ANNUAL REPORT 2010/11 serving our community In the largest natural disaster ever faced by ENERGEX, our efforts could not have been achieved without the patience and support of the South East Queensland community. Thank you.

In early January, South East Queensland experienced increasing rainfall including areas of January 2011 torrential rain from 6 January. Falls on the Sunshine Coast and hinterland resulted in flooding along the Mary River and in Gympie which worsened during the weekend of 8 and 9 January.

150 millimetres of rain fell on Toowoomba in three hours. This added to the flooding already in Monday 10 the Mary Valley and the Brisbane Valley. More than 15,000 South East Queenslanders were left without power and ENERGEX crews worked around the clock to prepare for the worst. The Bremer River reached a peak of 19 metres. In preparation for the flood peak, ENERGEX Tuesday 11 interrupted supply to 22,000 homes adding to a significant number of interruptions on the whole ENERGEX network. The Brisbane River headed towards a flood peak of 4.5 metres at nine o’clock at night. To protect Wednesday 12 residents and infrastructure during the crisis, ENERGEX interrupted supply to 10 CBD buildings.

As the flood waters began to recede, ENERGEX was able to dispatch 400 crews to assist Thursday 13 the 105,000 homes that were without power in South East Queensland. Electricity supply was restored to more than 7,500 homes on that day alone. The restoration process continued, however, ENERGEX’s efforts to restore power Friday 14 to 77,000 homes continued to be hampered by street and suburbs access. ENERGEX had restored power to almost 30,000 homes and businesses, but the task Saturday 15 continued to be an incredible challenge. Every home had to be assessed for safety and, if necessary, the primary fuse removed before power could be restored to whole streets. Keeping customers informed of the restoration process and providing realistic timeframes Sunday 16 was vital. During this disaster, ENERGEX was mentioned in the media 4,874 times, produced 54 media releases, reported on 974 Australian Traffic Network radio spots and communicated 270 Twitter messages.

By this stage 19,000 homes were without power, but many thousands of these Monday 17 did not have their supply reconnected for weeks due to the nature of damage. The restoration effort continued with power continuing to be reconnected to Tuesday 18 and many more homes in the worst affected areas of Rocklea, Archerfield and the Lockyer Valley. Wednesday 19 ENERGEX had by this stage restored power to all but 1,000 uninhabitable homes. Throughout Friday 21 this disaster crews worked tirelessly through nights, days, weeks and months following the crisis to re-establish the network and help communities rebuild South East Queensland. ENERGEX is proud that the methodical process of restoring power to homes and businesses one by one proved to be a successful approach. Not one major injury was recorded and electricity supply was restored to more than 300,000 customers during one of the worst natural disasters South East Queensland has ever seen.

IMPACT OF FLOODING

Main substations flooded 4 Distribution feeders tripped or isolated 157 Premises disconnected for repairs ~12,000 Total customers off supply >300,000 Peak number of customers off supply ~150,000 Calls for assistance to contact centre ~230,000 Main zone substation outages 25

1 ENERGEX ANNUAL REPORT 2010/11 The flood event that impacted South East Queensland in January 2011 will go down in history.

Chris Arnold (ENERGEX Event Manager during the floods) reflects on some positives that emerged during one of Brisbane’s most devastating weeks:

“I was working from the Newstead office on Tuesday 11 January when the decision was made to escalate the business to a ‘Code Purple’, which meant the evacuation of close to 2,000 staff from the Newstead building and the Oxley Depot. As the evacuation was announced over the loud speaker at Newstead, we saw hundreds of staff quickly flee the building to make their way home. That’s when the enormity of the event hit many of us: as staff became increasingly concerned about their personal situations, their loved ones and possessions at home; as the traffic outside came to a standstill; and the CBD and public transport began to shut down. Being the Event Manager was certainly a challenge from many perspectives – balancing the community’s need for power with our need to ensure the electricity supply is safe and restored to essential infrastructure, such as hospitals, as quickly as possible. In the days that followed, I was able to spend more time outside our Corporate Emergency Response Room with our staff. I visited our teams in the CBD, the Sumner Industrial Estate and Jindalee and was struck by their selflessness and sense of community. They truly cared about the communities they were in and wanted to be there to help. It was more than a job for them; they took ownership and felt a sense of accountability for looking 300,000 In total more than homes and after the communities they had been assigned to work in. businesses experienced power interruptions during the flood event. The damage to our Similarly, the community’s response was outstanding. network was like nothing we had experienced Each of the communities I visited were undergoing previously, and yet within three days we were hardships but still showed support to their neighbours, 100,000 able to restore around of these their friends and our ENERGEX staff who were working customers back onto electricity supply. in the area. This amazing restoration effort could only This event taught us that we need to ensure we continue be achieved by working together with to have robust emergency plans in place. We need other key organisations including Federal, to work out a way of translating the way we interact State and Local Government agencies; other Queensland and interstate electricity with each other and our customers during emergency distributors; and our contractors. situations into our business as usual interactions. This event has allowed us to capture these learnings And of course, it could not have been achieved without the patience and support of and we are now implementing them into our business as the South East Queensland community. usual operations.” GLOSSARY AND INDEX ENERGEX ANNUAL REPORT 2010/11 2 about this report

Sustainability is an important issue which we believe warrants extensive coverage across the key aspects of our business. We At ENERGEX, effective have developed the ENERGEX Sustainability Report which can be accessed on our website at www.energex.com.au. To avoid stakeholder communications and duplication, detailed information regarding sustainability across the key areas is included in our Sustainability Report. This report reporting are key components to has been designed to align with the Sustainability Report which our corporate social responsibility follows the Global Reporting Initiative (GRI). position. We aim for continual In addition, each year we publish our Network Management Plan which provides greater details of our network performance and improvement through future management strategies. This report is also available on our website at www.energex.com.au accountability, transparency To assist in reading our Annual Report, we have included a and relevance of information. glossary of terms and index on pages 92-95. The report also includes our corporate governance arrangements (page 33) – the systems by which the organisation is directed and managed – as well as our risk management processes (page 29). The ENERGEX Annual Report provides a review of our operational and financial performance during the 2010/11 financial year We welcome your comments on this report as it assists us to against our strategies, objectives and targets as detailed in continually improve our reporting and meet the information our Statement of Corporate Intent (SCI) (pages 13-16). needs of our stakeholders. It demonstrates that we are building and maintaining a robust and sustainable business to service the energy needs of Feedback South East Queensland, and how we plan to continue this into Feedback can be provided via [email protected]. the future. This Annual Report and previous reports can also be accessed at www.energex.com.au or via the Corporate Communications team The aim of the report is to provide accurate and relevant on 13 12 53. information to meet the needs of our stakeholders, who include but are not limited to: ENERGEX Limited Corporate Office • our customers and community 26 Reddacliff Street, Newstead 4006 GPO Box 1461 • our employees and employee unions BRISBANE QLD AUSTRALIA 4001 • shareholding Ministers and Government Telephone: +61 7 3664 4000 Facsimile: +61 7 3025 8301 • electricity retailers ENERGEX Limited: ABN 40 078 849 055 • the electricity transmission distributor Enquiries • electricity generators Telephone: 13 12 53 • regulators Hours: 8.00am – 6.30pm Monday to Friday • suppliers. Email: [email protected]

For further information on our stakeholder engagement For more information on any of the initiatives, projects, products processes refer to page 70. and services mentioned in this report and more, visit the ENERGEX website at www.energex.com.au

Thank you Thank you to all the staff and colleagues who contributed to this Annual Report.

3 ENERGEX ANNUAL REPORT 2010/11 Cover photo: Our field staff worked tirelessly throughout 2010/11 to deliver upgrades of more than $3 million a day to better serve the South East Queensland community. contents

Our profile 5 OPERATIONAL REVIEW 42 Highlights 8 Putting safety first 43 Our number one corporate value. An overview of our Highlights 9 approach and activities to ensure the health, safety and wellbeing of our employees and our community. Financial highlights 11 Improving network performance 47 Statement of Corporate Intent 2010/11 13 Details how our electricity network performed in 2010/11 Our performance against our corporate key result areas, and our strategies to improve future network performance objectives and targets and emergency response to meet customer expectations. Challenges 17 Delivering operational excellence 53 CORPORATE GOVERNANCE 18 Demonstrates the systems and processes we put into place in 2010/11 to support delivery of our strategic vision. Chairman’s report 19 Responding to customer expectations 59 Our Chairman reflects on the business achievements Reflects on our role with customers and how we maintain of 2010/11 relationships through effective communication and support. Board profiles 21 Engaging our community 67 An overview of our Board members Focuses on our community engagement activities in Corporate governance 25 2010/11 and the initiatives we undertook to give back Our strategies, performance and reporting of the various to the South East Queensland community. processes that govern our organisation’s direction. Supporting our people 75 Included is our corporate governance framework and Identifies our work during the year to ensure our workforce organisational structure. possesses the right skills and capabilities to deliver our ORGANISATIONAL REVIEW 36 business requirements. Delivering sustainable outcomes 81 Chief Executive Officer’s report 2010/11 37 Our 2010/11 environmental performance demonstrates Our CEO reflects on how we are delivering on our our commitment to delivering sustainable outcomes and promises to the South East Queensland community. operating in a sustainable manner. Executives’ profiles 40 The executive team behind ENERGEX and their key Additional corporate reporting 89 responsibilities. Includes our financial five-year summary, ministerial directions and notifications, and our travel and hospitality expenses. INDEX AND GLOSSARY 92 Glossary and abbreviations 93 Index 95

ENERGEX ANNUAL REPORT 2010/11 4 our profile

At ENERGEX, we provide network services and infrastructure to distribute electricity into the homes and businesses of more than three million people in South East Queensland.

Who we are We are a Government Owned Corporation (GOC) with two shareholding ministers, the Minister for Finance, Natural Resources and The Arts, The Honourable Rachel Nolan MP; and the Minister for Energy and Water Utilities, The Honourable Stephen Robertson MP. For further information on our corporate governance and business structure refer to page 32.

At the core of our business are high performing total assets worth more than $9.8 billion, the expertise of around 3,900 employees and a drive to provide customers with energy solutions that are economically, socially and environmentally acceptable and sustainable. This is underpinned by technological innovation and advanced management systems which drive efficiency, quality and safety. Many of these are nationally or internationally certified or benchmarked to international standards. We also place sustainability and corporate responsibility high on our corporate agenda through contemporary environmental and social practices.

We’ve been providing electricity to Queenslanders for more than 100 years. During this time we have transformed from operating under the Brisbane City Council, the South East Queensland Electricity Board (SEQEB), and in 1995 as a Government Owned Corporation. When we changed our name to ENERGEX in 1997, it signified our entry into the emerging competitive national electricity market. In 2007, the Queensland Government sold our retail business to allow full retail competition. Our network

Our 3,900 employees work together to provide The electricity supply industry in which we operate is organised customers with energy solutions that are like links in a chain connecting the separate elements of economically, socially and environmentally generation, transmission, distribution and retail (see Figure 1). acceptable and sustainable.

5 ENERGEX ANNUAL REPORT 2010/11 Figure 1: South East Queensland Electricity supply industry PROFILE GENERATORS – Generators produce electricity and compete to sell it in the National Electricity Market. As electricity cannot be stored or branded to distinguish its generator, all electricity is centrally pooled and scheduled to meet demand. This pool is managed by the Australian Energy Market Operator (AEMO). Electricity Various generator powerstations TRANSMISSION – Electricity is supplied to ENERGEX through a high- voltage transmission network that is owned and operated by the Queensland Electricity Transmission Corporation Limited (Powerlink), Electricity Powerlink another GOC. transmission QLD

DISTRIBUTION – We own and operate the electricity distribution network in South East Queensland. We convert electricity from the transmission network into high and low voltages and deliver it through a network of Electricity wires and cables to homes and businesses. Distribution Bulk supply Zone Substation Substation RETAILERS – Retailers sell electricity and manage customer accounts and billing.

Powerlines Distribution CUSTOMERS – As the electricity distributor, we are primarily responsible and cables Transformers Substation for building and maintaining the electricity network and delivering a safe and reliable electricity supply to the South East Queensland community. We are also responsible for meter readings and connecting homes and businesses to the electricity network when requested by retailers Electricity on behalf of their customers. Our distribution area of 25,000 square retailers kilometres is bordered by Gympie in the north, Gatton in the west and Coolangatta on the New South Wales border. It includes almost 54,000 kilometres of overhead powerlines and underground cables, more than 600,000 power poles, some 46,000 transformers and more Customer than 330,000 street lights.

Figure 1 graphically depicts ENERGEX’S role within the South East Queensland electricity supply industry.

Our people Our environment Simply put, our staff are ENERGEX. They are highly skilled It is our responsibility to be aware of all current and future and committed, with each and every member truly valued impacts our business may have on the environment. Our team as an integral part of the ENERGEX team. We employ around of environmental specialists work to ensure our operations 3,900 employees across a diverse skill-base of specialised have as minimal impact on the environment as possible and roles, extending from qualified tradespeople, electrical best practice systems are adhered to and continually improved. engineers, technicians and designers, apprentices and cadets, We also channel significant operational, capital works and administrators, professionals and managers. Our workforce sponsorship funds into managing a comprehensive program strives to ensure South East Queensland’s electricity supply is involving recycling, revegetation and offsetting carbon emissions. safe, robust and reliable. Safety of our staff and the community We have recently revisited and enhanced our Environment is our number one value. We treat our team fairly and with dignity Strategy, Sustainability Report and Carbon Management Plan. while providing excellent working conditions conducive to helping staff realise their own career goals and business objectives. Our business ethics Our customers and communities We maintain a long-standing commitment to the community to conduct and report on the affairs of the business transparently Our aim is to deliver the service expectations of our customers and honestly while maintaining processes that ensure our through high levels of network performance and customer staff, at all levels, understand these responsibilities. These service. Whether it’s answering a simple enquiry or connecting responsibilities are at the forefront of our business decisions a large commercial organisation to the electricity network, to ensure they take into account social, economic and we are committed to ensuring the lifestyle and business needs environmental sensitivities, and are set out in our Code of of our customers are met or exceeded. Conduct. Our business operations are also monitored and scrutinised by the ENERGEX Board. The Board works to ensure Our long-term focus is to transform into a customer-centric our commitment to stakeholders and the community are carried organisation by providing customers with greater energy choices. out within strict governance frameworks. Our $1.3 million annual community sponsorship program continues to support the community’s endeavours.

ENERGEX ANNUAL REPORT 2010/11 6 Communication objective In 2010/11, we focused on developing our strategies, reaching the ENERGEX network our objectives and delivering on our targets. This report relates to what we achieved during the year and provides an account of our financial, operational, social and environmental performance in a way that enables comparisons to previous years. It demonstrates our vision to transform ENERGEX into a customer-centric organisation providing sustainable energy solutions. Gympie With this report, we aim to promote our operations across Noosa South East Queensland. Our theme of ‘Serving our Community’ reflects the importance we place on providing excellent customer service in our everyday activities to achieve our strategic Nambour Maroochydore objectives and vision.

Caloundra We have a policy of transparent operation and full disclosure – our report complies with the legislative requirements of the Kilcoy Woodford Corporations Act 2001, Government Owned Corporations Act Toogoolawah Caboolture 1993 and the Financial Accountability Act 2009.

Esk Redcliffe Vision, mission and values

Fernvale Our vision BRISBANE Gatton By 2015, we will transform ENERGEX into a customer-centric Ipswich organisation providing sustainable energy solutions. Our skilled Beenleigh and capable people will see us as an employer of choice as we create new customer solutions and opportunities. We will support our customers’ 21st century lifestyle aspirations and Surfers Paradise Boonah Beaudesert partner with the community to build sustainable economic growth in South East Queensland. In alignment with our shareholders’ expectations, we will be a safe, efficient, environmentally sustainable and commercial organisation. Our mission To achieve our vision, our focus is on providing safe, economic and sustainable delivery of reliable energy solutions to our Our direction customers. In the past 10 years, the population of South East Queensland This requires the provision of progressive solutions for our has dramatically increased with a 30 per cent growth in the customers and stakeholders to guarantee the long-term number of ENERGEX customers and a consequent rise in overall sustainability of electricity distribution in South East Queensland. energy use and demand. As a result, our electricity network’s capacity has more than doubled in this time. This population Through this focus, we aim to set a new standard of excellence surge and the soaring electricity use, mainly due to increased in delivering customers’ energy needs. domestic air conditioning, are predicted to continue. Our values Challenges facing the industry, which we will continue to address, We aim to live our corporate values every day. They underpin include the pressure on energy costs, the impact everything we do as a company and articulate what we see as of future new technology, changing customer and community most important. Our values express who we are and all that expectations, and the responsibility to act in a sustainable we aspire to be. They are the foundation for our reputation manner. A key initiative we are undertaking to balance the pricing and success. impacts with the community’s increasing expectation for a world-class power supply to meet modern-day needs involves our • Put safety first multi-streamed energy conservation and demand management • Respect and support each other program (page 51). • Impress our customers • Set a great example • Be a team player • Deliver balanced results

7 ENERGEX ANNUAL REPORT 2010/11 highlights manage ourProgram ofWork processes andsystems. During 2010/11, we introduced PoW IPto better

17 CI s 13 11 9 Challenges highlights Financial Highlights ANNUAL REPORT 2010/11 8 REPORT ANNUAL ENERGEX

HIGHLIGHTS highlights

• Restored power to more than 300,000 South East • Introduced PoW IP, our improved Program of Work processes Queensland premises with no significant safety incidents and systems, to better manage our resources to respond to following the January 2011 floods. Page 1 increasing demand for electricity supply. Page 56 • Achieved a solid after tax profit of $234.7 million. Page 90 • Introduced the pre-apprentice program, The Positive Power • Achieved a Corporate Responsibility Index (CRI) score of Mob Program, to provide indigenous participants with 86 per cent which is an improvement of 10.68 per cent exposure to our workplace culture and the necessary skills from 2009. Page 70 to qualify for a linesperson apprenticeship. Page 77 • Rolled out our new Power to Perform program aimed at • Official opening of our head office at Newstead and relocation 1,650 improving our staff performance management processes and of employees as part of our overarching property practices through a performance focused culture. Page 78 strategy. Page 86

9 ENERGEX ANNUAL REPORT 2010/11 • • • • network reliabilityandsecurity. Page 48 Achieved Page 45 Process (ZIP)witha Completed rollout ofthesafety trainingprogram Zero Incident Page 54 our network increasingnetwork capacityby MV.A. 464 Invested Page 57 Delivered arecord $550millionSummerPreparednessPlan. $1.22 billioninbuilding,operatingandmaintaining service standards forbetter thanminimumservice staff participation rate. participation 98 percentstaff ANNUAL REPORT 2010/11 10 REPORT ANNUAL ENERGEX

HIGHLIGHTS financial highlights

NET PROFIT AFTER TAX EARNINGS BEFORE INTEREST, TAX, DEPRECIATION and Amortisation interest cover

$234.7 3.3 3.2 $185.2

3.0 $140.8 $128.5 $122.8

2.8 2.8

$M 2010/11 2009/10 2008/09 2007/08 2006/07 Times 2010/11 2009/10 2008/09 2007/08 2006/07

RETURN ON AVERAGE TOTAL ASSETS

6.8% On July 1 2010, we commenced operating 5.8% 5.2% under the new regulatory framework under the 5.0% 5.0% jurisdiction of the Australian Energy Regulator (AER) Determination. The new determination runs for five years and provides the approved level of operating and capital expenditure which we are permitted to incur during the period, and the level of revenue which can be generated

% 2010/11 2009/10 2008/09 2007/08 2006/07 from the regulated distribution business.

In 2010/11, we delivered a Net Profit after Tax result of $234.7M. This result has enabled declaration of a dividend TOTAL REVENUE of $187.8M.

The financial year of 2010/11 represented our first year $1,736.4 of operating under the Australian Energy Regulator (AER) distribution determination. Financial performance exceeded $1,467.9 $1,403.0 $1,336.2 $1,261.0 targets whilst being impacted by the floods across South East Queensland, with capital expenditure reduced due to the resource requirements to address flood mitigation.

Total revenue in 2010/11 increased by 18.3 per cent compared to the previous year, with the increase being largely driven by the decision of the AER, which provides a revenue stream across the five-year determination period, to provide a return on assets employed in the business, depreciation and

$M 2010/11 2009/10 2008/09 2007/08 2006/07 operating expenditure.

11 ENERGEX ANNUAL REPORT 2010/11 expenditure program. which ispredominantlydriven by theongoingcapital year withatotal year-on-year growth of13.2 percent The value oftotal assets continuedto grow duringthe customer demand was also below expectations for the year. Queensland. The level of capital expenditure required to satisfy the year to address the impact of floods across South East financial year, mainly due to resources re-directed during The level of capital expenditure is slightly below the previous earnings generated from increasedprofits. in theasset revaluation aswell reserve asincreasedretained been anincreaseinthelevel ofequity asaresultofgrowth to fundtheongoingcapitalexpenditure program. Therehas The level ofdebtincreasedby 16.5 percentacross theyear ongoing capitalexpenditure program. of debtcontinuedto grow across theyear, mainlyto fundthe volume ofdebtaswell asthelevel ofinterest rates. Thelevel by 31.0 percentacross theyear dueto anincreaseinthe from 3.0to 2.8asaresultofborrowing costsincreasing (EBITDA) InterestAmortisation Cover ratiodeclinedslightly The Earningsbefore Interest, Tax, Depreciationand 6.8 percent. movements saw theReturn onAssets increasefrom 5.8to increased by 29.0percent.Thecombinedimpact ofthese across theyear, whileEarningsbefore Interest andTax (EBIT) The value ofaverage total assets increasedby 14.6 percent $18 million). incremental costsassociated withthefloods(approximately and accordingly, we didnot seekto recover therevenue for a costpassthrough applicationinrelationto thefloods also issuedENERGEX adirectioninJune2011 not to make application relatingto thefloods.TheshareholdingMinisters Board approved thewithholdingofcost passthrough including ourbroader community andsocialobligations,the floods andtakinginto accountthecommercial outcomes Given theexceptional 2011 circumstances oftheJanuary 30 June 2012. recover this foregone revenue in any future period beyond ($52.3 million) for the year commencing 1 July 2011 or to not seek to recover the additional DUOS revenue amounts issued by the shareholding Ministers in May 2011, we will year commencing 1 July 2011. However, under a direction of the 2010-2015 regulatory control period, including the to recover further revenue amounts in the remaining years Competition Tribunal decision which entitled ENERGEX regulatory determination resulting from an Australian During the 2010/11 year there was a change in the AER

CA DEBT/DEBT+EQ TOTA % $M % P ITA L A 2 2 2 $9,811.9 L EX 0 0 0 $985.4 62.0% 10/11 10/11 10/11 SS ET P ENDIT S U ITY U 2 2 2 $1,026.4 $8,671.1 RE 0 0 0 61.4% 09/10 09/10 09/10 2 2 2 $8,011.0 0 0 $871.0 0 62.8% 08/09 08/09 08/09 ANNUAL REPORT 2010/11 12 REPORT ANNUAL ENERGEX 2 2 2 $7,400.5 $722.3 0 0 0 59.1% 07/08 07/08 07/08 2 2 2 $7,683.7 $771.2 0 0 0 52.0% 06/07 06/07 06/07

HIGHLIGHTS statement of corporate intent 2010/11

KEY RESULTS AREA OBJECTIVE KEY PERFORMANCE ACTUAL Target measure Performance Review Future Challenges and Targets MEASURES PERFORMANCE

ENERGEX will achieve an injury-free workplace and LTIFR 2.43 <1.5 There were 17 Lost Time Injuries (LTIs) during Operational Objective to 2015/16 safety will develop a workplace culture where employees the 2010/11 year compared to 7 last year, Delivering with safety as ENERGEX’s first corporate value. PAGE 43 take personal responsibility for their safety. Safety resulting in an LTIFR outcome of 2.43. risk will be reduced through a targeted and structured Total Days Lost due to LTIs in 2010/11 2011/12 Operational Strategies approach to safety that delivers legislative compliance amounted to 250 compared to 69 last year Target zero injuries by developing a culture of personal and best practice business operations. and more than 320 days lost in each of the accountability for safety at work and outside work. CCFRS 2.99 3.70 previous three years. The increase from the previous year, while significant, mainly relates to minor injuries rather than severe injuries sustained in past years.

ENERGEX is committed to being an employer of choice Staff Engagement 65.8% 67.0% The staff survey resulted in an ENERGEX Operational Objective to 2015/16 people and an organisation that its employees want to be a EMPI tally score of 65.8% (compared to Build a sustainable and productive workforce that delivers part of. The corporation will ensure that its workforce 65.9% in 2009/10) against a target of 67.0%. strong business results. PAGE 75 possesses the skills and capability to deliver business While the target was not achieved, the 2011/12 Operational Strategies requirements, supported by a high performing and maintenance of the overall staff motivation Be prepared for the future workforce and skill customer focused culture. It will be driven by corporate score in a year of considerable change is requirements of ENERGEX; and values and will promote innovation and learning. encouraging. ENERGEX will work actively with staff and unions to Enhance our performance focused culture by embedding ensure the industrial environment provides flexibility Power to Perform. and benefits to ENERGEX and its people.

ENERGEX will deliver its regulated financial targets in OPAT ($M) 234.7 185.6 ENERGEX delivered a very strong financial Operational Objective to 2015/16 a sustainable manner through improved productivity result for 2010/11 with Operating Profit Deliver economic value and meet shareholder and the cost effective delivery of electricity to after Tax (OPAT) being significantly above commitments. financial retailers and services to customers. ENERGEX will budget. The financial performance resulted 2011/12 Operational Strategies pursue a series of reforms and initiatives to assist it Statutory ROA (%) 6.8 6.2 from a delay in expenditure against Network Exercise sound commercial judgment and ‘live within performance to meet the financial expectations of its shareholders, Demand Management activities as well our means’; and while working within the regulatory allowances as additional returns from non-regulated PAGE 90 provided under the Australian Energy Regulator. activities. Lower support costs for the Identify opportunities for non-regulated business Non–regulated businesses that integrate with and business resulted from prudent management by leveraging our comparative advantage and leverage the core business will be pursued where of resources while borrowing costs were customers’ needs. profitable opportunities exist. below budget due to the reduced capital expenditure program which resulted in a reduction in the level of debt which would otherwise have been required.

ENERGEX will develop best practice skills, processes Capex Plan (NMP) 87% Key physicals delivered to This year has delivered a substantial increase Operational Objective to 2015/16 operational and systems to support delivery of its strategic vision NMP plan in network capability comprising an additional Deliver operational excellence on our Program of Work and associated plans and initiatives. ENERGEX 998 MV.A of substation capacity (compared and AER commitments and deliver on legal, compliance will deliver commitments outlined in its Network with 378MV.A in 2009/10). In addition and corporate governance obligations. excellence Management Plan (NMP) and Summer Preparedness to this, the Transmission Program added PAGE 53 Opex Plan (NMP) 99% Key physicals delivered to 2011/12 Operational Strategies Plan (SPP) to ensure the continued operation and NMP plan 23 additional 33kV feeders and 173 11kV Understand opportunities for increased efficiency through growth of its distribution network and the satisfaction feeder upgrades. All network risks associated economies of scale and improvements; and of stakeholders. ENERGEX will deliver on its legal, with the summer preparedness projects in Deliver the Program of Work (PoW) and AER Commitments compliance and corporate governance obligations. Key Projects 66% Delivered to milestones 2010/11 were addressed by either project completion or implementation of contingency on time and on budget. plans. All risks associated with project delays Compliance Improvement Tracking to Plan Tracking to Plan have been managed with no adverse impacts on customers during the period.

13 ENERGEX ANNUAL REPORT 2010/11 KEY RESULTS AREA RESULTS KEY and benefits to and ENERGEX and people. benefits its ensure the industrial environment provides flexibility ENERGEX willand workunions with staff actively to values and will promote innovation and learning. culture.focused customer It will be driven by corporate by arequirements, supported high and performing the skills and to capability deliver business possesses of.part will The corporation ensure workforce that its and an employees thatwant organisation its to be a to ENERGEX is beingcommitted an employer of choice operations. business andpractice best approach to that compliance delivers safety legislative risk will be reduced through a andtargeted structured for take their responsibility personal safety. Safety will develop a workplace culture where employees ENERGEX will achieve an workplace and injury-free compliance and governance corporate obligations. ENERGEX willof stakeholders. deliver on legal, its andnetwork of distribution the its growth satisfaction Plan (SPP) to ensure the continued and operation Management Plan (NMP) and Summer Preparedness will deliver outlined in commitments Network its plans and andENERGEX associated initiatives. vision and of strategic delivery to its systems support ENERGEX will skills, processes develop practice best exist. opportunities profitable where pursued be will business core the leverage and with integrate that businesses Non–regulated Regulator. Energy Australian the under provided allowances regulatory the within working while shareholders, its of expectations financial the meet to it assist to initiatives and reforms of aseries pursue will ENERGEX customers. to services and retailers to electricity of delivery effective cost the and productivity improved through manner a sustainable in targets financial regulated its deliver will ENERGEX OBJECTIVE MEASURES PERFORMANCE KEY Compliance Compliance Improvement Key Projects Opex Plan (NMP) ROA (%)Statutory CCFRS Staff Engagement Staff LTIFR Capex Capex Plan (NMP) OPAT ($M) PERFORMANCE ACTUAL Tracking to Plan 66% 99% 6.8 2.99 65.8% 2.43 87% 234.7 Tracking to Plan Delivered to milestones NMP plan Key deliveredphysicals to NMP plan Key deliveredphysicals to 6.2 185.6 67.0% 3.70 <1.5 T measure arget

P on customers during the period. have been managed with no adverse impacts plans. All risks associated with project delays completion or implementation of contingency 2010/11 were addressed by either project with the summer preparedness projects in feeder upgrades. All network risks associated 23 additional 33kV feeders and 173 11kV to this, the Transmission Program added with 378MV.A in 2009/10). In addition 998 MV.A of substation capacity (compared in network capability comprising an additional This year has delivered a substantial increase have otherwise been required. inreduction the level of debt which would expenditure program which inresulted a below budget due to the reduced capital while ofwere resources borrowing costs fromresulted prudent business management for the Lowercosts support activities. as additional returns from non-regulated Demandas wellManagement activities from a delay in expenditure against Network budget. Theresulted financial performance Taxafter (OPAT) abovebeing significantly result for 2010/11 with Profit Operating ENERGEX delivered a strong financial very encouraging. score in a year of changeconsiderable is maintenance of the motivation overall staff While the target was not achieved, the 65.9% in 2009/10) against a target of 67.0%. EMPI tally score of 65.8% (compared to survey resulted in anThe staff ENERGEX injuries in sustained years. past relates to minor injuries rather than severe the previous year, whilemainly significant, previous three The years. increase from and more than 320 days inlost each of the amounted to 250 compared to 69 yearlast Total due Days Lost to LTIs in 2010/11 resulting in an LTIFR outcome of 2.43. the 2010/11 year compared to 7 year,last There were 17 Time Lost Injuries (LTIs) during R erformance evie w

F on time and on budget. Deliver the Program of Work (PoW) and AER Commitments of economies scale and improvements; and through for efficiency increased opportunities Understand Strategies 2011/12 Operational and governance corporate obligations. and AERand commitments deliver on legal, compliance Deliver excellenceoperational on our Program of Work to 2015/16Objective Operational needs. customers’ and advantage comparative our leveraging by business non-regulated for opportunities Identify and means’; our within ‘live and judgment commercial sound Exercise Strategies 2011/12 Operational commitments. Deliver economic value and meet shareholder to 2015/16Objective Operational Power to Perform. Enhance culturefocused our byperformance embedding requirements ofand ENERGEX; Be prepared for the future and workforce skill Strategies 2011/12 Operational results. strong business Build a sustainable and that workforce delivers productive to 2015/16Objective Operational forat safety workaccountability and work. outside Target zero injuries by developing a culture of personal Strategies 2011/12 Operational Delivering as value.with ENERGEX’ssafety corporate first to 2015/16Objective Operational Ch uture T and allenges ANNUAL REPORT 2010/11 14 REPORT ANNUAL ENERGEX argets

HIGHLIGHTS KEY RESULTS AREA OBJECTIVE KEY PERFORMANCE ACTUAL Target measure Performance Review Future Challenges and Targets MEASURES PERFORMANCE

ENERGEX will continue to improve network Minimum Service Standards Favourable to target ENERGEX continued to deliver favourable Operational Objective to 2015/16 network performance and emergency response to meet SAIDI – CBD 6.05 mins 15 mins reliability outcomes with all measures being Deliver a network that meets current needs whilst customer expectations for reliability and deliver on favourable to target. The ongoing capital transforming to the smart network of the future. SAIDI – Urban 79.75 mins 106 mins performance MSS. ENERGEX’s long term aspiration is to operate investment and maintenance program have 2011/12 Operational Strategies an intelligent connective network and provide best SAIDI – Rural 201.58 mins 218 mins resulted in this improved outcome, with all Prepare for the future network transformation through PAGE 47 practice energy solutions to customers. An increasing SAIFI – CBD 0.01 0.15 measures except SAIDI-CBD showing an smart network pilots and technology upgrades; and focus on demand management activities will be improvement on the results for 2009/10. pursued to enable more effective options for delivery SAIFI – Urban 0.92 1.26 Deliver excellence in Network Performance. of electricity supply. SAIFI – Rural 2.05 2.46

ENERGEX will maintain its focus on achieving Service Performance Index 85% >80% For the 2010/11 year the Service Operational Objective to 2015/16 customers network performance outcomes and customer Performance Index measured the satisfaction Respond to growing pressure to stabilise network PAGE 59 service improvements to meet or exceed customer of customers who had actually received an prices and satisfy customer performance and choice expectations. ENERGEX’s long-term aspiration is to ENERGEX service for the month, rather than expectations. transform into a customer-centric organisation that the previous measure of a random sample of 2011/12 Operational Strategies provides customers with greater choice in how they customers who may or may not have received Implement strategies to influence demand to stabilise participate in managing their energy needs. The a recent ENERGEX service. The Service capital investment and price increases; and corporation will support customers’ increased choice Performance Index measures customer options through operation of an intelligent connective satisfaction with a broad range of service Understand customers’ willingness to pay for flexible network and constructive relationships with key metrics and provides an aggregate indication services. retailers. ENERGEX will work with customers through with our service performance. pilots and trials to ensure customer input is gained in developing the future network options.

