Transcript MERALCO ODRC - Energy Regulatory Commission
REGULATORY ASSET BASE VALUATION USING ODRC
Meralco Experience
Presentation Outline I.
II.
III.
IV.
V.
VI.
ODRC Background Asset Accounting Replacement Costs Optimization Depreciation Results of Meralco’s ODRC Valuation
Conceptual Framework
Optimized Depreciated Replacement Cost (ODRC) is calculated based on the
gross current replacement cost
of assets that are
adjusted for over-design, over-capacity and/or redundancy
, less an
allowance for depreciation
.
Typical Entries in the ODRC Register
A3A
DW te g ory RG Ca Re gu la tory Ide
0300000001
nt ifie r As s e t Ty pe Co de As s e t Ty Co de pe De s c rip tion
PTX001 Power Transformer, 230/115/13.8 kV, 300 MVA 1
Qu a nt it y te / ta ll a tio n Da Av e ra g e A ge Ins
01/01/82
Us e ful/S
45
ta n dar Lif e d His to ric Cos t t De pre c ia His te d to ric Cos t c Re pla
132,382,744
e me nt Cos Op
-
timi s a tio n s tme nt Adju tims Op Re pla
132,382,744
e d
A3B A6 0300000177 BB0005 230 kV Breaker & Disconnect Module (3 pole) 03000015955 OH0011 #4/0 AWG Bare Copper Conductor A12 0300015804 3 01/01/92 35 22 01/31/06 DT0002 DT, 25 kVA, 19.92 kV - 240/120 V, 1 ph, Pole Mounted 100 1/1/06 35 30 3,472 4,595,473 3,431 4,519,931 29,425,149 11,286 8,919,800 29,425,149 11,286 8,919,800
c e me nt Cost s e
60,326,864
d Op timi De pre Re c ia te d c e me nt Cos pla
17,240,177 11,153 8,773,173
t
Asset Accounting
Asset Accounting Tools
1. Fixed Asset Register (FAR) 2. Automated Mapping/Facilities Management (AM/FM) 3. Field Verification/Sampling
Challenges Encountered by Meralco
Asset information was stored in several databases so asset tracker counts and other sources such as Mapguide & AM/FM, Meter Device Management System (MDMS), Transformer Inventory (TRINV), OTMS, CMS and SCADA have discrepancies.
• Asset Tracker provided the historic costs, count, age • AM/FM system provided the physical location for verification • ERC used the Asset Tracker after comparison and verification with other asset database
Challenges Encountered by Meralco
For Substation Assets Asset accounting was done using 100% field survey of all Meralco substations (79 major substations and 44 minor substations) • • • Installation date was captured during site inspections from name plate ratings Count of equipment was determined using single line diagrams Extensive photographic records were taken
Sample Meralco Substations Survey Schedule
Major Substations: From March 15 – April 7, 2006 Minor Substations: From June 1 – June 8, 2006
SUBSTATION
AYALA ALABANG CALUMPIT CBP1A GARDNER MANDALUYONG B. F. PARANAQUE DILIMAN NOVALICHES MALIBAY SUNVALLEY BAGBAGUIN CAINTA DOLORES PAMPLONA ZAPOTE BALIBAGO BOCAUE CUBAO LIIP STA. MARIA MALOLOS CARMELRAY HILLCREST TAGUIG LISP SAN MIGUEL BACOOR IMUS MANGGAHAN BALIWAG TABANG SILANG TAGAYTAY ST. ANTHONY
VOLTAGE LEVEL
110 kV - 34.5kV - 13.8kV
69 kV - 13.8 kV 110 kV - 34.5kV - 13.8kV
110 kV - 34.5kV - 13.8kV
110 kV - 34.5kV - 13.8kV
110 kV - 34.5kV - 13.8kV
110 kV - 34.5kV - 13.8kV
110 kV - 34.5 kV - 13.8 kV 111 kV - 34.5 kV - 13.8 kV 110 kV - 34.5kV - 13.8kV
