18/19 ANNUAL REPORT ACKNOWLEDGEMENT TO COUNTRY
We acknowledge and pay our respect to We acknowledge Aboriginal and Torres Aboriginal and Torres Strait Islander peoples Strait Islander peoples continued cultural as the First Peoples of Australia. and spiritual connection to the seas and the lands on which we operate on. We We are privileged to share their lands, acknowledge their ancestors who have throughout 2.3 million square kilometres walked this land and travelled the seas and of regional and remote Western Australia their unique place in our nation’s historical, and Perth, where our administration centre cultural and linguistic history. is based, and we honour and pay respect to the past, present and emerging Traditional Horizon Power uses the term Aboriginal and Owners and Custodians of these lands. Torres Strait Islander (and Aboriginal on future references) instead of Indigenous. Therefore, within all Horizon Power documents the term Aboriginal, is inclusive of Torres Strait Islanders who live in Western Australia. 18/19 ANNUAL REPORT 3
ACKNOWLEDGEMENT STATEMENT TO COUNTRY OF COMPLIANCE
For year ended 30 June 2019
MINISTER FOR ENERGY HON BILL JOHNSTON MLA
In accordance with the Electricity Corporations Act 2005 (the Act), I have the pleasure in submitting for your information and presentation to Parliament, the 2018/19 Annual Report of the Regional Power Corporation, trading as Horizon Power.
The Annual Report has been prepared in accordance with provisions of the Act.
Yours sincerely
Peter Oates Deputy Chair
9 September 2019 Broome 18/19 ANNUAL REPORT 5
ACKNOWLEDGMENT TO COUNTRY 2 STATEMENT OF COMPLIANCE 3
OUR PERFORMANCE 01 ABOUT US 8 2018/19 HIGHLIGHTS 9 OUR CAPABILITIES 10 SERVICE AREA 11 MESSAGE FROM THE DEPUTY CHAIR 12 CHIEF EXECUTIVE OFFICER’S REPORT 14 OPERATIONAL PERFORMANCE REPORT 16 PROVIDING A SAFE AND RELIABLE SUPPLY OF ELECTRICITY 18 DELIVERING FOR OUR CUSTOMERS 24
OUR COMMUNITY 02 EMPOWERING OUR COMMUNITIES 30 CASE STUDY – MASTER METER PROJECT 32 OUR PEOPLE 33 CASE STUDY – FIELDREACH 36 ENVIRONMENT 37 CASE STUDY – MINIMISING OUR ENVIRONMENTAL IMPACT 40 HERITAGE AND NATIVE TITLE 41
DIRECTORS’ REPORT 03 DIRECTORS’ REPORT 42 GLOSSARY OF TERMS 56
18/19 ANNUAL REPORT 7 01
OUR PERFORMANCE 8 18/19 ANNUAL REPORT
ABOUT US
Horizon Power is Western Australia’s regional and remote power provider. We are passionate about what we do and strive to ensure our customers receive safe and reliable power to their homes, businesses and communities.
As the only vertically integrated utility in We manage a total of 38 systems delivering We are making significant investments in Australia, we operate across the full energy power to 47,702 customer connections developing our renewable energy capability, supply chain – generation, distribution and servicing more than 110,000 residents, incorporating rooftop solar and battery transmission, and retail services. communities and businesses. This includes orchestration and expertise. We are leading the North West Interconnected System technical trials and pilots exploring new and Our employees and their families live (NWIS) in the Pilbara; the connected network innovative ways of providing our customers in many of the regional and remote covering three interconnected systems in with more sustainable, affordable power and communities we service and support. Kununurra, Wyndham and Lake Argyle; and tailored energy solutions. Spanning 2.3 million square kilometres, 34 microgrids tailored to meet the unique we are responsible for the largest We operate under the Electricity Corporations needs of some of the most isolated and geographical catchment of any Act 2005. We are governed by a Board of remote communities in the world. Australian power provider. directors accountable to the Minister for These systems connect communities Energy, the Hon Bill Johnston MLA. outside of the south west of the State from Kalumburu in the north, to Wiluna in the east, Shark Bay in the west and Hopetoun in the south.
We service more than 110,000 residents, communities and businesses 18/19 ANNUAL REPORT 9
2018/19 HIGHLIGHTS
First WA Government $1.8B Trading Enterprise to partner with Supply In assets $560M Nation In revenue
Installed Commissioned a Second stage solar farm of the Onslow 101 and network Renewable Meters in battery in Energy Pilot Onslow launched 13 Remote Aboriginal communities
IFAP IFAP WA’s best Gold Safeway Safeway Television commercial Award Innovation at the Campaign Award Brief Perth Awards runner-up for our ‘Stay 10 Metres Away’ safety campaign
Tropical Cyclone Installed Co-funded rooftop Veronica power solar PV systems restored with 4 in Djarindjin and minimal disruption Standalone power Lombadina to customers systems on remote properties in Esperance 10 18/19 ANNUAL REPORT
OUR CAPABILITIES
401 47,70247,702 Employees 6 Customer connections - 39,038 residential and Regional service depots and one administrative 8,643 services in Perth business
8,430km 56,794 7.7 GWh Of overhead Distribution poles Of renewable and underground energy transmission 979 purchased from and distribution customers and Transmission poles lines returned to 871 the network Transmission towers in service
0.55 kg CO2-e / kWh carbon emissions sent out
993.26 GWh 3 Energy types – Electricity gas, renewable energy delivered (wind, solar and hydro) a year and diesel 18/19 ANNUAL REPORT 11
Kununurra
Djarindjin
1 SERVICE 8
Kalumburu AREA Broome Wyndham 2 Ardyaloon Lake Argyle Port Hedland 4 Beagle Bay Kimberley Derby Warmun Camballin/Looma 4 Fitzroy Crossing Halls Creek Bidyadanga Yungngora Onslow
Point Samson 3 Karratha South Hedland Cossack Marble Bar Roebourne Nullagine Exmouth Pilbara Coral Bay
Carnarvon Gascoyne Junction Gascoyne/Mid West
5 Denham Meekatharra Wiluna Boolardy (MRO) Cue Mt Magnet Sandstone Yalgoo Laverton Leonora Menzies
Offices Esperance/Goldfields Current supply areas Serviced by South West Norseman Interconnected Bentley System
Hopetoun
6 7
Esperance
Region Town Project Key Kimberley Kununurra Master Meter Project 1 Kimberley Broome Smart Sun Pilot 2 MyPower 4 Pilbara Onslow Onslow Power Project 3 Pilbara Port Hedland MyPower 4 Gascoyne/Mid West Carnarvon Carnarvon DER Trials 5 Esperance/Goldfields Esperance Standalone Power Systems 6 Esperance Power Project 7 Kimberley Djarindjin/Lombadina Solar Incentives Scheme 8 12 18/19 ANNUAL REPORT
MESSAGE FROM THE DEPUTY CHAIR
I am delighted to be reporting on another year of achievement for Horizon Power. Much has been accomplished over the past 12 months thanks to the contributions of my fellow Board members and dedicated employees.