ENERGEX aims to be recognised by the community as Community Regard Index 65% >63% Research indicates that the Community Operational Objective to 2015/16 community a good corporate citizen and a leader in sustainability. recognises our role in maintaining and Maintain strong community relationships. PAGE 67 ENERGEX will engage the community in the planning building the network and that they see us with 2011/12 Operational Strategies and delivery of its network and strives to be a ‘good a primary role in providing a safe and reliable Balance network project outcomes and community neighbour’ in relation to its assets in the community. electricity supply, a primary role in power acceptance. restoration following outages and storms and a key supplier of data and education for electricity safety, energy conservation and demand management.

ENERGEX will deliver commitments within its Carbon Reduction as Tracking to Plan Tracking to Plan Carbon offsets for 2009/10 fleet and air Operational Objective to 2015/16 environment carbon reduction plan and achieve a sustainable per Carbon Reduction travel emissions have now been secured. Achieve a sustainable environmental position. PAGE 81 environmental position through implementing Management Plan These include biosequestration through 2011/12 Operational Strategies compliance activities and business practices that planting of native trees, Greenhouse friendly Minimise harm to the environment; and minimise harm to the environment. abatement credits, and Run of the River Hydroelectricity. Respond to the risks of climate change.

15 ENERGEX ANNUAL REPORT 2010/11 KEY RESULTS AREA RESULTS KEY developing the future options. network andpilots trials to ensure inputcustomer is gained in ENERGEX willretailers. work through with customers with relationships key andnetwork constructive throughoptions ofoperation an intelligent connective choice willincreased customers’ corporation support in managing participate The theirneeds. energy with greater choice inprovides customers how they into that transform organisation a customer-centric ENERGEX’s is aspiration long-term to expectations. improvements to service meet or exceed customer and outcomes customer performance network ENERGEX will maintain focus onits achieving supply. of electricity pursued to enableforoptions moredelivery effective focus on demand will management be activities An toincreasing solutions customers. energy practice an intelligent andnetwork connective provide best ENERGEX’s MSS. long term isaspiration to operate for reliability and expectations customer deliver on and toemergency performance response meet ENERGEX will continue to improve network minimise harm to the environment. that andpractices business compliance activities environmental through implementingposition planreduction carbon and achieve a sustainable ENERGEX will deliver within its commitments neighbour’ inin therelation tocommunity.assets its and ofandnetwork delivery toits strives be a ‘good ENERGEX will engage the community in the planning a citizen good corporate and a leader in sustainability. ENERGEX aims toby be therecognised community as OBJECTIVE SAIFI SAIFI – Rural SAIFI – Urban SAIFI – CBD SAIDI – Rural SAIDI – Urban SAIDI – CBD Service Performance Index Performance Service Minimum Standards Service Management Plan per Reduction Carbon as Reduction Carbon RegardCommunity Index MEASURES PERFORMANCE KEY 2.05 0.92 0.01 201.58 mins 79.75 mins 6.05 mins 85% Tracking to Plan 65% PERFORMANCE ACTUAL Tracking to Plan >63% >80% 2.46 1.26 0.15 218 mins 106 mins 15 mins Favourable to target T measure arget P Hydroelectricity. andabatement credits, Run of the River planting of Greenhouse native friendly trees, through includeThese biosequestration travelhave emissions now been secured. for 2009/10 offsets Carbon andfleet air demand management. and safety,conservation energy electricity and a key supplier of anddata for education following andrestoration outages storms supply, aelectricity role primary in power arole primary in providing a safe and reliable building the andnetwork that they see us with our rolerecognises in maintaining and that indicates Research the Community performance. with our service and metrics indication provides an aggregate with a broad rangesatisfaction of service Index Performance measures customer The aService recent ENERGEX service. who customers may or may not have received the previous measure of a random sample of for the ENERGEX service month, rather than whoof customers had actually anreceived Index Performance measured the satisfaction For the 2010/11 year the Service improvement on forthe results 2009/10. showing an measures except SAIDI-CBD inresulted this improved outcome, with all investment and maintenance program have favourable to The target. ongoing capital with all reliability outcomes measures being ENERGEX continued to deliver favourable R erformance evie w F Respond toRespond the ofrisks climate change. Minimise harm to the environment; and Strategies 2011/12 Operational Achieve a sustainable environmental position. to 2015/16Objective Operational acceptance. and Balance outcomes project network community Strategies 2011/12 Operational Maintain strong community relationships. to 2015/16Objective Operational services. towillingness customers’ pay Understand for flexible investment andcapital and price increases; to Implement influence demand strategies to stabilise Strategies 2011/12 Operational expectations. and choice customer performance andprices satisfy toRespond growing to pressure network stabilise to 2015/16Objective Operational Deliver excellence in Performance. Network and andupgrades; pilots network smart technology Prepare for the future through transformation network Strategies 2011/12 Operational transforming to ofthenetwork thesmart future. Deliver a currentthat network meets whilst needs to 2015/16Objective Operational Ch uture T and allenges ANNUAL REPORT 2010/11 16 REPORT ANNUAL ENERGEX argets

HIGHLIGHTS challenges

Future challenges

• Perform core business functions effectively, maintain operational control and position ENERGEX as a preferred employer with a continued focus on safety, people, culture, processes and systems. • Identify and implement opportunities to improve performance and delivery by focusing on operational excellence, step changes in economies of scale and developing additional profit streams. • Transition to a more intelligent, capable and connective network that meets future requirements and provides improved value for customers by harnessing demand and network prices, integrating technical advances and delivering to customer choice and performance expectations.

Developing a network that meets future technical and customer requirements is one of our key future challenges.

17 ENERGEX ANNUAL REPORT 2010/11 corporate governance we have in placeasuite ofgovernance policies to assist with thesedecisions. Our people arecommitted to ethical andresponsible decisionmaking and

25 21 19 Corporate governance Board profiles Chairman’s report ANNUAL REPORT 2010/11 18 REPORT ANNUAL ENERGEX

CORPORATE GOVERNANCE chairman’s report

ENERGEX Chairman John Dempsey The 2010/11 financial year has been a defining one for ENERGEX. I am proud that in a challenging environment signified by severe weather and regulatory reform, ENERGEX has still delivered a good result for our shareholders, customers, and the community in general.

The onset of wild weather in January presented significant challenges to the communities we serve and to our own network and staff. These challenges were met with an enthusiasm and commitment that, as Chairman of the company, is pleasing to see and consistent with my view of ENERGEX as a responsive and professional organisation. Most importantly, these challenges were met safely with no electrical injuries to our employees or the community. The value of this achievement can never be overstated.

During these floods, we incurred approximately $40 million in operating and capital costs. Due to growing price and cost pressure on customers coupled with the additional costs customers would bear to rebuild other major infrastructure in South East Queensland, the Board decided that ENERGEX would bear the additional costs resulting from the floods. Subsequently, the Queensland Government also gave us a direction to not pass on these costs to the community.

Despite the absorption of these costs, we still achieved a strong financial performance for the year.

Whilst our financial performance has been strong, we are mindful of our need to continue to provide our community with value for money and find meaningful ways to sustainably reduce our costs.

19 ENERGEX ANNUAL REPORT 2010/11 contribution to thetotal nationalreductionbehind ErgonEnergy. was recognisedasproviding thesecondhighest company- cent ofthetotal nationalreduction.Morespecifically, ENERGEX the three-year survey period,contributingmorethan90per largest contributor to peakdemandreductionofany state for way inpeakdemand managementandfor 2010/11 was the Australia. According Queenslandisleadingthe to thereport, of the2010 Survey ofElectricityDemandManagementin recognised intheAustralian Alliance to Save Energy’sReport While we stillhave alongway to go,ourwork hasbeen passed to through electricityconsumers efficientnetwork prices. utilisation ofnetwork assets, thebenefitscanultimately be Sunshine Coastonanormalsummer’sday. Byachieving better forecasts: theequivalent ofonethird ofthepower usedonthe next five years totalling megawatts144 from currentdemand Our target is to achieve realpeakdemandreductionsover the future customer behaviour to avert peak demand issues. adequate to deal with these trends while providing insight into This information affirms that our current planning strategies are consumption patterns of our customers and predict future trends. Through this survey, we can better understand the energy more than150,000 homesinthepast12months. four homesnow have airconditioning,whichisanincrease of showsQueenslanders that,amongother things,threeoutof energy consumption. Thissurvey ofmorethan3,500 Powerlink to commission asurvey into Queenslandhousehold Government-owned energycompanies ErgonEnergyand During theyear, withfellow we partnered Queensland anddemandmanagementstrategyconservation over five years. approach by investing morethan$130 millioninto ourenergy a 71 percentincreaseby 2020,we aretaking aproactive to proactively reducethepeakdemandforecast, projected at ofourvisionfor asmarter,As part moreefficientnetwork and line withthestated policyobjectives oftheAER. network’ vision.We‘smart believe thattheseinitiatives willbein peak demand,andensuringany our futurenetwork cansupport efficiency anddemandmanagementinitiatives to reduceour network to keep pacewithdemand,whilepromoting energy three pronged approach thatbalancestheneedto expand our of anoptimumnetwork investment model.Thismodelisa We have consideredtheAER’spositionthrough ourstrategy companies like ENERGEX. costs commensurate withthelevels provided ofservice by to beimproved to ensurethatconsumersarepaying electricity assets andmaintainreliability, therulesneed theAERconsiders the networks to meet risingelectricitydemand,replaceageing for Whilethereis a fundamentalneedto consumers. invest in reviews,regulatory withtheaimofproviding protection further a resultofitsexperiences derived from thisfirst round of for anumberofchangesto theNationalElectricityRules as Regulator (AER).TheAERhasrecentlyannouncedarequest reset, reset andthefirst administered by the Australian Energy We arenow into oursecondyear price ofthecurrentregulatory

market conditions. with well thoughtoutcompany strategies thatrespondto our Key coupled to thissuccesswillbe thecommitmentofourstaff we areinaposition to meet themsuccessfullyatalllevels. The challengesaresureto continuein2011/12, butIbelieve and helpfulnessofourstaff. QueenslandhaveFar North appreciated handtheefficiency first inCyclone YasiThrough ourefforts earlierthisyear, peoplein in allareasnot justthoselivinginSouthEastQueensland. appreciation heldfor from ourENERGEX Queenslanders staff As Itravel across Queensland, Iamoverwhelmed by the another successful year intheface ofenormouschallenges. Finally, Iwant to thankourmanagementand employees for improvements intheyears ahead. at bestpracticestandards andwillcontinueto focus on slightly higherthantheprevious year, we arestilltracking everything we do.Whileour safety statisticsfor 2010/11 are is safety. Thesafety andourcommunitydrives ofourstaff always willbe,akey focus for thecompany. Thatconstant Yet, through allofthis,thereisoneconstantthathas,and meet South EastQueenslanders’futureneeds. to continueto invest wiselyinournetwork whileensuringitcan impact onfutureelectricitypriceincreaseswilldrive ourneed External pressureto keep ourcostsdown andto minimiseour and pricepressuresfrom thecommunity. placed to respondto changes,carbontax issuesaround tariff strategies.conservation Byachieving this,we willbebetter model whilefocusing onourdemandmanagementandenergy achieve gainsfrom ouroptimumnetwork further investment As we lookforward, ourprioritiesintheyear aheadwillbeto from thesesystems. cope with an influx of electricity generated back into our network to buildandmaintainourelectricitynetwork. We alsoneedto resources required to connectthesystems withthoserequired our staffingand technical resources as to balancethe we try feed-in charges.Thishasplacedasignificantstrainon tariff of morethan$15 millionto thecompany through metering and connected to theENERGEX network, whichhascomeatacost In 2010/11, morethan70,000solarPVsystems have been peakdemandanditseffect onnetworkoffsetting resources. contribute to theproduction ofcleanenergy, they donothing for financial, humanand technical resources, andwhilstsolarPVs growth ofmorethan300percenthascreated pressureonour being connected to oursupplynetwork. Thisunprecedented use, withsignificantgrowth inthenumberofsolarPVsystems State Governments’ incentives to encouragerenewable energy haveQueenslanders respondedpositively to theFederal and Independently ofourwork to reducepeakdemand,SouthEast ANNUAL REPORT 2010/11 20 REPORT ANNUAL ENERGEX ENERGEX Chairman John Dempsey John

CORPORATE GOVERNANCE board profiles

John Dempsey Mary Boydell Major General (Retired) Chairman, ENERGEX Limited Board Director Peter Arnison AC, CVO ACIS, FIPA, Grad Dip Acctg and Fin Mangt, BCom, FCA, MAICD Director Grad Dip Ag Econ, GAICD Mary Boydell was appointed a BEc, D Laws UQ, D Univ QUT, D Univ Griffith, D Letters USQ, D Univ SCU, In June 2008, John Dempsey was non-executive Director of the ENERGEX appointed Chairman after acting in the Limited Board in July 2005. Mary chairs Peter Arnison was appointed a position since 1 January 2007. the Risk and Compliance Committee and non-executive Director of the ENERGEX John was first appointed as a is a member of the Audit Committee. Limited Board in December 2004. He chairs the Network and Technical non-executive Director of the ENERGEX She is a Chartered Accountant with Committee and is a member of the Risk Limited Board in July 1999. He is a extensive board experience in the private and Compliance Committee. member of the Board’s Audit Committee and public sectors combined with senior and a member of the Network and management roles in commerce and the Peter served for 37 years in the Technical Committee. accounting and legal professions. Australian Army in a variety of Infantry command appointments, retiring as Land He is also a Member of the Executive Mary is currently Commissioner of Commander, Australia, in June 1996. Committee of the Multiple Sclerosis the Queensland Water Commission, He was appointed Queensland’s 23rd Society of Queensland. Formerly Chairperson of the Gladstone Area Water Governor, serving from July 1997 to Deputy Mayor of the City of Cairns, he Board, Board Member of the CSIRO, July 2003. contributed to the development of the Member of the Surat Basin Engagement Management of the Wet Tropics World Group, Director of Uniquest Pty Limited He is Chancellor of Queensland University Heritage Area listing as Chairman of the and a Director of UATC Pty Ltd. Mary has of Technology; Chairman of The Centre for Community Consultative Group. previously served as the Chairperson Military and Veterans’ Health; Chairman He has had extensive experience in the of the Rural Industries Research & of the Brisbane Airport Community Queensland rural industry and was an Development Corporation, as a Director Aviation Consultation Group; and a inaugural member of the Sugar Industry of the Australian Trade Commission Director of the Australian Multicultural Tribunal in 1991, where he remained for (Austrade), Burnett Water Pty Ltd and Foundation. six years. Until recently John conducted a BSES Limited, as a Board Member of the In 2011, Peter chaired the Brisbane City public accountancy practice in Brisbane, Queensland Bulk Water Supply Authority Council Flood Response Review Board. and has more than 30 years’ experience and as an external adviser to Board Audit in the field. He is an Associate of the Committees in the public and private Institute of Chartered Secretaries and sectors. She is a former Chairman and also holds postgraduate diplomas in Member of the Queensland Regional Accounting and Financial Management Council of the Institute of Chartered and in Agricultural Economics and is Accountants in Australia. a Graduate of the Institute of Company Directors.

21 ENERGEX ANNUAL REPORT 2010/11 Protection PtyLtd(1995–2010). Chairman ofLightningandTransient Brisbane Inc(2001-2003). Hewas also Pty Ltd(1992-1993) Clubof andRotary Engineering (ATSE) (1992-1995), UniSyd Academy of Technological Sciencesand Australia (NATA) (1989-1995), Australian National Association of Testing Authorities including UniQuest PtyLtd(1988 -1993), onanumberofBoardsMat hasserved (IEEE), Engineers and Australia.Engineers Institute ofElectricalandElectronic Large ElectricalSystems (CIGRE),the Commission, International Councilof Australia, International Electrotechnical Association ofAustralia, Standards including theElectricitySupply protection andengineeringeducation committees onpower systems, lightning He hasbeenactive inprofessional and EmeritusProfessor. Research Fellow (fractional)until2008 in 1998 was appointed Professorial in ElectricalEngineering1980, and in 1959. Heprogressed to Professor University ofQueenslandasanacademic Queensland. Hewas appointed to the with theSouthernElectricityAuthority of in electricalengineeringcommenced Remuneration Committee. Mat’scareer and Technical Committee andthe He isamemberoftheNetwork Limited Board inDecember2004. non-executive Director oftheENERGEX wasMat Darveniza appointed a BE, PhD,DEng,HonDSc,FIEAust, FIEEE,LIVA Director M ProfessorEmeritus at Darveniza AO,at Darveniza FT S E

Treasury Corporation Board. Deputy MemberoftheQueensland (formerly ESISuper)andisaprevious John isaDirector ofEnergy Super Transmission andSupplyCorporation. Financial Officer for theQueensland Prior to astheChief this,Johnserved Officer from July 1997 to April2001. December 2000andChiefFinancial Executive Officerbetween March and positions atENERGEX includingChief Previously, Johnhasheldexecutive and Western Australia. reform inQueensland electricity industry industries andhasbeeninvolved with manufacturing, miningandenergy the private andpublicsectors inthe John hasextensive experience within Committee. a memberoftheRiskandCompliance Chairman oftheAudit Committee and Limited Board inJuly2005.Heis non-executive Director oftheENERGEX John Geldard was appointed a BCom, BE,CPA FAICD Director Geldard John

ANNUAL REPORT 2010/11 22 REPORT ANNUAL ENERGEX

CORPORATE GOVERNANCE Ron Monaghan Kerryn Newton Terry Effeney Director Director Chief Executive Officer BA LLM, MBA, MA, Grad Dip (Applied Finance and Investment), BE (Hons), BEcon, MEng, GAICD, RPEQ FAICD, AFAIM Ron Monaghan was appointed a Terry Effeney was appointed Chief non-executive Director of the ENERGEX Kerryn was appointed as a non-executive Executive Officer of ENERGEX on 8 January Limited Board in May 2008. Ron is Director of the ENERGEX Limited Board 2007. Prior to joining ENERGEX, Terry Chairman of the Remuneration Committee in October 2008. She is a member of the held the role of Chief Operating Officer of and a member of the Audit Committee. Risk and Compliance Committee and the Ergon Energy for three years and was an Remuneration Committee. Ron has extensive experience in industrial Executive Manager of Ergon Energy and its relations and is the General Secretary of Kerryn was admitted as a solicitor of the predecessor organisations for more than the Queensland Council of Unions. Ron Supreme Court of Queensland in 1991 10 years. has previously been a Director of Intrust and has worked in various legal and Throughout his career, Terry has gained Super and currently holds Directorships on management roles in the private and extensive experience in senior line the Sunsuper and WorkCover Boards and public sectors. Her roles have included management at both operational and is a member of the ACTU Executive. extensive experience as a lawyer and strategic levels including roles in network advisor for the Queensland Parliament and field operations management and and its parliamentary committees. business development. Since commencing Over the last decade, Kerryn has chaired his career with the Capricornia Electricity the boards of numerous not-for-profit Board, Terry has held numerous companies in the child care, aged care engineering and strategic development and housing sectors. roles throughout Queensland. Currently, Kerryn is Managing Director Terry is Deputy Chair of Energy Networks of a governance consulting firm and Association (ENA) and Chair of ENA’s advises organisations on a wide range of Smart Networks Committee. governance and management issues. In addition, Kerryn is a Commissioner of the Queensland Gaming Commission.

23 ENERGEX ANNUAL REPORT 2010/11 in CeramicFuel CellsLimited. listed telecommunications company and significant ENERGEX investments ina that includedthemanagementof been developed through responsibilities incorporateexpertise governance has positions. Inthelast12years, his held various engineering and management was operatingasSEQEBin1984 andhas Michael joinedtheorganisationwhenit Company Secretary. Director Corporate Governance and and inNovember 2010 hebecame General ManagerCorporate Governance In October 2007, hewas appointed as Secretary. October 2004asActing Group Company (Assistant Company andfrom Secretary) the positionofCorporate Manager Affairs Companies in sinceearly2004,firstly forsecretary theENERGEX Group Michael Russell hasbeenacompany GradDipAppCorpGov,BE, MBA, ACIS, GAICD, MIEAust, CPEng Company Secretary and CorporateGovernance Director M ichael Russellichael

Secretaries Australia. Corporate Governance through Chartered the Graduate DiplomainApplied December 2007. In2009,shecompleted Manager (AssistantCompany in Secretary) appointed asSecretariat andGovernance Legal CounselNetwork in2005.Shewas law firmbefore joiningENERGEX as in July2000andpracticedanational Marnie White was admitted asasolicitor LLB,GradDipLP,BA, GradDipAppCorp Gov, ACIS Company Secretary Manager andGovernance Secretariat M arnie White arnie ANNUAL REPORT 2010/11 24 REPORT ANNUAL ENERGEX

CORPORATE GOVERNANCE corporate governance

Highlights During 2010/11, we enhanced our governance As a Government Owned framework through: Corporation (GOC), we report • further expanding and updating the ENERGEX Corporate governance website to comprehensively document our against the Corporate Governance governance framework • responding to legislative change through updating our Guidelines for Government Owned frameworks to implement application of the new Public Corporations (the guidelines) Interest Disclosure Act 2010 (Qld) to Government Owned Corporations and the revised Competition and Consumer Act issued by the Queensland 2010 (Cth) (formerly the Trade Practices Act 1974) • further enhancing the governance framework to support Government. business management and decision making. Principle 1 – Foundations of management and oversight The guidelines reference the ASX Corporate Governance Board Charter Principles and Recommendations and provide the framework for all GOCs, including ENERGEX, to develop, implement, review and Our Board Charter, available on our website, provides a clear report on their corporate governance arrangements. delineation between the roles and responsibilities of the Board and individual directors and the matters which are delegated to The Board and senior management continue to support the management. Our Board holds monthly meetings which focus refinement of our evolving corporate governance framework, on matters of strategic guidance for the company and effective in accordance with the guidelines and other best practice oversight of management. Management’s responsibilities are standards, through the adoption of a continuous improvement well defined through job profiles, performance agreements and approach to governance. the Board-approved Delegation of Authority framework.

During the year, we implemented improvements to our Board Committees governance framework in response to the changing legislative environment including the updated Competition and Consumer The Board has established four committees to oversee a range Act 2010 (Cth) (formerly called the Trade Practices Act 1974) and of specialist issues on its behalf. the Public Interest Disclosure Act 2010 (Qld). Following the Board’s performance evaluation in June 2010, We have responded to these legislative changes through the Board reviewed its committee structure. Effective 1 October amendments to our governance framework which has and 2010, the Audit and Compliance Committee was renamed the will include the introduction of compliant processes, policy Audit Committee and its responsibilities were amended to amendments and training programs for staff. primarily oversee effectiveness of internal control, integrity and corporate assurance. The Corporate Development Committee was renamed the Risk and Compliance Committee to have oversight of risk and compliance management activities. The duties and responsibilities of the Network and Technical Committee and the Remuneration Committee remained unchanged. However, membership of each committee was also reviewed.

The register of Board Committees, including a summary of their roles and revised memberships, is set out on pages 33-34. Management has also established a number of committees to support the governance of ENERGEX and each committee’s role is defined in a Charter.

25 ENERGEX ANNUAL REPORT 2010/11 (2nd edition,with2010 amendments). Corporate Governance PrinciplesandRecommendations (relationships affectingindependencestatus)intheA of eachdirector, withreference to themateriality thresholds Our Board continuallyassessestheongoingindependence the sizeofBoard. the Board doesnot play aformal role inselectingdirectors or Government OwnedCorporations Act 1993 appointed by theGovernor-in-Council inaccordance withthe independent, non-executive directors. Ourdirectors are Our Board ofDirectors, includingtheChairman,areall directors Our Principle 2–Structure the Board to add value byundertaken theChiefExecutive Officer. Officer and oversees theassessmentsofSeniorExecutives The Board oftheChiefExecutive assessestheperformance see Principle8. information goals.Forand personal onPower further to Perform, Performance Indicators (KPIs)involving corporate, commercial achievement ofwell-defined Key Result Areas(KRAs)and Key individual executive agreementsbasedonthe performance management program for allemployees. Theprogram includes Power to Perform isthecomprehensive andformal performance performance management senior Assessing individual director orseniorexecutive. mentoring andtrainingover timeto suittheneedsof the introduction ofarolling inductionproviding information, During 2010/11, theinductionprocess was enhancedthrough to fullyandactively participate inmanagementdecisionmaking. new seniorexecutives to allow them,attheearliestopportunity, corporate expectations. Theinductionprocess isalsorelevant to an ENERGEX Director andto ourbusinessand understand the directors to theirroles understand andresponsibilitiesas the Board andCommittee functions.Theinductionassists them withanoverview ofouroperationsandinformation on New directors attend astructuredinductionsessionto provide induction Directors’ evaluation processes. responsibilities. Italsofacilitates Board operationsandself- directors intheirgovernance andsenior managers and supports process. TheHandbookdefinestheBoard governance systems directors oftheirinduction andisused asanintegral part Our Directors’ Handbookisdistributed and Officers’ to new Board Handbook (GOCAct). As such, SX

also set out in the Financial Report. also set out intheFinancialReport. TheirattendancesReport. atBoard andCommittee meetings are each director’s appointmentexpires areset outintheFinancial held by eachdirector includingthedate atthedate ofthisreport, to theirpositionareset outonpages21-24. Theterms ofoffice Details ofdirectors’ skills,experience relevant andexpertise annual review ofdirectors’ interests personal isalsoundertaken. of the interestpersonal inthematter (theexclusions insection195(2) and voting onamatter, wherethey have declaredamaterial absent themselves from ameeting, includingalldeliberations Constitution. TheConstitutionprovides thatadirector must under the declare thatinterest inaccordance withdirectors’ obligations in amatter beingconsideredby theBoard, thedirector will Where adirector hasaninterest oramaterial interest personal enhance theirskills,knowledge andexperience. to continuingeducationandtraining,to maintain,update and outtheirdutiesasadirector.to carry TheBoard alsohas access professional advice,atthecompany’s expense, to assistthem The Board provides Charter thatdirectors may seekindependent accessDirectors’ to training advice and compliance activitiesinthebusiness. improved focus on,andoversight of,assurance andrisk Compliance Committee”. Therevised committees provide an and the“Corporate Development Committee” asthe“Riskand the “Audit andCompliance Committee” asthe“Audit Committee” Board reviewed itsBoard Committee structure,restructuring Following therecommendationsset outintheevaluation, the Ministers outliningtheresultsofevaluation. 2010/11, was provided awritten report to theshareholding and clarifyingtherole ofonetheBoard committees. Inearly induction process for new directors, stakeholder engagement some minorimprovement inareas suchasthe opportunities out itsdutiesinaneffective manner. Thereview identified highly committed, cohesive andappropriately skilledto carry Boarda highperformance model,showed thattheBoard is completed inJune2010). The 2010 evaluation, basedon basis by anindependentconsultant(thelastevaluation was Our Board evaluation performance iscompleted onabiennial Board performance Assessing Corporations Act 2001 donot apply).Inaddition,an Corporations Act 2001 andENERGEX Limited ANNUAL REPORT 2010/11 26 REPORT ANNUAL ENERGEX

CORPORATE GOVERNANCE Principle 3 – Promote ethical and responsible We have in place a policy setting out the requirements of the Public Interest Disclosure Act 2010 and Public Interest decision making Disclosure Standard, which facilitate the disclosure, in the public Highlights interest, of information about any wrongdoing in the corporation and to provide protection for those who make public interest • We achieved a Corporate Responsibility Index score of 86 per disclosures. A copy of our Public Interest Disclosure Procedure is cent (a silver award) for 2009/10 (page 70), an increase from available on our Publication Scheme website under ‘Policies’ at 75.32 per cent in the previous year www.energex.com.au/about-us/right-to-information/publication- scheme • A summary of our achievements in corporate social responsibility is set out on page 70 Trading policy Key governance policies As our company is government owned, no director or employee holds or trades securities in any ENERGEX Group Company. Our We are committed to ethical and responsible decision making Conflict of Interest Policy includes a Restricted Trading Register, and have in place a suite of governance policies to establish which supplements the legal duties which apply to directors, this framework. These include the Code of Conduct, Compliance officers and employees relating to the misuse of information or Policy, Fraud Control Policy, Delegation of Authority Policy, position and insider trading laws. A summary of this policy is Conflict of Interest Policy, Public Interest Disclosure Policy, available on our Publication Scheme website under ‘Policies’ at Lobbying Policy, Reportable Gifts Policy and Purchasing Policy, www.energex.com.au/about-us/right-to-information/publication- and the ENERGEX Purchasing Manual. We also reviewed our scheme Entertainment and Hospitality Policy to provide better guidance to staff on appropriate expenditure and to clarify alignment of the policy with the standards set by the government. Principle 4 – Safeguard integrity in These policies apply to our Board and all personnel and are financial reporting advocated through a top down approach by our Board and senior management. Additional obligations of directors are set out Audit Committee in the ENERGEX Board Charter and the Directors’ and Our Board has in place the Audit Committee, comprised of Officers’ Handbook. independent directors, which oversees matters of financial Code of Conduct integrity. Its duties and responsibilities are set out in its charter which is available on our Publications Scheme website Our Code of Conduct sets the standard for how we operate in under ‘About Us’ at www.energex.com.au/about-us/right-to- accordance with business ethics, social objectives, corporate information/publication-scheme values and associated policies. Our Code of Conduct and Conflict of Interest policy align with Managing Conflicts of Interest in the During 2010/11, the role of the Audit Committee confirmed Public Sector – Guidelines and Toolkit, jointly issued by the Crime its focus on: and Misconduct Commission (Queensland) and Independent • financial integrity Commission Against Corruption (New South Wales). Our code • assurance over business operations includes examples and scenarios to assist in ethical decision making. A copy of the Code of Conduct is provided to all existing • effectiveness of control framework and new employees and is readily available on the staff intranet. • ethics and integrity. New employees receive induction training on ethical business practices including the Code of Conduct. The role of Chairman of the Committee is not held by the Chairman of the Board. Membership of the committee is The Board Charter includes a Directors’ Code of Conduct to disclosed on page 33. Details of members’ qualifications are assist the Board in its decision making process. Our advisers, included in profiles on pages 21-24. Attendance at meetings is consultants and contractors are expected to comply with disclosed in the Financial Report. high ethical standards aligned with the Code of Conduct. Our contracts with suppliers outline the expectations of the Code Internal Audit of Conduct. A summary of the main provisions of the Code of Our Internal Audit Group provides independent, objective Conduct is available on our website at www.energex.com.au/ assurance and advisory support designed to add value and about-us/we-are-energex/our-code-of-conduct improve our operations. Internal Audit assists the CEO and Reporting breaches of governance policy members of the Board to accomplish their objectives by bringing a systematic, disciplined approach to evaluation of the effectiveness We have established processes for the reporting of breaches of risk management, control and governance processes and of governance policy and investigating reports of unethical supports management’s improvement of these processes. practices. Employees have the option to report breaches Our Group Manager Internal Audit attends the Audit Committee anonymously via the 24 hour Disclosure Line, which is facilitated meetings to report on the status of the Internal Audit Plan. by an external provider. We also have in place a reporting process for Chief Executive Officer (CEO) notifications to the CMC of any suspected official misconduct, as defined in the Crime and Misconduct Act 2001. The CEO has appointed a CMC Liaison Officer to manage this process.

