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+64 3 348 5999 (Int)
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Managing Distribution Lines Companies under Increasing Regulatory & Budgetary Constraints:

Innovative new technology to support a commercial and operational response

Executive Summary

Recent decisions of Regulators in Australia and New Zealand indicate an increasing emphasis on reducing costs associated with managing transmission and distribution assets. A fundamental electricity industry regulatory objective, enshrined in Australian National Electricity legislation is the role of the AER to promote the efficient investment, operation and use of electricity services with the long-term interests of electricity consumers in mind. As a result of Regulator determinations, the industry is now facing a level of fiscal constraint that requires a consideration of alternative ways to manage specific asset classes in some cases.

In the past the Regulator has supported network investment arguments based on increasing network reliability and the reduction or maintenance of network average age. Australian utilities are now experiencing determinations from the AER that are clearly signalling that CAPEX and OPEX must be reduced in real terms (in some cases significantly) over the next regulatory periods. As a result the industry is now facing a level of fiscal constraint not experienced in past regulatory cycles. These determinations have proven painful indeed to all distribution lines companies, requiring a change in emphasis in asset management practices.

While many of the fundamentals of asset management for power utilities will remain the same, different approaches in the management of a number of asset classes may need to be considered to enable effective operation of a reliable and safe network under these changed fiscal constraints.

A new technology known as ‘Distribution Fault Anticipation’, coupled with a unique implementation  model, offers a timely means to manage this situation with significant benefits in reducing operating cost and increasing reliability of distribution networks. The paper discusses the technology and its contribution to effective asset management practice in organisations under major commercial pressure and fiscal constraint.

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