Asset Management Plan 2012

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Asset Management Plan

2012

Period Covered: 1 April 2012 to 31 March 2022

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1.0 Summary

1.1 Purpose of the Plan

The purpose of this Plan is to disclose information about Network Waitaki Limited’s management of its lines business assets, as required by regulation 7 of the Electricity Distribution (Information Disclosure) Requirements 2008, dated 31 October 2008.

Network Waitaki’s primary set of planning documents and processes are those that constitute its Network Development Plan and Finance Plan. The AMP is a summary of these documents that contains sufficient information to allow stakeholders to assess Network Waitaki’s asset management practices.

Network Waitaki is a wholly owned consumer Trust company and is locally managed to meet the Trust requirements which are documented in the company’s Mission Statement as follows:

1. Owning and operating a safe, reliable and efficient distribution system that meets the evolving needs of its consumers.

2. Supporting the economic growth and wellbeing of the community it serves.

Both the Asset Management Plan and the Network Development Plan serve the purpose of meeting these objectives in a coordinated manner.

The reliability and efficiency targets provided in the company Statement of Corporate Intent have been agreed between the Board and the Trust as appropriate performance measures supporting the above Mission Statement, and form the basis of the service levels in the Asset Management Plan (refer Section 4).

The purpose of the Asset Management Plan is therefore to demonstrate how Network Waitaki Ltd intends to sustain a safe, reliable, and efficient network that services the needs of its consumers.

1.2 Date Completed & Period Covered

The previous plan covered a period of 10 years from 1 April 2011. This plan covers a period of 10 years from 1 April 2012 and reviews action against the plan back to 2010/11. Updates will remain on an annual cycle until Network Waitaki completes its first valuation update (now due 31 March 2012) per the most recent regulatory changes. The ultimate intention is to align updates with the proposed new 5 yearly update cycle.

1.3 Asset Management Systems & Information

Asset management systems used by Network Waitaki include a Geographic Information Systems (GIS), asset databases, outage database, and SCADA records.

The Asset Data on which life cycle analysis is based in this revision is a snapshot of Network Waitaki’s main asset database. This database records the asset, site,

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and installation data associated with all line and equipment assets on Network Waitaki’s network and is maintained up to date within a monthly cycle of work on the network being completed.

The Network Development Plan (NDP) on which the development section of this plan is based was prepared in 2010 (based on 2009 data). This is a 10 year forecast of growth on which an associated capital development action plan is derived. Network Waitaki will next be updating the NDP in 2013 as part of its business planning cycle.

In 2008/09 Network Waitaki initiated an IT project to select and install Asset Management software to further support its management and reporting systems. This project is underway and is expected to be completed by the end of 2012/13 financial year. This asset management system will replace the old asset database and will integrate with the GIS, Financial, and other IT systems.

1.4 Network & Asset Description

The Network Waitaki network is a predominantly rural network supplying the North Otago, Hakataramea, and Ahuriri regions. Based on the 2011 Disclosures, the network comprises 176km of 33kV sub-transmission line, 1,344km of 11kV distribution line, and 210km of LV distribution line, and 13 zone substations. It supplies approximately 12,318 ICP’s, has an average ICP density of 7.12 ICP/km of line, and has a coincidental maximum demand of approximately 52MW, which is inclusive of the Black Point GXP. The network is supplied from four, Transpower Grid Exit Points (GXP) at Oamaru, Black Point, Waitaki, and Twizel. A breakdown of the assets, their relative value and quantities is given in Appendix A. This is based on Network Waitaki’s last ODV dated 31 March 2004 and therefore is not up to date with the relatively intensive developments in Network Waitaki’s sub-transmission system over recent years. This table will be updated annually when the new AIMS is operational by the end of 2012/13. A plan of the supply area and sub-transmission system is in Appendix C.

1.5 Service Level Objectives

Network development in the last two years has not adversely impacted Network Waitaki’s planned outage levels due to the 11kV line upgrades required to supply the dairy conversion and irrigation load growth. Network Waitaki seeks to sustain a long term benchmark comparison to other networks that is in the above average to upper quartile range of performance. The following table shows the reliability indices for the years 2007/8 – 2010/11 and forecast for 2011/12. The results include class b, c, and d outages, exclusive of transmission grid (Transpower-related) ‘a’ outages.

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Reliability Indices

Long-Term 2007/08 2008/09 2009/10 2010/11 2011/12

Target Actual Actual Actual Actual Forecast

SAIDI <90 95 69.36 64.23 61.33 90

SAIFI <1.70 2.10 1.07 1.46 0.82 1.7

CAIDI <53 45 64.82 43.98 75.07 53

The PricewaterhouseCoopers’ Electricity Line Business 2010 Information Disclosure Compendium indicates that the 1999-2003 5-year average threshold benchmarks are as follows:

 National SAIDI 178.6,  Network Waitaki SAIDI 70.3  National SAIFI 2.4,

 Network Waitaki SAIFI 1.1  National CAIDI 74.4, and  Network Waitaki CAIDI 63.9

Network Waitaki is meeting top industry performance levels and these results have been well under the 5 year average set in the Price Path Threshold legislation for 2008/2009 and 2009/2010 even though there was a high growth phase being driven by irrigation and dairy conversions. The network development required to meet these demands for additional load have resulted in an increase in live line works to accommodate this work without outages where possible. Network Waitaki took steps to address the impact created by these development outages by purchasing three 635kVA diesel generator sets. The generators target wide area/long duration outages only, and are normally established at standby sites where they can be used to address Network Waitaki loadings under a national grid emergency. These standby sites are also covered by Retailer energy purchase agreements.

To date one generator has been used to provide supply to the Black Point GXP when snow damaged Transpower’s 110kV line (5 weeks). They were deployed during the major upgrade in the Hakataramea Valley following the Snow Storm, the upgrade of the Broken Hut line (long remote spur) and they cover the Waitaki GXP constraint over summer. In 2010, one of the generators was used to provide continuous supply to Oamaru New World when the HV cable supplying Oamaru New World failed.

