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Statement of Corporate Intent 2010( Tabled Paper Number 1698)

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Statement of Corporate Intent 2010( Tabled Paper Number 1698) Statement2010 of Corporate Intent Statement of Corporate Intent 2010 Table of contents EXECUTIVE SUMMARY 3 1 INTRODUCTION 4 2 BUSINESS OVERVIEW 5 2.1 Who we are 5 2.2 What we do 5 2.3 How we do it 5 3 STRATEGIC OBJECTIVES 6 3.1 Corporate purpose 6 3.2 Values 7 3.3 Business objectives 7 3.4 Performance measures 8 4 SUMMARY OF MAJOR PROGRAMS 9 4.1 Asset management 9 4.2 Pilbara Energy Grid 9 4.3 Remote service extension 10 4.4 Customer service 10 4.5 Knowledge and technology 11 4.6 Carbon management 11 4.7 Leadership capability 12 5 FINANCIAL IMPACTS 13 5.1 Business impacts 13 6 ACCOUNTING AND DIVIDEND POLICIES 15 7 MINISTERIAL REPORTING 16 Statement of Corporate Intent 2010 2 Executive summary Horizon Power is a Government owned, vertically integrated energy business providing energy solutions to residential, business and industrial customers living and operating throughout regional Western Australia. Horizon Power’s service area is vast, covering all areas outside the South West Interconnected System (SWIS), and extending from Kununurra in the north to Esperance in the south. Operating within the legislative framework and the external environment, Horizon Power’s purpose is to create lasting value from its activities by maximising the social, environmental and economic benefit for the company and the communities which we service. This is reflected in Horizon Power’s business objectives, which are: • Social. To increase customer and community value. • Environmental. To reduce operating impact, influence customer behaviour, and offer sustainable solutions. • Economic. To grow profitably and deliver value from regional development. • Business Capability. To develop people and learning and comply with legislation. Horizon Power has identified three broad strategic platforms to respond to these issues. They are: • Performance excellence in existing business; • Pilbara Energy Grid; and • Remote service extension. The major programs that support these strategic platforms are: • Asset management. This strategy will address the social objectives of community safety, within the context of the economic and environmental objectives. • Pilbara Energy Grid. The North West Interconnected System (NWIS) is Horizon Power’s most significant opportunity to protect the financial sustainability of the organisation and thereby improve the economic outcomes for the organisation. The NWIS is also a significant opportunity for Horizon Power to pursue initiatives within our environmental objectives. • Remote service extension. Horizon Power is continuing to progress regularisation strategies for remote communities using an extension of the Modular, Automated, Renewable and Scalable (MARS) generation concept. • Customer service. Horizon Power is pursuing strategies to improve the customer experience through the development of new products and services. • Knowledge and technology. Horizon Power continues to manage its separation from Western Power. These strategies will assist Horizon Power staff to improve customer service. • Carbon management. Horizon Power is developing strategies to respond to immediate issues posed by the Carbon Pollution Reduction Scheme. • Leadership capability. A number of initiatives are underway to develop the capability and capacity of Horizon Power staff. These strategies directly address the business capability objectives of the organisation. Statement of Corporate Intent 2010 3 1. Introduction Horizon Power’s 2010 Statement of Corporate Intent (SCI) has been written in accordance with the Electricity Corporations Act 2005 (the Act). Under the Act, the SCI sets out the objectives and operational targets for the business and details how these will be achieved. The business strategies discussed in this document have been developed with the overarching aim of increasing the value of Horizon Power by delivering better outcomes for regional Western Australians. The underlying business model has been developed to increase the social, economic and environmental benefits provided to regional communities by Horizon Power’s operations. These benefits will be realised through Horizon Power using its assets, skills and resources to achieve a state of organisational excellence in the simultaneous performance of: • Existing operational activities; and, • Deployment of capabilities to new growth opportunities. This SCI describes the strategies that have been developed to achieve these aims and details how they will be carried out in the expected business environment over the coming year. The expected social, environmental and economic benefits that will be provided to stakeholders are also described. Statement of Corporate Intent 2010 4 