The year has been a very rewarding and A lot of work has been undertaken during the Aboriginal Engagement challenging time and we have undergone a year to deliver safe and reliable power against At a Board level, we are committed to number of changes at the Board, Executive a rapidly changing energy landscape, which developing initiatives aimed at increasing and Ministerial level. In March, we appointed cannot be understated. Balanced against employment and economic opportunities our new Chief Executive Officer, Stephanie this work is affordability – reducing our costs for Aboriginal people and businesses in the Unwin. Stephanie has brought a wealth of through the uptake of distributed energy and communities in which we operate. We are experience to the business, along with a providing pricing solutions to government. focused on delivering these key initiatives and deep understanding of the energy sector. I developing our partnerships to expand on Customer and Community Support would like to thank Mike Houlahan, General our existing engagement model, and create Manager Commercial Services and Finance It is important to note some of the highlights more sustainable opportunities for Aboriginal for his stewardship as Acting CEO during the achieved throughout the year, including the customers. This ranges from solutions to recruitment process. On behalf of the Board, delivery of a number of initiatives aligned to improve the affordability of power for our I would like to congratulate our new Minister, our core business objectives. customers through to mutually beneficial the Hon Bill Johnston on his appointment We have led progress on tariff reform partnerships which will deliver jobs and to the Energy portfolio. We look forward to through MyPower, an innovative variable income to ensure sustainability. continuing to work with him on augmenting pricing product that realigns tariff structure the various initiatives we are undertaking to A key part of this was the successful and provides customers incentives to deliver safe and reliable power to residents completion of our master meter project, reduce peak usage. MyPower is a key part and businesses in regional and remote which delivers affordable electricity to of our strategy to provide customers with Western Australia. I also thank former remote Aboriginal communities. We worked fair and equitable access to electricity, Energy Minister, the Hon Ben Wyatt MLA, closely with customers in 13 remote create customer choice and increase the for his support of Horizon Power’s vision Aboriginal communities to transition each sustainable uptake of renewables. and strategy. resident to pre-payment meters rather An independent research report into than whole communities receiving one bill. I would like to acknowledge the commitment MyPower found that more than two-thirds of The installation of pre-payment meters and efforts of former Chairman Stephen vulnerable customers were financially better combined with the smart phone app now Edwell, who stepped down from the off under the pricing product, by smoothing provides customers with a more equitable role in May to lead the development and their energy costs during the year, ultimately way to pay for power, as well as ensuring implementation of the State Government’s helping them to save on their electricity bills eligible residents can access energy rebates Energy Transformation Strategy and by modifying their energy usage. Customer for the first time. Distributed Energy Resources Roadmap. feedback regarding the product has also During his time as Chairman, Stephen I am immensely proud of the fact that we been extremely positive, with close to three initiated the development of the new were the first Government entity to partner quarters saying they believe it is a fairer corporate strategy, which involved thorough with Supply Nation as part of the State way to pay for electricity and 84 per cent consultation throughout all levels of the Government’s Aboriginal Procurement Policy, indicating they will stay on the product. business. Stephen’s commitment and awarding our first contract under this Policy enthusiasm for this more equitable process in October to Port Hedland-based Barmelco has seen the new strategy receive significant Electrical Pty Ltd. The award was made to levels of support and engagement as a provide rostered relief staff to support the result and will no doubt translate to a very operations of the Marble Bar and Nullagine successful strategy with positive impacts to power stations from November 2018. regional communities when launched. 18/19 ANNUAL REPORT 13
On a personal note, I was pleased to Stage Two of the Onslow DER Project is Moving Forward participate, along with my fellow Board helping Horizon Power realise this future. I am confident that Horizon Power is already members and senior leaders in an intensive The construction and commissioning of a making significant progress on delivering cultural education program, which provided centralised solar farm, centralised energy initiatives that will ensure we are well placed insight into experiences of Aboriginal storage and customer-side DER products is to respond to, and meet the future needs of, peoples and was focused on demonstrating part of our aim to have up to 50 per cent of the our customers. leadership and responsibility. town’s energy supply coming from renewables. I would like to express my appreciation to my Renewable Energy We expect by 2020 to have a functioning fellow Board members for their time, efforts Distributed Energy Resources Management As part of our commitment to harnessing a and expertise they bring to overseeing System in Onslow, improves our ability renewable energy future for our customers Horizon Power’s activities. to integrate customer solar panels and we are examining sustainable energy batteries, and coordinate them with our This year we welcomed new directors solutions, particularly in towns where other assets connected to our networks, Gail Reynolds-Adamson and Sandra Di network limitations prohibit the installation to ensure the continued safe and reliable Bartolomeo. Gail and Sandra replaced of additional renewable energy. During the energy supply for all customers. outgoing directors Neil Thompson and past twelve months we progressed several Rosemary Wheatley, both of whom I thank initiatives focused on resolving the economic, The deployment of off-grid renewable for their commitment and contributions to technical and transition barriers to this future, energy systems in Esperance has provided Horizon Power. through the development of new technologies, a safer, more cost efficient and reliable capabilities and operating practices. These power supply to rural customers, through Our achievements during the past year are distributed energy resource management the replacement of poles and wires with a testament to the excellent work of our trials are exploring how best to manage standalone renewable energy solutions dynamic workforce. I would like to recognise systems with high penetration levels of comprising solar PV, batteries and back-up and thank all employees for their ongoing distributed energy resources (DER), including diesel generators. This solution is uniquely dedication to providing our customers with a feed-in-management systems, weather designed to be utility-ready and able to safe and reliable power supply at the lowest forecasting and demand side management. replace ageing infrastructure in remote sites. possible cost. We expect to decommission 54 kilometres Much of this work is supporting the State of ageing distributed network, resulting in Government’s Energy Transformation savings in operation and maintenance costs. Strategy to deliver a cleaner, affordable This is a win-win for Horizon Power and and more reliable electricity supply to our customers. our customers by reducing dependence on centralised fossil-fuelled generation We recognise that as part of the West through the uptake of DER such as rooftop Australian electricity industry, we play a Peter Oates solar and batteries. pivotal role in working towards a lower Deputy Chair carbon future through direct measures and In Carnarvon, we have been working closely facilitating customers’ access to renewable with customers through a series of trials, to energy opportunities. We continue to collect a broad range of data from a variety investigate new technologies to support of DER technologies including rooftop solar, a lower carbon future and are actively battery storage systems and inverters with developing renewable generation projects as remote monitoring and control devices. These well as supporting customers to make their technologies are enabling Horizon Power own decisions with respect to renewable to explore the most economically efficient generation. We will continue to monitor and way to design and manage microgrids with a consider the impact of climate change risks very high level of DER. Lessons learned in the on the business and to take positive steps to Carnarvon DER Trials are being used to de-risk reduce our carbon emissions. the deployment and management of DER in the Onslow project.
Our achievements during the past year are a testament to the excellent work of our dynamic workforce 14 18/19 ANNUAL REPORT
CHIEF EXECUTIVE OFFICER’S REPORT
I am pleased to present Safety Pole management strategy my first Chief Executive Enabling a safe workplace We have continued to enforce and refine This year we successfully completed the our pole management strategy through a Officer’s report for delivery of our Safety and Health Strategy disciplined approach to our pole inspection, Horizon Power. which began in 2014. reinforcement and replacement programs. Approximately 30 per cent of our pole Since joining the organisation in March Our lost-time injury frequency rating asset base was inspected in 2018/19. Pole 2019, I have had the opportunity to visit (LTIFR) target for the year was zero, and condemnation rates have decreased and each of our regional offices and meet with unfortunately we did not achieve this target, have now stabilised at less than one per cent the people responsible for servicing and finishing the year with an LTIFR of 1.3. While of poles inspected. While our unassisted pole supporting our customers, in some of the this consisted of ten notifiable incidents, we failure rate has continued to improve with the most remote communities in the world. believe every accident is preventable and our three year rolling average rate declining below safety leaders play a key role in championing the 1.0 in 10,000 target in the last quarter of I have been impressed by the knowledge, a safe workplace culture. Through our 2017/18, and has maintained a steady value, professionalism and dedication of all our learnings we must continue to strive for our sitting at 0.82 for the month of June 2019. employees in the delivery of safe and reliable target of zero LTIFR. power to our customers under what can at Customers times be challenging circumstances. This I was delighted with our achievements at Reliability included Tropical Cyclone Veronica in March, the annual IFAP Safeway Innovation Awards. which posed the biggest risk to the north-west This included our second consecutive IFAP While we met our regulatory targets this region in a decade. I extend my sincere thanks Gold Safeway Award for our safety and health year, only 29 of our 38 systems met our and appreciation to our employees who went management systems, and a first runner-up internal performing systems targets. The above and beyond to prepare and support for our mounted, retractable earth reel which difference in these two targets is how those communities affected, including our is being rolled out across our regions. the data is analysed. For the purpose of our regulatory reporting the combined crews who were quick to begin assessment of Safety awareness damage and restore power to customers. performance of all our systems is averaged Throughout the year we delivered a range out, resulting in an average interruption It also highlighted the effectiveness of of preventative community programs time of 178 minutes. However, our internal our four year Pilbara Underground Power across our regions. This included attending performance targets measure and report Project (PUPP), with 100 per cent of our agricultural shows, community events and on the performance of each of our systems customers who had converted to PUPP not other local forums to educate and raise