Electricity Asset Management Plan 2019-2029
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Vector Limited://
SECTION 6. DELIVERING OUR PLAN
This section of the AMP outlines how we develop an optimal portfolio of works so as to improve service levels and deliver on our strategic outcomes. These works are based on the plans set out in Section 5. We summarise our approach to project prioritisation and optimisation of investment and resourcing. The forecasted capital and operational expenditure (CAPEX and OPEX) needed to deliver on our asset management plans for our electricity network, for the 2020-2029 period, is included. 6.1 PRIORITISING OUR WORKS PORTFOLIO The key objectives that guide how we manage our assets relate to safety, reliability, resilience, cyber security and privacy, customer service and operational efficiency – see our asset management policy in Section 4. How we perform against these objectives is captured by our service-level metrics (see Section 2). These objectives also align with Vector’s vision and its mission to create a new energy future (see Section 1). The process of prioritising our portfolio of works aims to ensure the investment needed to meet both our key network objectives and service levels targets is efficient and results in the greatest long-term benefit to our customers. This is also an important step in achieving best industry practice in asset management, as prescribed by the standard, ISO 55000:2014 Asset management - Overview, principles and terminology. Project proposals: Once a project need has been identified, project proposals are created. These describe the project need, show the options considered and detail the preferred option. Project proposals are prepared by Vector’s subject matter experts, and these also consider the business value of each project. For network infrastructure projects, the value (both from a business and customer perspective) is usually expressed in terms of improvements to service-level metrics or risk mitigation – for example, how the project prevents a possible negative impact affecting our asset management objectives. A network-specific risk assessment matrix that is aligned with our enterprise risk management framework is used to assign a risk score against each project. This score signals the relative business value of proposed new projects. Preliminary investment plans: Once the business value of a project proposal has been assessed, these are then peer-reviewed, to ensure consistency, before being incorporated into preliminary infrastructure and digital investment plans. As part of developing these initial plans, our projects are staggered, so a realistic volume of work can be undertaken in each year. This is based on resource availability and specialist capability requirements. Any synergies and interdependencies between projects are also highlighted and incorporated into the plans. Portfolio prioritisation: A ranking approach is used for our early-stage investment plans to consolidate and prioritise them for delivery. The ranking considers key business objectives, including safety, network performance and customer experience. It also acknowledges the non-discretionary nature of certain projects (see below). The process for deciding on our investment proposals is summarised below:
Under this prioritisation model, a project’s contribution to achieving each of the following outcomes (listed in no particular order) is assessed and rated:
• • • • • • •
Net financial benefit Customer experience
Safety
Reliability Resilience
Operational efficiency
Cyber security and privacy
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