GRID SYSTEM INVESTMENTS

Transcription

1 EB-0-0 Exhibit D Schedule Page of GRID SYSTEM INVESTMENTS 0 0 SUSTAINING PORTFOLIO UNDERGROUND SYSTEM The underground distribution system consists of assets connected to the.kv,.kv and.kv primary voltage systems. It covers approximately percent of the total distribution system in THESL. The majority of the underground distribution system in the downtown area is connected in a radial and horseshoe area in a looped, distribution configuration. Like many other utilities in North America, THESL s underground plant is facing numerous challenges, namely: Aged asset base at or near the end of service life A large percentage of underground equipment installed in the field is either near or has passed its useful service life. Figure below illustrates the percentage of underground assets that have already passed their useful service lives. Deteriorating asset condition Aged equipment, harsh weather condition and ingress of dirt contamination have caused a general deterioration in the overall health condition of assets. The recent Asset Condition Assessment ( ACA ) study has revealed an increasing trend in deterioration of underground equipment. Lack of System Control and Data Acquisition ( SCADA ) control The majority of underground equipment is not connected to the SCADA system. As a result, a crew needs to be dispatched to the equipment s location to manually operate it when needed. This prolongs outages during a fault condition.

2 EB-0-0 Exhibit D Schedule Page of 0 0 % Figure : Percentage of Assets Past Their Useful Service Lives 0 Figure below provides a snap shot of reliability performance of the underground system from 000 to 00, excluding Major Event Days ( MEDs ), planned work and loss of supply. The blue line in Figure shows a generally increasing trend in underground Customers Interrupted ( CI ) from forced or permanent faults until 00 followed by signs of improvement. This is an indication of the positive results from the capital replacement program that THESL has undertaken over the past few years. The red line in Figure shows an increasing trend in the number of breaker auto reclose operations. This illustrates the impact of ageing equipment in which insulation strength is reduced leading to surface tracking. Surface tracking is an event in which the resistance of the insulation medium has deteriorated to a point where electrical current starts to flow over its surface. Left unattended, tracking will eventually lead to a flashover, which would

3 EB-0-0 Exhibit D Schedule Page of cause the equipment to suffer permanent damage resulting in lengthy power outages to customers. Ageing equipment must be replaced or upgraded in a scheduled program to prevent unplanned outages due to failure in the field as well as to effectively manage the health of THESL s assets. As a result, it is necessary for capital replacement and system enhancement programs to continue over the coming years to maintain and improve reliability of the electrical distribution CI Forced Year Auto Figure : Ten-Year Underground CI (Customers Interrupted) 0 Figure below presents the five-year CI numbers from underground equipment failures. Figure clearly shows that primary cable is the leading cause of underground power outages. Over the past few years, however, the number of interruptions due to primary cable failure has declined. This is mainly attributable to the direct-buried cable and capital replacement program that THESL has been undertaking over this period. While THESL is aggressively pursuing replacement of ageing assets, it is not focusing solely on like-for-like system replacement. Instead, THESL is also undertaking

4 EB-0-0 Exhibit D Schedule Page of initiatives involving system enhancements to utilize available new technology and equipment. These initiatives are being undertaken to take advantage of the asset renewal program to proactively replace assets with more modern equipment for additional improvement to system reliability and performance. Defective U/G Equipment: CI Contribution Customers Interrupted 0,000 0,000 0,000 00,000 0,000 0,000 0,000 0,000 00,000 0,000 0,000 0,000 0,000 0 Primary Cable & Joints Submersible Transformer Elbow Terminator Switchgear All other types 00,,,,,0, 00 0,,0,,,, 00 0,,,0,0,, ,0,,,0,0,0 00,0,,, 0,0 0, Figure : Underground Defective Equipment CI 0 THE UNDERGROUND WORK PROGRAM Table shows underground investment for the historical, bridge and test years while Table shows the units of work planned for underground assets over the 0-0 period.