individually. By setting more difficult experiencing any loss of power as a result of awareness of common and hidden electrical internal targets it allows us to target Cyclone Veronica. risks in homes, businesses and communities. systemic issues and redirect resources to Having grown up in the Pilbara, I am well In March, we launched a new safety provide a better customer experience in aware of the importance in ensuring the campaign Stay 10 metres Away, which future years. needs of our regions are at the forefront of demonstrated the dangers associated Factors such as lengthier outages due our decisions and strategy. Regional insights with fallen powerlines. This very effective to generation issues or weather events, play a particularly vital role in reminding us campaign was awarded WA’s best television affected the performance of some individual just how unique and different our customers’ commercial at the 2018 Campaign Brief systems with smaller customer populations. requirements can be from region to region. Perth Awards. This results in higher average interruption In reflecting on the year, central to the Investing in our assets times above their individual targets. Additionally, our ability to respond quickly to success of our operations has been our In August 2017, we enacted our Electricity our remote system faults due to the distance continued commitment in delivering on Network Safety Management System between resource centres also had an our underlying principles and values. (ENSMS) in accordance with revised impact on the results for some systems. This included initiatives that focused on regulation. We completed our first full year safety, our people, our customers and the of operation under our ENSMS and continue We are continuing to investigate communities we serve. to deliver a safe network and working opportunities such as alternative resourcing environment. Internal self-assessment strategies, remote sensing and control as system checks have shown good adoption of well as improved predictive failure mode new practices across the business, and this analysis, to mitigate this issue. was reflected in a recent audit of the system. 18/19 ANNUAL REPORT 15
Supporting inclusivity and diversity Our people are at the This year we have enacted a number of centre of our success, initiatives identified in our Disability Access and Inclusion Plan (DAIP) for 2019 - 2024. and maturing our This has included a new mobile app to organisational culture optimise customers’ ability to access and manage their bills from their home or mobile was a continued focus in a way that suits them. Refurbishments throughout the year have been made to our buildings to improve accessibility, and changes made to our Customer Service induction training. We renewed our commitment to our Supporting a renewable future We continued to enhance the skillset of Reconciliation Action Plan with the Board Distributed Energy Resources (DER) our employees, by offering a significant initiating the development of the plan, which technologies such as solar panels and number of development and secondment will be submitted to Reconciliation Australia. battery storage systems is an area where we opportunities throughout the business. Considerable engagement and consultation has occurred across the regions and have seen continued interest and demand Aboriginal employment from our customers. Our numerous energy communities to ensure the plan builds on our As an organisation which services a trials and pilots across regional and remote existing Aboriginal engagement, projects, significant proportion of Aboriginal Western Australia will continue to play an training and partnership initiatives. customers across our regions, we continued instrumental role in informing the business our commitment to offer direct employment Looking forward as to how we can effectively facilitate the opportunities to Aboriginal people. We deployment of off-grid and non-network Change is inevitable, and the changing currently have 18 Aboriginal employees solutions and technologies. landscape of the energy market will continue which represents 4.5 per cent of our employee to present both challenges and opportunities Making solar more accessible base. In addition, there was an increased for the business. In partnership with our focus on identifying and offering indirect A key step forward this year has been our customers and communities, we have the opportunities through supporting Aboriginal business-wide review of small-scale rooftop opportunity to shape the future landscape businesses, contractors and suppliers through solar hosting capacities for each of our 38 of energy generation in regional and remote our procurement policy for contractors. power systems. This review enabled a total Western Australia. of 10 megawatts of additional hosting Communities We must continue to foster a workplace capacity being made available across Investing in our communities culture which attracts and retains a number of regional towns including outstanding people, who bring with them a Karratha, Port Hedland, Broome, Derby, Our commitment to grass-roots community wealth of knowledge and expertise. Equally, Carnarvon and Esperance. partnerships were again a key focus in we must continue to push the boundaries of our regions. Our grassroots community new energy infrastructure and technology We also took the opportunity to update sponsorship program, which supports our Renewable Energy System Technical through our ongoing investment in research innovative and sustainable community and trials. Requirements for embedded generation. Our initiatives, continues to strengthen updated technical requirements align with communities by fostering a sense of local This is our opportunity to lead the way Energy Networks Australia’s first set of national pride and place. During 2018-19, we in delivering tailored, innovative and guidelines released in March 2019 which will partnered with 95 community organisations sustainable energy solutions, which ensure a consistent approach to embedded and provided more than $230,000 in funding. can offer our customers cost effective generation connections across the country. alternatives to traditional generation and Giving back Hosting capacity and the updated technical supply models. I am pleased that employees continued to requirements will come into effect at the embrace our volunteer leave program, which Working together, Horizon Power will be beginning of the next financial year. provides two days of paid volunteer leave an even greater place to work, setting the benchmark in our industry as an innovative People annually to all employees to volunteer their time to support community initiatives. leader, with strong values and engaged An engaging, diverse and skilled workforce people working together to deliver great Our people are at the centre of our success, Our volunteer leave program was recognised business outcomes. at the 2018 Department of Fire and and maturing our organisational culture was a continued focus throughout the year. Emergency Services’ Volunteer Employer In May 2019, we deployed a new Employee Recognition Awards, with our Mid West Experience and Engagement Survey. These depot winning a gold award for enabling results will be released early in the next employees to take volunteer leave to respond financial year, and will enable us to establish to emergency incidents or attend training. a new employee engagement benchmark by which to measure our future employee Stephanie Unwin engagement results. Chief Executive Officer 16 18/19 ANNUAL REPORT
OPERATIONAL Performance indicators Our performance against key financial and non-financial performance indicators PERFORMANCE and targets, as outlined in our Statement REPORT of Corporate Intent:
Table 1: Performance overview: critical business outcomes 2017/18 and 2018/19
Critical business outcomes Target Actual Target Actual Notes to For more performance performance achieved performance the table information result for result for result for see page 2018/19 2018/19 2017/18
SAFETY – MINIMISE THE RISK OF HARM
Employee safety Lost-time injury frequency rating 0.0 1.3 1.8 1 N/A
Public safety Total number of notifiable public N/A 10 N/A 6 2 N/A safety incidents Unassisted pole failure rate Number of unassisted pole failures divided 1.00 0.82 0.81 5 21 by 10,000 over a 12 month rolling average
VALUE – MAXIMISING LONG-TERM VALUE
Net Profit After Tax ($M) Profit for the year after income tax (Target represents latest budget as 33.1 35.9 111.9 4 55 approved by State Treasury) Cost management Unit cost to supply – unit cost (cents/kWh) (Target represents latest budget as 34.3 34.3 36.1 5 N/A approved by State Treasury) Return on assets (%) Earnings before interest and tax divided by average total assets 5.9 6.4 10.5 9 N/A (Target represents latest budget as approved by State Treasury)
COMMUNITY – BE A HIGH-PERFORMING BUSINESS
Customer satisfaction Survey rating (%) >70 87 80 7 N/A
Reliability Number of systems that meet reliability 33 29 36 7 18 performance standards System reliability and electricity delivery System Average Interruption Duration 290 178 83 7 18 Index (SAIDI) – average total length of outages in minutes over 12 months System Average Interruption Frequency Index (SAIFI) – average number of 6.6 1.7 1.1 7 18 interruptions over 12 months Project management Major project completion within ±5% 100 100 100 10 N/A of approved budget (%) 18/19 ANNUAL REPORT 17
Notes to the Performance overview table
1. Although we fell just short of our Lost- 3. Ten notifiable incidents were reported 4. Net profit after tax compared favourably time Injury Frequency Rate (LTIFR) target through the year. One to WorkSafe WA to budget primarily due to higher sales of zero lost time injuries, we did record and the remainder to Building to large enterprise customers, offset by a zero LTIFR for a three month period and Energy: higher operating costs associated with between January to March 2019. This higher vegetation maintenance activities • The incident reported to WorkSafe year’s target was an improvement on last and cyclone Veronica. WA was the lost time injury referred year’s frequency rate of 1.8. to above. 5. The higher operating costs were While the LTIFR is one of our safety and apportioned over higher sales volume • The nine notifiable incidents related health performance lagging indicators, resulting in the unit cost to supply to be to the electrical network and we are focused on leading indicators as on target. were reported in compliance with a strategy to reduce injury frequency. the Electricity (Network Safety) 6. The unassisted pole failure rate remained These leading indicators include visible Regulations 2015 (WA): steady. Additional information is safety and health, communication and provided on page 21. collaboration, workplace inspections - four faulty neutrals on the and encouraging a reporting culture electrical network 7. We exceeded our target for customer to manage hazards before they satisfaction and improved on last year’s - three minor fires on the networks in become incidents. performance. Although price still remains South Hedland and Onslow a concern for customers, it has had less This strategy contributed to a decline in - stubble fire caused by third party influence than compared to last year. our Total Recordable Injury Frequency interaction with the network in Rate over the same period from 9.0 to 3.9. 8. Our performing systems declined to Esperance, and 29, down from 36 last year. Additional 2. One work-related injury occurred in April - third party damage to high voltage information is provided on page 18. when an employee sustained a fractured underground cable in Coral Bay. hip. The number of days off required 9. Return on assets compares favourably to reporting of the incident to Worksafe WA. the target with higher profits. 10. The Roy Hill Connection Project and Phase One of the Onslow DER Project were completed in this financial year.
Our customer satisfaction rating for the year significantly increased and also improved on last year's performance 18 18/19 ANNUAL REPORT
PROVIDING A SAFE AND RELIABLE SUPPLY OF ELECTRICITY
We remain determined to meeting our objective of providing customers with a safe and reliable supply of electricity. Over the past 12 months we met our overall regulatory targets and continued to deliver our asset maintenance and works program, and worked closely with independent suppliers to ensure this will continue into the future.
