessary equipment, improving safe working practices, and ensuring that workers are stood down in unsafe conditions. Motorists will be kept safe by ensuring that aboveground structures are kept as far as possible from the carriage way within the constraints of private land and road reserve. MPNZ will ensure that all safety issues are adequately documented and available for inspection by authorized agencies. MPNZ will disclose performance information in a timely and compliant fashion. 26 P age

27 1.4.4 Managing Conflicting Interests Priorities for managing conflicting interests are: Safety - MPNZ will give top priority to safety. Even if budgets are exceeded or non-compliance arises, MPNZ will not compromise the safety of its staff, its contractors or the public. Viability - MPNZ will give second priority to viability (as defined above), because without it MPNZ will cease to exist which makes supply quality and compliance pointless. Pricing MPNZ will give third priority to pricing as a follow on from viability (noting that pricing is only one aspect of viability). MPNZ recognises the need to adequately fund its business to ensure that consumer s businesses can operate successfully, whilst ensuring that there is not an unjustified transfer of wealth from its consumers to its shareholders. Supply quality MPNZ will give fourth priority to supply quality because a reliable electricity supply is a key input to a prosperous and orderly community. Compliance - MPNZ will give lower priority to compliance that is not safety related. 1.5 Accountabilities and Responsibilities for Asset Management 6 The organisational structure of MPNZ is shown below. The MPNZ Trust holds shares in the Company on behalf of the electricity customers who are both the income and capital beneficiaries of the Trust. The Trust is made up of seven trustees who are elected by the electricity customers. The Trust has the role of appointing the Board of Directors of the Company and to approve the Statement of Corporate Intent. The Trust also feedbacks valuable information to MPNZ from discussions they have with customers on matters such as quality and performance. Statement of Corporate Intent AMP, Business Plan, Performance Review Individual Employment Agreements MAINPOWER TRUST BOARD OF DIRECTORS Managing Director Allan Berge Group Finance Manager Warren Wright Commercial Manager Dayle Parris Corporate Services Manager Wayne Lapslie Engineering Manager Peter Hurford Generation Manager Andrew Hurley HR Manager Sandra O Donohue Community Relations Manager Regulatory Manager IMS Manager Network Manager Operations Network Manager Development Network Manager Field Services Network Manager Assets Network Manager Projects Network Manager Customer Services Safety & Training Manager Training Co-Ordinator Figure 4 Accountability Structure The Board of Directors is responsible for the overall corporate governance of MPNZ. The Board guides and monitors the business and affairs of MPNZ on behalf of the shareholder the MPNZ Trust, to whom it is accountable. MPNZ has seven Directors on the Board including a Managing Director. Company performance is monitored by an audit committee made up of three Directors. 6 Fulfils requirement P age

28 MPNZ operates within several governance policies, including a Delegated Authority policy, Treasury policy, an internal audit and management review program and an SCI. All policies and procedures have been approved by either the MPNZ Board of Directors or the MPNZ Trustees as required. An annual strategy planning meeting is held between the Board and the Executive Management around December each year where new developments and changes to asset management methodologies are discussed and agreed. This establishes a framework for the new AMP for the following year. The Board approves the annual AMP, Business Plan and Budgets, and ensures they are consistent with the SCI. Progress against the AMP is reported to the Board on a monthly basis. Reporting of actual financial performance against budget is analysed monthly by senior management. The Board delegates the day-to-day responsibility for the operation and administration of the Company to the Managing Director. The Managing Director s Management team is responsible for the Company s operations, including the delivery of the AMP and for achieving operational objectives. Each divisional manager is also responsible for human resources within their division including individual employment contracts, training, succession planning, and health and safety systems. The Engineering Manager is responsible for producing and delivering on the AMP and for ensuring that good industry practice asset management is deployed so that the MPNZ network continues to satisfy customer requirements. The Engineering Manager is responsible for achieving the work identified in the annual Business Plan and for ensuring cost performance against budget. Asset management outcomes are reported to the Board of Directors every month with a more detailed report every six months, and a revised and updated AMP each year. Project progress reports are prepared fortnightly, identifying all budget and schedule variances, and all significant project issues and risks. All network planning, design and operations are carried out by MPNZ Engineering Staff. Some major projects are designed by external consultants but conceptual design and project management is maintained within the network team. Planning and design responsibilities include the optimisation of network performance and investment through effective strategic planning, investment and network modelling. Key accountabilities include the development of the AMP, network performance, technical standards, maintenance, capital investment optimisation and implementation of the capital work plan. The majority of works contracts are undertaken by MPNZ s Engineering Field Services staff. Work initiated by customers or from within MPNZ will be designed and planned by the Engineering Assets staff with help from Field Services Supervisors and Customer Planners. The Engineering Projects section project coordinators will set up the job and liaise with Field Services Supervisors to resource and schedule the work prior to Field Services staff undertaking the work. Project management and coordination of the various works will be carried out by a number of selected staff from relevant groups depending on the size of the project. External contractors are used from time to time generally on large projects where a tender has been released due to insufficient internal resources, or on smaller jobs to help fill in times of high workloads. Monitoring of the performance of field workers whether they be Field Services staff or external contractors, is given high priority. This includes health and safety performance, work quality performance and work delivery performance. More detailed information on how field services are managed is provided later in this section Accountability at Ownership Level MPNZ has a single shareholder the MainPower Trust. The Trust currently has 7 trustees each of who stands possessed of 8,110,571 ordinary shares in MPNZ on behalf of the Trust. Tony Hall (Chair) Richard Allison Brent Hassall Jim Abernethy Kevin Brookfield Catherine McMillan 1 vacant seat due to a death (by-election in progress as this AMP is being finalised) 28 P age

29 The Trust is subject to the following two accountability mechanisms: By an election process in which up to 3 trustees are elected/re-elected by connected consumers every 3 years. By the Trust Deed which holds all Trustees collectively accountable to the New Zealand judiciary for compliance with the Deed Accountability at Governance Level MPNZ currently has 6 non-executive Directors and a Managing Director who collectively comprise the Board and are accountable to the Trust through the SCI. Gill Cox (Chair) Peter Cox (Deputy Chair) Trevor Burt Stephen Lewis Judith Hoban Tony King Allan Berge (Managing Director) Because the SCI includes projected revenue and reliability measures (as described in Section 1.1) both the Trust and the Board are informed of intended price and supply quality tradeoffs Accountability at Executive Level The Managing Director of MPNZ, Mr Allan Berge, is accountable to the Board of MPNZ primarily through his employment agreement. The Managing Director s performance criteria includes supply reliability and quality targets. The Engineering Manager, Mr Peter Hurford, is accountable to the Managing Director for asset management and ensures that each Engineering section takes responsibility for their part of asset management as detailed below in section Accountability at Management Level Accountability for asset management at the second tier is split two ways: Accountability for the moment by moment continuity and restoration of supply lies with the Network Manager - Operations, principally through control & dispatch, switching and fault restoration. The success of this role obviously depends on the nature and configuration of assets decided upon. Accountability for managing the existing assets and planning new assets lies jointly between the Network Manager Development and the Network Manager - Assets. This function addresses long-term planning issues such as capacity, security and asset configuration. Hence in the medium to long term, the Network Manager Development plays significant roles in influencing key outcomes such as reliability, security and capacity. Accountability for the key area of line pricing lies with the Commercial Manager and the Network Manager - Development Accountability at Works Implementation Level The Network Manager Field Services has field services staff that are accountable to him primarily through their employment contracts for delivering specific outcomes that contribute to the overall price-quality trade-off. In-house field staff are accountable to the Network Manager Field Services individually through their employment contracts 29 P age

30 and collectively through internal service level agreements, whilst external contractors are accountable through performance based contracts. From time to time, MPNZ obtains competitive quotes from external contractors for well defined larger projects. Analysis of the quotes obtained reveals that MPNZ s internal contractor pricing is competitive, and is therefore productively efficient Summary of Accountability Mechanisms The primary and other accountability mechanisms are summarised in the following table: Function Primary Accountability Mechanism Other Accountability Mechanisms Representation Election of trustees by connected Company annual report. customers. Information disclosure. Disclosed AMP. Public notices in newspaper. Consultation on major issues. Trustees being approached in the street by concerned customers. Trustees are accountable to the NZ judiciary for complying with the Deed. Occasional challenges of Trust decisions and activities by any other stakeholders. Ownership Statement of corporate intent. Twice-yearly meetings between Trust and Board Governance Employment contract. Monthly board reports. Informal discussions between Chairman and Chief Executive. Management and Employment contract. Monthly management meetings. Service Delivery Weekly team talks. On-going daily contact. General work-place accountability (masterservant relationship). Internal Contracting Employment contract. Internal company dynamics. Internal service level agreement. Competitive tendering of large one-off projects. External Contracting Performance based contracts Competitive tendering. Unstated threat of taking work back inhouse. Table 6 - Primary and Other Accountability Mechanisms 30 P age

31 1.5.7 Key Reporting Lines The key formal reporting mechanisms and their content are summarised below: Reporting line Reporting mechanisms & content Trust to Customers and wider Community Consultation on Trust s annual plan. Trust s AGM. Trust s annual report and audited accounts. Board to Trust Company annual report, includes Chairman and Managing Director s statements and audited accounts. Annual information disclosure. Twice-yearly presentation includes financial and operational performance. Managing Director to Board Managing Director s statement in company annual report, includes narrative of year s highlights. Monthly board report, includes progress on significant CapEx projects and major outages. Engineering Manager to Managing Director Annual report on budget and major projects and Board Monthly report includes year to date performance and progress against budget. Individual reports on major projects. Daily updates on areas of concern Level 3 Staff to Level 2 Managers Daily updates during brief meetings. Annual reports Field Service Supervisors to Network Weekly progress reports Manager Field Services Monthly meetings on progress to budget External Contractor to Network Manager Weekly progress reports Field Services Monthly meetings on progress. Table 7 - Key Reporting Lines Delegated Authorities The level of delegated authority within the Company is shown in the following table: Purchase or Sale of Goods or Services Managing Director s Approval in Writing Approved Budget Group Managing Director Any amount with prior Board approval $500,000 Group Finance Manager $200,000 $100,000 Group Managing Director - Secretary $2,500 Engineering Manager $200,000 $100,000 Network Manager - Development $50,000 Network Manager - Assets $50,000 Network Manager - Operations $50,000 Network Manager - Field Services $50,000 Network Manager - Projects $50,000 Commercial Manager $200,000 $100,000 Human Resources Manager $200,000 $100,000 Information Technology Manager $200,000 $100,000 Generation Manager $200,000 $100,000 Other Engineering Staff $2,500 Table 8 - Delegated Authorities 31 P age

32 1.6 Significant Assumptions 7 MPNZ is assuming that the following issues will underlie its Asset Management activity: Residential subdivision activity will continue due to the migration north following the 2010 and 2011 earthquakes. Major industrial plants will keep on drawing the same kw and kwh for the next 5 years A low rate of irrigation growth will continue. No significant embedded generation will be commissioned within the next 5 years, with the possible exception of the Brown s Rock hydro development in the Oxford district. Existing external regulatory and legislative requirements are assumed to remain unchanged throughout the planning period. Thus the external drivers which influence reliability targets and design, environmental, health and safety standards and industry codes of practice are constant throughout the AMP period. All projections of expenditure are presented in real New Zealand dollar terms, that is 1 April 2013 values. In reality over time, input costs (including those sourced from outside of New Zealand) for asset management activities will change at rates greater or less than the rate of general inflation. As expenditure forecasts are updated annually, this approach is acceptable and consistent with that prescribed. Transpower continues to provide sufficient capacity to meet MPNZ s requirements at the existing GXPs and undertakes the additional investment required to meet additional future demand, as specified in the Development Plan section of this AMP. The existing Vision and Corporate Objectives and Policies of MPNZ continue for the planning period. The results of future annual customer surveys of customer satisfaction and willingness or otherwise to pay for improved reliability are consistent with those undertaken since Neither the MPNZ network nor the local transmission grid is exposed to a major natural disaster during the planning period. The MPN network is exposed to normal climatic variation over the planning period including temperature, wind, snow and rain variances consistent with its experiences since Demand growth at each GXP is predicted to continue throughout the planning period at a rate consistent with the historical rate of growth from Seasonal load profiles remain consistent with recent historical trends. Zoning for land use purposes remains unchanged during the planning period. No changes are proposed to the existing business of MPNZ, and thus all prospective information has been prepared consistent with the existing MPNZ business ownership and structure. The principal sources of information are: MPNZ s Strategic Planning documents including the Statement of Corporate Intent and the Annual Business Plan and Budgets; MPNZ s Business Continuity Plan; Annual MPNZ Customer Surveys ( ); Maximum electricity demand, at each GXP, for the period ; Regional population data and forecasts sourced from Statistics New Zealand and the Waimakariri, Hurunui and Kaikoura District Councils; Interaction with customers and the community in relation to possible future developments within the network region. 7 Fulfils requirement P age

33 1.7 Factors that may lead to Material Differences 8 MPNZ considers that the following factors may lead to material differences: Wet years that require less than average irrigation, which reduces income and hence the funds available. Big snow storms that divert resources from line maintenance. The likely cost increase and timing delays of MPNZ s new office building due to high demand for building resources. Regulatory requirements may change, requiring MPNZ to achieve different service standards or different design or security standards. This could also impact on the availability of funds for asset management. MPNZ s ownership could change, and different owners could have different service and expenditure objectives than those embodied in the AMP. Customers could change their demands for reliability or their willingness to pay for different levels of service. The network could experience major natural disasters such as an earthquake, flood, tsunami or extreme wind, rain or snow storms. The rate of growth in demand could significantly accelerate or decelerate within the planning period. Within each region, load patterns could change resulting in a movement from summer to winter peaks and vice versa. Significant embedded generation capacity may be commissioned within the network supply area. Significant land zoning changes may be implemented within the region. Significant new loads may require supply. MPNZ s largest customers may significantly reduce load. There could be major unforeseen equipment failure requiring significant repair and possible replacement expenditure. More detailed asset management planning undertaken over the next 3 5 years may generate development and maintenance requirements which significantly differ from those currently provided for. 8 Fulfils requirement P age

34 1.8 Overview of Asset Strategy and Delivery 9 The objectives of MPNZ s AMP are outlined above, consistent with its Corporate Vision, Goals and Objectives and the needs of its Stakeholders. A balancing of the asset management drivers are required to achieve these objectives. The key drivers have been identified as follows: Driver Measurement Asset management solution Safety Contractor safety Asset design Customer safety Maintain existing assets to be safe General public safety Operate assets according to safe industry codes of practice and regulation Ensure that MPNZ s contractors and employees commit to active participation in safety training, safe work practices, hazard identification and prompt reporting of near misses and incidents Economic CapEx per ICP, CapEx per km. Cost-benefit analysis. Efficiency OpEx per km, OpEx per ICP. Tender processes for major projects Maximising utilisation of assets Robust maintenance and renewal plans Service Performance Risk Management Environmental Management Reliability of supply (number and duration of faults) Capacity of supply (ability to meet the demand for load) Quality of supply (voltage levels, waveform quality, momentary fluctuations) Loss of supply from natural disaster or asset failure Transpower failure to supply Shortfall in the provision of capacity or reliability Retention of the ISO standard in Environmental Management Regulatory Commerce Act 1986 Compliance Electricity Act 1992 Electricity Regulations 1997 Electricity (Hazards from Trees) Regulations 2003 Electrical Codes of Practice Resource Management Act 1991 Table 9 - Overview of Asset Strategy and Delivery Determine what level of service customers require through customer enquiry and feedback and provide service options (where possible) and associated costs Develop, implement and test Business Continuity Plan Avoid the discharge of contaminants into the environment Consideration of the environment when purchasing new assets e.g. SF6 gas switchgear Mitigate against visual pollution when planning new infrastructure Ensure compliance with relevant regulatory requirements in all asset management solutions 9 Fulfils requirement P age

35 1.9 Overview of Systems and Information 10 MPNZ utilises a management philosophy driven by continued certification to international standards in quality management, environmental management and in health and safety that underpins the total asset management operation. A number of information management tools are also utilised to help deliver relevant information to the decision makers. During 2010 & 2011 MPNZ introduced a new software platform to improve asset management by integrating asset information, works management and financial information and providing business intelligence Integrated Management System MPNZ has integrated quality, environmental and health and safety management into a single group-wide business management system referred to as the Integrated Management System ( IMS ). The IMS is used to proactively manage the business; comply with the laws, regulations, and customer requirements; prevent pollution; ensure worker and public safety and support continuous improvement. The IMS has been designed on two levels: MPNZ Group - information and management processes that are common to every company within the MPNZ Group; and Operation Specific - information and operational processes which are specific to individual companies within the MPNZ Group. For example quality, health and safety and environmental management directly impact on asset management processes in the following ways: Quality Management MPNZ maintains an ISO9001 certified quality assurance program and continues to develop, implement and internally audit the program in accordance with this commitment. Relevant standards for asset management planning include design, purchasing, document and record management and environmental management Environmental Management MPNZ supports the principle of a sustainable planet and is committed to caring for the environment while delivering energy and energy-related products and services to our customers. MPNZ is also committed to an ISO14001 certified environmental management program. In relation to the AMP, this includes: Promoting pollution prevention through employee/contractor training and education. Exceeding environmental legislation and developing a co-operative relationship with territorial regulatory authorities. Adopting a responsible role in managing all hazardous substances. MPNZ has a transformer oil containment program in use at major substations and for emergencies. MPNZ is aware of the issues involved in the use of SF6 gas in its network equipment and has developed procedures for its safe handling and disposal. MPNZ has also been a cooperative partner in recent work undertaken by Transpower in the safe handling and disposal of SF6. Promoting energy efficiency and conservation through efficient design and customer education. Considering environmental issues when establishing new extensions to the network or reconstructing existing network Health and Safety MPNZ has established the following Strategic Goals for Public and Employee health and safety: To provide a safe and healthy work environment for staff, contractors, visitors and the public with a zero tolerance for unsafe acts or omissions; 10 Fulfils requirement P age

36 To encourage staff, contractors and visitors to think and act safely at all times; To measure and continually improve our Health and Safety performance by setting objectives aimed at the elimination of work related injury and illness; To make Health and Safety planning and accident prevention an integral part of all (short and long term) planning processes so that all practicable steps are taken to prevent accidents and harm to people and property; To benchmark our performance and practices against the best in the business in New Zealand; To comply with New Zealand Health and Safety legislation, industry regulations, codes of practice and safe operating procedures. MPNZ has achieved certification to the NZS4801 Health and Safety Management standard. The following chart illustrates the interaction of these key MPNZ Group management processes and their relationship to operational processes: Figure 5 Key Company Processes 36 P age

37 1.9.2 Asset Management Information Systems Asset Management Information Systems have been developed at MPNZ to support the asset management processes. Table 10 below provides a description of each system. AMIS Description Accounting Systems Capital and maintenance expenditure is managed using a comprehensive financial system. Capital expenditure relates to the purchase of fixed assets, or to an increase in the output or service capacity of a fixed asset. Expenditure to maintain or recapture the existing output or service capacity of the network is expensed. Historically MPNZ s accounting systems and budgets have collated renewals and asset replacement with maintenance. The accounting system has been recently modified to separately capture renewals from maintenance. In 2011 a TechnologyOne software platform was introduced to integrate financials, works and assets management. Geographic Information System ( GIS ) MPNZ uses a GE Network Solutions Geographical Information System (GIS) for the management of spatial asset information. A number of GIS based applications have been developed covering outage management, maintenance reporting, load flow analysis, and mobile GIS for field staff. GIS provides a primary data source for asset valuations, a reference system for all work, a reference system for roads, properties, easements, and geographic representation of assets. The TechnologyOne software has been integrated with the existing GIS system. A web based GIS viewer provides the primary user interface to asset information for network operators, engineering and maintenance staff. Further development of the outage management and load flow applications will be advanced once the TechnologyOne platform is fully bedded down. MPNZ employs global positioning satellite (GPS) technology for positioning key assets (transformer poles, tap off poles, switch locations) on the geographical platform. Information about other assets (including in between poles) is also gathered to ensure accurate location and identifier information in the GIS and associated equipment databases. Asset SQL Databases All field asset information for transformers, switchgear and equipment, cables and conductors is stored in TechnologyOne. This system supports a SQL database back end and a dot net front end. Information is maintained from as-built field information. MPNZ s hardware and server software is continually updated consistent with modern high capacity hardware platforms. Information security management includes maintaining backup facilities for stored information for protection from a security breach or disaster. Works Management System The works management system issues and tracks jobs through the TechnologyOne software. It also maintains cost and quality information. A comprehensive job reporting system provides managers with detailed information progress of the work plan, work hours and cost against budget. 37 P age

38 AMIS SCADA and Load Management Systems Description MPNZ s Invensys Wonderware Intouch SCADA (supervisory control and data acquisition) system: - displays voltage, current, & status information in real time from remote points on the network - receives instantaneous information on faults - remotely operates equipment from the control centre. MPNZ operates Landis and Gyr ripple injection plants and On Demand load management software to control: - customer water heaters to limit system peak loads and area loading constraints (mainly during winter months) - street lighting - electricity retailer tariffs. AutoCAD Detailed substation plans, standard construction drawings and many subdivision plans are prepared and stored in AutoCAD Where applicable, these are linked to the TechnologyOne assets. Network details such as cable locations in trenches, boundary offsets, GPS location etc are stored in AutoCad to be viewed without complicating the GIS system. Customer Information This database is used to issue and maintain installation control points (ICPs) with retailers. System ( CIS ) It also manages customer information, lines tariff and consumption data. Outage information is imported from the Outage Management System and stored against each customer. The CIS is linked to the GIS for customer location information. The CIS is maintained daily from event changes notified by Retailers and new connections. The CIS is an important tool for MPNZ s revenue protection. Communication Voice radio system for communication to field staff. Systems Digital radio network for communicating with zone substations and other field equipment Sophisticated telephony system for general land based and mobile communication. Human Resource Systems MPNZ s human resource information will be transferred to the new TechnologyOne platform during 2013/14. This will include Employment Contracts, competency and skillset information and safety and training records. A succession plan exists within each section. Inventory Systems All stock and supply chain details are managed through the TechnologyOne software platform as a single entity. MPNZ maintains a separate storage facility for its own stock. Single large item purchases are occasionally purchased direct by MPNZ Engineers where a technical specification or long lead times are involved. Outage Management System The outage management system is GIS based, with all planned shutdowns managed with traces across the GIS to identify all affected customers and switching points. For unplanned outages, all relevant fault information is entered into the GIS after the event. Reports are run from the GIS to generate outage statistics as required. Table 10 - Description of Asset Management Information Systems 38 P age

39 1.9.3 Asset Management Processes Figure 6 illustrates the main steps currently undertaken in asset management at MPNZ. These are replicated throughout the relevant Sections of this AMP as illustrated on the diagram. Figure 6 - Linkages between AMP Sections 39 P age

