Operating Maintenance Expenditure Forecasts by bobbybrull

VIEWS: 9 PAGES: 17

									Operating & Maintenance
Expenditure Forecasts

Annaliza Bitantes
Energy Regulatory Officer I
Operating & Maintenance
Expenditure Forecasts

                     9,000.00

                     8,000.00

                     7,000.00

                     6,000.00
 in Mn PhP Nominal




                     5,000.00

                     4,000.00

                     3,000.00

                     2,000.00

                     1,000.00

                               -
                                    TRANSCO ERC DD      TRANSCO ERC DD        TRANSCO ERC DD      TRANSCO ERC DD      TRANSCO ERC DD        TRANSCO ERC DD
                                          2005                2006                  2007                2008                2009                  2010

                     Non-netw ork    546.00    546.00    653.00    488.00      614.00    512.00    653.00    535.00    690.00    558.00      732.00   581.00
                     Netw ork       1,996.00   1,532.00 2,441.00   1,167.00   2,454.00 1,248.00   2,562.00   1,322.00 2,673.00   1,398.00   2,781.00 1,458.00
                     Payroll        1,895.00   1,600.00 2,308.00   1,656.00   2,866.00 1,785.00   3,562.00   1,917.00 3,926.00   2,050.00   4,346.00 2,183.00
                                                                                        Regulatory Year
         Payroll Forecasts


                    5,000.00

                    4,500.00

                    4,000.00

                    3,500.00
in Mn PhP Nominal




                    3,000.00

                    2,500.00

                    2,000.00

                    1,500.00

                    1,000.00

                       500.00

                              -
                                   TRANSCOERC DD   TRANSCOERC DD   TRANSCOERC DD     TRANSCOERC DD   TRANSCO ERC DD   TRANSCO ERC DD
                                         2005            2006            2007               2008           2009             2010

                    Non-netw ork
                    Netw ork
                    Payroll        1,895.00        2,308.00        2,866.00           3,562.00       3,926.00         4,346.00
                                                                              Regulatory Year
     Payroll Forecasts
 Payroll                                                              CPI less 2%
   Network Operations Supervision
& Eng'g Staff
                                                                      reduction of 5% representing an estimate of the OPEX related to Sub T/L
                    Network Operations Other Staff
                     5,000.00

                     4,500.00

                     4,000.00

                     3,500.00
in Mn PhP Nominal




                     3,000.00

                     2,500.00

                     2,000.00

                     1,500.00

                     1,000.00

                        500.00

                               -
                                    TRANSCO ERC DD     TRANSCO ERC DD         TRANSCO ERC DD      TRANSCO ERC DD     TRANSCO ERC DD         TRANSCO ERC DD
                                          2005                2006                  2007                2008                2009                  2010

                     Non-netw ork
                     Netw ork
                     Payroll        1,895.00   1,600.00 2,308.00   1,656.00   2,866.00 1,785.00   3,562.00   1,917.00 3,926.00   2,050.00   4,346.00 2,183.00
                                                                                      Regulatory Year
         Network Operating & Maintenance
         Expenditure Forecasts



                    8,000.00

                    7,000.00

                    6,000.00
in Mn PhP Nominal




                    5,000.00

                    4,000.00

                    3,000.00

                    2,000.00

                    1,000.00

                              -
                                   TRANSCO ERC DD   TRANSCO ERC DD   TRANSCO ERC DD    TRANSCO ERC DD   TRANSCO ERC DD   TRANSCO ERC DD
                                         2005             2006             2007               2008            2009             2010

                    Non-netw ork
                    Netw ork       1,996.00         2,441.00         2,454.00           2,562.00        2,673.00         2,781.00
                    Payroll        1,895.00         2,308.00         2,866.00           3,562.00        3,926.00         4,346.00
                                                                                Regulatory Year
             Network Operating & Maintenance
             Expenditure Forecasts
   Network
                                                      gradual annual reduction of 5% from 2006-2008 and 2% from 2009-2010, reduction of 5% representing an
                    Network Operations
                                                      estimate of the OPEX related to sub T/L
                    System Operations                 gradual annual reduction of 5% from 2006-2008 and 2% from 2009-2010 due to expected decrease
                    WESM Compliance
                                                       in the cost of network operations as some of the network assets may have been sold and fully depreciated
                                                      reduction of 25% for 2006 due to a big jump from 2005
                                                      gradual annual increase from 2006-2010 of 7%, 6%, 4% and 2% respectively due to expected
                    Network Maintenance
                                                          increase in the cost of network maintenance as the network gets older
                                                      reduction of 5% representing an estimate of the OPEX related to Sub T/L
                    Insurance                         unchanged in consideration of the risk which may affect the WACC
                       8,000.00

                       7,000.00

                       6,000.00
in Mn PhP Nominal




                       5,000.00

                       4,000.00

                       3,000.00

                       2,000.00

                       1,000.00

                                -
                                     TRANSCO ERC DD     TRANSCO ERC DD         TRANSCO ERC DD      TRANSCO ERC DD     TRANSCO ERC DD         TRANSCO ERC DD
                                           2005                2006                  2007                2008                2009                  2010

                      Non-netw ork
                      Netw ork       1,996.00   1,532.00 2,441.00   1,167.00   2,454.00 1,248.00   2,562.00   1,322.00 2,673.00   1,398.00   2,781.00 1,458.00
                      Payroll        1,895.00   1,600.00 2,308.00   1,656.00   2,866.00 1,785.00   3,562.00   1,917.00 3,926.00   2,050.00   4,346.00 2,183.00

