Vector - Entrust · 2020. 6. 25. · 2009/ 10 12. 5M 12. 6M 0. 1M 2010/ 11 12. 6M 4. 8M 7. 8M) 2011/ 12 13. 2M 4. 0M 9. 2M) A total of $4. 082M was spent on undergrounding over the

fVector

Report to the Auckland Energy Consumer Trust

Overhead Improvement Programme

Financial Year 2011/ 12

August 2012

1 Introduction

Under the terms of the New Deed Recording Essential Operating Requirements,

Clause 4. 3 requires the Company to provide a written report to the Trust on theoperation of the Overhead Improvement Programme. This report provides detail

of the operation of the programme in compliance with the terms of the deed.

2 The Overhead Improvement Programme

The Overhead Improvement Programme commenced in 2001. The Minimum

Undergrounding Investment was set at $ 10M - with this to be increased by a PPI

adjustment in subsequent years. After considering the adjustment, there was no

increase applied until the 2005/ 06 year. The New Deed Recording Essential

Operating Requirements reset the base Minimum Undergrounding Investment to10. 5M in 2005.

The Minimum Undergrounding Investment amounts for the past five years havebeen:

Year ending June 2008 11. 2M





3 Expenditure of the Undergrounding Investment

The actual expenditure in undergrounding throughout each year of the past fiveyears of this programme is summarised in the table below:

MinimumActual

Undergrounding DifferenceExpenditure

Investment

2007/ 08 11. 2M 10. 1M 1. 2M)

2008/ 09 12. 2M 12. 2M 0. 0M

2009/ 10 12. 5M 12. 6M 0. 1M

2010/ 11 12. 6M 4. 8M 7. 8M)

2011/ 12 13. 2M 4. 0M 9. 2M)

A total of $ 4. 082M was spent on undergrounding over the past year. This

included $ 129k received from Auckland Council and resident groups as

contributions towards various customer initiated undergrounding work.

The net investment in undergrounding for the year 2011/ 12 was $ 4. 0M. With

this, the actual expenditure over the past five years is $ 43. 6M - an average of

8. 7M each year. As the average over the five year period is less than Minimum

Undergrounding Investment, the actual expenditure for this period needed to

match or exceed the Minimum Undergrounding Investment amount in order to

satisfy the undergrounding obligations required by the deed.

OIP Expenditure

14

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Budget

6 MI Actual

Minimum

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0

2007/ 08 2008/ 09 2009/ 10 2010/ 11 2011/ 12

Financial Year

The undergrounding investment in 2007/ 08, while below budget, still satisfied the

Minimum Undergrounding Investment for that year as the investments made in

the years preceding it had been significantly higher than budget and had lifted the

5- year average amount above the Minimum Undergrounding Investment.

4 Achievements in 2011/ 12

As we have continued to outline to the Trust over the past 2 years, the

environment created by the government ultra- fast broadband project has

continued to constrain Vector's ability to develop projects and to achieve thetargeted 2011/ 12 investment for this programme. In particular the award of the

UFB project has caused Chorus to withdraw from further investment in its copper

network that has removed opportunities to coordinate with Vector which is

necessary to a achieve successful undergrounding outcome.

Despite this challenge we completed 40 OIP projects comprising small scaleundergrounding, overhead improvements deploying aerial bundled conductorABC) solutions, and pole substation conversions through the past year. The

small scale undergrounding projects included; Margaret Street in Freemans Bay,Keith Ave and Platina Street in Remuera, Belvedere Street and Withiel Drive in

Epsom, Randolph Street in Newton, and Gill Crescent and Jamaica Place in

Blockhouse Bay. The ABC projects were completed in Mitchelson Street in

Ellerslie, and Mountjoy Place, Waller Street and Rowe Street in Onehunga.

Samples of photographs from these projects have been included in the Appendix

of this report.

5 Delivering the Programme in 2012/ 13

We have identified an initial tranche of 20 small scale projects where

undergrounding can proceed independent of Chorus needing to participate andinvest to convert its copper telephone network. Through developing these

undergrounding projects, supplemented with further pole substation conversions,there is sufficient work to meet the $ 13. 3M Minimum Undergrounding Investment

for the 2012/ 13 year.

Simon Mackenzie

Group Chief Executive

APPENDIX:

Vector Overhead Improvement Programme 2011/ 12

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Documents

Vector - Entrust · 2020. 6. 25. · 2009/ 10 12. 5M 12. 6M 0. 1M 2010/ 11 12. 6M 4. 8M 7. 8M) 2011/ 12 13. 2M 4. 0M 9. 2M) A total of $4. 082M was spent on undergrounding over the