Capacidad diagnóstica

339. This account includes the cost of labour, materials used and expenses incurred in operation and maintenance of transmission line plant, the book cost of which is includible in Accounts 354, Towers and fixtures, 355, Poles and fixtures, 356, Overhead conductors and devices.

340. USA 563 includes work activities of the following nature: • aerial Patrols;

• ground Patrols;

• management / tracking of maintenance items;

• site inspection of maintenance items found on air patrols – confirmation; • assist in trouble identification, assessment and location;

• transferring loads, switching and reconnecting circuits and equipment for maintenance purposes;

• ground clearance checks;

• audits of work performed and crews performing the maintenance work;

• tagging or retagging of structures, installing danger signs, flight avoidance markers; • marking and identification of phasing;

• corrective or Urgent Maintenance including;

• splicing or patching of Conductors, Over Head Shield wires or Fiber Optic Cables; • replacing of individual insulators in a string;

• overhauling and repairing line cut outs, line switches, line breakers, etc.; • insulator Washing – aerial and ground based;

• retagging, retying, or rearranging position or spacing of conductors; • installing, repairing and bonding of gates and fences in rural areas; • bonding of adjacent buildings;

• site investigation of building or road encroachments; • first call operations for buried cables;

• high Loads move facilitation;

• assist landowners, stakeholders, industrial customers, developers during activities in proximity to lines; and

341. AltaLink currently maintains approximately 12,000 km of transmission circuit length, with an additional 1,389 circuit km to be added through 2014 year end. Please see Table 5.2.7-6 USA 566 - AltaLink Major Asset Volumes for a summary of the current and forecasted line lengths managed at AltaLink. These transmission line assets include managing approximately 56,000 structures of various types with an estimated 9,800 transmission line structures being added through the test period.

342. Table 5.2.5-1 below illustrates the volume and typical types of work activities undertaken within this USA in the past 2 years.

Table 5.2.5-1 - USA 563 - Operation & Maintenance Transmission Line Work Quantities

2010 2011

Line Patrols 81 59

Emergency Line Patrols 20 29

Emergency Maintenance 43 58

Table Note: Timing and costs of activities will vary base on the length of the specific line, terrain and time of year and the overall requirements of the defined maintenance plan.

343. A key driver of current and future overhead line expenses is a number of standards and practices, such as the Alberta Electrical Utility Code (AEUC), Alberta Reliability Standards (FAC- 501-AB), as well as good maintenance practices. To comply with these standards and practices, but more importantly to maintain a safe and reliable transmission system, AltaLink must patrol and inspect each line on a scheduled basis, record and develop a maintenance plan. Once the plan has been developed AltaLink must complete, audit and record the results of that plan. AltaLink is required to report that maintenance plan to the AESO on an annual base for specific interconnection lines.

344. AltaLink’s goal is to achieve and sustain an optimized line maintenance program by employing the most cost effective inspection, maintenance and document management practices while complying with all necessary rules and regulations, maintaining relations with all landowners and stakeholders and sustaining asset reliability and performance for ratepayers.

Table 5.2.5-2 - USA 563 - Operation & Maintenance Overhead Line Expense ($M)

Expense 2010 Actual 2011 Actual 2012 Mgmt Update 2013 Forecast 2014 Forecast Labour 1.3 1.5 1.4 1.5 1.6 Contracted Manpower 2.0 3.0 3.1 3.1 3.4 Other (GOE) 0.6 0.9 1.1 1.5 1.5 Total 3.9 5.4 5.6 6.1 6.5

Totals may not add to due to rounding

345. Approximately 25% of USA 563 is attributable to labour expenses with an additional 50% attributed to contracted manpower. Therefore, AltaLink’s 2013-2014 forecast is directly related to increased efforts to operate and maintain existing and new transmission facilities while complying with all necessary rules and regulations.

Table 5.2.5-3 - USA 563 - Operation & Maintenance Overhead Line Expense Forecast Increase ($M) Forecast Increase 2013 Forecast 2014 Forecast Average Labour 0.1 0.1 0.1 Contracted Manpower 0.1 0.3 0.2 Other (GOE) 0.4 0.1 0.2 Total 0.5 0.5 0.5

Totals may not add to due to rounding

346. AltaLink forecasts operating expenses to increase by $0.5M per year on average. Approximately $0.1M of this increase is attributable to labour expenses, $0.2M is attributable to contracted manpower, and $0.2M is attributable to general operating expenses. Labour, contracted manpower and other general operating expenses are discussed in turn below.

