Vector Electricity Asset Management Plan— 2020 Update
1 – introduction
This Asset Management Plan (AMP) update sets out the material changes that have occurred in our Asset Management practices and investment since 31 March 2019, when the last electricity AMP (2019-2029) was published. 1 Where relevant we have also included context and updates on our operating environment and strategic planning; taking into account our updated assessment of the potential for rapid shifts in demand trends driven by uptake and impact of new technology, climate change, changing customer preferences and expectations, and in Auckland particularly, continued and rapid growth, development and urbanisation of the rural fringes. Throughout this AMP we comment on Vector’s Strategic Reliability Management Plan (SRMP) covering the accelerated programmes of work that reflect our commitment to quality compliance. There has been a concerted effort to improve data quality and analyse the root cause of outages and this has confirmed that the big challenge for the business to achieve its quality targets is outage duration. We have updated the 10-year capital and maintenance programmes to reflect ongoing investment in the existing network assets to ensure a safe and reliable network; ongoing evolution of work practices to ensure worker and public safety; and the network development required for the long-term interests of Auckland’s energy consumers. As documented in this AMP update, our asset management and replacement strategies, SRMP initiatives and Health and Safety practices are designed to achieve strengthened network resilience. We have made a number of deviations from our previously published 2019 AMP to bring forward planned reliability improvements that reflects our commitment to achieving regulatory compliance requirements. This focus on regulatory compliance and reliability is further expanded below. For further context, we have also set out Vector’s Symphony group strategy, and how this is applied within the regulated electricity network. During the second part of March 2020, the New Zealand government declared a range of measures in response to the COVID- 19 pandemic. We had already begun planning for what the impacts could be by establishing an incident management team (IMT) to oversee our response to the outbreak, in line with the Vector group’s Crisis Management Framework. Our focus is on the wellbeing of staff and ensuring the electricity network continues to be available for all our customers. The uncertainty and fluidity of the situation means that the impact of this crisis could not be factored into this update. Regulatory compliance and reliability In the context of performance against regulatory quality measures, underlying duration of outages persists as a challenge. Our outage duration performance continues to be impacted by ongoing changes in the operating environment. Further to additional time driven by safety improvements following Health and Safety legislation introduced during the last regulatory period (DPP2), ongoing changes have included customer growth in previously rural areas; congestion caused by infrastructure projects; increases in new connections; substantial increases in the number of vehicles on the roads; reduced road space due to new bus and cycle lanes; and more activity on our network due to increasing expenditure on system growth and relocation works resulting from those large-scale infrastructure projects. Major fault causes such as third-party interference (for example car v pole), vegetation, and overhead and underground faults have been compounded by these changes to Auckland’s operating environment. We have also seen more weather-related major event days (MEDs), which carry an impact on regulatory performance due to the clean-up occurring outside the required event boundaries, and a greater number of high wind days that sit below the MED trigger. Within this context, the activity driven by the RY20 SRMP as part of our ongoing reliability programme was designed to deliver a specific set of initiatives within a twelve-month time frame to provide lasting outage duration reduction. The RY20 SRMP is a further development of our existing reliability programmes undertaken since RY2015-16 and meaningfully accelerates reliability focussed initiatives as part of a progressive work programme that has expanded as we have validated sustained adverse trends. In designing and executing the SRMP for RY20, we took considerable care to ensure each initiative would deliver an enduring reliability benefit in an economically responsible manner, proportionate to the need and with explicit regard to the long-term expectations of our customers. Expenditures originally forecast in later periods of the 2019 AMP have been brought forward to deliver the reliability benefit earlier. Early indications are that the technology being adopted for some of these programmes of work will deliver not only the forecast improvement in unplanned outages, but also a positive impact on planned activities for customers. Importantly, as the SRMP involved bringing forward work programmes and expenditure already discussed in our 2019 AMP, there is no additional long-term cost to consumers other than the time value of money. The accelerated programmes include the rollout of network automation. It is also important to note that the reliability objectives and reliability strategies within the SRMP are a subset of Vector’s broader set of asset management objectives as specified in the 2019 AMP and reiterated again where necessary in this 2020 AMP update. In some limited instances, work in our 2019 AMP was deferred by a short period to enable work under the SRMP
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1 A copy of this AMP is available on the Vector website at https://www.vector.co.nz/disclosures/electricity/amp
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