Electricity Ashburton Limited trading as EA Networks Information Disclosure Prepared according to subpart 3 of the Part 4A Commerce Act 1986 Assessment Period: 1 April 2011 31 March 2012 Date: 11 December 2012
Introduction... 3 Information Disclosure Disclaimer... 3 FS1 Regulatory Profit Statement... 4 FS1 Regulatory Profit Statement (continued)... 5 FS2 Asset and Financing Statement... 7 FS3 Regulatory Tax Allowance... 8 AV1 Annual Regulatory Valuation Roll-Forward Report... 9 AV2 Regulatory Valuation Disclosure by Asset Class... 10 AV3 System Fixed Assets Replacement Cost Roll-Forward Report... 11 AV4 Business Merger, Acquisition or Sale - Regulatory Asset Base Disclosure... 12 MP1 Network Information Assets Statistics... 13 MP1 Network Information Electricity Demand... 14 MP2 Performance Measures... 15 MP3 Quality Measures... 16 MP3 Price Measures... 17 AM1 Expenditure Forecasts and Reconciliation... 17 AM1 Expenditure Forecasts and Reconciliation (continued)... 18 Auditors Report on Disclosure Information... 19 Certificate for Disclosed Information... 22 Page 2 of 22
Introduction These Information Disclosure documents are submitted by EA Networks pursuant to subpart 3 of Part 4A of the Commerce Act 1986 in accordance with: The Electricity Information Disclosure Requirements issued 31 March 2004, consolidating all amendments to 31 October 2008, The Electricity Distribution (Information Disclosure) Requirements 2008, The Electricity Information Disclosure Handbook (as amended 31 October 2008), and The Handbook for Optimised Deprival Valuation of System Fixed Assets of Electricity Lines Businesses (30 August 2004). Information Disclosure Disclaimer The information disclosed in this 2012 Information Disclosure package issued by EA Networks has been prepared in accordance with the requirements listed above. The Requirements require the information to be disclosed in the manner it is presented. The information should not be used for any other purposes than that intended under the Requirements. The financial information presented is for the line business as described within the Requirements. There are also additional activities of the Company that are not required to be reported under the Requirements. Page 3 of 22
Schedules FS1 Regulatory Profit Statement Income Electricity Distribution Business: Electricity Ashburton For Year Ended 2012 Net Line Charge Revenue Received 27,260 plus Discretionary Discounts and Customer Rebates 3,368 Gross Line Charge Income 30,628 ($000) Capital Contributions 459 plus Net Value of Vested Assets - Total Capital Contributions and Vested Assets 459 AC Loss Rental Rebates Received 245 less AC Loss Rental Rebates Passed On 245 Net AC loss rental income (deficit) - Other Income 602 602 Total regulatory income 31,689 Expenses Transmission Charges - Payments to Transpower 3,708 plus Avoided Transmission Charges - payments to parties other than Transpower 836 Total Transmission Costs 4,544 Operational Expenditure: General Management, Administration and Overheads 3,103 System Management and Operations 2,245 Routine and Preventative Maintenance 1,133 Refurbishment and Renewal Maintenance - Fault and Emergency Maintenance 419 Pass-through Costs 261 Other - Total Operational Expenditure 7,161 Operational earnings 19,984 Regulatory Depreciation of System Fixed Assets (incl. value of assets decommissioned) 7,241 plus Depreciation of Non-System Fixed Assets (incl. value of assets decommissioned) 434 Total Regulatory Depreciation 7,675 Earnings before interest and tax (EBIT) 12,309 less Regulatory Tax Allowance 931 plus Indexed Revaluation (of System Fixed Assets) 2,791 plus Revaluations of Non-System Fixed Assets - Regulatory profit / loss (pre-financing and distributions) 14,169 Page 4 of 22