One of the three diesel generators is now permanently deployed at the Waitaki District Council’s main water reservoir. This ensures the continuity of water supply during any large scale power outages, while also leaving the generator available for use in times of grid emergencies.

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Network Waitaki also makes extensive use of “Live Line” maintenance techniques to minimise planned outages. Network Waitaki subsidiary contractor has two “Glove & Barrier” live line crews to undertake this work.

1.6 Life Cycle Asset Management

The maintenance practices applied to each asset group, or type, may vary depending on the strategic importance of the asset, the cost/benefit ratio of the planned maintenance, and the maintenance/inspection techniques available. Network Waitaki uses condition-based maintenance for the majority of its assets; however some assets such as LV service fuses are replaced on failure.

Network Waitaki purchased a wood pole scanner in 2011 and plans to scan suspect poles before any subsequent work is undertaken. This approach aligns with the Electricity Engineers’ Authority (EEA) guideline for working on poles (Guide to Work on Pole and Pole Structures -Revision 1 September 2010).

1.7 Risk Assessment

Network Waitaki uses the risk management standard AS/NZ 31000 - Risk Management, and appropriate planned actions are determined for all significant risks. These actions include capital development, maintenance or operational enhancement, business planning or training, and contingency planning.

Network Waitaki maintenance policies include routine inspections to ascertain asset condition and regulatory compliance. These policies rank public and environmental safety as a top priority.

With enactment of the new Electricity Safety Regulations on 1 April 2010, Section 61A of the Electricity Act has come into effect and electricity generation and network companies are required to have in place, by 1 April 2012, a documented and audited safety management system (SMS). The SMS shall cover all practicable steps that must be taken to prevent the electricity supply system from presenting a significant risk of serious harm to the public or significant damage to property.

This SMS requirement applies to owners of generation assets greater than 10 MW and owners of network assets greater than 10 MVA. Network Waitaki is in the process of reviewing its in-house documentation and setting up a data base to comply with the Section 61A requirements.

Network Waitaki undertakes an annual review of its suit of Risk Management documentation, which includes:

 Physical Risk Assessment  Asset Failure Recovery Plan  Emergency Preparedness Plan  Business Continuity Plan

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1.8 Performance and Plans for Improvement

Plans to improve the performance of the network are based on: 1. improving condition based maintenance strategies, 2. adopting new and improved maintenance techniques, 3. improving network monitoring, and

4. employing more network automation

Examples of these include the use of Partial Discharge Tests (PDTs) and wood pole scanning to provide non-invasive testing of in-service assets, and the continuing deployment of remote controlled high voltage switching devices. Maintaining compliance with Network Waitaki’s own design and security standards are key drivers of development planning. When load increases, or load demographics change, the deployment of network assets needs to be reviewed to ensure that they deliver the appropriate service levels.

Standardisation, higher design standards, targeting of critical assets, and adopting appropriate technology updates underlie Network Waitaki’s performance strategy.

Identification of best practice is achieved through benchmarking with other companies via The PricewaterhouseCoopers’ Electricity Line Business Information Disclosure Compendium.

1.9 Cross-reference to Requirement 24 AMP Prescription

The following table is intended as a cross-reference for the structure of this document to the structure of prescribed content listed in Schedule 2, Requirement 24 of the Electricity Information Disclosure Requirement 2006.

Cross-reference to Requirement 24 Schedule 2

Information to be included in Asset Management Plans

Req.

24 Description

Report

Section Section Title

1 Summary of Plan 1 Summary

2 Background and Objectives 2 Background

2a Purpose of Plan 1.1 Purpose of Plan

2b Interaction with Corporate Goals… 2.1 Interaction with Business Planning… 2c Period Covered by Plan 2.2 Period Covered

2d Stakeholders Interests 2.3 Stakeholders Interests

2e Accountabilities and Responsibilities 2.5 Accountabilities and Responsibilities 2f AM systems and Processes 2.6 AM systems and Processes

3 Assets Covered 3 Asset Description

3a Description of Area 1.4 Network and Asset Description 3b Network Configuration 3.1 Network Configuration

3c Description by Asset Category 3.1 Network Configuration 3c Age Profiles and Condition 6 Life Cycle Assessments

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3d Justification for Assets 3.4 Asset Justification

4 Service Levels 4 Level of Service

4a

Consumer Orientated Performance

Targets 4.2

Consumer Orientated Performance Targets

4b Other Targets 4.3

Asset Performance and Efficiency Targets

4c Justification of Targets 4.5 Justification of Service Level Targets 5 Network Development Plans 5 Network Development

5a Planning criteria and Assumptions 5.2 Planning Criteria

5b Methodology 5.3 Prioritisation of Network Developments

5c Demand Forecasts 5.4 Demand Forecast

5d Policies on Distributed Generation 5.5 Distributed Generation 5e Policies on Non-Network Solutions 5.6 Non-Network Options

5f Development Options 5.7 Development Plan 5g

Development Programmes and

Actions 5.7 Development Plan

6

Lifecycle AM Planning -

maintenance 7 Maintenance Planning

6 Lifecycle AM Planning - renewal 6 Life Cycle Assessments 6a Maintenance Planning criteria 7

Maintenance Planning - asset sub-sections

6b Maintenance Planning policies 7

Maintenance Planning - asset sub-sections

6c Renewal Policies 6

Life Cycle Assessments - asset sub-sections

6d Renewal Programmes and Actions 6

Life Cycle Assessments - asset sub-sections

6e Renewal Expenditure 5.7.6 Capital Expenditure Plan

7 Risk Management 8 Risk Management

7a Methods and Conclusions 8 Risk Management 7b

Emergency Response and

Contingency Plans 8 Risk Management

8 Evaluation of Performance 9 Performance Evaluation 8a Review of Progress 9 Performance Evaluation 8b Evaluation of Actual Performance 9 Performance Evaluation

8c Gap Analysis 9 Performance Evaluation

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2.0 Background

This AMP covers all electricity distribution assets that are owned and operated by Network Waitaki within its area of supply. It also makes reference to Transpower’s transmission network and GXP’s where these impact on service levels.