5 EB-0-0 Exhibit D Schedule Page of Table : Underground Investment 00 to 0 ($ millions) Actual Actual Actual Bridge Test Test Test Underground Table : Planned Underground Units of Work Direct-buried primary cable (km) Non-direct-buried Primary cable (km) 0 0 PILC cable replacement (km) Transformers 0 Pad mounted switches URD vault rebuild (switches) 0 Feeder automation (switches) Cable chambers (new) Cable Chamber (rebuild) 0 0 Duct bank (km) (new)... The $ million increase from 0 to 0 is due to additional long-term programs such as Queens Quay West civil rebuild resulting from the City of Toronto s Waterfront revitalization project, from system enhancement programs such as air-vented padmounted switches replacement, and from a reduction of the backlog of aged equipment such as direct-buried cable, submersible transformers and switches that have reached or passed the end of their useful lives. 0 From 0 to 0, the capital budget is proposed to increase by a further $ million. This is a result of increased number of assets that need to be replaced as they have either reached or passed their useful service lives as well as additional enhancement programs such as feeder automation.

6 EB-0-0 Exhibit D Schedule Page of From 0 to 0, there is a further increase of $0 million in underground capital investment. This is due to a ramping up of the direct-buried cable replacement program as well as the result of the planned full implementation of the new Standard Design Practice (SDP-00) version. 0 The updated design standard requires installation of concrete-encased ducts for secondary service conductors and inclusion of street lighting connections. The revised design also requires the installation of new tap boxes on city sidewalks for outdoor and street lighting connections. The current design practice for direct-buried primary cable replacement does not require the replacement of existing direct-buried secondary wires or street light facilities in concrete-encased ducts. The updated design would ensure replacement of aged secondary conductors that supply power to our customers; it would also reduce the duration of any future power interruptions from local equipment failure with quick secondary conductor replacement from the conduit. An additional enhancement program for feeder loading relief and tie-points used for load transfers are also added to the 0 programs. Map shows locations of the planned underground projects from 0-0.

7 EB-0-0 Exhibit D Schedule Page of Map : Underground investment Cable Replacement A large portion of the planned expenditure is allocated to primary cable replacement programs. These programs are mostly proposed for the north-east part of the city where the majority of the cable is located. A total of kilometres of direct-buried cable is planned for replacement between 0 and 0 representing. percent of the total population of direct-buried cable. This work is required as faulty primary cable continues to be the leading cause of interruptions in the underground system. As can be seen from Figure above, the capital program that THESL has undertaken during the past few years has yielded a gradual improvement in system reliability, particularly in primary cable related outages. As a result, THESL plans to continue investments to aggressively

8 EB-0-0 Exhibit D Schedule Page of replace and upgrade aged and poor performing system assets, especially direct-buried cable, to ensure continued reliability improvement in future years. 0 THESL s current practice is to replace direct-buried XLPE (cross-linked polyethylene) cables with tree-retardant TRXLPE cables that incorporate metal foil barriers and water migration controls to further reduce the rate of deterioration from water treeing. THESL is on the path to replace all of the direct-buried cable with cable installed in concreteencased ducts. Replacing direct-buried cable with cable installed in concrete-encased ducts provides better mechanical protection against contamination from local soil and underground conditions, which better maintains normal operational integrity and maximizes service life. In addition, in the event of a fault on a cable segment, the faulted section can be quickly replaced. 0 The blue lines in Map show locations of direct-buried cable replacement. This work will involve removing old direct-buried XLPE cable and replacing with TRXLPE cable in concrete-encased ducts. Although this program is mainly targeted for the replacement of direct-buried cable, other equipment connected to the feeders that are at, or reaching, end of their useful service life will also be included in the work. Such other equipment includes switches, submersible transformers, terminations, building vault transformers and accessories. Underground Rehabilitation The red lines on Map show locations where underground rehabilitation work is planned for 0-0. The underground rehabilitation program is focused on replacement or upgrade of equipment that is aged or showing signs of poor condition. These assets are analyzed based on feeder reliability performance, based on the age of the equipment connected, based on the number of outages in a given time period, based on the cause of the outages, and based on available feeder inspection information. Work scopes are

