APS Underground Distribution Cable Replacement Project

1. APS Underground Distribution Cable Replacement Project Scott Gudeman Manager Const Projects and Support Svcs September 27, 2012

2. Agenda • UG Distribution Cable Historical Overview • Cable Replacement Program • Replace Vs. Repair • Where We Are Today • Future Direction

3. UG Distribution Cable Historical Overview

4. Background • APS began installing direct buried underground primary distribution cable in the 1950’s and continued until the mid 1980’s. • The majority of direct buried underground primarycable in the APS distribution system is a 165-180 mil XLPE, non-jacketed type cable.

5. Cable Failures • In the mid-1980’s, we started to experience a steady increase in direct buried underground cable failures. • There were 0.3 failures for every circuit mile of underground cable, accounting for 24% of the Company’s overall SAIFI rating.

6. Cause of the Failures • The direct buried XLPE primary cable had reached the end of its useful life. Although manufacturer’s projected a 30-year life expectancy; we were realizing 16 years. • Contributing factors to cable failures were installation practices, mechanical failures, water trees, accessory failures, manufacturing defects, corrosion, or system overload. • As a result, APS began to install 220 mil, TRXLPE, Jacketed UG cable in conduit in 1986 and fully transitioned to full conduit primary and secondary system in 1988.

7. Cable Replacement Project

8. Cable Replacement Project • The Underground Distribution Cable Replacement Project began in 1992 with the goal of replacing all direct buried underground cable in the APS System. • It has continued since then with the same objective, yet with changing funding levels and business drivers to achieve that goal.

9. Cable Replacement Plan Business Drivers The Business Drivers used to determine which cable runs to replace: • Customer Satisfaction • Critical Customers and Key Accounts • Operating Demands and Priorities • Number of Faults per Run • Reliability (SAIFI) • Cost Containment

10. Replacement Approaches Utilize a combination of quick response and planned tactics: • Accelerated Replacement (AR) 1-1/0A • Quick Hitters (QH) 3-1/0A • 750A and 1/0A Planned Replacement Work • Corroded Neutral Planned Replacement Work • Locate and Repairs • Service/Secondary Replacement

11. Quick Response Cable Replacement – AR’s and QH’s Three Phase 3-1/0A Cable Single Phase 1/0A Cable • <= 500’ • Not in major street • Not in private easement • Use blanket permit with municipalities • Contract out all excavation and conduit installation • APS crews install and terminate wire • Typically a 7 working day turnaround on jobs with guards

12. Planned Feeder Cable Replacement - 750A 750kCmil Feeder Cable • Jobs are scoped, designed, routed and permits acquired • Budget status determines when job is released for construction • A limited number of jobs are on the shelf so that we can react quickly • Contract all excavation and conduit installation • APS crews install and terminate wire

13. Planned Cable Replacement – Corroded Neutral Cable 1/0A or 3-1/0 in Northern Regions • Concentric Neutral on DB cable has sacrificed itself due to corrosive soil conditions • Jobs to replace multiple runs prioritized by Districts • Jobs are scoped, designed, routed and permits acquired • Budget status determines when job is released for construction • A limited number of jobs are on the shelf so that we can react quickly • Contract all excavation and conduit installation • APS crews install and terminate wire

14. Locate & Repair Single Phase or Three Phase Circuits • >500’ • In major street • In private easement • Needs a permit to replace • Other complications such as limited access

15. Service/Secondary Cable Replacement Includes both service and secondary direct buried low voltage (<600 volts) cable runs • Added emphasis in 2011 to replace rather than repair service/secondary faults • Typically, no guards since we can put a service kit on the house • All work is completed by a contractor. They excavate, install conduit and conductor, and re-landscape

16. Replace Vs. Repair

17. Replace Vs. Repair Primary Cable • Philosophy is a balanced approach between Replace and Repair • Mean time between faults accelerates with each failure • 2nd Time Fault Recurrence – 3.58 years • 3rd Time Fault Recurrence – 2.13 years • 4th Time Fault Recurrence – 1.21 years • 5th Time Fault Recurrence – 1.40 years • 6th Time Fault Recurrence – 0.56 years

18. Replace Vs. Repair Primary Cable • Average cost for Repairs (2011) • $3,800 for 1/0A • $5,800 for 750A • Average Replacement Cost (2011) per work order • $10,190 for 1/0A • $60,108 for 750A • Can replace 1/0A for less than the cost to repair it three times.

19. Where We Are Today

20. How Much Direct Buried Cable Was Installed? • It was estimated that we installed about 5,000 trench miles of direct buried underground primary cable • We have replaced approximately 2,300 trench miles through July 2012

21. Cable Replacement Year to Date

22. Estimated Direct Buried Cable Remaining Trench Miles (Aug 2012)

23. Future Direction

24. Going Forward The Cable Replacement Program will focus on: • Replacing all of the direct buried 750A feeder cable in the next 4-5 years • Replacing all identified corroded neutral primary cable (estimated 67 trench miles) in next 7-8 years • Continue with AR and QH program

25. Going Forward • Continue the balanced approach to replace and repair both primary and secondary/service • Advocate funding cable replacement at the same levels as 2012 • Primary - $22M • Svc/Sec - $3.5M

26. Questions?