7.9 Electricity network resilience targeted rate proposal
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Section Seven: Supporting Information
7.9 Electricity network resilience targeted rate
7.9 Electricity network resilience targeted rate proposal
We own a significant number of trees along the network of overhead power lines (around 80 per cent in urban
areas and around 30 per cent in rural areas). The remainder are mostly in private ownership.
The electricity network in the Auckland region is largely owned and maintained by Vector. Vector supplies
electricity to most of the population within the Auckland region. Approximately 24,000 households in the south of
the region have electricity supplied by Counties Power.
What we are proposing
We are proposing to introduce a targeted rate of $10.5 million per annum1 on Vector’s utility assets to fund our
tree management programme around the Vector overhead electricity supply network. This will increase the tree
maintenance budget by $5 million to allow for an enhanced, risk-based service to more effectively manage risk
to Vectors powerlines from trees we own.
As part of the proposal, $500,000 will be ringfenced for new tree planting activity. The additional tree planting
will be integrated with the enhanced management of council trees near power lines to manage the impact on the
tree canopy as per the Auckland Urban Ngahere (Forest) Strategy.
This proposal will also free up around $1.5 million of our current spending on tree management near power
lines. We are proposing to spend this on:
• $500,000 additional investment in tree planting activity. In combination with new and existing budgets
this will triple tree planting budget to $1.5 million and result in around 3,000 trees being planted annually
• $1 million to increase service levels by reducing pruning rotation from eight years to five years.
We will also improve public safety around power lines, reduce power outages and improve the resilience of
public trees.
To do this, we will require additional resources to ensure consenting is carried out as efficiently as possible. This
will be funded from the targeted rate budget.
Funding the enhanced tree management programme from general rates is not appropriate as the service
primarily benefits Vector.
Background
Around $5.5 million is currently spent annually on trees we own near power lines, this includes:
• $4 million from Vector’s operational budgets
• $1.5 million from our budgets (funded by general rates) provided by full facilities suppliers.
During the 10 April 2018 storm event, gale force winds and heavy downpours brought down over one thousand
trees across the Auckland region. This resulted in power outages of a significant scale. At its height on 11 April
2018 up to 183,000 homes and business were without power (or around 30% of the region). The storm caused
the worst power network damage in two decades.
The risk to the electricity system from trees is governed by the Electricity (Hazards from Trees) Regulations
2003. These regulations were designed to protect the security of supply of electricity, and ensure the safety of
the public from hazards caused by trees. Trimming trees to the distances under the regulations is not sufficient
1
Under the proposal the targeted rate will be increased by our internal rate of inflation each year.
Auckland Council 10-year Budget 2021-2031
Supporting InformationSection Seven: Supporting Information
7.9 Electricity network resilience targeted rate
to ensure adequate power network resilience. However, the costs of trimming trees to the distances under these
regulations is forecast to increase over coming years.
Enhanced risk-based tree maintenance
As part of this proposal we will be taking an enhanced risk-based approach to management of our trees under,
or near, Vector’s power lines. This will be undertaken in accordance with best arboriculture practice and in
compliance with the Auckland Unitary Plan. Some tree maintenance may require additional applications for
resource consent.
The immediate focus (first few years) will be on reduction of the safety and resilience risk posed by trees to the
overhead network. The goal is to reduce the risk to an ‘as low as reasonably practicable’ level. This will be
achieved through enhanced pruning and shaping of trees to minimise the risk of trees, or their parts, coming into
contact with the power network.
Tree management options will always strive to deliver solutions that enhance public safety and the electricity
network. This may include some of the following options:
• open sky pruning (removal of branches directly above the network)
• widening the distance between the tree canopy and the network
• canopy height reduction to minimise the possibility of the failure of long, vertical limbs
• tree removal in certain cases where we determine this as the most reasonably practicable solution.
Consideration includes, but not limited to, threats to public safety concerns, weed species under power
lines, and palm trees under the power lines.
The enhanced risk-based approach to tree management will not initially be provided in areas covered by
Counties Power. In these areas we will continue our existing practice funded from general rates.
Formalisation
As part of this proposal we will enter into an agreement with Vector that includes:
• governance mechanisms
• resource consenting process
• public relations responsibilities
• new tree planting
• third party appointments to deliver the tree trimming work.
A long-term termination clause will also be included so that both parties can provide for unwinding of the
arrangement in the case of future changes in the regulatory framework.
Physical works delivery resource availability
There are currently only two providers of sufficient scale and with the required Health and Safety competencies
to carry out utility arborist services in Auckland. These are Treescape and Asplundh.
AIM Services is currently in the process of being authorised for arborist services near powerlines, which will
provide the option of a third provider.
Impact on tree amenity value and Auckland Urban Ngahere (Forest) Strategy impact
The Auckland Urban Ngahere (Forest) Strategy provides a framework, and a list of actions, required to deliver
the goal of increasing the canopy cover across the region from 18% to 30%.
