Attachment 10.2 Regulated Asset Base, Tax Asset Base and Depreciatin Access Arrangement Infrmatin 2 Octber 2017 Access Arrangement Infrmatin (AAI) fr the perid 1 July 2017 t 30 June 2022
Regulated Asset Base, Tax Asset Base and Depreciatin Public 2 Octber 2017
An apprpriate citatin fr this paper is: Regulated Asset Base, Tax Asset Base and Depreciatin Western Pwer 363 Wellingtn Street Perth WA 6000 GPO Bx L921 Perth WA 6842 T: 13 10 87 Fax: 08 9225 2660 TTY 1800 13 13 51 TIS 13 14 50 Electricity Netwrks Crpratin ABN 18 540 492 861 enquiry@westernpwer.cm.au westernpwer.cm.au Enquiries abut this reprt shuld be directed t: AA4 Prject Team Email: AA4@westernpwer.cm.au Page ii
Cntents 1. Intrductin... 1 1.1 Purpse... 1 1.2 Structure... 1 1.3 Overview... 1 2. Establishing the pening AA4 RAB balances... 2 2.1 Inflatin... 2 2.2 Opening AA3 RAB values... 2 2.3 AA3 Capital expenditure and cntributins... 4 2.4 AA3 asset dispsals... 5 2.5 AA3 depreciatin... 5 2.6 Rll frward f the RAB... 6 3. Establishing the pening AA4 tax asset base... 8 3.1 Depreciatin f the TAB... 9 3.2 Capital expenditure ver AA3... 9 3.3 Rll frward f the TAB ver AA3... 10 4. AA4 regulated asset base and tax asset base... 11 4.1 AA4 RAB summary... 11 4.2 AA4 TAB summary... 11 4.3 AA4 capital expenditure... 12 4.4 Asset dispsals... 12 4.5 Depreciatin... 12 4.5.1 Ecnmic life... 13 4.5.2 RAB depreciatin... 14 4.5.3 Tax depreciatin... 15 Page iii
1. Intrductin 1.1 Purpse This dcument details the rll frward f the regulatry asset base (RAB) and tax asset base (TAB), fcusing n the establishment f the pening asset base and depreciatin (i.e. asset lives) fr the furth access arrangement (AA4). This dcument cnsiders: Determinatin/calculatin f the pening AA4 RAB and TAB Capital expenditure frecasts Depreciatin Ecnmic lives f assets 1.2 Structure This dcument is structured as fllws: Sectin 2 prvides a high level summary f Western Pwer s AA4 ttal RAB and TAB mvements Sectin 3 prvides an verview f the AA3 rll frward Sectin 4 AA4 frecasts and key assumptins Sectin 5 details the RAB and TAB depreciatin methdlgies prpsed fr AA4 1.3 Overview Key Messages: Western Pwer is prpsing t use the same RAB and TAB rll frward methdlgy as in previus access arrangements A straight line depreciatin methdlgy has been adpted fr regulatry depreciatin A diminishing value depreciatin methdlgy with an end f ecnmic life clse ff is prpsed fr tax depreciatin Regulatry and tax asset lives remain the same with the exceptin f metering t reflect the asset lives f the new standard meter There are n new r changes prpsed fr asset categries There are n prpsed asset dispsals fr AA4 Page 1
2. Establishing the pening AA4 RAB balances Western Pwer has rlled frward its RAB frm the start f the third access arrangement (AA3) perid until 30 June 2017 by applying the methdlgy that is cnsistent with the apprach taken in the secnd access arrangement, described belw. This ptin is cnsistent with the requirements f sectin 6.48 f the Access Cde. In general, this invlves the fllwing steps: start with the pening RAB at the cmmencement f AA3 (i.e. $3,853.4 millin fr distributin and $2,554.7 millin fr transmissin, as at 1 July 2012, in July 2012 dllars) adjust this RAB t accunt fr: the difference between any estimated capital expenditure included in that value, and actual capital expenditure undertaken in the preceding access arrangement perid, and the difference between any frecast inflatin included in that value, and actual inflatin bserved in the preceding access arrangement perid, and add the value f capital expenditure (net f cntributins) incurred frm 1 July 2012 t 30 June 2017 deduct the value f dispsals and frecast depreciatin that ccurred frm 1 July 2012 t 30 June 2017 Table 2 and Table 3 set ut the rll frward f the distributin and transmissin RAB frm 1 July 2012 t 30 June 2017 in real 2012 dllars. 