January 2012 Capital Investment - National Grid

More documents

Recommendations

Info

Exhibit ___ (EIOP-19)Page 5 of 684I A. Capital Investment Plan SummaryThe Company manages its capital investment plan by system and by spending rationale.A view of planned investments segmented by system is presented in Table I-1 above,while a view of planned investments segmented by spending rationale summarizedbelow.Investment by Spending RationaleThe Company classifies its capital projects into five spending rationales based on theprimary investment driver: (A) Statutory or Regulatory; (B) Damage/Failure; (C) SystemCapacity and Performance; (D) Asset Condition; or (E) Non-infrastructure.Statutory or RegulatoryStatutory or Regulatory projects are required to respond to, or comply with statutory orregulatory mandates. These include those expenditures needed to ensure the minimumcompliance with the requirements of the North American Electric Reliability Corporation(“NERC”), Northeast Power Coordinating Council (“NPCC”), New York State ReliabilityCouncil (“NYSRC”), the Occupational Safety and Health Administration (“OSHA”), andthe PSC. It also includes expenditures that are part of the Company’s regulatory,governmental or contractual obligations, such as responding to new service requests,transformer and meter purchases and installations, outdoor lighting requests andservice, and facility relocations related to public works projects. With some exceptions,the scope and timing of work in this rationale is generally defined by others.Damage/FailureDamage/Failure projects are required to replace failed or damaged equipment and torestore the electric system to its original configuration and capability following equipmentdamage or failure. Damage may be caused by storms, vehicle accidents, vandalism orunplanned/other deterioration, among other causes. The Damage/Failure spendingrationale is typically a mandatory spending rationale of work that is non-discretionary interms of scope and timing. The Damage/Failure budget also includes the cost ofpurchasing strategic spares to respond to equipment failures.System Capacity and PerformanceSystem Capacity and Performance projects are required to ensure the electric networkhas sufficient capacity, resiliency, or operability to meet the growing and/or shiftingdemands of the system and our customers. Projects in this spending rationale areintended to reduce degradation of equipment service lives due to thermal stress, toimprove performance of facilities where design standards have changed over time, andto provide appropriate degrees of system configuration flexibility to limit adversereliability impacts of contingencies. In addition to accommodating load growth, theexpenditures in this rationale are used to install new equipment such as capacitor banksto maintain the requisite power quality required by customers and reclosers that limit thecustomer impact associated with an interruption. It also includes investment to improveperformance of the network such as the reconfiguration of feeders and the installation offeeder ties.I-36
Exhibit ___ (EIOP-19)Page 6 of 684Asset ConditionAsset Condition projects are required to reduce the likelihood and consequences offailures of transmission and distribution assets, such as replacing system elements likeoverhead lines, underground cable or substation equipment. During the previous tenyears, the Company adopted an Asset Management approach that relied on a holistic,longer-view assessment of assets and asset systems to inform capital-investmentdecisions. As part of this approach, the Company conducted assessments of majorasset classes such as circuit breakers or subsets of asset classes such as a circuitbreaker manufactured by a particular vendor. The assessments focused on theidentification of specific susceptibilities for assets and asset systems and thedevelopment of potential remedies. In light of current economic conditions, however, theCompany presents a modified approach in this Plan that reduces near-term capitalcosts. The result is greater reliance on the purchase of spare equipment to replacedamaged equipment that may fail in service for certain elements of the transmission anddistribution system. The modified approach also calls for a more targeted replacement ofassets based on their condition versus wholesale replacement based on “end of usefullife” criteria, especially for transmission line refurbishment projects. This approach willresult in lower capital investment in the near term, but may present adverse impacts onreliability and safety performance as compared to higher investment levels in the longterm. Closer monitoring of system performance as it relates to asset condition causeswill be necessary.Non-InfrastructureNon-Infrastructure projects are ones that do not fit into one of the foregoing categories,but which are necessary to run the electric system. Examples in this rationale includesubstation physical security, radio system upgrades and the purchase of test equipment.Investment by spending rationale for fiscal years FY13 to FY17 is provided in Table I-2,and Figures I-1 and I-2.Table I-2Investment by Spending Rationale ($ millions)Rationale FY13 FY14 FY15 FY16 FY17 TotalStatutory orRegulatory222.4 222.8 197.1 174.6 173.1 989.9Damage/Failure 43.7 44.4 40.8 41.2 42.8 212.9System Capacityand Performance64.2 74.4 79.5 103.3 112.0 433.3Asset Condition 85.5 103.7 155.8 173.5 182.1 700.6Non-Infrastructure6.2 4.7 5.9 5.4 5.1 27.3Total 422.0 450.0 479.0 498.0 515.0 2,364.0I-47
Page 1 and 2: Niagara Mohawk Power Corporationd/b
Page 3 and 4: Testimony of Electric Infrastructur
Page 5 and 6: Exhibit ___ (EIOP-19)Page 2 of 684T
Page 7: Exhibit ___ (EIOP-19)Page 4 of 684s
Page 11 and 12: Exhibit ___ (EIOP-19)Page 8 of 684M
Page 13 and 14: Exhibit ___ (EIOP-19)Page 10 of 684
Page 59 and 60:
Exhibit ___ (EIOP-19)Page 56 of 684
Page 61 and 62:
Page 63 and 64:
Page 65 and 66:
Page 67 and 68:
Page 69 and 70:
Page 71 and 72:
Page 73 and 74:
Page 75 and 76:
Page 77 and 78:
Page 79 and 80:
Page 81 and 82:
Page 83 and 84:
Page 85 and 86:
Page 87 and 88:
Page 89 and 90:
Page 91 and 92:
Page 93 and 94:
Page 95 and 96:
Page 97 and 98:
Page 99 and 100:
Page 101 and 102:
Page 103 and 104:
Page 105 and 106:
Page 107 and 108:
Page 109 and 110:
Page 111 and 112:
Page 113 and 114:
Page 115 and 116:
Page 117 and 118:
Page 119 and 120:
Page 121 and 122:
Page 123 and 124:
Page 125 and 126:
Page 127 and 128:
Page 129 and 130:
Page 131 and 132:
Page 133 and 134:
Page 135 and 136:
Page 137 and 138:
Page 139 and 140:
Page 141 and 142:
Page 143 and 144:
Page 145 and 146:
Page 147 and 148:
Page 149 and 150:
Page 151 and 152:
Page 153 and 154:
Page 155 and 156:
Page 157 and 158:
Page 159 and 160:
This document has been redacted for
Page 161 and 162:
Page 163 and 164:
Page 165 and 166:
Page 167 and 168:
Page 169 and 170:
Page 171 and 172:
Page 173 and 174:
Page 175 and 176:
show all

January 2012 Capital Investment - National Grid

Create successful ePaper yourself

Delete template?

Save as template?