13 Jun 2017

Electricity distributors defend use of 'outdated equipment'

9:00 am on 13 June 2017

The electricity distribution industry is defending itself against suggestions that it sometimes uses outdated equipment that should have been replaced years ago.

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Photo: 123rf

The Electricity Networks Association said the normal life expectancy of electrical gear did not reflect how well it was actually working, as some equipment lasted longer than others.

The comments followed critical remarks about the industry from the Commerce Commission.

In its survey of 29 electric lines companies, the Commerce Commission found some were using power poles, transformers and switching gear long past their usual life expectency.

In one case, as many as 50 percent of substation transformers were being worked beyond their use-by date.

But the chief executive of the Electricity Networks Association, Graeme Peters said the actual age of electrical gear was not the point.

"Some of these assets can be affected by a whole range of things, the climate, the soil condition, temperature, whether salt is present and how much loading it has had," Mr Peters said.

"So there are all sorts of factors (that affect this), not just the age of the asset."

Graeme Peters added the official retirement age of company equipment sometimes derived from the rules of accountancy rather than the actual workability of the gear.

That was because assets were depreciated over a set length of time, which produced an economic advantage if they continued working on later.

In its report, the Commerce Commission looked at how often the power failed in each area, as well as how old the assets were.

Top Energy had the highest number of outages, which lasted longest, of all 29 companies.

In a statement, Top Energy management said it was not their fault.

"Top Energy's network spans large areas of remote and rural countryside, exposed to dense bush and rough terrain," the statement said.

"When an outage occurs it will often be in a location where our crews have to tramp through bush and forests to locate, assess, and repair. This naturally impacts on the duration of the power cut."

Another company to perform poorly in the commission's survey was The Power Company, which runs lines in the countryside outside Invercargill.

Also in the bottom tier was Alpine Energy, which stretches from Timaru to the peak of the Southern Alps.

But Alpine's chief executive Andrew Tombs said the poor performance was not his company's fault.

"We had a trifecta of bad weather events, heavy snow, heavy wind and flooding, all in the same area and not very far apart in terms of timing," he said.

"But if you were to take those out, we would have been under the regulatory threshhold."

Electricity is a 'fundamental lifeline'

Meanwhile, the lines companies will face further scrutiny.

The Electricity Authority is currently working on its own analysis of their work and promised a statement later.

And the president of Local Government New Zealand Lawrence Yule said lines companies had no option but to get their business right.

"Electricity is a fundamental lifeline," he said.

"Just about everything we use all needs electricity, so how well infrastructure is looked after by lines companies is very important to us.

"We want it to have good asset management policies so there are not unplanned outages and in storms there is a high degree of resilience."

Minister of Energy Judith Collins said the findings that some company equipment was in serious need of replacement sent a clear message that boards of those companies needed to focus on their core responsibilities.

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