2.1 Inflatin The AA3 decisin was based n real 30 June 2012 dllars, these have been cnverted t real 30 June 2017 dllars using the fllwing CPI data. Table 1: CPI data, actual inflatin and inflatin factrs Inflatin 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 June CPI 180.4 June CPI (rebased) 100.4 102.8 105.9 107.5 108.6 110.7 Actual inflatin 1.18% 2.39% 3.02% 1.51% 1.02% 1.93% End f year inflatin factr 0.907 0.929 0.957 0.971 0.981 1.000 2.2 Opening AA3 RAB values Table 1Table 2 and Table 3 set ut the pening values f the distributin and transmissin RAB frm 1 July 2012 in real 2012 dllars as well as shwing the cnversin t real 2017 dllars. Page 2
Table 2: Opening AA3 distributin RAB Distributin asset grup Value [$M real as at 30 June 2012] Value [$M real as at 30 June 2017] Wden Ple Lines 1,131.0 1,247.1 Undergrund Cables 1,404.1 1,548.1 Transfrmers 455.1 501.8 Switchgear 375.7 414.2 Street lighting 87.5 96.4 Meters and Services 142.7 157.3 IT 109.5 120.7 SCADA & Cmmunicatins 20.4 22.4 Other Distributin Nn-Netwrk 103.9 114.6 Distributin Land & Easements 23.6 26.0 Table 3: Opening AA3 transmissin RAB Transmissin asset grup Value [$M real as at 30 June 2012] Value [$M real as at 30 June 2017] Transmissin cables 32.9 36.3 Transmissin steel twers 749.0 825.8 Transmissin wd ples 214.2 236.2 Transmissin Metering 1.9 2.1 Transmissin transfrmers 344.0 379.3 Transmissin reactrs 15.3 16.9 Transmissin capacitrs 140.6 155.1 Transmissin circuit breakers 681.9 751.9 SCADA and Cmmunicatins 62.4 68.8 IT 54.6 60.3 Other Nn-Netwrk Assets 56.3 62.1 Land & Easements 201.4 222.0 Page 3
2.3 AA3 Capital expenditure and cntributins Capital expenditure incurred during AA3 has been incrprated int the capital base in accrdance with sectin 6.51A f the Access Cde. AA3 capital expenditure has been assessed against the new facilities investment test detailed in sectin 6.52 f the Access Cde. Table 4: Grss capital expenditure ver AA3 in nminal dllars $M Nminal 2012/13 2013/14 2014/15 2015/16 2016/17 Distributin 779.1 804.1 835.8 720.3 540.2 Transmissin 226.3 329.3 161.4 125.5 122.0 Table 5: Grss capital expenditure ver AA3 in real 30 June 2017 dllars $Real as at 30 June 2017 2012/13 2013/14 2014/15 2015/16 2016/17 Distributin 838.9 840.5 860.7 734.2 540.2 Transmissin 243.7 344.2 166.2 127.9 122.0 Table 6: Cash cntributins ver AA3 in nminal dllars $M Nminal 2012/13 2013/14 2014/15 2015/16 2016/17 Distributin 90.1 102.6 77.2 90.8 93.4 Transmissin 17.8 1.8 4.9 5.4 15.3 Table 7: Cash cntributins ver AA3 in real 30 June 2017 dllars $Real as at 30 June 2017 2012/13 2013/14 2014/15 2015/16 2016/17 Distributin 97.0 107.2 79.5 92.6 93.4 Transmissin 19.2 1.8 5.0 5.5 15.3 Table 8: Net capital expenditure ver AA3 (capital expenditure less capital cntributins) in real 30 June 2017 dllars $Real as at 30 June 2017 2012/13 2013/14 2014/15 2015/16 2016/17 Distributin 679.9 671.5 628.9 515.5 364.4 Transmissin 224.5 342.4 161.2 122.5 106.7 Page 4