110 kV - 34.5 kV - 13.8 kV 110 kV - 34.5kV - 13.8kV
110 kV - 34.5kV - 13.8kV
110 kV - 34.5kV - 13.8kV
110 kV - 34.5kV - 13.8kV
110 kV - 34.5 kV - 13.8 kV 110 kV - 34.5 kV - 13.8 kV 110 kV - 34.5kV - 13.8kV
110 kV - 34.5 kV - 13.8 kV 110 kV - 34.5 kV - 13.8 kV 69 kV - 13.8 kV 110 kV - 34.5 kV - 13.8 kV 110 kV - 34.5kV - 13.8kV
110 kV - 34.5kV - 13.8kV
110 kV - 34.5 kV - 13.8 kV 69 kV - 13.8 kV 110 kV - 34.5 kV - 13.8 kV 110 kV - 34.5 kV - 13.8 kV 110 kV - 34.5kV - 13.8kV
69 kV - 13.8 kV 69 kV - 13.8 kV 110kV - 13.8kV
110kV - 13.8kV
110 kV - 34.5kV - 13.8kV
AREA
SOUTH NORTH CENTRAL SOUTH CENTRAL SOUTH NORTH NORTH CENTRAL SOUTH NORTH CENTRAL CENTRAL SOUTH SOUTH SOUTH NORTH CENTRAL SOUTH NORTH NORTH SOUTH CENTRAL CENTRAL SOUTH NORTH NORTH SOUTH SOUTH CENTRAL NORTH NORTH SOUTH SOUTH CENTRAL
DATE
20-Mar-06 20-Mar-06 20-Mar-06 20-Mar-06 20-Mar-06 21-Mar-06 21-Mar-06 21-Mar-06 21-Mar-06 21-Mar-06 22-Mar-06 22-Mar-06 22-Mar-06 22-Mar-06 22-Mar-06 23-Mar-06 23-Mar-06 23-Mar-06 23-Mar-06 23-Mar-06 24-Mar-06 24-Mar-06 24-Mar-06 24-Mar-06 24-Mar-06 27-Mar-06 27-Mar-06 27-Mar-06 27-Mar-06 27-Mar-06 28-Mar-06 28-Mar-06 28-Mar-06 28-Mar-06 28-Mar-06 B C D E A B C C E C E A B C D E A B C D E A B C D E A
GROUP
A B C D E A B
ADDRESS
Madrigal Business Park, Bo. Alabang, Muntinlupa McArthur Highway, Bo. San Marcos, Calumpit, Bulacan Reclamation Area, Roxas Blvd., Pasay Sucat, Muntinlupa Edsa, Mandaluyong Bo. San Dionisio, Paranaque Diliman, Quezon City Quirino Highway, Novaliches, Quezon City Pasong Tamo, Makati Sun Valley Drive, Paranaque, Metro Manila Molina Compound, Molina St., Bagbaguin, Valenzuela Ortigas Avenue Extension, Bo. Sto. Domingo, Cainta, Rizal Bo. Dolores, Taytay, Rizal Sta. Cecilia, Kubo-kob, Bo. Pamplona, Las Pinas, Mapulang Lupa, M.M.
Bo. Zapote, MCCRRP Sta. Rosa, Bo. Balibago, Sta. Rosa, Laguna[Road To Filsyn] Dona Remedios, Trinidad Highway, Bo. Sto. Cristo, Baliwag, Bulacan Cubao, Quezon city LIIP, Binan, Laguna Bocaue Exit, Bocaue-Sta. Maria Provincial Road, Bo. Turo, Bocaue, Bulacan La Trinidad, Bo. Bundukan, Bocaue, Bulacan Bo. Canlubang, Calamba, Laguna Hillcrest Drive, Pasig Blvd., Pasig Elizco Road, Taguig, Metro Manila Bo. Diezmo, Cabuyao, Laguna Cagayan Valley Road, Provincial Road, Bo. Silangan, San Miguel, Bulacan Barrio Cruz Na Daan, San Rafael, Bulacan Bo. Habay, Bacoor, Cavite Aguinaldo Highway, Anabu, Imus, Cavite PBM Compound, Rosario, Pasig City, Metro Manila Dona Remedios, Trinidad Highway, Bo. Sto. Cristo, Baliwag, Bulacan FBIC, Bo. Ticay & Santol, Malolos, Bulacan National Highway, Silang, Cavite Bo. Buho, Silang, Cavite Globe Steel Compound, Taytay, Rizal
Actual Field Verification
Pre-survey Meeting
Actual Field Verification
Verification of Single-line diagrams and nameplate ratings
Actual Field Verification
Verification of switchgear and control room equipment
Learnings on Asset Accounting
1. There should only be one facility manager per item who tracks the total count & other relevant information (installed, for test, under repair, available in stock, for disposal, monthly usage and if possible forecast requirements). 2. Revive the pole monitoring system.
