January 2012 Capital Investment - National Grid

Exhibit ___ (EIOP-19)Page 52 of 684between the windings and the tank. A project to replace this transformer was sanctionedin September 2011 with a new transformer expected to be ordered by February 2012.A transformer at Vail Mills underwent condition assessment in 2011 to confirm the needfor replacement as indicated by DGA results which show signs of discharging in themain tank possibly caused by corona or occasional arcs. There is currently no systemspare for this transformer.The Company will be revisiting a long term transformer replacement strategy much like ithas in place for oil circuit breakers. Transformers on the ‘watch list’ have a higher thanaverage probability of failure and could therefore fail in-service. The ‘watch list’ will beused to identify candidates for replacement that will be further evaluated by subjectmatter experts within the Company for inclusion within the program.Customer Benefits:The failure of an average 17MVA sized transformer could lead to a loss of power forapproximately 17,000 residential customers. The prolonged time needed for restoration(either through the installation of a spare or a mobile sub) can translate into millions ofcustomer minutes interrupted.2011 to 2012 Variance:The Company will, in the short-term, adopt a ‘replace on fail’ approach for transformerswhere failure includes DGA results that suggest immediate replacement is necessary orwhere actual failure takes place. The budgeted amount in this program will fund theremoval, delivery and installation costs and the replacement unit will be funded throughthe Station Failures-Budgetary Reserve line item. Although this approach provides thelowest short-term capital investment costs it increases the risk of service interruptions forcustomers. Thus, while in the short-term the increased risk of transformer failure can bemanaged through deployment of strategic spares, in the longer-term, a more proactiveand less reactive approach to transformer replacement is recommended to manage theoverall population.Table II-20Transmission – Transformer Replacement StrategyProgram Variance ($millions)CIP FY12 FY13 FY14 FY15 FY16 FY17 Total2011 6.6 5.4 3.2 3.0 3.0 - 21.22012 - 4.9 0.8 0.0 0.0 0.0 5.7Circuit Breaker Replacement Strategy (C37882)The circuit breaker population is managed through ongoing inspection and maintenanceactivity along with routine preventative maintenance activities and electrical testing. Ingeneral, the circuit breaker population continues to be adequate for our needs; however,there are a number of obsolete circuit breakers that require investment. During the Plan,obsolete oil circuit breakers will be replaced with modern equivalent circuit breakers.II-3553