40 Key asset management processes are: Data Flow - the flow of energy consumption data, customer information, and installation details into the customer CIS database from retailers and the new connections process. This allows the association of customers, consumption and income to assets by area for tariff analysis and network project justification. Flow of Asset Information - the flow of asset information into the GIS system and TechnologyOne SQL databases from as-built information and maintenance inspection programs. Key Outputs include all Field Services and external contractor work issued through the TechnologyOne works management system - all work is issued through a work order in the works management system. Multiple work orders can be issued to a project and work cost breakdowns can be reported by labour, materials, transport and creditors. MPNZ s Shareholder Registry - MPNZ as a Trust maintains information on customer or shareholder transactions or events in the CIS; i.e. when customers vacate a connection or shift into a new connection. MPNZ Revenue Protection - this process produces a customer created invoice of the amount owed to MPNZ from Electricity Retailers for the provision of line function services based on customer energy consumption and tariff reported from the CIS. Asset Valuations - a frozen asset dataset taken at the beginning and end of each year is generated from the asset SQL databases and GIS system, and any changes are related back to a work order in the works management system. Supply Chain Management - all stock is managed in the TechnologyOne system. Managing Routine Asset Inspections and Network Maintenance - asset maintenance and renewal is generated from asset information held in TechnologyOne and the GIS. Maintenance work is based on asset condition following inspection, preventative maintenance methods, asset reliability analysis, and on reactive maintenance systems. The asset databases contain asset history, inspection information, and asset lifecycle management data. Poles are identified for mechanical load failure testing in any particular year based on a report of asset information systems looking at asset age and last maintained date and a condition based maintenance required date estimate. Estimates of cost are applied in GIS and an Excel spreadsheet is used to refine the final annual lines maintenance based on what is economic and practical. The 5 year forward work plan for line maintenance is also viewed graphically via the GIS to enable optimisation of work packages. Any GIS user can view the maintenance priority of any line so that other related capital or operational work can be properly coordinated. Pole test data is managed in PDAs and software provided by the manufacturer of the pole tester. All other inspections are managed through mobile computers and in-house developed software. Planning and Implementing Network Development Processes - Large project management milestones, details and contract management are monitored using Excel spreadsheets in addition to the works management system. SCADA stored history data is used for analysis of feeder history and for load forecasting. An in-house developed line design program is used to check line design compliance with AS/NZS7000 and specify the tensioning of lines under construction. More complex designs are analysed with the Poles n Wires software package. SINCAL loadflow analysis software is used and it is planned to develop this software in conjunction with the customer metering information to calculate power flows and fault ratings more accurately within the distribution network. Measuring Network Performance - MPNZ employs in-house developed outage management software to calculate and disclose system reliability and system security indices. SCADA helps to compare real-time feeder loadings with forecasts. The TechnologyOne software provides business intelligence for use in reporting key performance indicators. A bespoke SQL database was implemented during 21012/13 which includes incidents, defects, hazards and suggested improvements. There are several quality control steps involved in processing information, with overnight error checking deployed in the GIS system to ensure connectivity and data integrity. Most customer information and network extension information is received in electronic form and is checked manually for accuracy. 40 P age

41 1.9.4 Funding Strategy The AMP broadly establishes the capital and maintenance expenditure programs for the next ten years, focusing on the first five years of this period. Annual budgets are prepared in more detail and subsequently reviewed by senior management and approved by the MPNZ Board of Directors as part of the annual business planning cycle. Projects identified within this AMP do not proceed until they are approved by MPNZ. Approval of an individual project requires project justification prepared in accordance with established capital budgeting procedures and guidelines. MPNZ adopt the following capital budgeting procedures for evaluation of projects identified in the process of maintenance and development planning: The need for the project is justified in terms of its need for meeting load growth, improving security or reliability, maintaining supply standards or other established criteria. Project alternatives are identified. The least cost solution amongst the project alternatives is confirmed by comparing lifecycle cost estimates. All costs and benefits associated with the project are determined and quantified wherever possible. In many instances, benefits are more difficult to quantify, particularly where reliability improvements are concerned. MPNZ returns to Qualifying Customers, in the form of monthly rebates credited to power accounts, all revenues that the Board considers surplus to the requirements of the business. The Board s budgetary process recognises that sufficient net revenues must be retained by the business; i.e. not distributed in the form of rebates, to fund its total operation including the investment in new capital development. Following a review of strategic direction in December 2009 the Board of MPNZ concluded that while MPNZ will ensure that its line service charges are in the lower half when compared with the charges of other line companies it would also recognise that MPNZ had financial constraints with respect to liquidity and therefore agreed that the funding of all capital and maintenance expenditure from retained earnings was no longer appropriate. As a result a funding arrangement was put in place that would allow MPNZ draw down as and when the company s liquidity position necessitated additional short term support. MPNZ has commissioned an independent review of its pricing methodology to align it better with the Electricity Authority s Electricity Distribution Pricing Principles and Information Disclosure Guidelines. This review should be completed in 2013 and may lead to significant tariff structure changes Limitations of Asset Management Data System Gaps Identified Detailed information has been kept on sub-transmission and distribution conductors, poles and cables for many years and more recently this information is being improved following pole inspections and cable testing. MPNZ has also built up comprehensive information on zone substation transformers from inspections and maintenance programs. As built information is collected during installation for underground low voltage cables so this information has been well maintained and is accurate. Conversely fifteen years ago the overhead low voltage was only recorded in hard copy drawings and this information was difficult to use. However, there are a small number of areas set aside for further improvement where asset information is incomplete or inaccurate. These include: Information on ages of switchgear used prior to 1984 is scarce and a program to capture more accurate information on these switches is underway. This should be completed to full extent possible in Low voltage overhead systems including pole and conductor information remains inaccurate in part and during 2010 a program was initiated to further improve this information. This is continuing slowly as resourcing this is a low priority. 11 Fulfils requirement P age

42 The management of vegetation is hampered by the lack of an overview of vegetation integrated with network assets. The detailed management of landowners trees is much more comprehensive. Vegetation management is an area being targeted for further development. The history of assets that have been replaced has not historically been retained however the TechnologyOne system is now maintaining an asset history. MPNZ continually corrects errors in asset data when they are identified, usually as a result of inspections, faults or maintenance activities. The tight integration of financial and asset records with the valuation audit requirements and complex coding of value changes makes updating of parameters which affect valuation (e.g. age) very difficult. MPNZ is intending to capture more information on the actual measurement of the impact on investment in improved reliability such as live line techniques. MPNZ uses the TechnologyOne software platform for asset management planning. This has helped to identify further information gaps some of which have been addressed but others will require more detailed data collection over the next few years Description of Key Processes 12 Managing Routine Asset Inspections and Network Maintenance - asset maintenance and renewal is generated from asset information held in TechnologyOne and the GIS. Maintenance work is based on asset condition following inspection, preventative maintenance methods, asset reliability analysis, and on reactive maintenance systems. The asset databases contain asset history, inspection information, and asset lifecycle management data. Poles are identified for mechanical load failure testing in any particular year based on a report of asset information systems looking at asset age and last maintained date and a condition based maintenance required date estimate. Estimates of cost are applied in GIS and an Excel spreadsheet is used to refine the final annual lines maintenance based on what is economic and practical. The 5 year forward work plan for line maintenance is also viewed graphically via the GIS to enable optimisation of work packages. Any GIS user can view the maintenance priority of any line so that other related capital or operational work can be properly coordinated. Pole test data is managed in PDAs and software provided by the manufacturer of the pole tester. All other inspections are managed through mobile computers and in-house developed software. Planning and Implementing Network Development Processes - Large project management milestones, details and contract management are monitored using Excel spreadsheets in addition to the works management system. SCADA stored history data is used for analysis of feeder history and for load forecasting. An in-house developed sag tension program is used to calculate the tensioning of lines under construction. SINCAL loadflow analysis software is used and it is planned to develop this software in conjunction with the customer metering information to calculate power flows and fault ratings more accurately within the distribution network. Measuring Network Performance - MPNZ employs in-house developed outage management software to calculate and disclose system reliability and system security indices. SCADA helps to compare real-time feeder loadings with forecasts. From 2011 the new TechnologyOne software will provide increased business intelligence for use in reporting key performance indicators. A SQL network operational events register has been developed with an Access front end to report on customer complaints, environmental issues, and operational issues Overview of Documentation, Controls and Review Process 13 MPNZ maintains an ISO9001 certified quality assurance program and continues to develop, implement and internally audit the program in accordance with this commitment. Relevant standards for asset management planning include design, purchasing, document and record management and environmental management. MPNZ maintains a document control system under this certification that includes asset management documentation, controls and 12 Fulfils requirement Fulfils requirement P age

43 review processes. The controlled documents comprise asset management policies, operating standards, construction specifications, work instructions, process flows, competency and training registers, contractor management controls and a business continuity plan. The ISO9001 certification ensures annual review and continual improvement of the documentation systems. Where asset management design and construction is outsourced, contractors must comply with the MPNZ asset management processes, controls and documentation systems Overview of Communication and Participation Process 14 MPNZ communicates its Asset Management Objectives to staff and stakeholders as follows: Stakeholder group Means of Communicating MainPower Trust Submission of the approval of the SCI (which sets out reliability and revenue targets). MPNZ Board Submission of the AMP for approval. Submission of annual budgets and business plans for approval. Management team Involvement in compiling the AMP and individual components. Updates on AMP compilation progress. Updates on works plan progress. Field staff Annual presentation of work plan during the first few weeks of the year. Public Public disclosure of the AMP. Customer surveys. Safety notices. Table 11 - Overview of Communication and Participation Process 14 Fulfils requirement P age

44 2. Assets Covered An overview of the MPNZ service area, the location of key assets and a description of the main network asset categories is provided in this section. Transpower s transmission system and GXP stations are also included to illustrate MPNZ s dependence on the national grid. The MPNZ network consists of 66 kv and 33 kv sub-transmission circuits, a large distribution system comprising both 22 kv and 11 kv voltages, and a low voltage system. MPNZ has no sub-networks as defined by the Information Disclosure Determination. The MPNZ network delivered electricity to customers in the North Canterbury (including Kaikoura) and Wigram areas over the year as follows: Peak Instantaneous Electricity Delivered Network Demand (GWh) (MW) North Canterbury (including Kaikoura) Wigram 1 5 Total Table 12 - Peak Instantaneous Demand System Measure Peak Load 101 MW Energy Entering the System 541 GWh Loss Ratio 4.4% Load Factor 62 % Customers 34,746 Zone Substation Capacity (base ratings) 118 MVA Distribution Transformer Capacity 437 MVA Distribution Transformer Capacity Utilisation 22.5% Table 13 - System Measure 44 P age

45 2.1 Details of Assets 15 The supply area incorporates a small part of the Christchurch City Council region in the south, moving north through the Waimakariri District Council, the Hurunui District Council and the Kaikoura District Council areas respectively. The southern-most boundary lies a short distance south of the Waimakariri River and takes in the small urban area of Kainga and the rural area of Coutts Island. The northern boundary lies approximately 25 kilometres north of Kaikoura town at the small coastal settlement of Rakautara. The supply area follows the coastline in the east, and its westernmost region includes Lees Valley, Lake Sumner and the Boyle area in the Lewis Pass. Maps of the northern and southern sections of the North Canterbury network region shown below, illustrate GXPs, zone substations and sub-transmission and approximate distribution circuit capacity. Figure 7 - MPNZ North Canterbury Network (North) 15 Fulfils requirement P age

46 Figure 8 - MPNZ North Canterbury Network (South) Figure 9 below shows the MPNZ Network schematic diagram incorporating Transpower grid exit points, and MPNZ subtransmission feeders, zone substations and distribution feeders. MPNZ also supplies the urban area of Wigram located in west Christchurch. This is geographically separated from the remainder of the network and is located approximately 15km south of the main MPNZ North Canterbury area of supply. 46 P age

47 Figure 9 Transpower Asset Configuration 47 P age

48 2.1.1 Load Characteristics The North Canterbury load is increasingly dominated by dairy farming and associated irrigation loads particularly in the Culverden and Waipara areas, and also Southbrook from loads along the fringes of the Waimakariri River. Kaiapoi, Kaikoura and Wigram areas currently maintain the typical urban winter peaking load profile which is levelled off at times of low residential demand by substantial commercial and small industrial load. The Ashley GXP supply is dedicated to the adjacent fibreboard mill which has a very level and constant load profile throughout the year. Table 14 below shows the Summer and Winter peaks on each zone substation. Refer also to Schedule 12b Report on Forecast Capacity. Summer Winter Substation Peak Amps MVA Amps MVA Amps MVA Amps MVA Amps MVA Amps MVA Southbrook Winter Cust Summer Swannanoa Summer Bennetts Summer Oxford summer Rangiora North Winter Amberely Winter MacKenzies Rd Summer Greta Summer Cheviot Summer Leader Summer Ludstone Rd Winter Mouse Point Summer Hanmer Winter Lochiel Winter Haw arden Summer Kaiapoi S1 * Winter Rangiora West * Winter Pegasus * Winter Kaiapoi North * NA NA NA NA NA NA NA NA Winter * Distribution sw itchboards Table 14 - Summer and Winter Peaks Major Customers and Characteristics The operation of the network in areas supplying major customers gives special consideration of these customers for security of supply and maintenance reasons. Alternative supply options have been constructed where possible to provide security consistent with the needs of these major customers, however some of them are located in rural areas where this is not always economic. In addition a list of high priority customers has been developed where power supply is an essential service for reasons of life support, major regional employer and scale of loss, so that higher levels of service can be provided where needed. SCADA and GIS systems alert system controllers when high priority customers power supplies have been interrupted or are planned to be shut down. MPNZ s major customers are: the Daiken NZ medium density fibreboard mill at Ashley. The mill is supplied from a wholly dedicated Ashley GXP via four 11 kv feeders which provide reasonable levels of security. The Daiken controllers have a facility to disconnect the power supply during emergencies, and maintenance is scheduled by MPNZ to coincide with Daiken maintenance programs or times of low production. the Heller Meats plant at Kaiapoi. The site has undergone rapid growth and the total load is able to be switched between two MPNZ 11 kv feeders in the area. They have two main supply points where approximately half the plant can be maintained from each. They have also installed a backup generator for critical items. 48 P age

49 the Patience and Nicholson tool manufacturing plant in Kaiapoi. This plant can be supplied from either of two 11kV supplies from the Kaiapoi switching station, and one of these can also be swapped to an independent backup feeder. the McAlpines sawmill at Southbrook. Recently the mill has been transferred onto a new high security duel feeder supplied switchboard which has reduced the risk of power interruptions to the mill. the Mitre 10 megastore plant at Southbrook. This site is planned to be supplied from two alternative 11kV feeders in the Belfast Timber kilns at Coutts Island. This plant is connected near the end of a spur 11kV overhead line in a rural farming landscape. No alternative supply is available at the site. Line maintenance is scheduled to coincide with plant maintenance programs. several large supermarkets and other commercial businesses scattered over Rangiora, Kaiapoi and Kaikoura. The transformers for each of these are part of ringed feeders with RMU s allowing rapid switching of supply to an unfaulted feeder Wigram Network The Wigram network located in Christchurch is not electrically contiguous with MPNZ s other networks Distribution Area MPNZ owns a small 11 kv and low voltage network located in the Wigram area. MPNZ takes supply from the Orion network at 11 kv and there is an 11 kv circuit breaker and associated 11 kv metering at this connection point. Network design and equipment employed on this network is very similar to other parts of the MPNZ network. The network is totally underground and the total lengths of 11 kv and low voltage cables are 2.8km and 8.2km respectively. This network has backup supply from Orion at the connection point however an 11 kv ring, and therefore an alternative supply has not yet been established within the Wigram development. Further stages of the Wigram area have been developed by Orion with no integration to MainPower s network so it is unlikely that the network will transition from a radial to a ring structure Load Characteristics The Wigram load characteristic is dominated by residential customers with a typical winter peak and summer low. A small amount of commercial load levels off the bottom of the daily profile Major Customers and Characteristics The major customer is Air Force World, which operates a museum with a large heating load in winter. 2.2 Description of Network Configuration Bulk Supply Configuration The 220 kv South Island transmission network is owned and managed by Transpower. The configuration and performance of this system has a major effect on MPNZ in terms of system reliability and security to MPNZ s customers, embedded generation and future costs for the network. There is currently no significant embedded generation. Four 220 kv circuits supply Transpower s Islington GXP from the Waitaki basin, with double circuit and single circuit tower lines from Tekapo, Ohau and Benmore following different routes to Islington. 16 Fulfils requirement P age

50 A single circuit tower line also connects Livingston and Islington. The prudent planning capacity at Islington is now 1141 MW at (n-1) winter security. Maximum demand at Islington in 2008 was 1072 MW. The double circuit tower line CHH-TWZ A was first commissioned in 1975, the single circuit tower line ROX-ISL A was commissioned in 1956, and BEN-ISL A was commissioned in Kikiwa is supplied from Islington by two 220 kv circuits on two tower lines, one tower line having single circuit capability and the other having double circuit capability. Transpower-Transmission System Kikiwa Haywards Culverden Waipara MVA 11 Ashley 66 Southbrook Kaiapoi 65 MVA Benmore Figure 10 - Transpower Transmission System Most of the 66 kv North Canterbury transmission system is also owned and managed by Transpower. One double circuit tower line runs from Islington 66kV to Southbrook, and a 220 kv interconnection at Waipara supplies a second 66 kv double circuit to Southbrook. The location and routes of these lines are shown in Figure 10 above. The Culverden Kaikoura 66kV circuit is now owned by MPNZ. MPNZ also operates a 66kV circuit from Waipara to Cheviot Historical Development The past decade has seen considerable capital investment by Transpower in network enhancement. Several major projects aimed at supplying additional capacity have been completed including: Transpower GXP station transformer upgrades; Construction of a third North Canterbury 66 kv circuit (from Islington) now redundant; Construction of a third 220 kv Islington Kikiwa circuit, involving removal of the third North Canterbury 66 kv circuit, a new 220/66 kv connection at Waipara to supply the highly loaded southern region using the two Transpower Waipara-Southbrook 66 kv circuits and a new 220/33 kv connection at Culverden; 50 P age

51 Sale of the Culverden Kaikoura 66 kv circuit and Kaikoura GXP to MPNZ in Transpower Grid Exit Points Details of Grid Exit Point ( GXP ) transformers and connections are presented below in Figure 11. The single line schematic shows the 220 kv interconnections at Culverden and Waipara along with transformer ratings, connection configurations and the ownership boundary between Transpower and MPNZ. MPNZ has initiated planning of the highlighted Ashley upgrade, and is investigating options for the future Rangiora East GXP. Transpower Grid Exit Point - Security Southbrook 2014 Kaiapoi Ashley ~ MainPower ~ 8 Waipara Culverden Proposed Rangiora East Legend ~ MainPower ~ Figure 11 - Configuration of each Transpower s GXP supplying MPNZ s network 51 P age

52 GXP Description Kaiapoi Location Transformer Capacity Firm Capacity Configuration Supply to MPNZ Southbrook Location Transformer Capacity Firm Capacity Configuration Supply to MPNZ Ashley Location Transformer Capacity Firm Capacity Configuration Supply to MPNZ Waipara Location Transformer Capacity Firm Capacity Configuration Supply to MPNZ Culverden Location Transformer Capacity Firm Capacity Configuration Supply to MPNZ Table 15 - GXP Description Western edge of Kaiapoi 76 MVA 38 MVA Two 40 MVA 66/11 kv three phase transformer banks Eight 11 kv circuit breakers South side of Rangiora, adjacent to MPNZ s Southbrook zone substation 80 MVA 40 MVA Two dual-rated 30/40 MVA 3-phase transformer banks Two 33 kv circuit breakers Ashley rural area, 500m from Daiken NZ. This GXP is dedicated to the supply of the mill. 20 MVA 10 MVA Two 10 MVA banks of single phase transformer units. Four 11 kv circuit breakers and an emergency circuit breaker if required for the local area. Northern edge of the Waipara township. 160 MVA 80 MVA to the 66 kv bus Two 80 MVA 220/66 kv transformer banks directly connected to the Islington- Kikiwa 220 kv circuits. The 66 kv supply from these transformer banks feed a single 66/33 kv dual-rated 10/16 MVA 3-phase transformer bank. Two 33 kv and one 66 kv feeder circuit breakers and one 66kV load plant circuit breaker. 7 km north of Culverden township 60 MVA 30 MVA to the 33 kv bus. Two 30MVA 220/33 kv transformer banks directly connected to the Islington- Kikiwa 220 kv circuits. A 10/20 MVA 33/66 kv step-up regulating transformer rated at MVA with no fans has been installed to maintain the 66 kv supply to Kaikoura. 33 kv via two feeder circuit breakers and cables. 52 P age

53 2.2.2 Subtransmission System The location of MPNZ s zone substations are shown in Figure 12, MPNZ Subtransmission Network. MainPower Sub-Transmission System 66kV 33kV Kaikoura Ludstone Road Hanmer Springs Lochiel Oaro Marble Quarry Mouse Point Culverden GXP Leader Cheviot Hawarden Greta Waipara GXP McKenzies Road Amberley Oxford Ashley GXP Rangiora Bennetts Cust North Southbrook Southbrook GXP Swannanoa Kaiapoi GXP Figure 12 - MainPower s Subtransmission Network This section contains asset descriptions and their capacity and performance. A summary of the 66 kv and 33 kv lines by type and length is shown below in Table 16. Circuits are listed with capacities appropriate for the season of the load peaks. Some circuits are limited by available protection settings. All circuits have less than 75% of capacity utilised. In some instance the circuits may be unable to transmit their full rated capacity due to end of line voltage drop. Refer also to Schedule 12b Report on Forecast Capacity. 53 P age

54 Voltage ea Load Capacity Utilisation Length Conductor Predominant Line Circuit (kv) (MVA) (MVA) (%) (km) type Pole type Construction Southbrook Cust % 17.8 Neon Wood Horizontal Cust Oxford % 19.6 Mink Concrete Horizontal Southbrook Bennetts 33/ % 31 Neon Concrete Delta Southbrook Rang.North % 7.2 7/12Cu/Mink Wood Delta Rang.North Amberley % 23 7/12Cu Wood Delta Amberley Waipara % /12Cu Wood Delta Waipara Hawarden % 24.9 Ferret Wood Horizontal Waipara Cheviot % 52.8 Hyena Wood Horizontal Cheviot Kaikoura % 65.9 Mink Wood, Steel Horizontal Culverden Hanmer % 26.8 Ferret/Mink Wood Horizontal Culverden Kaikoura % 82.1 Hyena Wood, Concrete Delta Table 16 - Summary of 66kV and 33kV Lines Key information about each of the sub-transmission circuits is provided below in Table 17. Circuit Description Southbrook Cust Runs from Southbrook to Tallots Rd via Fernside with a short tee section to Cust. Historically the only supply to the Cust and Oxford substations. Normally supplies Cust and Oxford. In 2010 this line was upgraded to Tallots Rd with Neon conductor with a summer thermal rating of 460A at 60degC and protection at 420A. Cust - Oxford Continues from Tallots Rd to Oxford via the Bennetts substation. Largely unchanged from the original concrete pole line with Mink conductor. Southbrook Bennetts The 66 kv Neon concrete pole line (currently operated at 33kV) was constructed in 2002 between Southbrook and Bennetts via Swannanoa and Tram Road. Protection is set at 420A. The line normally supplies the Bennetts and Swannanoa substations. There is a Neon tie link line along Tallots Rd to the Southbrook- Cust circuit. Southbrook Waipara This 1939 wooden pole line interconnects Southbrook and Waipara GXP s with tee off connections for Rangiora North and Amberley. This line normally supplies Amberley from Waipara and the northern area of Rangiora from Southbrook. The section between Amberley and Rangiora North substations is currently used only as a back-up line. This is an important link for transferring load between Southbrook and Waipara during faults or maintenance. Southbrook's northern Rangiora load is transferred onto Waipara, or Waipara s local and western load is transferred onto Southbrook in these circumstances. Waipara Hawarden A light radial 33 kv line feeding a small remote load at Hawarden. 66 kv / 33 kv Waipara Kaikoura Supplies the Cheviot zone substation approximately equidistant from Kaikoura and Waipara and also a number of smaller substations along its route. Kaikoura is normally supplied from a 66 kv line fed from Culverden via the Inland Road. The Waipara Kaikoura line is used to supply Kaikoura via a 16 MVA kv step-down transformer installed at Cheviot when the main supply from Culverden is out of service for maintenance This line has very high voltage drop when supplying Kaikoura and its capacity is constrained by the thermal rating of in line voltage regulators at Claverley and fixed tap transformers along the Oaro coast. Currently 90% reinsulated for 66 kv between Cheviot and Kaikoura. 54 P age