27 ENERGEX ANNUAL REPORT 2010/11 publication-scheme ‘Policies’ atwww.energex.com.au/about-us/right-to-information/ Policy isavailable onourPublicationSchemewebsite under ofourGovernmentA summary andShareholderDisclosure Ministers. briefing notes, we provide to theshareholding report a quarterly In additionto submissionsonspecificmatters, includingregular companies undertheASXListingRules. to thecontinuousdisclosureobligationswhichapplyto listed our company anditssubsidiaries.Thisrequirement issimilar financialpositionand financial performance, governance of information concerningourcompany includingouroperations, Parliament. OurshareholdingMinisters have accessto material to theshareholdingMinisters, whoareinturnaccountableto policies andother legislationinorder to ensureaccountability consideration theobligationsset outintheGOCAct, relevant We adoptabroad approach to disclosure.We take into Principle 5 – fair view andareincompliance withaccountingstandards. the Board thatthefinancialstatements representatrueand to Our CEOandChiefFinancialOfficerannuallycertify statements Financial oftheexternalperformance auditors onanannualbasis. Limited anditssubsidiaries.TheAudit Committee reviews the Queensland Auditor-General istheexternal auditor for ENERGEX In accordance withtheprovisions oftheGOCAct, the audit External operate inaccordance withbusinessethics, socialobjectives, corporate values andassociated policies. arerequired toOur staff work inaccordance withourCodeofConduct,whichsets thestandard for how we Make

timely

and

balanced

disclosure

right-to-information/publication-scheme website under ‘About Us’ at www.energex.com.au/about–US/ Our revised constitution is available on our Publication Scheme the dividend procedure to theamendmentsindividendrule in amendment to theENERGEX Limited Constitutionto alignour During theyear, ourshareholdingMinisters approved an TaxAfter (OPAT) andispayable by 31 December2011. dividend recommendationwas 80percentofOperatingProfit accordance withsection131 oftheGOCAct. The2010/11 a dividendrecommendationto ourshareholdingMinisters in Between 1and16 May eachfinancial year, ourBoard makes policy dividend Our publication-scheme ‘Policies’ atwww.energex.com.au/about-us/right-to-information/ Policy isavailable onourPublicationSchemewebsite under ofourGovernmentA summary andShareholderDisclosure policy guidelines. Ministers for projects inaccordance withtheGOCAct andGOC basis. Managementseekstheapproval ofourshareholding onaregular with representatives ofshareholderdepartments Minister. andemployees managers OurCEOandcertain liaise formal andinformal basis,andmeets regularlywiththePortfolio principal liaison officer with the shareholding Ministers, both on a shareholding Ministers ontheseissues.OurChairmanisthe government guidelines.We work cooperatively withthe in accordance withourobligationsunderlegislationand significant financial,operating,socialor environmental impact inatimelymanneronallissueslikelyWe to report have a to shareholders our Reporting of shareholders Principle 6–Respect the rights Corporations Act 2001. ANNUAL REPORT 2010/11 28 REPORT ANNUAL ENERGEX

CORPORATE GOVERNANCE Principle 7 – Recognise and manage risk Risk management systems Our risk management practices recognise and manage all risks Throughout the 2010/11 year, we continued to operate using in delivering balanced commercial outcomes. the principles of AS/NZS ISO:31000 2009 as the guiding framework for managing risk. We utilise this Standard Highlights (together with Australian Standard AS 3806 – Compliance Programs) to manage a diverse and complex range of significant • We transitioned to a new Board sub-committee structure risks and enterprise-based risk management and compliance that included the newly chartered Risk and Compliance management frameworks. This standard has been implemented Committee. This committee is intended to uplift the Board- throughout the organisation to ensure material risks and level oversight of risk within the company compliance obligations are identified and appropriately managed. • Our capability to withstand severe business disruption was proven by the response to the floods across South East The multitude of risks we manage includes network, financial, Queensland in January 2011. In terms of managing business operational, people, strategic and commercial risks. Details continuity risks, we were able to relocate 11 critical functions of those risks and the type of controls in place are set out in from their primary workplace to designated backup locations risk registers managed by each division. Accountabilities within 24 hours. There, they continued to service the needs within the Enterprise Risk Management (ERM) Framework are of our business and customers explained below: • Our Corporate Risk and Compliance Group delivered a (a) Our Board maintains oversight of the ERM Framework’s tertiary-accredited training course in Fundamentals in Risk effectiveness through its Risk and Compliance Committee, and Compliance to business unit leaders which has oversight of: • We adopted the end-to-end model for managing compliance • the risk management framework, policies, control processes (see Figure 2) and reporting mechanisms • The Corporate Compliance Plan successfully delivered key • the compliance management framework, policies, control activities and initiatives across the whole of our business in processes and reporting systems relation to the end-to-end compliance management model • regulated business framework and controls • Risk management activities were fully integrated with business planning to ensure that the context of risk • non-regulated business activities and divestments. management is retained throughout the course of all (b) The Audit Committee provides assurance that the corporation business decisions is properly meeting its obligations in relation to: • New legislation implemented effectively, in particular, the Competition and Consumer Act 2010 (formerly called the • financial integrity Trade Practices Act 1974) • assurance over business operations • effectiveness of control framework • ethics and integrity.

Figure 2: END-TO-END MODEL FOR MANAGING COMPLIANCE

Know Embed Manage obligations obligations accountability Assurance

Controls systems Demonstration that Proactive embedded into Adequate and effective compliance obligations management of business processes to operation of control are identified and compliance obligations manage compliance systems is evidenced understood is demonstrated obligations

29 ENERGEX ANNUAL REPORT 2010/11 • • • • • established comprising: an integrated suite ofstrategies andinitiatives hasbeen that iscloselyintegrated withthebroader ERMFramework, corruption). To provide aneffective fraudcontrol framework We arecommitted to theprevention offraud(including Fraud control and theeffectiveness ofmanagementthoserisks. timely manner, ofany material matters affectingouroperations Executive ManagementandtheBoard aremadeaware, ina and codesofpractice.Theseprocedures alsoensurethat conducted inaccordance withrelevant legislation,regulations processes oftheorganisationarebeing to ensuretheaffairs procedures includingcompliance trainingandassurance The internal control framework iscomprised ofpoliciesand • • • organisation’s objectives inthefollowing categories: reasonable assuranceregarding theachievement ofthe framework withinENERGEX, whichisdesignedto provide Our Board isresponsiblefor theoverall internal control Internal control framework (d)  (c) 

to theBoard monthlythrough thesechannels. management, arecontinuouslymonitored andreported and compliance incidents,andtheeffectiveness oftheir management responsibilities.Material businessrisks Our Executive ManagementTeam hasactive risk of aCorporate Compliance Framework. Enterprise RiskManagementFramework andimplementation governance responsibilitiesthrough themaintenance ofthe Risk andCompliance Committee inthedischarge ofits Our Corporate the RiskandCompliance Group supports obligation to notify the CMC of suspected official misconduct. Misconduct Act 2001 Officer who manages the obligations under the reporting processes, including a dedicated CMC Liaison the CMC) fraud) orsuspected officialmisconduct (for notification to corporate policies)orbreachesofthelaw (suchassuspected breaches oftheCodeConduct(anditssupporting any concernsregardingreport unethical conduct, The DisclosureLineisameansby whichemployees can the independentlyoperated 24 hourDisclosureLine. protocols misconduct) investigation capabilities,standards and fraud (includingcorruptionandsuspected official allegations offraud the processes recording for andinvestigating reporting, and coordination offraudcontrol activities,including as well assetting outtheprocesses for ongoingmonitoring establish obligationsfor fraudidentificationandprevention Fraud Control Policy andFraud Control Standard which establish obligationsinrelationto ethical behaviour governanceCode ofConductandsupporting policieswhich governance processes. risk managementsystems effectiveness andefficiencyofoperations to enable the CEO to carry out his Crime and

raise aconcerningoodfaith. by another employee andwilltake actionto protect thosewho who notify managementofinappropriate orcorruptbehaviours interest disclosuresincompliance withtheAct. staff We support also afford protection from reprisalsto makingpublic persons appropriate, properly investigated anddealtwith.Theprocedures that publicinterest disclosuresareproperly assessedand,when the publicsector. We have establishedprocedures to ensure public interest disclosuresofinformation aboutwrongdoing in ENERGEX. TheAct facilitates protection for thosewhomake Act 1994. Elementsofthenew Act applyto GOCsincluding 2011,1 January reforming the The PublicInterest DisclosureAct 2010 commencedon InterestPublic Disclosures risk managementandcompliance managementframeworks. diverse andcomplex rangeofsignificantrisksandenterprise-based We usetheprinciplesofAS/NZSISO:31000 2009to managea Whistleblowers Protection ANNUAL REPORT 2010/11 30 REPORT ANNUAL ENERGEX

CORPORATE GOVERNANCE Principle 8 – Remunerate fairly and responsibly Legislative framework Highlights We operate in accordance with various laws and regulations, the most significant of which are listed below: • The performance management program, Power to Perform, Safety was implemented on 1 July 2010 and has completed the first • Electrical Safety Act 2002 (Qld) & Electrical Safety Regulation annual cycle of its application across the business 2002 (Qld) Remuneration Committee • Dangerous Goods Safety Management Act 2001 (Qld) • Workplace Health and Safety Act 1995 (Qld) & Workplace The Remuneration Committee of the Board oversees employee Health and Safety Regulation 2008 (Qld) remuneration and performance policy. Membership of the committee is set out on page 33. The committee’s charter sets Operational out the roles and responsibilities of committee members and is • Building and Construction Industry Payments Act 2004 (Qld) available on our Publication Scheme website under ‘About Us’ • Competition and Consumer Act 2010 (Cth) at www.energex.com.au/about-us/right-to-information/ • Information Privacy Act 2009 (Qld) & Information Privacy publication-scheme Regulation 2009 (Qld) • Integrated Planning Act 1997 (Qld) Remuneration policy • Land Title Act 1994 (Qld) Our remuneration strategy and practices are aimed at ensuring • Privacy Act 1988 (Cth) we attract, retain and motivate high calibre employees at all • Property Law Act 1974 (Qld) levels by providing an appropriate combination of competitive, • Queensland Building Services Authority Act 1991 (Qld) fixed and variable remuneration components. We comply with & Queensland Building Services Authority Regulation the Government Owned Corporations Governance Arrangements 2003 (Qld) for Chief and Senior Executives to achieve a balance between • Right to Information Act 2009 (Qld) & Right to Information public accountability and transparency and our need to attract Regulation 2009 (Qld) and retain high calibre staff from competitive labour markets. Our senior executive remuneration arrangements are subject Regulatory to approval or endorsement by the shareholding Ministers, • Electricity Act 1994 (Qld) & Electricity Regulation 2006 (Qld) complying with specific key criteria. • National Electricity Law as set out in the schedule to the National Electricity (South Australia) Act 1996 & Electricity – We also have a comprehensive suite of procedures and policies National Scheme (Queensland) Act 1997 & National to govern remuneration practices in accordance with GOC Electricity (Queensland) Regulations under the National guidelines. Senior executive remuneration is disclosed in the Electricity (South Australia) Act 1996 Financial Report (in accordance with accounting rules and • National Electricity Rules government guidelines). Directors’ remuneration is established • Queensland Competition Authority Act 1997 (Qld) & independently by the shareholding Ministers and is approved Queensland Competition Authority Regulation 2007 (Qld) by the company in a general meeting in accordance with the company’s constitution. Directors’ remuneration is disclosed in • Queensland Electricity Industry Code the Financial Report. Environment • Environmental Protection Act 1994 (Qld) & Environmental Assessing performance Protection Regulation 2008 (Qld) & Environmental Protection To reinforce our performance-based culture, we offer an annual (Waste Management) Regulation 2000 (Qld) performance pay scheme which is linked to our KRAs and • National Greenhouse & Energy Reporting Act 2007 (Cth) KPIs. During 2010/11, we measured progress towards the • Nature Conservation Act 1992 (Qld) achievement of our vision and purpose through success against • Sustainable Planning Act 2009 (Qld) & Sustainable Planning nine KRAs and KPIs. Regulations 2009 • Vegetation Management Act 1999 (Qld) Our performance management program, Power to Perform, was introduced on 1 July 2010 and aims to improve performance People management processes and practices across our business and • Anti-Discrimination Act 1991 (Qld) strives towards a performance focused culture which is critical • Crime and Misconduct Act 2001 (Qld) & Crime and to our people and safety strategy. The framework promotes Misconduct Regulation 2005 (Qld) continual performance and development conversations between • Fair Work Act 2009 (Cth) & Fair Work Regulations 2009 (Cth) the employee and their leader. • Public Interest Disclosure Act 2010 (Qld) • Workplace Relations Act 1996 (Cth) & the associated National Employment Standards and Award Modernisation Process Corporate • Corporations Act 2001 (Cth) • Government Owned Corporations Act 1993 (Qld) & Government Owned Corporations Regulation 2004 (Qld) Finance • A New Tax System (Goods and Services Tax) Act 1999 (Cth) • Income Tax Assessment Act 1936 (Cth) & Income Tax Assessment Act 1997 (Cth)

31 ENERGEX ANNUAL REPORT 2010/11 Individual staff roles areIndividual indefined staff joband profiles goals are set out agreements. in performance Each division has plana with Keybusiness defined Result Areas and KPIs which link plan.to theENERGEX business corporate ManagementThe Executive Team implements the Board’sand through policies thestrategies framework. ofdelegation authority Our CorporateOur Governance Framework and Organisational Structure Board committees Limited Board ENERGEX Network divisions Network M S P hareholding M hareholding anagement structure anagement erformance Network Committee Audit & P rogramming inisters P Network Network rocurement

Subsidiary Subsidiary Boards Delivery Energy Compliance Committee Risk & divisions company Holding Regulation S trategy & trategy Chief Executive Limited Board Management Shareholding ENERGEX Executive Delegation Ministers

Officer

Team

accountability Customer and Assurance S

ervices Committee Network & Technical • • as Ministers, at 30 June 2011 were: behalf of theof State Queensland. Our shareholding shareholding whoMinisters hold the shares on ENERGEX is a public, unlisted company with two a day to day basis. to on limitations, operate the business control framework including financial the CEO and management, through a The Board to has delegated authority Management Team meetings. thedivision attend Executive General Managers from each The CEO, CFO and Executive

50 per cent of the voting shares. andEnergy Waterholding Utilities, the remaining MP,The Hon. Stephen Robertson Minister for of the shares Bnon-voting class cent of the Avoting class shares and 100 per cent holding Naturaland 50 Resources Theper Arts, The Hon. Rachel Nolan MP, Minister for Finance,

Resources Human Human

ANNUAL REPORT 2010/11 32 REPORT ANNUAL ENERGEX Governance) and Corporate (including CFO P governance arrangements. governance arrangements. and keyresponsibilities each Board and committee’s for details ofand directors on pageand 33 Committees Refer to the of Register Boards erformance Corporate Corporate Finance & Finance Remuneration Committee Ergon Energy ENERGEX and to services providing IT venture company, SPARQ is a joint S olutions olutions P SP ty ty ARQ L td

ORGANISATIONAL REVIEW CORPORATE GOVERNANCE Our corporate governance framework and organisational structure Register of Boards and Board Committees

Membership KEY ACCOUNTABILITIES SIGNIFICANT MATTERS DURING 2010/11 KEY GOVERNANCE ARRANGEMENTS ENERGEX Limited Key Board Decisions • Mr John Dempsey (Chairman) • Responsibilities under section 88 of the GOC Act • Oversight of ENERGEX’s safety and environmental performance The attendance of the directors at meetings of the Board is presented in the • Maj. Gen. Peter Arnison • Provides the overall strategic direction of the corporation • Oversight of the Program of Work including the approval of network projects Directors’ Report section in the Financial Report. • Ms Mary Boydell • Approves the Statement of Corporate Intent, Corporate Plan, and procurement contracts exceeding the CEO’s delegation of authority The ENERGEX Limited Board has a Constitution and Board Charter including a • Emeritus Prof. Mat Darveniza Network Management Plan and Demand Management Plan • Oversight of the company’s financial performance including the approval Directors’ Code of Conduct. • Mr John Geldard • Oversees effective governance, leadership and management of the ENERGEX Financial Statements • Mr Ron Monaghan • Monitors safety, environmental and financial performance • Approval of the Statement of Corporate Intent, Corporate Plan, Network • Ms Kerryn Newton • Informs shareholding Ministers of the operations, financial performance Management Plan, Demand Management Plan and Summer Preparedness Plan All directors, including the chairman, and financial position of the corporation and subsidiaries • Oversight of the process for the completion of, and relocation to, the Newstead are independent, non-executive directors. • Provides formal delegations of authority to the CEO, management office building. and employees. • Oversight of ENERGEX’s response to the Queensland floods and Tropical Cyclone Yasi.

Subsidiary Boards The subsidiary Boards are comprised of Executive Directors from the • Subsidiary companies were established to manage a number • Divestment of non-core assets Subsidiary governance aligns with the ENERGEX Limited standards. Executive Management Team (in most cases the CEO, CFO and of ENERGEX’s unregulated business activities. • Deregistration of Service Essentials Pty Ltd (the former retail billing entity, The Risk and Compliance Committee maintains oversight of the unregulated Executive General Manager Customer Services). jointly owned by ENERGEX and Ergon Energy) businesses on behalf of the Board. • Strategic management of unregulated business opportunities. Where dormant and no longer required, subsidiaries have been voluntarily wound up or deregistered.

COMMITTEE RECOMMENDATIONS AND OVERSIGHT (in addition to standing Committee responsibilities)

AUDIT COMMITTEE Effective 1 October 2010, the Audit and Compliance Committee was The Audit Committee provides assurances to the Board that ENERGEX Oversight of: Committee governance: renamed the Audit Committee. Its members are: Limited is properly meeting its obligations in relation to: • The financial performance of the company • A Charter is in place (reviewed annually) for each committee and is • Mr John Geldard (Committee Chair) • Financial integrity • The preparation of the ENERGEX Limited Financial Statements, available on our Publication Scheme website under ‘About Us’ at • Mr John Dempsey • Assurance over business operations including endorsement to the Board for approval www.energex.com.au/about-us/right-to-information/publication-scheme • Mr Ron Monaghan • Effectiveness of control framework • Internal and external audit activities • Charters set out the specific duties (to provide oversight on behalf • Ms Mary Boydell • Ethics and integrity. • Ethical standards including the ENERGEX Code of Conduct. of, and recommendations to, the Board in relation to specific matters) and The role of the Committee Chairman is not held by the chairman of the governance arrangements ENERGEX Limited Board. • The Chief Executive Officer and senior executives are invited to committee meetings at the discretion of the committee The internal and external auditors attend committee meetings by way • Committees may seek assistance in carrying out their duties by engaging of standing invitation. suitably qualified external advisers • The qualifications of each committee member is presented in the directors’ NETWORK AND TECHNICAL COMMITTEE profiles on pages 21-24, and their attendance at meetings is presented in the Directors’ Report in the Financial Report. • Maj. Gen. Peter Arnison (Committee Chair) • Recommends strategy and approaches to the Board on network and Oversight of: • Emeritus Prof. Mat Darveniza technical issues • Preparation of the Network Management, Demand Management and • Mr John Dempsey • Provides oversight of ENERGEX’s approach to network standards Summer Preparedness Plans and technological innovation • Network operating and maintenance initiatives • Provides oversight of ENERGEX’s fulfilment of its commitments under the • Development and application of technology strategies Network Management Plan to provide a reliable, safe and cost effective • The impact of the South East Queensland floods on customers, electricity supply. the network and the Program of Work.

REMUNERATION COMMITTEE • Mr Ron Monaghan (Committee Chair) The Remuneration Committee provides oversight and recommendations Oversight of: • Emeritus Prof. Mat Darveniza to the Board on: • Workforce planning including the promotion of equity and diversity in ENERGEX • Ms Kerryn Newton • Strategic remuneration and employment matters including Board approved • Review of employment policies and frameworks aligned with legislative and policies and remuneration and workplace agreement frameworks GOC policy requirements • The senior executive succession planning • Establishing corporate and CEO performance targets and oversight of the • ENERGEX’s obligations in relation to remuneration, superannuation and performance review process employment matters under law and government policy • Staff survey methodology and results • Directors’ skills, induction program and performance reviews. • Senior executive succession planning and recruitment • Enterprise bargaining negotiation framework and process.

RISK AND COMPLIANCE COMMITTEE Effective 1 October 2010, the Corporate Development Committee was Considers and advises the Board on: Oversight of: renamed the Risk and Compliance Committee. Its members are: • The risk management framework, policies, control processes and • Strategic review of remaining unregulated businesses including divestments • Ms Mary Boydell (Committee Chair) reporting mechanisms and transition processes as appropriate • Mr John Geldard • Compliance management framework, policies, control processes • Assessing the effectiveness of ENERGEX’s treasury, risk management, • Maj. Gen. Peter Arnison and reporting systems compliance and governance policies • Ms Kerryn Newton • Regulated business framework and controls • Oversight of the Enterprise Risk Management Framework, Compliance • Non-regulated business activities and divestments. Framework, Corporate Risk Profile and reporting • Oversight of the resilience of ENERGEX’s operations during the 2011 floods • Oversight of the Corporate Compliance Plan and Corporate Reporting.

33 ENERGEX ANNUAL REPORT 2010/11 Our corporate governance framework and organisational structure Register of Boards and Board Committees

Membership KEY ACCOUNTABILITIES SIGNIFICANT MATTERS DURING 2010/11 KEY GOVERNANCE ARRANGEMENTS ENERGEX Limited Key Board Decisions • Mr John Dempsey (Chairman) • Responsibilities under section 88 of the GOC Act • Oversight of ENERGEX’s safety and environmental performance The attendance of the directors at meetings of the Board is presented in the • Maj. Gen. Peter Arnison • Provides the overall strategic direction of the corporation • Oversight of the Program of Work including the approval of network projects Directors’ Report section in the Financial Report. • Ms Mary Boydell • Approves the Statement of Corporate Intent, Corporate Plan, and procurement contracts exceeding the CEO’s delegation of authority The ENERGEX Limited Board has a Constitution and Board Charter including a • Emeritus Prof. Mat Darveniza Network Management Plan and Demand Management Plan • Oversight of the company’s financial performance including the approval Directors’ Code of Conduct. • Mr John Geldard • Oversees effective governance, leadership and management of the ENERGEX Financial Statements • Mr Ron Monaghan • Monitors safety, environmental and financial performance • Approval of the Statement of Corporate Intent, Corporate Plan, Network • Ms Kerryn Newton • Informs shareholding Ministers of the operations, financial performance Management Plan, Demand Management Plan and Summer Preparedness Plan All directors, including the chairman, and financial position of the corporation and subsidiaries • Oversight of the process for the completion of, and relocation to, the Newstead are independent, non-executive directors. • Provides formal delegations of authority to the CEO, management office building. and employees. • Oversight of ENERGEX’s response to the Queensland floods and Tropical Cyclone Yasi.

Subsidiary Boards The subsidiary Boards are comprised of Executive Directors from the • Subsidiary companies were established to manage a number • Divestment of non-core assets Subsidiary governance aligns with the ENERGEX Limited standards. Executive Management Team (in most cases the CEO, CFO and of ENERGEX’s unregulated business activities. • Deregistration of Service Essentials Pty Ltd (the former retail billing entity, The Risk and Compliance Committee maintains oversight of the unregulated Executive General Manager Customer Services). jointly owned by ENERGEX and Ergon Energy) businesses on behalf of the Board. • Strategic management of unregulated business opportunities. Where dormant and no longer required, subsidiaries have been voluntarily wound up or deregistered.

COMMITTEE RECOMMENDATIONS AND OVERSIGHT (in addition to standing Committee responsibilities)

AUDIT COMMITTEE Effective 1 October 2010, the Audit and Compliance Committee was The Audit Committee provides assurances to the Board that ENERGEX Oversight of: Committee governance: renamed the Audit Committee. Its members are: Limited is properly meeting its obligations in relation to: • The financial performance of the company • A Charter is in place (reviewed annually) for each committee and is • Mr John Geldard (Committee Chair) • Financial integrity • The preparation of the ENERGEX Limited Financial Statements, available on our Publication Scheme website under ‘About Us’ at CORPORATE GOVERNANCE • Mr John Dempsey • Assurance over business operations including endorsement to the Board for approval www.energex.com.au/about-us/right-to-information/publication-scheme • Mr Ron Monaghan • Effectiveness of control framework • Internal and external audit activities • Charters set out the specific duties (to provide oversight on behalf • Ms Mary Boydell • Ethics and integrity. • Ethical standards including the ENERGEX Code of Conduct. of, and recommendations to, the Board in relation to specific matters) and The role of the Committee Chairman is not held by the chairman of the governance arrangements ENERGEX Limited Board. • The Chief Executive Officer and senior executives are invited to committee meetings at the discretion of the committee The internal and external auditors attend committee meetings by way • Committees may seek assistance in carrying out their duties by engaging of standing invitation. suitably qualified external advisers • The qualifications of each committee member is presented in the directors’ NETWORK AND TECHNICAL COMMITTEE profiles on pages 21-24, and their attendance at meetings is presented in the Directors’ Report in the Financial Report. • Maj. Gen. Peter Arnison (Committee Chair) • Recommends strategy and approaches to the Board on network and Oversight of: • Emeritus Prof. Mat Darveniza technical issues • Preparation of the Network Management, Demand Management and • Mr John Dempsey • Provides oversight of ENERGEX’s approach to network standards Summer Preparedness Plans and technological innovation • Network operating and maintenance initiatives • Provides oversight of ENERGEX’s fulfilment of its commitments under the • Development and application of technology strategies Network Management Plan to provide a reliable, safe and cost effective • The impact of the South East Queensland floods on customers, electricity supply. the network and the Program of Work.

REMUNERATION COMMITTEE • Mr Ron Monaghan (Committee Chair) The Remuneration Committee provides oversight and recommendations Oversight of: • Emeritus Prof. Mat Darveniza to the Board on: • Workforce planning including the promotion of equity and diversity in ENERGEX • Ms Kerryn Newton • Strategic remuneration and employment matters including Board approved • Review of employment policies and frameworks aligned with legislative and policies and remuneration and workplace agreement frameworks GOC policy requirements • The senior executive succession planning • Establishing corporate and CEO performance targets and oversight of the • ENERGEX’s obligations in relation to remuneration, superannuation and performance review process employment matters under law and government policy • Staff survey methodology and results • Directors’ skills, induction program and performance reviews. • Senior executive succession planning and recruitment • Enterprise bargaining negotiation framework and process.

RISK AND COMPLIANCE COMMITTEE Effective 1 October 2010, the Corporate Development Committee was Considers and advises the Board on: Oversight of: renamed the Risk and Compliance Committee. Its members are: • The risk management framework, policies, control processes and • Strategic review of remaining unregulated businesses including divestments • Ms Mary Boydell (Committee Chair) reporting mechanisms and transition processes as appropriate • Mr John Geldard • Compliance management framework, policies, control processes • Assessing the effectiveness of ENERGEX’s treasury, risk management, • Maj. Gen. Peter Arnison and reporting systems compliance and governance policies • Ms Kerryn Newton • Regulated business framework and controls • Oversight of the Enterprise Risk Management Framework, Compliance • Non-regulated business activities and divestments. Framework, Corporate Risk Profile and reporting • Oversight of the resilience of ENERGEX’s operations during the 2011 floods • Oversight of the Corporate Compliance Plan and Corporate Reporting.

