ASSET MANAGEMENT PLANNING PROCESS
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1 Filed: -0- EB--0 Tab Page of ASSET MANAGEMENT PLANNING PROCESS.0 INTRODUCTION Hydro One s Asset Management Plan is a systematic approach to determine and optimize on-going operating and maintenance expenditures and capital investments in its distribution system and general plant. Hydro One has adopted an Asset Management model since its inception. The objective of this plan is to ensure all funding is spent in the most effective manner to realize the best value for Hydro One stakeholders and customers and to minimize total bill impacts. To accomplish this objective, Hydro One applies a consistent approach to assess the relative asset risk impacts on business values and strategic objectives by considering and balancing asset performance (including physical condition), costs and risks, lifecycle management from an overall power system perspective and assigning asset risk scores to the corresponding investment planning actions for in-service assets. Hydro One s mission and vision is We will be an innovative and trusted company, delivering electricity safely, reliably and efficiently to create value for our customers. The asset management process at Hydro One supports the corporation mission and vision..0 THE ASSET MANAGEMENT PLAN OVERVIEW The Hydro One Asset Management Plan is incorporated throughout the evidence as documented below: Voice of the Customer (, Tab, Schedule ) Summary of Distribution Business (, Tab, Schedule ) Planning Process (, Tab, Schedule ) Investment Plan Development (, Tab, Schedule ) Investment Prioritization Process (, Tab, Schedule )
2 Filed: -0- EB--0 Tab Page of Project/Program Approval and Control (, Tab, Schedule ) Work Execution Strategy (, Tab, Schedule ) Asset Risk Assessment (, Tab, Schedule ) Regional Planning Process (, Tab, Schedule ) Common Corporate Costs OM&A Asset Management (Exhibit C, Tab, Schedule ) Distribution Assets Investment Overview (Exhibit D, Tab, Schedule ) The results of this process is the five year capital and OM&A investment plan filed at and Exhibit D, Tab and Exhibit C, Tab..0 THE ASSET MANAGEMENT PLAN This section provides more detailed descriptions of the aspects of the Asset Management Plan.. Voice of the Customer Customers are a major driver of long-term success. Hydro One listens to its customers, analyzes their needs and then modifies its work activities and work programs to address those needs. The many channels through which Hydro One listens to its customer s needs are discussed in, Tab, Schedule.. Summary of Distribution Business The Summary of Distribution Business (, Tab, Schedule ) provides an overview of the Hydro One distribution system including the evolution of the system,
3 Filed: -0- EB--0 Tab Page of distribution system assets and asset performance. This exhibit also discusses the Corporate values, strategic goals and performance targets. All of these factors are considered to inform the Asset Management model and work plan.. Planning Process Business planning is performed annually and focuses on the development of a detailed plan for each year in the plan. The results as they apply to the test years form the basis for this Custom Rate Application.. Investment Plan Development Hydro One utilizes a systematic investment approach to plan and optimize on-going capital, operating and maintenance expenditures. Five investment categories; sustaining, development, operations, customer service and common corporate costs, follow a common investment plan development process described in, Tab, Schedule.. Investment Prioritization Process The investment prioritization process is part of the overall company risk-based asset management planning process (see, Tab, Schedule ). The prioritization process converts Hydro One Distribution s business values and key performance indicators into investment criteria and guidelines that are used for managing risk and facilitating trade-offs between investments to achieve the optimal balance of cost effectiveness, customer expectations, asset and business needs within the constraints and criteria imposed.
4 Filed: -0- EB--0 Tab Page of. Project / Program Approval and Control Once the preliminary investment plans have been accepted at the proof-of-concept stage and have gone through the investment prioritization process, a detailed analysis of the preferred alternatives and costs is completed for individual projects, programs and business cases. Based on the detailed analysis, cost estimates are prepared for review and approval by senior management and ultimately the Hydro One Board of Directors. See, Tab, Schedule for more details.. Work Execution Strategy Hydro One Distribution s Work Execution Strategy provides increased work execution capacity and necessary flexibility to accommodate the planned distribution work programs. The strategy will also address the continuing global business challenges such as the uncertainty regarding material availability and qualified personnel to undertake the work. A focus on efficiency continues throughout Hydro One s work planning and execution activities and processes. See, Tab, Schedule for more details.. Asset Risk Assessment Hydro One s Asset Risk Assessment methodology is built on the Asset Condition Assessment approach previously filed in proceeding EB Since then, Hydro One has completed an asset inventory of its key distribution assets that has been linked to other non-condition based information such as outage and customer data. This has enabled Hydro One to extend its assessment methodology to improve its focus on noncondition risk factors. More details are found in Exhibit, Tab, Schedule.
5 Filed: -0- EB--0 Tab Page of. Regional Planning Process In accordance with the Ontario Energy Board report, Renewed Regulatory Framework for Electricity Distributors: A Performance Based Approach ( RRFE ), all distributors are required to participate and align wth the regional planning process and activities., Tab, Schedule describes Hydro Ones participation in the regional planning process.. Common Corporate Costs OM&A Asset Management The Hydro One Transmission and Distribution businesses are operated using the Asset Management model. The model separates the asset management functions of planning, decision-making and approvals from the services functions of engineering, construction, customer service and grid operations which execute approved plans. The Asset Management organization focuses on ensuring that the necessary transmission and distribution assets are planned, acquired, constructed, maintained and operated such that they deliver the required function and level of performance expected by customers in a sustainable manner over the long term. See Exhibit C, Tab, Schedule for more detail.. Distribution Assets Investment Overview The Distribution Asset Investment Overview (Exhibit D, Tab, Schedule ) summarizes the results of the Asset Risk Assessment process for the key distribution assets and their primary risk factors. These results are utilitize in the identification and prioritization of asset needs to assist in the investment plan development of both the capital and operating and maintenance work programs.
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