9 EB-0-0 Exhibit D Schedule Page of 0 created to replace and upgrade equipment to ensure proper mitigation of risks in the field. The equipment types include: Building vault equipment THESL-owned equipment installed inside customer owned transformer vault. Locations are spread across the city s distribution system. Submersible transformer vault equipment Submersible type transformer installed in below grade vault mainly on city sidewalks. Most of these locations are in the horseshoe part of the city. Pad-Mounted switchgear Primary switchgear installed on above grade concrete pads. This switchgear is installed mainly on boulevards along main roadways and sub-divisions on the.kv distribution system around the horseshoe part of the city. PILC (Paper-Insulated Lead Cover) cable and non-direct-buried XLPE cable Primary cable installed underground through duct banks and cable chambers. The majority of these cable types are installed in and around the downtown area. Underground Residential Distribution ( URD ) vault equipment Underground transformers and switches installed in below grade vaults supplying power to parts of the downtown. Civil infrastructure Cable chambers, transformer vaults and duct banks. 0 The redevelopment of the Central Waterfront Area is highlighted as a major objective of the City s vision for the Waterfront area. As a result of proposed road work on Queens Quay, Waterfront Toronto has requested that THESL remove its overhead installations and relocate some of the existing underground assets. As part of this City initiated work, THESL will construct new underground facilities such as cable chambers and duct banks along Queens Quay.

10 EB-0-0 Exhibit D Schedule Page 0 of In 0, construction work will be carried out on Queens Quay between Bathurst Street and York Street. In 0, construction work will continue on Queens Quay between Yonge Street and Parliament Street and in 0, work will be carried out on Queens Quay between York Street and Yonge Street. 0 System Enhancement and Grid Modernization In addition to programs that replace aged and unreliable assets, system enhancement projects are also included as a part of the underground rehabilitation program to proactively make improvements to reliability performance. These programs will replace obsolete equipment with modern equipment and include system reconfiguration and automation to achieve additional reliability benefits. 0 For 0-0 THESL will continue the deployment of grid modernization initiatives to integrate proven solutions into the current distribution system. Grid modernization has evolved into an integrated planning and operational model. Starting in 0, feeder automation projects will incorporate underground equipment where feasible in addition to overhead switching devices on a feeder for further reliability improvement. Previous feeder automation projects focused mainly on automating overhead switching devices for isolation and restoration. As the majority of feeders include both overhead and underground segments, additional reliability improvement can be achieved by automating underground switching devices to further utilize the capabilities of the technology. Map below shows the areas of overall feeder automation, with most of the underground automation projects taking place in the eastern part of the city from 0-0.

11 EB-0-0 Exhibit D Schedule Page of Map : Feeder automation Approximately feeders throughout THESL distribution area do not have adequate tiepoints and feeders are loaded at more than percent of their capacity under normal conditions. In 0 THESL will initiate a project covering ten mainly underground feeders, which will establish a minimum of three tie-points for each feeder and reduce normal loading to less than percent of its rated capacity. Map below shows locations where potential overloading exists. It contains both overhead and underground feeders.

12 EB-0-0 Exhibit D Schedule Page of Map : Location of Potential Overloading Condition A spot network pilot project will be conducted in 0 to install network equipment in two selected existing customer locations in the horseshoe area with.kv supply. This is another system enhancement initiative for reliability improvement. 0 THE DRIVERS OF THE UNDERGROUND WORK PROGRAM Cable Replacement As demonstrated in Figure, primary cable is the major cause of power outages in the underground system. Furthermore, Figure below shows that, direct-buried cable is by far the leading contributor to cable failures. Direct-buried cable was installed in the horseshoe area of the city in 0s and 0s. The majority of these are XLPE cables directly buried in ground. Because of the method of installation, this type of cable installation is constantly exposed to contamination from the soil, causing premature degradation to the insulation strength and corrosion to the

