January 2012 Capital Investment - National Grid

Exhibit ___ (EIOP-19)Page 37 of 684Table II-11Transmission – 3A/3B Tower StrategyProgram Variance ($millions)CIP FY12 FY13 FY14 FY15 FY16 FY17 Total2011 .04 .03 0.0 0.1 6.1 - 6.32012 - 0.0 0.0 0.0 0.0 0.0 0.0Relay Replacement StrategyProtective relays are maintained in accordance with Company substation maintenancestandards and NERC or NPCC requirements, where applicable. Overall the populationof approximately 4,000 relay packages remains adequate but approximately 6% of thepopulation requires investment based on their condition, performance or obsolescence.The program will commence by replacing the worst 6% of the relays over the next eightyears. Beyond that, studies and pilot programs will be initiated to explore the mostefficient and cost effective approach to addressing the remaining population. The longtermobjective is to have an asset management approach that allows a morecommoditized approach to relay replacement. This approach will be necessary formodern microprocessor relays that are expected to have only 15 to 20 year asset lives.Strategy SG157 (C34690), approved in late 2010, identifies relay replacementcandidates based on historical performance (relay models from the same manufacturerwith known performance issues) or obsolescence where parts and technical support areno longer available. The sanctioned scope included the replacement of about 245 highpriority relay packages, 18 communication packages and 7 control houses over the nextsix years 11 , however, to reduce the costs of the Plan, the replacement period has beenextended a further two years. The conceptual funding level (-25%/+50%) for this projectis expected to be $55 million. This project represents the first phase of the multi-year“NY protection and control replacement” project. Specific projects are being engineeredand will be sanctioned in due course. As a result of deferral of $125 million associatedwith the substation rebuild program beyond the five-year period of this Plan in 2011, theCompany will be reevaluating whether the scope of the relay replacement programshould be revised.Drivers:This strategy ensures that reliable protective relay systems are in place to preserve theintegrity and stability of the transmission system following a fault. This strategy isneeded now because properly functioning protective relays are essential for rapidisolation of faults on the system thus protecting customers from potential outages andprotecting equipment from damage.Customer Benefits:Properly functioning elements of relay protection schemes limit the extent and durationof outages. Further, the protection system is designed to protect high value assets11 For the list of specific relays, sites and timescales please refer to Strategy paper SG157II-2038