ASSET MANAGEMENT PLAN 2017-2027 NETWORK …

1 ASSET MANAGEMENT plan 2017 -2027 NETWORK TASMAN LIMITED CONTENTS 1 EXECUTIVE SUMMARY .. 1 OVERVIEW AND plan PURPOSE .. 1 CORPORATE OBJECTIVES AND ASSET MANAGEMENT DRIVERS .. 1 STATUS OF PROGRAMMES AND PROJECTS .. 2 ASSET MANAGEMENT SYSTEMS AND INFORMATION .. 2 NETWORK CONFIGURATION AND ASSET DESCRIPTION .. 3 SERVICE LEVEL 4 ASSET MAINTENANCE AND RENEWALS plan .. 7 NETWORK DEVELOPMENT PLANS .. 9 RISK MANAGEMENT .. 12 PERFORMANCE GAP ANALYSIS AND IMPROVEMENT PLANS .. 12 2 BACKGROUND AND OBJECTIVES .. 15 ASSET MANAGEMENT plan PURPOSE .. 15 CORPORATE OBJECTIVES .. 15 ASSET MANAGEMENT PLANNING DRIVERS .. 16 PLANNING PERIOD AND REVIEW PERIODS .. 17 STAKEHOLDERS .. 17 ACCOUNTABILITIES AND RESPONSIBILITIES .. 19 AMP INTERACTION WITH CORPORATE GOALS AND BUSINESS PLANNING.

2 22 ASSET MANAGEMENT INFORMATION SYSTEMS .. 23 INFORMATION SYSTEMS GAP ANALYSIS: .. 24 ASSET MANAGEMENT plan FORMULATION AND STRATEGIC REVIEW PROCESS .. 25 3 NETWORK CONFIGURATION AND ASSET DESCRIPTION .. 28 NETWORK CONFIGURATION .. 28 ASSET JUSTIFICATION AND NETWORK OPTIMISATION .. 30 ASSET DESCRIPTION .. 32 NETWORK VALUATION .. 42 4 NETWORK PERFORMANCE .. 43 ASSET PERFORMANCE .. 43 ASSET EFFECTIVENESS .. 44 ASSET EFFICIENCY .. 46 PERFORMANCE OBJECTIVES .. 47 JUSTIFICATION FOR SERVICE LEVEL TARGETS .. 49 5 NETWORK DEVELOPMENT plan .. 54 INTRODUCTION .. 54 NETWORK DEVELOPMENT POLICIES .. 54 NON ASSET SOLUTION POLICY .. 55 DISTRIBUTED GENERATION POLICY .. 56 PLANNING CRITERIA .. 57 NETWORK SECURITY 58 SECURITY DESIGN 58 DEMAND FORECAST .. 60 DEVELOPMENT plan - DETAIL .. 66 NEW CONSUMER GENERATED NETWORK EXPENDITURE.

3 78 MAJOR NETWORK DEVELOPMENT PROJECTS 2016/17 .. 79 MAJOR NETWORK DEVELOPMENT PROJECTS 2017 /18-2020/21 .. 80 6 ASSET RENEWAL AND MAINTENANCE plan .. 83 PLANNING CRITERIA AND ASSUMPTIONS .. 83 ASSET RENEWAL AND REFURBISHMENT POLICY .. 84 ASSET CLASSES .. 84 ASSET MAINTENANCE AND RENEWAL CATEGORIES .. 85 ASSET INSPECTION AND CONDITION MONITORING .. 86 LIFECYCLE ASSET MAINTENANCE AND RENEWAL BY ASSET 87 103 7 NON NETWORK ASSETS .. 106 NON NETWORK ASSET DESCRIPTION .. 106 NON NETWORK ASSET DEVELOPMENT, MAINTENANCE AND RENEWAL POLICIES .. 106 NON NETWORK ASSET CAPITAL, MAINTENANCE AND RENEWAL PROJECTS 2016-2021 .. 107 8 RISK MANAGEMENT .. 108 OVERVIEW .. 108 RISK MANAGEMENT STRATEGY .. 108 RISK MANAGEMENT BACKGROUND .. 109 NETWORK RISKS CONTEXT .. 110 RISK BENCHMARKING .. 111 NETWORK RISK ANALYSIS.

4 112 EARTHQUAKE PERFORMANCE AND RISK .. 121 RISK MANAGEMENT CONCLUSIONS .. 124 9 PERFORMANCE MEASUREMENT, EVALUATION AND IMPROVEMENT .. 126 FINANCIAL AND PHYSICAL PERFORMANCE .. 126 SERVICE LEVEL AND ASSET PERFORMANCE .. 129 GAP ANALYSIS AND IMPROVEMENT PLANS .. 131 10 PLANNING ASSUMPTIONS .. 134 SIGNIFICANT ASSUMPTIONS .. 134 FACTORS THAT MAY AFFECT AMP 136 LIST OF APPENDICES .. 138 A. NETWORK LAYOUT .. 139 B. GROWTH PROJECTION .. 148 C. NETWORK PERFORMANCE STATISTICS .. 151 D. CAPITAL EXPENDITURE PROJECTION NETWORK DEVELOPMENT & ASSET RENEWAL .. 152 E. SPECIFIC NETWORK DEVELOPMENT & ASSET RENEWAL 154 F. NETWORK MAINTENANCE AND OPERATIONS EXPENDITURE PROJECTION .. 157 G. TYPICAL ASSET MAINTENANCE AND RENEWALS ACTIVITIES .. 161 H. DESIGN NETWORK VOLTAGE REGULATION .. 162 I. ZONE SUBSTATION RISK ASSESSMENT MATRICES.

