Minister of Energy Letter to the Chair of Transpower

7 July 2006

David Gascoigne
Chairman Transpower New Zealand Ltd
PO Box 1021
Wellington

Dear David

Transpower Response to Connell Wagner Recommendations

As I advised to you in my letter of 13 June regarding the outage in Auckland on 12 June 2006, I engaged an independent expert (Connell Wagner Ltd) to conduct a review of the report Transpower commissioned. I would like you to convey my thanks to those Transpower staff members who assisted Connell Wagner in carrying out this review.

The draft report from Connell Wagner was provided to Transpower staff for comment. The report has now been finalised and a copy of it is enclosed.

The report makes a number of recommendations for immediate action which Connell Wagner believe will reduce the likelihood of this type of incident occurring again.

I would ask that you advise me by 21 July whether you propose to adopt the following recommendations from Connell Wagner, and indicate the anticipated timeframes for the remedial work:

1. Electrically bond all the earthwire connections at Otahuhu and at similar substations elsewhere. They report bonding of some connections/joints but not others. I am aware that some of the earthwires have been or are being removed. For those that are staying, if you are not proposing to do this bonding, please explain why not;
2. Underground the existing 220 kV circuits that cross over the 110 kV portion of the substation;
3. Remove all conductors and earthwires which cross over busbars at Otahuhu.
4. Introduce a higher level of risk analysis and maintenance management system (including physical audits) for sites or assets where the consequences of an outage are more significant, i.e. a form of tiered risk analysis and assessment;

I am also interested to understand Transpower's view of where in practice the risk of single point failures is highest around New Zealand. I expect Transpower has a list of risk points which I would like to see, ordered by the population or load which would be cut off, including an assessment of the likelihood of such risks, the likely magnitude of the impact and what mitigation measures you already have planned

There are also longer term actions to improve the diversity of supply into Auckland from the south, which I know you are already investigating, that are broadly supported by Connell Wagner. It would be helpful if by 21 July you could also advise me of the process you intend to adopt to finalise your view as to the most appropriate solutions, including the time you expect that assessment to take.

Yours sincerely

David Parker
Minister of Energy

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