The AMP is not Network Waitaki’s primary planning document but is rather a compilation of various internal documents that are produced to meet the requirements of the Disclosure Regulations.

2.1 Interaction with Business Planning Process & Other Corporate Goals

Network Waitaki is a lines company with 100% of its shares held by the Waitaki Power Trust, which is a consumer trust. The Trust represents the interests of its beneficiaries, who are the end-use consumers connected to the Network Waitaki network.

The Corporate objectives, goals, and related performance targets of the company are set out in the Statement of Corporate Intent (SCI), which is agreed annually between the Board of Directors and the Waitaki Power Trust. The SCI covers the coming financial year plus the two succeeding years and is updated annually.

The SCI also includes policies and objectives relating to Health & Safety, Risk Management, Human Resources, Environmental Management, Social Responsibility, Compliance, and the Efficient Use of Resources.

The company’s strategic planning, annual business planning and budgeting processes, identifies the key initiatives that are required to achieve the targets and objectives set in the SCI and the Network Development Plan. Annual Business Plans and Budgets are prepared to schedule actions needed at a more detailed level to deliver corporate objectives, assign responsibilities, and allocate resourcing for the coming financial year.

The AMP provides a summary of the information contained in these internal planning documents, to enable stakeholders to assess Network Waitaki’s asset management practices.

A flowchart of Network Waitaki’s planning process is provided at the end of this section to aid description of the interactions of different plans and the information flows, between plans. The planning process should be viewed as a continuous cycle rather than a hierarchy of documents.

2.2 Period Covered

This AMP covers the period of 10 years from 1 April 2012 to 31 March 2022 and documents the known and projected capital and maintenance projects that will be required.

The programme of work indicated in the AMP is based on current knowledge. The NDP includes some major projects which are consumer driven and may vary

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in time, scope, and firmness. Such projects have the potential to significantly impact the annual budget and will therefore be subject to Board approval. This AMP was approved by the Board of Directors on 27 February 2012.

2.3 Stakeholder Interests

As a wholly owned consumer trust, corporate goals and objectives are primarily driven by the Waitaki Power Trust and consumers, however there are many other stakeholders who also have input into the planning and asset management process. These inputs are derived from surveys, direct communication, complaints, and contract negotiations. Network Waitaki stakeholders include:

 The Waitaki Power Trust, whose requirements are documented in the SCI and agreed with the Board annually; the Trust receives quarterly reports detailing performance to date against targets, and meet regularly with the Board Chairman and CEO. The Trust is also interested in the level of annual discount that will be provided to consumers.

 Energy Retailers and Consumers, who require a safe and reliable power supply at reasonable cost. There is regular direct contact with Retailers and large consumers, in addition to the bi-annual consumer surveys. Consumer complaints and fault reports also provide additional feedback that is incorporated into Network Waitaki’s maintenance and capital planning. Concerns normally focus on the security and quality of supply and such concerns have resulted in a new zone substation being planned for the Hampden area that will enhance the security of supply in the southern part of the network. In the mass market surveys that have been undertaken to date consumers have expressed a strong preference for continuing to pay about the same line charges to receive about the same reliability. Consumers, through the Waitaki Power Trust, are also interested in the level of annual discount that will be provided by Network Waitaki.

The bi-annual consumer survey planned for 2011 has been cancelled in light of the scheduled five-yearly ownership review of Network Waitaki in 2011. The review solicits response from the consumers on the ownership of Network Waitaki. Previous reviews have mainly expressed satisfaction with the performance and have urged with the continuation of the annual discounts on the electricity bills.

 Transpower, who are interested in any growth in the network that will require transmission line upgrades or new GXP, and in the revenue that they generate from Network Waitaki.

 Network Waitaki staff, who are interested in health and safety issues, and in employment, education, and training opportunities.  Local Authorities, who are not only consumers but also, have an

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public property including street lighting. They are also interested in minimising the environmental impact of installed Network Waitaki assets, and in fostering economic development within the region. Regular contact with the local council also enables both parties to benefit from any conjoint installation opportunities.

 New Zealand Transport Agency, who have an interest in the safety and control of assets installed within the road reserve, and also in street lighting. NZTA requirements impact at both the planning and installation stages and can have a significant impact on cost.

 Farmers and Developers, who want power to be made available for their developments in a timely manner and at a fair and reasonable cost. Discussions normally centre on the capacity that is available, the cost of establishing the supply, and the lead time that will be required.

 Government Agencies, who legislate and audit compliance.

 Contractors, who are interested in the magnitude of both the current and projected annual work programmes and in any changes to policies or standards that may impact on their business. An annual forum is held for local electricians and electrical inspectors to bring them up to date with any changes in the Network Waitaki connection standards and any issues that have arisen. The last forum included a session on variable speed motor starters and the harmonic issues caused by these devices.

2.4 Conflicts of Interest

Any conflicts in stakeholder requirements are normally resolved by prioritising the requirements on a risk and obligation basis. All stakeholders want to minimise the risk of injury to the public, staff or contractors and these concerns are given the highest priority. Network Waitaki has obligations to maintain supply to existing consumers at the security levels set out in the SCI.

With a predominantly rural network, Network Waitaki has a number of lines that are essentially uneconomic. A significant number of these lines are in snow prone areas, and would not meet our current design standards. However, the number of uneconomic lines is decreasing as a result of the significant growth in dairy conversions and associated irrigation. Whilst the growth rate has been slowing down, there are potentially large irrigation and dairy-related loads and significant industrial growth within the period of this AMP. In addition to these capital requirements the Trust requires that a portion of the annual profit be returned to consumers. These conflicts have been resolved by closely monitoring line condition and prioritising capital replacement based on risk assessment, and by the introduction of a Connection Charge that in part recovers the cost of new developments from the developer.

