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1Dave Openshaw UK Alpha 6 – Block 3
Barcelona 12-15 May 2003
Network Asset Management as a Contracted Service Provision
based on paper TFS_Openshaw_C1
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2Dave Openshaw UK Alpha 6 – Block 3
Barcelona 12-15 May 2003
LE Group UK Networks Branch165,000 km network14.6 GW demand7.7m customers
b
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3Dave Openshaw UK Alpha 6 – Block 3
Barcelona 12-15 May 2003
Asset Governance / Asset Management Model
EPN
Network Assets
Network Management
SPN
Network Assets
Network ServiceAgreement
Network ServiceAgreement
Power Networks Asset Governance
LPN
Network Assets
Network ServiceAgreement
LE Group Networks Branch
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4Dave Openshaw UK Alpha 6 – Block 3
Barcelona 12-15 May 2003
UK Regulatory Model
+ -
+
+ +
x OpeningValue
-
Investment
DepreciationDepreciation
AssetValue
WACC
RegulatoryReturn
OperatingCosts
AllowedRevenue
Performance Based
Adjustment
Assurance of Stewardship
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5Dave Openshaw UK Alpha 6 – Block 3
Barcelona 12-15 May 2003
UK Use of System Charges
£0.00
£10.00
£20.00
£30.00
£40.00
£50.00
£60.00
£70.00
£80.00
£90.00
£100.00
Easte
rn P
ower
Net
works
Seebo
ard
Power
Net
works
East M
idlan
ds
United
Utili
ties E
lectri
city [
Norweb
]
Lond
on P
ower
Net
works
Aquila
Net
works
[Midl
ands
]
YEDL [Y
orks
hire]
NEDL [N
orth
ern]
SE Pow
er D
istrib
ution
[Sou
ther
n]
SP Man
web
Wes
tern
Pow
er D
istrib
ution
(Sou
th W
est)
SHE Pow
er D
istrib
ution
[Sco
ttish-
Hydro
]
Wes
tern
Pow
er D
istrib
ution
(Sou
th W
ales)
SP Dist
ribut
ion [S
cottis
h Pow
er]
Typical Annual DUoS Charges - Residential Unrestricted Customer
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6Dave Openshaw UK Alpha 6 – Block 3
Barcelona 12-15 May 2003
Value - Quality vs. Price
SSE North
SPWPD W
WPD SNEDL
SSE South
AquilaEME
SPN
EPN
ManwebYEDLUU
LPN
0.00
20.00
40.00
60.00
80.00
100.00
120.00
140.00
£40.00 £50.00 £60.00 £70.00 £80.00 £90.00 £100.00
Average annual use of system charge - unrestricted residential customer (3,750 units p.a.)2
Cu
sto
mer
Min
ute
s L
ost
per
co
nn
ecte
d
cust
om
er 2
001/
02 1
Quality of Supply / average domestic charges
Sources: 1 - Company 2001/02 Licence Condition 5 Information and Incentives Project submissions
2 - Company 2002/03 Licence Condition 4 statements
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7Dave Openshaw UK Alpha 6 – Block 3
Barcelona 12-15 May 2003
Risk Management Assurance• Ofgem Asset Risk Management survey
conducted in 2002
• 12 x distribution / transmission companies surveyed
• Performance against 3 key areas of risk audited:
• Business Strategy & Direction
• Asset & Network Strategy
• Asset Life Cycle Management
• 18- point radar plot compiled for each company