ENERGEX ANNUAL REPORT 2010/11 34 ENERGEX’s EXECUTIVE MANAGEMENT OF CORPORATE RESPONSIBILITY AREAS

CORPORATE responsibility Index area Committee Chair Key RESPONSIBILITIES for 2010/11 Community and overall corporate responsibility Executive Terry Effeney, Oversee ENERGEX business operations Management Chief Executive Officer Management and monitoring of material business Team risks and compliance incidents Corporate Peter Weaver, Executive Monitoring of the ENERGEX Sponsorship Policy Sponsorship General Manager Approval of key sponsorships based on ENERGEX Committee Customer Services Sponsorship Policy Environment Environment Chris Arnold, Executive Monitoring of our environment performance Council General Manager Development and monitoring of our Environmental Network Performance Strategy and Plan Energy Chris Arnold, Executive Monitoring EC&DM Plan Conservation General Manager Development of EC&DM Strategy and Demand Network Performance Management (EC + DM) Steering Committee Human rights and workplace – People Susan Kehoe, Executive Oversee the 2010/15 People Strategy employee issues Committee General Manager Human Resources Marketplace – supply chain Investment Terry Effeney, Review and endorse/reject project business Review Chief Executive Officer proposals, business cases and project variations Committee Prioritise the Business Change Portfolio Financial Risk Darren Busine, Provides oversight of financial risk management Management Chief Financial Officer across the business with specific responsibilities Committee including monitoring financial risk management policies and procedures to determine that appropriate internal control processes have been implemented to address key risks Marketplace – customers/consumers Corporate Michael Russell, Director Oversee and make recommendations for: Emergency Corporate Governance • the annual Summer Preparedness Plan Response • approach to Corporate Emergency planning, Committee methodologies, debriefs, simulations and testing • corporate Emergency Management Handbook • corporate Business Continuity Plan (BCP) ENERGEX Peter Weaver, Executive Oversee and make recommendations for the Community General Manager Community Powerline Enhancement Program Consultation Customer Services Committee Summer Chris Arnold, Executive Development of operational plans for summer Preparedness General Manager preparedness Steering Network Performance Committee Workplace – health, safety and wellbeing Safety Council Chris Arnold, Executive Monitoring safety performance General Manager Development and monitoring of Safety Strategy Network Performance and Plan

35 ENERGEX ANNUAL REPORT 2010/11 organisational review and operational performance acrossand operational performance our key business areas. During 2010/11, we continued to deliver astrong financial 40 37 Executives’ profiles CEO’s report ANNUAL REPORT 2010/11 36 REPORT ANNUAL ENERGEX

ORGANISATIONAL REVIEW chief executive officer’sreport 2010/11

During the past few years, we have made a number of significant ENERGEX Chief Executive Officer Terry Effeney promises: • promises to deliver value to our South East Queensland Community through on-going improvements in service, safety and reliability of the electricity supply • promises to our regulators to operate within the financial and regulatory parameters provided • promises to the retailers and customers to provide accurate data and keep them informed • promises to our Shareholders to be financially responsible and deliver strong business results.

At ENERGEX we take our promises very seriously and this year I am pleased to report that we have again delivered strongly on these promises.

This was particularly evident in our response to the South East Queensland floods and just a few weeks later our deployment to North Queensland to support the Cyclone Yasi recovery efforts.

With South East Queensland already waterlogged, January saw the rains intensify bringing with it floodwaters engulfing thousands of homes and businesses and consequently, parts of the ENERGEX power network.

Over a period of two weeks, flooding cut power to more than 300,000 South East Queensland premises causing in excess of $35 million worth of damage to our power network alone.

37 ENERGEX ANNUAL REPORT 2010/11 engagement andhave reliablebaselinedata. awarded to companies thatfrequently demonstrate stakeholder placesusinthesilver whichis This performance category a 10 percentincreaseonlastyear’s resultto 86percent. This year Iampleased to announcethatwe hadmorethan to other organisationsandascoreof oneto 100 isgiven. environmental policiesandpractices.Results arethencompared business operationsrangingfrom workplace managementto The CRIcloselyanalysesourcorporate responsibilitywithinall Responsibility Index (CRI). This positive resultwas alsoreflected inour2010/11 Corporate level inthreeyears. research showing thatourcommunityregard was atitshighest the summerwhichbecameevident inourrecentbrandtracking In fact, ourcommunitystandingreceived asignificantboost over member ofthecommunity. community whoseeENERGEX asavalued andtrusted corporate This isamessagethataccepted andresonates well withinthe outcome iszero injuries. safety value istheENERGEX-wide beliefthattheonlyacceptable time onewe continueto work hard to improve. Tiedcloselyto our Our safety record isoneofwhichwe areproud whileatthesame I commend our staff on their commitment to safety. I thank the community for their support during these events and the support and patience of our customers and community. This is a great outcome but we could not have achieved it without no significant power-related injuries to staff or the community. Unprecedented network damage repaired in record time with Two very large incidents with two very similar outcomes. of network brought down by windsofnearly300km/h. assisted ErgonEnergytostaff repairhundredsofkilometres ethos and315 ofthemcombinedwith298ourcontractor ourcrewsAgain lived upto theircommitmentto thecommunity regional centres. of Cairnsinflictingsevere damageonsomeofthearea’slargest 5systemtasks, Category Cyclone Yasi crossed thecoastsouth returned toJust asourstaff theirpost-floodbusiness-as-usual turn itsattention to therecovery effort. replacing power infrastructureto ensurethecommunitycould worked around theclockfor weeks cleaning,repairingand mobilisedquickly and magnitude ofourresponse.Ourstaff The extent ofthedamagewas unprecedented aswas the

Six Star Green Star headquarters inNewstead.Six StarGreenheadquarters toand therelocationofmorethan1,600 ourpurpose-built staff our fleet, enhanced sustainablebusinesspracticesinthefield Much ofthiscanbeattributed to of ourcontinuedcarbonoffset has seenusagainimprove ourenvironmental credentials. real benefits to ourbusinessandIampleased to say 2010/11 Our focus onenvironmental sustainability continuesto provide environmental impact. a responsibilitythatmustbeprovided unilaterally withminimal to theregionisnotenergy services onlyourcorebusiness;it’s Delivering suchasignificantProgram of Works andprovision of MV.Aadding 464 to thegrid. substations andupgradedcapacityat11 zonesubstations These upgradesincludedconstructionoftwo new zone totalling morethan$3millionperday. record ofupgrades to numbers theregion’selectricitynetwork This year, despite theobvious impacts ofthe floods, we delivered class distributionnetwork. within ourmeanswhiledelivering ourcommitmentto beaworld Still, withstrong economic credentials we mustcontinueto live expenditure levels over thenext five years. (AER). Through thisframework, theAERhasprovided uswithset frameworkregulatory outlinedby theAustralian EnergyRegulator This successhasbeenachieved aswe work withinournew assets to $9811.9 million. (2009/10: $185.2 million) and a 14.6 per cent growth in our total highlights including a Net Profit after Tax result of $234.7 million disasters, we still achieved a strong economic outcome with And this year, in the face of adversity and incomparable natural exceptional atareasonablecost. service of SouthEastQueensland,we mustalways aimto provide Therefore, asanorganisationultimately fundedby thepeople of thecommunity’sexpectations. Financial responsibilityis,andwillalways be,amajorcomponent of service. to ahighlevelMeeting theseidealsdoesn’tjustpertain upon aswe meet ourstakeholders’ needsandexpectations. commitment to thecommunitythatwe mustcontinueto build It isthiscorporate responsibilitythatisdirectlylinked to our ANNUAL REPORT 2010/11 38 REPORT ANNUAL ENERGEX

ORGANISATIONAL REVIEW Very soon we will have been at our Newstead office for We need to embed our current improvement projects, including 12 months. In this time alone we will have cut 2,100 tonnes our Program of Work Improvement Program (PoW IP), Power to of our annual carbon emissions which is equivalent to removing Perform and Joint Workings and deliver the benefits from them. 520 cars from the road annually while saving us $22 million in And we must prepare for changing customer expectations by rent and operational costs over a period of 15 years. finding ways to give customers greater choice and the ability to influence their energy consumption. The majority of these savings can be attributed to cutting- edge technology including active chilled beam air conditioning Finally I’d like to thank our staff for this year’s company-wide technology, waste management systems, automatic water achievements. Our staff has always lived by ENERGEX’s harvesting and recycling and electricity producing photovoltaic organisational values and this shines through in this year’s cells mounted on the building’s rooftop. quantifiable corporate results.

As we look to the future, we have four key priorities for 2011/12. Through their continued commitment to operational excellence We must refocus on safety and ensure that we perform better we have been able to, once again, deliver an exceptional service than we did this year as we strive to achieve our no injuries goal. to the people of South East Queensland while meeting our We must continue to deliver on our core promises which are the shareholders’, our regulators’ and our community’s expectations. commitments contained in our ENERGEX scorecard.

Terry Effeney ENERGEX Chief Executive Officer

Through our staff’s continued commitment to operational excellence, we have been able to deliver an exceptional service to the people of South East Queensland.

39 ENERGEX ANNUAL REPORT 2010/11 executives’ profiles The executive team behind ENERGEX, led by Chief Executive Officer, Terry Effeney.

Darren Busine Susan Kehoe Kevin Kehl Chris Arnold Chief Financial Officer Executive General Executive General Executive General BEc, FCPA, FFin, GAICD Manager Human Manager Strategy and Manager Network Resources Regulation Performance Areas of responsibility: Commercial and Finance, GAICD, BSocWk, BA, MBus B Eng (Hons), Grad Cert Elect Supp Eng B Eng (Elec), Post Grad Dip Bus Management, MIE Aust, CP Eng, Financial Control, Performance Areas of responsibility: Areas of responsibility: RPEQ, GAICD Management, Strategic People Strategy, Workforce Strategy and Development, Areas of responsibility: Change and Program Planning, Organisational and Revenue Strategy, Regulatory Corporate Occupational Management, Taxation Leadership Development, Affairs, Corporate Strategy and Health and Safety, Network and Treasury, Corporate Remuneration and Benefits, Strategic Initiatives. Capital Planning, Network Governance and Risk and Industrial Relations, Asset Management, Compliance. Employee Health and The Strategy and Regulation Division provides a single Systems Engineering, The Corporate Finance and Wellbeing, Human Resource focal point for coordination Environmental Management, Performance (CF&P) Division Operations and Systems, of ENERGEX’s corporate and Network Property Data and is focused on the delivery Staff Communications, and regulatory strategies which Coordination, Operational of balanced commercial Human Resources Consultancy ensures future business Technology and Demand and outcomes. To support this Support. challenges are identified Risk Management. objective, the division provides Susan and her team play and managed consistently a combination of centralised Chris and his division are an active role in supporting with our vision and values. financial management responsible for the strategies managers to make ENERGEX It is also responsible for the functions and commercial and plans which enable a great place to work and identification and assessment business partnering support ENERGEX to build and maintain act as an advocate for its of new business opportunities through its operational groups. the network. The division

people. They are responsible ORGANISATIONAL REVIEW both within and external to our maintains a focus on the for ensuring ENERGEX has In 2011/12, Darren and core activities. future, developing plans for his division will continue to the right mix of people and In 2011/12, Kevin and several years down the track. deliver ENERGEX’s Business skills to achieve its business his division’s focus will be They place a high priority on Performance Strategy focusing goals. This is done through on implementing pricing understanding how population on identifying improved planning, recruitment, training strategies that encourage growth and changing customer efficiencies while managing the and development, a positive energy efficient behaviour needs are driving infrastructure business’ costs. A key focus workforce culture, staff and maintain affordable development to keep pace with of the division will be ensuring engagement and effective electricity tariffs; extending growth and proactively act in the delivery of benefits from management of people’s the focus of strategic planning sustainable ways. ENERGEX’s major change and performance. to 19 horizons; successfully In 2011/12, a key focus for investments programs. In 2011/12, Susan and her co-ordinating ENERGEX’s Chris and the division will be division will continue providing corporate strategies to achieve to balance the need for cost both strategic and operational balanced business outcomes; containment with the network’s support to managers to pro-actively engaging with growth and maintenance help bring out the best in regulators and key stakeholders requirements. their people and to create a to secure ENERGEX’s position constructive and collaborative within national electricity working environment. Some of market; leveraging core the key projects for the division business activities to maximise include the Power to Perform ENERGEX’s efficiency; and Program, Workforce Planning optimising the benefits from the and the Wellness Program. introduction of smart network and other technology solutions.

ENERGEX ANNUAL REPORT 2010/11 40 Peter Price Bill Lyon Peter Weaver Executive General Manager Executive General Manager Executive General Manager Network Programming and Energy Delivery Customer Services Procurement BBus, CertMgt, AssocDipEE B.Com, MBA, FAICD BEng (Hons), M Eng Sc, GAICD Areas of responsibility: Design, Areas of responsibility: Business Areas of responsibility: Field Support, Projects and Works Management, Support Services, Customer Contact Metering Dynamics, Joint Workings, Field Services, Major Projects, Network Centre, Corporate Communications, Network Program Management Operations, Improvement and Delivery Customer Advocacy, Energy Market Office, Commercial Group, Business Support, and Contract Delivery. Services, Government Relations, Performance, Procurement & Property Services and General The Energy Delivery Division’s key Logistics, and Safety Quality and Counsel (Legal). responsibility is to provide customers’ Environment (SQE). energy needs by safely and efficiently The Customer Services Division A key focus for the division will be designing, constructing, maintaining has three key responsibilities: the building a world’s best practice program and operating ENERGEX’s network. primary interface between ENERGEX management capability to support Energy Delivery has a vast scope of and its customers and stakeholders; efficient delivery of the Program of work, including field operations, network the provision of business, legal and Work and related support services. customer services, transmission, and commercial property services; and the They will be working to develop and network operations. control of ‘meter to cash’ processes implement rolling 18 month and for the calculation and collection of In 2011/12, Bill and his division will five-year programs to align network DUOS revenue. continue to support the implementation security and reliability requirements of the Program of Work Improvement The division provides support services with delivery capability. They will Program while delivering ENERGEX’s for the network and administrative also leverage these rolling programs Program of Work, according to program functions within the business and is to optimise contracts with our key scope, cost, hours and time targets. a key link between the designing and materials and services suppliers. planning of work and the construction A priority will also be reducing the whole functions. It also plays a significant role of life costs for a range of support in the energy retail market by providing services including fleet, training and retailer requested connection services, safety equipment. metering infrastructure and meter In 2011/12, Peter and his division consumption data. This role includes will focus on a number of key projects the management of the retailer/ including continuing the Joint Australian Energy Market Operator Workings project with Ergon Energy (AEMO) interface and the energy and progressing a non-regulated market settlement. revenue strategy to further leverage In 2011/12, Peter and his division ENERGEX core capabilities into will focus on delivery of key projects competitive markets. including the Customer Strategy, Program of Work Data Quality Project, Connections Process Improvement, ENERGEX Corporate Property Strategy and Joint Workings.

41 ENERGEX ANNUAL REPORT 2010/11 operational review and operational performance acrossand operational performance our business units. During 2010/11, we continued to deliver astrong financial 53 47 43 59 75 67 81 89

s

p

Network performance Operational excellence Community Customers Additional corporate reporting Environment afety eople ANNUAL REPORT 2010/11 42 REPORT ANNUAL ENERGEX

operational review putting safety first

What we set out to achieve THIS YEAR HOW WE PERFORMED

Zero LTIs and LTIFR Further action required 17 LTIs and an LTIFR of 2.43 reported in 2010/11. Page 44

Continue implementation of ZIP Achieved Completed rollout of ZIP with more than 98 per cent of staff having completed training. Page 45

Deployment of our Management of Alcohol and Other Achieved Drugs Standard Standard deployed and program established for random alcohol and drugs testing. Page 45

Retain our external accreditation to AS/NZS4801 Achieved and the Electrical Safety Office requirements Retained all our safety accreditation. Page 44

Development and assessment of our Employee Achieved Wellness Program Launched several initiatives as part of this program. Page 45

Continue implementing Community Safety Strategy Achieved Updated and continued implementing our Community Safety Plan. Page 44

What we want to achieve next year At ENERGEX, our goal is zero • Continue to focus on reducing our LTIs and LTIFR to zero • Reduce the risk of identified high and medium risk injuries within our workplace work activities and the wider community. • Continue embedding the Zero Incident Process (ZIP) Program • Implement the recommendations from the Fatigue This year we continued to Management Review and the Safety Best Practice make significant progress Benchmarking Review to ensure that ENERGEX continues to be a leader in this area towards this goal through the • Continue the deployment of our Management of Alcohol and Other Drugs Standard to ensure safe working environments implementation of targeted for our employees by introducing random testing for alcohol initiatives aimed at eliminating, and drugs and offering support and counselling to those in need reducing or controlling the • Seek to retain our external accreditation to AS/NZS4801 and the Electrical Safety Office requirements. Our risk inherent risks that come with management and auditing process will continue to be refined operating an electricity network. and used to accurately identify potential risks and implement appropriate measures • Further development and assessment of our Employee Wellness Program will assist our employees reach a balanced, healthy lifestyle at work and home • We will continue to review and progress our Community Safety Strategy and program, to achieve ongoing improvement and reduction in the likeliness of a community safety incident involving electricity occurring

43 ENERGEX ANNUAL REPORT 2010/11 focus onreducingtheserisks. 15 projects were implemented in2010/11 to continuethe processes andbehavioural safety. Now initsthird year, high riskactivities,moderate riskactivities,systems and associated withouroperationalactivitiesunderfour key areas: The planprovides astructuredapproach to reducingtherisks being seenfrom ourfive-year HealthandSafety Strategic Plan. throughout thecompany, demonstrated by theresultsnow However, thisyear hasseenanevidential positive shift We have longupheldasafety-first culturethroughout ENERGEX. M ENERGEX andwillcontinueto remainakey focus into thefuture. have beendriven by theoperationalbusinessgroups within approach withourcontractors.our partnering Theseinitiatives Audit Framework, theContractor ManagementFramework and bysupported thesuccessfulimplementation oftheThreeTier This improvement incontractor safety hasbeen performance and 2008/09:34LTIs). by 88percentto justnineLTIs for 2010/11 (2009/10: 17 LTIs significantly improve over thelast12monthswith LTIs reducing The safety ofourcontractors performance hascontinuedto T audits across theorganisation. improved to scheduleandrecord safety, quality andprocess The monitoring andreview functionalityhasbeensignificantly tool for andidentifyingsafety measuringperformance trends. ENERGEX-specific customisations andisnow becomingacore Progress onoureSafe databasealsocontinuedthrough making progress. not yet reachedourultimate goalofzero injuries,we are injuries requiring additional medicaltreatment.Whilewe have days lostto injuriescanbeattributed to peoplewithexisting of injuriesarelesssevere thaninthepastandmany ofthe indicators have increasedfrom lastyear. However, thetypes While we arestillatbestpracticelevels, ourkey performance of ourintervention strategies andprograms inrecentyears. These results,shown inTable 1, reaffirmthepositive impact SeverityTime Injury Rate (LTISR) bestpracticelevels. atindustry Injuries (LTI), Frequency LostTimeInjury Rate (LTIFR), andLost milestones andcontinuedto maintainthenumberofLostTime In 2010/11, we achieved significantsafety performance Achieving key milestones safety ab Days lost toDays lost LTIs whole days andlost an WorkCover accepted claim, in the year of incapacity, one or a onset, defined moremedical certificate Time Lost Injuries (LTIs) – number of work-related injuries with: Claims FrequencyCompensable Rate(CCFRS) Severity worked in the year Time Lost Rate Injury Severity (LTISR) – days per lost million hours injuries per million hours worked during the year Time Lost Injury Frequency Rate (LTIFR) – total number of time lost KEY SAFETY PERFORMANCE INDICATORS PERFORMANCE SAFETY KEY aintaining asafe workenvironmentaintaining l e 1: Wor kpl k ace s ey indicator afety s

• • • • The key projects thatwere addressedin2010/11 were: has attracted theinterest ofexternal safety andriskpeers. is attheforefront ofcontemporary riskmanagementscienceand identify risksassociated withoperationalactivities.Thisprocess continued to beusedthroughout thebusinessto accurately requirements ofAS/NZSISO31000 RiskManagementStandard, A contemporaryriskmanagementprocess, alignedwiththe management, communicationprocesses andrecord keeping. our safety suchasimprovements performance to site hazard was conducted. Thisprocessto enhance identifiedopportunities management system, arisk-based internal auditingprocess adherence to therequirements ofthelegislationandsafety in theElectricalSafety Act 2002 Systems andtheElectricalSafety Officerequirements set out AS/NZS 4801 OccupationalHealthandSafety Management Our safety managementsystem retained itsaccreditationto M improve safety in anefficientandeffective performance manner. regulations andcodesofpractice to influencethelegislation to and Safety Bill(now the inconsultationandreviewparticipated oftheModelWork Health to alignhealthandsafety legislationacross Australia. We have During theyear, we have beenactively involved inthechanges legislation safety workhealth and National harmonised outcome for ourworkers andthepublic. this process isto manageon-site hazards ensuringasafe work statements, the safety manual and our work practices, the aim of deployed to allworkers. by Supported 14 genericwork method identification andmanagementprocess was reviewed and ofourrisk managementframework,As part theon-site hazard Remaining safe on-site aintained external accreditation external aintained health andwellbeing. motor vehicle safety load restraintfor field vehicles fatigue management 2008/09 398.00 58.20 16.00 2.34 – Work Health andSafety Act 2011 (Qld)), ANNUAL REPORT 2010/11 44 REPORT ANNUAL ENERGEX (Qld).Additionally, to ensure 2009/10 69.00 1.00 2.99 9.81 7.00 2010/11 250.00 35.81 17.00 2.43 2.99

operational review Empowering to change behaviour Improving our health and wellbeing

During the year, we completed the rollout of our cognitive We believe a healthy lifestyle and workforce not only reduces behavioural safety program, the Zero Incident Process (ZIP). health risks and prevents injuries, but also boosts employee ZIP focuses on providing employees with the information and morale, supports our safety culture and provides customers with skills needed to make safe choices at work and become more a continued high level of service. This year several initiatives effective within the systems and environment. It is about were launched as part of our Employee Wellness Program. empowering people to take control of their personal safety. Since implementation, more than 3,750 employees (98 per These initiatives included: cent) have attended the program. • healthy choice catering menus The focus of ZIP is now changing to provide tools to managers • Lighten Up – a lifestyle modification program designed by and employees in order to continue to use the concepts that Queensland Health to equip participants to make healthier ZIP has inspired within our everyday life. lifestyle choices in the areas of nutrition, physical activity and stress management • QUIT programs – a quit smoking program • The Global Corporate Challenge – a pedometer based Case study health initiative Lighten Up is a healthy lifestyle program designed by QLD • The Biggest Loser Club – an online weight loss program Health for adults who want make improvements to their • sponsorship of sporting events health and reduce their risk factors for chronic disease. It consists of a number of workshops covering information • subsidised flu vaccination program. such as the psychology of behavioural change, nutrition, We also assist employees through our workplace rehabilitation exercise, weight loss and stress management. To date, program, which covers both work-related and non-work related ENERGEX has had some impressive outcomes, including injuries and illnesses. the testimonial below, with 100 per cent of participants indicating they would recommend the program to other Managing safety risks ENERGEX employees. Managing alcohol and other drugs in the workplace is a key “I was diagnosed with (and shocked at) having high blood safety priority. In line with our commitment to a safe working pressure, averaging 163/95, four weeks ago on my Lighten environment and to the ENERGEX Union Collective Agreement Up initial assessment. I embarked on a change to my diet (EUCA), the Management of Alcohol and Other Drugs Standard and exercise regime as well as making the necessary has been formalised and an education and awareness program visits to my GP. In four weeks, I have moved that down to has been deployed to all staff focusing on the impact of alcohol a more acceptable blood pressure of 117/74 (I’m now an and other drugs in the workplace. Supported by ENERGEX expert on the numbers!). Four weeks of personal focus management and the Unions, a random testing program for supported by the program content and some simple and alcohol and drugs will be implemented in 2011/12. sustainable changes to eating, drinking and exercise habits. The program gave me the shock and then the information A review of current fatigue management practices was also to make some significant changes. I can feel the difference completed during the year following the Brisbane floods and already and appreciate the opportunity to attend the Lighten response to Cyclone Yasi. Expert advice was obtained from Up program.” the University of Adelaide’s Centre for Sleep Research and recommendations from this report will be implemented in 2011/12. Think safe, work safe, home safe Quarterly corporate safety campaigns relevant to the work One of the key components of the ZIP process and home environments were rolled out throughout the year involved the Personal Big 5 concept – the five to further reinforce our safety culture. Following the natural most important things that motivate staff to return disasters in early 2011, the focus of our safety campaigns home safely at the end of the day. This concept shifted to reinforce the importance of remaining safe. Our really helped employees to identify the important campaign began to promote the Safe Days (days without LTIs and aspects of their life within their own households, medically treated injuries) that had been achieved throughout ENERGEX and their community. the organisation rather than focusing on the number of LTIs. Our communication material was targeted at the four behaviours that most frequently contribute to incidents: • complacency • distraction • speeding/rushing • frustration.

A range of educational materials were also developed to deliver these programs.

45 ENERGEX ANNUAL REPORT 2010/11 this category. Danica DiklicandScott Cullenwere alsofinalistsin the safety standard for theSlacksCreekfieldcrews. Safety for category Leadership consistently setting announced astheoverall winneroftheExcellence in than 30nominationsfor theawards withErisBruni Excellence inSafety Solution.We received more award inExcellence inSafety or Leadership time. Employees were ableto nominate for an in theENERGEX Excellence Awards for thefirst In July2010, safety was includedasacategory Celebrating safety the challenge that started on19the challengethatstarted May 2011. than 70teams, oralmost500people,entered in walk around theworldvirtual for 16 weeks. More walking challengewhereemployees engageina workplace healthinitiative. Itisapedometer-based Corporate Challenge(GCC),theworld’s largest health andwellbeing, We intheGlobal participated To show ourongoingcommitmentto employee electrical safety riskswithinthehome. Our communityeducation programs address on page74. More information aboutmany ofthesecampaigns canbefound • • • • • • • • • greatest impact. Theseinclude: through ananalysisofincidentsandaccidentsmay have the whichhavesafety risksandopportunities beenidentified Our communityeducationprograms addressthoseelectrical they maintain a safe environment when near electrical assets. direct communication including mail-outs to businesses to ensure electrical safety education sessions with community groups and behaviours. Key activities this year included consultation and and amongstbusinesseswhich,inturn,facilitates safer increased electricalawareness andeducationinthecommunity outcomeofthecommunitysafetyThe primary framework is research anddata. haveopportunities beenidentifiedthrough the evaluation of Withineachcategory, keyand partnerships. messagesand safety, asafe andreliableelectricitynetwork, andcollaboration business communityawareness, aworkforce committed to direction across allkey areasincludingcommunityawareness, plan isourcommunitysafety framework whichprovides community educationandawareness programs. Withinthe theanalysis,monitoring anddevelopmentsupports ofsuccessful This year, we updated ourCommunitySafety Planwhich safety community Educating about boating safety. recreation andaviation activities rural safety what’s goingoninyour community kids safety safe home electricalsafety Look Up and Live andDialBefore You Dig severe weather tree ANNUAL REPORT 2010/11 46 REPORT ANNUAL ENERGEX

operational review improving network performance

WHAT WE SET OUT TO ACHIEVE THIS YEAR HOW WE PERFORMED

Improve our Minimum Service Standards (MSS) for network reliability Achieved and security Achieved better than minimum service standards. Page 48

Report against new Service Target Performance Incentive On Track Scheme (STPIS) Introduced and reported against new STPIS standards and achieved five of the six reliability measures. Page 49

Undertake our planned vegetation management program Achieved Continued planned vegetation management program with total expenditure of $72.71 million. Page 50

Continue to deliver energy efficiency and demand management initiatives as Achieved part of our Demand Management Strategy Trialled targeted home and business initiatives to reduce energy demand. Page 50

Progress investigation into the use of electric vehicles Achieved Work continued on identifying the impact of electric vehicles on our network. Page 52

Our electricity network is one What we want to achieve next year of the fastest growing in • Improve our service standards for network reliability and security, exceeding the industry minimum service standards Australia. We plan to invest in • Achieve the six MSS reliability targets set for 2011/12 the order of $7 billion during • Continue our planned vegetation management program with a budgeted expenditure of $70.918 million the next five years to ensure • Continue investigating the use of electric vehicles and it continues to meet the undertake additional market analysis and modelling of user data on the network to determine its impacts community’s expectations for a • Continue implementing new software to enhance our reliable electricity supply. Distribution Management System

47 ENERGEX ANNUAL REPORT 2010/11 Table 2tracksandcompares since2006/07 ourMSSperformance anddemonstrates how we compared in2010/11 to ourMSStargets. T to key CBDsubstationsandfeeders between 10 and13 January. businesses withintheCBDarea,we proactively supply turnedoff from itscalculation.To ensurethesafety ofresidentsand affected by thefloodsasnot allflood impacts were excluded However, normalisedSAIDIfigures for ourCBDarea were severe weather. reliability by excluding majorevents predominantlycausedby SAIDI figuresprovide atruerpictureofthenetwork’s day-to-day excluded through majorevent day declarations. Ournormalised normalised urbanandruralresults,asmostoftheimpact was unprecedented, itdidnot contribute significantly to our Although thestorms andflood impact on overall SAIDI was significant year of2008/09whichincluded‘TheGapstorms’. network in2010/11 was almostfour timesassevere asthenext effect ofmajorevent floods onour days suchastheJanuary shown over thelastfive inGraph years 1. Asdemonstrated, the affected andinexcess of600minutes. Thesystem SAIDIis of the network required, our overall SAIDI impact was significantly customers takingseveral days andrebuildingofsignificantparts flood event,peak oftheJanuary restoration to 90percentofour With morethan20percentofourcustomers interrupted atthe repeated inlessthan100 years. extreme thatstatisticallytheseresultsarenot expected to be the variance went well beyond thenormalrangewithevents so onthenetwork.in reliabilityperformance However, thisyear Weather events areoneofthekey factors affectingvariance maintain andrestore supply. which challengedallaspectsofourbusinessoperationto area was greatlyimpacted by thesesevere weather events, to homesandbusinessesacross Queensland.Ourdistribution In 2010/11, weather conditionscaused unprecedented damage reliability Network ab (mins) SAIDI (P N MSS (events) SAIFI l &U lanned e 2: R R ormalised e l iabi l p ity Short rural Short Urban CBD Short rural Short Urban CBD nplanned erfor P eliability m ) ance erformance 2006/07 A ctual 203.00 80.00 2.33 1.00 0.00 0.00 * impact ofthemajorevent days onour2010/11 results. Graph 1tracksoursystem SAIDIsince2006/07 anddemonstrates thesignificant GRA target for reasonsdiscussedabove. targets, as set outinTable 3.We didnot achieve theCBDSAIDI In thepastyear, we achieved five ofoursixreliability STPIS MSS obligationsfocusing onunplanned performance. forperformance customers andoperates concurrentlywithour to encouragedistributors to maintainandimprove service for thefive-year period2010-15. regulatory STPIS isintended Performance Incentive Scheme(STPIS) introduced by theAER This year alsosaw Target thecommencementofourService (MSS), asset outinTable 2. we stillachieved Standards allourreliabilityMinimumService figures.Despitein ourCBDperformance this,inthepast year interruptions were thatoccurredonthe13 included January major event days onawhole-of-ENERGEX basis,whichmeant However, were only10 to classifiedas 12January January 2007/08 with with the actual end of June figures when available Note – The 2010/11 at result endis YTD of March 2011 and will be updated A Unplanned Planned Major Event Day ctual P 242.00 H 1: Sy 85.00 1.05 1.05 4.00 4.00 0.04 2.71 s te 2008/09 m S A 2010/11 449.1 ctual 31.5 80.3 228.00 AIDI (12AIDI Month 91.20 1.05 2.56 0.06 3.10 2009/10 108.0 2009/10 33.9 22.0 A ctual 216.00 88.50 ANNUAL REPORT 2010/11 48 REPORT ANNUAL ENERGEX 1.20 1.20 0.08 2.41 ) 2008/09 115.2 101.3 27.2 2010/11* A ctual 201.60 79.30 2007/08 6.40 2.05 0.91 0.01 110.5 21.3 0.0 2010/11 106.00 218.00 2006/07 15.00 MSS 1.26 2.46 0.15 19.1 11.9 95.9

operational review Table 3: Reliability performance

STPIS Normalised reliability performance (unplanned) 2010/11 ACTUAL 2010/11 TARGET

SAIDI (mins) CBD 6.390 3.300

Urban 57.010 69.400

Short rural 142.280 173.200

SAIFI CBD 0.011 0.032

Urban 0.836 1.044

Short rural 1.804 2.285

Table 3 compares our actual STPIS performance against our targeted performance.

