8.
EDPR 2011 ASSET MANAGEMENT PROGRAM, DELIVERY
AND COMPLETION
8.1
OVERVIEW
JEN will largely deliver the EDPR 2011 IT Program of Work committed. Actual plus Forecast capex is projected at $76.2M compared to an allowance of $72.6M, a variance of $3.6M or 5%.
Table 14 – EDPR 2011 CAPEX Comparison to Allowances ($2015, $M)
2011 2012 2013 2014 2015 estimate Total Variance to actual/ forecast Revised proposal 23.0 23.9 19.5 7.5 7.7 81.7 5.5
Regulatory allowance (incl.
Merits review outcomes) 20.6 21.2 17.3 6.7 6.9 72.6 -3.6
Actual/estimate 20.0 26.3 9.8 9.9 10.2 76.2 -
Actual/forecast less regulatory
allowance -0.6 5.1 -7.5 3.2 3.4 3.6
Figure 18 – Actual to Forecast Capital Spend for EDPR 2011
23.0 23.9 19.5 7.5 7.7 20.0 26.3 9.8 9.9 10.2 81.7 76.2 72.6 0 10 20 30 40 50 60 70 80 90 100 0 5 10 15 20 25 30 2011 2012 2013 2014 2015 estimate Total
Revised proposal Actual/estimate Regulatory allowance
$millions $millions
EDPR 2011 ASSET MANAGEMENT PROGRAM, DELIVERY AND
COMPLETION — 8
8.2
PROGRAM DELIVERY STATUS 2011 TO 2014
From the commencement of the EDPR 2011 period in 2011 to October 2014 JEN has undertaken and completed the following major projects:
Replaced the legacy SAP systems more than 12-years old that provided capability for enterprise management, asset management as well as financial management and accounting.
Retired legacy systems applications as a result of the SAP program including SAP and non-SAP applications.
Developed and commissioned the AMI advanced meter systems based on SAP IS-U/Itron IEE MDM and Silver Spring UIQ, NMS, which was subject to separate allowances but a major part of the overall JEN program of work.
Complied with AMI and National Energy Customer Framework market and regulatory obligations as well as met non energy regulation obligations and changes.
Relocated from the legacy data centres infrastructure platforms and services that had reached end of life due to constraints on expansion. The transition was completed in 2012/13 into 2 outsourced data centres.
Replaced the core IT Infrastructure including a back log of end of life systems with new technologies to be more efficient and more cost effective.
Replaced the desktop and laptop standard operating environments as well as the Microsoft Office application solutions.
Conducted a number of systems consolidations, replacements and retirements enabled by new technologies, cloud based software as a service and the new capability introduced by the above project.
8.3
PLANNED ASSET MANAGEMENT PROGRAM COMPLETION IN 2015
The IT capex plan for 2015 provides $10M of budget for IT projects which are consistent with the completion of the EDPR 2011 asset management plan submission, determination and capex allowances:
Implement Stage 1 of a 3 stage longer term business intelligence, analytics and data warehouse program from 2015 to 2018.
Implemented the first of the new Cloud Computing based services using the SAP solutions recently made available in their Australian based data centres.
Increased JEN’s defences against a long term increase in security risks and threats maliciously aimed at damaging, disabling and shutting down energy networks. This includes implementing a new Security Information and Event Management system capability along with a 24 x 7 security alert monitoring service. This investment is a necessary initiative and major investment beyond what was planned at the time of the JEN EDPR 2011 determination.
SAP Financial Management – Provides for continuous change to financial management, accounting and reporting as the market and business environment constantly changes.
SiteSafe Incident management system upgrade.
Records and document management development to meet obligations.
Retirement of legacy meters (type 4, manually read type 5 + 6 and type 7 metered and unmetered) remaining from the rollout of AMI meters.
8 — EDPR 2011 ASSET MANAGEMENT PROGRAM, DELIVERY AND
COMPLETION
Lifecycle growth and replacement projects for IT Infrastructure will take place for: – Data storage
– Infrastructure services – Platforms and processing – End user services
– Organic growth as the market and business grows
8.4
DEFERRED PROJECTS
The following projects and investments were deferred by JEN until JEN EDPR 2016: The Distribution Management System
Field Mobility System and associated Business Process Re-engineering Project
The Distribution Management System implementation was deferred as a result of the end of systems sharing with United Energy Distribution making the original solution and project cost unviable. JEN decided to defer the project until the EDPR 2016 period and conduct the project together with the Outage Management System upgrade/replacement as a more efficient and cost effective approach. Concurrently, the systems vendors have been converging OMS/DMS solutions into an integrated product further supporting a delay in project timing.
The original Field Mobility and Business Process Re-engineering project was defined in 2010 for the EDPR 2011 using laptop technologies, communications available at the time and systems applications that were not built for a mobile and field based workforce. In a few short years following the EDPR 2011 determination the information systems industry entered a new era of smart internet and new communications based mobility technologies that has revolutionised the way the public uses technology and business is conducted. These rapidly deployed technologies and their take up by both consumers and businesses has changed the efficiency opportunities and expectations of energy customers, consumers and JENs workforce along with our ability to manage and respond to emergencies and the need for information anywhere anytime.
The new information technology era is also characterised by a rapid take-up of new smart and mobile technologies accompanied by new mobility software applications by both new vendors as well as existing vendors extending their products with additional mobility solution capability. JEN’s core solutions systems vendors (primarily SAP, Microsoft and GE respectively) have released new mobility application products that work with the existing core application solutions that JEN has implemented.
New vendors and services companies are offering mobility solutions using “Cloud Computing” based services on an agreed service level or flexible usage level, including on demand, that has now matured to become viable and financially effective for JEN’s needs.
None of these technologies existed in 2010 and cloud computing services were in their infancy in Australia and were considered too immature to be included in the JEN EDPR 2011 submission and determination. JEN has therefore decided to carefully re-define mobility strategies and plans as well as the program for work for the EDPR 2011. The mobility program has not stopped but has been slowed down and pushed back to ensure all of the research, planning and pilot projects can be undertaken to make the right technology and process change decisions, with the most suitable investment levels for the energy market. The range of solutions and investment costs are substantial due to the technology choices, methods of service delivery and the possibilities for service improvement. This new era of technologies and opportunities requires in depth examination, proof of concept and a pilot projects for a prudent, efficient and cost effective result.
EDPR 2011 ASSET MANAGEMENT PROGRAM, DELIVERY AND
COMPLETION — 8
Table 15 – JEN 2015 IT CAPEX Plan sets out the projects and capex cost plans for 2015 which completes the EDPR 2011 Period. The plan is consistent with the EDPR 2011 Asset Management Plan and determination.
Table 15 – JEN 2015 IT CAPEX Plan