Narragansett Electric Co. d/b/a National Grid USA is seeking Rhode Island state regulators’ approval of its proposed “Electric Infrastructure, Safety and Reliability (ISR) Plan,” for fiscal year 2016 (FY16), in which it proposes a capital spending plan for FY16 in the amount of $73.3 million.
For the average residential customer receiving standard offer service and using 500 kWh per month, implementation of the proposed ISR factors will result in a monthly bill increase of 78 cents, or 0.9 percent, according to the company’s Dec. 23, 2014, filing with the state Public Utilities Commission, according to TransmissionHub.
The company said that the plan is designed to protect and improve the electric delivery system through repairing failed or damaged equipment, addressing load growth/migration, sustaining system viability through targeted investments that are driven primarily by condition, maintaining levels of inspection and maintenance, and operating a cost-effective vegetation management program.
The company said in its plan that the $73.3 million spending level to maintain the safety and reliability of its electric delivery infrastructure in FY16, covering the period from April 2015 through March 2016, is about 11 percent higher than its budget of $65.9 million for capital improvements on the Rhode Island network during FY15. The increase is primarily driven by the asset condition category, the company added.
The company is proposing to spend $24.1 million in FY16 to replace assets that must be replaced to maintain reliability performance. That level is about 23 percent higher than the FY15 budget of $19.5 million, the company said, adding that the increase is driven primarily by, for instance, the South Street asset replacement project.
The South Street substation is a major 115/11-kV supply substation serving downtown Providence and the surrounding area. The replacement is driven by asset condition concerns, the company added, noting that the building layout is such that it precludes the implementation of modern installation standards in order to replace original equipment.
Additionally, spare parts for the protection components are unavailable and will be irreplaceable in the event of a failure. This is another new multi-year project, and the company proposes to spend about $4.6 million in FY16.
The company noted that load relief projects for FY16 include the proposed New London Ave substation – formerly the West Warwick substation. That project includes building a new 115/12.47-kV substation in Warwick to provide thermal relief to area distribution feeders, transformers and supply lines, as well as to support projected growth in the area. Land has been acquired to house that substation and engineering will be conducted for the new site. The company added that it proposes to spend $6.8 million on that project in FY16.
In joint pre-filed direct testimony, James Patterson Jr., director, network strategy, New England Electric, with National Grid, and Ryan Moe, a vegetation strategist with National Grid, noted that the proposed spending level for each of the key driver categories proposed for FY16 is:
· Statutory/regulatory: About $15.6 million
· Damage/failure: About $11.2 million
· Asset condition: About $24.1 million
· Non-infrastructure: $275,000
· System capacity and performance: About $22.1 million
The investments arise from the company’s regulatory, governmental or contractual obligations, such as transformer and meter purchases and installations, the officials said.
The need to repair failed and damaged equipment totals about $11.2 million, or 15 percent, of the company’s investment, they said, noting that those projects are required to restore the electric distribution system to its original configuration and capability following damage from storms, vehicle accidents, vandalism and other unplanned causes.
The plan also includes the investment necessary to comply with statutory and regulatory requirements and to fix damaged or failed equipment as mandatory and “non-discretionary” in terms of scope and timing. Together, the officials added, those items account for about $36.8 million, or 37 percent, of proposed capital investment in FY16.
Since the investments associated with those categories of work are non-discretionary, those categories of spending are subject to unavoidable deviations. As such, the officials said, mandatory, or non-discretionary, capital investments are recovered through a capital rate adjustment mechanism that reconciles the plant in service amounts associated with this projected spending to the lesser of actual plant in service or actual spending on a cumulative basis following the close of the fiscal year.
The system capacity, asset condition, and non-infrastructure projects that National Grid will pursue in FY16 have been chosen to maintain the overall reliability of the system and collectively total about $46.5 million, or 63 percent, of the company’s proposed FY16 capital investment.
System capacity and performance projects are required to ensure that the electric network has sufficient capacity to meet the existing and growing and/or shifting demands of customers, the officials said, adding that generally, projects in that category address loading conditions on substation transformers and distribution feeders to comply with National Grid’s system and capacity loading policy.
The investments in that category are also used to install new equipment, including capacitor banks to maintain the requisite power quality required by customers and reclosers that limit the customer impact associated with system events. System capacity and performance projects account for about $22.1 million, or 30 percent of the proposed capital investment in FY16, the officials added.
The company noted that its plan proposes to spend about $8.9 million for vegetation management in FY16, or a 13 percent increase from the amount requested and approved for FY15.
The company also said in its plan that while reliability in FY14 was better than any of the prior six fiscal years, trees and deteriorated equipment were the top two drivers affecting customers interrupted.
Among other things, the plan noted that trees were responsible for about 57,000 customer interruptions in FY14, representing about 17 percent of the total interruptions in FY14. The company’s vegetation management program includes a cycle pruning program, which is designed to ensure that the vegetation growth along the overhead portion of the company’s distribution network does not interfere with the safe and reliable performance of the electric network, according to the plan.