2. Business overview 2.1 Who we are Horizon Power is an innovative, Government owned, vertically integrated energy business providing energy solutions to residential, business and industrial customers living and operating throughout regional Western Australia. Horizon Power’s service area is vast, covering all areas outside the South West Interconnected System (SWIS), and extending from Kununurra in the north to Esperance in the south. Horizon Power is responsible for generating, procuring, distributing and retailing electricity in the fast growing regional centres of Western Australia. The rapid expansion of regional developments has demanded the achievement of step changes in the quality and capacity of industrial infrastructure that leaves a valuable legacy for generations of Western Australians in a way that is both socially and environmentally sustainable. 2.2 What we do Within our service area, Horizon Power supplies electricity to approximately41,000 customers. Horizon Power manages a diverse set of power systems including small scale liquified natural gas, compressed natural gas and diesel/wind hybrids. These systems have been developed by Horizon Power and provide an ideal basis for proving new systems and technologies. This has resulted in 10 per cent of the power supplied by Horizon Power coming from renewable sources. Our customer base reflects a diversity of lifestyles, modes of work and income levels across a spectrum of different townships, ranging from major resource towns to self-sustaining remote and Indigenous communities. Similarly, weather experienced in the service areas is widely divergent, from the tropical north with its wet season and frequent cyclones to the temperate southeast with its cold and windy winters. 2.3 How we do it In June 2008, Horizon Power undertook significant operational realignment across the business to ensure we are best placed to achieve our corporate objective to contribute lasting social, economic and environmental value in the communities we serve. The new structure has aligned structure with strategy and seeks to minimise internal barriers that inhibit the effective and efficient deployment of our initiatives. The business structure comprises of eight divisions that support Horizon Power’s tripartite strategies of Performance Excellence, Expanding the North West Interconnected System and Expanding Regional Supplies. Horizon Power’s eight divisions are: • Operations: Delivers balanced, consistent and sustainable operational performance in each district. • Islanded Systems Development: Develops, sells and implements islanded system opportunities. • Strategy and Business Development: Leads strategy development, pursues new opportunities to grow, and commercially manages the NWIS. • Governance and Company Secretariat: Develops and implements effective systems of governance, monitors and reports on compliance and legislative obligations, and manages risk and maintains the company’s policies and procedures. This division also provides support to the Board. • People and Corporate Services: Develops and ensures effective deployment of key corporate services such as Public Affairs, People Services, Marketing and Product Development and Occupational Safety and Health management. • Shared Services: Develops and maintains a range of internal consulting services and support solutions. • Knowledge and Technology: Creates, deploys and manages a strategy to position the business as an innovative user of technology. • Finance Services: Leads and secures appropriate funding and ensures sound financial management and reporting. Horizon Power’s head office is in Karratha, with regional offices located in Kununurra, Broome, Port Hedland, Carnarvon and Esperance so that we can respond to customer queries and investigate local issues promptly. Coinciding with the realignment of the business was the move of Horizon Power’s Perth administration centre to a new premise at Technology Park in Bentley. Statement of Corporate Intent 2010 5 3. Strategic objectives 3.1 Corporate purpose Operating within the legislative framework and the external environment, Horizon Power’s purpose is to create lasting value from its activities by maximising the social, environmental and economic benefit for the company and the communities in which it lives. Horizon Power believes that lasting value is created by seeking better solutions for stakeholders. The focus therefore is not on growth for the sake of growth, but on innovation, cost management and financial prudence. Horizon Power has identified three broad strategic areas of focus for the organisation that will be the main vehicle for delivering lasting value. These are: • Performance excellence in existing business. Define, pursue and deliver performance excellence in the management of our existing business through the safe, efficient and
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