55 Circuit Description Culverden Kaikoura This 66 kv line is the normal supply from Culverden to Kaikoura The line provides a backup supply for the Waipara-Kaikoura line. Culverden Hanmer A light radial 33 kv line supplying Marble Point, Lochiel and Hanmer zone substations. The unregulated Marble Point and Lochiel substations and two 33kV/240V transformers along the line constrain the available capacity for Hanmer. There is no back-up capability into the Hanmer region. Table 17 MainPower Subtransmission Circuits Zone Substations A summary of key information and statistics for each zone substation is set out in Table 18. Details of zone substation assets are covered by asset class in subsequent sections, including transformers; switchgear; property and buildings; other secondary assets. Table 18 highlights the historical lack of redundant capacity in MPNZ s substation transformer capacity. Current security standards require 100% backup capacity for substations supplying urban communities or important loads where practical. The series of capacity upgrades over the next 5 years will provide backup capacity to most customers. Zone substation transformers over 1MVA capacity have OLTC facilities with 1.25% tap steps. General Transformers Switchgear Zone Substation 2011 Peak Load (MVA) Sub-transmission Security of Supply Level Capacity (MVA) Transformer capacity after a single fault Capacity available after switching Remote Control Number of Feeders Capacity (MVA) Oil Containment Seismic Restraint Type Feeder Circuit Breakers Southbrook Yes 6 2 x 16/22 Yes Yes Indoor 6 Reyrolle vacuum Cust Yes 3 7.5/11 Yes Yes Outdoor 3 Nulec SF6 Bennetts Yes 3 2 x 3/4 Yes Yes Indoor 3 Holec vacuum solid dielectric Oxford Yes 3 8 Yes Yes Indoor 3 Reyrolle (2x oil, 1x Vacuum) Swannanoa Yes 4 7.5/11 Yes Yes Indoor 4 Tamco vacuum Rangiora North Yes 3 5/7 Yes Yes Outdoor 3 Nulec SF6 Amberley Yes 3 2 x 3/4 Yes Yes Indoor 3 Reyrolle oil MacKenzies Rd Yes 3 2/4 Yes Yes Outdoor 3 Nulec SF6 Greta Yes 3 2/4 Yes Yes Outdoor 3 Nulec SF6 Cheviot Yes 3 2/4 Yes Yes Outdoor 3 Nulec SF6 Leader Yes 3 1/2 Yes Yes Outdoor 3 Nulec SF6 Oaro No No No Outdoor 1 ME KFE vacuum Kaikoura Yes 4 2 x 4/6 Yes Yes Indoor 4 South Wales oil Hawarden Yes 3 3/4 Yes Yes Outdoor 2 GPC oil, 1 Nulec SF6 Mouse Point Yes 4 2 x 13 Yes Yes Outdoor 4 W&B SF6 Marble Quarry No No No Outdoor 1 GPC oil Lochiel No No Yes Outdoor 1 Nulec SF6 Hanmer Yes 2 4/ Yes Yes Indoor 2 South Wales SF6 Colour Key: Less than 75% of capacity utilised % of capacity utilised Over 100% of capacity utilised 1 A single fault will cause a loss of supply. 2 - Two subtransmission lines supply to near the substation but a short single spur line completes the circuit. 2 A faulted line can be bypassed by manually switching to an alternative line. 2 + A faulted line will be bypassed by automatic switching to an alternative line without loss of supply. Table 18 - Zone Substation Loadings 55 P age

56 2.2.3 Distribution System MPNZ s distribution system is largely rural with many long radial spurs into valleys. The 22 kv and 11 kv distribution is 94% overhead. The only areas of significant underground reticulation are the major towns of Rangiora and Kaiapoi. The overhead distribution has a high percentage of wood poles (88%) which are mainly treated pine. Older poles were predominantly about 9m hardwood and larches giving relatively short spans and minimal ground clearances. Post 1990 mainly 10m poles were used. A review of snow loadings and designs has recently led to 11m poles being used as standard. As to be expected with a largely overhead system MPNZs distribution is very subject to the climatic conditions prevalent in Canterbury e.g. high winds and occasional very heavy snow accumulation. Environmental factors like vegetation and wildlife also have a very significant impact on the operation and reliability of the network. The network is largely meshed in the southern area with air break switches used for network reconfiguration in the overhead areas and ring main units (RMU) in the underground areas. Most urban ground mounted substations have an RMU. The northern area is more sparsely meshed with fewer alternative supply options. Network extensions and strengthening required to provide capacity for rural irrigation growth are also providing opportunities for increased meshing of the network improving security and reliability. Future network automation will be able to build on this development to further improve reliability. Load control has been used as a method of deferring network reinforcement, particularly for the larger urban areas. This can be via specific load control targets for load centres like Southbrook and Hanmer, or inherent in the load control for overall peak reduction purposes. Network reinforcement has generally been accomplished either by voltage regulator installation, conductor upgrade or reconfiguration, or voltage change to 22 kv. Extensive use is made of rural pole mounted circuit breakers to improve reliability, and these are all monitored via MPNZs SCADA system. The 11 kv reticulation in the main towns of Rangiora and Kaiapoi is 90% underground and all the local councils require new urban network extensions to be underground. Smaller tourism dominated urban centres like Kaikoura and Hanmer are also being undergrounded in conjunction with local council initiatives e.g. water main replacements etc Distribution Substations MPNZs high voltage distribution network is predominantly overhead and the majority of substations are pole mounted. Distribution substations in rural areas are typically pole mounted for transformers up to 200 kva and ground mounted above this although many irrigation customers require their high voltage spurs to be underground with ground mounted substations. Pole transformers are protected with drop out 11kV fuses and low voltage HRC fuses where practical. The main urban areas have largely underground distribution with ground mounted substations. The local district councils have been reluctant to allow ground mounted substations to be located in road reserves (and often other reserves), and this has meant that most residential or rural residential areas have their ground mounted substations located on private property within either easements or lots purchased by MPNZ. Some of the early distribution substations within the towns of Rangiora and Kaiapoi were constructed as buildings or large substation rooms providing ample space and they were usually constructed of poured concrete and stucco exteriors. These buildings usually had an internal overhead 11kV bus bar attached on the walls with dropout style fuses off the bus protecting the transformer. Some included older style 11kV ring main units with circuit breaker protection for the transformer. Low voltage panels were established in these buildings using HRC open style low voltage fusing. Most of the old style overhead bus systems have long since been replaced with cable and ring main unit systems. From the 1960s onwards smaller predominantly front access steel kiosks were used to house the transformers and switchgear. Over the years there have been a number of design changes to these steel boxes to improve ventilation and to allow for changes in low voltage fuse ways across manufacturers. Ring main units were used with an 11kV HRC 56 P age

57 fuse protecting the transformer. The box design allowed for a maximum transformer size of 500 kva, however these had to be derated because of poor cooling. Low voltage panels were typically the open style Lucy HRC fuse and were manufactured in-house. In the Kaiapoi urban area (the former Kaiapoi Electricity area), the substations are predominantly mini- substation packages with RMU s in every second substation and air mounted fuses in the remainder. Whilst both separate shell kiosks and mini-subs are still used, in more recent times the trend has been to establish outdoor style transformers with cable boxes and separate front access outdoor cabinets for the ring main units and low voltage panel. This design allows much more flexibility to utilise a wider range of switchgear, change transformer sizes, and for accessibility as well as allowing the full rating of the transformer to be utilised. It also has a slightly larger footprint Low Voltage Network About 60% of MPNZ s low voltage system is underground cables. These are used typically around the larger urban areas and can vary in size from 6 mm for street lights through to 300 mm for heavy distribution. Most are aluminium types. The overhead low voltage systems are used in the small rural towns and in the rural farming areas to enable a number of customers to be supplied from one transformer. Most overhead low voltage conductors are bare or covered copper. Almost all new low voltage reticulation since 1990 has been underground. Conversion to underground reticulation is the preferred maintenance strategy for old low voltage lines where this can be economically justified. Every attempt is made to coordinate such work with the local district councils to minimise costs and disruption. Much of the remaining low voltage overhead in urban or semi urban areas is thus very old and typically nearing end of life. This is particularly true of the small beach communities. Rural overhead low voltage is generally renewed, as undergrounding can seldom be justified, and it is typically in better condition. The majority of the LV distribution cables are aluminium with pre 1990 cabling being mainly 95mm 2 3 core neutral screen solid conductors and post 1990 being mainly 185mm 2 4 core stranded conductors. Some 120mm 2 and 240mm 2 and 300mm 2 have also been used. Low voltage cables are typically terminated in above ground plastic service boxes with larger link boxes used to created tie points between substations wherever practical. Urban low voltage distribution voltage drops are designed for 4% and rural residential areas are designed for 2.5% recognising the wider range of HV voltages in rural areas. As built information has been collected during installation for underground low voltage cables so this information has been well maintained with accurate type information and less accurate age information. Conversely fifteen years ago the overhead low voltage was only recorded in hard copy drawings and this information was difficult to use. Over the last ten years the urban overhead low voltage information has been recorded electronically and is now considered to be reliable in the location and type of conductors used, although the age information is still poor. Corrections will continue to be made to this information as inspections and work is done at these sites. Rural low voltage overhead data is still substantially incomplete. It is being captured in conjunction with maintenance work on the associated medium voltage network. All low voltage cables are of the new XLPE or older PVC types that have been used since the late 1960s. Failure rates on these cables have been very low and we believe them to be in good condition. There is little available information on the practical useful life of low voltage cables. Based on the high reliability of existing cables up to 40 years old, MPNZ assigns PVC low voltage cables an expected useful life of 60 years. Low voltage overhead systems are included in the MPNZ pole testing regime. Where significant numbers of LV only poles require replacement in urban areas, consideration is given to underground conversion. Where District Councils are renewing underground services, consideration is also given to bringing forward overhead renewal expenditure and cost sharing underground conversion. Regular meetings are held with the councils to underground programs. 57 P age

58 2.2.6 Secondary assets Protection MPNZs network protection functionality is divided into two main categories, analogue (including old electromechanical devices) and digital. All the digital relays used have communication ports for configuration and SCADA interfacing. Some protection functionality is integrated in the hardware it controls e.g. older pole mounted circuit breakers. These are not included as secondary assets. MPNZ has purchased only digital protection relays since 1990 and with the substation upgrade over this period approximately 85% of the network is protected by modern digital devices. A similar percentage of substation OLTC controllers are digital and these all have serial communication to MPNZs SCADA system SCADA The SCADA system is based on Invensys Wonderware Intouch version 10.5 software running on standard hardware. The main server hardware is approximately 2 years old. There are three operator stations in MPNZ s control centre and a remote access facility. The SCADA uses both DNP3 and Modbus drivers and has many other protocols available. Almost all MPNZs network system digital devices are connected to the SCADA system, either directly or via substation RTU devices Ripple Injection Systems MPNZ uses ripple control to reduce peak loading on the network via offering controlled tariffs, controlling load to relieve specific network constraints including load reduction during contingency events, controlling load to reduce Transpower transmission charges and meets Transpower constraints. MPNZ owns all five of the ripple injection plants and approximately 25,000 receiving relays used on the network. MPNZ employs Landis & Gyr SFU-G and SFU-K ripple injection plant using Decabit code for load control and tariff switching. The plants operate at an injection frequency of 283 Hz. All the plants and relays are less than 21 years old and performing reliably Network Metering MPNZ has modern digital power meters installed at each GXP to provide power flow and quality information to SCAD and ripple control systems Data Communications A digital radio network was established during 1999 to cover the eastern region. The system is capable of supporting DNP3 and Modbus protocols at data rates up to 9600bps. It is a full duplex hot carrier backbone network which provides data gateways at Mt Cass, Beltana and Kaikoura communicating with the SCADA network hosted in Rangiora. A data-radio link was also established in 2002 between Mt Grey and Wallace Peak creating a western wireless link through North Canterbury with a gateway also at Mt Grey.. DNP3 information from Hanmer, Mouse Point, Balmoral, and Hawarden is received directly at the gateway at Wallace Peak and sent back to Rangiora via Mt Grey. A fibre optic cable has been installed between the Culverden GXP and MPNZ s Mouse Point substation to interface with the GXP metering. A fibre optic cable is similarly employed between the Kaikoura GXP and Ludstone substation, and between Kaiapoi GXP and the Kaiapoi load control building. More recently fibre optic cables have been installed to connect the Rangiora West switching station to Southbrook for protection and SCAD functions. Similar links are also being incorporated with the Kaiapoi North, Pegasus, and Percival St switching stations Voice Communication MPNZ employs a Tait FM E band system for vehicle communications which consists of a base station located at Rangiora and five other repeaters sited at Mount Thomas in the southern region, Mount Cass in the Waipara area, Mount Beltana in the Cheviot area, Wallace Peak in the Hanmer area and Williams Spur in the Kaikoura area. This network provides five separate channels covering the company s distribution area and a sixth simplex channel for vehicle to vehicle communication. A seventh channel is used to scan channels 1-6 from any repeater station. Portable 58 P age

59 handheld radios have been connected to each field contractor vehicle offering greater flexibility of use within distances of 300m from the vehicle. An emergency button on each portable radio enables the contractor to send an SOS to the control centre during an emergency. 2.3 Network Assets by Category Subtransmission The subtransmission system is a mixture of 33 kv and 66 kv circuits on old hardwood pole lines and newer predominantly concrete pole lines, with a few short cabled sections. Table 16 in Section shows the length and construction type of each circuit. The older lines in particular are the focus of ongoing testing and renewal. Conductors used on the newer lines are in good condition and have plenty of remaining life. Some conductor vibration damage has been recorded on the Southbrook-Bennetts line and vibration dampers were fitted and remediation work carried out during the 2012 calendar year. Cables used on the sub-transmission system are all XLPE and are expected to last at least 45 years. Detailed information has been kept on all sub-transmission conductors, poles and cables for many years and is frequently reviewed and updated following pole inspections and cable testing. Figure 13 shows the pole age profile for all 66 kv and 33 kv overhead lines. The high percentage hardwood poles in the older lines require careful management. A systematic program of testing and renewal, as described in Section 5 is focused on ensuring these assets maintain their service potential. Capital line upgrades from 33kV to 66kV over the next 5 years will accelerate the replacement of older hardwood poles and most will be replaced by kv & 33 kv Poles Qunatity Steel Pine Larch Hardwood Concrete Cumulative % Age (yrs) Figure 13 Age Profile - 66 kv and 33 kv Poles 17 Fulfils requirement 4.4 and P age

60 Figure 14 shows the age profile for all 66 kv and 33 kv cables and it is expected that they all have at least 15 years remaining life. 66 kv & 33 kv Cables Length (km) Age (yrs) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Figure 14 - Age Profile - 66 kv and 33 kv Cables Zone Substations MPNZ has 18 zone substations changing the subtransmission voltage to the distribution voltage. It has one substation at Kaikoura recently purchased from Transpower which changes the subtransmission voltage from 66 kv to 33 kv. Fourteen of the substations are 33 / 11 kv although there are three 66 / 11 kv substations and one 33 / 22 kv substation. Two of the 33 / 11 kv substations have been built for future operation at 66 / 11 kv or 22 kv. Figure 15 shows the age profiles for zone substation transformers. Zone substation transformers are expected to last at least 60 years. This is based on a history of sound maintenance programs as detailed in Section 8. Any maintenance requirements noted during inspection have always been addressed in a timely manner. Most major zone substation transformers have been replaced with larger ones as high growth has dictated upgrades. Thus many of the zone substation transformers are relatively young. The age profile indicates that even the older transformers could be expected to last another 20 years, and monitoring information indicates these are continuing to perform well. The Cumulative MVA % line in the profile also indicates that the older transformers are typically small units in rural areas. Load growth is continuing to cause transformer upgrades and in the process releases system spares for the remaining old units. 6 Zone SubstationTransformers 100% 5 4 Quantity Cumulative % Cumulative MVA % 90% 80% 70% 60% Quantity % 40% 30% 20% 10% Age (yrs) 0% Figure 15 - Age Profile Zone Substation Transformers 60 P age

61 Zone substation transformers above 1 MVA capacity have on load tap-changers to regulate the bus voltages and the majority of loads applied to them over their lives to date have been below the manufacturer ratings. These transformers have been subject to normal and typical urban and commercial load curves and cyclic loading. MPNZ has built up comprehensive information on zone substation transformers over many years of maintenance and upgrades and the information is continually checked for accuracy during routine inspections. The three oldest substations are small outdoor structures with single fixed tap transformers of capacity of less than 1 MVA, and single feeders. Due to past upgrades to similar substations there are spares for all the major components. The Kaikoura substations are particularly exposed to salt mist conditions and have high steel corrosion rates and elevated outdoor switchgear maintenance requirements. The age profiles for zone substation circuit breakers are shown in Figure 16 below. Zone substation circuit breakers are expected to last at least 40 years with appropriate maintenance. Some models may be made redundant earlier than this due to unexpected failure mechanisms or technological advances. Any maintenance requirements noted during inspection have always been addressed in a timely manner. Most zone substation circuit breakers have been replaced when substations have been upgraded or replaced due to high growth. The age profile below shows that approximately 80% of substation circuit breakers are less than 25 years old. Load growth is continuing to cause substation upgrades and in the process releases system spares for the remaining old units. There are five circuit breakers over 40 years old. Two of these are 33 kv English Electric OKW3 circuit breakers which are exhibiting near end of life behaviour with increasing maintenance issues and shortage of spares. Two are Reyrolle LMT circuit breakers which have been performing reliably and for which plug in replacements are held. The remaining old circuit breaker is an AEI GPC weight and chain unit. These were quite common but due to their low rating and high maintenance requirements have been replaced. This last unit which supplies less than 10 customers in a remote situation is currently performing acceptably but will be probably be replaced with a second hand more modern circuit breaker within the next 5 years. The worst performing of the five remaining OKW3 circuit breakers will also be replaced in 2013 to create spares for the remaining units. 25 Substation Circuit Breakers 100% Quantity TAKAOKA SCHNEIDER DOGBOX AEG S WHIPP & BOURNE GVR TAMCO VH2 SOUTH WALES EO2 SOUTH WALES D4XD SCHNEIDER FLUAIR REYROLLE LMVP REYROLLE LMT NULEC N36 NULEC N27 NULEC N12 MCGRAW EDISON KFE LONG AND CRAWFORD JAPAN AE POWR NVBOA HOLEC NVS ENGLISH ELECT OKW3 AEI GPC ABB EDF 72 SK 1-1 Cumulative % 90% 80% 70% 60% 50% 40% 30% 20% 10% Age (yrs) Figure 16 - Age Profile Substation Circuit Breakers 0% Figure 17 shows the age profiles for zone substation disconnectors. Zone substation disconnectors are expected to last at least 40 years with appropriate maintenance. Some models may be made redundant earlier than this due to unexpected failure mechanisms. Any maintenance requirements noted during inspection have always been addressed in a timely manner. The profile shows that approximately 50% of substation disconnectors are less than 15 years old. Generally older disconnectors have no serial numbers or unique identifiers and so the ages are only estimates with common default values. Load growth is continuing to cause substation upgrades and consequential disconnector replacement or removal. Disconnectors are readily maintained and generally reliable. Schneider DA27 disconnectors have had issues in the past with early insulator failure due to bad batches produced through the period 61 P age

62 when most MainPower DA27 s were purchased. These have been identified and replaced. The four oldest disconnectors are in the two smallest substations supplying a few remote rural customers. These are very low load and low fault level locations and they are performing well. Substation Disconnectors Quantity Age (yrs) Figure 17 - Age Profile Substation Disconnectors Schneider PLJ Schneider IVB-AD Schneider ISW-LK Schneider IRW-PJ Schneider IRW-NL7 Schneider IRW-NG10 Schneider IRW-DA27R Schneider IRW-DA27 Schneider IRW-DA26 Schneider IRW-960 Schneider IRW-955 Schneider IDW-AF Cumulative % 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% The protection relays profiled below are located in zone substations except for approximately half of the Nulec devices which are field mounted. The oldest two relays are associated with MPNZs smallest substation and will eventually be replaced in conjunction with its old weight and chain circuit breaker, however both are currently performing acceptably. The 43 year old relays relate to a 33 kv circuit breaker at Cheviot. The line these protect is currently being converted to 66 kv and eventually these will be redundant. The remaining older electromechanical relays are all regularly tested and performing well. Replacement may eventually be triggered by the need to change to digital relays to provide more in depth fault information for network automation schemes. Protection Relays Quantity VAMP Siemens SEL Nulec GEC/Alstom ABB/Asea Cumulative % Age (yrs) Figure 18 Age of Protection Relays 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 62 P age

63 2.3.3 Distribution and LV Lines Large numbers of hardwood poles were used in the earliest part of distribution lines network construction. Larch poles impregnated with creosote were used in the late 1950s and through the 1960s in combination with hardwoods. Treated Corsican pine poles were used from 1973 and concrete poles were also purchased from the mid 1970s. The main pole types used today are H5 treated Radiata pine and pre-stressed concrete. Over the past eleven years a large number of lines have been converted from 11 kv to 22 kv by changing the insulators, and this process is continuing. This has largely been undertaken in rural areas experiencing high growth in irrigation demand and conversion of farms to dairying. Areas converted so far are Culverden including Leslie Hills, Mouse Point and Balmoral, and the Rockford, Burnt Hill and Thongcaster Road areas and West Eyreton areas around Oxford and Bennetts. Figure 19 show the lines that are operating at 22 kv. The 22 kv conversion process has also required replacement of switchgear and transformers. Some of the newer items in good condition that are recovered are reutilised within the 11 kv network. The remainder are scrapped. Generally all new switchgear is purchased rated for 22 kv and new 11 kv transformer purchases are only required for a few larger sizes not commonly recovered. The ageing distribution level hardwood and larch pole population has been the biggest single renewal issue for MPNZ. Regular testing and subsequent renewal of HV distribution poles over the last 20 years now has ensured that the weakest poles continue to be replaced at or near the end of their service life. The age profile reflects this with steadily decreasing pole numbers with increasing age. The few peak years with more than 200 poles older than 70 years are likely due to data errors, particularly as larch poles were not purchased through this period. MPNZ now has extensive and reasonably accurate data on its high voltage distribution lines following the rigorous testing and inspection regimes that have been employed. 22 kv & 11 kv Poles Quantity Pine Larch Hardwood Concrete Cumulative % 100% 90% 80% 70% 60% 50% 40% 30% 20% % % Age (yrs) Figure 19 - Pole Age Profile 22 kv and 11 kv 63 P age