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2.5 Accountabilities and Responsibilities

The ultimate accountability for the network assets lies with the Directors of Network Waitaki, who are appointed by the Trustees, and who approve the Asset Management Plan. Directors are also accountable to the Trustees for meeting the requirements set out in the Statement of Corporate Intent, which includes specific asset management objectives and service targets.

Directors have an involvement in approving projects and budgets needed to support the AMP. For larger projects, new investments, and projects committing the company to expenditure over several years the approval process includes a formal Sanction for Expenditure. This provides Directors with technical detail and presents the business case for the proposal. Directors review Sanctions, post implementation, to confirm delivery on benefits and continued need. The Asset Management Plan, Network Development Plan and Strategic Plan all signal the need for future investments so that Directors can assess the long term issues such as funding requirements.

Management report outage statistics, network performance, and work programme progress to the Directors on a monthly basis.

Quarterly reports comparing year to date performance against the SCI are provided to the Trust. Annual reports are prepared by both Network Waitaki and the Waitaki Power Trust.

The management of the assets is the responsibility of Network Waitaki’s executive management organised per the Network Waitaki Organisational Structure shown on page 16.

Asset management responsibilities are allocated between the engineering managers as follows:

Network Planning and Operations Manager

This manager has responsibility for the long term network performance and planning activities, and the day to day operation of the network. This includes the management of the annual capital and maintenance work programmes, control room operations, contractor interface, and the development of standards and policies.

Planning and Development Manager

This manager has responsibility for special projects such as distributed generation, fibre network development, factory acceptance inspections. Industrial scale installations may also be resourced from this position.

General

Pricing and disclosure duties are shared by the both the Network and Commercial Managers with assistance and input from the Finance Manager. Network Waitaki’s fault service is currently resourced by Network Waitaki Contracting Ltd, a distribution contracting company, which is 100% owned by

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Network Waitaki. The service is secured via a monthly fee to ensure resource availability is always maintained in Oamaru. Performance is reviewed annually and compared with industry benchmarks.

The majority of the annual work programme is undertaken by Network Waitaki Contracting Ltd (NWCL), who has a staff of approximately 20 people located in Oamaru. NWCL does not provide technician services and these have to be out sourced.

Network Waitaki has a relatively small staffing establishment intended to resource a narrow business model i.e. operational management of a lines business. Work activity is shared by a discipline based team and assigned on the basis of competence to do the task not seniority of an individual position e.g. the entire engineering team, from the Network Manager to the Engineering Officer, man the Control Room on a roster basis.

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2.6 Asset Management Systems & Processes

The following asset management systems are used in managing Network Waitaki assets:

 An Intergraph (G-Electric) Geographic Information System, which is used to record and display the location and condition of network assets. The primary functionality of the GIS is that it provides a connectivity model of the network and therefore delivers a powerful query tool for asset management applications

 An Asset Database, which is used to record the attributes, current status, and service history of network assets. The asset database also includes the financial asset register, and is used for both asset management and financial planning. A suite of valuation and asset management systems is linked to the Asset Database. This database is linked to the GIS i.e. provides the attribution for the connected asset elements.

 An Outage Database, which is used to record and analyse outage reports and calculate the reliability indices. The GIS is used to identify consumers affected during switching.

 A condition based inspection and assessment programme, which is used to determine asset maintenance and replacement requirements and priorities. Each asset group has an appropriate inspection/testing action and frequency cycle identified. These may trigger more detailed inspection, more frequent inspection (closer management), maintenance actions, or a planned replacement action. Network Waitaki selects the inspection technique it considers the best practice for its network and ensures its effectiveness by analysis of results.

 A financial management system (ACPAC) which is used to record and track the value of installed assets and stock inventory.

 ETAP load flow modelling software is used to model the impact of load growth.

 Network Waitaki is currently replacing the asset database, works order database, and faults database with an Asset Management Information System. This system will integrate with the GIS and financial systems and will significantly enhance and streamline the processes already employed. This project commenced in November 2009 and is approximately 75% complete.

2.7 Asset Data Accuracy

The accuracy and completeness of the data Network Waitaki has at its disposal to plan and manage assets is limited by the following issues:

 Original data capture: the data contained in Network Waitaki’s data systems was originally captured from limited hard copy records and field inspections. For some key data items, such as age, it is not possible to get an accurate determination by looking at the asset or testing it. Such data is therefore an

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informed estimate; however by basing asset management actions on condition assessment rather than age overcomes this issue. In some instances, data was captured for a specific regulatory application, for example valuation. This data is subject to independent audit.

 Conversion errors: Converting data from one record system to another and applying it to a different application can introduce errors. Such projects are therefore inclusive of quality control measures. Occasionally it is found that where the accuracy of data is acceptable for one application it is not for another. Similarly, additional data is often required for new applications. Data washing is generally undertaken prior to conversion in these cases.

 Data maintenance: Keeping data up to date with physical changes on the network can be a challenge when new investment and upgrade is intensive. The multiple entries of the same data that are required to maintain the existing database records and GIS lead to data errors. It also does not make the most effective use of the limited staff resources available in this area. Network Waitaki is currently transferring its data to the new system.

Many of these issues are being resolved by the implementation of the Asset Information Management System (AIMS) as it removes the current duplication in data entry that is required to populate the various databases. It will also significantly enhance Network Waitaki’s ability to produce reports and disclosures as all of the data will be linked. To transfer the data from the Asset Database to the Asset Management Information System will require any inaccuracies in the current Network Waitaki asset records to be addressed. This work is nearing completion.

