WORKING GROUP#3 DISTRIBUSI TO THE 9 TH WORKING COMMITTEE MEETING

1. PROJECT COORDINATOR REPORT WORKING GROUP#3 DISTRIBUSI TO THE 9TH WORKING COMMITTEE MEETING PLN - INDONESIA 1 December 2008 Singapore

2. CONTENT • Executive Summary • Project 5, Material Management • Project 7, Asset Management • Status of the 10 Projects of WG3 Distribution • Consideration when proposing projects for 2009 • Proposed projects for 2009 • Endorsement Required WG3 Disribution - 1 Dec 2008

3. Executive Summary [1/4] • Previous 8th Working Committee Meeting and 24th Council Meeting in Cebu/Philippine, on June 2008, recommended WG3 to: • Submit Project Completion Report • Come up with salient point and recommendation for each completed project for adoption of the Council • Proposed Program for 2009. • WG3 activities since June 2008: • Project Leaders 3 (Singapore, Distribution System Performance ) and Project Leaders 4 (Indonesia, Distribution Operation & Maintenance) have finished Project Completion Report through Networking (email discussion). • The 7th WG#3 Meeting was held on 27-28 November 2008, in Singapore, hosted by SP POWERGRID Ltd.: • Discussion on Project 5 (Material Management, Project Leader : Philippine/Meralco) and Project 7 (Asset Management) • Initial discussion by email, both Project Completion Reports had been finalized on the Meeting. • The Meeting was attended by 25 delegates from 7 countries namely Brunei Darussalam, Cambodia, Indonesia, Malaysia, Myanmar, Philippines and Singapore. • Thailand, Vietnam, Laos could not attend because of the incident at Bangkok Airport. WG3 Disribution - 1 Dec 2008

4. Executive Summary [2/4] • Obstacles: • Some project member received assigment from their management only 1-2 weeks before the Meeting. Assistance from Country Coordinators are expected to assigning project member earlier. • Result of the 7th Meeting WG3 Distribution in Singapore: • Project Completion Report 5 ,Material Management • Project Completion Report 7, Asset Management • Next WG3 Meeting: • 8th Meeting WG3 Distribution, tentatively, in Cambodia, on March 2009 • 9th Meeting WG3 Distribution, tentatively, in Brunei Darussalam, on September 2009 • Proposed Projects for 2009 WG3 Disribution - 1 Dec 2008

5. Executive Summary [3/4] • Recommendation & Endorsement required: • Slides on respective Project • Proposed Project 2009: • HAPUA Guidelines to minimizing losses in energy delivery: • HAPUA Guidelines to connecting alternative & renewable energy power plant to distribution: • HAPUA Guidelines to encouraging DSM on end-user side: • Programs of staff exchange among member countries on implementation of (1), (2) & (3) Pilot Project in implementing (1), (2), (3) WG3 Disribution - 1 Dec 2008

6. Executive Summary [4/4] • Endorsement Required: • Project 5, Material Management (slides on respective project) • Project 7, Asset Management (slides on respective project) • Proposed Project 2009: • Considering the highlight of the previous Council Meeting • Project scope would not exceed 1 year • Extending to more cooperation between ASEAN engineers in real project WG3 Disribution - 1 Dec 2008

7. Project 5, Material Management [1/4] • Project Objectives • Exchange information and experiences on the various processes & practices employed by HAPUA member countries in addressing challenges in materials management • Recommend a common policy, strategy or information exchange facility to encourage cooperation among member countries. • Project Outcomes • 7 countries (Brunei, Cambodia, Indonesia, Malaysia, Philippines, Singapore and Myanmar) participate in the discussion,6 countries presented papers. • Project leader: Mr. Roberto D. Serica, from Philippines/Meralco • The participants able to benchmark or compare their existing practices with those of other utilities, and share insights on how materials management are being practiced by other member countries. • The discussions yielded helpful suggestions on how to address the common materials management challenges faced by the different participants. WG3 Disribution - 1 Dec 2008

8. Project 5, Material Management [2/4] • Issues • Scope of Material management are: purchasing, spend management, vendor management, stock management, material process management, store management, enhance specification. • The different item-identification methods used by the different members of HAPUA and recommends a common item identification system between members to improve comparison of items. Suggestions were made in the discussion for a possible use of existing international product naming convention. • The difficulty of obtaining verifiable information on supplier and product performance and proposes the sharing of these information on supplier and product performance under the auspices of HAPUA. • The trend is that activities under Material Management are put under Procurement function which is defined as the combined functions of purchasing, inventory control, transportation, receiving, inspection, storekeeping, and salvage and disposal operations. WG3 Disribution - 1 Dec 2008

9. Project 5, Material Management [3/4] • Lessons Learned • Material management has evolved from administrative/support activity to a strategic activity and has an important effect on the utility’s bottom line. • Among the different members there is also a different level of maturity on practices and information systems of Material Management, but all members has shown a common interest to improve. • The different member utilities employ different strategies such as different purchase strategies for different items. They also employ spend analysis in strategic sourcing. Standardization, quality assurance and use of Vendor Managed Inventory are also practiced by the members. • Process-wise, member countries employ various generic processes for materials management and practices may vary depending on local laws or conditions and many emphasize constant improvement in their processes. WG3 Disribution - 1 Dec 2008