Across our whole service area, our customers Performance highlights Challenges on average experienced 1.7 power We experienced one significant weather The development of cost-effective solutions interruptions for the year. This is well within event, Tropical Cyclone Veronica, which to provide safe and reliable supply across our performance target of 6.6 interruptions crossed the coast north of Karratha in March our extensive rural networks remains a (System Average Interruption Frequency 2019. The overall impact on our service to challenge. We are addressing this challenge Index – SAIFI). The average length of time customers was minimal, primarily due to the through diversifying our asset offering into of interruptions was 178 minutes, against significant investment made by the State new technologies. This includes SPS, which a target of 290 minutes (System Average and local governments in undergrounding will eliminate many safety and reliability Interruption Duration Index – SAIDI). Although our Pilbara distribution networks. concerns at the extremities of our rural within our regulatory requirements, we networks, where we have long power lines. recognise the impact of these interruptions Ardyaloon, Gascoyne Junction, Sandstone on our customers and the community, and and Wiluna achieved a SAIDI of zero during Our ability to respond quickly to remote constantly assessed the interruptions to drive the year. system faults due to the distance between resource centres remained a challenge. We continuous improvements. Four SPS units were deployed in the investigated opportunities such as alternative Esperance rural network, with 11 more While we met the overall regulatory reliability resourcing strategies, remote sensing and planned next year. These systems improve target, this year only 29 of our 38 systems control as well as improved predictive failure reliability by removing long rural lines from met our internal individual performing mode analysis to mitigate this issue. This remote farming properties, which can systems targets. This is a key internal is a safety issue at its core and a reliability experience frequent and prolonged measure of performance taking into account challenge – one we are confident that digital power outages. both the length and number of interruptions technologies can help improve. experienced by our customers in each of A new software system Fieldreach, was our individual service areas. Generation deployed to help plan and perform asset outages, system controls and weather events inspection tasks more efficiently and affected reliability in Broome, Beagle Bay, effectively. The software offers accurate, Derby, Esperance rural, Hopetoun rural, timely and granular insights into the Looma, Lake Argyle, Wiluna and Yungngora. condition of our assets and status of work. The investment in our asset management We expect this to further improve the continued to have positive impacts on safety and reliability of our systems and reliability in Kununurra and Onslow. management of work. 18/19 ANNUAL REPORT 19
Figure 1: System Average Interruption Duration Index (SAIDI) 2015/16 – 2018/19
Reliability Performance SAIDI (using normalised data) over four year period 250
200
150
100 SAIDI (Minutes) 50
0 2015 2016 2017 2018 2019
Average length of time customers were without power Trend
We significantly reduced power interruptions to customers and the average length of time of power interruptions 20 18/19 ANNUAL REPORT
Network assets Table 2: Transmission and distribution network lines through our service area
Network type Carrier Kilometres Transmission 220 kV 203.1 132 kV overhead 112.3 132 kV underground 1.8 66 kV overhead 153.1 66 kV underground 3.0
Distribution High voltage 3-phase overhead 2,044.0 High voltage 3-phase underground 924.4 High voltage single phase overhead 2,848.8 High voltage single phase underground 13.6 Low voltage overhead 559.0 Low underground 1,567.6 TOTAL 8,430.7
Table 3: Other transmission and distribution assets
Asset Amount Total transformer capacity 802 MVA Number of transformers 4,333 Number of distribution poles 56,794 Number of transmission wood poles 235 Number of transmission steel poles 744 Number of transmission towers 871
Table 4: Asset Management Plan (AMP) drivers
AMP driver Actual ($) 2017/18 Actual ($) 2018/19 Asset service 6.4 12.2 Safety 11.6 14.3 Reliability 4.4 2.7 Regulatory compliance - 0.6 Capacity 0.7 2.1 Knowledge and technology investment 5.6 4.9 Mobile plant and operational fleet 2.4 0.6 Property management 3.3 4.5 TOTAL 34.4 41.9
In 2018/19 Horizon Power’s overall actual expenditure on the asset management works program was higher than last year mainly due to the replacement of unserviceable poles in Esperance, which was brought forward for safety reasons. 18/19 ANNUAL REPORT 21
Protecting our assets Pole management strategy We minimised the risk of harm to our We continued to develop and refine our employees, customers and the community pole management strategy with over Our Health and Safety through deliberate and considered actions 18,000 poles (approximately 30 per cent Management and to manage the safety of our people and of our pole asset base) inspected this year. our assets. We achieved this through Pole condemnation rates have decreased Electricity Network Safety the application of our Health and Safety significantly since the introduction of Management Systems Management and Electricity Network Safety our pole management strategy, and Management Systems. are now stabilised at less than one per contributed to minimising cent of poles inspected. There were five In August 2017, we enacted our Electricity the risk of harm to unassisted pole failures for the year, one Network Safety Management System each in Esperance, Karratha and Laverton employees, customers and (ENSMS), which centred on the safety of and two in Carnarvon, which is a very our assets and the impact they have on the community small number for the year and well within our workers and the public in accordance industry averages. with regulation set by the Office of Building and Energy (formerly EnergySafety). We completed our first full year of operation under the ENSMS, continuing to deliver a safe network and working environment. Internal self-assessments demonstrated good levels of adoption of new practices across the business.
Figure 2: Unassisted pole failure rate 2016/17 to 2018/19
Rate per 10,000 poles on a 3 year rolling average 2
1
0 JUNE 2016 JUNE 2017 JUNE 2018 JUNE 2019
Failure Rate Target Trend
Figure 2. shows the continued improving trend in our unassisted pole failure rate. This rate declined below the target of 1.6 in 10,000 poles per annum during the last quarter of 2017/18, and maintained a steady value sitting at 0.82 in June 2019. This performance is attributed to the application and continuous improvement of the Pole Management Strategy introduced in 2013/14. 22 18/19 ANNUAL REPORT
Conductor management • Developed a conductor assessment - allocating budget to replace and National safety regulators have identified strategy in conjunction with industry manage conductors in Denham, conductor (powerline) management as a experts to manage the risk of our Carnarvon and Exmouth conductors across the network, and major risk to electricity network businesses - commencing work to underground high commenced assessments in areas that across Australia. voltage conductors in Denham were considered at high risk of failure. Acknowledging this risk, we: Work included: - auditing conductor condition on the Esperance network, and • Continued to execute our 10 year risk- - a detailed audit of our conductors in based replacement program, which Denham, Carnarvon and Exmouth - analysing the correlation between involves the replacement of small copper conductor conditions to local - developing and executing a conductor conductors. This program is scheduled for environmental factors (e.g. wind management plan for Denham completion in 2021. direction and speed, proximity to - developing conductor management corrosion sources, conductor age plans for Carnarvon and Exmouth and material types). 18/19 ANNUAL REPORT 23
Table 5: Electricity capacity/generation and sales by town 2018/19
Town Generated Purchases Total power Used Sent out Renewable Power (kWh) purchased / in works (kWh) Energy buyback (kWh) generated (kWh) imported into HP (kWh) network (kWh) Ardyaloon 1,760,680 1,760,680 1,760,680 31,490 Beagle Bay 1,691,881 1,691,881 1,691,881 2 Bidyadanga 2,911,083 2,911,083 2,911,083 4,623 Broome 130,787,460 130,787,460 130,787,460 1,120,683 Looma 2,343,520 2,343,520 2,343,520 Carnarvon 40,521,091 40,521,091 840,405 39,680,686 963,567 Coral Bay 3,339,362 3,339,362 3,339,362 4,320 Cue 3,402,109 3,402,109 3,402,109 58,804 Denham 5,231,842 5,231,842 177,900 5,053,942 223,825 Derby 33,365,601 33,365,601 33,365,601 126,958 Djarindjin / 1,761,150 1,761,150 1,761,150 57,992 Lombadina Esperance 66,582,131 66,582,131 66,582,131 1,377,806 Exmouth 23,885,089 23,885,089 23,885,089 547,221 Fitzroy Crossing 15,254,287 15,254,287 15,254,287 71 Gascoyne Junction 752,613 752,613 752,613 24,517 Halls Creek 12,030,597 12,030,597 12,030,597 5,909 Hopetoun 4,735,148 4,735,148 4,735,148 231,339 Kalumburu 2,128,304 2,128,304 91,046 2,037,258 1 Kununurra 99,675 60,286,511 60,386,186 99,675 60,286,511 260,726 Lake Argyle 825,663 825,663 825,663 102 Laverton 3,875,191 3,875,191 3,875,191 89,426 Leonora 8,649,748 8,649,748 8,649,748 18,269 Marble Bar 2,231,825 2,231,825 246,555 1,985,270 76,972 Meekatharra 6,555,757 6,555,757 6,555,757 170,792 Menzies 707,541 707,541 707,541 50,932 Mount Magnet 3,788,625 3,788,625 3,788,625 101,198 Murchison 3,726,407 3,726,407 74,682 3,651,725 Radio-astronomy Observatory Norseman 3,489,852 3,489,852 3,489,852 113,252 Nullagine 1,635,632 1,635,632 594,411 1,041,221 26,583 Onslow 20,231,546 543,696 20,775,242 2,047,938 18,727,304 94,845 Sandstone 651,274 651,274 651,274 45,376 Warmun 2,723,773 2,723,773 2,723,773 10 Wiluna 2,460,179 2,460,179 2,460,179 15,785 Wyndham 195,573 7,051,213 7,246,786 195,573 7,051,213 16,765 Yalgoo 1,006,179 1,006,179 1,006,179 23,118 Yungngora 1,810,349 1,810,349 110,610 1,699,739 NWIS 563,811,478 563,811,478 563,811,478 1,809,538 TOTAL 72,580,402 976,261,233 1,048,841,635 4,478,795 1,044,362,840 7,692,817 24 18/19 ANNUAL REPORT