                                                                                       Regulatory Year
Operating & Maintenance
Expenditure Forecasts

                    9,000.00

                    8,000.00

                    7,000.00

                    6,000.00
in Mn PhP Nominal




                    5,000.00

                    4,000.00

                    3,000.00

                    2,000.00

                    1,000.00

                              -
                                   TRANSCOERC DD   TRANSCOERC DD   TRANSCOERC DD     TRANSCOERC DD   TRANSCO ERC DD   TRANSCO ERC DD
                                         2005            2006            2007               2008           2009             2010

                    Non-netw ork    546.00          653.00          614.00            653.00          690.00           732.00
                    Netw ork       1,996.00        2,441.00        2,454.00           2,562.00       2,673.00         2,781.00
                    Payroll        1,895.00        2,308.00        2,866.00           3,562.00       3,926.00         4,346.00
                                                                              Regulatory Year
Operating & Maintenance
Expenditure Forecasts
Non-network                                                restrict at 95% for smoothing efficiency
 Insurance                                                 unchanged in consideration of the risk which may affect the WACC


                       9,000.00

                       8,000.00

                       7,000.00

                       6,000.00
   in Mn PhP Nominal




                       5,000.00

                       4,000.00

                       3,000.00

                       2,000.00

                       1,000.00

                                 -
                                      TRANSCO ERC DD      TRANSCO ERC DD        TRANSCO ERC DD      TRANSCO ERC DD      TRANSCO ERC DD        TRANSCO ERC DD
                                            2005                2006                  2007                2008                2009                  2010

                       Non-netw ork    546.00    546.00    653.00    488.00      614.00    512.00    653.00    535.00    690.00    558.00      732.00   581.00
                       Netw ork       1,996.00   1,532.00 2,441.00   1,167.00   2,454.00 1,248.00   2,562.00   1,322.00 2,673.00   1,398.00   2,781.00 1,458.00
                       Payroll        1,895.00   1,600.00 2,308.00   1,656.00   2,866.00 1,785.00   3,562.00   1,917.00 3,926.00   2,050.00   4,346.00 2,183.00
                                                                                          Regulatory Year

                       Non-network                                   restrict at 95% for smoothing efficiency
                        Insurance                                    unchanged in consideration of the risk which may affect the WACC
Regulatory Asset Base
& Valuation

David Dawson
ERC’s Regulatory Expert
Optimization RAB

• ERC checked on-going projects
  against RAB and did not identify any
  overlap in claim of value
• Otherwise, ERC has relied on SKM
  et. al optimization of the RAB
• DD adjusts for:
  – Windfall
  – Connection assets
  – Sub-transmission assets via disposals
RAB - Windfall


• s.4.8.1 of TWRG indicates that asset
  lives may differ from those used for
  financial reporting
• s.4.8.3 of TWRG indicates the ERC is
  interested in treatment of windfall
  gains and losses
• These could arise from valuation or a
  change in asset lives
 RAB – Windfall Potential

        Changes in Asset Value                        Changes in Economic Life


P1.1m
P0.8m                                         P0.8m

ODRC                                          ODRC


                              Windfall Gain




        10      20      30         40   50            10      20      30         40   50

              Asset Life (years)                            Asset Life (years)
RAB – Windfall Treatment

• For DD only history known from 1996
  appraisal using 30y uniform life
                      Changes in Asset Value & Life


       P1.1m
       P0.8m                                Change Asset Life to 30 Year

                                                     Change Asset Life to 50 Year
  Delta ODRC
                                                                  ODRC with windfall
                                                              Windfall for Review
                                                                  ODRC without windfall



               1990   1995    2005   2010     2015     2020

                               Time (years)
RAB – Windfall DD Review

• Windfall applicable for ODRC and
  appraisal to the extent asset lives now
  recommended to differ from 30y
• DD only looks at substations, lines,
  interconnectors, meters &
  communications
• Other assets (appraisal) not yet
  examined in detail
RAB – Subtran & Connection (a)

• Focus for DD on plant & equipment
• Use SKM data on T/ST & N/C
  definitions
• Resultant outcome is four groupings
  – Transmission divided by network &
    connection
  – Sub-transmission divided by network &
    connection
 RAB – Subtran & Connection (b)

 • Summary for substations
Remove Windfall
                  (PhP k)             RC          DRC        ODRC
Transmission      Network      51,947,381   31,850,787   31,224,055
                  Connection    4,676,022    2,339,635    2,299,865
               Network
Sub-transmission                4,115,644    2,262,987    2,126,576
                  Connection    4,928,207    2,321,889    2,256,838
                  TOTAL        65,667,254   38,775,297   37,907,334
Retain Windfall
                  (PhP k)             RC          DRC        ODRC
Transmission      Network      51,947,381   35,548,721   34,825,712
                  Connection    4,676,022    2,805,680    2,746,616
               Network
Sub-transmission                4,115,644    2,535,220    2,392,466
                  Connection    4,928,207    2,454,869    2,359,158
                  TOTAL        65,667,254   43,344,490   42,323,951
RAB – Subtran & Connection (c)

• Summary % for substations
Windfall
               (PhP k)        RC        DRC       ODRC
Transmission   Network         -   3,697,934   3,601,656
               Connection      -    466,045     446,751
               Network
Sub-transmission               -    272,234     265,890
               Connection      -    132,980     102,319
               TOTAL           -   4,569,193   4,416,617
% Windfall
               (PhP k)        RC        DRC       ODRC
Transmission   Network      0.0%      10.4%       10.3%
               Connection   0.0%      16.6%       16.3%
               Network
Sub-transmission            0.0%      10.7%       11.1%
               Connection   0.0%       5.4%        4.3%
               TOTAL        0.0%      10.5%       10.4%

								
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