2.4 AA3 asset dispsals The fllwing tables detail the value f the asset dispsals that were made ver the AA3 perid. These dispsals primarily relate t the sale f land hldings n lnger required. The values belw als include insurance recveries fr transmissin Bus Tie Transfrmer (BTT) 1 and BTT2 lcated in Muja. A ttal f $6.98m was recvered frm insurance claims fr BTT1 and BTT2 ver AA3, as the cst f these assets has been recvered frm the claims, the RAB has been reduced accrdingly. Table 9: Asset dispsals ver AA3 in nminal dllars $M Nminal 2012/13 2013/14 2014/15 2015/16 2016/17 Distributin 0.9 0.3 4.8 2.8 0.6 Transmissin 4.1 4.1 9.0 59.5 1.4 Table 10: Asset dispsals ver AA3 in real 30 June 2017 dllars $Real as at 30 June 2017 2012/13 2013/14 2014/15 2015/16 2016/17 Distributin 0.9 0.3 4.9 2.8 0.6 Transmissin 4.4 4.2 9.3 60.6 1.4 2.5 AA3 depreciatin As discussed in sectin 4.5.2, depreciatin f the RAB ccurs in tw parts the depreciatin f the initial capital base and f new capex since 2006. The fllwing tables detail the frecast regulatry depreciatin that was included in AA3 revenue against these tw categries. Table 11: AA3 frecast depreciatin f the initial capital base in real 30 June 2012 dllars $Real as at 30 June 2012 2012/13 2013/14 2014/15 2015/16 2016/17 Distributin 105.9 105.5 105.4 88.0 81.3 Transmissin 56.3 56.3 56.3 56.3 56.3 Table 12: AA3 frecast depreciatin f the initial capital base in real 30 June 2017 dllars $Real as at 30 June 2017 2012/13 2013/14 2014/15 2015/16 2016/17 Distributin 116.8 116.3 116.2 97.0 89.6 Transmissin 62.1 62.1 62.1 62.1 62.1 Table 13: AA3 frecast depreciatin f capital expenditure since 2006 in real 30 June 2012 dllars $Real as at 30 June 2012 2012/13 2013/14 2014/15 2015/16 2016/17 Distributin 88.2 108.7 132.1 153.7 174.0 Page 5
$Real as at 30 June 2012 2012/13 2013/14 2014/15 2015/16 2016/17 Transmissin 28.9 37.5 47.1 56.7 61.1 Table 14: AA3 frecast depreciatin f capital expenditure since 2006 in real 30 June 2017 dllars $Real as at 30 June 2017 2012/13 2013/14 2014/15 2015/16 2016/17 Distributin 97.2 119.9 145.7 169.5 191.9 Transmissin 31.9 41.3 51.9 59.1 67.3 Included in the AA3 decisin were values fr accelerated depreciatin, these are shwn the tables belw. Table 15: AA3 frecast accelerated depreciatin ver AA3 in real 30 June 2012 dllars $Real as at 30 June 2012 2012/13 2013/14 2014/15 2015/16 2016/17 Distributin 3.4 0.5 - - - Transmissin - - - - - Table 16: AA3 frecast accelerated depreciatin ver AA3 in real 30 June 2017 dllars $Real as at 30 June 2017 2012/13 2013/14 2014/15 2015/16 2016/17 Distributin 3.8 0.5 - - - Transmissin - - - - - 2.6 Rll frward f the RAB Cmbining all f the values in the preceding tables, the RAB can nw be rlled frward ver the AA3 perid. Table 17: AA3 distributin RAB rll frward ($ millin real as at 30 June 2017) Distributin 2012/13 2013/14 2014/15 2015/16 2016/17 Opening RAB 4,248.7 4,709.9 5,144.4 5,506.4 5,752.6 Net Capex 679.0 671.2 624.0 512.7 363.8 Depreciatin 214.0 236.2 261.9 266.5 281.5 Accelerated depreciatin 3.8 0.5 - - - Clsing RAB 4,709.9 5,144.4 5,506.4 5,752.6 5,834.9 Page 6
Table 18: AA3 transmissin RAB rll frward ($ millin real as at 30 June 2017) Transmissin 2012/13 2013/14 2014/15 2015/16 2016/17 Opening RAB 2,816.7 2,942.8 3,177.6 3,215.4 3,156.0 Net Capex 220.1 338.2 151.9 61.8 105.2 Depreciatin -94.0-103.4-114.1-121.3-129.4 Accelerated depreciatin 0 0 0 0 0 Clsing RAB 2,942.8 3,177.6 3,215.4 3,156.0 3,131.8 Page 7