3. Assign company numbers to all major equipment upon acceptance.
Replacement Cost (RC)
Replacement Cost
Replacement Cost can be established by: a. Reference to historical costs, adjusted for inflationary increases since construction (indexation) b. Comparison with recent costs of similar assets (replacement cost method) c. Reference to technologically advanced assets in use elsewhere (modern equivalent asset) Aside from material and labor costs, RC includes design and engineering costs, transport, freight, duty, local delivery, interest during construction, etc.
Challenges Encountered by Meralco
Cost Estimating Methods 1. There were differences between the estimated and actual costs because of the following: a. Average material costs were used instead of last purchase cost.
b. Overtime and night differential cost not considered as relevant cost.
2. Actual and estimated labor cost do not match perfectly.
Learnings on Replacement Cost
1. Incorporate overtime and night differential pay in the cost estimates.
2. Review manhours requirement per constructive unit.
3. Implementing offices to explain if there are wide discrepancies between estimated and actual costs.
Optimization
Optimization
In practice, optimization is carried out in accordance with the following principles: a. Exclude stranded assets.
b. Optimize the configuration of the network – system is reconfigured resulting in a lower value network. c.
Optimize the capacity of elements in the network.
d. Optimize network engineering – components of the network are replaced with components with lower value.
e. Optimize stores and spares.
Planning Horizon
Network Components
Subtransmission lines Substations (excluding transformers) Primary distribution circuits Points of connection to transmission network Substation transformers Distribution Line Transformers Secondary distribution circuits Low voltage network Other distribution assets
Planning Horizon 15 years (2022) 10 years (2017) 5 years (2012)
Factors Considered in the Optimization
1. Loading of delivery point power transformers or grid exit points 2. Loading of subtransmission lines 3. Subtransmission System Configuration (number and size of transformers and feeders per substation) 4. Loading of substation power transformers 5. Substation topology (breaker-and-a-half bus configuration against single bus scheme) 6. Substation engineering (AIS or GIS 34.5 kV switchgear, spare GIS breakers, OLTC vs. AVRs)
Factors Considered in the Optimization
7. Loading of distribution lines 8. Loading of distribution line transformers 9. Circuit breaker interrupting current ratings 10. Power conditioning equipment 11. Low voltage service 12. Spares – meters, DTs, poles and wires 13. Load Forecast
SUMMARY OF PROPOSED OPTIMIZATION OF PBA OF MERALCO DISTRIBUTION ASSETS Asset Sub Category
Substation
Description
I. 34.5 kV GIS cost to AIS cost
Count
30 II. Breakers for future use on GIS Substations a. CBP1A b. Hillcrest c. Legazpi d. Zapote III. Optimisation due to CB Fault level Optimisation * a. 40 kA to 31.5 kA b. 40 kA to 25 kA 3 2 2 3 22 44 * Optimization of circuit breakers was not included in the final valuation report but included in the optimization report.
Loading Of Distribution Transformers (2012)
SECTOR ALABANG TOTAL DT CAPACITY IN 2006 (KVA) 899,480.00 ENERGY DELIVERY APRIL, 2012 (KWH) 161,535,234 UTILIZATION LF=1.0
LF=0.4
24.9% 62.4% BALINTAWAK DASMARINAS MANILA PASIG PLARIDEL RIZAL SAN PABLO STA. ROSA VALENZUELA TOTAL 735,964.50 770,885.50 1,551,839.50 2,490,373.50 654,713.00 642,898.50 419,290.50 722,460.50 1,322,403.50 10,210,309.00 116,700,321 103,218,433 248,179,890 381,887,940 103,302,858 118,988,822 62,890,315 114,500,776 196,614,651 1,607,819,240 22.0% 18.6% 22.2% 21.3% 21.9% 25.7% 20.8% 22.0% 20.6% 21.9% 55.1% 46.5% 55.5% 53.2% 54.8% 64.3% 52.1% 55.0% 51.6% 54.7%
SUMMARY OF PBA’s PROPOSED OPTIMIZATION OF MERALCO DISTRIBUTION ASSETS % Optimized Asset
1 Substation 2 Line Transformers * 6.72% 0.16% 3 Meters 40.41% * PBA found the optimization of line transformers not significant and thus was not included in the final valuation report.
Learnings on Optimization
1. Review policies on GIS modules and circuit breaker fault ratings.
2. Improve the process of DT monitoring (existence, SIN to DT connectivity, kWH to kW computation). 3. Review policies on DT sizing to increase the loading of the DTs (minimum capacity, initial kVA size).