64 The LV pole testing program has been less rigorous and is still being refined. Rural LV poles are tested and maintained in conjunction with the high voltage line they are associated with. MPNZs data quality on its LV, including poles, is generally poor and largely restricted to pole location and conductor information. More complete data on the pole types, estimated age, ownership, and test information is being gathered as part of the high voltage distribution line testing process. Urban and rural community low voltage lines will be targeted for data capture beginning in the 2013/14 year as the pole testing program extends to a more in depth focus on LV poles. This will inevitably lead to higher rates of LV pole replacement rather than undergrounding. To put the situation in perspective it should be noted that LV poles represent only approximately 6% of the pole population. Low Voltage Poles % 90% Quantity Unknown Pine Larch Hardwood Concrete Cumulative % Age (yrs) Figure 20 LV Pole Ages 80% 70% 60% 50% 40% 30% 20% 10% 0% Some of the concrete poles in the Kaikoura region were locally poured with inferior aggregate. These have suffered more rapid decay, require regular inspection, and often replacement at 60 years or less. Early in 2012 MPNZ identified an issue with higher than expected pole fire rates on SWER lines with pine poles. The fires created a safety hazard. They were found to be caused by the more flammable nature of pine poles as compared with hardwood or concrete, and the SWER conductor passing over the pole with a clearance able to be bridged by wildlife more commonly than standard construction distribution lines. A maintenance program to increase clearances was started in 2012 and this will continue in 2013 and 2014 until all SWER lines have been upgraded to reduce the fault incidence. Conversion from 11kV to 22kV also introduced increased risk of wild life faults with existing clearance between conductors and to poles, and the clearances for new construction were increased accordingly. Minimum conductor clearances and jumper clearances at poles are checked during the conversion process. The over head conductors are on average of similar age to the poles although often poles have been renewed under existing conductors or conductors have been upgraded on old poles. The general condition of conductors is good. It is likely that older lines on shorter poles were over tensioned and susceptible to vibration however there is little evidence that this has caused the early replacement of any conductors. Salt corrosion of coastal conductors is a minor problem, as is rusting of some of the 234km of remaining galvanized steel conductors. Over 40% of conductors are less than 25mm 2 and normal load growth is the major trigger for conductor replacement. The historically short pole design in conjunction with light conductors also has high failure rates in extreme snow fall events. Lines likely to be susceptible to snow loading failure have been identified and improving their resilience is a input to the maintenance process. One side effect of conversion to 22kV to accommodate load growth is that this tends to slow the replacement of small conductors which would increase network reliability. 64 P age

65 The ageing hardwood and larch poles are mechanically pole tested every 10 years to ensure they have adequate remaining strength. Any weak poles are replaced and all crossarms, stays and other hardware is checked and replaced as required. Treated pine and concrete poles are generally in very good condition and are inspected and hardware maintained, but not yet mechanically tested. Conductors in the MPNZ region are in very good condition and are not prone to accelerated deterioration due to atmospheric conditions except in a few coastal areas. Figure 22 below shows the age profile for the pole population used to support 22kV and 11 kv overhead lines. All hardwood and larch poles over 40 years old have been tested and by 2015, this will reduce to 35 years Distribution and LV Cables The majority of the high voltage underground cables are either 95 mm 2 or 185 mm 2 although more recently 300mm 2 has been used for major urban feeders or to supply distribution switching stations. Smaller sizes are being employed for rural customer spurs. 22 kv & 11 kv Cables Length (km) Age (yrs) Figure 21 Age of 22kV and 11kV Cable Cu XLPE Cu PILC Al XLPE Al PILC Cumulative % 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Cables used in the last 20 years are in good condition and have substantial of remaining life. Three quarters of the cables used on the MPNZ system are XLPE types and are expected to perform for at least 45 years. The remaining quarter are PILC types which are expected to have a 70 year service life. Figure 21 above shows the age profile for 22 kv and 11 kv underground cables. Most of the older PILC are in central urban areas. Network planning has focused on increasing the number of distribution circuit breakers to shorten the length of line and number of customers exposed to future cable faults and to shorten restoration times. High voltage cables on rural spur supplies like irrigation pumps which at times have almost no load can be subject to operational issues with over voltages due to ferro-resonance. This is not yet known to have caused early cable failure but has caused surge arrestor failure and extended outages for some customers. The problems are triggered by single phase operation, typically due to a fuse clearing a fault. Attempts to mitigate the ferro-resonance problems include fitting ganged three phase fuse assemblies which all clear quickly minimising single phase operation. Low voltage cables have a similar age distribution to 22 kv and 11 kv cables. Residential subdivision growth is primarily responsible for the increase in the last 20 years with only a small contribution from undergrounding projects. The change from mainly 95mm 2 to mainly 185mm 2 cable 20 years ago can be clearly seen in Figure 22 below. For simplicity, no distinction is made between aluminium and copper cables as more than 99% are aluminium, and all smaller cables combined into the 50mm 2 category. Street lighting cables are generally 6mm 2 and installed in conjunction with the low voltage distribution. Approximately 50% of the LV distribution is accompanied by a street lighting circuit. 65 P age

66 LV Cables Length (km) Cumulative % 100% 90% 80% 70% 60% 50% 40% 30% 5 20% 10% % Age (yrs) Figure 22 - Age Profile - Low Voltage Cables (excluding streetlighting) There have been some defects and failures due to improper termination of LV cables leading to UV degradation of exposed tails. These have been repaired as they are identified. Some conductors have suffered corrosion due to water penetration. This is primarily an issue for the screens of neutral screen cables and the cores of 4 core stranded cables as these are the most susceptible to sheath damage and end sealing issues, and have more interstices to accumulate moisture. The failure rate is however currently very low but this may ultimately determine the end of life of the cables. Very few cables have exhibited significant deterioration due to thermal overloading Distribution Substations and Transformers Most customers are supplied from primary distribution voltages of 22 kv or 11 kv. A few are fed from SWER systems operating at 6 kv and a very few from distribution transformers on the 33 kv subtransmission system. This last group are remote customers and they constrain the operation of the subtransmission system. They are being removed where ever possible. Substations are either ground mounted, often with some type of shell or cover, or pole mounted. The data available on the type of substation is reasonably good however the age information for assets older than 30 years in particular is poor with many defaulting to 45 years (1967). The age distribution of ground mounted substations by type is shown below. Most ground mounted substations can have the transformer changed or upgraded without changing the substation, and the shell type is seldom changed without a complete rebuild. This means that the substation initial construction date is a good indicator of age. This is not the case for pole mounted transformers where a pole change for maintenance or transformer upgrade, or a voltage change effectively renews the site in the existing location, but the original construction date for the site doesn t change. Fuses and earths are frequently renewed at the same time. Substation age is thus much less meaningful for pole mounted substations and pole or transformer age are better proxies. Most recent designs have used mini-subs, micro-subs, or the Pegasus Modular configuration utilising a standalone transformer with HV and LV cable boxes and a separate shell for the HV and LV switchgear. The older kiosk configurations are limited in their transformer utilisation by the cooling capacity. The small rural installations using the low cost Gyro plastic covers have not proved particularly robust long term and these are likely to be slowly phased out in favour of micro-subs. A number of the older designs do not suit modern safer and more reliable HV switchgear mounting. Upgrading sometimes involves complete rebuilds also increasing the footprint and introducing land issues as most are located on private property rather than road reserve. Information on distribution substations is very accurate due to the high levels of maintenance undertaken at these sites. All distribution substations are expected to last at least 45 years. Building substations and kiosks have been well 66 P age

67 maintained over the years and are in very good condition. Where major upgrades have occurred in distribution substation buildings the structure has usually also been seismically strengthened. Ground Mounted Transformer Substations Quantity Building Gyro Plastic Pad Mounted Pegasus Modular Canzac Micro-sub Mini-sub Teepee Kiosk MED Kiosk MP Kiosk Cumulative % 100% 90% 80% 70% 60% 50% 40% 30% 20% 20 10% % Age (yrs) Figure 23 Age of Ground-Mounted Transformer Substations MPNZ s distribution area is mainly rural and hence most substations are pole mounted. As previously noted many old pole mounted substations are effectively renewed when the pole is replaced. Others are upgraded when transformer upgrades cause the substation pole to be changed to a higher strength one. The transformer age profiles below thus are also a reasonable indicator of pole mounted substation age for transformers up to 200 kva. MPNZ has over 7500 distribution transformers. A variety of these have been purchased over the years, including Tyree, ABB, Astec, Tolley and Wilsons. Large quantities of transformers were purchased between 1967 and 1973 due to the growth in the distribution network at this time. Many of these were in the range of 10 to 30 kva. Mainly 22 kv distribution transformers are currently being purchased due to expansion of the 22 kv network. 11 kv transformers that are replaced due to the 22 kv expansion project are reused in other parts of the network. Figures 24 and 25 show the age profiles for single phase and three phase distribution transformers. The high level of irrigation growth and subdivision development has lead to more, larger three phase transformers being installed over the last 10 years. Over a similar period the conversion of irrigation areas to 22kV has also meant that many small transformers have also been replaced. Many of the recovered transformers are in excess of 30 years old, small, have high losses, and are uneconomic to reuse. These are scrapped along with those with any significant defects which may be uneconomic to rectify. Newer and larger recovered transformers are reused in 11kV areas. This means that the average age of transformers in 11kV areas is rising significantly as few new 11kV transformers are being purchased except larger sizes for subdivisions and commercial developments. The failure rate of even 60 year old distribution transformers is very low and MPNZ has many spares. Overall the wave of near end of life high loss transformers is being replaced by low loss (MEPS1) transformers. 67 P age

68 Single Phase Transformers kva 30 kva <= 15 kva Cumulative % 100% 90% 80% 70% 60% Quantity % 40% 30% 20% 10% Age (yrs) Figure 24 - Age Profile - Single Phase Distribution Transformers 0% Quantity Three Phase Transformers 1000 kva 500 kva 300 kva 200 kva 100 kva 50 kva <= 30 kva Cumulative % 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% Age (yrs) Figure 25 Age Profile - Three Phase Distribution Transformers 0% Historically distribution transformers have been tracked by numbering the site as well as the transformer with separate numbers, thus enabling a transformer to be tracked in and out of a site due to maintenance or upgrading. This system of tracking has meant that the distribution transformer information is very accurate. The majority of distribution transformers are expected to last at least 45 years. Distribution transformers 200 kva and greater however are expected to perform for at least 55 years recognising a history of inspecting these sites on an annual basis and undertaking remedial maintenance where necessary. Small distribution transformers are treated as run to failure items. 68 P age

69 2.3.6 Distribution Switchgear Circuit Breakers, Reclosers and Sectionalisers There are a number of different types of circuit breakers and reclosers on the system, including bulk oil, SF6 and vacuum types. Figure 26 shows the age profile for distribution circuit breakers. The oldest outdoor reclosers are the 11 kv Reyrolle OYT oil type that employ relatively coarse and unreliable protection mechanisms. These will also be replaced over the next ten years. Most of the next generation of recloser purchased, the McGraw series, will also be replaced over the next 10 years due to 22 kv upgrades, the operational requirement for remote operation and fault information, and the high level of inspection, testing, and maintenance required. The remaining outdoor circuit breakers are either vacuum or SF6 type and are performing reliably in their early to middle economic life. Recent circuit breaker purchases have been of SF6 types and require very little maintenance. MPNZ has a policy of minimising its use of SF6 gear because of its potential harm to the environment and will continue to investigate other means of arc quenching and insulation within circuit breakers. Future circuit breaker purchases are likely to be non SF6. Indoor circuit breakers are mainly vacuum or SF6 and are very reliable with only occasional minor problems occurring. The economic life of this group of circuit breakers is around 45 years and only a few are approaching this. High numbers of circuit breakers have been purchased since 1975, a reflection of feeder growth and the replacement program for older circuit breakers. Most of the remaining indoor Reyrolle LMT oil circuit breakers will be replaced in 2014 in conjunction with the Rangiora West area 66 kv upgrade. Quantity Distribution Circuit Breakers REYROLLE LMVP SOUTH WALES D4XD WHIPP & BOURNE GVR SOUTH WALES D6XD REYROLLE OYT REYROLLE LMT NULEC N36 NULEC N27 NULEC N12 mesa MXSP-24 MCGRAW EDISON KFE MCGRAW EDISON KF MCGRAW EDISON H2 MCGRAW EDISON GN3E MCGRAW EDISON GH LONG AND CRAWFORD Cumulative % 100% 90% 80% 70% 60% 50% 40% 30% 5 20% 10% Age (yrs) 0% Figure 26 - Age Profile Distribution Circuit Breakers The most recent Reyrolle LMVP purchases relate to the installation of three indoor distribution switching stations at Rangiora West, Pegasus, and Kaiapoi North, and the renewal of Percival St distribution board in Rangiora Ring Main Units The use of ring main units in conjunction with distribution substations commenced around 1950 with Long and Crawford and BTH equipment. During the 1970 s and 1980 s ABB s SD range of oil ring main units were used, followed 69 P age

70 in the 1990 s by increased use of air-insulated Holec (Magnefix) type switchgear. Large purchases of ring main units were made during the 1990s reflecting the high growth in subdivisions at this time. The Holec Xiria sealed air insulated range has also been used since Ring Main switchgear has an expected life of 40 years however the early ABB SD switchgear and the older L&C and BTH oil switchgear have maintenance issues and increasing concerns regarding their operational safety as they age and system fault levels increase. Knowledge of the location and age of pre 1990 switchgear is poor as can be seen by the large spike in the Figure 27 age profile. This was improved in 2012, and will be improved further and a replacement program developed in Ring Main Switchgear Quantity L&C J4 L&C GF3 Holec Xiria Holec MD4 GEC DA4 BTH JB721 ABB SD-SERIES2 ABB SD-SERIES1 ABB SAFELINK Cumulative % Age (yrs) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Figure 27 - Age Profile Ring Main Switchgear Disconnectors Most of the air break switches installed during the period 1950 to 1980 were Canterbury Engineering types 955, DA2, DA27, NL7 and NG10. More recently, Dulmison and Schneider s integrated spar mounted air break switches, and Electropar EPS2 switches have been used. The number of new distribution line installations is stable as more live-line work and increasing feeder circuit breakers offset the requirements of network growth. Additional switches are still being installed for isolation of large customer loads e.g. irrigation supplies. Outdoor distribution disconnectors are expected to have a 35 year life. The age profile below highlights the lack of quality installation data for switches with most shown being installed in This information should improve substantially over the next few years. After data correction there will still be a large number of disconnectors around the end of their expected life. Conversion of irrigation areas to 22kV and the switchgear renewal program should result in approx. 30 old switches being replaced each year. This should remove this renewal wave over a 5 year period. 70 P age

71 Disconnectors Quantity Stanger Schneider PLJ Schneider ISW-LK Schneider IRW-NL7 Schneider IRW-NG10 Schneider IRW-DA87R Schneider IRW-DA27 Schneider IRW-DA26R Schneider IRW-960 Schneider IRW-955 Schneider IDW-AF Electropar EPS2 Dulmison Morlyn HSB 22kV Disconnector 11kV Disconnector Cumulative % 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% Age (yrs) 0% Figure 28 - Age Profile Disconnectors Ripple Injection Systems (Load Control) MPNZ owns all ripple injection plants and receiving relays used on the network. MPNZ employs Landis & Gyr SFU-G and SFU-K ripple injection plant using Decabit code for load control and tariff switching. The plants operate at an injection frequency of 283 Hz and are listed below. Location Commissioned Voltage Maximum Load Mouse Point 1993, kv 30 MVA Kaikoura kv 30 MVA Southbrook kv 60 MVA Kaiapoi GXP kv 30 MVA Waipara GXP kv 60 MVA Table 19 - Ripple Injection Assets The Southbrook load plant was upgraded to a 60 MVA capacity plant during 2002 due to the large growth being experienced on that site. The Waipara 33 kv load was replaced with a 66 kv plant in conjunction with the conversion of the Waipara to Kaikoura circuit to 66 kv in The Mouse Point plant was replaced in 2006 with a more modern equivalent due to a failure of the old plant. All plants are GPS synchronised. The majority of the receiver relays are Zellweger/Enermet RM3 installed between 1993 and The remainder are the later Landis & Gyr RC5000 series, and recent purchases are RO3 type relays. 71 P age

72 Ripple Relays % % Quantity RM 3 RC5000 RO3 Cumulative % 80% 70% 60% 50% 40% % % % Age (yrs) 0% Figure 29 - Age Profile Ripple Relays. The load control plant is used for tariff switching, for controlling the peak loads at Transpower GXP and to manage load constrained areas of the network. Designs and physical structures of injection plants has been well documented and are regularly maintained and tested. Relay records have been well maintained for all installations and are very accurate. All injection plants and relays are modern and have been reliable in operation with low failure rates. The injection plants are expected to perform for at least 20 years before requiring replacement. The RM3 and RC5000 relays are slightly less reliable than the RO3 relays and MPNZ has a policy of only installing RO3 relays in new or replacement situations. The installation of a smart metering system with load control functionality is likely to supersede the ripple plant systems within the remaining life of the plants Street Light Control Most streetlights are controlled by ripple relays located at local low voltage distribution substations and the relays receive a signal by ripple injection initiated from a light level sensor. Dedicated street light supply cables loop around a number of lights from each control point. A small number of lights are controlled from local photocell sensors. Streetlights are not metered but consumption is assessed based on the loading characteristic of each light. All streetlight control points are well documented. Streetlight relays are modern and reliable and extremely low failure rates have been reported. Their age is consistent with the ripple plant age SCADA The present SCADA system is based on Invensys Wonderware Intouch software running on standard hardware. There are three operating stations in MPNZ s control centre and separate remote access facilities. The software has both DNP3 and Modbus drivers. The existing system is aging now although still performing reliably. It has relatively high maintenance and development costs compared to currently available systems. New hardware has been purchased for the SCADA servers and a major upgrade has been received for the software but this requires significant re-engineering of the system which has not yet been completed. This work is expected to be completed during 2013/14. Transpower is completing major upgrades to Kaiapoi, Southbrook, and Ashley GXPs over the next 3 years. Control of these will need to be integrated with MPNZ s SCADA system and agreement has been reached to implement an ICCP interface to achieve this early in the 2014 calendar year. 72 P age

73 MPNZ s first SCADA system utilised remote terminal units (RTUs) communicating with Conitel protocol and these have now either been completely changed to more modern DNP3 RTUs, or been slaved to a more modern RTU on site. All remote sites are now communicating via the DNP3 protocol. Work is proceeding on new field devices, including intelligent circuit breakers, line fault indicators and power quality devices with remote communication facilities and this can be seen by the budgeted expenditure allocated to switchgear and SCADA in the capital reliability budget. MPNZ is committed to using the latest distribution automation technologies to improve system performance and fault response times Communications Data Communications A data radio network was established during 1999 to cover the eastern region. The system is capable of supporting DNP3 and Modbus protocols at data rates up to 9600bps. It is a full duplex hot carrier backbone network which provides data gateways at Mt Cass, Beltana and Kaikoura communicating with the SCADA network hosted in Rangiora. A data-radio link was also established in 2002 between Mt Grey and Wallace Peak creating a western wireless link through North Canterbury. DNP3 information from Hanmer, Mouse Point, Balmoral, and Hawarden is received directly at the gateway at Wallace Peak and sent back to Rangiora via Mt Grey. A fibre optic cable has been installed between Transpower s Culverden site and MPNZ s Mouse Point site so that loading levels can also be brought back to Rangiora via the new link. A fibre optic cable is similarly employed between the Transpower site at Kaikoura and MPNZ s Ludstone zone substation. A data radio repeater was also installed at Mt Grey to provide coverage of MPNZ s southern area with DNP Voice Communication MPNZ employs a Tait FM E band system for vehicle communications which consists of a base station located at Rangiora and five other repeaters sited at Mount Thomas in the southern region, Mount Cass in the Waipara area, Mount Beltana in the Cheviot area, Wallace Peak in the Hanmer area and Williams Spur in the Kaikoura area. This network provides five separate channels covering the company s distribution area and a sixth simplex channel for vehicle to vehicle communication. A seventh channel is used to scan channels 1-6 from any repeater station. Portable handheld radios have been connected to each field contractor vehicle offering greater flexibility of use within distances of 300m from the vehicle. An emergency button on each portable radio enables the contractor to send an SOS to the control centre during an emergency. MPNZ communications systems are well documented. Communications equipment is assigned a total useful life of 15 years. Both data and voice communications systems are modern and reliable although now approaching mid life. The data radios are however no longer procurable and MPNZ will migrate to a new generation of radios in the southern area in conjunction with a communications upgrade for the Rangiora West 66 kv project. This will free up exiting radios to be used elsewhere in the network. Over time, all data radios will be renewed with the new hardware, or possibly some will be integrated into the communications for a smart metering network Protection and Metering Systems All modern zone substations use Areva, SEL or Siemens digital electronic protection systems. Older substations have GEC electromechanical relays which are still reliable but have limited setting ranges and functionality. A number of individual relays in these substations have been replaced in conjunction with circuit breaker replacements. MPNZ also owns high voltage metering systems for several large users including the Daiken MDF plant and McAlpines timber processing plant. Protection and metering systems are well documented. Modern protection systems log system events locally for lengthy periods and also log on SCADA central master station software. Metering records are maintained on SCADA SQL database. The total useful life assigned to protection and metering systems is 40 years. Historically this equipment has been extremely reliable and is monitored frequently. 73 P age