13 EB-0-0 Exhibit D Schedule Page of neutral conductors leading to premature cable failure. As illustrated in Figure, more than percent of direct-buried cable has passed their useful service lives. Direct Buried Cable Contribution (CI) 00,000 0,000 00,000 0,000 00,000 0, CI Direct Buried Cables All Other Cables Figure : Direct-Buried Cable CI Contribution 0 Direct-buried cable is often found on the egress or trunk portion of the feeder. A fault on a trunk segment of the cable will cause the station feeder breaker to lockout, interrupting power to all customers supplied by the feeder. Due to the nature of the installation, fault locating is frequently time-consuming and repair work is often very disruptive as it involves cutting into roads and sidewalks. As a result, failures from direct-buried cable contribute greatly to total Customers Interrupted (CI) and Customer Hours Interrupted (CHI) statistics. Additional information on Electrical Infrastructure Reliability is available at Exhibit D, Tab, Schedule. Moreover, as the physical integrity of direct-buried cable is already weakened due to years of contamination from harsh underground environment, any fault experienced by the feeder would additionally degrade its strength, causing higher risk of additional failures elsewhere on the cable. The most recent THESL ACA audit of direct-buried cable has shown notable increases from 00 to 0 in the Poor (from 0 percent to

14 EB-0-0 Exhibit D Schedule Page of. percent) and Very Poor (from percent to. percent) condition categories (see Exhibit D, Tab, Schedule for the THESL ACA Audit). Consequently, THESL plans to ramp up the replacement of this asset in the coming years to ensure that risk of failure from this asset class is properly mitigated. 0 Underground Rehabilitation In addition to direct-buried cable replacement, other equipment and other types of cable are analyzed for rehabilitation and upgrade. These are typically ageing assets that are at or past their useful service life. Capital investment projects are created after analysis of feeder reliability, the number of outages within a given time period, causes of failure and, in some cases, results from patrols by field crews. Most of these feeders are either poor performing with excessively high CI and CHI statistics or feeders that have sustained number of outages within a short period of time. Their planned replacement or upgrade is necessary to mitigate risk of additional failures. 0 As underground equipment is mostly installed outdoors and operated in exposed conditions, it is subjected to dirt, road salt, seasonal variations in temperature, water, moisture and condensation. Over time, its physical integrity degrades causing deterioration in the overall asset health condition. For equipment installed in building vaults, constant ingress of dust and road debris through ventilation louvers causes accumulation of dirt on insulation material surfaces. Although regularly scheduled maintenance identifies those locations and undertakes necessary follow up cleaning work, repetitive accumulation of contaminants causes deterioration of the equipment s insulation. Over time, this presents a high risk of failure from electrical flashover when combined with moisture and condensation. Depending on the feeder segment where the equipment is connected, asset failure can cause lengthy outages to all customers connected to that feeder.

15 EB-0-0 Exhibit D Schedule Page of Picture below shows insulators in a vault with excessive accumulation of contamination. Picture : Excess Contamination on the Insulators 0 Submersible Transformers Submersible transformer vaults are typically installed below grade in the sidewalk or boulevard. They are constantly exposed to ingress of dirt, debris, road salt and water. Accumulation of dirt sometimes clogs the drain which causes flooding in the vault and accelerates corrosion on the equipment. Over time, rust develops on the transformer enclosure leading to degradation of the physical integrity of the unit. Corrosion on the tank enclosure will ultimately lead to leakage of oil causing internal failure of the unit. Excessive contamination on termination components causes erosion of insulation material resulting in flashovers. When conditions warrant, this equipment needs to be replaced to prevent ultimate failure of the unit. Pictures and below show transformers with oil leak and corrosion. Additional information is available in the Electrical Infrastructure Reliability description found at Exhibit D, Tab, Schedule.

16 EB-0-0 Exhibit D Schedule Page of Picture: Submersible Transformer with Oil Leak Picture : Submersible Transformer with Corrosion

17 EB-0-0 Exhibit D Schedule Page of Switchgear Underground switchgear is also a major contributor to outages from underground equipment. As shown on Figure, primary switchgear is the second most common cause of underground failures after primary cable. Switchgear is a critical part of the underground distribution system, which is used for feeder switching and load transfer. Although both CI and CHI from underground switchgear related incidents have shown improvement, the design of air vented switchgear currently installed in the.kv looped distribution system is prone to failure resulting in large increases to CI and CMO every time a switch fails. 0 0 Air-ventilated pad-mounted switchgear is prone to dust and contamination buildup on insulation surfaces, which when combined with the presence of moisture and condensation in the vicinity of the equipment, can cause tracking and flashover between phases or phase to ground resulting in damage to the unit and a feeder outage. Fault locating is time consuming as crews must physically visit every underground installation to identify the failed unit before power can be restored through an alternate supply. As pad-mounted switches are installed mainly on feeder trunks, their failure often results in lengthy outage to feeder(s) affecting on average,00 customers and,00 CHI. Currently, there are approximately pad-mounted switches installed in the field. Figure below illustrates the ten-year failure rate of air-vented pad-mounted switches.