3. Establishing the pening AA4 tax asset base The TAB is rlled frward using similar methds t the RAB described abve. The key differences in methds are: - The TAB is rlled frward in nminal terms - Depreciatin fr the TAB is calculated using the diminishing value methd as ppsed t the straight line methd fr the RAB - Depreciatin is based n actual expenditure rather than frecast deprecatin The pening values fr the TAB fr distributin and transmissin are shwn in the fllwing tables. Table 19: Opening value fr the Distributin Tax Asset Base Distributin asset grup Value [$M nminal] Wden Ple Lines 2,747.9 Undergrund Cables 110.2 Transfrmers 32.2 Switchgear 25.7 Street lighting 35.1 Meters and Services 3.2 IT 31.5 SCADA & Cmmunicatins 15.9 Other Distributin Nn-Netwrk 107.7 Distributin Land & Easements 18.2 Equity Raising Csts 0 TOTAL 3,127.7 Table 20: Opening value fr the Transmissin Tax Asset Base Transmissin asset grup Value [$M nminal] Transmissin cables 1,328.9 Transmissin steel twers 58.8 Transmissin wd ples 9.1 Transmissin Metering - Transmissin transfrmers 165.5 Page 8
Transmissin asset grup Value [$M nminal] Transmissin reactrs 1.9 Transmissin capacitrs 12.8 Transmissin circuit breakers 23.6 SCADA and Cmmunicatins 72.7 IT 18.8 Other Nn-Netwrk Assets 151.0 Land & Easements 200.1 Equity Raising Csts 0 TOTAL 2,046.3 3.1 Depreciatin f the TAB Similarly t the RAB, depreciatin is split in tw parts. Table 21: Depreciatin f the Initial capital base fr the TAB in nminal dllars $M nminal 2012/13 2013/14 2014/15 2015/16 2016/17 Distributin 83.8 84.9 80.9 80.0 77.3 Transmissin 64.8 66.4 63.6 62.9 60.9 Table 22: Depreciatin f AA3 capital expenditure fr the TAB in nminal dllars $M nminal 2012/13 2013/14 2014/15 2015/16 2016/17 Distributin 2.1 45.8 76.6 107.6 128.2 Transmissin 0.3 15.4 28.5 37.0 43.1 3.2 Capital expenditure ver AA3 The capital expenditure added t the TAB ver AA3 is: - Actual grss capital expenditure (shwn in Table 4) - less cntributins (shwn in Table 6) - less dispsals (shwn in Table 9) The resulting capital additins are shwn in the fllwing table. Page 9
Table 23: Capital expenditure added t the TAB ver AA3 in nminal dllars $M nminal 2012/13 2013/14 2014/15 2015/16 2016/17 Distributin 630.6 642.1 605.9 502.9 363.8 Transmissin 204.4 323.5 147.5 60.6 105.2 3.3 Rll frward f the TAB ver AA3 The fllwing tables shw the rll frward f the TAB ver the AA3 perid. Table 24: AA3 distributin TAB rll frward ($ millin nminal) Distributin 2012/13 2013/14 2014/15 2015/16 2016/17 Opening TAB 3,127.7 3,668.9 4,179.8 4,628.3 4,943.6 Net Capex 630.6 642.1 605.9 502.9 363.8 Depreciatin -89.3-131.1-157.4-187.6-205.5 Clsing TAB 3,668.9 4,179.8 4,628.3 4,943.6 5,101.9 Table 25: AA3 transmissin TAB rll frward ($ millin nminal) Transmissin 2012/13 2013/14 2014/15 2015/16 2016/17 Opening TAB 2,043.3 2,182.5 2,424.2 2,479.7 2,440.3 Net Capex 204.4 323.5 147.5 60.6 105.2 Depreciatin -65.2-81.8-92.1-99.9-104.0 Clsing TAB 2,182.457 2,424.197 2,479.651 2,440.342 2,441.580 Page 10
4. AA4 regulated asset base and tax asset base The fllwing sectin shws the parameters and assumptins used t derive the capital base ver the AA4 perid. When determining the AA4 RAB rll frward, cnsideratin is given t the fllwing areas: Capital expenditure and the new facilities investment test Depreciatin Frecast inflatin 4.1 AA4 RAB summary Table 26: Distributin RAB rll frward ($ millin real as at 30 June 2017) Distributin 2017/18 2018/19 2019/20 2020/21 2021/22 Opening RAB 5,834.9 6,080.8 6,320.0 6,582.2 6,715.3 Net Capex 509.5 520.0 557.4 431.3 445.7 Frecast depreciatin 263.6 280.8 295.2 298.3 289.1 Clsing RAB 6,080.8 6,320.0 6,582.2 6,715.3 6,871.8 Table 27: Transmissin RAB rll frward ($ millin real as at 30 June 2017) Transmissin 2017/18 2018/19 2019/20 2020/21 2021/22 Opening RAB 3,131.8 3,183.9 3,277.4 3,396.1 3,473.8 Net Capex 165.8 210.7 245.6 216.0 212.7 Frecast depreciatin 113.7 117.2 126.8 138.2 144.3 Clsing RAB 3,183.9 3,277.4 3,396.1 3,473.8 3,542.2 4.2 AA4 TAB summary Frecast capex is in input in real as at 30 June 2017 terms, fr the purpses f rlling the TAB frward the inflatin assumptins used in determining the AA4 Weighted Average Cst f Capital have been used. Table 28: Distributin TAB rll frward ($ millin nminal) Distributin 2017/18 2018/19 2019/20 2020/21 2021/22 Opening TAB 5,101.9 5,400.3 5,685.5 5,988.7 6,129.2 Net Capex 517.9 537.2 585.2 460.3 483.5 Frecast depreciatin 226.5 263.5 295.0 321.1 327.1 Clsing TAB 5,516.0 5,802.7 6,048.8 6,197.7 6,366.6 Page 11