FS1 Regulatory Profit Statement (continued) Notes to Regulatory Profit Statement FS1a: Discretionary Discounts: Customer Rebates and other line charge adjustments ($000) Customer Rebates - Line Charge Holidays and other Discretionary Discounts 3,368 Total Discretionary Discounts and Customer Rebates 3,368 FS1b: Related party expenditure - summary ($000) Avoided Transmission Charges - Operational Expenditure 1,845 FS1b Notes: Subvention Payment - Other related party expenditure 14,924 Total Related Party Expenditure 16,769 RELATED PARTY TRANSACTIONS: Ashburton District Council Ashburton District Council hold 28,750,000 deferred shares with the following conditions attached: a) There is no right to distributions, dividends or rebates. b) There is a right to vote if the rights attached to the deferred shares are to be altered, or there is a proposal that would change the control of the company, or the rights of the council are not carried forward on an amalgamation. c) The shares are not transferable, except to another local authority, or if 25 per cent of the voting shares are controlled by one person. d) The right to an equal distribution with the holders of the rebate shares on a winding up of the company. Transactions where EA Networks has paid Ashburton District Council: 2012 2011 $,000 $,000 Rates 142 149 Pole yard rental 59 60 Other services 92 8 EA Networks contracting EA Networks has a contracting division that provides services to the Line Business. The services provided are for the maintenance of the network and capital construction of system fixed assets. The contracting division of EA Networks has provided the following services at cost, including overheads, for the period 1 April 2011 to 31 March 2012. No amounts have been forgiven or written off, and no amounts remain outstanding at the end of the period. Transactions where EA Networks has paid Electricity Ashburton Contracting: 2012 2011 $,000 $,000 Maintenance of system asset 1,552 1,793 Construction of distribution lines and cables 4,363 5,765 Construction of distribution transformers 6,059 1,982 Construction of distributions substations 620 931 Construction of low voltage lines and cables 3,872 3,796 Purchase of critical spare stock 10 352 Page 5 of 22
FS1c: Operational Expenditure notes ($000) Merger and Acquisition Expenses Merger and Acquisition Expenses (not to be included in Operational Expenditure) - Material items (if greater than 10% of the Operational Expenditure line item) Material item amount 1 - Notes to be provided separately within expenditure category: Select one Material item amount 2 - Notes to be provided separately within expenditure category: Select one Material item amount 3 - Notes to be provided separately within expenditure category: Select one FS1c: Operational Expenditure Notes: 2012 2011 $000 $000 Merger & Acquisition Expenses 0 0 Material items (greater than 10% of Operational Expense Line items) General, Management, Administration and Overheads Personnel Costs 923 939 System Management and Operations Personnel Costs 1,202 773 Fibre connections 700 0 Routine & Preventative Maintenance Substations 500 691 Trees 254 264 Maintenance Unscheduled Other 190 242 Fault & Emergency Maintenance Maintenance Emergency Lines 419 471 Pass-Through Costs Rates 129 137 Industry Fees 72 60 Commerce Commission Costs 60 90 FS1e: Reclassified items in Operational Expenditure ($000) Value of items which have been reclassified since previous disclosure (if greater than 10% of any affected line item) - Previous classification: Select one New classification: Select one ($000) Value of items which have been reclassified since previous disclosure (if greater than 10% of any affected line item) - Previous classification: Select one New classification: Select one ($000) Value of items which have been reclassified since previous disclosure (if greater than 10% of any affected line item) - Previous classification: Select one New classification: Select one Page 6 of 22