18 EB-0-0 Exhibit D Schedule Page of # Figure : Ten-Year Pad-Mounted Switchgear Failure Rate Pad-mounted switchgear has exhibited a trend of increasing failures over the last ten years with the failure rate during the last five years being particularly high. The failure rate trend may be due in part to their design, which appears to be prone to premature failure. Picture below shows a failed air-vented pad-mounted switch. Picture : Failed Air-Vented Pad-Mounted Switch

19 EB-0-0 Exhibit D Schedule Page of 0 Sealed type switchgear has its internal live components physically sealed from the exterior. This design eliminates the ingress of dirt into the live components, thus totally eliminating the above-mentioned failure mode. In addition, SCADA connection on new switchgear allows for its remote operation by system controllers and also allows for status monitoring. The new switchgear is manufactured with the same foot print as the existing air-vented switchgears so that replacement can be completed quickly and without the need for major additional civil work. Removal of the identified unreliable air-vented switchgear in a planned program is a priority to mitigate the risk and consequence of its failure and improve the system reliability. Approximately pad-mounted switches will be replaced from 0 to 0, this represent. percent of total air-vented padmounted switches installed in the field. 0 PILC Cable Primarily in the downtown area,. kv feeders commonly utilize PILC cable. The cables perform well as long as the outer lead jacket is not damaged. However, when the jacket is broken due to stress and fatigue, oil may leak out of the jacket causing deterioration in insulation strength. As some of the oil in the cable may contain PCB (Poly Chlorinated Biphenyls), leaking of oil into the storm or sewage systems will cause environmental contamination. In addition some existing PILC cables are undersized according to current cable size standards. Undersized cables restrict the load carrying capacity of a feeder under normal conditions and contingency conditions. The shortage of PILC cable manufacturers and skilled tradesperson to install PILC cable and joints are additional drivers for PILC replacement. Currently, THESL is targeting replacement of PILC cable that is showing signs of defect such as broken lead jacket and cable that is undersized according to current standard. PILC cables selected for replacement in 0-0 are those with high risk of failure as well as those that are undersized. Those cables will be replaced with standard copper

20 EB-0-0 Exhibit D Schedule Page 0 of TRXLPE cable encased in concrete conduit. Between 0 and 0, THESL plans to replace kilometres of PILC cable. This represents. percent of the existing PILC cable on the system. 0 0 Underground Residential Distribution (URD) Vaults URD switching vaults were introduced in the downtown more than years ago. They are used to supply power to both commercial and residential customers. Due to the design and equipment specification of URD 00A and 00A switching vaults, they do not contain an available heat source, such as a transformer, that would promote air circulation. As a result, non-stainless steel switching equipment installed in those vaults is experiencing accelerated corrosion due to exposure to trapped moisture. Compounding this situation, the ventilation design and equipment layout inside the vault has allowed dirt to accumulate on top of switching equipment, causing corrosion of components such as elbow terminations. Almost all URD switching vault equipment is in a poor or very poor condition due to rust on the cabinet and corrosion on the connectors. This equipment must be replaced proactively in a planned manner to avoid the risk of sudden failures that would impact both reliability and safety. URD switching vaults are scheduled for replacement from 0 to 0, which represents percent of the total number of URD switching vaults. Pictures and below show the condition of some URD switching vault equipment.