This very strong result, while pleasing, is considered abnormal During the year, we purchased specialised imaging equipment as it is based on a much lower storm contribution than that to assist field crews find the more obscure network defects. reflected in the targets. This is due to the majority of our This included optically stabilised binoculars, the latest adverse weather resulting in exclusions under the major event generation of infra-red cameras, and high quality cameras day criteria. equipped with geo-tagging imagery and GPS derived coordinates. This imagery can be integrated with mapping software to enable To meet our licence conditions and customer expectations, we further engineering analysis. continue to invest in reliability programs to improve unplanned performance including feeder upgrades, vegetation management Short term weather forecasts from a specialist meteorological and remotely controlled switchgear installation. Other initiatives service provider were also trialled during summer to indicate include a stronger focus on patrolling the network immediately the probability (low, medium, and high) of lighting, hail, and high following momentary interruptions to help prevent possible winds. These forecasts are made for a 36 hour period and are subsequent permanent faults. broken up into three hour time windows for Brisbane, the Gold Coast, the Sunshine Coast, and the Western area. Through these We also continue to manage the number and duration of forecasts, we were able to shape our daily operational planning planned outages on the network that interrupt supply to to take into account any possible storm threat and its effect customers by coordinating and packaging work in the area and on our workforce scheduling. The trial was successful and a using generators where available. In spite of this, our planned contract with a specialist meteorological service provider for outages have increased due to the significant amount of work 36 hour storm threat forecasts has been funded for 2011/12. being carried out to build and maintain the network. While we intended to carry out 8,271 planned outages during the year (2009/10: 7,776), five weeks of lost time due to the severe weather events during summer reduced our planned outages to 7,635 events. Chopper patrols give a bird’s eye Improving our reliability view of the network Our annual helicopter patrols continued this Improving our performance through STPIS year, inspecting around 15,000 kilometres Our AER Service Target Performance Incentive Scheme of poles and powerlines. (STPIS) commenced on 1 July 2010. Through the use of financial penalties and rewards, the scheme encourages The $1.2 million aerial survey of the overhead electricity distributors to seek sustainable improvements network allows for early detection of cross arm in network reliability. Network reliability improvements deterioration or overgrown vegetation impacting on generated under STPIS are in addition to the improvements powerlines and poles. It is one of the many ways that customers will experience from other established reliability we are keeping the electricity supply in rural and improvement programs. semi-rural areas safe and reliable, supplemented by vehicle and foot patrols in areas where flying is unable to be conducted. Customers were kept informed prior to helicopters patrolling their area, and in sensitive areas the flight plan was altered at the request of customers.

49 ENERGEX ANNUAL REPORT 2010/11 network reliabilitystatistics(seepage48). in preparationfor risingwaters dramatically impacted onour state. ofthenetwork Theneedto de-energisesignificantportions over muchofQueenslandandtheSouthEastcorner ofthe higher rainfall patterns last seen in the 1970s saw heavy flooding pattern presented challengesofanother type.Areturn to the East Queenslandthissummer, thestrong LaNiñaweather Although relatively mildtemperatures were experienced inSouth the increasinglikelihood ofstorms, floods,heatandhighwinds. Summer isapivotal periodfor ournetwork dueto performance summerOur performance to adhoctrimmingbasedoncustomer undertake requests. In additionto ourplannedmaintenance program, we continue network required to power ourstreetlights. network andinstallationofphotoelectric cellsto reducethe being usedincludingrealignmentorinsulationoftheoverhead undesirable by thelocalcommunity, alternative solutionsare In someinstanceswhereremoval ortrimmingisconsidered normal cuttingprofile. limbs andtreesoverhanging ourelectricalwiresbutoutside also invested $2.5millioninto assessing andremoving defective To reducetheriskto ournetwork further duringhighwinds,we Coast CityCouncil. and replacementprogram withBrisbaneCityCouncilandGold This year, we invested $1millioninourlargestever treeremoval remove andreplacerisktreeswithpowerline friendlytrees. councils through establishedMemorandaofUnderstanding to We arealsocontinuingto work cooperatively withother local organisations. community includinglessdisruptionandcostsavings to both simultaneously, we have beenableto deliver benefits to the By usingtheonecontractor andschedulingourprograms withtheirroutine street treepruning. planned trimmingefforts the program, working withBrisbaneCityCouncilto combineour This year we continuedacollaborative approach out to carry ensure asafe andreliableelectricitysupply. aesthetic component ofthetreeswithresponsibilityto strong winds.Ourtrimmingtechniques ensurewe balancethe duringsevereparticularly weather events suchasstorms and 16,000 kilometres ofpowerlines to improve network reliability, more than$72millionandtrimmedtreesalong during storms andhighwinds.During2010/11 we spent used to improve communitysafety andreduceinterruptions Vegetation managementisamajorpreventative strategy power interruptions M anaging vegetation toanaging reduce of risk the

the summers of2007/08the summers and2008/09. summer period.Thenumberofstorms however was down from weather events affecting 333,700customers throughout the throughout SouthEastQueensland,we experienced 15 major the floodsaffecting morethan300,000homesandbusinesses to 2009/10, theseverity ofthestorms was greater. Inadditionto Although thenumberofstorms experienced thisyear was similar across South East Queensland. hotter days indicating a high latent air conditioning load present temperature-related demand increases across the network on 39 MW less than last year. Despite this, there were significant anticipated maximum demand of only 4,674 MW which was East Queensland reflected this, contributing to a lower than Australia’s coolest year since 2001. Temperatures within South According to the Australian Bureau of Meteorology, 2010 was outcomes from thisprocess. andmonitoringQueensland FloodsCommissionofInquiry any for moreinformation). Thisincludesproviding information to the this experience canbecapturedfor futurebenefit(seepage 57 stakeholders iscontinuingto ensurethelessonslearnedfrom 1974 floodrelated injuries. work with various Further there were nosignificantelectricalincidents,unlike Brisbane’s 15 January, withinonlyafew days ofthefloodpeak. Additionally, were ableto restore morethan90percentofournetwork by floodcrisis.Byutilisingtheseplans, we managing theJanuary Management Plan(seepage58),provided aframework for theFloodRisk Our BusinessContinuityPlansandinparticular DMS applicationswillbeakey focus in2011/12. design, project timelinesand costs.Implementation ofthenew project. We have now finalisedthebusinessrequirements, ENERGEX Board approved theimplementation phaseofthe as theDMSsolutionfor ENERGEX. InDecember2010, the In March 2010, we announcedGEEnergy’sPowerOn software information for decisionmaking. increase automation andallow usto have moreupto date an establishedplatform to improve ournetwork performance, distribution network. At itscompletion, thisproject willprovide management andcontrol capability covering thecomplete network whichiskept upto date inrealtimeto provide network OurDMSisadatabasemodelofourelectricity and services. System (DMS)applications–consistingofhardware, software a vendor to designandimplement DistributionManagement In 2008,we beganaproject focussed onselectingandengaging Focusing our network management capabilities ANNUAL REPORT 2010/11 50 REPORT ANNUAL ENERGEX

operational review Creating a sustainable future network GRAPH 2: SOUTH EAST QUEENSLAND PEAK DEMAND IS GROWING

As we look to the future, we face challenges associated with Maximum actual peak demand in MW on the the introduction of new technology, customer choice and ENERGEX network expectations, and the need for continued prudent network was recorded on 15 February 2010 investment. To address these challenges, we are working to 60% understand their impacts on our business through a range of pilots and trials to optimise the customer and network outcomes. 50% This is what we are building for 40% Through these initiatives, we hope to make a real difference by partnering with our customers to reduce future price rises 30% related to network investment, while ensuring we can meet their This is what we requirements. 20% are billing for Reducing peak demand 10% 0% In Queensland, peak demand occurs on a few hours of a few 2010/11 2009/10 2008/09 2007/08 2006/07 2005/06 2004/05 2003/04 2002/03 2001/02 hot days a year when the energy network is very congested with Energy growth Demand growth people using electricity at the same time, particularly when air conditioners are switched on. Graph 2 demonstrates the gap between the energy growth we are building for versus the energy growth we are billing customers for. Meeting peak demand is a costly exercise due to the capital investment required to maintain sufficient capacity during these times. Approximately 13 per cent of our $8.6 billion network Our target is to achieve real peak demand reductions over the is built to supply a demand for energy that only occurs for next five years totalling 144 megawatts from current demand fewer than 100 hours a year. The rest of the year this capacity forecasts: the equivalent of one third of the power used on the remains unused – but still must be maintained and paid for by Sunshine Coast on a normal summer’s day. By achieving better consumers. While we could continue to expand the network to utilisation of network assets, the benefits can ultimately be cater for these peak times, this is not a sustainable approach for passed to electricity consumers through efficient network prices. consumers or the environment. Graph 2 illustrates the increase in overall energy consumption across our network (energy growth) compared to the increase in As part of our vision for a smarter, more efficient network and demand at peak times (demand growth). to proactively reduce the peak demand forecast, projected at a 71 per cent increase by 2020, we are taking a proactive For more information about our customer strategies and approach by investing in our energy conservation and demand initiatives to reduce demand and encourage energy efficiency, management strategy. This year, significant progress was see page 63. made implementing our targeted initiatives following funding assistance provided by the Queensland Government and review allowance from the Australian Energy Regulator to invest in demand management programs. These programs have made a significant impact on our peak demand, as demonstrated in the Australian Alliance to Save Energy’s Report of the 2010 Survey of Electricity Demand Management in Australia. According to the report, Queensland’s peak demand for 2010/11 was the largest contribution to peak demand reduction of any state for the three- year survey period contributing more than 90 per cent of the total national reduction.

Peak demand Although domestic electricity use peaks each day between 4pm and 8pm, network peak demand only occurs for a few hours on a few days each year. In fact, 13 per cent of our network capacity is only used for a few hours on a few days each year. We are working with the community to develop more sustainable solutions while maintaining a safe and reliable electricity supply.

51 ENERGEX ANNUAL REPORT 2010/11 be examined. of network impacts andstrategic responseoptionswill with government andindustry. Market analysis,assessments regarding theuseofelectric vehicles inclosecollaboration In 2011/12, we willcontinueto progress theinvestigation over timeto refine ouranalysis. to predict.We willcloselymonitor theelectricvehicle market how soon;andhow they willbeusedandrecharged,aredifficult years to evolve meaningthatthecorequestions ofhow many; This emergingelectricvehicle market will,however, take many quality ofsupply for allnetwork ismaintained. users effective mannerwhileensuringtheavailability, reliabilityand recharging requirements for electricvehicles inthemostcost We recognisetheneedto bewell-positioned to meet the use inthecommunity. challenges andpreparetheelectricityinfrastructurefor their are working withgovernment bodiesto overcome andindustry toward lower emissionsandlessoildependentmotoring, we widespread adoptionofelectricvehicles, whichprovide apath network for thefuture.Inrecognitionofpotential for a significant factor inthedevelopment oftheelectricity We have identifiedtheemergenceofelectric vehicles as P beyond theelectricitymeter. working collaboratively withcustomers to identifysolutions to maximisethebenefitsfromefforts new technologies while progressed alongthispath, thesharedvisionco-ordinates distributors andcustomers. Whileboth companies have co-ordination between generators, transmissioncompanies, An intelligent network increasesconnectivity, automation and investments. and willfeed into analysisandmodellingfor ourpotential from thisprogram willbedelivered over thenext threeyears These trialsaredueto becompleted in2014. Thelearnings reducing peakdemandaswell asimprovements inreliability. Our pilots andtrialsarefocussed onimproving power quality, network visionfor electricityinfrastructureinQueensland. were guidedby the network’detailed planningfor pilots ‘smart andtrialswhich withErgonEnergy,In partnership thisyear we commenced the network. quantities ofsolarphotovoltaic arrays currentlyinstalledon the network hasincreasedto assesstheimpact ofsignificant gridinitiatives.for Power futuresmart quality monitoring of networks’. Thefibrenetworkin ‘smart provides thecapacity network. Thiswillprovide afoundation for futureinvestments security framework for oursubstationfibrecommunications was developed thisyear whichledto theconfigurationof ‘smart network’. managementplan Asecurityandperformance ‘smart progressWe inourlongterm aremakingfurther plansfor a Investigating networks smarter lanning for electric vehicles for electric lanning Network VisionOutlookto 2030 , ashared

water systems to control loadtariffs. customers to encouragetheconnectionsoftheirsolarhot events. To addressthis,we have provided incentives to exacerbatefurther alreadyseriousnetwork peakdemand demand managementcapability, thesesystems willpotentially as backupboostingfor solarsystems). Intheabsenceof capabilities andremainingdependentonelectricsupply(such by many systems beinginstalledwithoutdemandmanagement efficient systems. ThisreductioninNDMcapabilityiscaused systems declinewiththeuptake ofreplacementgreenhouse capability asthenumberofelectricelementstorage hot water expected reductioninNetwork DemandManagement(NDM) due to theireffects onour network. Oneoutcomeisan provide challengesto ourcurrentandfuturenetwork planning Although reducinggreenhousegasgeneration,suchmeasures heat pump alternatives. systems withgreenhousefriendly solarhot water systems or homeowners who replaceexisting electricstorage hot water installed solarphotovoltaic (PV)systems andarebate to eligible incentivesseparate inplace–solarcreditsfor supporting newly Renewable EnergyTarget (RET).Currently, therearetwo of renewable energysystems theMandatory to support implemented anumberofincentives to encouragetheuse Since itsinceptionin2001, thefederal government has generation for embedded Allowing onset ofelectricvehicle useinSouthEastQueensland. We areworking to prepareournetwork for the ANNUAL REPORT 2010/11 52 REPORT ANNUAL ENERGEX

operational review delivering operational excellence

What we set out to achieve HOW WE PERFORMED

Develop and release 2010/11 Summer Preparedness Plan Achieved Delivered a record $550 million Summer Preparedness Plan. Page 57

Invest $1.36 billion on upgrades and maintenance to our On Track electricity network Targeted investment of $1.22 billion in building, operating and maintaining our network, increasing network capacity by 464 MV.A. Page 53

Commence the first 11 selected projects under our Achieved Community Powerline Enhancement Program Commenced 12 projects with one already completed, 11 still underway and three proposed for 2012/13. Page 57

Deliver the 2010/11 PoW on time and within budget Achieved $895 million was invested in our network system Capital Program. Page 54

Continue Joint Workings project Achieved Delivered efficiencies and cost savings through Joint Workings initiatives with Ergon Energy. Page 58

At ENERGEX, we have a vision What we want to achieve next year for a smarter, more efficient • Continue promoting the Community Powerline Enhancement Program including completing the existing projects that have electricity network by 2025. been identified Our strategy is to invest in • Deliver the $1,110 million capital planning program for 2011/12 the capacity, utilisation and • Continue embedding our Program of Work Improvement reliability of our network Program (PoW IP) into our operating practices • Develop and implement the 2011/12 Summer while ensuring our systems Preparedness Plan and processes can support the delivery of this vision. Another Delivering to meet demand way we are making sure that Investing in our network’s capacity and reliability We currently manage electricity assets valued at $8.63 billion our network of today can (illustrated in Table 4) and have nearly 3,900 employees meet the needs of South East working towards delivering an electricity network that supports our customers’ lifestyle aspirations and sustainable economic Queenslanders tomorrow. growth. More than $1.22 billion was invested this year to build, operate and maintain the electricity network. This is the second year we have delivered improvements to our network exceeding $1 billion despite staff restrictions in January and February due to our flood and Cyclone Yasi response. To reflect these reduced man hours, capital expenditure was reduced by approximately a quarter of a million direct labour hours which were redirected to flood and Yasi rectification works.

53 ENERGEX ANNUAL REPORT 2010/11 • • • • increased capacitythrough the region.Duringtheyear we: Program, resultinginsignificantnetwork improvements and $895 millionwas invested inour network system Capital appliances andthecontinuingpopulationsurge. 3, driven by thesoaringdomesticuseofenergy intensive electricity inSouthEastQueensland,asillustrated inGraph This resultcontinuesto reflecttheincreasingdemand for the Program ofWork spendin2010. from $1.36 billionto $1.2 billion.Thisexpenditure isinlinewith reduction inouranticipated overall Program ofWork expenditure been achieved. Theresultofourresponseto theseevents was a Post theseevents, revised physical targets were set andhave Note 3–Network linedataisto theendofDecember2010 andisunderreview. Remaining network dataandcustomer dataisto theendofMarch 2011 Note 2–Sinceimplementation ofanew customer information system inmid2008,customer typeinformation isnolongerreadilyavailable Note 1–Theincreasein132/110 kVlinelengthin2006/07 over isdueto previous adataredefinition reports T ab 132/110 kV 33 kV 11 kV Distribution Transformers Distribution Poles Total Zone Substations Bulk Supply Substations (Qty) Equipment Other LV Total (km) of –Underground Cables Length Street Lights Street 132/110 kV 33 kV 11 kV LV Total of –OverheadLines Length (km) Total Overhead and Underground (km) ASSETS Other Residential Customers and network reliability. replaced 277 ringmainunits(11,000 volts) to improve safety the maximumdemandprogram installed orreplaced520new distributiontransformers via 178 x11,000 volt powerlines to improve reliability constructed oraugmented 17 x33,000volt powerlines and net increaseincapacity(illustrated inGraph4) capacity at11 MV.A zonesubstations, resultingina464 commissioned two new zonesubstationsandupgraded l 4: o e 4: 2 u t 1 l ine change s the s to o u r k a ey ss et 2006/07 1,230,950 1,122,990 s 296,849 612,638 107,960 13,844 36,200 50,044 42,261 14,720 2006/07ince 17,709 1,680 8,592 4,207 2,091 103 942 207 36 2007/08 • • • • customer requested work. Inthepastyear we: maintenance program to improve reliabilityandcomplete Similarly, almost$324 millionwas invested inournetwork 1,258,940 1,148,270 306,892 622,064 110,670 36,349 43,420 14,827 14,732 17,843 51,176 improve safety andreliability. replaced neutralclamps on4,154 low to voltage services reduce interruptions and replaced9,877 cross armsto improve safety and onlowinstalled 4,230spacers voltage openmains the network inspected 116,174 of polesto ensureongoingserviceability electricity network to maintainestablishedclearancezones trimmed vegetation alongmorethan18,850km of 1,638 9,083 2,136 4,657 106 213 981 37 2008/09 1,278,200 1,167,890 630,259 314,008 110,310 36,490 44,613 52,361 15,871 14,736 17,953 1,640 1,053 5,099 9,612 2,161 219 107 37 ANNUAL REPORT 2010/11 54 REPORT ANNUAL ENERGEX 2009/10 1,299,075 1,187,770 638,982 111,305 324,111 45,456 53,256 18,032 16,649 36,607 14,742 5,469 1,658 1,092 9,978 2,175 223 110 38 2010/11

1,204,210 1,316,130

111,920 333,797 647,648 46,083 53,928

18,104 10,214 36,758 14,751 17,170 1,134 1,656 5,700 2,247 122 227 40 3

operational review GRAPH 3: SOUTH EAST QUEENSLAND’S ENERGY CONSUMPTION

22,135 21,610 21,880 20,930 GWh GWh GWh 20,665 GWh GWh

2010/11 2009/10 2008/09 2007/08 2006/07 Graph 3 tracks the change in South East Queensland’s energy consumption since 2006/07.

GRAPH 4: ENERGEX NETWORK CAPACITY

10,017 MV.A 9,553 9,278 MV.A MV.A 8,670 MV.A 8,155 MV.A 6,544 MV.A

June 2011 June 2010 June 2009 June 2008 June 2007 June 2006

Graph 4 demonstrates the increase in our total network capacity since June 2006.

TABLE 5: TOP 20 PROJECTS IN 2010/11

PROJECT NAME PROJECT DESCRIPTION $ SPEND

Bundall to Molendinar Establish 2 x 110kV underground circuits 30,116,105

Griffin Establish 110/33kV bulk supply substation 26,881,581

South Pine to Hayes Inlet Establish 110kV double circuit overhead feeders with one feeder energised at 33kV 25,826,450

Airport Link Northern Busway Service relocations 12,811,779

Burpengary Establish two module 33/11kV substation 10,864,813

Tennyson to St Lucia Establish 33kV underground feeders and decommission two existing feeders 10,554,195

Adelaide Street, Brisbane Acquire land for substation site 9,950,112

Woodridge Rebuild 33/11kV zone substation 9,021,648

Whiteside Establish 33/11kV modular substation 8,982,024

Buranda Establish 33/11kV zone substation 8,620,305

Airport Link Establish operational supply to Airport Link 8,140,871

Paddy Gully Establish a 33kV zone substation 7,734,226

Gympie North Establish a 33/11kV zone substation 7,471,763

Brisbane CBD Longterm provision for conduits – stage 1 7,259,274

Ebbw Vale to Moggill Establish new 33kV feeder 7,110,874

Murrarrie Establish 33/11kV Doboy Zone Substation 6,832,428

Middle Ridge to Postmans Ridge Establish 2nd 110kV feeder utilising Powerlink’s spare 275kV Circuit 6,546,716

Beerwah Upgrade of bulk and zone substation 6,359,431

Wamuran Establish 33/11kV zone substation 6,044,715

Lytton Install 3rd 110/33kV transformer 6,033,636

These projects have been chosen based on their costs within the 2010/11 financial year.

55 ENERGEX ANNUAL REPORT 2010/11 outcomes. will provide thebestsocial,economicandenvironmental local communitywhowere key indetermining aroute that growing areas.Since2006,ENERGEX hasengagedwiththe rising demandfor fastest electricityinoneofthecountry’s The SunCoastPower to Project meet the isnecessary from improved reliabilityandquality ofpower supply. 325,000 SunshineCoastresidentsandvisitors willbenefit Maroochydore. Oncecompleted in2014, morethan upgrade to ENERGEX’s existing substationatJonesRoad, Eudlo, anew substationatPacific Paradise andan Paradise, theconstructionofaswitchingstationat overhead powerline from Palmwoods eastto Pacific the installationofadoublecircuit 132,000 Volt (132kV) Construction willcommenceinlate 2011 andinvolves now andinto thefuture. dependable electricitynetwork to homesandbusinesses Sunshine Coast,allowing ENERGEX to deliver arobust and way for a complete overhaul of the electricity network on the ENERGEX ontheSunshineCoast.Theproject willpave the expensive integrated electricityproject ever by undertaken The $91 millionSunCoastPower Project isthemost study Case maximum benefitsarerealised. our businessaswell asembeddingthechangesto ensure application across thevarious functionsand geographieswithin immediate improvement anddrivingconsistent opportunities new Program ofWork framework. Thiswillinvolve identifying will beto ‘stabiliseandimprove’ and‘embedsustain’the In June2011, PoW IPwillenter anew phaseandthefocus and balancedbusinessinto thefuture. help usmeet ourAERexpectations andachieve asustainable together across divisionsusingthenew processes andtools will how we plan,program anddeliver ourProgram ofWork. Working to morethan700peopleinthebusinessfocused onimproving This year, we have deployed new processes, measuresandtools effective useofexisting resources. meet supply requirements in thefuturethrough efficientand increasing demandfor electricityandstrengthenourabilityto The improvement program was initiated to addressthe design phaseandcompleting theinitialphaseofdeployment. throughout 2010/11 withafocus onfinalisingthesolution Our Program ofWork Improvement Program (PoW IP)continued of program work Improving our Improving how we design and build assets BuswayNorthern project. $8.2 billionCross River RailTunnel andthenext stageof the East Queenslandinfrastructureprojects includingthe Looking to thefuture,we willbeinvolved inupcomingSouth homes andbusinessesinthesurrounding areas. ensuring acontinualsafe andreliablesupply ofelectricityto the to facilitate project construction.Allofthiswork isdonewhile these projects may require theexisting network to berelocated for both theconstructionandoperationphases.Inaddition, generally require the provision ofareliablesupplyelectricity projects andtheGoldCoastRapidTransit project. Theseprojects Tunnel, Busway Roundabout LinkNorthern andAirport Airport inthecomingyearcontinue toincludetheLegacyWay support Key projects we throughout supported 2010/11 andwill added to the demand for electricity in South East Queensland. Recent government action on infrastructure investment has also provide support for large corporate and government projects. In addition to distributing electricity to homes and businesses, we S S upporting infrastructure growth in in growth infrastructure upporting outh East Queensland East outh ANNUAL REPORT 2010/11 56 REPORT ANNUAL ENERGEX

operational review Enhancing the look of our assets We have established a five-year $40 million powerline Community Powerline improvement scheme, in conjunction with local councils, designed to improve the look of electricity supplies in areas Enhancement Program with significant community benefit. Called the Community The Community Powerline Enhancement Program Powerline Enhancement Program (CPEP), the project’s main involves six Council areas and aims to improve the focus is undergrounding or bundling existing powerlines in visual aspect of electricity infrastructure in sensitive sensitive locations such as major street shopping precincts, areas. The CPEP is a subsidy scheme which, in sensitive environmental and heritage areas, locations with conjunction with the required 50 per cent funding significant vegetation, high pedestrian or vehicular areas, and by the local government authority, will provide in communities abutting bays, rivers and coastlines. annual funding for projects worth up to $8 million The program commenced in July 2010 and to date we have each year for lower voltage powerlines up to 11kV. received 17 project proposals valued at $20.4 million from six This is another way ENERGEX works within our Council areas. Of these 17 projects, one project is now complete, community to provide a safer and more visually 11 projects are underway and three are proposed for 2012/13. appealing environment. The plan focuses on lower voltage electricity lines up to 11,000 volts.

This project is part of a larger five-year $100 million program to While our summer response plan could not have predicted the underground existing and future assets as identified by Local severe weather events that affected South East Queensland Councils and the community. throughout 2010/11, our Business Continuity Plans and Flood Risk Management Plan provided a framework for managing Planning for the unexpected the January 2011 flood crisis. These plans were important in their contribution to the efficiency of the flood preparation and Preparing for summer 2010/11 response (see page 50 for more information on our summer performance). Severe weather events including storms, floods, extended periods of high temperatures and high winds can cause Improving our summer response significant damage to any power network. In preparation for the 2010/11 summer season, we invested more than We are now identifying opportunities to improve our processes $550 million through our Summer Preparedness Plan to by conducting a full review of the flood events to identify improve the resilience of the network and our response to improvements to our current systems and processes. severe weather events. We have already identified a number of areas where there The 2010/11 plan focused on four major areas of is opportunity for improvement. Some of these relate to our service delivery: internal processes while others relate to issues affecting the wider community, like the location of CBD electricity • prepare the supply network for the upcoming summer distribution assets. to minimise outages of customers’ electricity supply • manage and minimise the impact of extreme weather events During the next 12 months, work will continue to: on customers’ electricity supply • revisit our processes for determining the best location • identify and respond to emergencies with the potential to of future assets to ensure assets are placed well above impact on customers’ electricity supply Q100 levels • keep customers informed of electricity supply issues • review our current Flood Plan and make it publicly available during summer. • update our current database to include contact details and Within these areas of service delivery, specific targets were substation/switching access point for each of our CBD sites established and achieved prior to summer. These included: and work with companies located within these facilities to ensure their business continuity plans including damage to • increasing major substation capacity by more than 700MVA electrical equipment • upgrades to more than 180 x 11 kV feeders • review our emergency communication protocols with • upgrades to more than 520 distribution transformers stakeholders • vegetation management and trimming of more than • review our electrical connection process and ensure protocols 16,500km of the distribution and transmission network are in place for generator deployment. • inspections to more than 12,000 system component (such as poles) • pre storm aerial patrols of more than 450 x 11kV and 33kV feeders • replacement of more than 8,000 timber crossarms following system inspections.