FS2 Asset and Financing Statement Electricity Distribution Business: Electricity Ashburton Ltd For Year Ended 2012 Capital Expenditure on System Fixed Assets (by primary purpose) ($000) Customer Connection 3,674 to AM1 System Growth 7,749 to AM1 Reliability, Safety and Environment 619 to AM1 Asset Replacement and Renewal 2,882 to AM1 Asset Relocations - to AM1 Total Capital Expenditure on System Fixed Assets 14,924 to AM1 Capital Expenditure on Non-System Fixed Assets 539 from AV1 Capital works roll-forward (for System Fixed Assets) Works Under Construction at Beginning of Year 2,337 plus Total Capital Expenditure on System Fixed Assets 14,924 less Assets Commissioned in Year 13,510 from AV1 Works under construction at year end 3,751 Regulatory Investment Value calculation System Fixed Assets: regulatory value at end of Previous Year 177,703 from AV1 Non-System Fixed Assets: regulatory value at end of Previous Year 6,423 from AV1 Finance During Construction Allowance (on System Fixed assets) 4,354 2.45% Total Regulatory Asset Base value at beginning of Current Financial Year 188,480 plus (System Fixed Assets Commissioned in Year 13,510 from AV1 System Fixed Assets Acquired From (Sold to) a Non-EDB in Year - from AV1 Non-System Fixed Assets: Asset Additions 539 from AV1 Regulatory Asset Base investment in Current Financial Year - total 14,049 Regulatory Asset Base investment in Current Financial Year - average 7,025 plus (minus) where a merger or acquisition has taken place within the year Adjustment for merger, acquisition or sale to another EDB - from AV4 Regulatory Investment Value 195,504 to MP2 Page 7 of 22
FS3 Regulatory Tax Allowance Electricity Distribution Business: Electricity Ashburton For Year Ended 2012 Earnings before interest and tax (EBIT) 12,309 ($000) add Total Regulatory Depreciation 7,675 Other Permanent Differences - not deductible - Other Temporary Adjustments - Current Period 792 8,467 less Non Taxable Capital Contributions and Vested Assets 336 Tax Depreciation 8,291 Deductible Discretionary Discounts and Customer Rebates 3,368 Deductible Interest 4,551 Other Permanent Differences - Non Taxable 92 Other Temporary Adjustments - Prior Period 812 17,450 Regulatory taxable income for Year 3,326 less Tax Losses Available at Start of Year - Net taxable income 3,326 Statutory Tax Rate 28% Regulatory Tax Allowance 931 Notes to Regulatory Tax Allowance FS3A Adjustments Classified as Other 2012 2011 $000 $000 Other Temporary Differences Annual Leave 325 363 Long Service Leave 74 64 Gratuities 342 317 Days in Lieu 5 3 A C C Levies 43 48 Provision for Doubtful Debts 3 17 792 812 Other Permanent Differences - Non Taxable Shareholder refunds unclaimed 92 60 FS3b: Financing assumptions (for Deductible Interest and Interest Tax Shield calculation) Standard Debt Leverage Assumption (debt/total assets) 40% % Standard Cost of Debt Assumption 5.82% % Deductible Interest 4,551 $000 Interest Tax Shield Adjustment 1,274 $000 Page 8 of 22
AV1 Annual Regulatory Valuation Roll-Forward Report Electricity Distribution Business: Electricity Ashburton Ltd For Year Ended: 2012 Year of most recent ODV 2004 System Fixed Assets ($000) ODV Year + 1 ODV Year + 2 ODV Year + 3 ODV Year + 4 ODV Year + 5 ODV Year + 6 ODV Year + 7 ODV Year + 8 For Year Ending: 2005 2006 2007 2008 2009 2010 2011 2012 Regulatory Value at End of Previous Year* 106,569 113,681 122,348 130,479 139,790 151,231 162,282 177,703 plus Assets Commissioned 8,437 9,067 9,847 10,327 13,863 14,171 15,295 13,510 Gross Value of Vested Assets Assets Acquired from (Sold to) a Non-EDB 26 979 277 83 (15) - - Asset Additions 8,463 10,046 10,124 10,410 13,848 14,171 15,295 13,510 plus Indexed Revaluation 2,986 3,694 3,105 4,392 4,151 3,095 7,249 2,791 less Depreciation of System Fixed Assets 3,906 4,138 4,338 4,527 4,874 5,129 5,558 5,803 Regulatory Value of Assets Decommissioned 431 935 760 964 1,684 1,086 1,565 1,438 Regulatory Depreciation (incl. value of assets decommissioned) 4,337 5,073 5,098 5,491 6,558 6,215 7,123 