The faults, planned outage data, and switching times are recorded from contractor fault response sheets, switching programmes, and SCADA records, which are manually loaded into an access database. A list of the number of consumers that are located between the various switching points on the network is derived from the GIS and is updated annually. Many outages have various stages during restoration when the number of consumer affected by a fault will vary. The customer minutes from each of these stages is calculated manually to provide a single SAIDI, SAIFI, and CAIDI figure for each outage. The number of ICPs affected by the fault takes no account of the status of the ICPs, and the total number of ICPs is simply the average of the start and finish number of ICPs for that financial year. Temporary changes to the configuration of the network can result in errors in the number of ICPs counted if these changes are not known at the time the fault calculations are undertaken. This process was based on the guidelines produced by the long defunct Electricity Supply Association of NZ as the default for standard industry practice. It is subject to the annual disclosure audit and no changes to the process have been required. However this process will be replaced by the new AIMS which will calculate the SAIDI, SAIFI, and CAIDI results based on a GIS line trace and the Registry to determine the actual number of active ICPs that were affected by the outage and actual number of active ICPs that were connected to the network at the time the outage occurred, which will eliminate the necessity for manual calculations, and improve reporting accuracy.

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NWL Asset Management Process

Determine AM Drivers

Influencers The Stakeholders

Drivers Safety

Corporate Vision Customer Service Operational Efficiency Security and Quality of Supply Regulatory Compliance Shareholder Returns

Statement of Corporate Intent Strategic Plan Asset Management Process

Inputs Network Strategy

Policies & Standards Service Targets Load Forecasts Asset Valuation Data Asset Condition Data Outage Statistics Cost Tracking

Process Network Development Plan

Life Cycle Assesment Performance Assesment Risk Assesment

Outputs Capital Programmes

Maintenance Programmes Standards & Specifications

Annual Work Programmes and Budgets Annual Reports

Financial Service Compliance

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Asset Description

3.0 Asset Description

3.1 Network Configuration

The Network Waitaki network is predominantly a rural network supplying the North Otago, Hakataramea, and Ahuriri regions. Based on the 2010 Disclosures, the network comprises 176km of 33kV sub-transmission line, 1344km of 11kV distribution line, and 210km of LV distribution line, and 13 zone substations. It supplies approximately 12,318 ICP’s, has an average ICP density of 7.12 ICP/km of line, and has a maximum coincidental demand of approximately 52MW, which is inclusive of the Black Point GXP. The network is supplied from four Transpower Grid Exit Points (GXP), Oamaru, Black Point, Waitaki, and Twizel.

A 33kV sub-transmission network connects the zone substations to three grid exit points (GXP) at Oamaru, Waitaki, and Twizel. The Oamaru GXP has a maximum demand of approximately 36MW, and supplies 9 zone substations. The Waitaki GXP has a maximum demand of approximately 4.7MW and supplies 3 zone substations. The Twizel GXP was previously utilised solely as a backup supply for the Waitaki GXP to facilitate both Network Waitaki and Transpower planned maintenance. However to cope with peak demand and to maintain contingent capacity at Benmore Dam, Network Waitaki has now permanently shifted the Ohau Zone Substation and the Ruataniwha 33kV connected farm supply, approximately 1.7MW of load, from the Waitaki GXP to the Twizel GXP.

The 25MVA 110/11kV GXP at Black Point was commissioned in 2006 and has three 11kV feeders dedicated to the NOIC irrigation scheme which is Network Waitaki’s largest single consumer. NOIC take supply at 110kV and therefore own the transformer and 11kV switchboard. The point of common coupling to Network Waitaki’s network is at 110kV to manage voltage quality issues associated with starting 11kV rated motors. Phase displacement precludes any interconnection between the Network Waitaki and NOIC 11kV networks.

The majority of Network Waitaki zone substations are radially connected to their GXP. Therefore supply restoration is dependent on 11kV interconnection between substations. The main urban substation, Chelmer Street, which supplies 30% of Network Waitaki’s peak winter load, has an N-1 security configuration with dual 33kV lines and transformers that have recently been upgraded to 28MVA (ONAF) units. The second urban zone substation at Redcastle Road has also been upgraded to a dual 12.5MVA transformer configuration with the transformers being relocated from Chelmer St. A 33kV ring interconnects Oamaru GXP, Redcastle Substation and Pukeuri Substation, which supplies Network Waitaki’s second largest consumer the Alliance Pukeuri Works. This 33kV ring provides N-1 security to both substations. Two zone substations were established and commissioned at Enfield and Papakaio, in 2006. These are both N security, 5/7MVA 33/11kV substations, which is Network Waitaki’s standard for a rural substation. Enfield Substation is an intermediate substation that is supplied from the Ngapara 33kV sub-transmission line and has three 11kV feeders.

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Duntroon Substation was commissioned in 2010/2011 to meet the increasing dairy and irrigation loads in the general Waitaki Plains area. The 5/7MVA 33/11kV substation, which is Network Waitaki’s standard for a rural substation, is supplied from Oamaru GXP. A new 15km 33kV line extension utilising Jaguar conductor was established between Ngapara and Duntroon Substation. The substation has three outgoing 11kV feeders.

The Ngapara 33kV line has been upgraded to Jaguar conductor to maximise its development potential.

The Weston – Pukeuri 33kV line has enough capacity for Papakaio Substation and to carry the full load of the Oamaru GXP/Pukeuri/Redcastle ring in the event of a line fault. This ring between Pukeuri and Redcastle provides improved security to all three substations. This consists of 1,507m of 300mm2 Al underground cable and 6,445m of Neon overhead conductor. The 33kV protection has been upgraded to allow these lines to operate as a closed ring providing N-1 security to both Redcastle and Pukeuri substations.

The 33kV line to Papakaio was extended by 7.9km to a new substation at Papakaio, constructed in 2009. The extension uses Neon overhead conductor and 110m of 33kV underground cable. The Papakaio Substation has four 11kV feeders.