57 ENERGEX ANNUAL REPORT 2010/11 businesses andourcustomers. closer cooperationcoulddeliver significantbenefits to both research andconsultation, identifiedanumberofareasinwhich program. Theprogram commencedin2007 extensive andafter Energy to implement thebenefitsidentified byourJoint Workings During theyear, we continuedworking together withErgon together results byProducing working inasafeEast Queenslanders and sustainable manner. on ourcorebusinessofdelivering reliableelectricityto South divestment ofthesenon-coreassets, we cancontinueto focus small power stationsatlandfillgassites inVictoria. Through business basedinVictoria, andentered agreementsto selltwo completed theasset saleofVarnsdorf PtyLtd,aco-generation We continueto assessourcorebusinessandin2010/11 core our on Focusing business Identifying internal efficiencies Continuity PlansorDisaster Recovery Plans. available to allow ourcustomers to plantheirown Business Plan andto have highlevel information abouttheplanpublicly ofourSummerPreparedness aspart the FloodPlanendorsed In preparationfor thenext summerseason,we intend to have • • • • • During theflood events, ourFloodPlanassisted us to: public duringaflood event. the Police, SESandlocaldisaster coordinators), andwiththe communication internally, (including withEmergencyServices The FloodPlanalsocontainsadetailed planfor our • • • • • The key objectives ofourFloodPlanare: River inGympie isprone to flooding. Plan hadbeeninoperationsince1995/96 becausetheMary Plan appliedto BrisbaneandIpswich.AGympie specificFlood in responseto theincomingLaNinaweather system. TheFlood Program, we developed aFloodRiskManagement Planin2010 ofourongoingandproactiveAs part SummerPreparedness M anaging our flood risks flood our anaging to customers related to floodrisksandpublicsafety. determine how andwhatinformation neededto beprovided liaise effectively withother stakeholders coordinate ournetwork operations’response develop asset managementprocedures basedonthisrisk identify whichassets were atriskofinundation resumption ofnormaloperationsasquickly aspossible. conditions timely restoration ofthenetwork to normaloperating speedy restoration ofadequate supplyto customers a coordinated responseto anemergency employeesemergency services safety atalltimesto thepublic,employees andother

to both businesses. on ten new initiatives to provide benefitsandsavings further Next year, theproject team willenter phasethreefocusing the needsofproject andenableditssuccess. and formal sharingprocesses. Eachoftheapproaches hasfitted collaborations, jointtechnical committees, centresofexcellence Joint Workings continuesto beaccomplished through oneoff and connectionsmetering. developed indefect classification,plantrating,publiclighting scale through jointpurchasing. Additionally, jointmanualswere optimisation, reductionsininventory returns andeconomiesof procurement andlogisticareasthrough inventory holding consistent approach across thetwo companies; andinour corrective andpreventive maintenance areasto ensurea quality, reducecostandconstructiontimeonsite; inour network assets; insubstationdesignto improve safety and for monitoring, analysingandassessingtheconditionofour monitoring whichidentifiesappropriate methods andstrategies Key areasofprogress in2010/11 includedincondition It isscheduledfor completion in2014. the EPMsrollout andsustainedusethroughout thebusiness. which identifiedthesystems andprocesses required to support During theyear, we completed phase ofthisproject thefirst accessibility, transparency, consistency andquality. decision makingcapabilityby providing improved information EPM willimprove ourcorporate andbusiness performance enginewithdrilldownintelligent capability. reporting platform,and aconsolidated through reporting adatamodeland deliver asinglesource oftruthfor data,viaadatawarehouse, The aimofourPerformance Management(EPM)Program isto capabilities making decision Improving our ANNUAL REPORT 2010/11 58 REPORT ANNUAL ENERGEX

operational review responding to customer expectations

What we set out to achieve HOW WE PERFORMED

Continue to provide information and advocate information Achieved on energy efficiency initiatives Continue to promote energy efficiency through targeted programs for homes and businesses. Page 63

Continue customer attitude and behaviour tracking Achieved Consistently strong customer satisfaction levels with corporate reputation again rating near the top 10 per cent of utilities. Page 60

Execute the Auto Guaranteed Service Level (GSL) Project Achieved Project completed and delivered the changes required to fulfil amendments to the Queensland Electricity Industry Code. Page 62

Trial the Rewards Based Tariff (RBT) initiative in late 2011 Achieved In partnership with Ergon Energy, this year we commenced a two year trial into RBT to investigate the impact of theoretical electricity pricing structures. Page 66

What we want to achieve next year

• Establish additional Energy Conservation Communities within We strive to maintain open, the Ipswich Council area and further expansion within the honest and regular communication Moreton Bay and Sunshine Coast Council area • Establish an Energy Information Centre in conjunction with with our customers to ensure Ergon Energy to provide end users with quality information about Demand Management and Energy Conservation we proactively understand and • Continue tracking customer attitudes and behaviour respond to their energy-related • Continue trialling the Rewards Based Tariff (RBT) initiative in 2011/12 choices. • Establish systems and process changes required to comply with NECF legislative package from 1 July 2012 • Review existing network tariffs to align with the proposed Queensland Government tariff changes • Continue developing and implementing our Customer Service Standards

59 ENERGEX ANNUAL REPORT 2010/11 of answer of23seconds. answered over 1,400 LossofSupplycallswithanaverage speed Tropical Cyclone Yasi. Over aseven-day period,ENERGEX staff upon to assistinmanagingcallsfor ErgonEnergyinthewake of Immediately following theflood events, ENERGEX was called telephones andfood andwater to residents. worst affected areasproviding information, electricityto mobile We alsodeployed amobilecommunicationcentreacross the developed specifically for floodinformation. more than2,300ofourtwitter followers andanew webpage was Utilising socialmedia,we alsoprovided 270 twitter messagesto spots culminating in 4,874 media mentions throughout the period. Mail advertisements and 974 Australian Traffic Network radio to residents through more than 54 media releases, three Courier In addition to these calls we provided proactive communication average to beanswered. telephone callswithcustomers waiting lessthan20secondson Group received nearly180,000 emergencyandLossofSupply Over oftheseevents, thecourse theENERGEX Customer Contact through anarray ofmediums. we continuedto provide information to affected residents Throughout thedevastating 2011, weather effects ofJanuary S times duringtheearlierstagesofahighcallvolume event. The overall benefit to ourcustomers waiting would beshorter when calleduponduringstorms orlargescaleoutages. Group beingableto standby loginandwork staff from home continued triallingRemote Response whichwillseeContact improvement remainsafocus. TheCustomer ContactGroup While we continueto achieve these highstandards, ongoing 43,000 emergencycalls(2009/10: morethan 43,000). of supplycalls(2009/10: morethan436,000)and period). OurContactGroup received morethan563,000loss number within20seconds(excluding thefloodandstorm event We answered almost74 percentofcallsto ourgeneralenquiries telephone, email,letter andfax (2009/10: 897,954 enquiries). In total, we respondedto 1,136,777 customer enquiries via and customer careprovided to thecommunity. national successdemonstrates support thequality ofservice, the callcentreindustry. Ourfive-year consecutive state and The awards recogniseachievements ofthehighestlevel within the Year andQueenslandContactCentreChampion oftheYear. Association Awards, takingoutAustralian Teleprofessional of for itsaward attheAustralian Teleservices winningservice In July2010, ourCustomer ContactGroup was againrecognised Award service customer winning haring information emergencies in haring

G inourstrategicplays planning. asignificantpart Understanding whatourcustomers expect now andinthefuture perception thanthegeneralcommunity. ofourperformance who have haddirectcontactwithushave asignificantlyhigher 10 percentofutilities.Thegraphalsohighlightscustomers three years, withcorporate reputationagainratingnearthetop consistently strong customer satisfaction levels over thepast delivery. andservice Graph5demonstratesperformance our citizen’. Thisresearch assistsusto andimprove understand our community’s perception ofENERGEX actingasa‘goodcorporate to customersservice whohave directcontactwithusandthe customer satisfaction, perceptions regarding of ourdelivery We engageanindependentresearch company to assess remains high Customer satisfaction *  43%: Meanutilities 51%: Top 33%utilities 63%: Top 10% utilities the worldwide marketing research company, TNS)are: since2008.Ourcorporateperformance reputationbenchmarks (asdetermined by Graph 5compares incorporate ourperformance reputationandservice 0% 20% 40% 60% 80% 100% ra score withcustomers slightly,vary however itdoesindicate directcontactleadsto ahigherengagement used to derive resultsbetween corporate performance reputationandservice Note –Benchmarking appliesto corporate reputationindex only. Thequestions p h 5: COR Q12011 Q42010 Q32010 Q22010 Q12010 Q42009 Q32009 Q22009 Q12009 Q42008 Q32008 Q22008 Q12008 P Corporate Reputation ORATE RE PU TATION + ANNUAL REPORT 2010/11 60 REPORT ANNUAL ENERGEX S ERVICE Service Performance P ERFOR M ANCE RATING S

operational review 100 20 40 60 80 0 Q12008 Q22008 Q23008 Q24008 Q21009 Q22009 Q23009 Q42009 Q12010 Q22010 Q32010 Q42010 Q12011 Encouraging a customer-centric organisation More than 650 staff and contractors received an Excellence Award nomination in 2010 and a selection of representatives In 2010/11, our customercare program continued to focus on from each category attended the Inaugural Excellence Awards developing, encouraging and recognising excellent customer ceremony in May 2011. In total, 29 category finalists were service within ENERGEX. This year saw an increased emphasis recognised on the night with 17 awarded an Excellence Award. on contractor training sessions and customer service training for new apprentices with 429 contractors and 76 new apprentices A new Chairman’s Award was also launched at the event attending courses to better manage their daily interactions with for ‘recognition of consistent excellence and outstanding our customers and the South East Queensland community. demonstration of the ENERGEX values.’ This was awarded to Alex Blauw, Project Manager and winner of the Project Champion Feedback gathered from staff who attended these sessions Award for his outstanding professionalism, attention to detail and and from our customers has directly led to the development of assistance with a number of key zone substation projects. a ‘Damage to Property’ feedback card. These cards are used by field staff and contractors to provide customers with the process and contact details to rectify any damage that may have been inadvertently caused to customer property by ENERGEX during the course of our activities. The card overcomes difficulties Recognising our top suppliers advising customers if they are not present at the time of the damage and the issue cannot be discussed directly. The aim Providing a customer-focused service requires of this card is to ensure that adequate communication with the effective assistance from a range of external customer occurs following damage to property and will ultimately organisations that supply us with service. We rely lead to improved service. on around 400 contracted suppliers of goods and services to assist us with everything from building Recognising excellent customer service is a key focus of the and maintaining the network to supplying photocopy customercare program. During the year, we relaunched our paper. The ENERGEX Supplier Quality Awards have customercare recognition scheme rebranding it the ENERGEX been running for more than 20 years and recognise Excellence Awards. This new program expands on our original outstanding achievement by our suppliers and customercare awards program by introducing a number of new contractors. This year, eight suppliers received quality award categories recognising excellent staff performance in awards across the seven categories. the areas of safety, innovation, environment, projects and performance.

Guaranteeing good service The Queensland Electricity Industry Code (the Code) specifies Guaranteed Service Levels (GSLs) that we must provide in relation to the timeliness of service received by small customers. We are required to pay a financial rebate (detailed in Table 6) to the customer if the following service standards are not met: • keeping an appointment with a customer • not connecting or reconnecting electricity on time • wrongfully disconnecting a customer • failing to reconnect hot water supply within one business day (unless otherwise agreed) • failing to give at least two business days notice of a planned power interruption • interruption to electricity of more than 18 hours for urban or rural customers, or eight hours for CBD customers • more than 10 interruptions for CBD or urban customers, or more than 16 interruptions for rural customers, in one financial year.

ENERGEX Chairman John Dempsey presents the inaugural Chairman’s Award to Alex Blauw.

61 ENERGEX ANNUAL REPORT 2010/11 T the retailers. stakeholders with6,947 attributed to ENERGEX and130 to 365. Allclaimshave between therelevant beenapportioned 6,712 GSLclaimsandreliabilitymatters initiated theremaining displayed inTable related 6.Customer issuesgenerated service financial year, a total of7,077 GSLclaims were paidas error was causedby thedistributor orretailer. Inthe2010/11 administration oftheGSLprogram regardless ofwhether the The QCAdeemselectricitydistributors accountablefor the joint approach. while working closelywithErgonEnergyto ensureaconsistent changes required to fulfiltheseamendments to theCode delivered thepeople,process andinformation technology implementation ofthesechanges.Through thisproject, we was establishedinNovember 2009to ensurethetimely To meet thesenew requirements, anAuto GSLproject • • • implemented on1July2010: Authority (QCA),threemajorchangesto theCodewere In areview oftheGSLprogram by theQueenslandCompetition ab GSL GSL T Missed scheduled appointment Missed Hot water complaint – failure to attend Planned interruption – Business Wrongful disconnection Total Customer Service Failure to reconnect New connection Service Customer Total Reliability Reliability – interruption frequency Reliability – interruption duration Reliability EVENT GSL Planned interruption – Residential automatically. all seven typesofGSLswillbeidentifiedandpaid one monthtimelimitfor processing claims three monthtimelimitfor customers to lodgeaclaim l 6: G e 6: otal c SL l ai ms p ms s entity and category by aid 2009/10 T GSL CLAIMS PAID otal CLAIMS GSL 958 956 138 482 293 15 26 o 2 0 2 0 2 u rce

2010/11 6712 7077 1303 4264 365 183 404 365 240 317 expectations. Thisprogram isscheduledto continueinto 2012. economical andmeets ourcustomers’ andshareholders’ continue to ourcustomers serve inaway thatisconsistent, customer interactions. Customer standards willassistusto implementing, customer standards for morethan70identified Following aninitialreview, we have developed, andare • • • • StandardThe Customer Program Service identifies: how we provide them. we provide whatservices understand customers and andstaff based onourroleprovider, asadistributionservice andthatour We needto make aretherightservices surethatourservices our customers. holistic review oftheimpact ofthatchangeoninteractions with environment haschangedand,untilnow, therehasnot beena Retail Contestability (FRC) andthesaleofourretail arm,our everyday businessactivities.Sincetheintroduction ofFull Program to review ourinteractions withcustomers inour During theyear, we Standards establishedaCustomer Service Customer S Maintaining consistent customer communication 1 0 what isthecommercial impact ofthestandards. who isaccountablefor ofthoseservices delivery shouldbeperformed how theservices wewhat customer shouldbeperforming services 2009/10 ENERGEX RELATED ENERGEX 633 631 289 162 137 ervice S ervice 15 26 2 0 0 2 2 2010/11 tandards Program tandards 6582 6947 1301 4264 365 404 365 226 240 147 ANNUAL REPORT 2010/11 62 REPORT ANNUAL ENERGEX 0 0 2009/10 RETAILER RELATED RETAILER 325 325 193 131 0 0 0 1 0 0 0 0 2010/11 130 130 36 91 0 1 2 0 0 0 0 0

operational review Electrical Contractor Stakeholder Management Maintaining effective relationships with The Electrical Contractor Stakeholder Management team the retailers continued to maintain strong working relationships with We maintain regular contact with retailers, including quarterly electrical contractors; recognising the importance of an interstate visits to discuss the major issues being faced by efficient and coordinated approach to the delivery of customer ENERGEX and retailers, and periodic teleconferences to actively connection services. engage retailers in proposed process changes. A satisfaction survey is also conducted annually to gauge retailers’ opinions The existing Electrical Work Request (EWR) Web Portal, our key on our performance. In the latest survey, we scored 84 per cent online communication tool for electrical contractors, is now (2009/10: 66 per cent), well above our target satisfaction level widely used by electrical contractors. This offers an efficient way of 65 per cent. for electricians to manage their work and customer enquiries by providing them with the ability to track jobs online and receive Following the sale of the three retail arms of the New South updates on application and connection progress directly to Wales government’s state-owned electricity companies to Origin their mobile phones, emails and through web access. Since its and TRUenergy, which occurred on 1 March 2011, we worked implementation, more than 119,000 EWRs have been submitted with the impacted companies to ensure a seamless transition for via the web portal by electrical contractors. any South East Queensland-based retailers and customers.

During the year, almost 88 per cent of EWRs were submitted Origin and AGL continue to be the largest electricity retailers electronically and 12 per cent submitted via fax. operating in our distribution area, with approximately 62 per cent (up from 57 per cent in 2009/10 due in part to the New Workload in connections continues to grow rapidly, with the South Wales purchase) and 25 per cent (down from 29 per cent number of EWRs received increasing from the monthly average in 2009/10) of customers respectively. TRUenergy is the next of 9,481 in 2010 to an average of more than 13,000 in 2011. largest retailer with approximately six per cent of customers. This is largely due to the increased uptake of solar photovoltaic Customer transfer activity remains high although there has been installations (see page 83 for more information). a slight drop off from January 2011. During the January floods, communication of power restoration On 1 February 2011, new credit support provisions were enacted arrangements with electrical contractors was vital to ensure in the form of a guideline issued by the QCA. The guideline customers were re-energised as quickly and as safely as outlines when we may request credit support from a retailer possible. In conjunction with the Master Electricians Australia, which is dependent on the network charges payable by the we added instructions to our website for electrical contractors, retailer and the retailer’s credit rating and payment history. detailing what processes needed to be followed to get supply The guideline replaces the provisions that existed in the restored to flood-affected residents. This was done to streamline Standard Coordination Agreement between ENERGEX and efficiencies during the flood crisis and subsequent recovery retailers. Although the guideline differs from the previous SCA phase. In normal circumstances, we also require a request from provisions, it does align with the methodology that will be applied the customer’s retailer for reconnections, but this was bypassed nationally under the National Energy Customer Framework (see due to the extraordinary circumstances. page 66 for more information).

Providing energy efficient advice Encouraging off-peak use During the floods, we were regularly asked by our Connecting hot water systems to off-peak tariffs, where customers for information about retaining the electricity is provided for limited hours per day at a discounted services of a qualified electrician. rate, is an excellent way to reduce a customer’s power bill while assisting us to better manage our peak electricity load. However, We coordinated with the Master Electricians a declining customer base for connections of hot water systems Australia (MEA) to advise customers through the to an off-peak tariff meant only four per cent of new hot water media and during our onsite work about the best installations were utilising the off-peak connection. way to retain an electrician’s service. In addition, we informed the MEA of any multiple disconnections During the year, a project was formed to raise customer in one area so they could arrange to have electricians awareness of off-peak tariffs through an advertising campaign, available for customers in need of services. Finally, participation in the Brisbane Home Show and the offering of a a recommended fee of $200 was negotiated with $100 rebate for hot water systems that connect to off-peak. the MEA members for a mandatory basic inspection service to flood affected customers.

By coordinating with the MEA, we were able to assist customers with a seamless reconnection process.

63 ENERGEX ANNUAL REPORT 2010/11 In addition, industry engagement was carried out with hot water manufacturers, electricians and plumbers, training authorities and our field staff to engender their support for off-peak connections. Early indications suggest since the start of this program in September 2010 there has been a positive increase in customer connections to the off-peak tariff (April 2011: 5.8 per cent). Promoting energy conservation and demand management in the home As part of our energy conservation and demand management program, we have been working at the grass roots level with households, community groups, local councils and the State Government to promote awareness and practical cost-effective solutions to energy conservation and demand management in the home.

Through initiatives such as the ‘Cool Change’ and ‘Energy Conservation Communities’ programs, we have actively engaged with more than 5,000 households and various community stakeholders in Brisbane, Gold Coast, Redlands, Sunshine Coast and Moreton Bay Council areas to deliver a package of services and products that are helping combat peak demand on the electricity network and promote the more sustainable use of energy.

Services and products offered currently include the installation of demand management technology on air-conditioners and pool filtration systems in the home enabling these appliances to be cycled. In addition, rebates have also been offered to assist households in converting their pools and greenhouse efficient hot water systems to off-peak tariffs, helping households not only combat peak demand but receive cheaper power when operating these appliances.

Participation in these residential programs is voluntary and based on individual household circumstances. Next year, we hope to expand our residential energy conservation and demand management programs into new communities in Ipswich and the Moreton Bay area to improve utilisation on critical parts of the We have actively engaged more than 5,000 our network. households to deliver energy efficiency and peak demand initiatives including installation of demand management technology on air-conditioners. In addition to working with households, we have been working with local councils, community groups and schools in promoting understanding and awareness of energy conservation and demand management in the community. Schools and community groups have also benefited from the program directly with nearly $180,000 worth of grants being made available through local energy conservation community benefit funds.

As we continue to work with industry and governments in developing new solutions to demand management and energy conservation, it is expected that active resident participation and community engagement will continue to expand, building on the success established in 2010/11. operational review

ENERGEX ANNUAL REPORT 2010/11 64 Encouraging businesses to conserve energy Responding to regulatory and market forces Our Commercial and Industrial Initiative involves working with We have identified a range of important regulatory and market business consumers to offer financial incentives to undertake changes that will impact on our customers within the next two to Energy Conservation and Demand Management (EC&DM) based three years. projects to reduce peak demand on our network. National market developments The initiative aims to identify the most cost-effective technology solutions, commercial models, and develop and demonstrate We are actively contributing to the continued development of the expertise to proactively implement these solutions. regulatory framework. We have strong engagement with policy and regulatory agencies on a range of issues including the Retail We directly engage potential consumers for the program Tariff Review, the development of the National Energy Customer including approved suppliers of EC&DM services. Options Framework (NECF), consultation on the Regulatory Investment typically include energy efficient lighting, heating, ventilation and Test for Distribution (RIT-D) and in the merits review application cooling; distributed generation including customer generation, on the gamma decision in response to the Australian Energy cogeneration and tri-generation; fuel switching, load shifting and Regulator’s (AER) final determination. load curtailment. Retail Tariff review During the past year, contracts with consumers to secure 26MW of peak load reduction have been entered into with feasibility In May 2011, Queensland’s Minister for Energy and Water studies commenced at more than 44 other sites and in excess Utilities, The Hon. Stephen Robertson, announced changes to of 60 additional consumers being made aware of the initiative. the retail tariff structure in Queensland. These changes will see the existing residential flat rate tariff (Tariff 11) replaced with alternate structures that provide customers with incentives to manage their usage and cost.

We are reviewing existing network tariffs to align with the proposed changes and will be working closely with the Queensland Government, the Queensland Competition Authority (QCA) and our industry partners on this tariff reform.

NECF represents the most significant change for us in our interactions with customers, retailers, regulators and market institutions since the introduction of Full Retail Competition in 2007.

65 ENERGEX ANNUAL REPORT 2010/11 initiatives andgovernment policy. tariff peak demand.Theselearningswillfeed into shapingfuture inreducing oftheeffectivenessour understanding ofsuchtariffs inrespondingtoconsumers new pricingstructures anddevelop towards ofthisnature,highlightthechallengesfaced by tariffs ofcustomeran understanding acceptanceandbehaviour The Rewards BasedTariffs initiative aimsto assistusingaining reward incentives. encouraged to respondto thesetheoretical trialpricesthrough on thetrial’stheoretical are electricityprices.Consumers statements thatprovide feedback based ontheirperformance are billedby receive retailers, ratherconsumers performance demand days. Thetrialdoesnot changetheway consumers specificallytargeting high demand (capacitybased)tariff, a dynamicpeakpriceandtime-of-useprice),maximum (incorporating throughout tariff thetrialincludingatimevarying arebeingtestedlow priceperiods.Threetypesoftariffs usageintoperiods andoffer incentives discretionary to shift consider how to limittheirelectricityconsumption duringpeak underinvestigationThe tariffs to encourageusers carefully depending onthetimeofday andpeakperiods. respond to, andbenefitfrom, electricitypricesthatdiffer whether volunteers across thestate arewillingandableto Cairns, Toowoomba andBrisbane.Thistrialseeksto identify approximately inselected 3,500consumers suburbsthroughout two financial (2010/11years and2011/12) andinvolves electricity pricingstructures.Thetrialisbeingcarriedouto Rewards BasedTariffs (RBT)to trialtheimpact oftheoretical withErgonEnergy,In partnership thisyear we begantrialsinto Trialling rewards tariffs based ver compliance by 1July2012. including electricalcontractors andconsumergroups to ensure changes. We willalsobeengagingwithrelevant stakeholders systemrequirements andprocess andensuringthenecessary We arenow focusing ontheapplicationofournew regulatory Queensland from 1July2012. the NECFlegislative package isexpected to take effectin The majorityofthenew obligationsarisingfrom regulatory consumerprotections.of energy-specific retailers anddistributors thatsupplythemandincludesarange for therelationshipbetween energycustomers andtheenergy The focus oftheNECFisonproviding framework aregulatory energy distributionsector into asingleset ofnationalrules. obligations)for theretailcommunity service energymarket and frameworksregulatory (excluding retail priceregulationand Energy, theNECFinvolves theharmonisationofstate-based Established following discussionsby theMinisterial Councilon the introduction ofFull Retail Competition (FRC) in2007. customers, retailers, regulators andmarket institutionssince the mostsignificantchange for usinourinteractions with The NationalEnergyCustomer Framework (NECF)represents National EnergyThe Customer Framework ANNUAL REPORT 2010/11 66 REPORT ANNUAL ENERGEX

operational review engaging our community

What we set out to achieve HOW WE PERFORMED

Improve our Community Regard Index (CRI) score from 2009 Achieved Achieved a CRI score of 86 per cent, an improvement of 10.68 per cent from 2009. Page 70

Support the community through our 2010/11 sponsorship program Achieved Continued to provide around $1.35 million in funding and support to South East Queensland communities. Page 71

Complete the trial of new stakeholder engagement database and Achieved assess its effectiveness Completed trialling of our SUGAR database program with additional training required prior to its organisation-wide implementation. Page 69

Update our Community Consultation Manual Achieved Updates to the manual included a community engagement policy, a standard Terms of Reference document for the establishment of community reference groups, and the redefining of our community engagement processes for major projects. Page 69

Launch the new ENERGEX website Achieved Redesigned and relaunched website in May 2011 to provide greater avenues for information sharing across the site. Page 68

What we want to achieve next year

• Continue supporting the community through our 2011/12 We continue to consult, inform community partnership program focusing on local community and engage with our local initiatives, safety, education, and sustainability • Commission the London Benchmarking Group Australia New communities to maintain a Zealand to review our community partnership portfolio. The Group boasts 52 members and provides approaches and strong link between ENERGEX valuations for a range of community contributions and an international standard for measuring and benchmarking and the South East Queensland corporate community investment community. • Continue monitoring and updating our stakeholder management strategy to reflect changing business requirements • Continue trialling our new Community Benefits Fund which focuses on investing in the neighbouring communities which may be impacted by specific major projects • Maintain our commitment to transparent corporate reporting through the CRI initiative

67 ENERGEX ANNUAL REPORT 2010/11 weather andflooding. 20 percentoftheserelatingto safety duringthissummer’swild In addition,nearly500mediareleaseswere distributed with ofmorethan200capitalworksadvertising projects. to theirelectricitysupplyviaflyers, stakeholder letters and We continuedto keep thecommunity informed ofkey upgrades safety and maintenance, network Communicating upgrades customer’s experience andengagement. ideas generationandfeedback –alldesignedto enhancethe This two-way dialogueprovides aplatform for discussions, • • • • • Key benefitsofthenew site include: using BrouseAloud. forreaders visuallyimpaired and canbelistened users) to the site usesassistive technology compatibility (suchasscreen Web Content Accessibility Guidelines,Version 2.0,Level AA, information sharingacross thesite. Inadherenceto W3C and relaunchedinMay 2011 to provide greater avenues for Our website (www.energex.com.au) was alsoredesigned networking channelsincludingFacebook, Twitter andYouTube. discussion forum. We engagewiththecommunitythrough social including Whirlpool,aleadingAustralian internet andtechnology channels andarenow actively involved inonlineforums expandedThis year we oursocialcommunication further channels communication our Expanding our localcommunitieshasbeenakey focus in2010/11. Identifying theoptimumtools andprocesses for engagingwith Working in ourcommunities lightning tracker. new weather centrefeaturing localweather information and ability to register for ENERGEX updates andalerts messages social sharingtools to helpthecommunityspreadour links to connectwithoursocialnetworking channels current electricityusage energy demandindicator showing SouthEastQueensland’s

involved from anearlystageandcommongoalswere achieved. and organisedgroups to were ensurethatallaffected parties representatives, localcouncils, other infrastructureproviders, We alsoengagedother key stakeholders includingelected in revegetation andlandscapedesigns. negotiating thespecificlocationofpower polesandalso assisted Communities hadinput into thedesignprocess, for example, adequately informed. several majorinfrastructureprojects to ensurethe publicis distributed morethan26typesofcommunicationrelatingto 141 community, stakeholder andlandowner meetings; and This year alone,weinmorethan10 participated activities; our infrastructureprogram inlinewithcommunityneeds. ofourcommitmentto delivering arepart Our consultationefforts (CID) process. major projects undertheCommunityInfrastructureDesignation activities across SouthEastQueensland,inlinewithour We arecontinuingto ramp upourcommunityconsultation infrastructure Consulting major on program inlinewithcommunityneeds. commitment to delivering ourinfrastructure ofour arepart Our consultationefforts ANNUAL REPORT 2010/11 68 REPORT ANNUAL ENERGEX

operational review TABLE 7: 2010/11 major consultation projects

Project Consultation activities Project stage

Abermain to Lockrose • Stakeholder briefings (completed) • CID submitted under the Sustainable Planning Act, 110kV single circuit • Community information days (2 x November 2009, 2009 in May 2011 2 x August 2010) • Public feedback periods • Meetings with landowners (ongoing)

Loganlea to Jimboomba • Stakeholder briefings completed • CID submitted under the Sustainable Planning Act, • Community information days (May 2009 and 2009 in September 2010 March 2010) • Public feedback periods • Meetings with landowners (ongoing)

Mudgeeraba to Tugun • Stakeholder briefings (ongoing) • CID process discontinued 110kV double circuit • Community information days (March 2008, • Project/future network requirement for the area are May 2008 and April 2010) under review • Public feedback periods • Meetings with landowners (ongoing) • Established and engaged with community reference group

SunCoast Power Project • Stakeholder briefings • This project was designated under the Sustainable • Community information days (March 2008, Planning Act, 2009 in April 2011 May 2008 and April 2010) • The project is now in the design phase • Public feedback periods • Meetings with landowners • Established and engaged with community reference group

Sunrise to Peregian • Stakeholder briefings (ongoing) • Preliminary consultation activities undertaken • Meetings with local community and environmental • Corridor Selection Report developed groups (ongoing) • Work will now begin on developing the Draft Initial • Landowner meetings (ongoing) Assessment Report • Meetings held and working relationships formed with other government agencies

SunSouth Power Project • Stakeholder briefings (ongoing) • Draft of the Corridor Selection Report 110kV double circuit • Community information day (May 2011) • Draft of the Environmental Impact Statement (EIS) • Meetings with landowners (ongoing)

Our Community Consultation Manual was reviewed during Initial trials, involving 52 ENERGEX staff, to implement a new the year to ensure it reflects current community engagement stakeholder engagement database were reviewed in early 2011. trends. Updates to the manual included producing a community This new database enables users across the organisation to engagement policy to ensure a consistent approach to record and access data including discussions, outcomes and consultation throughout the business, establishing a standard feedback from any engagement on an ongoing basis. The review Terms of Reference document for the establishment of focused on the usability of the database across the organisation community reference groups, and the redefining of our with results suggesting the need for greater staff training prior to community engagement processes for major projects. its organisation-wide implementation.

Focusing on our stakeholder relationships This year we also continued our ENERGEX Community Consultation Committee (ECCC) bringing together During the year, our Stakeholder Management Strategy was representatives of local government, industry, planners, updated to reflect a more diverse approach to stakeholder state government and social justice organisations. The ECCC engagement. Through this update, we have identified enables a platform for discussion and provides on-going advice opportunities for shared assets and knowledge across to the company on current community issues, concerns and stakeholder organisations and new tools for engaging expectations, taking on board the range of opinions, needs and stakeholders. expectations. In addition, the committee oversees and approves the Community Powerline Enhancement Program (see page 57 As illustrated in Table 7 and Table 8, a range of engagement for more information). tools were used throughout the year to ensure stakeholders are regularly engaged.

69 ENERGEX ANNUAL REPORT 2010/11 The development andmaintenance ofrelationshipswithourrangestakeholders isanessentialactivityandonethatenablescommongoalsto beachieved. monitor improvements throughout theorganisation. from allareasofthebusinesswhowork hard to recommendand and Responsibility Working Group comprising representatives practices canlargelybeattributed to theCorporate Sustainability our CRIresults.Thisprogress incorporate responsibility workplace management,we were ableto substantiallyimprove responsibility, community, environment, marketplace and and systems to recogniseandmanagekey areasof corporate Through significantimprovement inourpolicies,directions Kingdom basedorganisation,BusinessintheCommunity. submission isassessedby aninternational, independentUnited engagement andhave reliablebaselinedata.OurCRI to companies thatfrequently demonstrate stakeholder This scoreplacesusinthesilver whichisawarded category improvement of10.68 percentfrom theprevious year. This year we achieved aCRIscoreof86percent,an InitiativeGlobal Reporting (GRI). strategy –theCorporate Responsibility Index (CRI)andthe corporate inlinewiththebusiness responsibilityperformance Currently, we usetwo programs to measure andimprove our responsible socially Being T ab Media Our employees and Customers community, including environmental groups stakeholders Community Large customers Suppliers and contractors Powerlink generators, anddistributor electricity transmission Electricity retailers Electricity customers Business RegulatorsandAER, Energy –Water QCA, Ombudsman Queensland and Governmentcouncils departments Shareholding Ministers Government stakeholders STAKE l Stae 8: H OLDERS k eho l engage der m 2010/11ent

Media briefings; meet-and-greet days; media releases/alerts; interviews. days; interviews. media releases/alerts; Media meet-and-greet briefings; TeamShare and division group days; weekly group meetings. intranet; internet social media ‘Yammer’; emails; divisional includingupdates open to the topical presentations surveys; workshops; entire organisation; andforums; other communications via consultants; managers, supervisors and leaders’ including article group newsletters; newsletters Connections Regular updates including daily ‘Bulletin Board’ email; CEO updates; Committee. call centre and verbalConsultative ENERGEX Community conversations; and surveys feedback forms; consultations; forums and face-to-face meetings, website/social sponsorships; letters; media tools; presentations; brochures andadvertisements; flyers, sheets; fact newsletters, Community communications. written meetings; changesverbal andworkshops; Network briefings; and industry Awards. Quality development; Suppliercontract andworkshops Meetings; letters; briefings; joint planning issues, network and communications. and communications regarding written planningVerbal, and face-to-face surveys. satisfaction teleconferences; visits; interstate quarterly letters; policies, agreements, meetings; written Briefings; meetings and providing responses. written forums, attending face-to-face engaged Actively with the presenting atAER publicand consultants its Provided andsubmissions ongoing to reporting the onQCA relevant issues. Committee. Consultative ENERGEX Community at various levels ofand each organisation; verballetters communication; Information days; Memoranda meetings andof Understanding; briefings keyincluding issues meetings with the Chairman and CEO. 2015/16; regular andbriefings reports, on updates performance quarterly Intentof Statement Corporate 2010/11 andPlan Corporate 2010/11 – KEY MET KEY * (Business intheCommunityadministers theprogram) YEAR 2011 2009 2008 H ODS OF ENGAGEMENT DURING 2010/11 DURING ENGAGEMENT OF ODS ANNUAL REPORT 2010/11 70 REPORT ANNUAL ENERGEX CRI SCORE CRI

58.58 75.32 86*

operational review Supporting the community GRAPH 6: Sponsorship activities for 2010/11 BY CATEGORY Throughout 2010/11, our sponsorship program continued to provide funding and support to South East Queensland communities with an investment of approximately $1.35 million. Our sponsorship policy was reviewed in 2010 and updated to reflect our commitment to sustainability.