74 Power Factor Correction Plant MPNZ has no system power factor correction installations of its own, however, the Daiken NZ mill at Ashley has two 11 kv capacitor banks of power factor correction and Transpower have installed power factor correction for voltage support on the 66 kv bus at Southbrook Property and Buildings MPNZ owns substation buildings, office and administration buildings and contractors operational buildings. Substation buildings are assigned a nominal useful life of 50 years. All MPNZ buildings are well maintained. Buildings have been inspected following the recent earthquakes and there has been no significant damage. The main office building has been design reviewed by independent consultants and found to be significantly below current code requirements. A decision has been made to abandon this building and for MPNZ to relocate its head quarters to the south side of Rangiora. This shift should take place in the current financial year. MPNZ owns metering system and communications equipment at all Transpower GXPs to monitor load for load management purposes and for revenue protection. All have Ion type meters, installed after MPNZs ripple injection plants are located in Transpower GXPs at Waipara and Kaiapoi. MPNZ also has SCADA and local service equipment associated with load control at these sites Mobile Substations and Generators MPNZ has invested in a diesel mobile generation plant to assist with reducing the number of planned interruptions. The plant is rated at 275 kva and is able to be used for low voltage supply directly off the generator or at 11-22kV supply via a transformer. The plant has been fitted on a tandem axle truck along with the transformer, protection systems and connecting leads. The generator is used during planned work to maintain the supply to customers and it has enough capacity to supply an average load off an urban transformer kiosk, or can be connected to long lengths of overhead lines at 11 or 22 kv supplying up to 100 customers. MPNZ also has a smaller 88 KVA generator for use with low voltage customers only. This is frequently large enough to supply small subdivisions during maintenance outages. A good history of operational information has been maintained including loading information and running costs. The diesel generator truck is now five years old and is well maintained. Use and operation of the generators is controlled by MPNZ Operations staff Embedded / Distributed Generation There is no major embedded generation on the MPNZ network. MPNZ is planning to construct a 60MW wind farm on Mt Cass near Waipara, and the resource consent for the wind farm has been approved. MPNZ is also investigating several other potential wind and small hydro generation opportunities. The wind monitoring equipment is monitored on a monthly basis and has been performing well. MPNZ does not own any other significant generation plant connected to its network. 74 P age

75 2.4 Asset Justification Introduction The main justification for the assets employed by MPNZ to deliver electricity to customers is that they are the minimum required to provide electricity of sufficient capacity and reliability to all customers, accommodating reasonable growth forecasts, consistent with MPNZ s Corporate Organisational Objectives and Goals and the targets specified in the SCI Historical Development Table 20 outlines the historical development of the MPNZ system. Date 1916 onwards 1928 onwards 1930s onwards 1960s onwards 1990s onwards Major Development The Public Works Department constructed a double circuit 11 kv line from Belfast across the Waimakariri River to supply a flour mill in Ohoka and the Kaiapoi Borough. The distribution voltage chosen for Kaiapoi and the surrounding Eyre district was 3.3 kv. Shortly after an 11 kv feed was extended to Rangiora and that district was also distributed at 3.3 kv. Over the next few years the 11 kv feed was extended to the Oxford, Ashley and Kowhai districts with the Kowhai district taking supply at 6.6 kv. In 1928 the North Canterbury Electric Power Board (NCEPB) was formed from the amalgamation of the districts excluding the Rangiora and Kaiapoi boroughs. The main engineering task at the time was to coordinate the differing voltages across the district. The 1927 Electricity Supply Regulations reduced the ground clearance for 11 kv overhead systems, so it was decided to standardise at 11 kv throughout the district since it was low cost due to the existing poles. The 11 kv system catered for growing load in the district for many years. In the early 1930s Waipara, Cheviot and Amuri counties sought access to the NCEPB s supply and a 33 kv line was constructed from Southbrook to Waipara. The northern counties were distributed at 11 kv although some of the lines were rated for 33 kv to cater for future growth allowing for the large distances involved. 33 kv sub-transmission and 11 kv distribution voltages prevailed as the system developed as both voltages were able to cater for the slower rates of growth experienced through the war years and up to the 1970s. A 33 kv link between Waipara, Cheviot and Kaikoura was created in the 1960s to supply the growing load at Kaikoura, the link had previously been running at 11 kv. In the 1970s the NCEPB took over the Kaikoura District Council s electricity system, comprising 33 kv sub-transmission and 11 kv distribution. A new 66 kv line was built by Transpower to supply Kaikoura from Culverden, with a 66 / 33 kv GXP station constructed at Kaikoura. The NCEPB constructed a 33 / 11 kv zone substation beside the GXP to supply the local 11 kv system. Strong urban residential growth was backed up by the dairy farming boom from the mid 1990 s requiring supply to large irrigation and milking shed load. Zone substations capacity was increased and critical areas were upgraded to 22 kv as the 11 kv systems ran out of voltage regulation or thermal rating. 75 P age

76 Date 2000 onwards Major Development Residential and dairy growth continued. A 66 kv rated subtransmission circuit was built from Southbrook to Bennetts via Swannanoa. Conversion of the Waipara to Kaikoura 33 kv line to 66 kv was undertaken. Planning commenced to convert the Rangiora west area from a 33/11 kv to 66/22 kv network. A new strategy was developed for meeting urban growth developed using 66 kv sub-transmission and 11 kv distribution networks, a level of transformation voltage which is optimal for large residential load centres onwards The Christchurch earthquakes caused a major shift in urban load centres and load growth patterns in the Waimakariri district. Irrigation load growth slowed but continued in both the Waimakariri and Hurunui areas. Staged conversion of the Oxford, Bennetts and Cust areas to 22 kv continued. Construction commenced to convert the Rangiora west area from four 33/11 kv substations to two 66/22 kv substations A new strategy for meeting urban growth developed using 66 kv sub-transmission and 11 kv distribution networks, a level of transformation voltage which is optimal for large residential load centres. Table 20 - Historical Development The continuing trend of high growth requires new asset development well before assets are due for renewal or refurbishment. MPNZ expects that demand growth and capacity upgrades will continue to drive the lifecycle management plan with the main focus being continued development projects Supply Reliability and Quality The existing network assets are required to provide a reliable supply of electricity at a suitable quality that meets the service target levels adopted by MPNZ. Although MPNZ is an exempt Electricity Distribution Business ( EDB ) it is still necessary to calculate and maintain the data for disclosure and comparison with other EDBs and for use in setting targets for reliability. Long-term trends of reliability indices show that the network assets are being utilised more effectively to provide an increasingly more reliable supply, as described in Section 4 in respect of service level performance and targets Capacity and ODV Network Optimisation As shown by Commerce Commission s 2004 regulatory valuation optimisation investigation, the MPNZ network is close to the minimum necessary to provide the required capacity. An indication of potential over design in the network is the amount of optimisation that was applied to assets in the most recent audited valuation undertaken in The optimisation process examined stranded assets, excess capacity and over-engineering. The valuation was undertaken in accordance with the Commerce Commission s ODV Handbook and was audited by PricewaterhouseCoopers. The current valuation required no optimisation. 76 P age

77 3. Service Levels A key objective of asset management planning is to match the level of service provided by the assets to the expectations of customers and other stakeholders. This is consistent with MPNZ s vision and corporate organisational objectives and goals as specified in Section 1.1 of the AMP. MPNZ s SCI contains specific target service levels for the first three years of the planning period which have been set following consideration of the overall vision and corporate objectives, and following consultation with customers and other stakeholders. The SCI objectives are consistent with the AMP target service levels for the first three years of the plan. MPNZ has initiated annual strategic reviews of actual performance against target (contained in Section 7 for the year ended 31 March 2012 period), and this, combined with industry benchmarking and consultation with interested stakeholders, contributes to how service performance targets are set each year. For the purposes of this AMP, the key service criteria are listed below. These are consistent with the asset management drivers, outlined in Section 1, and are also used to manage conflicting stakeholder objectives as previously explained in that section of the plan. Safety First Reliability of Supply Quality of Supply Customer Service Environmental Protection Economic Efficiency These service criteria are used in the following ways: to inform customers of the proposed service standards to enable customers to assess the suitability, affordability and equity of the services offered. to develop asset management strategies appropriate to that level of service as benchmarks against which performance will be measured to identify the costs and benefits of the service options assessed and offered For the purpose of this plan, primary customers are electricity retailers and direct network customers. Electricity retailers, together with customers, provide information directly to MPNZ to enable service targets to be specified. In recognition of the fact that retailers cannot necessarily communicate levels of service required by end-customers, particularly residential and commercial consumers, MPNZ also engages directly with those customer groups. The levels of service identified in this AMP also reflect current industry standards and legislative requirements. Legislation establishes minimum mandatory levels of service (for example, health and safety legislation) and service level reporting requirements. The strategic and corporate objectives of MPNZ establish the scope of services offered and the extent to which service level targets exceed mandatory minimums, where they exist. Setting service level targets reflects MPNZ s commitment to continual improvement, however service level improvement is likely to plateau once the majority of customers are satisfied with service level delivery. The levels of service will reflect changing customer expectations as further information on customer and other stakeholders preferences emerges and in response to changing regulatory requirements. 77 P age

78 3.1 Defined Performance Indicators 18 The key service level performance measures for the MPNZ network are defined in this section Safety First Operating and maintaining an electrical network is inherently hazardous. Prioritising safety means providing a safe reliable network and a healthy work environment. This will be achieved by ensuring close working relationships between managers and staff through a high level of interaction, site visits, positive feedback to staff, targeted contact for good behaviour, and by targeting those behaviours to be reduced or increased. MPNZ also participates in industry related benchmarking of safety incidents to provide a basis for measurement of our performance. MPNZ is currently undertaking an external review of its work practices and internal processes to identify opportunities for safety improvements. MPNZ uses four measures to monitor safety performance: the number of injuries to the public as a result of the MPNZ network the number of injuries to MPNZ staff and monitored by rolling lost time injury frequency rates the number of notifiable injuries in any one year the number of near misses to MPNZ staff. MPNZ s latest consumer survey has revealed the following: Awareness of safety messages was 36%, and showed a decline over the period. Surveyed consumers who were able to recall safety messages thought they were about right. Awareness of tree trimming messages was 53%. Of that 53%, 55% recalled that the message was in the newspaper Reliability of Supply Network reliability is determined by the quantity and duration of power supply interruptions. System Average Interruption Frequency Index (SAIFI) measures the number of times that a customer can expect the supply to go off. System Average Interruption Duration Index (SAIDI) measures the number of minutes that a customer can expect to be without supply each year. Customer Average Interruption Duration Index (CAIDI) is a measure of the average duration in minutes of supply interruption. The Commerce Commission conducts a five yearly review of the quality limits for electricity lines businesses. The SAIDI and SAIFI thresholds were last set in 2004 based on the average of the five years prior ( ), and apply to the 12 month periods through to Although MPNZ is no longer subject to these thresholds from 1 April 2010, MPNZ will continue to monitor its performance as if it were. The new reliability limit targets from 1 April 2010 to 31 March 2015 will be a SAIDI of minutes (reduced from ), and a SAIFI of 1.6 interruptions (reduced from 1.71). These reflect a new approach to setting reliability and include normalisation for extreme and normal variation in reliability performance, based on the reference period. Whilst there is no limit measure for CAIDI, MPNZ still monitors CAIDI closely as CAIDI equals SAIDI divided by SAIFI. 18 Fulfils requirements 5 and P age

79 3.1.3 Quality of Supply Supply quality relates to the voltage delivered at the customer s installation control point over the range of loads that the customer has contracted for. Targets are specified in the Electricity Regulations and in various industry codes of practice. The key parameters are voltage magnitude, level of harmonic distortion and the level of interference. The performance measure for quality of supply is the number of proven complaints originating from the MPNZ network Customer Service Since 2004, customer surveys have been undertaken annually which assess MPNZ s performance from a customer perspective. This information is used to develop an understanding of MPNZ's customers willingness to pay for improved reliability which is used when determining service level targets and assessing alternative development options. MPNZ s latest customer survey has revealed the following preferences: 86% of consumers surveyed indicated that they do not require an improvement in supply quality. 80% of consumers surveyed indicated that any price increase would be too much. 84% of consumers surveyed indicated that they would not be willing to receive lower levels of reliability and power quality in return for a discount Environmental Protection Environmental performance reflects the number of environmental issues identified through the year and the number of environmental complaints received from customers and the public. Environmental performance measures used include: the number of complaints of excessive noise from substation and distribution transformers the number of environmental complaints from staff, the public, customers and other stakeholders the amount of SF6 gas lost (as a percentage of total volume) if any the number of uncontained oil spills the number of times that the requirements of resource consents or territorial authority is exceeded Economic Efficiency Economic efficiency reflects the level of asset investment required to provide network services to customers, and the operational costs associated with managing the assets. MPNZ discloses the following statistics annually in accordance with the Electricity Distribution Information Disclosure Determination Load Factor = Electricity entering the system / Maximum demand x 365 x 24. This is a measure of the average load compared with the maximum load over a year but is averaged over all GXP s so does not recognise the impact of high winter loads in one part of the system and high summer loads in another Utilisation factor = Maximum demand / Transformer capacity. This is a measure of how well the assets employed on the system are utilised but calculated over all GXP s and so averages the impact of high winter loads in one part of the system and high summer loads in another. It also does not recognise the reduction in low voltage distribution assets achieved by installing additional transformer capacity Loss ratio = Electricity losses / Electricity entering the system. Electricity losses represent physical losses in lines and transformers, losses caused by un-metered or inaccurately metered supplies, and errors due to the meter reading and billing reconciliation process. They are inevitable but MPNZ considers that it is environmentally and economically responsible to ensure that system losses are kept as low as reasonably practical. The level of operational cost associated with managing the assets is indicated by operating costs per circuit kilometre and operating costs per customer, or Installation Control Point ( ICP ). This is supplemented by similar ratios for asset investment; capital costs per circuit kilometre and capital costs per customer. These measures are industry standard 79 P age

80 measures disclosed by lines companies each year. This allows MPNZ to benchmark its operational and capital costs against all lines companies in New Zealand. MPNZ s objective is to minimise expenditure while meeting the other service targets noted above. 3.2 Consumer-Oriented Performance Indicators 19, Asset Performance Indicators 20 Table 21 below summarises the service level measures defined by MPNZ for the purpose of assessing asset management and electricity distribution quality of service consistent with each aspect of service as defined above. The service targets are for the MPNZ network and exclude Transpower activities and any associated Transpower service levels that may impact on MPNZ s service performance. Service level targets for the preceding 12 months are included in the table for reference. Actual performance against the target is summarised in Section 9. The remaining sections in this chapter set out the target levels of service for each measure for the planning period, 1 April March 2023 and the justifications for the targets. Strategic Outcome Safety Measure Number of public injuries on MPNZ facilities or due to MPNZ network issues Number of OSH notifiable accidents Measurement Process Network and contractor operational events databases 2013 Target 0 0 Considerations When Setting Target Zero is the only acceptable target Number of near misses 0 Reliability 21 Number of employee injuries SAIDI SAIFI CAIDI Faults/100km total Faults/100km 66kV Faults/100km 33kV Faults/100km 22kV Faults/100km 11kV Faults/100km SWER Total Interruptions Network outage records Based on service level drivers, past performance, regulatory requirements, customer feedback for targeted improvement, planned development and maintenance programs, climate and industry benchmarking. SAIDI and SAIFI targets are approx 70% of the 2011 median results for the industry. Quality Number of proven complaints for: Voltage Complaints < 20 Based on past performance, network standards, benchmarking and customer feedback 19 Fulfils requirement Fulfils requirement MPNZ plans to implement systems to disaggregate SAIDI and SAIFI to consumer market segments eg. Urban, Rural Towns, Rural and Remote Rural 80 P age

81 Strategic Outcome Customer Service Measure Average rating from customer survey Deliverables Overall Satisfaction Measurement Process Annual Survey 2013 Target Considerations When Setting Target Based on past performance, regulatory requirements to consult with customers and security standards Environment Number of complaints of excessive noise from substation/distribution transformers Complaints 0 Zero is the only acceptable target consistent with the Code of Sustainable Practice. Number of environmental complaints from staff or public 0 Target is consistent with good industry practice Percent of SF6 gas lost Gas pressure <1 % Number of uncontained oil spills Reported incidents 0 Economic Efficiency Number of breaches of resource consent requirements Load Factor Capacity Utilisation Factor Loss Ratio Reported incidents Power billing system 0 64% 21.3% 5.6% Based on past performance and benchmarking, consistent with MPNZ s Code of Sustainable Practice. Capital Cost per km $7,115 Capital Cost per ICP Operating Cost per km Financial records $957 $2,184 Operating Cost per ICP $294 Table 21 - Strategic Outcome Service Level Targets 22 Future service level targets are shown in the following table for the planning period, 1 April 2013 to 31 March It is expected that these targets are achievable by MPNZ (with the exception of the impact of unanticipated extreme events such as a major storm or further earthquakes). Justification for each of the targets is set out in the following section. The forecast expenditure over the next ten years on maintenance and renewal of assets will contribute to improved service level targets and results due to lower levels of faults. The high levels of customer growth and increasing customer density will mitigate some of the reliability gains leading to only a gradual net decrease in SAIDI and SAIFI. 22 Fulfils requirement P age

82 Strategic Outcome Actual Actual Actual Actual Actual Measures SAIFI Total SAIDI Total CAIDI Total SAIFI planned (B) SAIFI unplanned (C) SAIDI planned (B) SAIDI unplanned (C) Reliability Faults/100km total Faults/100km 66kV Faults/100km 33kV Faults/100km 22kV Faults/100km 11kV Faults/100km SWER Total Interruptions Quality Number of proven voltage <20 <20 <20 <20 <20 <20 <20 <20 <20 <20 <20 Number of public injuries on Safety Number of OSH notifiable Number of employee injuries Customer Average rating from customer Service Deliverables Overall Satisfaction Number of excessive noise Number of environmental Environmental Percent of SF6 gas lost <1 % <1 % <1 % <1 % <1 % <1 % <1 % <1 % <1 % <1 % <1 % <1 % <1 % <1 % <1 % <1 % Number of uncontained oil spills Number of breaches of resource Load Factor 66.2% 70.4% 69.7% 71.1% 61.8% 65.0% 64.0% 64.0% 64.0% 65.0% 65.0% 66.0% 66.0% 67.0% 67.0% 68.0% Capacity Utilisation Factor 23.1% 22.7% 21.7% 21.5% 22.5% 21.5% 21.3% 21.1% 20.9% 20.7% 20.5% 20.4% 20.3% 20.2% 20.1% 20.0% Economic Loss Ratio 5.4% 5.3% 5.3% 5.6% 4.4% 5.6% 5.6% 5.6% 5.6% 5.6% 5.6% 5.6% 5.6% 5.6% 5.6% 5.6% Efficiency Capital cost per km $3,312 $3,529 $2,989 $2,659 $2,982 $2,933 $7,115 $4,649 $4,400 $3,856 $3,854 $3,761 $3,660 $3,787 $3,717 $3,987 Capital cost per ICP $440 $467 $400 $356 $392 $384 $957 $616 $577 $501 $495 $481 $465 $478 $467 $498 Operating cost per km $1,640 $2,032 $1,963 $2,206 $2,300 $2,340 $2,184 $2,248 $2,259 $2,278 $2,317 $2,327 $2,330 $2,334 $2,338 $2,342 Operating cost per ICP $218 $269 $262 $295 $300 $306 $294 $298 $296 $296 $298 $297 $296 $295 $294 $292 Table 22 - Service Level Targets 82 P age

83 3.3 Basis of Performance Indicators Strategic Outcomes MPNZ s key business drivers are the desire to deliver superior service, ensuring security and reliability of supply, and taking every opportunity to ensure that the Company is managed effectively and efficiently in the best interests of customers and stakeholders. This is consistent with MPNZ s corporate vision to be recognised as a leading regional electricity distribution and electricity supply company. MPNZ places a high value on its relationship with its customers and its local communities. MPNZ recognises that these relationships will be strengthened through maintaining high levels of service. MPNZ s Corporate Organisational Objectives and Goals, previously outlined in Section 1.1 are consistent with these strategic drivers and provide the framework for establishing service level targets in relation to asset management. In this respect MPNZ determines its service targets consistent with these overall objectives by considering the environment in which it operates and the wishes of customers External Environment MPNZ s wider operating environment is established by upstream electricity supply and transmission delivery and relevant Government Policy Statement and regulatory bodies including the Electricity Commission and the Commerce Commission. Demand for electricity in New Zealand will continue to grow requiring new investment in generation. MPNZ has been granted a resource consent for a wind farm at Mt Cass, and is investigating a mini hydro site at Browns Rock on the Waimakariri and other wind and small hydro opportunities. MPNZ believes there is scope to enhance local generation through adopting a more integrated perspective on network asset management. Priority will also continue to be given to MPNZ s warm homes program and energy audits for customers to manage demand. The Electricity Industry Reform Amendment Act 2001 implemented a targeted form of regulation to be applied to lines businesses under Part 4A of the Commerce Act Under this regime the Commerce Commission sets price path and quality thresholds. The price path threshold applied to MPNZ from 1 April 2004 prevented line charges from increasing any higher than CPI-2% per annum when averaged out. From 31 March 2010 MPNZ no longer falls under the Commerce Commission s pricing and quality threshold regime and is now allowed to self regulate due to its customer owned status. MPNZ s price path going forward will reflect the following objectives. MPNZ is a community/consumer owned lines business and continues to determine its revenue requirement and therefore its line services charges on the basis that lines revenue collected from its customers by way of these charges will be sufficient to cover its operating costs and capital development, and to maintain its capital and/or revenue resources at a level considered appropriate by the Board without recourse to term debt. Line services revenues collected from customers under this policy that are considered to be surplus to MPNZ s revenue requirements are returned to customers in the form of rebates credited to their power accounts. MPNZ continues to adopt uniform line services charges for all customer categories within a particular customer group, irrespective of customer density, the location of the nearest Transpower point-of-supply, the configuration of and investment in MPNZ s sub-transmission and distribution network, or other load characteristics. Variable distribution and variable transmission line services are charged by way of a uniform per kilowatthour charge in each customer group. Similarly the quality threshold was set equal to the network SAIDI and SAIFI for the five year period and required no deterioration against this historical benchmark. The regulatory reliability threshold levels set for MPNZ through this period were (149) SAIDI and 1.71 (1.75) SAIFI. These also expired on 31 March Although 23 Fulfils requirement P age

84 exempt from the quality threshold from 1 April 2010, MPNZ has assessed its quality limit, based on the Commission s revised approach (which includes normalisation for normal and extreme variation across the reference period 1 April March 2009) as SAIDI and 1.6 SAIFI Customer Demand for Service While MPNZ strives to accommodate the expectations of its customers in its asset management practices, there is limited information available on the value to customers of reliability, quality and customer service, and in particular how these values can be incorporated into asset management practices. Since 2004 MPNZ has conducted annual customer surveys to assess service performance and to improve MPNZ s understanding of customers preferences, particularly in respect of the price-quality trade-off. The 2012 survey was undertaken by an independent professional organisation and the key focus of the survey was to ascertain among the various customer segments the following information: the most important deliverable for customers how customers rated the delivery of the most important deliverable attitudes towards power interruptions MPNZ s performance in responding faults the price versus quality trade off. The survey is targeted at linking customer responses to asset management drivers. The number of customers surveyed was 608. Recommendations from the 2012 survey of customers views in respect of asset management planning include: MPNZ performed well during the recent external events and should continue to concentrate on reliability and security, especially for commercial and major users. The near 50/50 split in line charge preference for uniform versus segmented tariffs indicates more due diligence and community discussion should take place before contemplating any change from the status quo (uniform charging). The loss of supply created by external events and the high profile restoration process has created an environment where increased expenditure on network security would be more readily accepted Overall Customer Survey Results Key findings from the 2012 customer survey include: 86% of customers surveyed stated that they do not require an improvement in the quality of their supply, an increase from % of customers surveyed were not prepared to pay any more. 84% of customers surveyed would not exchange lower levels of quality and reliability for a discount. MPNZ offers the same line charges for similar customers across its North Canterbury network including similar customers located in both urban and rural areas. The costs of supply however are greater for rural areas, where customer density is lower. This implies a level of cross subsidisation from urban to rural customers. This is offset by the higher quality of service able to be supplied to urban customers (due to network configuration and shorter response times) and the benefits to the wider community of maintaining affordable supply in rural areas. In addition it is also noted that due to the interconnected features of electricity networks it is almost impossible to provide differing levels of service to customers located on the same part of the network. Thus accommodating individual customer needs (with the exception of large industrial and commercial consumers with dedicated supplies) is not possible. 84 P age

