Grimsby Power Inc’s capital budget is divided into the following categories:
· Conversion to 27.6kV
· Customer Driven
· Pole Replacement Program
· Pad-Mount Replacement Program
· Silicone Injection of Underground Primary Cables
· Regulatory Requirements
A detailed description of each of these categories is provided as follows:
Conversion to 27.6kV:
The largest portion of Grimsby Power Inc.’s capital expenditures has been on Conversion to 27.6kV. In 1989 the then Grimsby Hydro Electric Commission adopted an ambitious plan to rebuild the entire distribution system over a 25 year period. At the time a policy was adopted to improve system reliability by converting 4.16kV and 8.32kV distribution systems to 27.6kV. The 4.16kV and 8.32kV was supplied through a number of distribution substations that were approaching end of life. The distribution system fed from the oldest stations in an area below the Niagara escarpment was converted first (Phase I). This work took place from 1990 to 2002. The next phase of the plan (Phase II) was to convert the area above the escarpment. This work was planned to take place from 2002 to approximately 2012. In the midst of Phase II capacity issues arose at the Beamsville TS owned by Hydro One. The solution to this issue resulted in a new Transformer Station being built on the escarpment known as the Niagara West Transformer Station owned by an affiliate company Niagara West Transformer Corporation. Two feeders from the station supply Grimsby Power Inc. and the conversion work set in Phase II of the rebuild plan were focused on loading these two feeders (and at the same time unloading the constrained feeders at Beamsville TS).
The Town of Grimsby has grown steadily over the last several years. This growth requires significant investment in distribution plant in order to service the new customers. Grimsby Power Inc. had 9350 metered customers in 2005 which has increased to 10,061 metered customers by the end of 2010 and forecasted to reach 10,486 by the end of the 2012 Test Year. This represents a growth rate in the 2% per year range and it is expected this will continue into the test year.
Customer driven projects are those projects that Grimsby Power Inc. undertakes to meet customer obligations in accordance with the OEB’s Distribution System Code (the “DSC”) and Grimsby Power Inc.’s Conditions of Service. Activities include connecting new residential & general service customers and constructing distribution plant to connect new subdivisions. Grimsby Power Inc. contributes to the cost of these projects using the economic evaluation methodology in accordance with the DSC and the provisions of its Conditions of Service for system expansions to determine the level of capital contribution.
Pole and Pad-Mount Replacement Program:
Replacement projects are completed when it has been determined through proper condition assessment that assets have reached their end of useful life. Grimsby Power Inc. completes visual inspections of its plant and performs predictive testing on certain assets where such testing is warranted, and replaces assets based on inspection and testing results as asset conditions are determined. Generally, assets identified in one year are scheduled for replacement in the following year. New assets require less maintenance, deliver better reliability and reduce safety risks to the general public. Poles are replaced when the strength of the wood (usually at the ground level) is no longer capable of withstanding the extreme weather conditions for which they were designed or if any visible portion of the pole is compromised. Pad-mounted transformers are subject to corrosion where the metal tank comes in contact with the concrete support foundation. Grimsby Power Inc. has noticed a trend in the cases, tanks, or both corroding to the point where the case is penetrable or the tank is seeping oil. When such a condition is identified the pad-mount transformer is scheduled for replacement.
Silicone Injection of Underground Primary Cables:
Underground primary cable is subject to an aging process which depending on the age of the cable may lead to premature failure. Much of this degradation is caused by water damage. Silicone injection of underground primary cables has been performed for utilities since the mid 1980’s and has proven successful in increasing the life expectancy of cable by 20 years or more. Grimsby Power Inc. adopted this life extension technology in 2004. Each year a section of the distribution system is targeted for this cable restorative process.
These projects are capital investments which are being driven by regulatory requirements. These requirements may include, among others, directions from the OEB, the IESO, the Ministry of Energy (and its predecessors) or the Ministry of Environment. In 2006, The Government of Ontario established targets for the installation of smart electricity meters for all Ontario customers by December 31, 2010. In keeping with this directive Grimsby Power Inc. began installing smart meter communications infrastructure in 2009 and performed a mass deployment of meters in 2010. Grimsby Power Inc. is scheduled to complete 100% of the deployment of Smart Meters as approved by Ontario Regulation 427/06 by the end of July 2011.
The Distribution System Code specifies the elimination of long term load transfers (LTLT). Currently the distribution system code specifes that such arrangements be finalized by June 30, 2014. Grimsby Power Inc. began the process of building the distribution system to connect all customers within Grimsby Power Inc.'s service territory to its distribution system in approximately 2002. This process was completed in 2010. Grimsby Power Inc.'s "Elimination of Long Term Load Transfer Plan" was updated with the OEB in December 2010. A permanent exchange of customers in 2011 will finalize all LTLT situations.