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1.0 INTRODUCTION
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Hydro One’s Asset Management Plan is a systematic approach to determine and optimize
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on-going operating and maintenance expenditures and capital investments in its
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distribution system and general plant. Hydro One has adopted an Asset Management
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model since its inception. The objective of this plan is to ensure all funding is spent in the
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most effective manner to realize the best value for Hydro One stakeholders and
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customers and to minimize total bill impacts. To accomplish this objective, Hydro One
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applies a consistent approach to assess the relative asset risk impacts on business values
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and strategic objectives by considering and balancing asset performance (including
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physical condition), costs and risks, lifecycle management from an overall power system
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perspective and assigning asset risk scores to the corresponding investment planning
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actions for in-service assets. Hydro One’s mission and vision is “We will be an
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innovative and trusted company, delivering electricity safely, reliably and efficiently to
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create value for our customers”. The asset management process at Hydro One supports
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the corporation mission and vision.
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2.0 THE ASSET MANAGEMENT PLAN OVERVIEW
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The Hydro One Asset Management Plan is incorporated throughout the evidence as
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documented below:
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• Voice of the Customer (Exhibit A, Tab 5, Schedule 1)
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• Summary of Distribution Business (Exhibit A, Tab 6, Schedule 1)
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• Planning Process (Exhibit A, Tab 17, Schedule 1)
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• Investment Plan Development (Exhibit A, Tab 17, Schedule 3)
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• Investment Prioritization Process (Exhibit A, Tab 17, Schedule 4)
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• Project/Program Approval and Control (Exhibit A, Tab 17, Schedule 5)
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• Work Execution Strategy (Exhibit A, Tab 17, Schedule 6)
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• Asset Risk Assessment (Exhibit A, Tab 17, Schedule 7)
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• Regional Planning Process (Exhibit A, Tab 17, Schedule 8)
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• Common Corporate Costs OM&A – Asset Management (Exhibit C1, Tab 2, Schedule
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9)
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• Distribution Assets Investment Overview (Exhibit D1, Tab 2, Schedule 1)
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The results of this process is the five year capital and OM&A investment plan filed at and
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Exhibit D1, Tab 3 and Exhibit C1, Tab 2.
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3.0 THE ASSET MANAGEMENT PLAN
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This section provides more detailed descriptions of the aspects of the Asset Management
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Plan.
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3.1 Voice of the Customer
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Customers are a major driver of long-term success. Hydro One listens to its customers,
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analyzes their needs and then modifies its work activities and work programs to address
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those needs. The many channels through which Hydro One listens to its customer’s
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needs are discussed in Exhibit A, Tab 5, Schedule 1.
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3.2 Summary of Distribution Business
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The Summary of Distribution Business (Exhibit A, Tab 6, Schedule 1) provides an
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overview of the Hydro One distribution system including the evolution of the system,
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Corporate values, strategic goals and performance targets. All of these factors are
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considered to inform the Asset Management model and work plan.
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3.3 Planning Process
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Business planning is performed annually and focuses on the development of a detailed
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plan for each year in the plan. The results as they apply to the test years form the basis for
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this Custom Rate Application.
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3.4 Investment Plan Development
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Hydro One utilizes a systematic investment approach to plan and optimize on-going
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capital, operating and maintenance expenditures. Five investment categories; sustaining,
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development, operations, customer service and common corporate costs, follow a
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common investment plan development process described in Exhibit A, Tab 17, Schedule
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3.
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3.5 Investment Prioritization Process
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The investment prioritization process is part of the overall company risk-based asset
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management planning process (see Exhibit A, Tab 17, Schedule 4). The prioritization
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process converts Hydro One Distribution’s business values and key performance
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indicators into investment criteria and guidelines that are used for managing risk and
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facilitating trade-offs between investments to achieve the optimal balance of cost
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effectiveness, customer expectations, asset and business needs within the constraints and
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criteria imposed.
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3.6 Project / Program Approval and Control
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Once the preliminary investment plans have been accepted at the proof-of-concept stage
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and have gone through the investment prioritization process, a detailed analysis of the
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preferred alternatives and costs is completed for individual projects, programs and
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business cases. Based on the detailed analysis, cost estimates are prepared for review and
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approval by senior management and ultimately the Hydro One Board of Directors. See
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Exhibit A, Tab 17, Schedule 5 for more details.
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3.7 Work Execution Strategy
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Hydro One Distribution’s Work Execution Strategy provides increased work execution
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capacity and necessary flexibility to accommodate the planned distribution work
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programs. The strategy will also address the continuing global business challenges such
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as the uncertainty regarding material availability and qualified personnel to undertake the
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work. A focus on efficiency continues throughout Hydro One’s work planning and
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execution activities and processes. See Exhibit A, Tab 17, Schedule 6 for more details.
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3.8 Asset Risk Assessment
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Hydro One’s Asset Risk Assessment methodology is built on the Asset Condition
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Assessment approach previously filed in proceeding EB-2009-0096. Since then, Hydro
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One has completed an asset inventory of its key distribution assets that has been linked to
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other non-condition based information such as outage and customer data. This has
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enabled Hydro One to extend its assessment methodology to improve its focus on non-
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condition risk factors. More details are found in Exhibit 17, Tab 17, Schedule 7.
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In accordance with the Ontario Energy Board report, “Renewed Regulatory Framework
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for Electricity Distributors: A Performance Based Approach (“RRFE”), all distributors
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are required to participate and align wth the regional planning process and activities.
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Exhibit A, Tab 17, Schedule 8 describes Hydro Ones participation in the regional
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planning process.
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3.10 Common Corporate Costs OM&A – Asset Management
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The Hydro One Transmission and Distribution businesses are operated using the Asset
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Management model. The model separates the asset management functions of planning,
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decision-making and approvals from the services functions of engineering, construction,
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customer service and grid operations which execute approved plans. The Asset
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Management organization focuses on ensuring that the necessary transmission and
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distribution assets are planned, acquired, constructed, maintained and operated such that
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they deliver the required function and level of performance expected by customers in a
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sustainable manner over the long term. See Exhibit C1, Tab 2, Schedule 9 for more
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detail.
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3.11 Distribution Assets Investment Overview
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The Distribution Asset Investment Overview (Exhibit D1, Tab 2, Schedule 1)
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summarizes the results of the Asset Risk Assessment process for the key distribution
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assets and their primary risk factors. These results are utilitize in the identification and
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prioritization of asset needs to assist in the investment plan development of both the
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capital and operating and maintenance work programs.
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