Table 29: Transmissin TAB rll frward ($ millin nminal) Transmissin 2017/18 2018/19 2019/20 2020/21 2021/22 Opening TAB 2,441.6 2,504.5 2,606.4 2,736.6 2,823.3 Net Capex 168.5 217.7 257.9 230.5 230.7 Frecast depreciatin 105.6 115.8 127.7 143.7 148.5 Clsing TAB 2,504.5 2,606.4 2,736.6 2,823.3 2,905.5 4.3 AA4 capital expenditure Capital expenditure in AA4 is added t the RAB when it is reasnably expected t satisfy the new facilities investment test. This is cnsistent with sectin 6.51 f the Access Cde. Table 30: distributin capital expenditure acrss AA4 Distributin [$M] 2017/18 2018/19 2019/20 2020/21 2021/22 Ttal (real 2017) 674.9 702.2 718.4 581.5 601.9 Ttal (nminal) 685.9 725.4 754.4 620.6 652.9 Table 31: transmissin capital expenditure acrss AA4 Transmissin [$M] 2017/18 2018/19 2019/20 2020/21 2021/22 Ttal (real 2017) 178.7 223.4 258.2 229.0 225.8 Ttal (nminal) 181.6 230.8 271.1 244.3 244.9 4.4 Asset dispsals Cnsistent with the previus apprach in AA1 t AA3, Western Pwer has nt frecast any asset dispsals ver the AA4 perid. The capital base will be adjusted fr actual asset dispsals that ccur ver the AA4 perid when setting the capital base fr the subsequent access perid. The asset dispsals ver AA4 will cntinue t be based n the grss asset sales prceeds. 4.5 Depreciatin Key messages: N prpsed changes t asset grup categries fr transmissin and distributin Western Pwer prpses t maintain the ecnmic lives that were applied in AA3 fr majrity f the asset grups, except fr distributin meters and services which is prpsed t be 15 years Western Pwer is maintaining the RAB depreciatin apprach apprved by the ERA in previus access arrangements and depreciate assets using the straight line apprach Page 12
Western Pwer is prpsing a slight mdificatin t the TAB depreciatin methdlgy in rder t fully depreciate the asset within its stipulated ecnmic tax life 4.5.1 Ecnmic life Western Pwer is prpsing t maintain the ecnmic lives that were applied in AA3 fr majrity f the asset grups, except fr distributin meters and services which is prpsed t be 15 years. Nte that this changes will nly affect the calculatin f the capital base and target revenue fr new facilities investment undertaken during the AA4 perid. New facilities investment undertaken in previus access arrangements will cntinue t be depreciated based n the ecnmic lives that applied at the time the depreciatin frecast was develped fr the investment. Table 32 and Table 33 set ut the distributin and transmissin asset categries and standard lives Western Pwer prpses t apply t all capital expenditure in the regulatry perid. Table 32: Distributin asset lives fr AA4 expenditure Distributin assets RAB life Tax life Wden Ple Lines 41.00 45.00 Undergrund Cables 60.00 50.00 Transfrmers 35.00 40.00 Switchgear 35.00 30.00 Street lighting 20.00 15.00 Meters and Services 15.00 25.00 IT 6.00 4.00 SCADA & Cmmunicatins 10.16 10.00 Other Distributin Nn-Netwrk 10.16 10.00 Distributin Land & Easements n/a n/a Equity Raising Csts 43.000 5.00 Table 33: Transmissin asset lives fr AA4 expenditure Transmissin RAB life Tax life Transmissin cables 55.00 47.50 Transmissin steel twers 60.00 47.50 Transmissin wd ples 45.00 47.50 Transmissin metering 40.00 25.00 Transmissin transfrmers 50.00 40.00 Page 13
