Appendix 3. Presentation Slides DISTRIBUTION UNIT COST VEGETATION DISTRIBUTION UNIT COST VEGETATION MANAGEMENT BENCHMARK STUDY MANAGEMENT BENCHMARK STUDY INTRODUCTION AND FRAMEWORK INTRODUCTION AND FRAMEWORK 22 ‐ Oct ‐ 2015 William Porter Director of Research, Development and Industry Intelligence
PURPOSE OF BENCHMARKING STUDY The objectives of this study by CN Utility Consulting (CNUC), enabled by peer and longitudinal comparisons, are: • To help Hydro One comply with Ontario Energy Board’s (OEB) directives (EB2013 ‐ 0416), • To identify best management practices, • To identify measurements to substantiate continuous improvement, and • To recommend innovative approaches to ensure a successful and cost ‐ efficient utility vegetation management (UVM) program over the next seven to ten years and beyond
THE VEGETATION MANAGEMENT STUDY TEAM • Project team members: – William Porter: Director of Consulting of CNUC and Project Lead – Nina Cohn: Statistical Analyst [CNUC’s Senior Analyst] – Stephen Cieslewicz: President of CNUC and Project and Expert Witness Advisor and Witness • 60 years of experience in Utility Vegetation Management (UVM) • Same project team that performed the 2009 UVM benchmark project for Hydro One • CNUC team has provided expert testimony for numerous legal and regulatory cases • CNUC team has produced several peer ‐ reviewed publications and scientific articles
CNUC BACKGROUND AND RELATED PROJECTS Projects relevant to the current Hydro One Benchmarking Study • CNUC has been performing comprehensive benchmarking of UVM programs since 2002 and has data dating back to 1997. • The team is comprised of the authors of the UVM Benchmark & Industry Intelligence publications in 2002, 2010, 2012 and 2014. Numerous projects for utilities in which UVM benchmarking was a key component, examples include: Hydro One, MidAmerican Energy, Connexus Energy, Ameren Illinois, Puget Sound Energy, BC Hydro, United Illuminating, and Avista Utilities
BENCHMARKING STUDY FRAMEWORK Hydro One Distribution UVM Benchmarking Study Survey Design, A Review of Participation, Data Recommendations Data Analysis Hydro One’s and Management and Conclusions Program Deployment Regulatory and Literature Review
HYDRO ONE PROGRAM REVIEW • Data is collected in five datasets, entire company and four zones: – Hydro One – Northern – Southern – Central – Eastern • Longitudinal internal study of the five datasets
2009 CRITERIA FOR CHOOSING APPROPRIATE COMPARATORS • 2009 comparator locations based on climate conditions, growth, storm paths, and forest canopy cover: – Around Ontario – Northeastern North America – Western North America – Southeastern North America • 2009 customer density: – ≤ 30 customers per circuit kilometre
CHOOSING CURRENT STUDY COMPARATORS • Peer comparators – 2009 criteria – Unit and categorical comparisons – Total productivity factors • General comparators – Policies and procedures – Best practices – Regulatory drivers – Workforce
COMPARATORS FOR 2015 ‐ 2016 The following two slides are select lists of North American companies that have participated in CNUC benchmark surveys and who are potential comparators for this study Additional companies may be invited
RECENT DISTRIBUTION BENCHMARKING PARTICIPANTS ‐ 31 COMPANIES Alabama Power Company [AL, USA] Northern Indiana Public Service Company [USA] Ameren Illinois Company (AIC) [IL, USA] Northern States Power – MN [USA] Appalachian Power Company [VA/WV, USA] Northern States Power – WI, MI [USA] Avista Utilities [WA/ID/OR, USA] Ohio Power Company [USA] Baltimore Gas and Electric Co (BG&E) [MD,USA] Omaha Public Power District (OPPD) [NE, BC Hydro Distribution [BC, CAN] USA] Commonwealth Edison [IL, USA] Pacific Gas & Electric (PG&E) [CA, USA] Connexus Energy [MN, USA] PacifiCorp [CA/OR/WA/ID/WY/UT, USA] Consumers Energy Company [MI, USA] Public Service Company of Colorado Entergy Corporation [LA/AR/MS, USA] [USA] EPB (Electric Power Board) [TN, USA] Public Service Company of Oklahoma Hydro One Networks Inc. [ON, CAN] [USA] Hydro ‐ Québec [QC, CAN] Southwestern Electric Power Company Indiana Michigan Power Company [USA] [TX/AR/LA, USA] Indianapolis Power & Light [IN, USA] Southwestern Public Service Company Kentucky Power Company [KY, USA] [NM/TX, USA] Lincoln Electric System (LES) [NE, USA] Tampa Electric Company (TECO) [FL, USA] MidAmerican Energy (MEC) [IL, USA] United Illuminating Company [CT, USA] Companies Names in Italics and Brown Fonts were in the 2009 Hydro One Rate Case CNUC Benchmarking Study 12 of the 14 comparators in the 2009 study are recent participants
