2020 ANNUAL REPORT Mainpower New Zealand Ltd Annual Report 2020

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2020 ANNUAL REPORT Mainpower New Zealand Ltd Annual Report 2020 2020 ANNUAL REPORT MainPower New Zealand Ltd Annual Report 2020 MAINPOWER NEW ZEALAND LIMITED From North of Christchurch, through the Waimakariri, Hurunui and Kaikōura districts, MainPower New Zealand Limited delivers electricity to North Canterbury. It is our responsibility to provide a safe, secure and reliable electricity distribution network to support our region. CONTENTS 1. Your Electricity Lines Company 3. MainPower Board of Directors 5. Chair's Review 7. MainPower Executive Team 8. Chief Executive’s Message 9. Asset Management 11. Managing our Risk 13. Sustainability 15. Generation 1 7. People and Culture 19. Our Customers 21. Our Place in the Community 23. Financial Report 2020 MainPower New Zealand Ltd Annual Report 2020 Who owns MainPower? YOUR ELECTRICITY MainPower’s ownership structure is Consumer ownership of MainPower * Customers previously connected to the designed to benefit the people of North entitles Qualifying Customers to a rebate. Kaiapoi Electricity Network and builders’ Canterbury. The MainPower Trust holds Once a customer is connected to the temporary supplies are not deemed Qualifying the ownership of MainPower New MainPower network, that customer is Customers under the Trust Deed. LINES COMPANY Zealand Limited on behalf of the qualifying issued with a redeemable preference customers*. The seven Trustees appoint share (also called a rebate share) in MainPower’s Board of Directors, monitor MainPower through which they receive a the Company’s performance through rebate, which has the effect of reducing its Statement of Corporate Intent and their monthly lines charge. regularly meet with the Directors. MainPower’s role Electricity supplying North Canterbury is generated by hydro-electric power stations throughout the South Island. Electricity travels across high voltage transmission lines and equipment owned by Transpower, called the national grid. MainPower owns and operates the power lines and equipment used to distribute electricity from the national grid to homes and businesses throughout North Canterbury. Electricity retailers then sell to electricity consumers. Invested 27 $25.17 million Paid MainPower’s network area: in capital $10.55 million 11,180 square expenditure throughout in Qualifying Customer rebates kilometers North Canterbury 1 2 MainPower New Zealand Ltd Annual Report 2020 MAINPOWER BOARD OF DIRECTORS Tony King (Chair) Graeme Abbot Janice Fredric Fraser Jonker Stephen Lewis Brian Wood Tony joined as a Director in August 2016 Graeme joined as a Director of MainPower Janice joined as a Director of MainPower Fraser joined as a Director of MainPower in Stephen joined as a Director of MainPower Brian joined as a Director of MainPower in and was appointed Chair in July 2017. He in August 2016 and is Chair of the Board's in August 2016 and is Chair of the Board's August 2018. in September 2008 and is Chair of the August 2018 and is a member of the Audit is a member of the Board’s Remuneration Remuneration Committee and a member Audit and Risk Committee. Safety, Health, Wellbeing and Environment and Risk Committee. Committee, Audit and Risk Committee, of the Safety, Health, Wellbeing and Fraser is the current CEO of Pioneer Committee and a member of the and the Safety, Health, Wellbeing and Environment Committee. Janice is a professional director with Energy, a position held since 2010. He Remuneration Committee. He also sits as Brian is an experienced professional Environment Committee. a broad portfolio of current and past has more than 25 years’ experience the Board representative on the Strategic director with extensive consulting Graeme is currently General Manager of directorships and extensive executive in the energy sector as an energy Asset Management Steering Group. experience. He is also a Chartered Fellow Tony has extensive experience in senior Hanmer Springs Thermal Pools and Spa, experience. She is a Chartered Accountant consultant in South Africa before moving of the Institute of Directors and holds operational and corporate management working closely with the complex owner and a Chartered Member of the Institute of to New Zealand and being involved in Stephen is a company director and a Master of Business Administration roles, as an independent consultant, and Hurunui District Council, to promote Directors and holds a Master of Business the distribution, generation and retail business consultant with over 45 years’ (Otago). over 15 years as a company director. the local region as a significant tourism Administration (Massey). environment in both New Zealand and experience in the electricity supply destination. Australia. industry. He has held governance positions in the commercial and not-for-profit Other directorships: Other directorships: Other directorships: sectors. He has previously held executive Brian is Chairman of Canterbury Linen Mt Cass Wind Farm Ltd, Greenpower NZ Other directorships: Janice is Chair of the Civil Aviation Other directorships: and senior operational roles in the UK, US Services Ltd, Delta Utility