7,241 plus (minus) Acquisition of System Fixed Assets from another EDB - - - - - - - - less Sale of System Fixed Assets to another EDB - - - - - - - - Net Acquisitions (Sales) of System Fixed Assets from (to) an EDB - - - - - - - - plus (minus) Net Increase (Decrease) Due to Changes in Asset Register Information - Regulatory Value of System Fixed Assets at Year End 113,681 122,348 130,479 139,790 151,231 162,282 177,703 186,763 Non-System Fixed Assets Regulatory value at end of previous year 2,757 3,133 3,096 3,396 3,355 3,486 3,534 6,423 plus Asset Additions 812 416 774 532 724 455 3,557 539 plus Revaluations - - - - - - - - less Depreciation (incl. value of assets decommissioned) 436 453 474 573 593 407 668 434 plus Net Acquisitions (Sales) of Non-System Fixed Assets from (to) an EDB - - - - - - - - Regulatory Value of Non-System Fixed Assets at Year end 3,133 3,096 3,396 3,355 3,486 3,534 6,423 6,528 Total Regulatory Asset Base Value (excluding FDC) 116,814 125,444 133,875 143,145 154,717 165,816 184,126 193,291 Notes to Annual Regulatory Valuation Roll-forward Report AV1a: Calculation of Revaluation Rate and Indexed Revaluation of System Fixed Assets CPI as at date of ODV 928 For Year Ended 2005 2006 2007 2008 2009 2010 2011 2012 CPI at CPI reference date 954 985 1010 1044 1075 1097 1146 1164 Revaluation Rate 2.80% 3.25% 2.54% 3.37% 2.97% 2.05% 4.47% 1.57% System Fixed Assets: Regulatory Value at End of Previous Year 106,569 113,681 122,348 130,479 139,790 151,231 162,282 177,703 Indexed Revaluation of System Fixed Assets 2,986 3,694 3,105 4,392 4,151 3,095 7,249 2,791 AV1b: Input for prior year Acquisitions (Sales) of Assets to (from) another ELB ($000) For Year Ended 2005 2006 2007 2008 2009 2010 2011 2012 Acquisition of System Fixed Assets from another EDB Sale of System Fixed Assets to another EDB Net Acquisitions (Sales) of Non-System Fixed Assets from (to) an EDB Page 9 of 22
Subtransmission Zone Substations Distribution & LV Lines Distribution & LV Cables Distribution Substations and Transformers Distribution Switchgear Other System Fixed Assets Total for System Fixed Assets (per AV1) AV2 Regulatory Valuation Disclosure by Asset Class (for System Fixed Assets) Electricity Distribution Business: Electricity Ashburton For Year Ended: 2012 Subtotals by Asset Class (for System Fixed Assets) ($000) System Fixed Assets Regulatory Value of System Fixed Assets (as per most recent ODV 17,217 12,234 29,969 16,640 19,264 8,764 2,481 106,569 Cumulative roll-forward since most recent ODV: Asset Additions 95,867 Indexed Revaluation (of System Fixed Assets) 31,463 less Regulatory Depreciation (of System Fixed Assets) 47,136 Net Acquisitions (Sales) of System Fixed Assets from (to) an EDB - Net Increase (Decrease) Due to Changes in Asset Register Information - Regulatory Value of System Fixed Assets at Year End 186,763 Page 10 of 22
AV3 System Fixed Assets Replacement Cost Roll-Forward Report System Fixed Assets - Replacement Cost Electricity Distribution Business: Electricity Ashburton For Year Ended: 2012 ($000) Replacement cost at end of previous year 285,711 Asset Additions 13,510 Indexed Revaluation (of System Fixed Assets) 4,488 less Replacement Cost of Assets Decommissioned 2,688 Net Acquisitions (Sales) of System Fixed Assets from (to) an EDB - Net Increase (Decrease) Due to Changes in Asset Register Information - Replacement cost of System Fixed Assets at year end 301,021 System Fixed Assets - Depreciated Replacement Cost Depreciated Replacement Cost at end of previous year 178,247 Asset Additions 13,510 Indexed Revaluation (of System Fixed Assets) 2,800 less Depreciation of Replacement Cost 5,803 less Depreciated Replacement Cost of Assets Decommissioned 1,438 Net Acquisitions (Sales) of System Fixed Assets from (to) an EDB - Net Increase (Decrease) Due to Changes in Asset Register Information - Depreciated replacement cost of System Fixed Assets at year end 187,316 Notes to Price and Quality Measures AV3a: New Asset Additions Asset Additions - Depreciated Replacement Cost 13,510 plus Difference in Replacement Cost and Depreciated Replacment Cost values of Asset Additions - Asset Additions - Replacement Cost 13,510 Page 11 of 22