ADDITIONAL RECENT BENCHMARKING PARTICIPANTS ‐ SPECIAL TOPICS 17 ADDITIONAL COMPANIES ATCO Electric [AB, CAN] New Brunswick Power [NB, CAN] Con Edison Inc. [NY, USA] Nova Scotia Power Inc. [NS, CAN] Duke Energy Corporation [NC, USA] Puget Sound Energy Inc. [WA, USA] ENMAX Power Corporation [AB, CAN] Saskatoon Light & Power [SK, CAN] Horizon Utilities [ON, CAN] SaskPower [SK, CAN] KCPL [KS, USA] Southern Company [AL, USA] Manitoba Hydro [MB, CAN] Toronto Hydro ‐ Electric System Limited National Grid [MA, USA] [ON, CAN] National Rural Electric Cooperative Association [VA, USA] We Energies [MI/WI, USA] Companies in 2009 Study not represented: Allegheny Power [WVA/PA/MD/VA, USA] Central Maine Power [ME/NY, USA]
SURVEY DESIGN AND STRATEGY Defining and Gathering Data: • Utility characteristics • Productivity Labour Hours, Work Types, Equipment, Costs, and Cycles • UVM Practices • Safety • Reliability • Workforce characteristics • Regulatory Policies
METHODOLOGY FOR ANALYSIS • Data Management and Analysis • Normalizing measurements to reflect total productivity factors • Identifying Trends and Best Management Practices • Modeling Efficiencies • Forecasting Workload
TOTAL PRODUCTIVITY AND EFFICIENCY FACTORS – Tree density – Customer density/customer service – Weather/catastrophic events – Cost of living indices – Reliability measurements – Terrain and site characteristics – Forest composition and health – Worker turnover – Safety – Environmental Quality
THE STATE OF THE UVM INDUSTRY IN NORTH AMERICA Is Reliability Centered Maintenance (RCM) a standard of care for UVM?
UNDERSTANDING THE UVM INDUSTRY UTILITY VEGETATION MANAGEMENT (UVM) PROGRAM DRIVERS Weighted Ranking of the Importance of Each UVM Objective 2002 2006 2012 2013 2014 1. Reliability 1.5 2.0 2. Safety 2.5 3.0 3. Comply with Specific Laws 3.5 4. Cost Effectiveness 4.0 4.5 5. Customer Service 5.0 6. Prevent Fires 5.5 6.0 7. Preserve and Provide 6.5 Environmental Quality Most Important at the Top Previous Studies Had Safety Ranked as the Number One Objective
SAFETY: HOW TO MEASURE SUCCESS • Electrocutions in the public sector • Average percent of trees in contact at time of maintenance • The frequency and costs of fires caused by trees and power lines • incident reporting is not a true measure of line clearance safety • Tree and power line contacts are an unsafe condition • Accidents are not reported to external stakeholders by the majority of companies
RISK TOLERANCE Trees in Contact at Time of Maintenance Sample Size: 17 Average: 40% Q1: 15% Median: 35% Q3: 60% 90% 80% 75% 80% 70% 70% Percent of Trees in Contact 70% 60% 60% 60% 60% 50% 50% 35% 35% 35% 40% 30% 15% 15% 20% 10% 8% 10% 1% 0% 0% BB BD AH AA AP AZ AF AO BE AN AE AW AR AG AI AD AJ Company Code
COST: WHAT IS THE VALUE OF EFFECTIVE UTILITY VEGETATION MANAGEMENT? • The risk of electrical • Electric reliability has gained the contacts, accidents, most attention by regulators fires and increased customer interruptions has been significant enough to make a case for adopting best management practices in a UVM program
PREFERRED VS. DEFERRED MAINTENANCE If a property owner, private tree company or worst of all, a child enters a tree that obscures the presence of a single phase primary tap and there is an injury or fatality, then the utility has suddenly lost all of the gain from taking a risk with trees that have low reliability impact.
GETTING TO KNOW THE CUSTOMER Recorded Data about Customers Who Own Properties That Require UVM The UVM dept knows percent of overhead customers have trees that routinely require 10% UVM A record is kept on customers that have vegetation near overhead lines on their 25% property Vegetation data and permissions collected by 5% the UVM program is stored in the CSS The CSS information is available to the 40% forestry notifiers/planners 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% Percent of Companies
INDUSTRY PERCEPTION OF WORKLOAD • The UVM customer base is a subset of the utility customer population • How many customers (meters) have UVM performed on their property? Question asked in survey • 45% of utilities perceive their workload as 100% of their electric customers • Is UVM is viewed as a system correction more than a customer transaction?
SYSTEM RELIABILITY The efficacy of a program isn’t just measured by how long it has gone without an outage but rather how well it can prove the conditions that cause an outage won’t happen in the future.
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