DELIVERING FOR OUR CUSTOMERS
12,185 Customers downloaded our mobile app 236 new customer 15,752 connections Followers on our social media platforms
Broome 18/19 ANNUAL REPORT 25
73,105 23,776 Customer Paperless billing calls customers
Customers 1,147 21,531 moved premises Customer complaints
17,082 Customer % My Account 87 satisfaction customers score 26 18/19 ANNUAL REPORT
Improvements in the delivery A leader in advanced microgrid design In June 2019 we commissioned a 1 MW of customer service and operation Solar farm and associated 1 MW/1 MWh Improving customer access to their The energy industry is in a period of battery system. information and services was a key initiative transition, moving away from large The next phase of the project is to deliver up to for the year. To achieve this, we upgraded our centralised power stations to distributed 2 MW of distributed customer solar and up to customer information and billing system, energy resources (DER) located throughout 1 MW of small scale customer battery systems. Gentrack Velocity to expand the range of the electricity network and most often self-service functions on our website and owned by our customers. We continued Through strategic investment in renewables mobile app including: our focus to actively explore technology to and battery storage, we are bringing forward allow us to integrate these DER resources a future energy model whereby both • providing a tool (in the mobile app) to into our systems without compromising centralised and DER combine to form a more assist customer understanding of their quality and reliability requirements. Given diverse, safe, secure and reliable energy home appliance energy consumption the small size of many of our systems, this system which supports lower ongoing • enhanced bill payment through direct requires solutions unique to our operational operating costs and simultaneously delivers debit (including direct debit by credit card) environment. During the past 12 months, we mutual benefits for the electricity system led trials in Carnarvon, Broome and Onslow and customers. • adding concession details without having with the goal of improving the integration to call us, and Under its State Development Agreement, and management of renewables and the Chevron-operated Wheatstone Project • real-time bill payment. releasing more DER into our systems. is providing $106 million for Horizon Power to build the power infrastructure, as part of We also embarked on a customer experience Onslow Distributed Energy its $250 million commitment to upgrading program to simplify and streamline Resources Project Onslow’s social and critical infrastructure. customer contact with us. The goal of this In Onslow we progressed work to deliver three year program is to identify and deliver an advanced microgrid supply model, with Carnarvon Distributed Energy improvements in process and systems, taking the overarching goal of supplying up to 50 Resources Trials into account various customer perspectives. per cent of the town’s energy needs from In Carnarvon we continued working with 82 A key focus includes improving customers’ renewable energy. customers to explore the most economically experience with our contact centre and In July 2018, the Onslow community’s power efficient way to design and manage a improving the service provided by our supply was transitioned to a new power microgrid with very high levels of DER, and employees. This resulted in a significant station delivered as part of Stage One of reduce dependence on centralised fossil increase in customer service ratings, as the Onslow DER Project. This consisted of fuelled generation. The Carnarvon DER well as a reduction in Energy and Water a gas-fired power station supported by an trials commenced in 2018 with support Ombudsman complaints. integrated 1 MW battery system, 33 kV from the Australian Renewable Energy Using data to make customers safer underground transmission circuits, a zone Agency (ARENA), on behalf of the Federal Government, to trial a variety of DER The deployment of advanced meters substation and an extended underground technologies including rooftop solar, battery throughout all of our systems and to almost 11 kV distribution network. storage systems and inverters with remote all of our customers, enabled us to develop monitoring and control devices. systems to leverage data collected to proactively identify hazardous conditions Data collected from the trials will inform our in customer homes, businesses and our understanding of the impact of weather and network. Through the year we identified and power station operation, and in turn how rectified over 40 hidden safety risks, many to maximise hosting capacity for DER. The times without the customer being aware trials are an important step to overcoming that such a risk existed. barriers associated with renewable energy development by providing innovative solutions for customers who are increasingly looking for more choices in how they manage their own energy requirements. Our trials, pilots and reform are some of the ways we're delivering energy solutions for regional growth and vibrant communities 18/19 ANNUAL REPORT 27
Smart Sun Pilot Standalone Power Systems Price reform In Broome North, the Smart Sun Pilot, a Since 2015 we have been installing and In 2019 we continued to explore our joint initiative with LandCorp, focused on trialling standalone power systems (SPS) in innovative and more equitable pricing enabling the 15 participating households Esperance to test a lower cost, more reliable product, MyPower. Introduced in Port in the Waranyjarri Estate to significantly and safer mechanism to deliver power to Hedland and Broome in 2017, MyPower reduce their energy use from the network our more isolated customers on larger rural delivers pricing plans similar to a mobile and their energy bills. This Pilot was networks. Having demonstrated the SPS phone payment plan. Customers are delivered through the uptake of rooftop concept, we are developing SPS as a new charged a monthly fee based on how solar, battery energy storage and appliance asset class and exploring mechanisms to much electricity is consumed at peak management managed as a single system deploy them at scale. times, with a low variable energy charge. using an innovative software platform. In This pricing model ensures customers are In April, site-work commenced to provide addition, this allowed us to understand how charged relative to the costs incurred on SPS units to customers connected to a single to integrate higher levels of solar energy the network and provides incentives to spur line in Esperance. On completion, this generation into the electricity network as reduce consumption and bills. Available to project will see 54 kilometres of poles and well as reducing demand. residential and small business customers, wires being removed, many of which will MyPower provides an option to assist A reduction in peak consumption will come from farmer’s paddocks, which will participating customers with managing their improve network utilisation efficiency and improve paddock safety and land use. energy bills, smoothing the costs out across has the potential to defer costly network the year and making energy use in off-peak augmentation. In addition, it has the Enabling access to distributed times very attractive. potential to reduce the amount of high-cost energy solutions electricity infrastructure required in new Our industry continues to undergo a rapid Key findings from customer housing developments. transformation, as customers are embracing surveys indicated: DER technologies such as solar panels and Early Pilot findings show significant • 84 per cent would stay on the product batteries to generate their own electricity. reductions in both household energy With an eye to this, we have begun • 64 per cent found it easier to manage consumption and peak demand. Customers addressing the challenges of the changing their energy consumption the longer they have saved an average of $20 to $70 per environment by facilitating the deployment were on the plan week since system installation, equating to of off-grid and non-network solutions and up to 70 per cent saving on their electricity • 78 per cent feel their plan is right for them technologies. The knowledge we have gained bills, while the network is seeing a 30 per from the trials in Carnarvon, Broome and Due to popularity, the original Pilot was cent penetration of DER on the network Onslow has enabled this transition. extended for an additional year, resulting and can achieve approximately 20 per cent in more than 1,250 customers signing up reduction at peak. We have also undertaken a review and to the product. We continue to engage with update of both our hosting capacity limits State Government to work towards the full and technical requirements. This will enable deployment of the Pilot in the longer term. the connection of more renewable energy onto the grid in a manner that continues to maintain the reliability and security of supply for all of our customers. These changes are due to come into effect early in the next financial year.