85 Alternative supply options have been constructed where possible to provide security consistent with the needs of major customers. In addition, high priority customers are monitored, for example, where power supply is essential for reasons of life support and higher levels of service are provided in these instances. The majority of MPNZ s supply area has experienced significant growth over the past ten years, much of this due to residential subdivision, dairy farming and associated irrigation developments. This demand growth has been met by MPNZ by investing in new or larger distribution feeders, new or larger zone substations and larger Transpower GXPs. Inherent in this upgrade work is significant improvements in system reliability, security of supply and quality of supply for a large proportion of MPNZ s existing customers. MPNZ also recognises that some specific customer segments have some concern over system reliability and key initiatives have been planned over the next five years which are detailed in Section Setting Reliability Targets Reliability performance targets are derived from a combination of historical performance, network analysis, benchmarking with other lines companies and customer consultation. In 2002 and 2006 MPNZ experienced heavy snow events which gave rise to much higher than average SAIDI and SAIFI levels. In 2010 the Canterbury earthquakes caused even more outages. The intervening years have been fairly consistent. MPNZ benchmarks industry information on reliability to help establish future service level targets. Table 23 below shows MPNZ s relative ranking for SAIDI and SAIFI against other like New Zealand lines companies (those with 10 or less customers per km) for reliability performance for 2009, 2010 and Even after the earthquakes, MPNZ s 4 year average ranked it fourth for SAIDI and second for SAIFI. Recent customer surveys have highlighted price and reliability as the key MPNZ deliverables and MPNZ is comfortable with the levels of reliability through a period of high network growth with associated planned outage requirements. Consistent with MPNZ s vision to be a leading regional energy company in New Zealand, MPNZ is committed to maintaining this level of reliability. SAIDI SAIFI Rank Rank Rank Rank Rank Rank Alpine Energy MPNZ Centralines Eastland Network Electricity Ashburton Horizon Energy MPNZ Marlborough lines Network Waitaki Northpower Scanpower The Lines Company The Power Company Top Energy Westpower Table 23 - Relative Ranking for SAIDI and SAIFI Individual feeder reliability history has been used as an indicator of expected future reliability. A five year average is used to try to balance out the effect of one off events which would otherwise cause different feeders to be the worst performing ones each year. The extensive feeder reconfiguration due to load growth over 5 years plus the impact of 24 The 2012 data was not available for inclusion in this AMP. 85 P age

86 previous reliability improvement measures makes historical data useful as only one input to the assessment regime. MPNZ also calculates a feeder reliability index based on the length of line, number of connected customers, line size, and downstream protection elements. This helps identify those lines which are likely to be poor performers. This index, combined with the historical data, is used to target expenditure on asset management improvements. These include improved tree clearance, strengthening lines for higher snow loadings, the creation of shorter feeders with fewer customers per circuit breaker, improvements to recurring problems such as opossum faults or bird clashes and the relocation of poles to reduce the risk of vehicle accidents. A majority of customers have indicated in annual surveys undertaken since 2004 that they do not want reduced reliability in exchange for lower prices or improved reliability with higher prices. In 2011 there was more willingness to pay for increased reliability. MPNZ has reported significant improvements in system reliability due to the inherent effects of MPNZ s capital works program which, as noted above, has largely been driven by growth. Customers are generally not aware of this improvement because often the work occurs without their knowledge and the improvements occur gradually over a long period of time. The potential impact of upgrade projects and system reconfiguration on reliability is outlined with each project. The reliability targets which are shown in Table 22 reflect gradual improvements over the next 10 years. MPNZs main focus in the short term is in security. This is consistent with consumers current levels of awareness of the need for security power supply following the earthquakes, but recognises the inherent improvements in reliability of the distribution network which will occur as MPNZ completes its network capacity and security upgrade programs in response to new demand Setting Capacity Targets The provision of capacity in the upper network is driven by historical customer load growth coupled with maintaining MPNZ s security level standards, (shown in the network development plan in section 7 of this plan). MPNZ monitors the capacity of GXP stations and zone substations against their peak loadings and also monitors the ratings of feeders against peak load. The targets are set to ensure that sufficient capacity is always available over the entire forecast period, consistent with customers expectations. Many zone substations have adequate capacity to meet customer demand but not to comply with MPNZ desired security standards. Rectifying this is factored into MPNZ s expenditure program. In order to meet this requirement and ensure sufficient capacity is available MPNZ undertakes detailed demand forecasts on an annual basis, as set out in Section Setting Power Quality Targets Power quality objectives are concerned with matching the performance of assets with the performance customers expect and are willing to pay for. Quality targets reflect industry standards for acceptable levels of voltage and harmonic distortion. Momentary fluctuations include surges, spikes, sags and dips in supply voltage. MPNZ uses industry forums, historical experience and customer complaints to determine what is acceptable or tolerable. MPNZ aims to supply all customers with supply quality that meets or exceeds the regulatory standards consistent with its corporate organisational goals and objectives (section 1.1). In order to achieve this MPNZ designs and develops the network to maintain the voltage within the allowable + 6% at the point of customer connection under all loading conditions. MPNZ employs monitoring equipment at some of the zone substations to provide information on voltage and waveform fluctuations. MPNZ has initiated a program to also monitor harmonics at zone substations. Normal system switching operations involving transfers of load are controlled so that system fluctuations are minimised. A large proportion of power quality complaints are associated with problems in the customer s own installation. Voltage complaints are generally due to undersized customer service mains or installation cables. Waveform problems are generally associated with harmonics being generated on a customer s installation by electronic equipment. While these are outside of MPNZ s control, the code of practice on limitation of harmonics can be used to ensure that other customers are not adversely affected. In recent times MPNZ has carefully monitored the level of harmonics arising from new irrigation pump motors fitted with electronic variable speed drives (VSD s). These are a known cause of harmonic distortion in the waveform. MPNZ has recently changed its connection standards to limit 86 P age

87 the harmonic currents of VSD s to less than 10% THD in an effort to maintain the system harmonic voltages within the code requirements. An audit program on irrigation pump motors will be commenced during 2012 to identify harmonic generation and incorrect power factor correction applied. Quality targets are set to reflect the impact of network investments over the planning period which may have an associated impact on power quality, even if this is not the main driver for the investment. In addition customer requirements and external influences are considered. The 2009 to 2011 customer surveys sought customers views on the quality of their voltage, were their lights dim at night or were they constantly popping light bulbs. Recent feedback from irrigator customers that their pumps are tripping out has usually been proven to be due to undersized cables in their own installations. Given customer surveys continually rate price and reliability above power quality concerns, MPNZ is not targeting improved levels of power quality during the forecast period, other than those which emerge from investments driven by other needs, and by controls on harmonic polluting loads as mentioned above. The number of voltage complaints is expected to remain low even with the expected load growth Setting Safety Targets MPNZ became certified to NZS 4801 standard in health and safety management in This initiative has lead to the development of a number of additional safety systems for staff and the public and has made MPNZ focus on the safety culture within the business at a practical level. During 2010 MPNZ Field Services Staff participated in an industry wide Electricity Engineers Association (EEA) safety culture pilot study which sought Staff impressions on criteria that affect their work safety. These included staff training, provision of equipment and tools, communication, work planning and Company policy. An action plan has been developed following the Staff feedback sessions which calls for improvements in two way communication, job planning, hazard management, traffic management at work sites, staff training initiatives, lone worker safety, drug and alcohol policies, and refinements to the Company s disciplinary process. A second follow up Staff survey was undertaken in late 2010 to measure improvement. Section 61A of the Electricity Act now states that by 2012 MPNZ must operate and have audited a Safety Management System (SMS) that requires all practicable steps to be taken to prevent the electricity supply system from presenting a significant risk to a member of the public or to property. Every SMS must comply either with the requirements of NZS 7901 Safety Management Systems, or Electricity (Safety) Regulations 49 and 50. MPNZ is accredited to NZS 4801 Health and Safety Management, ISO 9001 Quality Management, ISO Environmental Management, and ACC. An audit of these systems in 2010 also looked at MPNZ s compliance with Electricity (Safety) Regulations 49 and 50 which set out the requirements relating to operating an SMS, MPNZ passed this audit and intends to meet the more detailed requirements provided by NZS 7901 by The 2012 Customer survey included a section on safety which received the following responses: Across all groups 36% of all respondents indicated they were aware of MPNZ safety messages. This is below the 46% achieved in 2011 which is in turn below the 50% achieved in Most respondents indicated they recalled these safety messages via signage, newspapers or through mail/ with the power bill. Across all groups most respondents stated that levels of safety messages were about right now, noticeably, those not aware of the safety messages indicated that more could be done. There are varying levels of awareness among groups of the responsibility to trim trees on their property that are close to or touching overhead power lines. MPNZ has interpreted this result as follows: Continued focus on informing customers of tree trimming responsibilities is required as increased efforts in the last year have not significantly changed results. 87 P age

88 Safety messages should, at a minimum, continue at current levels. Additional and multiple channels of communication should be considered for this exercise. Our safety targets are set at no injuries, accidents or near misses. Although our historical performance has not always achieved these targets, they are consistent with our objectives for zero tolerance of unsafe work practices across the MPNZ organisation and for those with access to the equipment on our network Setting Customer Service Targets MPNZ s connection agreement sets out the terms and conditions for delivery of line services to customers for the conveyance of electricity. MPNZ uses customer feedback to ensure that customers needs are reflected in service standards. MPNZ s commitments to customers are to: Treat customers with courtesy and respect, to listen to their views and at all times act reasonably in dealings with them; Use all reasonable efforts to supply electricity that complies with all legislative requirements. The supply of electricity and network services is subject to the Electricity Act 1992 (as amended) and any regulations made under that Act; Inform customers of any interruptions necessary for planned maintenance or repairs to the network at least 48 hours before by telephone, notice in writing, a notice in a local newspaper, or a combination of these methods. Consistent with customer feedback from surveys and direct engagement with customers during planned or unplanned work or in response to queries, customer service targets are set to maintain the existing level of service across the entire planning period. Customers have indicated in customer surveys on power reliability that current levels of system reliability are acceptable. MPNZ uses industry benchmarked security of supply guidelines in system planning and design of the power system. More detail on the levels of security of supply is presented in section Setting Environmental Targets Consistent with MPNZ s Code of Sustainable Practice the only acceptable target for MPNZ for environmental incidents is zero incidents. MPNZ has maintained certification to the international standard ISO in environmental management for over ten years without any major corrective actions being required. Therefore based on past monitoring of these systems and the development of environmental design and monitoring policies over this period MPNZ is confident that a zero target for environmental incidents is achievable. MPNZ has also adopted accepted industry standards for oil leakage and SF6 gas leakage Setting Economic Efficiency Targets Economic efficiency targets are reflective of MPNZ s network and load characteristics which are unique to this network. The network reflects a balance of urban and rural customers spread out over a long and narrow area with an even spread of farming and commercial customers, and pockets of high summer irrigation load. The summer peak load is very similar to the winter peaks load but occurs in different parts of the network. This means that while the average load factor is very good, the area load factors are not and this has a large effect on global economic measures like transformer utilisation. The economic efficiency targets are based on an extrapolation of historical performance along with industry benchmarking to ensure that MPNZ at least maintains and if possible improves its relative industry position against other similar lines companies. The achievement of these objectives is partly dependent on the performance of other lines businesses. MPNZ s economic efficiency performance is therefore compared directly to other like electricity lines businesses and targets are derived to place MPNZ in the top performing quartile of these lines businesses. 88 P age

89 4. Network Development Planning 4.1 Planning Criteria and Assumptions 25 Planning criteria describe the limits placed on system elements that network development must conform to. MPNZ has adopted specific planning criteria to ensure consistent evaluation of the alternatives and that appropriate operating margins exist across its entire network. Asset Category Extension Upgrade Renewal Location Trigger Capacity Trigger Reliability Trigger Security Trigger Voltage Trigger Condition Trigger LV Lines & Cables Existing LV lines and cables don t reach the required location. Insufficient capacity to supply connection Voltage complaints Not applicable. Voltage at consumers premises consistently drops below 0.94pu. Distribution Substations Distribution Lines & Cables Zone Substations Network Equipment within GXP Load cannot be reasonably supplied by LV configuration therefore requires new distribution lines or cables and sub. Load requires new distribution sub that is beyond the reach of existing distribution lines or cables. Load cannot be reasonably supplied by distribution configuration therefore requires new sub-trans lines or cables and zone sub. Load cannot be reasonably supplied by system configuration Table 24 - Planning Criteria Where loggers indicate overloading. Greater than 75% rating where transfer capacity required. New load would exceed above thresholds. Peak load under emergency conditions exceeds capacity. Max demand consistently exceeds 100% of nameplate rating and no non-network solution available. Max demand consistently exceeds 80% of nameplate rating. Voltage complaints More outages than targeted. Design review highlights inherent weakness e.g. prone to snow damage. Less than target reliability Load profiles exceed accepted level No fixed criteria. Upgrade or extension will increase level of security and reduce SAIDI and SAIFI. Security criteria not met. Security criteria not met. Voltage complaints. Load flow analysis highlights voltage regulation problems. Voltage regulation issues. Equipment checks and records highlight concern Asset deteriorated to an unsafe condition. Third party requests work. Adjacent assets being replaced. Asset deteriorated to an unsafe condition. Third party requests work. Adjacent assets being replaced. Asset deteriorated to an unsafe condition. Third part requests work. Adjacent assets being replaced. Asset deteriorated to an unsafe condition. Third party requests work. Asset deteriorated to an unsafe condition. Third party requests work. 25 Fulfils requirements 11.1 and P age

90 4.1.1 Reliability Criteria Although there is no universally accepted definition of power reliability, the number and duration of service interruptions are of primary interest from the customers point of view as specified in Section 4. MPNZ uses reliability statistics to identify if and where system improvement is needed. Defining an acceptable level of service to customers, given the cost of reliability improvement, is a more difficult question to answer. MPNZ selects system options on the basis of the lowest through life cost design required to improve current levels of reliability. MPNZ uses its GIS system to evaluate the likely reliability of feeders. The GIS system traces the feeders and reports the length of heavy, medium and light conductors between downstream circuit breakers, and the number of ICP s in each section. Lighter conductors are assigned a higher failure rate. A resultant overall reliability index is calculated. In figure 30 below the different colours within a bar represent the contribution to the index between each circuit breaker in the feeder. Feeder R47 is clearly likely to have the poorest reliability. This table is used to rank feeders for reliability related upgrades. Any year s outage statistics are unlikely to match this very closely however it is representative of the average over 5 years Calculated SAIFI Index Relative SAIFI Index R47 Y23 P45 S15 K7 H31 SW64 S13 C40 U26 Y43 X28 BN24 C20 X38 P25 U36 P35 N34 T42 T43 K6 H21 K24 W21 Y33 T41 W23 X48 SW62 U46 G33 K4 P55 H41 G31 BN25 K1 G32 S14 L51 SW65 N44 SW63 R27 S36 BN23 U56 W22 O76 L52 S16 E80 R37 K18 C30 L53 K15 S34 S35 K19 Feeder ID Figure 30 Calculated SAIFI index One of the key criteria for distribution development planning is voltage. The current methods used to monitor voltage performance are SCADA using voltage measurements brought back from field equipment, load flow analysis results, manual voltage checks in normal and abnormal configuration and from investigations into power quality customer complaints. Some town feeders are approaching peak loading levels where it is becoming more difficult to transfer load during fault restoration. These include transferring load to Rangiora West from the Rangiora Borough or Rangiora East feeders, transferring load between the two Hanmer town feeders, and between Kaikoura s Town and Churchill Street feeders. A study of options to improve these operational weaknesses has already started and some improvement work has already been completed but further additional linking of priority feeders will occur over the next year to mitigate more of these problems. There are likely to be rapid changes to the load distribution around Rangiora and Kaiapoi in response to the Red Zoning of Kaiapoi and Christchurch properties and subsequent fast tracked subdivision development. MPNZ is trying to anticipate this in its feeder development program and the timing of GXP upgrades however there is a lot uncertainty over the speed and scale of the changes. This plan forecasts likely demand, at GXP and zone substation level over the next 10 years, recognising that there is more certainty associated with projections in the short term. The AMP also recognises that significant individual load developments are hard to predict and, in many cases, have to be accommodated as they occur. MPNZ s approach to 90 P age

91 forecasting demand involves spreadsheet analysis of historical demands together with knowledge of likely future developments. More complex mathematical models to forecast demand have not been employed as MPNZ considers that the forecasting approach must balance the needs for accuracy against the competing needs for reliability and usability. 26 The strong growth in MPNZ s size over the past 10 years reflects growing demand from households and businesses, especially for new connections and line extensions for subdivisions, lifestyle blocks, irrigation and dairying, in what has been one of the fastest growing regions of New Zealand. With the Canterbury region accounting for around 15% of New Zealand s total economic activity, second only to the Auckland region, it has a significant impact on the national economy. North Canterbury and Kaikoura, where MPNZ operates, may experience faster growth than some other parts of the region with continued migration into these areas from Christchurch city as Red zoned areas are vacated. Network development planning is undertaken to identify asset enhancement and development programs required to meet target levels of service and MPNZ s security standards. It is based on analysis of maximum demands, network power flows, specific customer requests and demographic estimates. Planning criteria for the development of the network are presented in the following sections, defining the constraints and limits applied to individual network components and the overall policies to which the development plan must conform. The definition of planning criteria ensures: Consistent evaluation of development options A benchmark against which policy changes can be assessed Transparency of operating margins. For the purposes of this AMP, a distinction is made between transmission, sub-transmission and distribution planning. The upgrade program for the 220 kv transmission system owned and managed by Transpower will depend to some extent on Transpower policy. A review of local transmission development is included for completeness as it has a major impact on the security and reliability of the MPNZ system. Sub-transmission planning emphasises long range objectives associated with system expansion and required increases in zone substation and GXP capacity to meet peak demand. It also takes into account key issues associated with reliability and security of supply. Distribution planning emphasises more short run objectives associated with new customer connections, power quality improvement (such as voltage regulation and power factor correction), loss reduction and operating improvements Security Criteria Security of supply is the ability of the network to meet customer demand without suffering an interruption in the first instance, and secondly, where an interruption develops it is the ability to restore power quickly via alternative supply or backup options. MPNZ s security guidelines generally look to provide an alternative backup supply where practical, however this is seldom done in isolation and is often coupled with parallel studies of: the network s load profile the ability to economically duplicate network assets to provide additional security asset utilisation the different risks associated with different equipment types response times 26 Forecast complexity needs to balance accuracy versus reliability and usability, with the risk of a complex forecast model becoming unusable due to difficulty in data preparation and interpretation. A balance is also required between return and effort, and a forecast of the next 24 hours should be more accurate than one for the next 10 years. In this situation the model is intended for long term planning and a less complex model is adequate. 91 P age

92 The EEA guideline for security of supply in New Zealand electricity networks adopts a reasonable level of security of supply standards. The security guidelines for restoration of supply following a single fault adopted by MPNZ for the planning period are shown in Table 25. These are not less than the EEA Guidelines for Security of Supply in New Zealand Electricity Networks and also accommodate MPNZ s own experiences and needs. MPNZ defines an urban area for security of supply purposes as town with a peak load greater than 10 MW. Class of Supply Description Demand Range (MW) Time to Meet Demand Rural radial feeders Repair time Rural feeders with alternative supply hours for 50% demand 6 hours for 100% demand Urban feeders hours for 50% demand 6 hours for 100% demand Zone substations Rural single bank Repair time for 100% demand Zone substations Urban single bank hours for 100% demand Zone substations Double bank hours for 50% demand Repair time for 100% demand GXP stations Single bank hours for 100% demand GXP & Zone substations Double bank hours for 50% demand 8 hours for 100% demand Table 25 - Security Guidelines for Restoration of Supply Rangiora and Kaiapoi are the only urban areas within the context of the security guidelines however MPNZ s customers have consistently placed high importance placed on security of supply. Where smaller communities can practically be given a similar level of security, upgrading to achieve this is a priority. The towns of Kaikoura, Culverden, Waipara, Amberley and Woodend all have security similar to urban areas. Planned upgrades will bring Oxford, Cust, Ashley, Leithfield and Cheviot up to a similar standard within the planning period. Hanmer and Hawarden are notable exceptions as they are both supplied from single subtransmission circuits with little or no interconnection to other parts of the system. For Hanmer in particular, non network solutions may be able to provide at least partial backup in the future. In the case of an adverse event (such as, but not limited to, snow storms, high winds, lightning, floods and earthquakes), MPNZ will use its best endeavours to restore electricity delivery as soon as practicable. The changing rural land use to increased dairying has also brought increased dependence on the power supply for the operation of many farms and drastically increased the overall economic impact to society of outages. The recent earthquakes have further raised awareness of security and reliability, even at some increased cost, and hence rural network development has also been focused on strengthening security which has been eroded by rapid load growth. This is particularly evident in the Rangiora West and Culverden areas Lost Customer Minutes Fund The reliability performance of MPNZ is judged according to the number of customer interruptions (SAIFI) and customer minutes lost (SAIDI) per connected customer. The number of customer minutes lost is generally perceived to be the most significant measure of supply quality and capital investment in this area will often include appraisals of the cost per customer minute lost rescued. One of the main difficulties in developing a distribution value for customer minutes lost rescued is the perceived difference in standards between customer groups. Rural customers are better prepared than urban customers to deal with interruptions because they have more of them and are generally better equipped to handle them. For example, they may have alternative ways to provide room heating, heat water and cook. Commercial customers in town centres or industrial customers with continuous processes can often have requirements significantly greater than the average. For example many commercial customers are badly affected by even a short interruption, some industrial 92 P age