A plan of the supply area and sub-transmission system is provided in Appendix C. One of the three Network Waitaki 635kVA diesel generator sets is connected onto the 11kV bus at Enfield, with the second being connected into the 11kV bus at Otematata Substation. These two generator sets are normally used for meeting network or transmission grid emergencies. They are currently not being used for peak load management. The generator sets at Otematata and Enfield are re-configurable to enable them to be transported to other locations to maintain supply to consumers during major line reconstruction projects or unplanned outages. The third generator is now permanently deployed to the Waitaki District Council’s main water reservoir to ensure continuity of water supply during any large scale power outages.

There are a total of forty-nine 11kV distribution feeder lines emanating from the thirteen 33/11kV zone substation. As the zone substations are radial connected to their GXP, supply restoration is therefore dependent on 11kV interconnection between substations. To further assist in a speedier supply restoration, Network Waitaki has embarked on a programme of having automated opening points on 11kV interconnection between substations. The only zone substations with N-1 security are the two urban substations, Chelmer and Redcastle which supply approximately half of Network Waitaki’s total consumer base.

Where 11kV feeders interconnect, they are normally configured as open points. Network Waitaki’s loadings are such that security provisions are generally focussed on switching to restore supply quickly rather than targeting nil interruptions. Rural 11kV lines are fitted with Reclosers and Sectionalisers to provide automatic sectionalising and thereby reduce the numbers of consumers affected by line faults. The majority of these devices are linked to the SCADA system and can be remotely operated. Fault indicators are also used extensively in the rural 11kV network to reduce the time taken for field staff to locate and isolate faulted sections of line.

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Approximately one third of the 11kV network is 2 wire single phase and features a large amount of spur configuration, which limits interconnection. This reflects the geographic remoteness of much of the network and the historical predominance of low energy intensity sheep farming.

The 11kV distribution network supplies 2,607 distribution transformers, 593 of which have a capacity in excess of 100kVA. All new transformers, 200kVA or over, are ground mount “mini-sub” configured, irrespective of whether they are installed in an underground or overhead reticulated area. LV reticulation in urban areas is typically supplied by 200-500kVA distribution substations which are located to accommodate four LV feeders. Transformer capacity is normally based on an average After Diversity Maximum Demand (ADMD) of approximately 5.6kW for a domestic consumer. An LV switchboard is normally housed in the transformer cabinet with each LV feeder being independently fused. The LV switchboard is mounted independently of the transformer cabinet and is fitted with an incomer switch to facilitate isolation and removal of the transformer independent of the LV board. In overhead reticulated areas transformers are protected by pole mounted expulsion fuses and in underground reticulated areas with ground mounted fused oil switches. In urban areas the LV system is run in open rings with tie points brought into ground mounted distribution boxes or jumper cuts in the overhead reticulated system. Ground mounted transformers earths in urban areas incorporate an equipotential earth loop to control step and touch voltages.

Transformers are arranged in a mesh layout such that neighbouring units can support an outage via LV interconnection. Both transformers and cables are designed with sufficient spare capacity for this purpose. Maximum Demand Indicators (MDI’s) are fitted to determine the need for capacity upgrade and phase balancing. Larger supplies may have dedicated LV cables back to the LV distribution frame and/or a dedicated transformer on their own site. Rural supplies tend to have smaller dedicated transformers which are pole mounted.

LV lines amount to 210km or 12.1% of Network Waitaki’s network, with LV reticulation being largely restricted to Oamaru and rural townships. Rural network design does not include LV interconnection between distribution transformers due to distance limitations on LV capacity.

Approximately 56% of the LV network is under-built on HV pole lines, with only 13% of LV service connections being via underground cable. In overhead reticulated areas road crossing is via Telecom poles where they exist and are in an acceptable condition. The Waitaki District Plan requires any new reticulation to be placed underground in areas that are specified as urban or residential. There are no undergrounding programmes in progress as the community has not expressed a desire for this in community planning processes (LTCCP and DP). Asset management drivers, including cost and outage minimisation, favour the retention of overhead assets.

Underground reticulation is a minority feature of Network Waitaki’s network: 33kV cable accounts for 8km or 0.5% of the network, 11kV cable accounts for 49km or 2.8% of the network, and LV cable accounts for 28km or 1.6% of the network. The District Plan requirements introduced after initial reticulation programs only impacts new extension work or new interconnections for security purposes with regard to under-grounding. Capacity upgrades in urban areas where under-grounding rules

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apply are often achieved by the installation of intermediate distribution substations rather than by conductor upgrades.

A breakdown of the assets, their relative value and quantities is given in Appendix A. This is based on the Network Waitaki last ODV dated 31 March 2004 and therefore is not up to date with the relatively intensive developments in Network Waitaki’s sub-transmission system over recent years. This table will be updated annually when the new AIMS is operational.

The growth in irrigation load resulted in Network Waitaki becoming a summer peaking network for the first time during the 2006/07 irrigation season. Diversity between GXP’s and zone substations therefore change significantly with the weather conditions in each area.

The Waitaki GXP is constrained to 5.5MVA. During the 2007/08 peak period Meridian Energy called on their 2MW of backup supply for Benmore, which required Network Waitaki to manage the constraint at Waitaki by shifting some load onto Twizel. There are indications from Meridian Energy that a revised backup demand of 1MW may only be required from Network Waitaki.

Continued load growth in the Waitaki GXP supplied area has necessitated a permanent shift of 1.7MW of load on to the Twizel GXP. Network Waitaki will continue with this strategy of re-distributing load between Waitaki and Twizel.

In total Network Waitaki transported 222GWh of energy across its network in 2010/11 plus an additional 19GWh to the NOIC irrigation scheme via the Black Point GXP. This figure is 4% above the 5 year rolling average (2005/2006 to 2009/2010). It should be noted that energy consumption is now dominated by irrigation load which is driven by dry weather conditions. For example in the 2011 year the monthly variance in consumption to the previous year ranged between +25.68% to -32.68%. This load is shared between GXP’s as follows: approximately 197GWh through the Oamaru GXP, 22GWh through the Waitaki GXP and 8GWh through the Twizel GXP. Network Waitaki has only four consumers who could be considered as large by national standards. These are:

 North Otago Irrigation Company: supplied from the dedicated Black Point GXP with n level security and no 11kV interconnection to Network Waitaki’s network.