21 EB-0-0 Exhibit D Schedule Page of Picture : URD Switch Condition Picture : URD Switch Condition Enclosure

22 EB-0-0 Exhibit D Schedule Page of 0 Queens Quay Reconstruction As part of the road reconstruction associated with Toronto s Waterfront Revitalization Program, THESL is required to rebuild its existing civil infrastructure along Queens Quay. Projects have been created to install new cable chambers and duct banks along Queens Quay for the expansion and enhancement of the distribution system. THESL is currently in the process of building a new Bremner Station near the waterfront, which will be used for load relief and to transfer load between other stations in the downtown area. Underground facilities along Queens Quay West are needed for interconnection of cables between the new Bremner station and neighbouring stations such as Windsor, Stratchan and Terauley Stations. This infrastructure is also needed to supply power to new customers along the waterfront. System Enhancement and Grid Modernization 0 Feeder Automation With the availability of microprocessor-based control and monitoring equipment in the utility sector, opportunities now exist to combine traditional power delivering hardware with the modern electronics and intelligent computer programs to improve distribution system safety and reliability. Feeder automation is one of the tools that will enable utilities to meet the demand effectively and efficiently. THESL installed a ten-feeder pilot automation project in 00. This program involved installation and/or upgrade of overhead switching devices and communication accessories on feeders to enable automation via peer-to-peer communication within the automation zone. The pilot project has improved reliability with 0 to percent of lost load restored within one minute. In contrast, restoration time for feeder outages without feeder automation ranges from a few minutes to hours depending on the nature of the fault.

23 EB-0-0 Exhibit D Schedule Page of THESL plans to expand feeder automation technology to underground equipment starting in 0-0. This program is being undertaken to maintain and improve reliability. Since the automation is designed to operate under fault conditions on the trunk portion of the feeder, timely isolation and restoration of trunk segments will greatly improve reliability performance of the system. Feeders selected for automation in 0 and 0 are located in the vicinity of Cavanagh TS which has shown poor reliability performance in the past. These feeders contain a mix of both overhead and underground segments that will be automated together to maximize the improvement in reliability. 0 0 Feeder Tie-Points Feeders that have less than three tie-points or that are loaded to more than percent of their rated capacity are adequate under normal circumstances. However, the timely restoration of service on these feeders after a fault these feeders can be more difficult because of their lack of connection points to adjacent feeders with spare capacity. Depending on the nature of the fault, affected customers on a feeder with insufficient tiepoints to transfer the load may have to wait until repair crew complete the necessary work before their power is restored. In such cases, outages can last for hours. As a result, system enhancement work is required to that ensure feeders with insufficient tiepoints are able to effectively transfer load. The majority of commercial and industrial customers in the horseshoe area are supplied via a looped distribution system. In the event of a failure on their normal supply feeder, customers will lose power until they are switched to an alternate source of supply. The duration of the outage will depend on the presence of SCADA controlled switches and availability of tie-points to feeders with spare capacity. In an effort to explore ways to provide customers on the.kv distribution system with a more reliable supply of power, a pilot project is planned for 0 to install a spot

24 EB-0-0 Exhibit D Schedule Page of secondary network system in two existing customer locations. The spot network system will be designed to connect secondary cables from two network transformers together to supply one or a few dedicated customers. Each transformer in a spot network location is supplied by a different feeder than the one supplying the transformer in the customer s vault and each is loaded at or below 0 percent of its capacity. 0 In the event of failure on one of the primary feeders, the other transformer will be able to supply the entire load on its own. In addition, because both transformers secondary cables are connected together, customers supplied using this system configuration will not experience even a momentary power outage if one feeder fails. Although THESL already has an operational.kv network grid in the downtown area, this pilot project is necessary because it will operate at a higher primary voltage of.kv and at a higher fault capacity level. 0 THE CONSEQUENCES OF DEFERRING THE UNDERGROUND WORK PROGRAM The following Figure is the representation of annual risk cost for major underground asset classes from 0 to 0 if no capital investment is injected for their renewal or upgrade.

25 EB-0-0 Exhibit D Schedule Page of $00,000,000 $0,000,000 $00,000,000 $0,000,000 $00,000,000 $0,000,000 UG Cables UG Switches UG TX $00,000,000 $0,000,000 $ Figure : Annual Risk Cost for This risk cost is derived from the Feeder Investment Model ( FIM ) that THESL has developed for capital project identification and justification. The economic model takes into account the total life cycle cost of each asset including capital installation, operation and maintenance, and decommissioning costs. In addition, the model also takes into account failure cost of the asset if it is left to run to fail. Failure cost is based on the health condition and age of the asset, probability of failure based on the risk curve established for each asset class, and social impact and economic loss from each asset failure. It is composed of various direct and indirect cost attributes associated with inservice asset failures including the costs of customer interruptions; the costs of emergency repairs and replacement; and the costs associated with potential catastrophic failures of assets. Given that a large percentage of the underground assets have passed or are approaching the end of their useful service lives, the risk cost for the underground system is very high.