93 customers cannot cope with long lasting interruptions and most domestic customers are relatively unconcerned about deep night power cuts. As discussed in section 4.1, the sensitivity of rural customers is also increasing with changing land use. There is no consensus in New Zealand as to the values to be used or how they are to be used. For the time being MPNZ has decided to, within the confines of its business processes, apply a monetary value to lost customer minutes so that a sum of money can be allocated in the budget each year to avoid or lessen the impact of power interruptions. This is not a payout to customers based on perceived losses; it is a management and funding tool for internal use to help reduce power disruptions to customers. MPNZ places a value of $0.07 cents per customer minute of interruption on planned interruptions and $0.20 per customer minute of interruption on unplanned interruptions or faults. These values are used to budget for the following initiatives: Expenditure to reduce outages from planned interruptions to provide temporary supply options using: - Live-line technology - Interrupter cables - Mobile generation. Expenditure to reduce outages resulting from faults to provide permanent supply options using: - Improved response times through mobile communication technology - Installation of automation schemes - Splitting feeders or creating new feeders from a zone substation to reduce the number of customers affected by a fault. Based on current levels of interruptions this means that MPNZ is willing to spend approximately $120,000 each year on planned interruption initiatives to prevent them from occurring, and approximately $400,000 each year to reduce system faults and hence lost customer minutes. This is in keeping with the results of the 2009, 2010 and 2011 customer surveys which identified that reliability of supply; i.e. how many interruptions customers are experiencing, is one of the most important issues for customers. Over time MPNZ will monitor the levels of funding applied to the reduction of interruptions by the above means and compare this against any real improvement. These funds are evident in the cost of employing live line techniques, running the mobile generator truck in place of planned shutdowns and the installation of additional circuit breakers and new feeders. It is however more difficult to determine the precise allocation of funds to improved response times as the outcomes of these improvements is not currently measured. The TechnologyOne software platform includes a mobility solution which will be developed to monitor response times in the future Voltage Regulation The objective of voltage regulation is to stay within the statutory voltage limits. Voltage regulation is generally set to control in the band 100% to 102% of nominal voltage at sites with 1.25% tap steps. Where either line drop compensation or 2.0% tap-changers are employed, the voltage regulation is set to control in the band V. Line drop compensation is rarely used because of the large customer spread along the distribution lines. Selection of the most appropriate means of voltage regulation depends on current demand, demand forecasts, network configuration, cost and amount of correction required. The allowable voltage drop of 12% to the network connection point is generally allocated as shown in Table 26. Urban Rural Regulated Bus range 1.5% 1.5% MV Distribution System 2.5% 5.0% Transformer 2.0% 2.5% Low Voltage System 6.0% 3.0% Table 26 - Allowable Voltage Drop 93 P age

94 In rural situations the actual MV distribution system voltage drop will depend on the distance of the customer from the voltage controlled supply point. Generally, network design aims for the distribution transformer to be as close as possible to the customer to remove the need for long low voltage (400V) circuits. Systems are generally designed to have less than 10% total voltage drop to the network connection point to allow for additional voltage drop when the system is being supplied in an abnormal configuration e.g. during and equipment outage. Transpower or MPNZ system switching or sudden large customer load changes may cause momentary fluctuations outside the 12% range. The voltage regulators will usually correct for these changes within a few minutes Fault Levels All MPNZ equipment is sufficiently rated to withstand the existing fault levels (the resultant current that flows during network short circuit faults). An increasing issue for MPNZ is that coupled with transformer upgrades at Transpower GXPs, the fault levels increase. 4.2 Strategies for Standardising Assets and Designs 27 MPNZ considers the following standard designs: Standard 22 kv construction drawing set for the 90% of overhead line structures. Designs comply with the Electricity Regulations and the relevant New Zealand Standards and Codes of Practice. New overhead lines are designed to AS/NZS7000:2010. Standard 11kV underground cable and ground-mount substations (not comprehensively documented). Key components such as distribution transformers and cable are largely standardised by the manufacturers. Smaller components such as protection relays, battery chargers and fuses are standardised. Departures from standard designs must be approved by the relevant Network Manager. MPNZ also pays particular attention to standardising the selection of overhead lines for maintenance to ensure that all like assets in an isolation area are maintained at the same time. This minimises outage times or generator costs, transport costs, and the completed cost per pole. Ad hoc pole maintenance is very inefficient especially in rural areas where travel times are significant. 4.3 Strategies for Energy Efficiency 28 MPNZ considers the following strategies for improving energy efficiency: Converting 11kV to 22kV reduces line losses and requires old transformers to be replaced with new MEPS compliant transformers. Loss capitalisation is considered when transformers are being purchased. MPNZ actively promotes energy efficiency in the community. 27 Fulfils requirements 11.3 and Fulfils requirement P age

95 4.4 Determining Capacity Conductors and Cables Overhead conductors are generally chosen firstly for mechanical strength, secondly to meet feeder voltage drop requirements, and then t meet thermal rating and line loss requirements. For the majority of the system, any conductor meeting the first two criteria will also have adequate thermal rating and economic losses. High-percentage-steel conductors are used in heavy snow areas and low load areas. All aluminium conductors are preferred for use in salt contaminated areas near coastal regions. The minimum conductor size used is ferret for all main lines above minor service line level. Squirrel conductor is gradually being removed from service due to its low strength especially in snow areas. All jumpers are now sized at ferret as a minimum or the line conductor size where this is larger. All new lines are designed to AS/NZS7000:2010 and the appropriate electricity regulations and codes of practice. The informative snow and ice loadings recommended in AS/NZS7000 are being used although these are still being reviewed for their appropriateness in MPNZ s area. The following conditions have been assumed when calculating the thermal rating of overhead conductors: Winter: Wind of 0.5m/sec, solar radiation of 1000 W/m2, black conductor, 50 degc temperature rise from 10 C ambient. Summer: No wind, solar radiation of 1000 W/m2, black conductor, 30 degc temperature rise from 30 C ambient. Cables are purchased to AS/NZS4026: Transformers Power transformers are operated to the limits allowable under BS Guide to Loading of Oil Immersed Power Transformers and BS EN Power Transformers General and Temperature Small power transformers often operate in the overload region. Larger transformers for commercial or subdivision loads generally operate at up to full load or 75% load in their normal configuration where they can provide an alternative supply to a neighbouring area. Transformer utilisation can be misleading as it is often more economic in rural networks to erect a 15 kva transformer for a new customer rather than install 150m of low voltage distribution to the next nearest transformer. This tends to reduce the overall utilisation factor yet also reduces the amount of investment in network assets per customer Overload Ratings MPNZ uses high load alarm settings based on a maximum of 90 percent of the protection settings on incomers and feeders in zone substations to alarm system controllers via SCADA. Where the thermal capacity of the immediate downstream network is lower, these ratings are used. 29 Fulfils requirement P age

96 4.5 Prioritising Network Development Projects Process and Criteria for Prioritising Network Development Projects are prioritised based on evaluation of the level of risk to MPNZ from not doing the work or delaying the work. The level of risk is measured with a simple five by five level matrix approach for each of the consequences and likelihood of each project or action. Factors considered in the evaluation include: The risk of non-supply to customers The identified areas for service level improvement to customers Cost benefit analysis Other benefits e.g. benefits of co-ordination with road authorities or Transpower. After considering the issues associated with a particular project a total score is obtained by averaging the scores in a balanced scorecard approach to derive a single score for a particular project. This score is then compared with other projects to determine project priorities. In general terms projects are prioritised as follows: Priority 1 - Addressing significant health, safety and environmental issues Priority 2 - Customer driven projects for new connections or upgrades Priority 3 - Addressing statutory voltage and power quality issues Priority 4 - Providing for load growth Priority 5 - Meeting reliability targets (where not addressed in Priorities 1-4) Priority 6 - Renewals. During January each year following the identification of the proposed work for the next five years, consultation with engineers and construction staff determines the relative priorities of the work. Inputs to the process will be determination of the main driver, the impact on customers should the project not proceed or be deferred, any seasonal requirements, and then last the cost and funding implications. 4.6 Demand Forecasts 31 The key sources of information used by MPNZ for demand forecasting are: Population and household projections obtained from Statistics New Zealand and Local District Scheme and Community Plans Notified changes in land use designations Known commercial, residential and industrial developments Historical electrical demands Non-network solutions (such as demand management) Extreme movements in temperature and rainfall where this impacts on peak demand Changing economic climate. Commodity prices (e.g. milk solids) 30 Fulfils requirement Fulfils requirement P age

97 MPNZ generates low, medium and high demand growth projections. The impact of the factors listed above on these projections is noted in the following Sections Population Population statistics and forecasts for the period 2001 through to 2021 are shown for each District Council in Table 27. Expected populations are based on Statistics NZ medium growth projections. Waimakariri Hurunui Kaikoura 2001 Census 36,900 9,885 4, Census 42,834 10,476 4, ,100 10,900 5, ,900 11,200 7, ,600 11,400 8,270 % Change % 12.9% 137.4% % Average annual % 0.7% 6.1% Table 27 - Forecast Population Growth The Waimakariri District Council includes the Oxford, Cust, Rangiora, Woodend and Kaiapoi areas. It is estimated that by 2016, 75% of all residents will live in the eastern part of the district within easy commuting distance from Christchurch. Rangiora, Kaiapoi, Woodend and Oxford are being encouraged to expand in the District Scheme Plan. Statistics New Zealand expects the population in the Waimakariri District to reach 51,600 by 2021 or an average annual growth of 1.8 %. The Council s planners believe that, given a number of known proposed developments following the earthquakes, the district s population is likely to track well above the medium projections and to reach 50,000 by 2013, and 60,000 by The Hurunui District Council covers Ashley in the south to Conway Flat in the north and the Lewis Pass in the west. The main population centres are Amberley, Cheviot, Waipara, Waikari, Hawarden, Culverden, Waiau and Hanmer Springs. Main growth areas are Hanmer Springs, which is a well known tourist and holiday location, and the area south of Amberley town down to Ashley. There are an increasing number of vineyards being developed in the Waipara and Amberley region along with associated tourist activities. Statistics New Zealand expects the population in the Hurunui District to reach 11,400 by 2021 or an average annual growth of 0.65%. The Kaikoura District Council encompasses the areas north of the Conway River (except Conway Flats) up to Kekerengu and west to the Inland Kaikoura Range. The main population centre is Kaikoura town with smaller settlements dotted along the eastern coastline at Oaro, Goose Bay, Peketa, and Rakautara. Growth is occurring in the Kaikoura town, Peketa, Oaro and Goose Bay driven predominantly by tourism and holiday homes. Tourism in the Kaikoura region is growing at around 8% per annum. Statistics New Zealand believes that the population in the Kaikoura District will reach 8,270 by 2021, which equates to an average annual growth of 6.9 %. This seems quite optimistic Land Use Changes MPNZ monitors land use changes by receiving notification of all territorial plan changes. Recent major land use changes include rural land around Rangiora, Woodend and Kaiapoi being rezoned as residential; and residential land at Amberley town being rezoned to commercial. The extent of higher density residential development allowed by the district plan around Mandeville has also been recently notified Known Major Load Developments The economic downturn has slowed developments particularly north of the Waipara River. Earthquake replacement housing in and around Rangiora and Kaiapoi has been ramping up throughout 2012 and is expected to peak over the 97 P age

98 next two years. New irrigation and downstream dairy farming continue to provide growth along the Waimakariri River. The Pegasus township development of approximately 2,000 lots located between the coast and Woodend has now been almost completed apart from the last few stages of the development. Whilst the downturn slowed Pegasus during 2010, growth has picked up again post earthquake. Completion of the residential areas of Pegasus is expected in The rate at which these lots are built on and the extent of any commercial development is highly uncertain. The large neighbouring Ravenswood development is also still progressing through planning and may ultimately determine the timing of a new Rangiora East GXP or major Southbrook upgrade. For the current plan it is still assumed that any significant load contribution from this will be at least five years away. ECAN s clean air policies in Rangiora and Kaiapoi have been expected to cause a rapid increase in heating loads at the respective GXPs. Their slow delayed implementation and the changing social attitude to heating has meant that many homes have been installing heat pumps for the last 5 years and there is unlikely to be a sudden surge in the future. The Red Zoning of much of the older part of Kaiapoi has removed these as potential load increases due to conversion. The new housing in Rangiora and Kaiapoi will be predominantly electrically heated but with the advances in housing energy efficiency, the after diversity maximum demand for a house is not expected to increase. MPNZ now expects these policies to have minimal impact on loads and have not factored such increases into MPNZ s demand forecasts. Irrigation development continues to ensure high rural growth for the Waimakariri District Council area. The conversion of the Eyrewell Forest area to dairy farms will continue to have a significant impact on MPNZ capacity provision in this area over the next ten years. Lifestyle block subdivisions throughout the Waimakariri and southern Hurunui District have picked up following the downturn. A new town centre plan for Amberley based around a supermarket could have a significant impact on Waipara over the next 3 years, although load will be transferred from Waipara GXP to Ashley GXP over a similar period. Irrigation is also continuing in the Culverden basin and the conversion of the Balmoral Forest area to dairying will maintain this growth. The Kaikoura and Hanmer regions have not experienced the expected significant growth in 2011 or 2012 due to the economic downturn. Housing construction has slowed considerably in these areas. No specific additional future developments for these regions are included in the demand forecast scenarios; however additional load growth associated with the recent developments is factored into the high scenario. There are no other major load developments included in the demand forecasts under any of the scenarios Known Major Generation Developments MPNZ s Mt Cass windfarm proposing 60MW has received its resource consent but has not been included in the demand forecasts due to there being no firm commissioning date available at this time. Meridian s proposed windfarm near Omihi has yet to reach the consent approval stage and is therefore not considered in demand forecasts at this stage. MPNZ s Browns Rock hydro generation proposal near Oxford has also not yet been committed to Historical Data Energy sales The consumption of energy by MPNZ s customers has increased 3.0 % per annum on average from 2003 to 2011 (Figure 31). In order to meet this demand significant investment has been made in additional capacity on the MPNZ network. The substantial dip for 2011/12 represents the combined effects of a very wet summer on irrigation consumption, a warm winter, and an underlying reduction in load following the earthquakes. This load reduction was gradual as many buildings were vacated due to earthquake damage or risk in the 18 months following September Rapid subdivision growth and the slow rebuilding of the commercial centres of Rangiora and Kaiapoi is expected to return sales to the 3% trend line within 5 years. 98 P age

99 Annual Energy Sales with 3.0% growth line 650, , ,000 MWhrs 500, , , , Year Figure 31 - Historical Yearly Electricity Consumption GXP Demand The following charts illustrate the historical daily demands at each GXP station from 2000 onwards and demonstrate the extent to which load growth is a factor at each GXP. This is the primary source of data used for the medium scenario demand forecast. Kaiapoi Peak Demand (kw) Kaiapoi GXP Daily Peak Demand (1 April 2003 to 31 January 2013) Kaiapoi has a classic winter peaking load profile dominated by urban areas. There has been strong historical growth on the Kaiapoi GXP until the 2010/11 earthquakes. The fall in load from Red Zoned and damaged houses and businesses has been offset by the transfer of some load area from Southbrook, and rapid new subdivision growth around Kaiapoi Date Figure 32 - Kaiapoi GXP Daily Load Peaks 99 P age

100 Southbrook Peak Demand (kw) Southbrook GXP Daily Peak Demand (1 April 2003 to 31 January 2013) The Southbrook load profile is still winter peaking but a clear smaller summer peak is filling in the troughs. The apparent fall in load in 2011 is due to the transfer of some load area to Kaiapoi and a very wet mild start to summer. Urban growth is expected to accelerate for the medium term as subdivisions are fast tracked to provide housing for earthquake displayed people. Irrigation related growth is approx 750 kva per annum. The planned Rangiora West 66kV conversion will reduce GXP load from Date Figure 33 - Southbrook GXP Daily Load Peaks Ashley Peak Demand (kw) Ashley GXP Daily Peak Demand (1 April 2003 to 31 January 2013) The Ashley GXP is dedicated to the Daiken NZ fibre board mill and demand has been falling since the late 1990s. MPNZ proposes to upgrade this GXP and supply additional regional load from winter This will also provide more security for Daiken Date Figure 34 - Ashley GXP Daily Load Peaks Waipara Peak Demand (kw) Waipara Daily Peak Demand (1 April 2003 to 31 January 2013) Date Since December 2007 the Waipara 33kV bus (brown) has only supplied the Amberley and Hawarden areas. These areas have traditionally had low growth. There has a small amount of irrigation load growth north of Hawarden. The Waipara 66 kv (green) feeder supplies the Cheviot 66 kv line heading north including the MacKenzies Road substation. There has been little growth recorded in this area except for irrigation developments particularly around the Hurunui and Waiau Rivers. This can be seen by the relatively flat profile. Figure 35 - Waipara GXP Daily Load Peaks 100 P age

101 Culverden Culverden GXP Daily Peak Demand (1 April 2003 to 31 January 2013) In April 2012 MainPower purchased the Kaikoura GXP and the load effectively transferred to the Culverden GXP. The Kaikoura contribution is shown in green. Peak Demand (kw) The Culverden area has been experiencing some winter growth from Hanmer and continual summer growth from dairy farming and associated irrigation. Irrigation related growth is expected to continue at approx. 750 kva per annum. Figure 36 - Culverden GXP Daily Load Peaks Date The Kaikoura area has historically had low but steady growth caused by tourism and commercial growth in the district however the global economic downturn has curtailed this. Zone Substation and distribution feeder loadings have been captured by MPNZ s SCADA system since This data is useful in assessing the actual instantaneous peaks, whereas the metered energy data from the GXPs measures an average sum of demands over the half hour. In practice the instantaneous peak can be substantially higher than the half hour values Load Forecasts Total Load Forecast (including Kaikoura) MPNZ will control individual GXPs during periods of network constraint and for system emergencies however the upper South Island peak load is now being used by Transpower to calculate transmission charges. The charges are based on MPNZ s coincident GXP loads at the time that the upper South Island is running a peak. This pricing methodology, introduced in 2008, means that MPNZ is also interested in controlling the MainPower peak load as rather than the individual GXP loads for the purpose of minimising transmission charges. Table 28 shows the forecast total system peak loads for the planning period. Actual peaks recorded at the time of upper South Island system peak will be lower due to higher levels of load control to be used at these times, and the natural level of load diversity amongst the participating networks. These loads assume severe winter and dry summer conditions. MainPower Forecast Peak Load (MW) excluding Wigram Summer Winter Table 28 - Forecast Total System Peak Loads 101 P age

102 Load Forecast by Individual GXP The following charts illustrate the expected demands at each GXP until the end of the planning period under each of the High, Medium and Low Growth scenarios. Peak Demand Forecast for Kaiapoi 35 Peak Demand (MW) High Growth Medium Growth Low Growth Woodend & Pegasus load transfer from Sbk. New Rangiora East GXP with reversal of Woodend & Pegasus transfer Year Figure 37 - Demand Forecasts for Kaiapoi The Kaiapoi GXP upgrade will maximize the capacity able to be supplied to Woodend and Pegasus, provide an urban feeder for the new Silverstream development, and allow the large Wetheral feeder to be split. 50 Peak Demand Forecast for Southbrook 33 kv Peak Demand (MW) Woodend load transfer to Kaiapoi Rangiora West 66kV commissioned Loburn load transfer to Ashley High Growth Medium Growth Low Growth Year Figure 38 - Demand Forecasts for Southbrook The Southbrook GXP has reached the full load of one bank. Load has been reduced by transfer to Kaiapoi, and will be greatly reduced by the conversion of the Rangiora West 33kV to 66kV. 102 P age

103 25 Peak Demand Forecast for Ashley 20 Medium Growth Low Growth Load transfer from Rangiora North Peak Demand (MW) Year Figure 39 - Demand Forecasts for Ashley The Ashley GXP is to be upgraded by 2015 to supply the surrounding Ashley, Loburn and Balcairn areas currently supplied from Southbrook and Waipara Peak Demand Forecast for Waipara 33 kv & 66 kv Load transfer to Ashley Peak Demand (MW) High Growth 33kV Medium Growth 33kV Low Growth 33kV Medium Growth 66kV Year Figure 40 - Demand Forecasts for Waipara 103 P age

104 35 Peak Demand Forecast for Culverden 30 High Growth Peak Demand (MW) Medium Growth Low Growth Kaikoura GXP combined into Culverden Year Figure 41 - Demand Forecasts for Culverden The Kaikoura GXP was purchased from Transpower by MPNZ on 1 st April 2012 and has become a MPNZ zone substation fed from the Culverden GXP. There is some diversity between the two load areas however the Culverden GXP load is likely to exceed the rating of one bank before the end of the planning period. The MPNZ system losses will also increase as the Kaikoura load is now metered at Culverden transferring losses from Transpower's network to MainPower's. 104 P age

105 Subtransmission Line Load Forecast Table 29 contains MPNZ s 33 kv and 66 kv line capacities and forecast demands for the next 10 years under the Medium Growth scenario. As demonstrated below, at the end of the planning period, all sub transmission circuits are projected to have sufficient capacity to meet projected demand in their normal supply configuration. Where circuits provide backup in the event of another line outage, the required capacity including backup is also listed. Sub-transmission Line Southbrook to Cust Cust to Oxford Southbrook to Bennetts Southbrook to Rangiora North Rangiora North to Amberley Amberley to Waipara Waipara to Hawarden Waipara to Cheviot Capacity (MVA) Load Forecast (MW) Normal Backup Normal Backup Normal Backup Normal Backup Normal Backup Normal Backup Normal Backup Normal Backup Line Config. Cheviot to Kaikoura Culverden to Hanmer Colour Key: Normal Backup Normal Less than 75% of capacity 75-90% of capacity-utilised Over 90% of capacity utilised To be upgraded to 66kV between 2013 and Table 29 - Subtransmission Line Load Forecast 105 P age

106 Zone Substation Load Forecast Table 30 shows details of the capacity and Medium Growth forecast peak load in MW at each zone substation for the next ten years. As illustrated below, before the end of the planning period a number of zone substations will require additional capacity in order to meet required projected demand and provide required security of supply. Southbrook substation is designed to run within the rating of a single bank and hence its utilisation is based on this. Summer / Zone Capacity Load Forecast (MVA) Winter Substation MVA Peaking Southbrook * Winter 2 x 16/ Rangiora North Winter 5/ Oxford Summer Bennetts Summer 2 x 3/ Swannanoa Summer 7.5 / Cust Summer 7.5 / Amberley Winter 2 x 3/ MacKenzies Rd Summer Greta Winter Cheviot Summer Hawarden Summer Kaikoura Winter 2 x 4/ Leader Summer Oaro Winter Mouse Point Summer 2x Hanmer Winter 4/ Lochiel Winter Marble Quarry Winter Colour Key: < 75% of capacity utilised 75-90% of capacity-utilised >90% of capacity utilised Substations to be upgraded * Southbrook capacity is based on a single bank (i.e. N-1 criteria). Table 30 - Zone Substation Demand Forecast Wigram network load forecast MPNZ expects little future growth at Wigram. 106 P age

