Timber utility poles are traditionally used for electricity and telecommunication distribution. Due to the old age of many distribution networks, the health condition of these timber poles needs to be assessed. Non-destructive testing (NDT) methods based on stress wave propagation have successfully been used in practice for the condition assessment of timber poles. However, for the successful application of these methods for damage identification, some limitations exist. To overcome these limitations, this paper proposes the use of wavelet packet energy (WPE) for the stress wave data analysis and damage identification. WPE is a sensitive indicator for structural damage and has been used for damage detection in various types of structures. This paper presents a comprehensive investigation on the novel use of WPE for the damage identification in timber utility poles using finite element (FE) models. The research study comprises of the following investigations: i) a comparative study between 2D and 3D models, ii) a sensitivity study of mesh density for 2D models, and iii) a study of the novel WPE-based technique for damage detection in timber poles. The results of the new method clearly show the effectiveness of the proposed damage identification technique based on WPE