Total for System Fixed Assets Non-System Fixed Assets Total RAB value (excl. FDC) Subtransmission Zone substations Distribution & LV Lines Distribution & LV Cables Distribution substations and transformers Distribution switchgear Other System Fixed Assets Total for System Fixed Assets AV4 Business Merger, Acquisition or Sale - Regulatory Asset Base Disclosure Electricity Distribution Business: Electricity Ashburton Ltd Disclosure required? (YES or NIL DISCLOSURE): NO DISCLOSURE REQUIRED As at (date): Proportion of year following transfer of assets 0% PART 1: Most recent ODV valuation of System Fixed Assets transferred ($000) Replacement Cost (RC) - less Depreciation - Depreciated Replacement Cost (DRC) - - - - - - - - less Optimisation adjustment - Optimised Depreciated Replacement Cost (ODRC) - - - - - - - - less Economic Value Adjustment (EVA) - Most recent ODV value - - - - - - - - PART 2: Valuation disclosure for transferred assets by Asset Class (at transfer date) ($000) Regulatory Value of System Fixed Assets (as per most recent ODV) - Cumulative roll-forward since most recent ODV: Asset Additions Indexed Revaluation (of System Fixed Assets) less Regulatory Depreciation (of System Fixed Assets) Net Acquisitions (Sales) of System Fixed Assets from (to) an EDB Net Increase (Decrease) due to Changes in Asset Register Information RAB Value of Transferred Assets at Transfer Date - - Acquisition of Assets from Another EDB Sale of Assets to Another EDB - - to AV1 - - to AV1 RAB Value of Transferred Assets at Transfer Date - "p" factor (proportion of year following transfer of assets) 0% Adjustment for merger, acquisition or sale to another EDB - to FS2 PART 3: Rolled-forward Replacement Cost values for System Fixed Assets transferred ($000) Net Acquisitions (Sales) of System Fixed Assets from (to) an EDB - RC Net Acquisitions (Sales) of System Fixed Assets from (to) an EDB - DRC RC & DRC values of System Fixed Assets at transfer date RAB value of acquired/(sold) assets - - to AV3 to AV3 Signed by: Selling Entity Acquiring Entity Page 12 of 22
MP1 Network Information Assets Statistics (Separate report required for each Non-Continuous Network) Network Name: Disclosure: Total Business Annual Disclosure - Requirement 6(1) Electricity Distribution Business: For Year Ended: 2012 (enter "Total Business" or name of network) Circuit Length by Operating Line Voltage (at year end) Overhead Underground Total (km) (km) (km) Electricity Ashburton Ltd > 66kV - - - 50kV & 66kV 265 1 266 33kV 110 5 114 SWER (all SWER voltages) - - 22kV (other than SWER) 1,019 25 1,044 6.6kV to 11kV (inclusive - other than SWER) 1,024 130 1,154 Low Voltage (< 1kV) 119 282 401 Total circuit length (for Supply) 2,535 443 2,979 to MP2 Dedicated Street Lighting Circuit Length 38 209 247 Overhead Circuit Length by Terrain (at year end) (km) (%) Urban (only) 114 5% Rural (only) 2,366 93% Remote (only) 55 2% Rugged (only) - 0% Rural & rugged (only) - 0% Remote & rugged (only) - 0% Unallocated overhead lines - 0% Total overhead length 2,535 100% Transformer capacity (at year end) - Previous Year Distribution Transformer Capacity (EDB Owned) 476 MVA 474 Distribution Transformer Capacity (Non-EDB Owned, Estimated) 11 MVA 11 Total Distribution Transformer Capacity 487 MVA (to MP2) 485 MP1 Notes: Estimated Proportion of Assets (by Replacement Cost) within 10 years of Total Life: Under the Information Disclosure Requirements definition, this may be based on other asset analysis. Transformers have been used as the basis of the estimate for the proportion of all Assets within 10 years of total life. Transformer age is considered to be a reasonable basis for this calculation for the following reasons: Zone Substation Transformer Capacity 297 MVA 282 System Fixed Assets age (at year end) Average Age of System Fixed Assets 16 Years Average Expected Total Life of System Fixed Assets 43 Years Average Age as a Proportion of Average Expected Total Life 38% % Estimated Proportion of Assets (by Replacement Cost) within 10 years of Total Life 15% % Transformers account for a significant portion of total assets, Transformers age is a reasonable estimate for other asset age as these are typically commissioned simultaneously. Page 13 of 22