Non-executive Director Kylie Chamberlain and Deputy Chair Peter Oates with Smart Sun Pilot participant Jade Howard in Broome
18/19 ANNUAL REPORT 29 02
OUR COMMUNITY 30 18/19 ANNUAL REPORT
EMPOWERING OUR COMMUNITIES
Community investment Community engagement In November we launched a new safety We are committed to ensuring we take an We have engaged with communities and campaign Stay 10M Away to demonstrate active and tailored approach in how we engage customers to share information regarding the dangers associated with fallen with our communities. Our regional business electrical safety, project updates, power powerlines. This was part of our overarching model allows us to be proactive in creating outages and planned maintenance work. public safety campaign Be Aware and supporting opportunities which will of Electricity. Throughout the year we had a presence assist in the development of our communities, at a range of community events including Through our energy efficiency campaign whether it is in employment opportunities or regional field days, school expos and Easy Ways to Save we provided customers sponsorship of community initiatives. excursions, community forums and business with simple energy efficiency advice Through our Sustainable Partnership Program functions, and met with customers sharing to help them save money, reduce their we continued to develop and support information and listening to their views. energy consumption and strengthen our partnerships with community organisations community standing as the ‘local Community events were held to support a which have activities, interests and values energy partner’. number of initiatives including the Onslow compatible with our own, and which Renewable Energy Pilot and the Smart Sun Delivering lower cost, innovative contribute to the long term strengthening of Pilot, along with a range of community solutions for remote communities our communities. During the financial year we forums in our regions to engage with partnered with 10 community organisations We are working closely with our customers customers on issues such as renewable and provided over $160,000 in funding to in remote Aboriginal Communities to energy changes and energy efficiency. a range of groups, including Shooting Stars, transition them to a new energy future Kidsafe WA, Spare Parts Puppet Theatre, We continued to provide customers with up- – with a focus on low cost and reliable Ronald McDonald House, Fair Game and The to-date information through the publication renewable energy solutions, and fostering Smith Family. of our monthly newspaper columns in community development through local jobs, regional newspapers. training and investment opportunities. Our grass-roots community partnerships are A key initiative was the Solar Incentives designed to support local projects, events or Safety awareness and energy efficiency groups that foster a sense of pride and place, Scheme, which was developed as a resulted The safety of the communities we serve is contribute to development and growth, and of extensive engagement with Aboriginal very important to us. We proudly continued bring the community together. This year we Corporations. While the Corporations our community safety campaigns to provided over $230,000 to 95 local community recognised solar would save money, educate the public on potential hazards organisations including The Kyle Andrews barriers such as upfront cost and technical associated with the use of, and interaction Foundation, Kimberley Girl, Esperance Sports decisions meant this option had not with, electricity and seasonal issues such as Star of the Year, Gascoyne Dash and the Port previously been progressed. cyclone and storm awareness. Hedland Mother’s Day Classic. Through the establishment of a During the year we developed a safety Our employees also volunteer their time co-investment solar fund to support the awareness campaign Safety on the Farm. to support community initiatives. We uptake of community-owned solar, we This campaign was designed to reduce supported these efforts by providing two were able to implement the first initiative the risk of damage to our electrical days paid volunteer leave annually to all of our renewable energy strategy for infrastructure by third parties, particularly employees. Our volunteer leave program was remote communities. during the harvesting and seeding seasons recognised at the 2018 Department of Fire in Esperance. As a result, the Djarindjin and Lombadina and Emergency Services’ (DFES) Volunteer communities signed up to the Solar Incentive Employer Recognition Awards, with our Mid Scheme in 2018 and have reduced their West depot winning a gold award for enabling electricity bills through this co-investment employees to take volunteer leave to respond solar partnership. A total of 80kW and 30kW to emergency incidents or attend training. of solar has been installed respectively. 18/19 ANNUAL REPORT 31
The community councils of Bidyadanga Supporting local Aboriginal Developing an accessible and (West Kimberley) and Warmun (East businesses inclusive community Kimberley) also voted in favour of Aboriginal communities and people are We are committed to developing an accessible progressing with the Solar Incentives a large part of our community and we and inclusive community by providing Scheme’s co-investment solar partnership. have embraced the State Government’s information, services and public facilities Installation will occur in the 2019/20 Aboriginal Procurement Policy (Policy). We that are easy for all community members to financial period. have made a commitment to work with access. This commitment was formalised in In total, we put forward $1.07 million Aboriginal businesses by setting targets our Disability Access and Inclusion Plan (DAIP) investment to co-fund up to 900kW of for the awarding of contracts to registered 2019-2024, developed and registered with community-owned solar in eight remote businesses. In 2019 our target is to award at the Disability Services Commission. least one per cent of our contracts valued at Aboriginal Communities under the project. Since our inaugural DAIP in 2008, we $50,000 or more to registered businesses. have worked with employees, customers, In the May Budget the State Government This increases to two per cent in 2020, and stakeholders and members of the public to announced $11.6 million investment in our three per cent by 2021. centralised solar project. This will enable us identify and apply a number of initiatives to to install solar farms in six communities to We were the first State Government entity to improve our access and inclusion for people reduce the cost of providing electricity while partner with Supply Nation, which maintains with disabilities. Taking advantage of the also cutting fossil fuel emissions. a national register of Aboriginal and Torres changes in technology, we launched a new Strait Islander businesses. Through working mobile app to optimise customers’ ability to As part of this initiative we will continue with Supply Nation and other partners, we access and manage their bills from their home to work with the relevant communities awarded contracts to Aboriginal businesses or mobile phone in a way that suits them. to ensure local people and companies are valued at $787,000 in 2018/19. This Other important activities include the involved during construction of the first two commitment included smaller contracts refurbishing of buildings to improve access farms, which are scheduled to be installed in valued below the threshold required by for people with disabilities. Induction Warmun and Kalumburu in 2020. the Policy. In October we awarded the first training for Customer Service staff was reportable contract under the Policy to a Underpinning all of this work is close refreshed to focus specifically on assistance Supply Nation-certified Aboriginal business engagement with Aboriginal communities. and services we are able to provide, aligned for the provision of key operational support to Moving forward, we will reinforce this with our DAIP commitments. and explore further opportunities for our Marble Bar and Nullagine power stations. Aboriginal people, through our third Reconciliation Action Plan. The plan is in draft and is expected to be approved and executed following close consultation with Reconciliation Australia.
We work closely with our customers in remote Aboriginal communities to transition them to a new energy future 32 18/19 ANNUAL REPORT
CASE STUDY DELIVERING LOWER COST, MASTER METER PROJECT INNOVATIVE SOLUTIONS FOR REMOTE COMMUNITIES
During 2018/19 Horizon Power installed The old billing method, where one bill was 101 pre-payment meters across 13 issued to a whole community, resulted Aboriginal Communities in the Kimberley, in significant debts accumulating across Horizon Power Pilbara and Mid-West Gascoyne. the communities. That debt accumulation installed 101 is now a thing of the past with residents The master meter project was designed paying upfront for their power with the pre- pre-payment meters in collaboration and consultation with payment meter. Aboriginal Community Corporations across 13 Aboriginal to resolve an issue they faced in being Residents also received education about our Communities connected to our network by one master new mobile app which allows them to buy meter. This meant all residents had to credit for their meter in the comfort of their contribute and split the bill for the whole own home rather than going to the local community, regardless of their individual store or post office. energy consumption. The project has also improved affordability for The project involved installing a pre- residents in these communities, by ensuring payment meter at every premise so eligible residents can access energy rebates. customers are billed only for the power they use and can budget more easily by paying for their power in smaller amounts as they go. The project also involved inspections which resolved a number of safety issues with the community electrical networks. 18/19 ANNUAL REPORT 33
DELIVERING LOWER COST, INNOVATIVE SOLUTIONS FOR We aim to attract, develop and OUR retain talented, high-performing REMOTE COMMUNITIES employees who share our vision PEOPLE and organisation culture
Our Horizon Way and Code of Conduct Training and development Diversity outlines the values which guide our decisions We recognise the importance of investing We recognise that the varied backgrounds and behaviours, and is foundational to driving in our people to deliver on our key business and experiences of our employees can help a high performance culture aligned to our objectives. We are achieving this through a to foster creativity and offer a range of strategy. These behaviours are embedded range of internal and external development talents, skills and experiences that benefit and reinforced throughout our people and secondment opportunities. our organisation. We remain committed to processes and solutions. We continued to fostering a culture where differences are We have adopted the principles of the focus on maturing our organisational culture valued and respected. to improve the way we do things and to drive 70:20:10 learning and development performance and innovation with a more model. The model suggests a proportional Our Equal Employment Opportunity human-centric approach. breakdown of how people effectively learn. Management Plan 2016-2019 outlines This is broken down with about 70 per cent initiatives to contribute to the employment Through our ongoing performance appraisal from on-the-job experiences - working on and inclusion of a diverse workforce. In and development planning process, we tasks and problems; about 20 per cent from our workforce, mature workers are well evaluate outcomes against business feedback and working around others and represented at 46 per cent and people objectives, progress against development 10 per cent from formal training such as from culturally and linguistically diverse goals and demonstrated behaviours against courses and reading. This guides learning background continues to increase in our values. Our recognition and reward and development discussions and planning representation to 20 per cent, up from program SHINE, supports a high performing as part of our Performance Appraisal and 18 per cent last year. With a continued workforce and recognises outstanding Learning and Development process. With our focus on awareness we have increased employee contributions. geographical spread, rapid skill changes and participation rates of females in senior individual learner behaviour, online courses leadership roles significantly this year at Leadership are highly applicable and cost effective. 