4. Review asset data on meters.
Depreciation
Depreciation
Straight line depreciation is adopted.
Factors to consider: 1. Effective lives – estimated life, assuming continued use in its present function as part of a continuing business. 2. Age of equipment
Factors in assessing effective lives
1.
Manufacturers’ recommendations 2. Maintenance levels and life extension policies 3. Environment in which the assets reside 4. External factors such as supply/demand characteristics 5. Physical, technological, functional and economic obsolescence 6. Survivor data – failure rates
Challenges Encountered by Meralco
• Insufficient validated failure rate records and asset life of equipment - Power Transformers, Breakers, Distribution Transformers, Meters, Poles and Wires - Not all asset data were available or easy to gather Aside from depreciation, this data is used to justify spare units
Learnings on Asset Lives
Finalize failure rates for power transformers, distribution transformers and meters.
PBA used a 10% annual DT failure rate (of the total DT population)
Results of Meralco’s ODRC Valuation
Results of Valuation
A.
A1
Meralco
Distribution Plant
Land and Land Rights (Distribution Purpose)
Replacement Optimisation Optimsed Cost Adjustment Optimised Replacement Depreciated Cost Replacement Cost
100% 0% 100% 100% A2 A3 Structures and Improvements (Distribution Purpose) Station Equipment A3a Power transformers A3b Switchgear A3c Protective equipment A3d Metering & control equipment A3e Communications equipment A3f Other station equipment A4 Poles, Towers and Fixtures – Distribution A5 A6 A7 A8 A9 Poles, Towers and Fixtures – Customer Overhead Conductors and Devices – Distribution Overhead Conductors and Devices – Customer Underground Conduits – Distribution Underground Conduits - Customer 100% 0% 100% 100% 100% 100% 100% 100% 100% 0% 100% 0% 100% 0% -1% 0% 0% -7% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 99% 0% 100% 93% 100% 100% 100% 100% 100% 0% 100% 0% 100% 0% 68% 0% 63% 53% 43% 51% 36% 51% 58% 0% 64% 0% 65% 0%
Results of Valuation
Meralco
A10 Underground Conductors and Devices – A11 Distribution Underground Conductors and Devices – A12 A13 Customer Line Transformers – Distribution Line Transformers – Customer A14 Power Conditioning Equipment A15 Services A16 Meters, Instruments & Metering Transformers-distribution A17 Meters, Instruments & Metering Transformers – customer A18 Information technology equipment (distribution) A19 Regulated Entity Property on Consumers' Premises A20 Street Lights and Signal Systems A21 Submarine Cables
SUB-TOTAL % FROM TOTAL Replacement Optimisation Cost
100%
Adjustment
0%
Optimsed Optimised Replacement Depreciated Cost
100%
Replacement Cost
89% 0% 100% 0% 100% 100% 100% 0% 100% 100% 100% 0%
100%
0% 0% 0% 0% 0% -40% 0% 0% 0% 0% 0%
-8%
0% 100% 0% 100% 100% 60% 0% 100% 100% 100% 0%
92%
0% 58% 0% 48% 53% 42% 0% 14% 50% 36% 0%
55% 79%
Results of Valuation
Meralco
Replacement Optimisation Cost Adjustment Optimsed Optimised Replacement Depreciated Cost Replacement Cost B. General Plant
B1 B2 Land and Land Rights (non-network) Structures and Improvements (non-network) 100% 100% -13% -8% 87% 92% 87% 32% B3 B4 B5 B6 B7 B8 B9 Office Furniture and Equipment Transportation Equipment Stores Equipment Tools, Shop and Garage Equipment Laboratory Equipment Information systems equipment (non network) Power-operated Equipment B10 Communication Plant and Equipment B11 Miscellaneous Equipment
C. Materials and Supplies (including spares) D. Transf. subtransmission assets E. Allocated OH Capitalized SUB-TOTAL % FROM TOTAL TOTAL
100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 0% 0%
100% 100%
0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
-9% -8%
100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 0% 0%
91% 92%
10% 12% 38% 43% 54% 14% 51% 36% 27% 100% 0% 0%
67% 21% 57%
Results of Valuation
As of June 30, 2006 Meralco Totals Percentages Depreciated Historical Cost 48,819,313,786
29%
Replacement Cost Optimized Replacement Cost 169,072,111,739
100%
155,257,925,205
92%
Optimized Depreciated Replacemnt Cost 96,640,693,811
57%