5 163 J. FEEDER RELIABILITY ANALYSIS .. 177 K. CONSUMER SURVEY 2016 .. 178 L. DISASTER RECOVERY AND RESPONSE 40 M. PROCEDURES FOR RECORDING OUTAGE INFORMATION FOR REGULATORY DISCLOSURE .. 57 N. INFORMATION DISCLOSURE SCHEDULES .. 59 NETWORK Tasman ASSET MANAGEMENT plan 2017 -2027 Final Page 1 1 EXECUTIVE SUMMARY OVERVIEW AND plan PURPOSE The NETWORK Tasman Limited (NTL) electricity NETWORK distributes power to approx 39,000 end use consumers in an area of 10,800 sq km in the northwestern corner of the South Island of New Zealand. The coverage area is shown in the map of Appendix A. The ASSET MANAGEMENT plan (AMP) documents the current ASSET MANAGEMENT practices used by NTL as part of developing an optimised MANAGEMENT strategy for its electricity NETWORK assets. It outlines the present state of the electrical distribution system and presents a plan for the future maintenance and development of the NETWORK .

6 This document is updated annually and will be continually refined. This plan incorporates regulatory reporting requirements in tabular form. The tables provide a standardised presentation of AMP information. These tables are appended to the document in Appendix N. The primary objective of the plan is to provide a systematic approach to the planning of programmes, the implementation of which will ensure that the NETWORK assets are being effectively and efficiently maintained, enhanced and developed to satisfy stakeholder requirements. The plan provides information on the implementation of programmes including how the company will organise and resource itself to ensure that the programmes are implemented in a timely and effective manner. The period covered by this plan is for ten years beginning on 1 April 2017 and extending to 31 March 2027.

7 The date of this revision of the plan is 31 March 2017 . This document was approved by the NTL board of directors on 21 March 2017 . The next review of this plan will be issued on 31 March 2018. CORPORATE OBJECTIVES AND ASSET MANAGEMENT DRIVERS NTL is owned by the NETWORK Tasman Trust on behalf of consumers as defined in the NETWORK Tasman Trust Deed. The drivers for the ASSET MANAGEMENT process are derived from the statement of corporate intent of the company. This includes the vision and mission statements of NTL and the key objectives of the company. The key business objectives arising from the vision and mission statements are as follows: To deliver reliable and high quality NETWORK services to consumers that are in broad alignment with consumer and/or consumer group expectations of reliability and price as revealed by the consumer consultation process.

8 To improve operational efficiency and effectiveness. To ensure regulatory compliance of the NETWORK and operations. To increase consumer value. NETWORK Tasman ASSET MANAGEMENT plan 2017 -2027 Final Page 2 Six ASSET drivers have been identified which define the scope and need for all ASSET MANAGEMENT work. The drivers are:- Consumer service (provision for adequate capacity and reliability), based on both direct consultation with large customers and use of suitable proxies for estimating the requirements of the mass market. Safety (of workers, contractors and the general public) Economic efficiency. Environmental responsibility Regulatory Compliance Risk MANAGEMENT The drivers will be both internally and externally set. Development of the NETWORK will be condition and performance based. STATUS OF PROGRAMMES AND PROJECTS This plan provides a long term indication of ASSET MANAGEMENT requirements.

9 Specific work programmes and projects will be drawn from this plan for inclusion in future annual business plans. Specific projects greater than $100,000 in value are subject to board approval on an individual business case basis. The inclusion of a particular project in this plan does not imply that the project will proceed. The implementation timing of capital projects in this plan is influenced by outturns of growth in particular areas. The advent and development of new technologies such as distributed generation and battery storage may have a significant effect on the implementation and timing of the capital expenditure projects in this plan . In this environment, the company is looking to apply new technologies to defer large capital projects where it is practicable and economical to do so. To adjust for the likelihood that only a proportion of projects will proceed, a downwards adjustment has been made to forecast capital expenditure in Appendix D.

10 ASSET MANAGEMENT SYSTEMS AND INFORMATION A number of information sub-systems are operated by NTL providing data inputs to the ASSET MANAGEMENT process. These are as follows: Geographic Information System (GIS) Central ASSET datastore for ASSET location Substation database Consumer connection database ASSET condition survey database Load survey database Outages and Faults databases Outage information and statistics Component failure records NETWORK Tasman ASSET MANAGEMENT plan 2017 -2027 Final Page 3 Trend analysis NETWORK Loadflow model NETWORK voltage profiles NETWORK configuration and load modelling Fault analysis Customer consultation exercises Direct consultation with large customers Use of suitable proxies for consultation with the mass market, such as security standards based on industry best practice and the level of customer dissatisfaction expressed to NETWORK Tasman.