37 per cent, an 11 per cent increase over the We acknowledge the importance of Our learning management system includes previous year. Additionally our Board was developing engaging leaders to create and compliance training in addition to a suite of gender balanced and the representation of inspire a customer-focused high performing safety and induction courses. We have also females on the Executive increased to 14 and innovative workforce. In an era of rapid recently subscribed to LinkedIn Learning, and per cent with the appointment of our CEO in change and digital disruption, we have mapped course content to our leadership March 2019. identified, through a series of employee competencies and company values. workshops in late 2018, the competencies With respect to youth we have increased required to navigate leadership challenges Our partnership with the Chamber of our intake of undergraduates throughout into the future. Commerce and Industry Western Australia the year, supporting work placements continued to offer the industry a successful for students from a variety of disciplines. During the year we deployed a leadership power engineering Graduate program. This Through our partnership with CCI WA, we program to a cohort of mid-level year, we hosted six graduates along with engaged six electrical engineering graduates management, to assist them broaden their six vacations students over the summer. In on a full time basis and six electrical skill set. addition, six undergraduates from Notre engineering undergraduates for the 12 week As part of our safety strategy a three day Dame, Curtin University, The University of vacation program this year. Western Australia and Murdoch University leadership training program Supervisor We have focused on improving our cultural completed 100-150 hours of work with us. Safety Set, continued to be deployed to all awareness training as part of our new leaders. Additionally, the leadership team As a result of changing technologies on employee induction. This year we engaged participated in Zero Incident Process to our network, a new technical competency a Supply Nation provider and worked with influence behaviours to further contribute to framework was developed and adopted. This them to tailor the program. This more a positive safety culture. To provide ongoing framework outlines a number of technical impactful program is delivered three times support and development for regionally- career pathways and a leadership pathway. per year in conjunction with our internal based leaders, we continued our mentoring In our Pilbara region our Distribution subject matter experts. We have been program that pairs members of our Overhead tradespersons have completed engaging with a disability employment Executive team with regional managers. upskilling training to obtain cable jointing service provider to explore work experience capabilities. Additionally, employees have and permanent placement opportunities. had the opportunity to elect to obtain Employees participated in activities during electrical skills and qualifications to expand NAIDOC Week and celebrated International skillsets to support our transmission assets. Women’s Day. 34 18/19 ANNUAL REPORT
ABOUT OUR PEOPLE 31% 69% Female Male 401 37% Employees, Female 395.2 full time senior equivalent leadership
4.5% 20% Aboriginal Employees from employees a non-English speaking background
% Perth 260 0.5 Regional 141 Employees with Broome 24 a disability Carnarvon 24 Esperance 32 Karratha 25 Kununurra 17 Onslow 2 Port Hedland 17 18/19 ANNUAL REPORT 35
Aboriginal employment We have also focused our attention on Improving our digital experience We serve regions throughout Western promoting a safe and healthy future of work. A priority during the year was the facilitation Australia where significant proportions of As digital technologies and automation of our digital strategy. We undertook an the population are Aboriginal. We employ 18 becomes more common, employment enterprise architecture review to ensure a Aboriginal people (4.5 per cent of employees) and workplaces are changing. To meet greater alignment between our technology and seek to offer direct employment these changes, we reviewed our incident and overall business objectives, through the opportunities where possible, while focusing management process, Inspection System delivery of a set of roadmaps to inform an on indirect opportunities through supporting Plan and operational processes to identify improved, consistent and efficient provision Aboriginal businesses, contractors and enhancement opportunities and further our of technology services. suppliers, and by allocating sponsorships safety cultural maturity. These roadmaps provided clarity and supporting Aboriginal community initiatives Our Operations division, predominantly direction for key initiatives and unmet such as Shooting Stars. consisting of regionally-based employees, business requirements needed to deliver on continued to maintain an effective safety Enabling a safer workplace our digital strategy, and has been a catalyst and health performance, recording zero lost for the initiation of a number of digital The safety of all employees is a core value time injuries for the year. The division’s last initiatives including the Human Resources and integral to the way we operate. We lost time injury occurred in January 2018. System Replacement, the Data Management strive for safety and health excellence and Integration Platform and the Customer through initiatives such as our leading Health and wellbeing Experience Program. safety and key indicators. These indicators In May we launched a free health are a suite of proactive risk-minimisation and wellness app My Wellbeing Mate The outcomes from the review have activities, routinely measured, with the to employees and contractors. This informed both our three year technology primary objective of sustaining low injury complements our long standing Employee strategy as well as our technology operating rates. They are designed to promote Assistance Program. The app provides users model, which began in December. The leadership engagement, practice and with access to a range of resources including revised Technology Strategy articulates visibility by management and frontline helplines, websites, guides, videos and how we will deliver foundational technology supervisors to assist in sustaining positive inspirational talks. capability to enable our digital strategy. safety outcomes. The technology operating model describes how we engage to deliver our services; what This year we successfully finalised and capabilities do our people need and how do delivered our Safety and Health Strategy, we enable them; and what are our ways of which commenced in 2014. The main intent working to deliver our services. of the Strategy was to promote, support and influence a positive safety culture. We recognise we still have work to do in the areas of leadership and accountability before we transition to a fully interdependent safety culture. Building on the foundation of the Safety and Health Strategy, we have been working on the design and development of a new wellness strategy plan to achieve our ambition of being a high-performing organisation. The strategy is expected to be finalised with application commencing next year. We serve regions throughout Western Australia where significant proportions of the population are Aboriginal 36 18/19 ANNUAL REPORT
MOBILE TECHNOLOGY CASE STUDY FIELDREACH SUPPORTING OUR CREWS
To ensure a continuous supply of electricity to Photos are also captured at the time of our customers, our crews are responsible for inspection, allowing Asset Managers to make Mobile technology inspecting and maintaining a large number more informed decisions about corrective is allowing our of assets across a vast service area. To help work required. plan and perform asset inspection tasks crews in the field to Assets are geographically displayed on more efficiently, we deployed a new software maps to help with completion of tasks, the undertake their roles system Fieldreach, which offers more pins also change colours to help the line accurate, timely and granular insights into the more efficiently crews understand which assets have been condition of our assets. inspected, which is helpful for inspection and effectively The software program deployed on iPads campaigns that can last a few days, weeks allows crews working in the field to undertake or months. asset inspections and capture any defects Fieldreach has enabled us to develop a more with increased data accuracy and less efficient asset maintenance process, helping duplication across the business. Crews can to ensure a reliable electricity supply for our also log their reports from anywhere in our communities. It is digitising the way our crews service area, even in remote areas with no conduct their inspections. mobile phone coverage. 18/19 ANNUAL REPORT 37
MOBILE TECHNOLOGY SUPPORTING OUR CREWS ENVIRONMENT
We are committed to delivering a quality, reliable electricity supply in an environmentally sustainable and responsible manner.
We recognise that our innovative programs We operate under an Environmental The Clean Energy Regulator will make our and on-going management procedures must Management System (EMS) to proactively 2018/19 NGER publicly available in the first protect the rights of future generations manage environmental activities, to provide quarter of 2020. An estimate is made for to a sustainable and diverse natural us with the necessary tools to identify Scope 1 emissions (direct) based on available environment. We look for every opportunity environmental issues, meet legislative information as at 8 July 2019. Because Scope to enhance environmental performance compliance, and strive for continual 2 (indirect) emissions are more complicated and to contribute to sustainable practices. improvement in environmental performance. to establish in accordance with the NGER Act, We are committed to measuring our they cannot be accurately estimated at the environmental actions as a way of improving Greenhouse gas and carbon intensity time of publishing. our performance, allocating resources We report total annual greenhouse gas efficiently and identifying areas of weakness. emissions as carbon dioxide-equivalent Our environmental performance is tracked (CO2-e) (shown in Table 6), in accordance using a number of performance indicators. with the National Greenhouse and Energy Reporting Act 2007 (NGER). CO2-e emissions attributed to Horizon Power have increased in 2018/19, primarily due to the operation of the newly constructed Onslow power station moving to us from an Independent Power Producer (IPP) in July 2018.
Table 6: Greenhouse gas emissions (tonnes CO2-e)
Reporting year Direct emissions (Scope 1) Direct emissions (Scope 2) Total energy consumption (GJ) 2018/19 41,6823 Final figures are reported to CER by 31 October 2019 and published Q1 2020 2017/18 38,799 32,504 911,047 2016/17 79,623 31,939 1,305,159 2015/16 99,200 38,357 2,182,657 38 18/19 ANNUAL REPORT
Carbon intensity of our total operations, To support ongoing reductions in carbon Carbon intensity is primarily influenced measured as kilograms of CO2-e per kWh of intensity, we recently released access to by IPPs, with relatively low influence from electricity sent-out, is a key measure of the an additional 10 megawatts of renewable Horizon Power operated power stations. overall greenhouse gas emissions related energy generation across our networks. The carbon intensity remained the same to energy production, inclusive of IPPs. This increase, which stems from a review of value of 0.55 kg CO2-e/kWh between Reducing carbon intensity demonstrates our technical requirements and a number 2017/18 and 2018/19 and within the improved greenhouse emission efficiency of in-depth renewable energy trials, is internal target of 0.65 kg CO2-e /kWh sent- and therefore is an important indicator with aligned to the State Government’s draft out, as shown in Table 7. respect to climate change. Distributed Energy Resources Roadmap which is anticipated to be released at the end of 2019.
