Western Power manages the electricity transmission and distribution network in the south west area of Western Australia. This network transports energy from generators to customers and comprises a large number of physical assets such as towers, poles, conductors and transformers.
The purpose of this Network Management Plan is to describe how the network assets are managed and to present Western Power’s network asset programmes of works for a 5-year rolling period. This is the first plan in this format. It covers the 6-years from 2011/12 to 2016/17 to provide alignment of the plan with the next Access Arrangement period. The plan replaces the former Transmission Asset Management Plan and the Distribution Asset Management Plan.
The network asset programmes presented in this NMP are based on meeting known business objectives derived from Western Power’s understanding of customer and stakeholder requirements, knowledge of the existing and projected network assets, the measured and expected condition of these assets, and the required and expected asset performance requirements.
There are a number of obligations and performance targets relating to the use, maintenance and operation of the network. This plan also describes the environment in which the network is operated and the asset management systems and processes used to meet the business’ obligations and targets.
2.2 Document hierarchy
The NMP is a key document in the asset management system. The plan is co-ordinated with the Network Investment Strategy and the Transmission Network Development Plan to ensure asset management investment is optimised. It is implemented through the Approved Works Program. Figure 2.1 illustrates the overall asset management document framework and where the NMP sits in this document hierarchy.
Implementation plans Implementation plans Implementation plans Implementation plans
Business strategic direction 2010 - 2013 purpose / vision / key focus areas
Implementation plans Key asset management drivers
Regulatory compliance Environmental Safety
System Performance – R & PQ System capability
Identify, assess & prioritise options to address issue/s NETWORK
MANAGEMENT PLAN
AWP
(1 - 5 - 10 yr plans)
Figure 2.1: Overall asset management document framework
2.3 Infrastructure assets included in the plan
The asset categories that are within the scope of the NMP include:
• network primary infrastructure assets (such as overhead lines, underground cables, switchgear and transformers);
• network secondary assets such as batteries and protection equipment;
• network related Information and Communication Technology (ICT) assets (e.g. metering, protection, SCADA and communication equipment);
• network related land, easement and building assets (such as substation sites or buildings);
• investments in alternatives to traditional network solutions (such as network control services, distributed energy resources and energy management solutions) and associated ICT investments; and
• network and non-network related research and development/innovation.
The asset categories that are outside the scope of the NMP include:
• plant, vehicles and tools;
• human resources;
• land, buildings and associated fixtures not related to the network (such as depots, offices and warehouses);
• system operation and management activities and ICT to support operation of the Wholesale Electricity Market;
• ICT not directly related to network or non-network investments (such as corporate IT systems); and
• investments to support work not related to services covered by an Access Arrangement.
2.4 Western Power’s role and key objective
The network is owned by the Western Australian State Government and managed by Western Power as a Government Trading Enterprise (GTE). The GTE operates in a commercial environment, and the managing director of Western Power reports to an independent Board of Directors.
A key business objective is to serve the people and industry of Western Australia by planning prudent investment in the network to meet their current and future needs, consistent with Western Power’s 2020 Vision and Strategic Direction 2010 – 2013, Transform the Core. The primary drivers of investments in the network within the period of this plan are safety, growth and security of supply, and service performance. Service performance is primarily related to maintaining reliability of supply and the environment. Key factors include condition and performance of assets and the associated risk of plant failures.
To meet this key business objective and to respond to the drivers for investment, this plan aims to achieve the following:
• safety of employees, customers and the public;
• optimised asset performance;
• optimised asset lifecycle costs;
• timely replacement of assets; and
• environmental compliance.
2.5 Shareholders and stakeholders
The sole shareholder in Western Power is the Western Australian State Government. However, there are many external stakeholders who have significant influence over or interest in the network investment decisions made by Western Power and the outcomes these deliver. These stakeholders include various departments of the State Government (shareholder, funder and policy maker), customers, market participants, communities and regulators (technical and economic).
Western Power is required to make investments in its network within the context of the ‘often competing’ needs and expectations of the various stakeholders, balancing return on investment, cost, performance and risk.
Ensuring commercially sound, well-justified and transparent network management is important to Western Power for a number of reasons, including:
• delivering sustainable shareholder and customer value;
• achieving satisfactory determinations on Access Arrangement revisions (pricing and revenue outcomes and appropriate returns on past investments), and compliance with license conditions;
• gaining access to adequate funding from the shareholder to support investments;
• achieving corporate strategic objectives;
• supporting and enabling the decision-making of external stakeholders;
and
• achieving a reputation as a competent, credible, customer focused, commercially sound and environmentally and socially responsible service provider.
The regulations that apply to Western Power support this approach to network management through tests that require Western Power to demonstrate the prudency and efficiency of proposed investments. The New Facilities Investment and Regulatory Tests as required under the Access Code focus on capital expenditures.
2.6 Key Elements of the Plan
The key elements of the NMP are set out in separate sections as described below.
• Description of the network: Chapter 3 provides an overview of the network, including its history, a description of its current state, and challenges that Western Power can expect in the future.
• Network management framework: Chapter 4 provides an overview of the approach to network management, and the asset management policy, practices and systems applied by Western Power. These support responsible and prudent asset management. It also describes the legal and regulatory environment that applies to Western Power.
• Objectives, investment drivers and outcomes: Chapter 5 provides a summary of the objectives of network management that are fully set out in the Network Investment Strategy. It also outlines the drivers to add to or modify the network and shows how these objectives and investment drivers lead to the outcomes expected of the network.
• System planning and development (growth): Chapter 6 provides details of growth forecasts, which affect the management and utilisation of assets.
It also provides details of the customer drivers that influence capital expenditures. Details of customer connections such as the methodology for forecasting customer connections, forecasts of numbers of new connection and an overview of the Connection Policies are also included in this chapter.
• Life cycle management plans (non-growth): Chapter 7 sets out the key issues and challenges facing the network and what is planned in order to manage and operate the network at the agreed levels of service (as defined earlier in the plan) while optimising lifecycle costs. Network strategies are detailed for each asset class. Thus this chapter details individual network management strategies and provides a consolidated management strategy at the network level.
• Integration of the works plans – growth and non-growth: Chapter 8 discusses the integration of the works across various asset classes and across growth and non-growth works. The interrelationship of the strategies is also discussed in this chapter for example the impact of growth capex and opex.
• Delivery Strategy: Chapter 9 discusses the strategy to deliver the plan.
• Financial Summary: Chapter 10 contains the financial requirements associated with implementing the plan.
• Network management plan monitoring and improvement: Chapter 11 outlines the measures used to assess the performance of the NMP, the improvement program through which improvements are made to asset management processes, and the procedures used to monitor and review the effectiveness of the asset management system.
2.7 Periodic Review of the Plan The NMP is an internal document.
Custodianship of the NMP document resides with the Network Performance Branch within the Networks Division. The plan will be formally reviewed and updated at least annually. However, more frequent revisions may occur if appropriate.
Network Management Plan DM#8007313 August 2011