 Alliance Pukeuri Works: supplied from the Pukeuri Substation via dedicated dual 11kV connections to their own 11kV network. Pukeuri is an n-security level substation but has an N-1 33kV sub transmission supply and multiple 11kV substation interconnections. The 11kV interconnections cannot supply the full load of the factory but do provide sufficient capacity to maintain the freezers and essential services.

 Summit Wool Spinners: able to be supplied from both Redcastle and Chelmer Substations. 11kV feeders are not dedicated but there are multiple alternative supply options.

 Lean Meats: supplied from Redcastle Substation. The 11kV feeders supplying Lean Meats are not dedicated but there are multiple alternative supply options.

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None of these installations have a significant impact on network operations other than they are 11kV connected via dedicated assets and their security arrangements are more directly related to the connection asset they are prepared to pay for. However the network is configured to specifically service the load they present at their existing locations.

3.2 Transpower Substations

Network Waitaki owns and operates the 33kV Indoor switchboard associated with the Oamaru GXP. This consists of 2 Incomer CB’s, a Bus Coupler, and 8 Feeder CB’s (including 1 spare). This was commissioned in 2007 and overcomes the configuration/operational issues associated with the previous Transpower outdoor 33kV bus.

Until June 2010, there were voltage control issues with Transpower’s 110/33kV transformers due to the on-board tap changers not working automatically. These tap changers have been replaced by Transpower with fully automatic and remote controlled units.

Remaining operational issues at Oamaru GXP include:

 No 110kV bussing which results in Network Waitaki’s 33kV board carrying the imbalance between circuits on the transmission system. This is unacceptable to Network Waitaki and is to be addressed with bussing upstream of Oamaru as part of the Waitaki Valley Reliability Project, which is still undetermined.  The directional protection schemes do not grade between Network Waitaki’s

33kV incomer CBs and the Transpower 110/33KV CBs. This should also be able to be resolved by bussing the 110kV lines.

 The Oamaru GXP needs Power Factor Correction capacitors which are scheduled to be installed in 2011/2012 at 11kV on Network Waitaki’s network to improve cost efficiency and technical effectiveness.

Operational control of the Waitaki and Twizel 33kV sub-transmission circuit breakers has been retained by Transpower for logistical reasons. Network Waitaki has operational control of the Black Point GXP which feeds out at 11kV and is currently dedicated to a single customer.

More discussion on the transmission and GXP issues relating to Network Waitaki can be found in Transpower’s Annual Planning Report. There are significant constraint issues with Transpower’s 110kV network that limit its ability to meet future demand. This has initiated upgrade investigations, which have progressed to the “shortlist” stage of the GUP (Grid Upgrade Plan) and GIT (Grid Investment Test) processes. Details can be found on Transpower’s website by referencing the Lower Waitaki Valley Reliability Project.

How Network Waitaki will ultimately develop its sub-transmission system will depend on the outcome from Transpower’s Lower Waitaki Valley Reliability Project.

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The geographic location of GXP’s and zone substations along with their interconnecting 33kV lines is shown in Appendix C. The Ruataniwha Substation shown in the plan is a 500kVA farm supply that is connected directly to the 33kV network and not a zone substation. A new 5/7MVA 33/11kV Duntroon Substation with N security has been commissioned in February 2011.

Zone Substation Capacities and Peak Demand

Transformer Capacity Continuous MD Security Security Firm Excess

ONAN ONAF 2010 Class Config. Capacity Capacity

MVA MVA MVA MVA MVA

Chelmer T1 20 28 12.8 C N-1 28 15.2 Chelmer T2 20 28 C N-1 28 15.2 Parsons 10 3.2 B2 N 10 6.8 Redcastle T1 10 12.5 10.7 B1 N-1 12.5 1.8 Redcastle T2 10 12.5 B1 N-1 12.5 1.8 Pukeuri 10 12.5 8.8 B1 N 12.5 3.7 Maheno 5 3.5 B1 N 5 1.5 Enfield 5 7 2.2 B3 N 7 4.8 Ngapara T1 5 7 5.4 B1 N 7 1.6 Ngapara T2 5 7 B1 N 7 1.6 Duntroon 5 7 N/A B3 N 7 7.0 Papakaio 5 7 5.3 B2 N 7 1.7 Kurow 2+2 3.5 B2 N 4 0.5 Otematata 3 1.8 B3 N 3 1.2 Omarama 3+3 2.0 B3 N 6 4.0 Ohau 3 1.4 A N 3 1.6

3.3 Secondary Network Assets

Network Waitaki owns and operates Enermet solid state 33kV Ripple Injection Plants at both the Oamaru and Twizel GXP’s. The Twizel plant was established in conjunction with Alpine Energy to service both areas. An indoor Enermet solid state 11kV injection unit is installed at the Kurow Zone Substation and services the load connected to the Waitaki GXP.

Each ripple plant is individually controlled by Network Waitaki’s Load Management System which is integrated into the master station of its Abbey Systems Powerlink SCADA system. The SCADA system is connected to all Network Waitaki’s zone substations and provides remote control, indication, logging and alarming for key operating assets. In addition, the majority of reclosers and sectionalisers are also connected to the SCADA system and can be remotely controlled. The auto-reclose function on all CBs and reclosers can be remotely disabled via the SCADA system to facilitate Live Line work.

The SCADA system uses UHF radio data communications provided by Network Waitaki’s 3 repeater radio network. Repeaters are sited at Cape Wanbrow, Station Peak and Cloud Hill. They are shared by the VHF Radio Telephone system Network Waitaki uses for operational voice communications between the Control Room and field operators.