MP1 Network Information Electricity Demand Maximum coincident Non-coincident Electricity demand system Sum of maximum demand (MW) demands (MW) GXP Demand 142 190 plus Embedded Generation Output at HV and Above 1 Maximum System Demand 143 less Net Transfers to (from) Other EDBs at HV and Above - Demand on system for supply to customers' Connection Points 143 less Subtransmission Customers' Connection Point Demand 0 0 Maximum Distribution Transformer Demand 143 to MP2 GXP Demand not Supplied at Subtransmission Level - Embedded Generation Output - Connected to Subtransmission System 1 29 Net Transfers to (from) Other EDBs at Subtransmission Level Only - - Estimated Controlled Load Shed at Time of Maximum System Demand (MW) - Five-Year System Maximum Demand Growth Forecast 2.9 % p.a. Electricity volumes carried (GWh) Electricity Supplied from GXPs 427 less Electricity Exports to GXPs 28 plus Electricity Supplied from Embedded Generators 103 less Net Electricity Supplied to (from) Other EDBs 0 Electricity entering system for supply to customers' Connection Points 502 less Electricity Supplied to Customers' Connection Points 473 to MP2 Electricity Losses (loss ratio) 29 5.9% % Electricity Supplied to Customers' Connection Points 473 less Electricity Supplied to Largest 5 Connection Points 81 Electricity supplied other than to Largest 5 Connection Points 392 83% % Load Factor 40% % Number of Connection Points (at year end) 18,146 ICPs to MP2 Intensity of service requirements Demand Density (Maximum Distribution Transformer Demand / Total circuit length) Volume Density (Electricity Supplied to Customers' Connection Points / Total circuit length) Connection Point Density (ICPs / Total circuit length) Energy Intensity (Electricity Supplied to Customers' Connection Points / ICP) 48 kw/km 159 MWh/km 6 ICP/km 26,054 kwh/icp Page 14 of 22
MP2 Performance Measures Performance comparators Operational expenditure ratio Total Operational Expenditure Replacement Cost of System Fixed Assets (at year end*) Electricity Distribution Business: Previous Years: Current Yr - 3 Current Yr - 2 Current Yr - 1 Electricity Ashburton Ltd For Year Ended: 2012 Current Financial Year 6 6 6 7 $m 244 261 286 301 $m Ratio (%) 2.45% 2.37% 2.24% 2.38% % Capital expenditure ratio Total Capital Expenditure on System Fixed Assets 16 13 13 15 $m Replacement Cost of System Fixed Assets (at year end*) 244 261 286 301 $m Ratio (%) 6.50% 5.06% 4.49% 4.96% % Capital expenditure growth ratio Capital Expenditure: Customer Connection and System Growth Change in Total Distribution Transformer Capacity - 6 9 11 $m 36 (8) 27 2 MVA $/kva - - 795 323 6,465 $/kva Renewal expenditure ratio Capital & Operational Expenditure: Asset Replacement, Refurbishment and Renewal - 4 3 3 $m Regulatory Depreciation of System Fixed Assets 7 6 7 7 $m Ratio (%) 0% 62% 47% 40% % Distribution Transformer Capacity Utilisation Maximum Distribution Transformer Demand 136 138 149 143 MW Total Distribution Transformer Capacity (at year end*) 466 458 485 487 kva Ratio (%) 29.2% 30.0% 30.7% 29.4% % Return on Investment Regulatory Profit / Loss (pre-financing and distributions) 15 13 18 14 $m less Interest Tax Shield Adjustment 2 1 1 1 $m Adjusted Regulatory Profit 13 12 16 13 $m Regulatory Investment Value 154 166 179 196 $m Ratio (%) 8.76% 7.32% 9.19% 6.60% % * If a Merger