  Prediction of the remaining life of high-voltage power transformers is an
important issue for energy companies because of the need for planning
maintenance and capital expenditures. Lifetime data for such transformers are
complicated because transformer lifetimes can extend over many decades and
transformer designs and manufacturing practices have evolved. We were asked to
develop statistically-based predictions for the lifetimes of an energy
company's fleet of high-voltage transmission and distribution transformers. The
company's data records begin in 1980, providing information on installation and
failure dates of transformers. Although the dataset contains many units that
were installed before 1980, there is no information about units that were
installed and failed before 1980. Thus, the data are left truncated and right
censored. We use a parametric lifetime model to describe the lifetime
distribution of individual transformers. We develop a statistical procedure,
based on age-adjusted life distributions, for computing a prediction interval
for remaining life for individual transformers now in service. We then extend
these ideas to provide predictions and prediction intervals for the cumulative
number of failures, over a range of time, for the overall fleet of
transformers.