The enhanced risk-based approach to tree management will be heavily focused and underpinned by risk
management. This means that while more pruning will be done (and some canopy lost during the process) this
will also result in more resilient and stable trees.
Auckland Council 10-year Budget 2021-2031
Supporting InformationSection Seven: Supporting Information
7.9 Electricity network resilience targeted rate
Only trees that are at risk of coming in contact with the network, and where there are reasonably practicable
ways to reduce that risk (through tree management options), would be pruned. Enhanced pruning is ultimately a
preventative measure to protect public trees and the power network.
The enhanced tree management program includes additional tree planting to mitigate the impact of pruning on
the city canopy cover. In recognition of the need to integrate the enhanced tree pruning programme and the
Urban Ngahere (Forest) Strategy, approximately 3,000 trees would be planted on annual basis. The enhanced
tree management program will most likely result in a net increase of the canopy cover over time.
Impact on electricity users
Vector is regulated as an Electricity Distribution Business and can ‘pass through’ rates, including targeted rates,
to electricity customers. This is done largely based on their use of electricity. The cost of the proposed tree
trimming programme will therefore be ‘passed through’ and paid by the people directly benefiting from the
service. Electricity customers in those areas where power lines are underground will also benefit from the
programme because overhead network outages also typically affect ‘downstream’ underground areas.
The $10.5 million targeted rate equates to the average residential electricity bill increasing by approximately $1
per month.
Estimates suggest that the improvement in the reliability of the network (i.e. avoided outages) due to this
enhanced risk-based tree management programme could result in $3.90 million to $20.3 million of economic
benefits to Auckland. However, not all of this benefit would accrue immediately as it would take a number of
years before the level of tree maintenance required to eliminate council owned tree outages is achieved. Priority
will be given to the most at-risk trees which will result in more of the benefits accruing earlier rather than later.
In addition to the economic benefits discussed above the proposal will also lead to
• improved public safety around power lines, as lines in close contact or brought down by trees currently
pose serious safety issues for the public and repair crews
• increased tree planting, and increased canopy cover, in alignment with the Auckland Urban Ngahere
(Forest) Strategy
• increased tree maintenance service levels by reducing pruning rotation from eight years to five years in
parks and town centres.
Undergrounding electricity network
Undergrounding the Vector network has been suggested as an alternative means to increase the electricity
networks resilience from the hazards presented by trees. Undergrounding the entire Vector electricity network
would cost more than $6.4 billion and result in an increase of around $1,609 per annum for all Vector electricity
users.
Vector currently spend $10.5 million a year on undergrounding the electricity network. This is in addition to new
underground circuits to meet the growing demand for new homes and businesses across the city. Vector is
currently undertaking undergrounding work in Mt Albert area.
Undergrounding may also occur where the additional costs are justifiable for Health and Safety reasons e.g.
frequent car vs. pole incidents in some cases could be avoided by relocating the poles and/or undergrounding.
Undergrounding will also occur where, customers and/or other infrastructure asset owners pay for it.
Once undergrounded, the number of faults is reduced (less impact from trees, etc.) but the network is exposed
to accidental dig-ins and faults take longer to find and repair than overhead. Undergrounding also comes with
additional issues such as:
• investment in new streetlights where these are mounted on Vector power poles
• investment in other underground networks eg: telecommunications which also use Vector power poles
Auckland Council 10-year Budget 2021-2031
Supporting InformationSection Seven: Supporting Information
7.9 Electricity network resilience targeted rate
• disruption caused while undergrounding
• berms already congested with other utility networks eg: gas, water services, etc.
• finding suitable land area for ground mounted transformers and switches
• a less flexible electricity network.
Auckland Council 10-year Budget 2021-2031
Supporting InformationSection Seven: Supporting Information
7.9 Electricity network resilience targeted rate
Attachment A: Options Table
Rationale Impacts on rates Impact on debt Impact on level of service
Option One: Maintenance of trees near Vector • Additional rates revenue of • No impact on the council’s debt • Reduced electricity network
introduce $10.5 power lines reduce the risk of $10.5m requirement as additional outages caused by council
million targeted outages on Vector’s electricity revenue is offset by additional owned trees
expenditure • More frequent pruning (with the
rate on Vector network which provides benefits to
current rotation reduced from
Vectors customers. eight years to five years in parks
and town centres)
• Improved public safety around
power lines, as lines brought
down by trees pose serious
safety issues for the public and
repair crews
• Increased tree planting activity
resulting in a net increase of the
canopy cover over time.
Option Two: Maintain status quo • No impact on rates • No impact on ability to borrow • No impact on level of service
status quo – no
new targeted rate
Auckland Council 10-year Budget 2021-2031
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