or Asset Transfer with another EDB was enetered into during the year, the denominators are calcuated as time-weighted averages. Expenditure comparison table Expenditure metrics ($ per): Total circuit length (for Supply) Electricity Supplied to Customers' Connection Points Maximum coincident system demand Connection Point ($/km) ($/MWh) ($/MW) ($/ICP) Distribution Transformer Capacity (EDB- Owned) ($/MVA) Capital Expenditure ($) per 5,192 33 108,086 852 32,489 from Operational Expenditure ($) per 2,404 15 50,055 395 15,046 from Transformer Capacity Utilisation: "Previous Financial Years" information disclosure has been amended to include Non-EDB owned Distribution Transformers as per the 2008 Disclosure Requirements. Page 15 of 22
MP3 Quality Measures (Separate report required for each Non-Continuous Network) Network Name: Disclosure: Total Business Annual Disclosure - Requirement 6(1) Electricity Distribution Business: Electricity Ashburton Ltd For Year Ended: 2012 QUALITY Interruptions Interruptions by class Class A - planned interruptions by Transpow er: Class B 199 planned interruptions on the netw ork Class C 261 unplanned interruptions on the netw ork Class D - unplanned interruptions by Transpow er Class E - unplanned interruptions of netw ork ow ned generation Class F - unplanned interruptions of generation (non-netw ork) Class G - unplanned interruptions caused by other electricity industry participant Class H - planned interruptions caused by other electricity industry participant Total 460 Total of above Interruption targets for Forecast Year 2013 Current Financial Year +1 Class B 300 planned interruptions on the netw ork Class C 150 unplanned interruptions on the netw ork Average interruption targets for 5 Forecast Years 2013-2017 Current Financial Year +1 to +5 Class B 300 planned interruptions on the netw ork Class C 150 unplanned interruptions on the netw ork Class C interruptions restored within 3Hrs >3hrs 214 47 Faults Faults per 100 circuit kilometres The total number of faults for Current Financial Year 7.82 in year 2012 The total number of faults forecast for the Forecast Year 5.00 in year 2013 The average annual number of faults forecast for the 5 Forecast Years 5.00 average over years 2013-2017 Fault Information per 100 circuit kilometres by Voltage and Type 6.6kV & 11kV non- SWER 22kV non- SWER SWER 33kV 50kV & 66kV >66kV Is this voltage part of the EDB system? Yes Yes No Yes Yes No Current Financial Year 7.71 12.75 5.25 1.88 Forecast Year 6.00 6.00 3.00 2.00 Average annual for 5 Forecast Years 6.00 6.00 3.00 2.00 Fault Information per 100 circuit kilometres by Voltage and Type 6.6kV & 11kV non- SWER 22kV non- SWER SWER 33kV 50kV & 66kV >66kV Underground 0.77 - - - Overhead 8.59 13.06 5.48 1.89 Reliability Overall reliability SAIDI SAIFI CAIDI Based on the total number of interruptions 192.70 1.51 127.43 Reliability by interruption class SAIDI SAIFI CAIDI Class B 73.36 0.26 283.20 Class C 119.34 1.25 95.23 Targets for Forecast Year SAIDI SAIFI CAIDI Class B 92.00 0.25 368.00 Class C 57.00 0.92 61.96 Average targets for 5 Forecast Years SAIDI SAIFI CAIDI Class B 80.00 0.26 280.77 Class C 73.00 1.08 74.07 Page 16 of 22
MP3 Price Measures Price information by Connection Point Class Connection Point Class Notes to Price and Quality Small Connection Points Medium Connection Points Large Connection Points Largest 5 Connection Points Gross line charge income ($000) 7,816 5,252 16,035 1,525 30,628 Error (FS1) Electricity Supplied to Customers' Connection Points (MWh) 124,761 63,228 204,192 80,595 472,777 from MP1 Number of Connection Points (ICPs) at year end 14,460 2,055 1,626 5 18,146 from MP1 MP3a: Connection Point Class breakpoints Total Unit Price (cents/kwh) 6.3 8.3 7.9 1.9 6.5 Relative Unit Price Index 1.00 1.33 1.25 0.30 1.03 Connection Point Class breakpoints methodology kva based breakpoints - additional disclosure Breakpoint between small