1. Submission on the draft ODV Handbook WEL Networks 14 th April 2004

2. Introduction WEL Networks are supportive of the changes that have been made to the draft ODV handbook. WEL Networks aim is to establish a framework that determines a fair and equitable method for determining asset valuations. WEL Networks have a number of points for consideration.

3. WEL Networks proposes that all systems that are essential to running the assets are included in the ODV calculation. This would exclude those systems used for running the business, but include those specifically related to driving the efficiencies from the assets. Exclusion of Assets (Asset Related Systems) SCADA AMS GIS Customer Information Real Time Control Condition information Performance information Data from field Asset types Age of assets Quantities of assets Included Excluded

4. Load control systems allow us to manage the demand on the Transpower point of supply and the utilisation of the network. This allows significant investment to be deferred as it provides approximately 18% of controllable capacity (30MW). WEL Networks propose the control relays at the customers premises should be included in the ODV calculation as well as the ripple injection plant. Exclusion of Assets (Control Relays)

5. Planning Periods The impact of the proposed planning periods will be a push for shorter term repeated investment. For example distribution transformers would be replaced in sub-divisions during multi-year construction projects. WEL Networks propose the following amendments: Draft ODVWEL Proposed Transmission Networks15 Years20 Years Zone substations10 Years15 Years HV and LVdistribution assets5 Years10 Years Distribution Transformers0 Years5 Years WEL Networks accept that in the short term this proposal leads to lower utilisation of assets. However, dynamic efficiencies are produced when targeted utilisation is reached. The alternative is to replace or reinforce assets leading to higher costs.

6. Multiple Cables in a Trench The draft ODV handbook correctly gives an allowance for Multiple Cables in a single Trench. This allowance only includes the additional costs of the cables. WEL Networks propose that there are other factors to be considered. In particular the costs of excavation, special backfill and re-instatement for the additional ground excavated. WEL Networks estimate more realistic costs are: Single Cable $125 Two Cables$170cost of cable only WEL Proposed$183cable, excavation and re-instatement WEL Networks recommend that ENA’s proposal should be adopted to review other project estimated costs. This should include such factors as traffic management.

7. Three Phase Distribution Lines The proposal from the draft ODV handbook will cause additional work for the ELB’s to determine if three phase or single phase distribution lines are installed. Until the early 1990s the standard at WEL Networks was for three phase lines for rural supply (to balance loads and provide for pumps etc) Currently our policy is to provide the appropriate supply for the customer. Of these most have been for dairy with a very small number of single phase supplies. WEL Networks propose that the additional work required to undertake this test will have little benefit.

8. Updating of ODV Schedules ODV Handbook values were set approximately 10 years ago. This leads to large changes in the ODV when assets are infrequently reviewed. WEL Networks would seek a more regular period for updating the values. WEL Networks would propose a three yearly cycle in line with the Commissions valuation review cycle.

9. Conclusion WEL Networks aim is to establish a framework that determines a fair and equitable method for determining asset valuations WEL Networks are supportive of the changes that have been made to the draft ODV handbook. There are a number of factors that we believe require further consideration Inclusion of asset systems in particular GIS and AMS systems. Inclusion of load control relays. Extension of planning periods. Regular updated and accurate Asset Replacement costs.