10. Project 5, Material Management [4/4] • Recommendation • Implement sharing of information among member countries in terms of having a common item-identification system and supplier & product performance information. • Implement a program of staff exchange under HAPUA to facilitate the transfer of best practices among the different members as a way of addressing the different maturity level in the area of materials management. • Expand the scope of WG5’s Project 4 Procurement Circle,: • To include other areas of the supply chain such as planning, warehousing, inventory management and quality assurance. • To consider WG3’s Project 5 Material Management regarding distribution engineer’s technical and operations concerns. WG3 Disribution - 1 Dec 2008

11. Project 7, Asset Management [1/8] • Project Objectives • To exchange information and experiences among ASEAN member countries in their policy of Asset Classification in relation to ‘Targeted Service Level Standard’ (Reliability & Security) which is selected on the basis of cost-effectiveness and potential business value of solutions (i.e.: the criticality of supply area, customer category). • To benchmark between countries on the asset reliability standard (failure rate). • Project Outcome • 7 countries (Brunei, Cambodia, Indonesia, Malaysia, Philippines, Singapore and Myanmar) participate in the discussion, however Cambodia & Myanmar did not present papers. Project leader: Mr. Haji Ismail Bin Mohd Din of Malaysia. • The importance of classifying the asset based on the reliability standard of major network components, such as: power transformer, MV switchgear, MV underground cable and MV overhead lines. • Deliverable of the discussion are as follows:- • Asset Classification Methodology • Asset Classification Reliability Standards WG3 Disribution - 1 Dec 2008

12. Summary of Asset Classification WG3 Disribution - 1 Dec 2008

13. Project 7, Asset Management [2/8] Asset Classification Methodology: WG3 Disribution - 1 Dec 2008

14. Project 7, Asset Management [3/8] Asset Classification for Class 1 Reliability Standard: WG3 Disribution - 1 Dec 2008

15. Project 7, Asset Management [4/8] Aset Classification for Class 2 Reliability Standard; WG3 Disribution - 1 Dec 2008

16. Project 7, Asset Management [5/8] Set Clasification for Clas 3 Reliability Standard: WG3 Disribution - 1 Dec 2008

17. Project 7, Asset Management [6/8] • Asset Classification for Class 4 Reliability Standard: WG3 Disribution - 1 Dec 2008

18. Project 7, Asset Management [7/8] • Issues • Asset classes and reliability standard vary between utilities. • Different type of asset used by utilities. • Different means of measuring or indices used for determining failure rate of asset. • To ensure high reliability standard will require higher investment. • Lesson Learnt • Assets need to be classified into several classes based on their importance. • Reliability standard for each class varies for different countries, however this classification exercise will provide a mean to make further improvement in their respective countries. • Some countries have even achieved a reliability standard that is comparable to European standard. WG3 Disribution - 1 Dec 2008

19. Project 7, Asset Management [8/8] • Recommendation • Each country should identify the security level of the designated area based on the reliability standard required. • It is envisaged that the use of GIS (Gas Insulated Switchgear), premoulded straight through joint, (N-1) transformer configuration and automation must be adopted for ensuring a better reliability standard. • The extensive use of Condition Based Monitoring (CBM) is a critical tool to further improve the performance of the assets. • Since the effort in ensuring of a higher reliability standard requires a substantial investment, it is also recommended that customers enjoying these privileges would be subjected to a higher tariff structure (negotiated B-to-B tarrif, not standard tarrif) . • To further enhance collaboration among country members with respect to implementation of asset classification, the needs to have a technical exchange program between utilities is greatly encouraged. WG3 Disribution - 1 Dec 2008

20. Status of the 10 Projects of WG3 Distribution

21. Consideration in Proposing WG3 Distribution Projects for 2009 • Concerns of The 24th HAPUA Council Meeting, 19 June 2008 in Philippine, in responding to the soaring price of fossil fuel by highlighting the importance of: • minimizing losses in energy delivery, • supporting alternative and renewable sources of energy, and • the encouragement of Demand Side Management on end-user side, to ensure effciency in the electricity industry. • Encouraging more involvement, engagement and undertaking by engineers of HAPUA countries in solving HAPUA utility problems, extending to more cooperation between ASEAN engineers in real project • Project scope would not exceed 1 year

22. Proposed Project for 2009 • HAPUA Guidelines to minimizing losses in energy delivery: • Following up the previous Project 1+2 • Compiling best practices in HAPUA • HAPUA Guidelines to connecting alternative & renewable energy power plant to distribution: • Following up the previous Project 10 • Compiling best practices in HAPUA • HAPUA Guidelines to encouraging DSM on end-user side: • Following up the previous Project 8 • Compiling best practices in HAPUA • Programs of staff exchange among member countries on implementation of (1), (2) & (3) • Pilot Project in implementing (1), (2), (3) WG3 Disribution - 1 Dec 2008

23. Endorsement Required • Country Coordinator will assign project member earlier. • 8th WG3 Distribution Meeting on March 2009, • Hosted by Cambodia • Focus on: • Formulating guidelines to minimizing losses in energy delivery • 9th WG3 Distribution Meeting on September 2009, • Hosted by Brunei Darussalam • Focus on: • Formulating guidelines to encouraging DSM on end-user side: • 10th WG3 Distribution Meeting on March 2010, • Hosted by Myanmar/Lao PDR • Focus on: • Formulating guidelines to connecting alternative & renewable energy power plant to distribution • Programs of staff exchange among member countries on (2), (3) & (4) • Pilot Project in implementing (2), (3) & (4) WG3 Disribution - 1 Dec 2008

24. Thank you WG3 Disribution - 1 Dec 2008