A discussion of the financial valuation of transmission line assets and asset renewal projects

Abstract

In many power transmission utility companies in North America, there is a large number of transmission circuits that are approaching their physical end-of-life and will require their outright replacement within the next five to ten years. With limited available resources, power utility companies need to be able to properly prioritize their re-investments into an aging network.[1] This paper discusses, the complexities involved in the financial valuation of existing transmission line assets and in particular, summarizes the various methods that are used for determining the financial benefits or costs associated with the particular transmission line asset renewal project. The financial valuation of the transmission line asset and asset renewal projects are essential part of the process to prioritize reinvestments into the ageing transmission infrastructure.