Services, Ltd, Option One Ltd and Red Bus Ltd. Mt Cass Wind Farm Ltd, Greenpower NZ Authority and the Aviation Security Mt Cass Wind Farm Ltd, Greenpower NZ and South America. Stephen is a Chartered Invercargill City Holdings Ltd, Buller Ltd. Service. She is a council member of Ltd, Ecogas GP Ltd, Southern Generation Member of the Institute of Directors. Holdings Ltd, Westreef Services Ltd Lincoln University and a Director of Credit GP Ltd and Dairy Creek GP Ltd. and also the Oversight Group for the Union Baywide, Mt Cass Wind Farm Ltd, construction of the highway and rail line Greenpower NZ Ltd and NZ Shipwreck Other directorships: from Picton to Christchurch. He is a Welfare Trust (Trustee). Mt Cass Wind Farm Ltd, Greenpower director of Lyttleton Port Company Ltd and NZ Ltd. Harrison Grierson Holdings Ltd, HWPC Ltd, Invercargill Central Ltd, Invercargill City Forest, Espatial Ltd, Mt Cass Wind Farm Ltd, Greenpower NZ Ltd and Harrison Grierson Holdings Ltd. 3 4 MainPower New Zealand Ltd Annual Report 2020 MainPower and give more cost certainty to and build on the value in our assets and consumers. MainPower’s overall revenue services including the implementation of requirement is expected to decrease in an Advanced Distribution Management the 2020-21 financial year compared to System. Collaboration with other lines the 2019-20 financial year. This is driven companies is also highly desirable. CHAIR'S REVIEW by several factors including a decrease Common architecture, access and in the charges paid to Transpower for competency will minimise risk across transmission service. regions and develop resilience across Last year’s Chair’s Review foreshadowed focus and effort to go into four areas: operating the industry. More information on our results, asset management, network pricing and strategic developments and it is gratifying for Strategic Developments transition to the 'lines company of the the Board to see the progress that has been made by the MainPower team in these areas. future' can be found in the AMP document To meet the evolving needs of customers available on the MainPower website. and support the decarbonisation of the Financial Results as activity falls in land development. The Board will continue to prioritise the economy, we are progressing with our The Board would like to thank Andy The Company has continued to focus safety, reliability and resilience of the Mt Cass Wind Farm. The Board made Lester, the executive team and the 2020 was a year of strong performance on improving operating performance to network as well as ensuring the delivery of the investment decision in December wider MainPower team for their efforts with the Statement of Comprehensive position MainPower for sustainable growth a quality service to North Canterbury. 2019 with the expectation of reaching throughout the 2019-20 year and look Income showing operational profit after opportunities. financial close early in the 2020-21 year. forward to continuing to work with the tax of $4.95m up from $1.56m last year. Our network maintenance and upgrade Unfortunately the economic upheaval of executive team to deliver strong results This was largely driven by strong lines plans for the 2021 year are just as COVID-19 has delayed progress somewhat for MainPower and the North Canterbury revenue, and efficiency and effectiveness "The Board will continue ambitious with a continued focus on and it will be later in the 2020-21 year community. in delivering both maintenance and the to prioritise the safety, delivery of the AMP and a number of before final approvals can be considered. expanded capital works programme. The major projects on the horizon including I personally would like to thank my fellow increase in the value of the distribution reliability and resilience the Southbrook 66kV substation upgrade, MainPower has also invested in Solagri, directors who have all contributed greatly network further boosted the results to give of the network as well Ludstone zone substation switchgear a business specialising in on-farm solar to the Company with a substantial time a total income of $10.73m. replacement and the Hanmer 33kV sub and battery systems generating low cost commitment made around the Mt Cass as ensuring the delivery transmission line conductor upgrade. electricity for agri-businesses. We are Wind Farm in particular. With two new Revenue was up on last year with $59.40m of a quality service to looking forward to seeing this further directors appointed last year, we reshaped in 2020 versus $56.21m last year. This was Network Pricing evolve and grow this coming year. our committee structure and membership helped by irrigation continuing through the North Canterbury." to continue to refine and enhance dry autumn months we have experienced This year the business has been governance practice at MainPower. in North Canterbury, partly offset by Asset Management implementing the new pricing structure "We continue to focus reduced contracting and customer as developed during the network pricing on becoming the ‘lines contribution revenues. Customer rebates The 2020 Asset Management Plan (AMP) review conducted in 2018-2019.
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