We focus our investments towards targeted initiatives around local communities, safety, education and environment/energy efficiency, as listed in Table 9. The distribution of our funds to each area is demonstrated in Graph 6. Safety

The policy is closely monitored by our Sponsorship Committee Environment (SEF) led by our Chief Executive Officer and consisting of senior Education managers from across the business. The committee meets every second month to discuss key sponsorship proposals and Community monitors existing sponsorships and budgets to ensure their effectiveness. Graph 6 provides a snapshot of the distribution of our sponsorship funds within the key sponsorship areas in 2010/11. We continue to encourage our hubs and operational staff in different regions of South East Queensland to assist with sponsorship of local community groups and charitable In response to our increasing focus on promoting sustainable organisations. Some of these have included the Make a Wish living, we launched our newest community partnership initiative Foundation, Sunshine Coast Health Foundation, St Johns in March 2011, the ENERGEX Environment and Sustainability Ambulance and the Ipswich Hospital Foundation. Fund. Funded through the sale of our scrap metal and other materials, South East Queensland community groups can apply for a grant from an allocated $150,000 per year. The first round of grants was released in March and totalled $50,000. This was ENERGEX staff donate to the Premier’s awarded to five community groups flood appeal • Corinda State High School • Maroochy Waterwatch During the year, ENERGEX and our staff donated $151,676 towards the Premier’s Flood Relief Appeal. • SEQ Catchments Of the total donation, our staff donated $75,838 • Moreton Bay Koala Rescue from their own households which was then matched • Kumbartcho Festival. dollar for dollar by ENERGEX. As an organisation, we were very proud to present this donation on behalf of The next round of submissions for the fund, worth a total of our staff, many of whom were personally affected by $100,000, will be awarded in October 2011. the flood crisis.

71 ENERGEX ANNUAL REPORT 2010/11 Table 9outlines ourkey morethan$5,000. worth sponsorships T ab Trust Lord Mayor’s Community INITIATIVES COMMUNITY LOCAL Ipswich Ipswich Festival Queensland SIDS andsupporting KIDS Dingo Creek – Festival St St Vincent De Paul 2010 Brisbane EKKA Royal Queensland Show (Give Me 5 for Kids) Foundation Sunshine Health Coast FoundationThe Starlight l 9: S e 9: p on

s or s hi p activitie SAFETY skin cancer awareness and funds to fight DaySunSmart – raising Queensland Council: Cancer Rural Fire Service Rescue Rescue Service Sunshine Helicopter Coast Volunteer Marine Rescue State Emergency State Service 2010/11s for EDUCATION (CEDA) forums (CEDA) Australia of Development Economic the for Committee at attendance students’ school high sponsoring – program Futures Bright ENERGEX ENERGEX Playasaurus Place Queensland Museum – Technology of Queensland University Association Queensland Arboriculture ENVIRONMENT EFFICIENCY/ ENERGY SEQ Catchments activity days activity ENERGEX Junior Landcare Awards Premier’s Sustainability Lord Mayor’s Awards Business (Bremer River Forum) International River Foundation ANNUAL REPORT 2010/11 72 REPORT ANNUAL ENERGEX AND COMMUNITIES AND CONSERVATION ENERGY Cleveland School State Birkdale School State Primary School Primary ofStar the Sea Catholic Buderim MountainSchool State Branch Noosa/Sunshine Coast RSPCA Mountain School Creek State

operational review Supporting energy efficient ideas Supporting our future leaders

In support of our energy conservation community (ECC) program, Education is one of our key support areas and we have see page 64, we have provided more than $125,000 in funding developed a close affiliation with the Queensland University of for sustainability projects commissioned by local schools and Technology (QUT). community groups within the Redlands and Sunshine Coast areas. Last year, we established a three-year $25,000 scholarship for The ECC program, which is a joint venture between ENERGEX, electrical engineering students. In addition to the scholarship the Queensland Government’s Office of Clean Energy and itself, we also offer paid vacation employment to the recipient to the relevant local Council, was established to encourage assist in their work experience requirements. residents to help the environment and minimise electricity consumption in periods of peak demand. We also provide support to the Monique Cramer Memorial Fund. The fund supports an annual award for a female student Energy efficiency was a key criteria for the funding with studying engineering at the Queensland University of Technology – successful projects including new kitchen appliances, heat the Monique Cramer Memorial Award. reduction window tinting, lighting and sound equipment and solar powered lighting installation. In 2010, we began donating to the Low Income Support Scheme operating within QUT’s Built Environment and Engineering Faculty. This scheme provides assistance to low income students via text book vouchers and a textbook loan scheme.

Case study Attending university can be an expensive experience. Queensland SunSmart Day is an annual event hosted by To assist with these costs, we are supporting QUT’s Cancer Council Queensland to encourage all Queenslanders Built Environment and Engineering Faculty’s Low to get involved in raising funds and awareness for the fight Income Support Scheme which is providing textbook against skin cancer. In 2010, the event was held on Friday loans and vouchers to low income students. Since 18 November ahead of National Skin Cancer Action Week. its inception in 2009, more than 100 students have ENERGEX has been the event’s major sponsor since it began benefited from the scheme. in 2009. The first Queensland SunSmart Day raised more Being from a low income background means than $30,000 for Cancer Council Queensland’s work in skin everything (mostly financially related) becomes hard cancer research, prevention and early detection programs for you. You have to find a way to pay for those much and patient support services. needed expensive text books; and for most of us Over 200 supporters hosted an activity on Queensland there is no other solution to this than begging longer SunSmart Day 2010. These included child care centres, hours at work to earn a little more just to help cover schools, businesses, and community groups. The highest these expensive costs… Thanks to the text book loan fundraising school was Amberley District State School who scheme, it helps us with the load of worrying about received a $1,000 cheque from ENERGEX to use towards paying for those expensive text books, freeing us SunSmart initiatives. from those long hours we could’ve been spending at work and concentrate more on our studies. As part of the initiative, Cancer Council Queensland delivered 11 SunSmart community talks to ENERGEX We really appreciate this much needed help. staff at their workplaces around the Brisbane region in 2nd Year Electrical Engineering Student November 2010.

73 ENERGEX ANNUAL REPORT 2010/11 Educating the community As part of our Community Speakers Program, our industry Through the success of our Community Speakers Program, experts present on a range of electricity-related topics to we are continuing to strengthen our presence in the local school children and community groups. community.

We have ENERGEX industry experts who present to a range of audiences from school children and community groups to businesses and local councils on numerous subjects including: the history of electricity and changes to the industry, electrical safety, energy efficiency, renewable energy, work in the community, ENERGEX and the environment, safetree, ENERGEX helicopter patrols and careers in the electricity industry.

Our approach to educating customers about the dangers of fallen powerlines during storms through use of real storm footage continued during the year. This campaign, which highlights the ‘real dangers’ of summer storms and fallen powerlines, was awarded the 2010 Australian Community Awards private sector category recognising emergency management initiatives that help to build safer communities across Australia. Its continued success to warn residents about the dangers of fallen powerlines is evident with newly-designed post campaign research in March 2011 indicating 79 per cent of South East Queensland residents are aware of the safety campaign and can demonstrate a clear recall of the campaign’s key messages.

In its second year, our peak demand education campaign continues to provide an excellent avenue for encouraging the community to help us reduce the demand on electricity during peak times with research showing 8 in 10 respondents aware of the concept of peak demand. This supports several targeted initiatives and trials to help us achieve a smarter, more sustainable network.

As well as our website, consultation and engagement activities, and targeted sponsorships, another key education tool used is our popular Switched On website for kids. More than 294,000 site visits have been recorded this year with registered members from all over South East Queensland receiving the e-newsletter. operational review

ENERGEX ANNUAL REPORT 2010/11 74 supporting our people

What we set out to achieve THIS YEAR HOW WE PERFORMED

Execute year one of our three-year Power to Perform program Achieved Successfully implemented first year of program. Page 78

Continue to invest in people leadership and training Achieved Continued to invest in a range of development programs including apprenticeships, para-professional cadetships, graduate development and staff development. Page 76

Continue to be an employer of choice Achieved Awarded the 2010 Minister’s Award for Excellence – Employers of Australian Apprentices. Page 77

Maintain a high level of employee motivation Achieved Achieved an Employee Motivation and Performance Index tally score of 65.8 (2009/10 65.87). Page 79

Our people are key to our What we want to achieve next year success. They are instrumental • Continue implementing our three-year Power to in our ability to serve and Perform program respond to our stakeholders, our • Finalise our Enterprise Bargaining Agreement 2011 • Continue implementing the ENERGEX Workforce customers and our regulators. Planning Framework

Building the workforce for the future We recognise flexible working arrangements deliver benefits to the organisation and our employees. We have policies in This year, we continued to deliver on our people strategy to place to facilitate home-based work, job share, and part time build a sustainable, adaptable and engaged workforce. This employment. Within our workforce, 3.5 per cent of our staff are will ensure we have the people, skills, culture and performance employed part time (2009/10: 3.5 per cent). required to deliver our business objectives now and in the future. To ensure we have the right workforce balance and skills, We are a significant employer in the South East Queensland we have developed a whole of ENERGEX Workforce Planning region, employing 3,892 people as at 30 June 2011 Framework. This allows us to analyse workforce need and (2010: 3,849). While our workforce is diverse, the majority resource availability in terms of numbers and skill requirements of our employees are employed in the areas of administrative/ across the business and to connect separate strategic workforce clerical, professional managerial and technical serviceperson initiatives under a single umbrella. (see Table 10 for complete listings) and across 31 sites throughout South East Queensland. In 2011/12, the focus will be on analysing the workforce gaps and risks and developing strategies to position ENERGEX to ‘live This year we recruited 283 new staff (2009/10: 240) with almost within our means’ for the remainder of the current AER period one third of these apprentices. This reflects the need to expand and to prepare for the next. our skill and knowledge base to keep pace with our customers’ lifestyle aspirations and changing environment.

75 ENERGEX ANNUAL REPORT 2010/11 rooms dueto befinalised inSeptember 2011. completed inJune 2011 andanew buildingto replaceflooded repaired withcivilandelectrical works to improve the poleyard facility to 50percent.Damageto thefacility is currentlybeing 2011 whichreducedcapacityattheRocklea technical training These successeswere reacheddespite flooddamage in early platform, andgrowing external revenue. costs through initiatives suchasEsiLearn,ouronline training Simultaneously, we have beenworking to drive down ourdirect bysupported government fundingfor apprenticetraining. continued ourfocus onhighquality internal trainingdeliveries 9001, ISO1400 andAS4801. Over thepastthreeyears, we have EsiTrain isalsocovered byofISO theENERGEX certification line withtheAustralian Quality Training Framework (AQTF). and rescuetraining.EsiTrain arenationallyaccredited courses in powerlines, underground cablesandsubstationsincludingsafety training required to work onlow andhighvoltage overhead EsiTrain, whichprovides thetradeandpost-tradetechnical We own andoperate a Registered Training Organisation(RTO), knowledge andexperience. These programs assistto develop ouremployees’ skills, cadetships, graduate development development. andstaff programs includingapprenticeships, para-professional In 2010/11, we continuedto invest inarangeofdevelopment employees’Developing capabilities our Note –Headcountincludesallpermanentandtemporary, andcasualemployees full-time,part-time asat30June2011 T ab Casual Trainee/Cadets Technical Serviceperson Supervisor Managerial Professional TOTAL EMPLOYEES Systems Operator Systems Power Workers Para-professionals Contract Executive Advisors Design Systems Electrical Apprentice Administrative/Clerical E C mployment l n e 10: Staff um ategory ber e s by mpl oy m category ent

E 2009/10 mployees para-professional roles across theorganisation. helps to buildcapabilityintheseemployees to fill future to gainanAdvanced DiplomaofElectricalEngineering,which and on-the-jobtraining,providing withTAFE participants training due to graduate thisfinancial year. Cadetships combinestudy para-professional cadetship programs running withtwo programs and cablejointers (2009/10: 338apprentices).We have six trades: electricalfitter mechanics, overhead linespersons We currentlyhave 367apprenticesemployed inthefollowing (2009/10: 33graduates). the businessprogram, andfour inthefinanceprogram intheengineerdevelopment22 participants program, four in and mentoring from oursenioremployees. Therearecurrently receive development personal of ourbusiness.Allparticipants applying theirstudiesandalsolearningaboutdifferent facets Graduates areableto rotate through relevant departments, engineering, businessandfinanceuniversity graduates. Our graduate programs aredesignedto attractrecent 136,691 hours). was givenof trainingdelivery) through EsiTrain (2009/10: This year morethan115,536 (ameasure studentcontacthours 3,849 1018 338 186 332 596 337 728 147 88 11 67 1 E AS at AS E mployees ANNUAL REPORT 2010/11 76 REPORT ANNUAL ENERGEX J nd 2011 une

3,892 640 188 335 692 967 149 367 378

93 11 72 0

operational review Participants will graduate from the program with a Certificate Case study II in Skills for Work and Training in early July 2011. A new program being piloted is ENERGEX’s Positive Power During the training, participants will be given the opportunity to Mob Program that has been developed by ENERGEX in apply for the mid-year intake of Apprentice Linespersons with conjunction with the Department of Employment, Economic ENERGEX. On completion of the pilot program, the 18 week Development and Innovation – Indigenous Initiatives course will be reviewed and if deemed successful will be part of Division, the Queensland Council of Unions and the Electrical our ongoing apprenticeship recruitment process. Trades Union of Australia, to provide opportunities for Indigenous Australians seeking electrical apprenticeships. The program was completed successfully in June 2011, with six participants commencing as Apprentice Linespersons. A further This year, 16 Aboriginal and Torres Strait Islander people three have commenced in Power Worker roles with ENERGEX. have commenced this pre-employment training program that Other participants achieved career outcomes with other aims to provide them with the skills necessary to gain and employers including one as an apprentice carpenter and another complete a linesperson apprenticeship with ENERGEX. gaining a traineeship in the mining industry.

The program consists of an 18-week course of theoretical An award winning apprenticeship program and practical training provided by a community organisation called The Spot Community Services and the Metropolitan The Federal Minister’s Awards for Excellence (MAE) is an annual South Institute of TAFE. The course will provide participants event that recognises and rewards organisations and individuals with exposure to ENERGEX’s workplace culture, provide who make an outstanding contribution towards the training of tuition in numeracy and literacy skills and will equip program Australian apprentices. participants to pass the apprenticeship entrance exam.

Other topics of study include, but are not limited to, resume training, interviewing skills, financial management skills, learner’s permit training and goal setting skills.

In 2010/11, 16 Aboriginal and Torres Strait Islander people took part our inaugural Positive Power Mob Program.

77 ENERGEX ANNUAL REPORT 2010/11 After receiving the ‘runners up’ award in both 2008 and 2009, ENERGEX was awarded the 2010 Minister’s Award for Excellence – Employers of Australian Apprentices. The applications were Power to perform evaluated on their ability to demonstrate excellent standards of training and support for employees in the workplace, as well as Power to Perform is ultimately about improving the processes and programs that were initiated by businesses our performance through our people. It is a key to provide positive outcomes for both the employer and component of our business platform and will help us Australian apprentices. The award stands testament to our highly to continue to build a performance-aware workforce. successful apprenticeship program. An improved workforce means that we are better able to achieve our objectives and targets and continue The Honourable Teresa Gambaro MP, Federal Member for to provide a safe and reliable electricity supply for Brisbane sent us a congratulatory letter commending the our community. remarkable achievement. “ENERGEX now offers one of the country’s most sought after apprenticeships,” wrote Ms Gambaro. Building effective leaders Powering performance Our leadership development programs continue to evolve and gain momentum in the business. Over the past year, Power to Perform – our performance management framework – 507 training spaces were filled on ENERGEX leadership continues to encourage a performance focused workforce development programs. with the skills, productivity and flexibility to deliver strong business results. All leadership programs continue to embed our values and leadership capabilities and have received outstanding feedback The program is designed to: from both participants and suppliers throughout 2011. • clarify performance objectives and link these with This year a program for new and aspiring leaders and organisational business plans individual coaching for members of the senior leadership • facilitate feedback through appraisal of individuals against team was introduced. Continuation of the successful Executive achievement of these objectives Development Program, run in partnership with Mt Eliza • recognise and reward performance. (Melbourne University Business School) has also been a key focus. This occurs through setting performance objectives, completing mid and final year reviews, and undertaking performance pay determinations.

In its first implementation year, Power to Perform has increased the company’s focus on performance with our leaders and employees working collaboratively according to agreed standards towards a common goal.

The new framework has facilitated uplifts in performance by individuals and the business by providing employees with the guidance, coaching and feedback they need to develop their skills and perform to the best of their ability. operational review

ENERGEX ANNUAL REPORT 2010/11 78 Creating equal employment opportunities Equal Employment Opportunity (EEO) is a key focus in the Active Travel Committee energy industry. Our EEO Policy and strategy demonstrates The Active Travel Committee is a group of ENERGEX our commitment and continual action to ensure our workplace staff who have volunteered to help promote a is free of discrimination and harassment. All employees and wider range of environmentally friendly and healthy potential employees enjoy equal access to opportunities within transport options across ENERGEX. This initiative the company based on their individual merit. aims at improving the health and well being of We track diversity in our workplace by measuring the gender our community through our staff. The Committee balance and people from minority groups employed1. We ask promotes walking, running and cycling to work as all new employees to complete an Equal Employment Census an alternative to driving and campaigns to improve in line with requirements of the Equal Employment Opportunity public transport options for staff. During the in Public Employment Act 1992. Provision of this information is transition to Newstead, the Active Travel Committee at the employee’s discretion, so collection of this information assisted staff with planning their new journey is limited to those employee’s who elect to participate in the through ensuring that staff were kept up to date census. However, in an industry which has traditionally been with transport developments. dominated by males, in 2010/11 our ratio of female to male employees is slightly above the industry median at 1:3.8 as at 30 June 2011.

In addition to a complaint handling system, which includes Listening to our staff both informal and formal procedures, we employ specialised Employee Contact Officers who are available to provide Results from the 2011 staff survey indicated our employees’ information to employees in their attempts to resolve EEO motivation levels remained stable with more than 3,100 staff matters informally. Employees may also access our Employee responding to our annual survey, representing a response rate Assistance Program (EAP) for confidential and professional of 79 per cent (2009/10: 85 per cent). support. The EAP provides assistance through short-term professional counselling and consulting for employees and Hinds Workforce Research use the Employee Motivation and members of their immediate families who face problems of a Performance Index (EMPI) to measure employee interest, personal, family-related or employment nature. satisfaction and commitment at work. The survey results indicated an overall tally score of 65.8 out of 100 (2009/10: Informing our people of their responsibilities 65.87), placing ENERGEX in the ‘Low High Performance Range’ of scores. We continue to implement an employee relations strategy that informs managers and employees of the requirements, As in the previous year, the results from the 2011 staff survey responsibilities and processes necessary for a professional will be used in RODA (Receive, Own, Discuss, Act) conversations. employee relations environment. Examples of its success The RODA workshops provide a forum for staff and managers include: to determine the required actions needed based on local level • ENERGEX Drug and Alcohol Policy – As part of our ENERGEX survey results and feedback. Union Collective Agreement (EUCA) 2008, parties agreed to Actions from the previous staff survey, which are continuing the joint development of the Management of Alcohol and Other into the coming year, included implementing Power to Perform, Drugs Standard. During the last two years, we have worked developing clear membership and expectations of the Senior collaboratively with the Unions to develop a policy that meets Leadership Team, continuing to invest in leadership development business and safety needs while also being supported by activities and introducing new internal communication tools. our employees • Corporate Property Strategy – We have developed a long term Throughout the year, employees are also able to voice their strategy to improve our property portfolio. To do this in an concerns or complaints through an independent disclosure effective way, we are involving employees and unions in the line operated by an external company and overseen by Internal development of individual projects including the successful Audit. While employees are encouraged to discuss issues with relocation of large numbers of staff to the new office building their supervisor, manager, executive general manager or Internal at Newstead Audit, the confidential disclosure line is available to report • Program of Work Improvement Project (PoW IP) – PoW IP is a suspected fraud and unethical or illegal matters. Its aim is to cross-divisional initiative targeted to achieve a more efficient enhance the existing fraud and compliance frameworks and and effective Program of Work (PoW) that continues to deliver support our Code of Conduct. safe, efficient and reliable energy to our customers. We were able to reach agreement with the Unions on some concerns around employment conditions through a Memorandum of Understanding to allow the project to progress uninterrupted.

1 For further information regarding our workforce profile please refer to our latest Sustainability Report at www.energex.com.au/about-us/corporate-reports

79 ENERGEX ANNUAL REPORT 2010/11 communication functionwithbestpractice. with ourinternal communication andto aligntheinternal to improveas important employees’ overall satisfaction levels of communication.Seven key areasoffocus have beenidentified for improvements to increase the relevance, value and timeliness were distinctpockets ofdissatisfaction andclearopportunities Despite thestrong overall satisfaction withcommunication,there were not beingmet.field staff below theAustralian average indicatingthatspecificneedsof line”audience) were typically results for (our“off well fieldstaff compared withother Australian organisations.However, the alonewould putENERGEXstaff into category ahigh-performance measures, thesatisfaction withcommunicationamongoffice for improvementand opportunities andchange.Onalmostall The auditfindingsidentifiedareasofcommunicationstrengths and tools. effectiveness ofexisting communicationprocesses, channels preferences andneeds,to review andmeasurethe We alsowanted to communication establishprofiles ofstaff internal communicationfunctionwas alignedwithbestpractice. communication andto develop recommendationsto ensureour satisfactioncommunication auditto withinternal assessstaff In 2010, we commissionedexternal outa consultantsto carry staff our with Communicating remain stableandinthe‘Low HighPerformance Range’for Australian companies. Results from our2011 survey indicate ouremployee staff motivation levels can support growthcan support into theseareas. content, itiscriticalthatwe have asolidintranet platform that 2010/11. Intheageofsocialnetworking andusergenerated focusIntranet modernisation was alsoanimportant areain message andtheneedsoftarget audiences. by directinginformation dependingonthepriorityof which isinitsinfancy, helpsto reduceexcessive communications segmentation, tailoringandclarityofmessages.Thenew system, templatesdesign system andsupporting to provide improved Another focus areawas theintroduction ofanew information employees andinmoreconsistent andcompelling ways. tools thatwillenablethemto communicate moredirectlywith management team asawhole,andonintroducing asuite ofnew has beenondeveloping acommunicationplanfor theexecutive The focus thisyear, interms communication, ofleadership 7. 6. 5. 4. 3. 2. 1. with bestpractice. communication andto aligntheinternal communication function improve employees’ overall satisfaction levels withourinternal Seven key areasoffocus have to beenidentifiedasimportant and theirrole inachieving it. Improve ofourbusinessstrategy understanding staff intranet modernisation technologyPursue innovation andupgrades,including Improve cross-divisional understanding and clarityacross allchannels andtools Improve audiencesegmentation,messagetailoring engagement communicationissues Addressto improve fieldstaff communication Develop targeted strategies leadership to support of messages to improve flow, timeliness,cutthrough andconsistency Ensure tighter governance around communicationpractices

ANNUAL REPORT 2010/11 80 REPORT ANNUAL ENERGEX

operational review delivering sustainable outcomes

What we set out to achieve THIS YEAR HOW WE PERFORMED

Deliver and implement the revised Carbon Management Plan Achieved We have exceeded our target with an overall decrease of 12 per cent. Page 87

Advocate embedded renewable energy sources including an Achieved expansion of our solar photovoltaic program Continued to facilitate these connections. Page 83

Continue environmental training sessions throughout ENERGEX Achieved Updated training course with 95 per cent of staff having completed the course. Page 83

Maintain certification of our Environmental Management System Achieved against the Australian New Zealand Standard Environmental Continue to maintain certification against ISO 14001. Page 84 Systems – Requirements with Guidance for Use (ISO 14001)

Continue to reduce greenhouse gas emissions against our Achieved 2006/07 benchmark level Achieved an overall decrease of 12 per cent on our 2006/07 baseline emissions. Page 87

This year, we continued to What we want to achieve next year promote energy conservation • Continue to reduce our carbon footprint by reducing our carbon emissions in line with the Queensland Government’s through targeted initiatives and five per cent reduction target trials, implemented strategies • Work with the Queensland Government and other industry professionals to develop a sustainable solution to meet to reduce our own environmental increased demand for solar PV installations • Continue work on our Corporate Property Strategy including footprint and worked with key gaining approval for key sustainable office designs bodies across South East • Continue implementing our Environment Strategy with particular focus on our offset strategies Queensland to progress in environmental best practice.

81 ENERGEX ANNUAL REPORT 2010/11 greenhouse gasemissions. gases. Refer to Table 11 on page88to ofour view asummary outactivitiesonourbehalfwhichdecreasegreenhouse carry This schemeallows theabatement providers certificate to other ecosystem services. providing wildlife habitat,increasedwater corridors, quality and These indigenousnative plants have theadditionalbenefitof • of $163,000: and airtravel carbonemissions,we purchased atatotal cost our carbonemissions.In2010/11, our2009/10 to offset fleet in 1996, we have planted almost300,000native treesto offset Since joiningtheAustralian Government’s GreenhouseChallenge emissions our Offsetting (page 15). indicators asset outintheStatement ofCorporate Intent Environment OperationalPlanwhichstates ourperformance Carbon ManagementPlan,Procurement Policy, andthe Corporate SustainabilityPolicy, Environmental Policy, Offsets The strategy by issupported ourEnvironment Policy, our • • • • • • • • all key environmental areas.Thestrategy focuses on: implemented to oversee andprovide strategic directionacross A new five-year Environment Strategy was developed and environmental management Delivering aconsistent approach to • • (5000t CO greenhouse friendlyabatement credits through Ecofund environmental communicationandtraining. systems compliance water, waste andenergymanagement pollution management cultural heritage biodiversity management sustainability our Environmental ManagementSystem Landcare (8,500tCO biosequestration through plantingofnative treeswithNoosa (6000t CO Run oftheRiver Hydroelectricity through Ecofund 2 2 -e) -e) 2 -e).

stakeholders andreducetheir carbonfootprint. vision to helporganisations achieve sustainableoutcomesfor all oftheirbusinessframeworkas aseriouspart andpromotes their are proud withacompany to thatembedssustainability partner reducing ourcarbondioxide emissions.Asanorganisation,we the amountofwaste thatwould goto otherwise landfilland has beenextended reducing to lengthpoles,further shorter poles andcross armsto sellasrecycled timber. Thisprocess Sustainability’ SupplierAward for theirwork inrecycling ourold Timber PtyLtdwas announced winnerofour‘Innovations in achievements Kennedy’s ofoursuppliers. ClassicAged Quality Awards, to recognisetheexceptional anopportunity This year marked ofourSupplier the20thAnniversary ENERGEX andthesupplier. initiatives thatwillresult insustainablebusinessbenefits to both tosuppliers develop businessmanagementdecisionsand We and collaborate proactively partners withourindustry activities areundertaken. indicators areprogressively implemented asprocurement ensuring thesustainabilitycriteria related to key performance requirements areincludedinallofourcontractswithsuppliers Corporate SustainabilityPolicy, environmental management optimising sustainability. Inaccordance withtheENERGEX and recycle, thereby improving endofusemanagementand of materials withaview to recover to identifyingopportunities We have adedicated team to examine the‘endto end’recovery • • • • procurement decisionmatrix.We consider: environmental, ethical andsocialconsiderationswithinour andconstruction.Toservices achieve this,we have established integrating sustainabilityinto ourprocurement ofgoods, the QueenslandState Procurement Policy, we areprogressively between environmental, ethical andvalue outcomes.Inlinewith Our procurement strategy focuses onensuringabalance procurement in towardsWorking sustainability the initialcost. includingendof usemanagement,ratherthanjust services value for money over thewhole-of-life ofthegoodsand compliance with legislative obligationsto employees the supplier’ssociallyresponsiblepracticesincluding manufacturing through improvedthe goodsandservices designor strategies to minimisetheenvironmental impacts of or theuseofrenewable resources products madefrom recycled orre-manufactured materials from lesspackaging, provision ofapackaging take-back, demand through considering the potential for reducedwaste strategies to avoid consumption andmanage unnecessary ANNUAL REPORT 2010/11 82 REPORT ANNUAL ENERGEX

operational review GRAPH 7: INSTALLED SOLAR PV CAPACITY

166

148

130

117

103 92 88 77 69 61 54 47 41 37 31 28 24 20 17 14 12 11 9 7 6 6 5 4 4 3 3 2 2 1 Installed Capacity (Megawatts) Jul 10 Jul Jul 09 Jul Feb11 Apr 11 Apr Apr 10 Apr Apr 09 Apr Oct 10 Oct Oct 09 Oct Oct 08 Oct Jan 11 Jan Jan 10 Jan Jan 09 Jan Jun 11 Jun Jun 10 Jun Jun 09 Jun Feb 10 Feb Feb 09 Feb Aug 10 Aug Aug 09 Aug Sep 10 Sep Sep 09 Sep Sep 08 Sep Nov 10 Nov Nov 09 Nov Nov 08 Nov Dec 10 Dec Dec 09 Dec Dec 08 Dec Mar 11 Mar Mar 10 Mar Mar 09 Mar May 11 May May 10 May May 09 May

Graph 7 represents the increase in energy from installed solar PV systems on our electricity network since September 2008.

Building environmental awareness among our people Requests from customers to The ENERGEX Environmental Awareness Training Course was connect and meter new solar updated this year and supplemented by an online format called EsiLearn. The course provides our employees with a better photovoltaic (PV) Power systems understanding of the environment and our responsibilities in the tripled to more than 70,000. field and office with 95 per cent of staff having completed the online training.

A group of enthusiastic staff also formed the Newstead Environment Awareness Team, aka the Green Team, to raise sustainability awareness in our new six star office building. Supporting embedded renewable energy sources This team was responsible for promoting innovative practices to reduce our footprint – in the workplace and home. From Over the last year, residents in South East Queensland continued promoting re-usable stationery, encouraging bin audits and to embrace the use of roof-top and small-scale solar photovoltaic recycling and sending useful information via emails, the Green (PV) power systems. The number of requests from customers Team looks at all levels and areas where action can be taken to to connect and meter new systems continued to rise almost protect the environment. exponentially with 2010/11 seeing the number of systems in use increase triple to more than 70,000, and 6,000 megawatt-hours This year we formalised the Corporate Responsibility Working of energy provided by rooftop solar PV systems. Group formed by representatives from all areas of the business to implement and monitor improvements in corporate We continued to facilitate these connections despite the huge responsibility, and the Sustainability Working Group to oversee increase in the number of applications. the sustainability framework and strategy. Our second Global Reporting Initiative (GRI) based Sustainability Report (for With the growth in the number, size and type of small-scale 2009/10) was published earlier this year. renewable energy sources continuing at an unprecedented rate, we continue to work actively with government, solar photovoltaic Environment is one of the Key Result Areas of our 2010/11 installers and clean energy organisations to address network Business Plan and its supporting initiatives include our Carbon and commercial challenges that come with the rapid growth in Management Plan, Corporate Sustainability Framework, the take-up of embedded generation. Our goal is to maintain a Environment Communication Plan and Climate Change. customer friendly connection process and recognised benefits for all energy customers.