26 EB-0-0 Exhibit D Schedule Page of Delay of planned underground capital work serves only to increase the risk cost in subsequent years. The result of such postponements is higher operations and maintenance costs, increased capital replacement cost and greater customer outage cost and inconvenience. In addition, further postponement of capital work will call into question the availability of sufficient resources in future years to complete needed work. 0 Cable Replacement With more than percent of direct-buried cable already passed its useful service life, postponement of this program will put the system at a higher risk of failure resulting in sharply deteriorating in power reliability. This is further shown by THESL s recent ACA report that has indicated a growing number of direct-buried cables migrated into poor and very poor condition categories. In fact, almost half the direct-buried cable is now in very poor condition and more than percent of it is in fair or worse condition. This means that essentially all direct-buried cables are in need of near-term intervention to minimize the reliability risk this asset poses. 0 As further demonstrated in Figure, there is an annually increasing risk from underground cable failure from 0 to 0. Although more than percent of those assets have already exceeded their useful service life, only. percent of the population is planned for replacement in the next three years. The risk of postponing any part of this program in terms of system reliability is substantial. Moreover, due to the fragile condition of direct-buried cables, any fault on the feeder will further degrade the cable increasing the probability of future faults elsewhere on the cable. With the increasing frequency of failures in a given cable segment, repair of repeatedly failing direct-buried cables results in high operating costs due to the high costs of locating faulted cable; excavating and trenching; landscaping; repairing roads, sidewalks, boulevards, and private property; traffic congestion; and potential public

27 EB-0-0 Exhibit D Schedule Page of safety hazards. As direct-buried cable failure typically impacts a large number of customers for a long duration of time, reductions in this program could reverse the reliability gains that THESL has made during the past few years with the primary cable replacement program. Finally, any delay in this program will add to the backlog of work and capital expenditures needed in the following years. Underground Rehabilitation Delay of this planned capital program would increase the risk of unplanned power outages. 0 0 The modest pace of the proposed replacements of underground cable and equipment that is in poor or very poor condition means that THESL will continue to face a high risk of failure from those key assets until they are fully refreshed or upgraded in the system. As a result, deferral of planned capital replacement work would increase the backlog of assets that need replacement and increase the need for THESL to propose larger capital investments in future years. Delay or postponement of PILC replacement will increase both reliability and environmental risks. Since the majority of PILC cables are installed in the downtown area, in the event that PCB contaminated oil leaks into the storm or sewage system or surrounding ground, costly clean-up work must be undertaken to minimize the environmental damage. In addition due to the risk of contamination from PCB contained oil, damaged cable replacement will be a lengthy process due to the amount of decontamination work required. This will certainly result in prolonged outages in the affected areas and increase system risks. Construction of civil infrastructure on Queens Quay is required now because once the Queens Quay West realignment is complete, an excavation moratorium will be in place

28 EB-0-0 Exhibit D Schedule Page of on the road and boulevard, and no capital work will be allowed in this area for a number of years. Without those underground facilities along the Queens Quay corridor, load transfer ability between stations in the downtown core will suffer due to lack of interconnection points, making emergency load transfers very difficult. Furthermore, in the absence of the needed underground facilities along the Queens Quay corridor, future real estate development along the water front area may be delayed due to a lack of electrical infrastructure. 0 System Enhancement and Grid Modernization Feeder automation and tie-point enhancement work is essential to support long term security and reliability of the distribution system. This work improves reliability by providing operational flexibility during system fault conditions and regular maintenance work, and provides capacity for load growth. Delay of this program would contribute to the potential for lengthy outages on affected feeders during system fault conditions, leading to deteriorating reliability performance. 0 THESL is actively exploring new technology and equipment designs to meet customers demand for enhanced quality and quantity of power supply. Pilot projects are required to prove the feasibility and practicality of non-traditional designs and installations. The spot network installation pilot project is essential to test a promising new approach for the enhancement of the secondary network system in horseshoe area.