Vector Electricity Asset Management Plan— 2020 Update
to be expedited. For example, some preventive ring main unit replacements have been deferred between six and twelve months to enable automation projects to proceed earlier. In all cases where such a decision was taken, the impact of the deferral on SAIDI (system average interruption duration index) and safety risk was assessed as low. Initiatives within the SRMP related to asset portfolio and asset management capability improvement have been integrated into this 2020 AMP update. EVOLUTION OF WORK PRACTICES Following the significant changes to Health and Safety legislation through the Health and Safety at Work Act 2015, Vector introduced operational practices of working deenergised except in specific limited circumstances. Since that time, and in accordance with a prudent approach to reassessment of hazards and risks associated with our activities, we have developed a greater understanding of the holistic work task risks, as well as the implications for our health and safety and asset management systems. New technologies and more advanced operating practices both in New Zealand and internationally are also available. In RY19, in collaboration with our field service providers (FSPs), we commenced a comprehensive review of all work tasks previously performed live, considering both the risk and the complexity of the task. We also considered the risk and complexity of the alternative to performing the work live along with new technologies and innovative practices. As a result of that review we identified and have implemented some changes to work practices that enable holistic safety risks to be appropriately managed while also managing down the outage time for customers. These changes have included some specific work tasks which are appropriate to perform live to manage down the impact on customers (either because the tasks have an acceptable level of risk and complexity, or because alternative techniques requiring customer outages would carry a similar quantum of risk); and utilising technologies and practices that can provide ‘indirect live line’ capability, with work being performed on energised assets thereby minimising disruption to customers. The use of new equipment such as bypass cables, increased use of temporary pole supports and more robust application of defect classifications can enable remedial work to be carried out under planned conditions making the customer experience better since the work can be more efficiently planned, then completed at a prior advised time, rather than under unplanned emergency conditions. Our FSPs remain empowered to assess the risk of the work task on the day, applying controls up to, and including, vetoing work when it is unsafe to do so. We have also conducted protection reviews and risk assessments on recloser operations to improve the customer experience from transient fault protocols with the aim to align these with international best practice. SINGLE POINT ACCOUNTABILITY Reflecting the advice of the Commerce Commission, we have implemented organisational realignment to provide single points of accountability within the regulated electricity network business for regulatory quality standards, and to separate out accountability for the regulated gas network. Please refer to section 3, Asset Management System for more information. REGULATORY SETTINGS CONFIRMED As we noted in our FY20 half year report, the Commerce Commission has confirmed the regulatory settings for the DPP3 period, commencing 1 April 2020. Those settings have restricted the capital expenditure available to us over the next five years at a time when the need to maintain and upgrade Auckland’s electricity network is at an all-time high. The level of both capital and operating expenditure is less than was published in the 2019 AMP and we have throughout this AMP update considered the impacts of the settings for revenue, expenditure and quality in the investment decisions made. Our investment prioritisation will continue to be health and safety outcomes, asset renewal, reliability and resilience of our existing network. Expenditure in these areas of investment will remain within the DPP3 allowances – any shortfall in the DPP3 CAPEX allowance is likely to impact our investment in the area of capital growth which will require regular reviews of options to fund that growth investment. While our focus for OPEX is increased expenditure in maintenance categories, there are operating expenditure areas that are outside the DPP3 framework that are fundamental to the safe, reliable future of our electricity network. These include cyber security, LV metering data, costs for new systems to support new technologies, as well as the costs of implementing the changes in DPP3 requirements. Our Symphony Strategy It is a time of challenges and opportunities for the energy sector in New Zealand. The Electricity Price Review (EPR) has highlighted the need for a coordinated and proactive step-change to ensure that key customer issues – such as energy affordability, are at the centre of the sector's decision making. This is particularly relevant as we transition to a low emissions future – as former Interim Climate Change Committee (ICCC) Chair David Prentice put it, “accelerated electrification will not happen if electricity is too expensive”. We maintain our belief that in order to enable a transition to low emissions energy at an affordable price, technology and innovation must play a leading role. It follows that the long-term interests of Auckland’s energy consumers cannot be served by a traditional view of what a network is and needs to deliver. Our traditional network assets will continue to play a key role, while becoming increasingly integrated with digital and consumer assets. This convergence allows us to more efficiently manage loads and smooth out demand curves, and adapt more quickly to changing network dynamics. This is a key part of efficiently responding to uncertain and rapidly changing demand patterns.
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