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The SCADA Master Station is located in Network Waitaki’s main office in Chelmer Street, Oamaru. It can be remotely accessed over the PC LAN and via the remote modem access. The Control Room is not manned but the duty Controller is able to access the SCADA system from home or wherever they are working. An SMS text system notifies the duty controller of any SCADA alarms and provides a brief description of the alarm.

Network Waitaki’s IT and PABX facilities are co-sited in the Control Room and share dual backup power systems, etc. The main office has a 20kW standby diesel generator to keep all essential systems operational during power outages.

3.4 Asset Justification

All assets are necessary to maintain the reliability and security of supply expected by customers, and to meet regulatory requirements. Network Waitaki is of the view that its historical delivery of high reliability does not indicate over investment but reflects its application of technical and work practice innovations such as:

 Live Line configured design

 Robustness and quality in design standards

 Highly developed and modern protection and automation schemes

A number of assets were optimised in 2004 for ODV purposes. However, all of these optimisations were capacity related and no assets have been identified as being unnecessary.

Capacity utilisation reflects the amount of seasonal load on the network and the low consumer density. Irrigation pump motors require additional transformer capacity for starting, and standard transformer capacities limit the opportunities to match consumers load requirements with transformer capacity. Rural residential consumers are normally supplied from a dedicated 15kVA transformer as the distance between consumer installations precludes the installation of LV reticulation. Network Waitaki results are in line with other rural networks that have similar load demographic trends. These changing demographics are increasing the network capacity utilisation, requiring Network Waitaki to establish new zone substations or additional network linkages to address the change.

The benchmarks Network Waitaki uses to compare its performance with that of other networks are those published in PWC’s Electricity Line Business Information Disclosure Compendium. This document provides a ranking of companies and statistical information such as the average value for each measure. Analysis applies most scrutiny to comparison with networks that share similar load characteristics and/or geographical location i.e. the closest distributors.

The specific performance statistics that Network Waitaki targets are those listed in its SCI, which are shown in section 4 of this document. These represent a better than average performance in all cases. It is also Network Waitaki’s objective to deliver this level of performance for lower than average prices.

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Network Waitaki’s load factor is high for a rural network (57%). This is the result of increasing intensity in farming practice enabled by irrigation, which has essentially filled in the off peak demand profile delivering a more efficient system load. As irrigation starts to dominate the system load profile it can be expected that load factor will decline due to the seasonality of irrigation load.

With increased load and changing load demographics, significant network reconfiguration and development has, and will continue to be required in the medium term to service changing user requirements. The level of capital investment that has been required to meet this load growth development is clearly visible in the age profile graphs provided in section 6 of this document.

Transmission and distribution voltages have been largely dictated by the historic choices made for the transmission assets from which Network Waitaki takes supply. While no changes are proposed in the distribution network voltage, the review of transmission development options will include the use of higher sub-transmission voltages. The choice of sub-sub-transmission voltage is dependent on the decisions reached by Transpower with regard to the Lower Waitaki Valley Reliability Project. Network Waitaki has refined the number of options it can pursue, in response to each of the options shortlisted by Transpower.

The biggest single load on the planning horizon is a 17-25MW cement plant located approximately 4km from the Oamaru GXP. While this load could be supplied by a dedicated 33kV feeder from Network Waitaki’s Weston 33kV Switching Station, this would exhaust the nominal growth allowance for future Network Waitaki demand from this Switching Station. As an alternative, a direct supply from Transpower via the Oamaru GXP is being investigated.

The North Otago Irrigation Company has been working on the extension and development of its secondary water distribution network. This will ultimately drive the implementation for Stage 2 of their primary pumping facilities at Black Point.

All other network capacity issues are being addressed economically through interconnection, intermediate substations, and conductor upgrade.

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4.0 Level of Service

4.1 Introduction

Network Waitaki distributes electricity to more than 12,000 consumers over

approximately 1,730 km of lines and cables, of which 95% is overhead. This gives an average consumer density of 7.1 consumers per km. This groups Network Waitaki with companies such as Alpine Energy, Buller Electricity, MainPower, Marlborough Lines, Eastland Network, and ScanPower. Like Network Waitaki these networks also have significant rural supply areas.

Network Waitaki’s corporate strategic direction is reflected in the Mission Statement and specified in the Statement of Corporate Intent (SCI). The objectives of which are to:

 own and operate a safe, reliable, and efficient distribution system, and  support the economic growth and wellbeing of the community it serves. In this context, service for Network Waitaki is about understanding stakeholder’s expectations and delivering cost effective solutions wherever possible to meet these expectations. Levels of service encompass not only quality of power supply but also network design, account management, project management and good

communication and interaction between Network Waitaki and its stakeholders. Network Waitaki endeavours to achieve the service level targets discussed below within its supply coverage area. These targets are benchmarks by which actual performance is to be assessed, enabling understanding of where improvement and focus is required.

4.2 Customer Orientated Service Levels 4.2.1 Adopted Service Level Targets

The customer service targets included in this AMP are limited to industry

performance measures used to monitor the reliability of the electrical network, as these are not discretionary and, in the view of Network Waitaki, effectively measure the extent to which it is able to achieve its objective of supplying a safe, reliable, and efficient electricity supply to its customers. This aligns with the view of the

Commerce Commission which, following a process on intensive public consultation at a national level also uses these indicators as the basis for setting a quality

threshold which it uses to determine whether the electricity distribution businesses that it regulates are performing to an acceptable standard. Note, that as a consumer owned Electricity Distribution Business (EDB) Network Waitaki is exempt from default price-quality path (“DPP”) regulation.

The two indicators that Network Waitaki uses for the development of customer service targets are:

SAIDI: System Average Interruption Duration Index. This is the accumulated total time that the average consumer connected to the network will be without supply in any measurement year as a result of faults and planned outages on the Network Waitaki network. The units are minutes.

Asset Management Plan 2012