Labour

Table 5.2.5-4 - USA 563 - Operation and Maintenance Overhead Line Expense Labour Forecast Increase ($M)

Forecast Increase 2013 Forecast 2014 Forecast Average Inflation 0.1 0.1 0.1 Other 0.0 0.0 0.0 Total 0.1 0.1 0.1

Totals may not add to due rounding

347. Subject to AltaLink’s labour inflation assumptions discussed in Section 1.8 Forecasting Methodology, labour expenses increase on average by $0.1M per year. The remainder of the forecast increase, less than $0.1M of the total increase, is attributable to operating staff additions (FTEs), related to new hires in the 2012 period as outlined in AltaLink’s 2011-2012 Compliance Filing.

348. As shown in Table 5.2.5-5, AltaLink is forecasting no staff increases for USA 563 from its 2012 Mgmt Update levels (which correspond to the AltaLink’s 2011-2012 Compliance Filing).

349. AltaLink has reviewed the current forecasted workloads and work processes for the test period based on its forecast maintenance plans and asset growth and confirmed current FTE

compliment continues to be required.

Table 5.2.5-5 - USA 563 - Operation & Maintenance Overhead Line Expense FTEs 2010 Actual 2011 Actual 2012 Mgmt Update 2013 Forecast 2014 Forecast

Contracted Manpower

350. Contractor costs in support of overhead line maintenance typically consist of: • helicopter services in support of aerial patrols;

• land agent support to facilitate landowner access to facilities;

• infrared conductor scanning services to assess conductor sleeve condition; • occasional support for corrective maintenance activities, if required; • support of high load corridor moves;

• support of insulator washing maintenance program requirements;

• support of bonding, installing and repairing of gates, fences or adjacent buildings; and • support of pole testing and inspection programs.

Table 5.2.5-6 - USA 563 - Operation and Maintenance Overhead Line Expense Contract Manpower Forecast Increase ($M)

Forecast Increase 2013 Forecast 2014 Forecast Average Inflation 0.1 0.1 0.1 Other (0.1) 0.2 0.0 Total 0.1 0.3 0.2

Totals may not add due to rounding

351. Of the forecast $0.2M per year average increase in contract manpower expenses, approximately $0.1M is attributable to AltaLink’s contractor inflation assumptions that are discussed in Section 1.8 Forecasting Methodology. The remaining forecast changes are attributable to a small

increase in volume of high load corridor moves and updates to the insulator washing program as detailed below.

352. Alberta Transportation has developed high load corridors throughout the province. There has been a steady increase in the number of requested loads that need to be moved that exceed the standard heights from third parties accounting for less than $0.1M of the forecasted increase. Contractors are used to confirm routes, load heights, and escort loads that are close to or within the general public’s clearance limits and where necessary make arrangements to lift the

conductors. In 2010 there were 28 escorted moves, in 2011 there were 56 escorted moves and in 2012 YTD (May) there have been 43 escorted moves, indicating an increasing trend.

353. An increase of approximately $0.1M of contracted manpower is due to unit cost increases due to work methods and contractor charges experienced in 2011 within AltaLink’s insulator washing program. In 2010 and 2011 AltaLink re-established this maintenance program after a near miss safety incident in 2009, resulted in improving safe work practice standards. This program seeks to prudently manage the number of line outages caused by damaged cross arms and poles due to contamination fires. AltaLink is planning to wash approximately 7,300

Other (GOE)

Table 5.2.5-7 - USA 563 - Operation & Maintenance Overhead Line Expense GOE Forecast Increase ($M)

Forecast Increase 2013 Forecast 2014 Forecast Average Inflation 0.0 0.0 0.0 Other 0.3 0.0 0.2 Total 0.4 0.1 0.2

354. The impact of inflation on the forecast increase in GOE of less than $0.1M per year on average as per the inflation assumptions discussed in Section 1.8 Forecasting Methodology. The remaining increases are as described below.

355. The average increase of $0.2M is related to the following;

• staffing costs due to full year impact of 2012 staff additions as outlined in AltaLink’s 2011- 2012 Compliance Filing, and associated staffing cost for maintenance activities while in the field;

• vehicle costs associated with increased fuel rates and fleet volume increase as shown in the following Table 5.2.5-8. This results in increases in both fuel and maintenance expenditures reflective of AltaLink’s forecast fleet size. AltaLink is forecasting a 5% per year increase in the cost of fuel, to reflect AltaLink view that the current 2012 fuel costs will increase modestly over the GTA test period; and

• the increase its vehicle fleet to accommodate additional field staff hired in 2012 who require vehicles in order to carry out maintenance activities on AltaLink transmission line facilities.

Table 5.2.5-8 – USA 563 - AltaLink Vehicle Fleet

Vehicles USA 563 2011 Actual 2012 Mgmt Update 2013 Forecast 2014 Forecast On Road Operating Vehicles 9 11 11 11

Off Road Operating

Vehicles 6 7 9 9

Operating Trailers 8 8 10 10

Total Operating

Vehicles 23 26 30 30