Transend - Appendix 5 Renewal capital expenditure - Australian ...

Renewal Capital Expenditure
TNM-GR-809-0929
Issue 1.0, January 2009
This replacement rate has been determined by Aurora over a 40 year period for an asset base
including over 250,000 wood poles and hence can be considered statistically valid. Further
information regarding actual and forecast wood pool failure rates is provided in the Burnie–
Waratah 110 kV transmission line wood poles condition assessment report, provided as Attachment
C2.
The historical replacement rate suggests that Transend is likely to require pole replacements at a
rate of approximately 10 poles per year. As there were no condemned poles identified in 2007–08,
it is likely that a larger number of poles will be identified for replacement in the next period than
would normally be observed. As the last pole to be condemned was identified in 2004–05, it is
estimated that 70–80 poles will require replacement in the 2009–13 revenue period.
There is always some level of uncertainty when predicting whether both poles comprising a tower
structure will be condemned, or whether only one of the two poles will be condemned. Regardless,
for suspension structures, it is Transend’s policy to replace both poles with a single steel pole.
Strain structures are replaced by two steel poles. Allowing for a number of structures where both
poles are found to be condemned, Transend estimates that 70 structures will require replacement in
the 2009–13 revenue period. To reduce this program by 50 per cent (as proposed by the AER)
would increase the likelihood of structure failure at numerous sites, significantly increasing the
safety, environmental and reliability risk to both Transend and the community.
3.2.2 Timing of pole replacement
Transend has considered the issue raised by the AER with respect to the replacement timing
following identification of a condemned structure. In 2006 Transend reviewed its wood pole
replacement strategy. This review resulted in Transend implementing a three yearly inspection
cycle for all wood poles (as is also utilised by Aurora Energy). Due to potentially poor access track
conditions during the wetter winter months Transend adopted an approach whereby pole
inspections occur during summer.
Where a condemned pole is identified, Transend also adopted a requirement to ensure that
condemned poles are replaced prior to the onset of the expected wet weather winter period. To
maximise the likelihood of this replacement occurring in the appropriate timeframe, Transend
specified that all pole replacements occur within three months of identification.
To leave a pole replacement until after winter (as has been suggested by the AER for any
condemned poles identified in the 2013–14 inspection cycle) would raise the likelihood of a pole
failure, increasing the safety, environmental and reliability risk to Transend and the community to
unacceptable levels. Undertaking repairs in winter would increase the time (and costs) required to
repair the transmission line because of additional access issues created by wet conditions.
Hence Transend is strongly of the opinion that funding must be made available for wood pole
replacements in 2013–14, and that this funding cannot be deferred until the following revenue
period.
3.2.3 Correction of typographical error
The AER draft proposal reflects a typographical error in Transend’s submission and shows
Transend wood pole replacement expenditure occurring in 2011–12. The expenditure should
actually be shown as being incurred in the 2010–11 financial year to ensure alignment with
Transend’s three yearly inspection cycle.
3.2.4 Conclusion
Transend’s revised revenue proposal is based on the following reasonable requirements for the
Burnie–Waratah 110 kV transmission line wood pole replacements:
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