and medium classes Breakpoint between large and medium classes kva based breakpoints 25 kva 69 kva AM1 Expenditure Forecasts and Reconciliation Electricity Distribution Business: For Year Ended 2012 A) Five year forecasts of expenditure ($000) From most recent Asset Management Plan Electricity Forecast Years Actual for Current Financial Year year 1 year 2 year 3 year 4 year 5 for year ended 2012 2013 2014 2015 2016 2017 Capital Expenditure: Customer Connection 3,674 4,041 1,230 1,230 1,230 1,230 Capital Expenditure: System Growth 7,749 6,024 5,879 5,855 9,031 6,919 Capital Expenditure: Reliability, Safety and Environment 619 363 320 450 853 2,245 Capital Expenditure: Asset Replacement and Renewal 2,882 3,377 3,780 3,475 2,325 2,325 Capital Expenditure: Asset Relocations - - - - - - Subtotal - Capital Expenditure on asset management 14,924 13,805 11,209 11,010 13,439 12,719 Operational Expenditure: Routine and Preventative Maintenance 1,133 1,725 1,371 1,372 1,376 1,375 Operational Expenditure: Refurbishment and Renewal Maintenance - - - - - - Operational Expenditure: Fault and Emergency Maintenance 419 421 421 420 421 422 Subtotal - Operational Expenditure on asset management 1,552 2,146 1,792 1,792 1,797 1,797 Total direct expenditure on distribution network 16,476 15,951 13,001 12,802 15,236 14,516 Overhead to Underground Conversion Expenditure 2,156 1,847 1,500 1,500 1,500 1,500 The Electricity Distribution Business is to provide the amount of Overhead to Underground Conversion Expenditure included in each of the above Expenditure Categories (explanatory notes can be provided in a separate note if necessary). Page 17 of 22
AM1 Expenditure Forecasts and Reconciliation (continued) B) Variance between Previous Forecast for the Current Financial Year, and Actual Expenditure Actual for Current Financial Year Previous forecast for Current Financial Year % Variance (a) (b) (a)/(b)-1 Capital Expenditure: Customer Connection 3,674 2,170 69.3% Capital Expenditure: System Growth 7,749 7,614 1.8% Capital Expenditure: Reliability, Safety and Environment 619 358 72.9% Capital Expenditure: Asset Replacement and Renewal 2,882 2,664 8.2% Capital Expenditure: Asset Relocations - - Not defined Subtotal - Capital Expenditure on asset management 14,924 12,806 16.5% Operational Expenditure: Routine and Preventative Maintenance 1,133 1,484-23.7% Operational Expenditure: Refurbishment and Renewal Maintenance - - Not defined Operational Expenditure: Fault and Emergency Maintenance 419 449-6.7% Subtotal - Operational Expenditure on asset management 1,552 1,933-19.7% Total direct expenditure on distribution network 16,476 14,739 11.8% Explanation of variance more than 10%: Capital Expenditure. Customer Connection EA Networks has no control over the level of customer connection. The customer connection budget contained in the Asset Management Plan was prepared using historical trends and economic data available at the time in which the Asset management was prepared. The variance between actual cost incurred and the budgeted cost reflects the differences in customer demand for new connection and the assumptions made in the Asset Management Plan. Capital Expenditure. Reliability, safety and environment Additional capital investment has been made in Ring Main Units and critical stock to shore-up supply on the network. Total capital spend as per AM1 $619K Less additional investment in RMU $308K Less purchase of critical stock $ 10K Adjusted total $301K Total budgeted spend as per AM1 $358K Variance percentage 8.5% Operating Expenditure on Routine and Preventative Maintenance The lower than planned expenditure on Routine and preventative maintenance reflects $171K lower investment in tree maintenance costs and a delay in earthing maintenance of $146K. Page 18 of 22
Auditors Report on Disclosure Information Page 19 of 22
Page 20 of 22
Page 21 of 22
Certificate for Disclosed Information Page 22 of 22