Transmissin RAB life Tax life Transmissin reactrs 50.00 40.00 Transmissin capacitrs 40.00 40.00 Transmissin circuit breakers 50.00 40.00 SCADA and cmmunicatins 11.00 12.50 IT 6.00 4.00 Other nn-netwrk assets 16.85 12.50 Land & Easements n/a n/a Equity raising csts 49.00 5.00 4.5.2 RAB depreciatin RAB depreciatin mdelled in tw parts, initial capital base (ICB) and new capital expenditure in the access perids fllwing disaggregatin. ICB depreciatin is depreciating the pening capital base when Western Pwer was first disaggregated in 2006. New capital expenditure depreciatin is depreciating the capital expenditure fr each year. The ERA apprved the fllwing methdlgy fr allcating Western Pwer s actual distributin capital expenditure t apprved distributin regulatry asset categries: Western Pwer reprted capital expenditure under the fllwing brad activity categries, ie: Grwth (Capacity expansin, Custmer driven, Gifted assets) Asset replacement and renewal (Asset replacement, State Undergrunding Pwer Prgram, Metering, Smartgrid, Wd ple management) Imprvement in service (Reliability driven, Rural Pwer Imprvement Prgram, SCADA & Cmmunicatins) Cmpliance (Safety envirnment & statutry) Crprate (IT, Business supprt, Equity raising csts). The reprted capex activity categries are then allcated t the fllwing distributin regulatry asset categries using the ERA apprved mapping matrix: 1 Wden ple lines Undergrund cables Transfrmers Switchgear Street lighting Meter services IT 1 There are tw apprved mapping matrices, i.e. the AA1 and AA2 mapping matrix; and the AA3 mapping matrix. Page 14
SCADA and cmmunicatins Distributin land & easements Equity raising csts. Initial capital base and annual capital expenditure in each f these distributin regulatry asset categries is depreciated ver their apprved standard life n a real straight line basis. Western Pwer prpses t maintain this depreciatin methdlgy fr all investments in AA4. 4.5.3 Tax depreciatin Tax depreciatin is als cnducted in tw parts, as per RAB depreciatin. The methdlgy fr Initial capital base tax depreciatin is based n prpsed changes t mdelling the tax asset base as part f the AA3 submissin. Refer t sectin 10.3.2 Mdelling tax asset base in the AA3 Amended access arrangement infrmatin fr the Western Pwer Netwrk. As apprved, Western Pwer prpsed t rll frward the AA3 tax asset base n a straight-line basis, therefre the ICB will cntinue t be depreciated n a straight line basis. As part f the AA3 submissin Western Pwer engaged Ernst & Yung t review its tax asset base. One f the recmmendatins was t depreciate the TAB n a diminishing value basis ver the apprved standard tax life. Western Pwer has prpsed a minr mdificatin t the diminishing value methdlgy t ensure assets are fully depreciated within its stipulated tax life. Western Pwer prpses t maintain ERA s apprved asset categries and standard tax lives fr all investments that ccurred prir t the start f the regulatry perid. The fllwing frmula is used fr the diminishing value methdlgy: Value f asset x (200% / asset s effective life) This frmula results in the depreciated assets value getting clse t and cntinues t apprach 0, but desn t fully depreciate by the end f its tax life. Western Pwer has incrprated an IF statement in its revenue mdel t catch and depreciate the remaining asset value in the final year f the assets tax life. Page 15