83 ENERGEX ANNUAL REPORT 2010/11 we constructandoperate ourinfrastructure. ENERGEX iscommitted to continuallyimproving theways accordance withQueensland State Government policy. ataratiooffive trees offset for oneremovedevery in All treesthatwere removed oftheproject arebeing aspart • • • Prior to vegetation clearing: use for recreationalpurposes. existing powerline easementthathadsignificantpublic possums andbirds), ofan scenicamenityandforms part corridor for avariety ofwildlife (includingkoalas, gliders, The bushlandareaprovides ahabitatandmovement upgraded andfullyoperational. pose anelectricalsafety riskoncethenew powerline was bushland ontheMurrumbaDowns easementthatdidn’t project, ENERGEX committed to retaining any remaining to SouthPine110kV sub-transmission lineduplication To reducetheenvironmental impact oftheHays Inlet study Case breasted lorikeets andother species. hollow-dependent habitat for brush-tailedpossums,scaly- sugargliders, easement was retained asastagtreeto provide natural one ofthemostsignificanthollow-bearing treesonthe the easement passage for koalas moving from theriver through 10 koala refugepoles were installedto provide safe tail gliders possums, parrots/lorikeets/rosellas andfeather the lossofhabitatfor sugar/squirrel micro gliders, bats, 40 nestingboxes were installedto compensate for

• • • • This hasinvolved: operation. matters areincorporated into ourbusinessplanningand Plan involving arangeofinitiatives to ensureclimate adaptation We areworking withErgonEnergyonaNetwork Adaptation Adapting to climate change year withnoinfringement notices received in2010/11. The effectiveness ofthisstrategy was proven againthis incidents causedby providers. usorany ofourservice also ensureswe continueto reducetheriskofenvironmental with Guidancefor Use(ISO14001). TheEnvironment Strategy Zealand Standard Environmental Systems –Requirements againstthe2004 ofthe version Australian Newcertified Our Environmental ManagementSystem continuesto remain workplace the in environmentalresponsibilities our on Delivering the Commercial andIndustrialprogram. Communities,RewardsEnergy Conservation BasedTariffs and detailed Theseprograms on page64. includedCoolChange, anddemandmanagement programsenergy conservation as During 2010/11 we worked withkey stakeholders to deliver our Working with and government industry Working Group. in preparationfor thephasingoutofAdaptation ofnormalbusinessplanning change becomesapart modifying existing business processes to ensureclimate constrained economy on technologies thataremoreapplicableto acarbon tailoring research anddevelopment expenditure to focus processes including carboncostforecasts inasset life planning rainfall, humidityetc) inasset life planningprocesses use ofclimate changemodellingpredictions(temperature, ANNUAL REPORT 2010/11 84 REPORT ANNUAL ENERGEX

operational review Offsetting our new distribution assets Using energy efficiently When designing and constructing our new electricity As part of our Strategic Energy Management Plan (SEMP), distribution assets, vegetation clearance may be required to which is aligned to the Queensland Government ClimateSmart build and maintain the asset. During 2010/11 we adopted initiative, we continued to monitor and manage our energy several important pre-offset strategies in accordance with the consumption. Remote tracking and reporting of energy use Queensland Government’s offsetting objectives. These objectives across all ENERGEX corporate sites is received through the require greater consideration of route selection and design recording of electricity account data, electricity sub-meters solutions to minimise habitat disturbance, vegetation removal and building management system data. The data collected is a and offset areas required. pivotal tool in identifying potential energy reduction opportunities and cost savings. These strategies included: In 2010/11 the electricity used at our offices, hubs and depots • temporarily relocating marine vegetation then re-instating in Queensland was approximately 16,629,055 kilowatt hours it post construction in a marine area identified by the (kW.h), which represents a decrease of approximately 5.52 per Queensland Government’s Department of Primary Industry cent from 2009/10 and a 2.61 per cent reduction compared and Fisheries as being of very high conservation value to the 2005/06 base year. This decrease is an indicator of • establishing a non-standard clearing profile to protect a viable improved performance despite our staff population remaining native vegetation buffer and koala movement corridor. constant over the same period. This year we also committed to purchasing approximately 40 per cent Green Power for all of our In addition to offsetting our assets, we proactively sponsor and corporate sites. participate in the Community Sponsorship Program at the SEQ Water North Pine dam site. Through this program more than The reduction of our energy consumption has been assisted by 12 hectares of koala habitat has been planted to date with the the relocation of our head office to the new ‘Six Star Green Office majority of trees planted in late December 2010. Design, V2’ accredited building in late 2010. Rated by the Green Building Council of Australia, together with our key workplace Reducing our waste and water consumption initiatives already underway, this move will help us meet the We continued to implement several water efficiency initiatives Queensland Government’s target of a 20 per cent energy in accordance with our Water Efficiency Management Plan consumption reduction by 2015. (WEMP) approved by the Queensland Water Commission. This year we further reduced our water consumption by approximately 30 per cent. This figure, however, is only an approximation as inaccuracies with our Newstead corporate office meter meant ENERGEX’s new corporate headquarters at there was no water billing data available during the year. To Newstead has been awarded a 6 Star Green Star overcome this we have used one month’s worth of data from the rating by the Green Building Council of Australia Newstead Building Management System (BMS) as supplied by (GCA), the first of its kind to be registered in the landlord and applied assumption analysis to calculate the Queensland. One of the highest contributing factors remaining months estimated consumption. in the building receiving this award was the use of recycled materials, namely timber, to complete the In 2010/11 our total waste consumption was 3,658.05 tonnes. décor of the building. Featured throughout the six Of this 9.71 per cent was recycled including 290.55 tonnes of storey development is recycled spotted gum used for direct waste (predominately concrete, paper and cardboard) and wall and ceiling panelling. The recycled timber holds 33.16 tonnes of co-mingle waste (items marked with a recycling even greater significance to ENERGEX because it symbol including plastic, paper and aluminium cans). comes from recycled power poles.

We continued to recycle our waste products and Forming part of our relocation from the CBD to our decommissioned assets to raise money for environmental Newstead Headquarters, the furniture disposal partnerships in South East Queensland. In 2010/11 the program project was implemented to track and oversee the to recycle metal, cable, oil and timber raised more than $6.5 disposal of all furniture items to ensure optimisation million. Around 1800 tonnes of metal, 516,405 litres of oil and of future use. The furniture items included chairs, 15624 metres of timber were recycled (figures as at end of June pedestal drawers, filing cabinets, tables, shelves and 2011). We sponsored environmental projects including SEQ bins. In total 6,650 furniture items were identified. Catchments, Landcare Queensland and the ENERGEX Junior Of this, only 205 items were disposed to landfill; Landcare activity program (for further sponsorship activities refer 3,326 items were purchased at auction; 1,139 items to page 71). A new trial project for staff to recycle mobile phone combined were either redistributed to other sites batteries also began internally. or sold to staff and 9,600kg of scrap metal was recycled. The most positive and timely contribution to the community was the donation of 1,980 furniture items to charity. Feedback suggests these charity items were received with great gratitude and need by many West End community businesses post the January floods.

85 ENERGEX ANNUAL REPORT 2010/11 the installedcapacityofsolarPVsinSouthEastQueensland. Graph 8demonstrates theamountofenergysuppliedto thegridby solarPVsand GRA as such,therevised trendanalysispriorto 2008/09isunavailable Note –We developed ourcategories moreextensively inthepastthreeyears and vehicle capitalandoperatingbudgets. numbers, We alsoextended ourfleet pool vehicle programs to reduce tool oftradevehicle usageatallmajorlocations. have commencedandfocus onpooloperationsandreview of make progress ontheDecember2010 target of25percent introduction. Actions neededto lockinthecurrentpositionand schemeapproximatelyClimateSmart its 12monthsafter Government OwnedCorporations were brought into the December 2010 of15 percent.Thiswas agoodresultgiven average) inJune2011 target for againstaClimateSmart We achieved an18 percentreduction(asamonthrolling emissions. ofreducedcarbon thedelivery each vehicle to category support we continuedto purchase thehighestgreenrated vehicles in harnessing theinnovations ofheavy vehicle design.Thisyear distribution managementintroducing moredieselvehicles and we have improved theefficiencyofourfleet through weight We arecommitted to asustainablefleet and, over the years, fleet Improving our P H 8: ENERGEX GHG e GHG ENERGEX H 8: m i ss ion s s by o u (%)rce Other Stationary and transport fuels Electricity in building Natural gas/landfill Street lighting Network losses

demonstrated inGraph8. source ofourgreenhousegasemissions are The primary workplaces thataresafe andenvironmentally sustainable. These projects greenandconnected willdeliver smart, • • • • efficiencies. Someofthe key projects include: consolidating workplaces whileproviding greater environmental and replacementprojects thatwillreduceoperatingcostsby The CPSprogram includes a significantnumberofrenewal Australian EnergyRegulator. implemented over afive-year periodwithfundingapproved by the and constraints.Valued at$266million,thestrategy isbeing existing landavailability properties, andregionalplanning issues network growth, futurebusinessrequirements, capabilityof amajorreviewafter againstproposed portfolio ofourproperty byEndorsed ourBoard in2009,theCPSwas established position usfor thefuture. ofimprovementsthe delivery to to ourexisting portfolio property The Corporate Strategy Property (CPS)isaninitiative focused on Consolidating ourpremises 220 office-basedemployees. Mount Gravatt to provide accommodationfor approximately establishing aSouthernMetropolitan Office (SMO)at Upper Farm withofficeand warehouse facilities establishing acustom-designed DistributionCentreatEagle office and warehousing facilities significantly redeveloping ourGeebungDepot to expand its 450 office-basedemployees Nundah to provide accommodationfor approximately Metropolitan Office(NMO)in establishing theNorthern reduction inenergyconsumption by 2015. Queensland Government’s target ofa20percent strategies, itwillgreatlyassistusto achieve the water efficiencybenefitsand waste management savings. Through itsenergyefficiency features, estate, isagreatexample ofthesesustainable environmentally sustainablemaster planned positioned withintheTrade CoastCentral Our industrialDistributionCentrebuilding, encouraging energy, water andwaste reductions. that willreduceourenvironmental footprint by sustainable officeand workshop solutions A key strategy elementofourproperty isfinding ANNUAL REPORT 2010/11 86 REPORT ANNUAL ENERGEX

operational review Reducing our carbon footprint In July 2008, the National Greenhouse and Energy Reporting Act (2007) (NGER Act) established a national system for reporting Each year we measure our carbon footprint and use the data greenhouse gas emissions, energy consumption and production to implement our Carbon Management Plan. The Carbon by corporations. In February 2011, the Department of Climate Footprint Summary Report, shown in Table 11, calculates our Change released the NGERS data for 2009–10. The NGERS carbon dioxide emissions to establish a base line of current data relates to the total quantity of carbon dioxide released. environmental performance and guide appropriate targets and As a consequence, larger distributors such as ENERGEX tend strategies for the future. to rate higher under the NGERS than smaller distributors.

In 2009/10 our total carbon footprint was 1,475,475 tonnes of Although a significant driver for reporting greenhouse gas CO2-e. This represents an increase of approximately 0.1 per cent emissions is meeting our compliance requirements, we also in comparison to our 2008/09 emissions. We have however understand and are committed to sharing responsibility achieved an overall decrease of 12 per cent on our 2006/07 for reducing greenhouse gas emissions and improving the baseline emissions. sustainability of our operations.

These results compare favourably with regard to our target of a The Federal Government’s Carbon Tax scheme is to be five per cent reduction in greenhouse gas emissions by the end introduced in 2012. Excluding light fleet and the Varnsdorf of 2010. It also puts us on track to meet our future emissions assets, for the 2009/10 year ENERGEX had 15,954 tonnes reduction targets of 20 per cent by 2015, and 33 per cent CO2-e scope 1 emissions in total that would potentially count by 2020. towards the facility threshold of 25,000 t CO2-e that mandates participation in the scheme. It is therefore unlikely that ENERGEX ENERGEX’s Scope 1 emissions will substantially reduce in would be required to participate directly in the scheme. 2010/11 with the sale of the Varnsdorf assets. This will result in the removal of approximately 118,565 tonnes of carbon dioxide.

Greenhouse gas emissions

Total greenhouse gas emissions 2007–2010 (tonnes CO2-e)

Emission Source 2007/08 2008/09 2009/10

Scope 1 – Direct emissions 108,537 112,604 144,057

Scope 2 – Emissions 129,2161 1,338,264 1,315,254 associated with the use of electricity

Scope 3 – Indirect 51,403 22,833 16,164 emissions

87 ENERGEX ANNUAL REPORT 2010/11 (1) TAB SPARQ Emissions Solutions (2009/10) S Employee Taxi Travel Green Power Purchased Offsets Carbon Accredited Waste disposed SF6 from Switchgear Air refrigerants conditioner – ofDiesel production electricity Natural Gas and Gas*Landfill and steam – of production electricity –MobileLoad TransportHeavy Combustion Fleet (>4.5t) Employee Air Travel Street lighting Street Losses Network byused ENERGEX Electricity Scope Scope 1 – Direct emissions Sources Emissions s E ENERGEX’ Scope Scope 3 – emissions Indirect Scope 2 with associated –the use Emissions of electricity Reduction Reduction Measures Scope 1+2+3 Full fuel fueland cycle fortransport stationary Mobile Combustion –Mobile ‘OnCombustion Road’ Transport Fleet Plant Fuel Use

50 percentofSPARQ Solutions’emissionsareincludedasSPARQ Solutionsisjointlyowned by ENERGEX andErgon Energy L E 11: ENERGEX’s E E 11: ENERGEX’s ummary C nergy C nergy (1) F arbon F arbon ootprint oot p (2009/10)rint C onsumption 159,159,951 22,452,531 2,344,465 2,627,603 7,287,208 144,858 326,440 251,286 3,894 1,295 1,356 3494 3667 168 437 12 C U onsumption ANNUAL REPORT 2010/11 88 REPORT ANNUAL ENERGEX Tonnes nits GWh kWh kWh kWh N/A km km GJ GJ kg kg kL kL kL kL CO 2 - e ( tonnes 1,315,254 1,152,550 1,465,475 120,100 144,057 141,652 19,500 16,164 21,052 26,131 11,070 4,284 9,899 3,639 8,851 6,631 306 982 280 741 30 39 )

operational review additional corporate reporting

TABLE 12: CORPORATE ENTERTAINMENT AND HOSPITALITY Ministerial directions Events over $5,000 Date Total Cost $ During 2010/11, the shareholding Ministers gave the following written directions to the ENERGEX Limited Board: ENERGEX Newstead Building 16 Dec 2010 25,597 Official Opening • On 30 May 2011, in accordance with section 108(4) of the GOC Act, in relation to including statements in the 2011–12 Supplier Quality Awards function 01 Apr 2011 8,841 Statement of Corporate Intent, including that ENERGEX will ENERGEX Annual Excellence 06 May 2011 111,392 not seek to recover 2011-12 increases in revenue arising Awards (incorporating from the Australian Competition Tribunal’s determination on Customercare Awards) function 19 May 2011 in ACT File No 2 of 2010 2011 ENERGEX Apprentice of 24 Jun 2011 29,390 • On 19 June 2011, in accordance with section 115(1) of the the Year Awards function GOC Act, requiring ENERGEX not to make a cost pass-through application to the Australian Energy Regulator in respect TOTAL 175,220 of January 2011 flood impacts incurred in the 2010-11 financial year • ENERGEX has absorbed the financial impact associated with the flood pass through direction this year and will absorb the financial impact of the Gamma direction in future years. Directors have assessed that the corporation will continue to remain solvent following these directions.

Our financial results exceeded our expectations for 2010/11 and we now boast total assets in excess of $9.8 billion.

89 ENERGEX ANNUAL REPORT 2010/11 (11) (10) (9) (8) (7) (6) (5) (4) (3) (2) (1) Notes TAB depreciation adjusted (EBITDA) adjusted depreciation and and interest tax before Earnings and interest tax before Earnings Net profit Income tax Income equivalent tax tax income before profit Operating operating expenses Other Borrowing costs Impairment Return on total operating revenue (%) perDividends share (¢) Amortisation Depreciation Employee expenses Cost of sales Cost Total revenue ($M)and Profit Loss A Number of employees at year end Maximum Demand (MW) Information Statistical Weighted average shares on issue Earnings per share (¢) Ratios ($M)Dividends Number of shares onat issue year end Share Information plant Property, and equipment and intangibles ($M) Expenditure Capital Total assets Sheet ($M)Balance Return on (%)average total assets Capitalised interest Capitalised Dividends/Net profit (%)profit Dividends/Net Total shareholders' equity Total debt Return on average shareholders' (%)equity Current ratio (%) EBITDA coverinterest (times) Debt/(Debt + Equity) (%) (%)Debt/Equity

s at J 30 2007 amounts include continuing operations results only results operations continuing include 2007 amounts Full time equivalents Interest) + Capitalised Costs EBITDA/(Borrowing Liabilities Assets/Current = Ratio Current Current EBIT/Average Total and Assets of Closing Opening Equity Shareholders’ and of Closing Opening Profit/Average Net Revenue Profit/Total Net and inpaid year the same haveprovided that been for in dividends the year andprovided include also amounts represent shown Dividends as a liability recognised being the balance with havenetted, been and Liabilities Tax Deferred Assets and Impairment and Amortisation Depreciation for total Adjusted and consumables and materials charges of use system to Transmission refers of sales Cost L E 13: FINANCIA (3) (1) une (4) (8) L F summ year ive (9) (2) (10) (7) (5)

ary (6) 875,532,774 875,532,774 9,811.9 2,922.4 1,736.4 4,769.8 (294.3) (284.1) (218.6) (214.8) (390.7) 2011 3,835 3,835 4,687 163.2 985.4 912.3 626.0 234.7 110.6 331.7 187.8 (97.0) 13.5 26.8 21.4 80.0 62.0 (2.2) 27.6 2.8 8.5 6.8 0.0 875,532,773 875,532,774 4,094.2 1,026.4 8,671.1 1,467.9 2,574.9 (345.7) (236.0) (182.4) (212.1) (224.7) 2010 3,784 4,768 485.2 185.2 148.2 118.0 260.5 159.0 (75.3) 727.7 21.2 12.6 16.9 80.0 61.4 (3.8) (2.7) 17.3 3.0 5.8 7.6 875,532,773 875,532,773 1,336.2 2,293.1 8,011.0 3,872.5 (306.9) (212.5) (208.1) (232.2) (197.6) 2009 4,499 3,733 388.2 183.4 128.5 168.9 102.8 623.6 871.0 175.7 (47.2) 62.8 80.0 12.1 11.7 (4.5) 14.7 2.8 1.3 5.0 5.6 9.6 ANNUAL REPORT 2010/11 90 REPORT ANNUAL ENERGEX 875,532,773 875,532,773 3,344.9 1,403.0 2,315.1 7,400.5 (303.6) (196.2) (232.5) (215.9) (220.6) 2008 4,142 3,794 946.9 108.2 155.2 395.3 144.5 140.8 (58.3) 722.3 199.1 651.0 672.5 (20.9) (14.2) 16.1 10.0 59.1 3.2 3.2 5.2 5.3 6.6 960,348,120 960,348,120 875,532,773 2007 3,268.5 1,261.0 3,016.0 7,683.7 (205.9) (255.8) (200.0) (212.6) (169.1) 3,863 3,863 4,289 354.5 122.8 185.4 108.4 500.0 655.6 586.7 771.2 (23.2) (62.6) 407.2 12.8 52.0 (9.0) 57.1 3.3 3.3 4.8 5.0 (11) 9.7 9.7

operational review International travel expenditure International travel is undertaken for approved business purposes in accordance with the Government Owned Corporations Air Travel Policy. We also have a Travel Policy for overseas and domestic travel, consistent with public expectations of accountability. The Travel Policy is approved by the Board.

Summarised in Table 14 is the international travel expenditure costs incurred by the ENERGEX Group of companies for 2010/11.

Table 14: International Travel Expenditure 2010/11

REGION Country Purpose No. of visits Expenditure ($) Subtotal ($)

Pacific Rim New Zealand To attend the Field Services Management 1 1,151 NZ conference and lead a post conference workshop.

To witness investigations into the failure mode 6 9,676 of ring main units and to develop a long term solution.

To make a presentation at the Energy Market 1 1,006 11,833 Association of New Zealand (EMANZ) Annual Conference 2011. (Airfare and accommodation paid by EMANZ).

Asia South To visit Korea Electric Power Corporation 2 14,888 Korea, Hong (KEPCo) to assess overseas trends in Kong and distribution and automation. Singapore

Seoul, South To attend a training course on behalf of 3 30,929 45,817 Korea Powerlink for repairing 275kV underground cables.

Europe France, To attend the CIGRE Electricity Conference in 2 41,710 United Paris as ENERGEX’s representative and visit a Kingdom and number of UK Distribution utilities to discuss Sweden relevant issues.

Scotland, To participate in configuration and design 2 27,646 69,356 United workshops regarding the proposed ENERGEX Kingdom DMS solution and meet with GE product development team.

USA USA Site visits to utilities utilising Advanced Smart 2 42,931 Network Technologies (incl DMS) to gain an understanding of the drivers of field productivity.

Attendance at conference regarding Ventyx 1 16,474 59,405 product suite to ensure ENERGEX's long term strategies for FFA are incorporated into the future product developments.

TOTAL $186,411

91 ENERGEX ANNUAL REPORT 2010/11 index and glossary GLOSSARY AND INDEX ENERGEXENERGEX 9292 We operate under strict guidelines and measured programs ANNUAL ANNUAL REPORT REPORT 2010–2011 2010/11 to ensure we achieve our Program of Work in a sustainable way. glossary and abbreviations

Australian Energy Market Operator (AEMO): From 1 July 2009, Electricity Industry Code (EIC or the Code): Under the authority AEMO replaced NEMMCO with a broader national focus on of the Electricity Act 2004, the Regulator issued the code to delivering an array of electricity and gas market, operational, prescribe requirements relating to industry planning, reporting development and planning functions. These functions and service standards. incorporate management of the National Electricity Market (NEM) electricity grid system. End to end process: The end-to-end Program of Work process starts with planning and ends with delivery (in the plan/program/ Australian Energy Regulator (AER): From 1 July 2010, the deliver stages). Delivery may be through internal resources or an Australian Energy Regulator is responsible for our economic external contractor. regulation under the provisions of the National Electricity Rules (NER). Equal Employment Opportunity (EEO): Requires that all employees have equal access to employment opportunities, Capital Expenditure (CAPEX) Plan: A measure of how effectively employment decisions are made on the basis of the individual ENERGEX is completing the program that is identified in the merit and requirements of the role, and the workplace is Network Management Plan. managed to ensure absence of harassment.

Capital Program of Work (Capital PoW): Investment in Global Reporting Initiative (GRI): Sets a standard framework, new network infrastructure or improving existing network including principles and indicators, for companies to report on infrastructure. organisational activities encompassing economic, environmental and social performance. CO2-e: CO2-e is a measurement to express the relative effect to carbon dioxide a specific amount of greenhouse gases has. Government Owned Corporation (GOC): An entity created by a It is calculated by multiplying the amount of tonnes of the government to undertake commercial activities on behalf of an greenhouse gas by its global warming potential. owner government.

Corporate Responsibility Index (CRI): An index used to measure Guaranteed Service Level (GSL): Defined by the Code distributors our corporate responsibility and sustainability performance and retailers must adhere to stipulations regarding the timing of across environment, community/social, workplace, marketplace reconnecting and disconnecting supply to the electricity network. and business conduct, and ethical governance. Initial Assessment Report (IAR) and Final Assessment Report: Customer: A party that consumes services or electricity and A detailed investigation of the potential environmental and social has a retail contract with a retailer and a connection contract impacts of a proposed project, to support the application for with a distributor. A customer can be categorised in the market Community Infrastructure Designation. as follows: Key Result Area (KRA): Key Result Areas are organisation Large Customer > 100MWh consumption per annum. wide objectives that measure business performance. There Small Customer < 100MWh consumption per annum. are currently eight KRAs covering Safety, People, Financial Performance, Network Performance, Operational Excellence, Demand (side) management: Activities which seek to influence Customers, Community and Environment. the patterns of energy consumption, including the amount and rate of energy used, the timing of energy use and the source and KPI: Key Performance Indicator. location of energy supply. kV: Kilovolts (1000 volts). Distributor: A party who manages an electricity distribution network (e.g. ENERGEX). Regulations define a distribution entity Lost Time Injury (LTI): Instances where permanent staff suffered as the party who provides customer connection services to a physical injury as a result of a safety incident, which resulted in a customer at an electrical installation or premise. The term those staff taking time off work. Distributor may also be used interchangeably with the term Network. A Distributor is also known as a ‘Network Service Lost Time Injury Frequency Rate (LTIFR): Calculated as the Provider’. number of lost time occurrences of injury or disease for every one million hours worked over a 12 month progressive period.

93 ENERGEX ANNUAL REPORT 2010/11 LV: Low voltage. Program of Work Improvement Program Project (PoW IP): An ENERGEX initiative that aims to improve the PoW Major event day: Is a statistically low probability event which is estimation process. calculated using network performance data from the previous five years. Queensland Competition Authority (QCA): An independent statutory authority charged with implementing competition policy Megavolt amperes (MV.A): The product of voltage and current and funding approval for electricity companies in Queensland. multiplied by one million. Funding approval from 1 July 2010 will be via the AER.

National Energy Customer Framework (NECF): Established Retailer: The party from which a consumer has contracted to following discussions by the Ministerial Council on Energy, the purchase electricity. NECF involves the harmonisation of state-based regulatory frameworks (excluding retail price regulation and community Sectionalising: Restoring power to one section of a feeder service obligations) for the retail energy market and energy (powerline) at a time after an interruption to isolate the cause distribution sector into a single set of national rules. of a fault.

National Electricity Market (NEM): A wholesale market for the Service Target Performance Incentive Scheme (STPIS): supply of electricity to retailers and end-users in Queensland, Introduced by the AER, STPIS is intended to encourage New South Wales, the Australian Capital Territory, Victoria, South distributors to maintain and improve service performance Australia and Tasmania. for customers and operates concurrently with our Minimum Service Standards (MSS) obligations focusing on unplanned National Electricity Market Management Company (NEMMCO): performance. The previous body which operated and administered the National Electricity Market (NEM). Since 1 July 2009, NEMMCO has been Smart meter: A general class of meter which will not only replaced by the Australian Energy Market Operator (AEMO). measure kilowatt hours but also ‘quality of supply’ functions. It is capable of being read remotely. National Meter Identifier (NMI): Identifies a customer’s electricity meter separately to all other meters. It is used when customers Social media: Media disseminated through social interaction transfer from one retailer to another. using various forms of technology and transforms people from content consumers into content producers. Forms can include, Network Management Plan (NMP): The plan is prepared but not limited to, internet forums, weblogs, social blogs, wikis, annually to explain how ENERGEX is managing the network podcasts, pictures, instant messaging and social media services to meet customer and shareholder aspirations. The NMP is a including FaceBook, YouTube, Twitter, MySpace and LinkedIn. requirement of the state government’s Electricity Industry Code (EIC or the Code). Statement of Corporate Intent (SCI): ENERGEX’s annual strategic planning document. Operational Expenditure (OPEX) Plan: A measure of how effectively ENERGEX is completing its maintenance program as System Average Interruption Duration Index (SAIDI): identified within the Network Management Plan. The average duration (in minutes) of the long duration (more than one minute) outages. Peak Demand: The maximum amount of electricity used at one time. Each day, electricity peaks in the early evening, as people System Average Interruption Frequency Index (SAIFI): start returning home and activity in the home starts. Once or The average number of long duration (more than one minute) twice a year, electricity peaks at summertime and winter. outages experienced by a customer over a period of time.

Program of Work (PoW): Taking plans for new network Zero Incident Process (ZIP): ENERGEX’s workplace safety investments and plans for ongoing network maintenance from awareness program that focuses on the ‘person’ component of the concept stage (design) through to delivery, ensuring the the Safety Culture Model. It gives participants an insight into the projects are delivered on time and within budget by achieving way their brain works, their thinking, their attitudes and how this best practice in the project management. drives their behaviour. It is designed to empower people to take control of their personal safety by becoming more effective within the systems they work in. ENERGEX uses ZIP under licence from Sentis Pty Ltd. GLOSSARY AND INDEX ENERGEX ANNUAL REPORT 2010/11 94 index

about us 5-7 employee, environmental awareness 83-84 apprentices, cadets, trainees 9, 76-77 employees, our people 75-80 asset base 54 energy conservation and demand management, education Australian Energy Regulator, funding 11-12 and our approach and programs 63-65 Board committees 25 Energy Conservation Communities see also energy conservation and demand management 64 Board of Directors 21-24 energy efficiency and conservation education73 Board structure 26, 32 Environmental Management System 81 bushfire safety 46, 57 environmental performance 81 Chairman’s report 19-20 equal employment opportunities and workforce diversity 79 Chief Executive Officer’s report 37-39 ethical business practice see also Code of Conduct 27 climate change response 84 executive management team 40-41 Code of Conduct 27 expenses see financial summary 11-12, 90 community electrical safety 46 financial summary 11-12, 90 Community Powerline Enhancement Program 57 fleet, our86 corporate entertainment and hospitality 89 greenhouse gas emissions see environmental performance corporate governance, compliance 13-14, 25-29 and climate change response 87-88 corporate office9, 85 Guaranteed Service Levels 61-62 corporate property strategy 9, 41, 79, 81, 86 history, our 5-7 corporate social responsibility 3, 9, 27 history see about us 5-7 customer and community engagement and education internal audit 27 see also stakeholder engagement 69-70 international travel 91 customer research 59-61 joint working 39, 41, 53, 58 customer satisfaction 60 key result areas 26, 32, 83 customer service 59 laws and regulations 31 dividends 90 major projects – Program of Works 53, 56, 68, 69 electric vehicles 52-62 Minimum Service Standards 10, 47-48 electricity demand and energy growth 73 National Energy Customer Framework 66 electricity industry structure 6 National Electricity Market 5-6, 20 employee engagement and communication 79-80 network investment 11-14, 47-50 employee satisfaction 79 network performance, reliability and quality of supply 47 employee training, development and leadership 76-78

95 ENERGEX ANNUAL REPORT 2010/11 network, profile of our5 organisational structure 32 procurement, sustainability 82 Program of Works 56 Program of Work Improvement Program (PoW IP) 56 purpose and vision, our 5 remuneration 31 renewable energy 83 revenue see financial summary 11-12 reward and recognition 78 risk management and compliance 29 safety performance measures 44 safety, health and wellbeing 43 Service Target Performance Incentive Scheme (STPIS) 49 sponsorships 71 solar photovoltaic (PV) power systems 83 stakeholder engagement and consultation 67 stakeholders, our see also stakeholder engagement and education 67 Statement of Corporate Intent 13 summer preparedness 57 suppliers 61 sustainability at ENERGEX 51, 82 values, our corporate 7 vegetation management 50 water and waste efficiency 85 workforce sustainability 75 GLOSSARY AND INDEX ENERGEX ANNUAL REPORT 2010/11 96 Printed on Monza Satin Recycled Printed Carbon Neutral and FSC Mixed Sources Certified Sources Carbon Neutral and FSC Mixed

ANNUAL REPORT 2010/11