107 4.7 Network Constraint Identification and Analysis As a result of the forecast load growth, the following particular constraints have been identified: Element Location Nature of Constraint Proposed Remedies GXP Southbrook Southbrook loading at 33kV has reached the rating of one transformer bank (its n-1 rating). The transfer of load to Kaiapoi and more targeted load control will reduce this load in the short term and the conversion of the Rangiora West area to 66kV for 2015 will substantially reduce the loading. Kaiapoi The Kaiapoi GXP is constrained by the number and rating of feeder circuit breakers. An upgrade is in progress to provide two additional higher capacity circuit breakers. Culverden The Culverden GXP is likely to approach the 30 MVA rating of one bank towards the end of the planning period. Continue to monitor load growth and opportunities for embedded generation. Initiate discussions with Transpower when upgrade required within approx 5 years. Ashley No capacity to feed surrounding area. Upgrade in planning stages with Transpower to add a 25 MVA transformer and second 11kV bus with five feeders for local area distribution. Sub-trans Rangiora west An outage of one of the two 33 kv circuits Southbrook to Cust and Southbrook to Swannanoa during the summer peak overloads the remaining circuit. MPNZ has installed emergency control on irrigation loads in this region to provide security of supply until the circuits are upgraded. MPNZ is upgrading this area to 66 kv over the next 3 years. More details are provided in Section 7. Cheviot to Kaikoura This circuit is limited by voltage drop and the capacity of in line voltage regulators at Claverley. It can only marginally supply Kaikoura during an outage of the normal Transpower 66 kv supply, even with the maximum available load control. An upgrade to 66 kv is in progress but stalled due to landowner negotiations. Load growth is currently very low and an interim solution using capacitors will be implemented in Zone Sub Southbrook The Southbrook zone substation ran above the 22 MVA rating of one bank for significant times during 2011 and in 2012 peaked at 26 MVA higher during the very cold June snows. A specifc Southbrook bus load control target has been implemented to maximise the time the load is kept within the n-1 rating. Load was transferred to Kaiapoi in August reducing the peak to below 22 MVA. Further load transfer to Rangiora North in two years will cater for the rapid load growth for the next five years. Beyond this a major upgrade may be required. Rangiora North Oxford, Bennetts Amberley Leader Mouse Point The Rangiora North substation operates up to its full rated load and will continue to do so over the planning period. The Oxford and Bennetts zone substations are both approaching 90% load in summer and have very limited alternative supply provisions in the event of a single transformer failure. The Amberley zone substation is approaching full load. This is acceptable in the short term as it is double banked and there are reliable alternative supplies from other zone substations to supply most of this area. Increased irrigation growth will exceed the transformer rating by the end of the planning period. This substation has a peak load of 15 MVA rising to 20 MVA by the end of the planning period. This is beyond its 13 MVA n-1 capacity. The transformer will be upgraded from 5/7 MVA to 7.5/11 MVA using a spare transformer released from the Rangiora west project in 2015 MPNZ has installed emergency control on irrigation loads in this region to provide security of supply until the circuits are upgraded. MPNZ is building new Burnt Hill substation to replace the Oxford and Bennetts substations over the next three years. More details are provided in Section 7. In 2015 this site will be load will be reduced following the establishment of distribution level supply out of Transpower s Ashley GXP. Upgrade of the Cheviot Kaikoura circuit to 66 kv (see above) will double the substation rating. MPNZ has installed emergency control on irrigation loads in this region to allow all but irrigation loads to be restored on a single 13 MVA transformer. Towards the end of the planning period a major upgrade will be required, refer also the Culverden GXP above. Table 31 - Constraints Identified 107 P age

108 4.8 Significant Development Options Available 32 MPNZ considers the development options in the following order: Do-nothing options. Non-network options. Network options Example 1 Southbrook zone substation has 2 x 22MVA transformers, and has reached its firm capacity. Load control is used to limit demand to 22MVA, however MPNZ recognises that as demand continues to increase network solutions will eventually be required. Example 2 Mouse Point substation has 2 x 13MVA transformers, which are routinely loaded to 16MVA during the irrigation season i.e. beyond (n-1) capacity. Irrigation pumps are controlled by a dedicated ripple channel which can shed load to the (n-1) rating. Example 3 The Hanmer demand should ideally have a second supply, either by a 2nd 33kV line or by embedded generation. A 2nd line is prohibitively expensive, and whilst some embedded generation is being investigated none has been committed to. 4.9 Network Development Program 33 This section gives an overview of ratings and loadings of network elements and describes the constraints that are projected to occur on the network within the planning period. The options and preferred solution for removing or mitigating any constraints are also presented Transpower Transmission The 220 kv South Island transmission network owned and managed by Transpower consists of four 220 kv circuits bringing power from the Waitaki basin to supply load to Canterbury, Tasman, Marlborough and the West Coast in the top half of the South Island. This system supplies significant load over comparatively long distances from the Waitaki and Twizel power stations. Over the past few years, during transmission or generation plant outages, the grid s capacity to supply power to Christchurch and the upper South Island has been constrained. Major factors contributing to this include: thermal capacities voltage instability due to heavy circuit loading thermal instability due to long distances between generation and the point of demand. Accordingly Transpower is improving the dynamic voltage support and reactive power management in the region, and the upper South Island by installing a new static var compensator (SVC) at Islington, and a reactive power controller in the Christchurch area. The Upper South Island (USI) load control scheme, which MPNZ is a part of, also includes 32 Fulfils requirement Fulfils requirement 11.9 and P age

109 targets based on Transpower s security limits to ensure fast response to changes in available capacity. This has the effect of better profiling the loads to delay Transpower upgrade expenditure. Transpower s system operator and all lines businesses affected by these constraints are in close communication with each other to deploy every possible option to prevent customers from losing power supply kv Transmission Development MPNZ has four 66 kv feeds into the main southern load centres and a dual 220 kv / 33 kv supply into the Culverden region. Kaikoura continues to be supplied from a 66 kv circuit from Culverden but this is now supplied from a 33/66 kv step-up transformer at Culverden. The 66 kv circuits supplying the southern region comprise the two Islington- Southbrook 66 kv circuits and the two Southbrook-Waipara 66 kv circuits that are supplied from the Waipara end and supply back down to Southbrook. Figure 42 shows transmission line ratings in MVA for the transmission system in North Canterbury and Kaikoura. Figure 42 - Transpower 66 kv Transmission Circuit Ratings Within two years MPNZ plans to request that Transpower upgrade the capacity of their two 66 kv transmission circuits running between Southbrook and Waipara to a similar rating as the Islington-Southbrook circuits, around 65 MW. This could be achieved by re-sagging the conductor or increasing the ground clearance. As the load grows in the southern region, stronger feeds from Waipara will be required in the event of the loss of an Islington-Southbrook circuit. Other options include the installation of distributed generation in the southern region. 109 P age

110 4.9.3 GXP Development Planned GXP developments are outlined below: Kaiapoi GXP Projected work Justification 11kV switchboard extension. MPNZ has built an 11 kv switchboard to the north side of Kaiapoi to provide capacity and security to the rapidly developing new subdivisions in the area. These have been accelerated by the recent earthquakes. The new switchboard also provides dedicated feeder circuit breakers for Woodend to enable the Woodend and Pegasus town loads to be transferred from Southbrook to Kaiapoi. The capacity of the switchboard is limited by the 400A rating of the old circuit breakers at the GXP. These cannot be upgraded and the only way to release more capacity is to extend the GXP switchboard with higher rated equipment. The immediate vicinity of the GXP is also being converted to a large subdivision which will require an additional feeder as the existing ones are all loaded over 65% of their capacity. The Wetheral feeder to the rural area south west of the GXP is one of MPNZ s poor performing feeders with a large number of customers, long length of line (refer Section 4.1.1, Calculated SAIFI indices ), and poor voltages at the extremities. Splitting this feeder in two, together with some conductor upgrades, is seen as the best option currently available to service this growing rural life style area. Achieving the above requires the addition of at least two higher capacity circuit breakers to the GXP switchboard. MPNZ s Southbrook zone substation was overloaded in 2011 and 2012 (refer Section , table 30) and has substantial load growth. Options are to upgrade Southbrook (very expensive, possibly triggering a GXP upgrade as well), or to transfer some Southbrook load elsewhere. Kaiapoi is the only neighbouring substation with any real capacity and is also approximately equi-distant to the Woodend / Pegasus load base. It can be configured to take over the load without any loss of reliability and security. A third option which has been investigated with a design report from Transpower is the creation of a new Rangiora East GXP. This solution would be far more expensive and take several years to implement. The GXP switchboard extension, in conjunction with the Kaiapoi North work is the most cost effective solution in the medium term. Status MPNZ has signed an investment agreement with Transpower, and project completion is planned for March Southbrook GXP Projected work Addition of two 66 kv feeders. Justification MPNZ is upgrading the Rangiora West area from primarily 33 kv / 11 kv distribution to 66 kv / 22 kv distribution to cater for the high level of irrigation related development (refer Rangiora West 66 kv below). The two 33 kv overhead lines supplied from MPNZ s zone substation are to be converted to 66 kv and a new 66 kv feeder is required on each side of the Southbrook 66 kv bus. Status Transpower has produced a high level options report for review and are now proceeding with more detailed design of the preferred option. Project completion is planned for the 2014/15 summer. 110 P age

111 Ashley GXP Projected work Justification Add a 25MVA transformer to the existing two 10 MVA transformers. Add five 11 kv feeder circuit breakers. MPNZ will have some ancillary work associated with this project e.g. installing a ripple plant and reconfiguring feeders. The Rangiora North zone substation which supplies the rural areas Loburn, Ashley, Balcairn and the north side of Rangiora town is at full capacity. There is significant load growth on the north side of Rangiora and the alternative supply point of the Southbrook zone substation is also at full capacity (refer Section , table 30). The upgrade will allow the transfer of the load on the north side of the Ashley river to the Ashley GXP and release the full capacity of the Rangiora North substation to supply Rangiora. It also removes the dependence of the Loburn and Ashley areas on the Ashley river crossing which has been washed away several times in floods over the last 20 years. The Amberley substation to the north has two small transformers but the peak load is now such that it cannot be supplied from a single bank with backup from neighbouring substations (refer Section , table 30). Amberley town is not large enough to qualify as an urban centre but is nonetheless a significant rural town and growing. MPNZ s security criteria require provision of similar to urban standard security to such towns where reasonably practical. The upgrade will allow much of the southern area fed from Amberley to be transferred to Ashley and strengthen backup interconnections. The rural feeders supplying Loburn, Ashley, Balcairn and Leithfield are amongst the poor performing feeders with a large number of customers, long length of line (refer Section 4.1 Figure 30) and poor voltages at the extremities. The upgrade will allow these areas, currently serviced by 3 feeders, to split over 5 feeders with the source more centrally located to the load base. The reduction in load on the Amberley substation and the removal of the rural areas from Rangiora North will significantly reduce the load on the Southbrook to Waipara 33 kv subtransmission circuit when it is required for backup purposes (refer Section , Table 29). This will enable an alternative supply to continue to be available to the Hawarden area in the event of an outage of the single 66/33 kv transformer bank at the Waipara GXP. The Daiken MDF plant has a peak load of 11 MVA and currently has to reduce load during a maintenance outage of one transformer. The upgrade will remove this constraint. Status This upgrade has been brought forward following the decision to defer the construction of a new Rangiora East GXP. Transpower is actively preparing a high level report on the upgrade options. Completion is expected by early Waipara GXP Projected work Justification Addition of one or two 66 kv feeders. MPNZ has a resource consent for a wind farm on Mt Cass which would require a 66 kv connection if fully developed. The timing of any construction is unknown at this stage. Towards the end of the planning period it may be necessary to upgrade the Amberley substation from 33/11 kv to 66/11 kv with increased capacity. This could be triggered by load growth, or the requirement to decommission the existing 33 kv line around Rangiora. This is not likely in the short to medium term but is flagged here as a possibility in the longer term. Status Possible timing P age

112 Culverden GXP Projected work The forecast load growth would require a capacity upgrade by the end of the planning period. This assumes continuing irrigation development which could also be mitigated by some embedded generation proposed for the area. The timing could be set by the requirement to upgrade the adjacent Mouse Point zone substation. Status Possible timing Kaikoura GXP Projected work Justification Modify for connection of upgraded Cheviot to Kaikoura 66 kv line MPNZ has been converting the Waipara - Kaikoura subtransmission line from 33 kv to 66 kv to increase its capacity so that it can continue to provide a backup supply to Kaikoura in the event of an outage or maintenance on the normal Culverden Kaikoura line or the 66/33 kv transformer. The Waipara to Cheviot section is now running at 66 kv and the Cheviot to Kaikoura section mainly converted with the notable exception of the Rakanui block across the hills above the tunnels south of Kaikoura. Completion of the work has been held up pending agreement with the land owner regarding the details of the upgrade. These negotiations have been protracted due to protracted change of ownership arrangements for the land. Status The configuration of the connection has not been finalised and this will now be reviewed again following MPNZ s purchase of the substation in Possible construction Rangiora East GXP Projected work Justification Construction of a new GXP. The Southbrook zone substation secure 11 kv capacity is fully utilised and Southbrook operated above the rating of one transformer for significant periods in 2011 and The 11kV capacity cannot be increased without largely rebuilding the substation and the long term plan is for Southbrook to become a 66 kv to 11 kv GXP with no 33 kv. The first stage of this will be complete with the conversion of the Rangiora West feeders to 66 kv. There is rapid growth predicted for the Rangiora urban area and the Woodend / Pegasus area. MPNZ is managing this constraint by more rigorous application of load control, the transfer of load to the Kaiapoi GXP, and the upgrade of the Ashley GXP to allow an upgraded Rangiora North substation to be fully committed to Rangiora. The urban feeders are being strengthened to redirect the all available Southbrook 11 kv capacity to Rangiora town. This will be sufficient to maintain security and reliability for a number of years. Ultimately as the load base at Woodend develops it will become too large to be supplied from Kaiapoi. At this stage the combined Woodend and Rangiora load will be approaching 40 MVA with much of it remote from the Southbrook site. The Southbrook site could be upgraded to 60+ MVA at 11 kv, or a new Rangiora East GXP constructed nearer the load base. This is the preferred option as it would provide more security and scope for appropriate feeder development into the future. The rate at which the load will grow is highly unpredictable especially with recent projections of migration of earthquake displaced Christchurch residents to the area. The earthquakes have caused rapid changes in the forecast rate of subdivision development and the WDC projections for the location of the developments are also very fluid. One forecast is for the accelerated completion of the Pegasus town, the rapid development of the neighbouring Ravenswood block, and continued subdivision around the existing Woodend town boundaries. 112 P age

113 This could create a load of more than 15 MW in the vicinity of Woodend which would be very difficult to supply from Southbrook and Kaiapoi. Extensive future subdivision is also likely to occur east from Rangiora towards Woodend. With such a large shift in the concentration of load a new GXP more central to the area would be required. There is a very large degree of uncertainty over these projections and the load growth may not occur as rapidly, or may as the WDC suggest in their latest estimates, be more focused on Rangiora. In such circumstances it may be more prudent to upgrade the Southbrook site. The deferment projects planned will be more cost effective in the short to medium term and allow time for the nature of the growth to become evident. Status Transpower has completed a detailed design review and costing for a new GXP and MPNZ is looking to purchase a suitable site in the near future. The budget is based on an early GXP completion in Table 32 shows the forecast capital expenditure at each GXP station over the next ten years. It is expected that MPNZ will enter into new investment agreements with Transpower which allows the cost to MPNZ to be spread over 20 years for these assets. Description ($m) Kaiapoi GXP 1.1 Ashley GXP 4.5 Southbrook GXP 4.0 Culverden GXP 7 Waipara GXP Rangiora East GXP 11 Table 32 - Forecast Expenditure GXP Development MPNZ Subtransmission and Zone Substation Development This section outlines projected work for each of MPNZ s subtransmission systems. The location of MPNZ s subtransmission lines and zone substations are shown in the network diagram Figure 14 in Section 3. In addition Table 16 (Section 2.2.2), and Table 18 (Section ) show the peak loads, security of supply, firm capacity and utilisation of capacity for each system. Tables 29 and 30 (Sections and ) show the 10 year demand forecasts. The projected works are designed to alleviate the constraints identified in the tables above and where possible raise the security to supply to meet MPNZ s security of supply guidelines (Section 4.1.2) Waipara - Kaikoura 66 kv Projected work Justification Upgrade the 33kV subtransmission line from Waipara to Kaikoura to 66 kv, including the zone substations along the route. Remove zone substations where practical. The Kaikoura 66 /33 kv substation is supplied from Culverden via a single wood pole line which is backed up, during faults or annual week long maintenance outages, from Waipara on the coastal 66 kv and 33 kv line. The load at Kaikoura is at the limit of that which can be backed up and MPNZ is in the process of upgrading the remainder of the coastal line to 66 KV. Currently Waipara to Cheviot operates at 66 kv and Cheviot to Kie Kie just south of Kaikoura has been reinsulated for 66 kv. The Leader substation has been replaced with a new 66 kv substation operating at 33 kv. The upgrade to Cheviot has enabled irrigation load growth along the coastal route whilst still improving the capacity and stability of the line when supplying Kaikoura. The line is still constrained by the rating of 33 kv voltage regulators at Claverley and the voltage drop at Oaro and fixed tap distribution transformers between Oaro and Kaikoura. The line connection at the Kaikoura substation also has to be reconfigured for operation at 66 kv. 113 P age

114 A number of large projects in the Kaikoura area have been put on hold with the recent economic downturn and load growth has been lower than projected allowing the Kaikoura backup to be managed with the delayed construction and partially completed upgrade. With this low growth there are options to provide a small capacity increase using capacitors which may be implemented in 2015/16. The Oaro substation would need to be rebuilt at 66 kv to complete the project. An alternative solution of extending the Kaikoura distribution across the hills in conjunction with the 66 kv upgrade is preferred. This would allow the Oaro substation to be decommissioned which would be more cost effective and eliminate potential load control issues. This is also dependent on land owner agreement. An additional capacity charge has been incorporated into the pricing of new connections in the Kaikoura District to help make the 66 kv upgrade economic. Status MPNZ is negotiating with landowners on the remainder of the route to allow completion of the upgrade, particularly across the hills between Goose Bay and Kaikoura. A design review of the substation termination is required now that MainPower has purchased the Kaikoura 66 kv line and substation Rangiora West 66 KV Projected work Justification Upgrade the 33 kv subtransmission lines to the west of Rangiora to 66 kv. Replace the existing four 33 kv / 11 kv zone substations with two 66 kv /22 kv zone substations with a secure capacity of 20 MVA each. Convert the surrounding areas to 22 kv as required to meet the current load demands. The peak load on the Southbrook GXP has reached the rating of one transformer. In order to keep within MPNZ s security standard either the transformer capacity must be upgraded or the 33kV load reduced. The peak load on the 33 kv subtransmission lines to Swannanoa, Cust, Bennetts and Oxford now exceeds the 20 MW rating available with one circuit out of service. Supply can be maintained to most customers by the demand control of irrigation customers but the potential economic impact is high. The annual increase in the connected capacity of irrigation motors in the area has been very consistent for the last 9 years averaging 800 kw. The load growth expected from this is approximately 1 MVA per year including the capacity for associated dairies, pivots, cottages, and general growth. The planned conversion of the Eyrewell forest area, which has already started, means this growth rate is unlikely to decrease in the next 5 years. The likelihood of requiring significant load curtailment for a single fault is increasing. A small amount of subtransmission capacity increase could be achieved by installing capacitors at the zone substations but growth would overtake this within a few years. The Oxford substation has a peak load approaching 7 MVA and is on a spur line with a single transformer. This makes it MPNZ s highest loaded low security zone substation. The most readily available backup transformer is in Kaikoura, replacement would take 36 hours, and the replacement would be fully loaded with the 2012 loads. The Bennetts substation has two transformers but requires the full capacity of both at peak load. Both Cust and Swannanoa are single transformers. Installing two new 66 kv / 22 kv transformers at Swannanoa and continuing operation at 33 kv / 11 kv would free up the existing Swannanoa transformer to be installed at Oxford to extend its capacity and make the Oxford transformer available as a larger more general purpose spare. These incremental options still only extend the capacity for a couple of years and do little to improve security. 114 P age

115 The 11 kv distribution in the area is at full capacity and in most cases cannot provide a backup supply with extending the load curtailment to a much wider area. The Oxford transformer is switchable to 33 kv/ 22 kv as a direct replacement for the Mouse Point transformers. The Mouse Point peak load now exceeds the rating of one transformer and it is appropriate to release the Oxford transformer as a spare. The Southbrook Cust 33 kv line is a 46 year old wooden pole line. Significant maintenance benefits will also be realised from its rebuild for 66 kv. Approved upgrade MPNZ is converting the Rangiora West area from 33 kv / 11 kv to 66 kv / 22 kv. This will provide double the existing capacity with some options for further increases, and remove the Rangiora West load from the Southbrook GXP 33 kv transformers. A new 66 kv / 22 kv zone substation will be built at Burnt Hill to supply the Oxford and Bennetts areas and the Swannanoa substation upgraded to 66 kv / 22 kv. Both will have dual 23 MVA transformers. The Southbrook Swannanoa Bennetts 33 kv line was originally constructed for 66 kv, as was the Swannanoa substation. This substantially decreases the overall upgrade cost and time frame. The existing 33 kv lines will be upgraded to 66 kv, rerouted and extended to provide a dual feed to both substations. The existing Cust, Bennetts, and Oxford transformers will be decommissioned. The Bennetts substation 22 kv switchgear will be utilised as a remote switching point and the substation site held for future expansion. The Oxford 11 kv switchgear will also continue to be utilised in the medium term. The surrounding distribution system will be converted to 22 kv. The Burnt Hill site was chosen for the new substation as it is central to the load base, allows the creation of a high number of feeders (up to 8), and has good access routes for two 66 kv circuits. This site is in sparsely populated dry farmland with no near neighbours. The option of upgrading the existing Oxford site was discarded as the site was small and located in the Oxford township urban area with immediately adjacent residential housing. It would have been very difficult to extend two 66 kv circuits to the site without extensive underground 66 kv. The environmental effects of the larger site would also have been very difficult to mitigate. The Oxford site did not offer the same opportunities for sufficient feeders to supply the required area without compromising reliability and security, and is much less central to the load area. Status Land has been purchased for the Burnt Hill substation and 66 kv line construction is underway. Consultation with affected land owners and consent applications will continue in Transpower is completing detail design for the addition of 66 kv feeders from Southbrook. Upgrade of the Swannanoa substation will be largely completed by March 2014 following the delivery of transformers in January The Bennetts - Burnt Hill 66 kv circuit will be completed by March Conversion of the existing Oxford Rd 33kV circuit to 66kV will continue in 2014/15. Construction of the Burnt Hill substation is expected before the summer of 2014/15. Conversion of key areas of the distribution system to 22 kv is 50% complete and will be ongoing through this period, and continue in the following years as required by growth. 115 P age

116 Southbrook - Waipara 33 kv Figure 43 - Rangiora West 66 kv and 22 kv Projected work Partial underground conversion. New Amberley substation. Justification The eastern side of Rangiora through which the line passes is subject to intensive residential subdivision. MPNZ has been approached by developers to underground part of the line to improve property values. The Rangiora North zone substation will remain as existing until it is decommissioned beyond the planning period. The highly loaded Amberley zone substation will have its load reduced by upgrades to the Ashley GXP and may require upgrading towards the end of the planning period. The Ashley GXP upgrade will introduce a phase shift between Ashley and Amberley which will reduce flexibility for normal operational switching. The Amberley substation would probably be upgraded as a 66 kv / 11 kv substation supplied either off the Transpower 66 kv circuits, or from the 33 kv line upgraded to 66 kv and redirected to Ashley GXP at the southern end. Consideration has been given to upgrading the Ashley GXP to 22 kv to supply the Amberley area in conjunction with an upgraded MacKenzies Rd substation to the north. This would allow the decommissioning of the existing substation and the 33 kv line (as Rangiora North is decommissioned at a similar time). This was found to be less economic and provide lower security and future growth potential for the Amberley community. Status Budget provision has been made for a new Amberley substation build between 2018 and P age