Table 7: Carbon intensity of sent-out electricity, actuals and targets 2015/16 to 2018/19
Reporting year Carbon intensity, kg CO2-e / kWh sent out Target intensity, kg CO2-e / kWh sent out 2018/19 0.55 0.65 2017/18 0.55 0.65 2016/17 0.56 0.65 2015/16 0.57 0.65
Air emissions Total sulphur dioxide (SO2) and normalised consumption for electricity generation SO2 emissions, shown as kg/MWh as opposed to diesel. Normalised We reported annual air emissions for the (generated), remained relatively consistent NOx emissions are shown as kg/MWh 2018/19 period to the National Pollutant in comparison to previous years. (generated) in Table 8. Inventory (NPI) for sites exceeding the NPI reporting thresholds. These reports and The decrease in total emissions of oxides of Final data supplied to the NPI may differ information on reporting requirements are nitrogen (NOx) can be attributed to a slight slightly from the estimated emissions and publicly available on the NPI website (www. decrease in diesel consumption. Normalised also includes additional statutory reporting npi.gov.au). An estimate of combined air NOx emissions slightly decreased in parameters. emission data from all of our generation comparison to the previous year. This can facilities is provided in Table 8. be attributed to an increase in natural gas
Table 8: Summary of air emissions 2016/17 to 2018/19
Air emissions summary 2018/19 2017/18 2016/17
Sulphur dioxide (SO2) Total (tonnes) 0.4 0.2 0.4 kg/MWh (generated) 0.006 0.004 0.004 Oxides of nitrogen (NOx) Total (tonnes) 439 441 461 kg/MWh (generated) 6.09 6.77 3.91
1 Direct emissions of greenhouse gas into the atmosphere from sources that are owned or controlled by the company, such as emissions from combustion in owned or controlled engines or equipment. 2 Indirect emissions of greenhouse gas from the generation of purchased electricity consumed by the company. This includes purchased electricity consumed in depots/offices, as well as line losses in networks operated by Horizon Power. 18/19 ANNUAL REPORT 39
Noise We are continuing the program of works to Environmentally sensitive No noise complaints were received fully decommission and demolish obsolete area program during the year. infrastructure from former power station The environmentally sensitive areas sites, in addition to the contamination program continued this year. The program Management of contaminated sites assessment and site clean-up. All remaining subjects all ground-disturbing activities to Our contaminated sites portfolio includes redundant infrastructure was removed from a desktop assessment before undertaking 31 sites reported under the Contaminated the former power station sites in Carnarvon the works. It provides employees and Sites Act 2003 (CS Act). The sites are and Onslow with materials recycled or contractors with processes and procedures typically former power stations where gifted to the local Shires for community use, to follow when working within these areas historical spills or leaks of hydrocarbons where possible. and ensures licences or permits are obtained have affected soil or groundwater. The Soil remediation projects were completed at as applicable. portfolio is managed in accordance with a four former power station sites as outlined in risk-based strategy, where key objectives Regulatory instruments the case study. are to achieve remediation targets and end- We maintained our environmental licence point classifications under the CS Act. This Table 9: Investigation and activities for the Karratha Temporary Generation undertaken at contaminated former power is achieved when no ongoing assessment Project this year and met all reporting station sites 2018/19 or remediation is required on the basis the obligations required under the licence. land use remains unchanged. However, Mungullah power station remains as a Groundwater monitoring opportunistic remediation may still be registered premises with no associated events (GME) undertaken if site use or infrastructure reporting requirements. None of our other changes, such as during decommissioning. Camballin Fitzroy Crossing (2) operating sites exceed the threshold for an During the year, Broome and Derby achieved Marble Bar environmental licence or registration. end-point classifications, reducing the number of sites requiring ongoing active We hold five native vegetation clearing management to 14. Other contamination permits issued by the Department of investigations / projects Water and Environmental Regulation. In We have appointed accredited contaminated Carnarvon – 2018/19 we also held three Permits to Take sites auditors to independently oversee granted by the Department of Biodiversity, soil remediation program completed investigations on sites where groundwater Conservation and Attractions for Declared (offsite disposal) contamination has migrated offsite. Table Rare Flora species in Esperance. Compliance 9 provides a summary of key site works Exmouth – reports have been submitted to the completed during the year. soil bioremediation program commenced respective departments in accordance with onsite and two additional groundwater As part of our program of works, several the applicable permit reporting conditions. monitoring wells were installed for further significant site demolition and remediation groundwater assessment Environmental incidents project milestones were achieved at former power stations sites during the year to Fitzroy Crossing – No reportable environmental incidents address legacy contamination issues. These soil bioremediation program occurred this year. were the completion of the third and final completed onsite (remediation phase of soil remediation at Fitzroy Crossing, being undertaken offsite) demolition and soil remediation of the Onslow – Carnarvon power station, decommissioning soil remediation program completed (offsite and soil remediation of Onslow power disposal) station and excavation of diesel impacted soils at the former Exmouth power station. Marble Bar – Site Management Plan prepared Meekatharra – Remediation Action Plan and mandatory Auditor’s Report prepared Site Remediation and Validation reports were prepared for Carnarvon, Fitzroy Crossing (Phase 1 and 2) and Onslow.
3 Estimated figure based on available information as at 8 July 2019. 4 Licence L8745/2013/1 granted under Part 5 of the Environmental Protection Act 1986 (EP Act) for a category 52-prescribed premises as defined by Schedule 1 Part 1 of the Environmental Protection Regulations 1987. 5 Registration R2385/2014/1 granted under Part 5 of the (EP Act) for a category 84-prescribed premises as defined by Schedule 1 Part 2 of theEnvironmental Protection Regulations 1987. 40 18/19 ANNUAL REPORT
MINIMISING CASE STUDY OUR ENVIRONMENTAL IMPACT
Horizon Power undertook significant soil More than 3000m3 of contaminated soil Reuse of the bioremediated soil either as remediation projects during the year to from the former Fitzroy Crossing power backfill on site or daily cover material at the address legacy diesel contamination at station was transported to the local landfill land fill site meant that the use of clean fill four of our former power station sites. The facility to undergo bioremediation at a soil resources was avoided and cost savings sites have been subject to many years of purpose-build bioremediation cell prior to were achieved. investigation and assessment and we are being reused as top cover at the landfill. Removal of redundant infrastructure pleased to be undertaking positive steps More than 1000m3 of contaminated and soils impacted with diesel was also to clean up the sites as well as finding soil has been excavated at the former undertaken at both the former Carnarvon opportunities to achieve sustainable Exmouth power station and will undergo and one of the former Onslow power outcomes in the process. bioremediation on site prior to being stations, which will reduce potential future The remote location of our sites adds reinstated in the excavations. impacts to local groundwater. logistical complexity and cost to the Bioremediation is a process that enhances It is hoped that the bioremediation program management of legacy contamination. naturally occurring degradation of the can be implemented for the soil remediation This challenge became an opportunity to hydrocarbons (diesel) to reduce the level program planned for the Mid West legacy explore alternative remediation strategies of contamination in the soil through the contaminated sites in the next financial year. at the former Fitzroy Crossing and Exmouth addition of nutrients, moisture and aeration. power stations and has resulted in the Using this process for our Exmouth and implementation of soil bioremediation Fitzroy Crossing sites avoided the need to programs at the two respective sites with transport the contaminated soil several greater sustainable outcomes achieved by hundred kilometres to the nearest suitably comparison to the traditional dig and dump licensed landfill for disposal. This avoided remediation approach. using up landfill space as well as the need for long-haul heavy vehicle transport, which is considered a high risk activity.
We turned a challenge into an opportunity to explore remediation strategies that resulted in soil bioremediation programs in Fitzroy Crossing and Exmouth 18/19 ANNUAL REPORT 41
MINIMISING OUR ENVIRONMENTAL HERITAGE AND IMPACT NATIVE TITLE
Native title and heritage compliance Building strong, respectful partnerships with Aboriginal heritage monitors were engaged We worked closely with the Community people and communities is fundamental to assist in protecting Aboriginal cultural Councils, Traditional Owners and to achieving our goals for reconciliation, values during ground-disturbing works for custodians of the lands on which we serving our customers effectively and operational and project-related activities, operate, aiming for genuine engagement reflecting the community we live and including with the Gnulli People in by building trust through early and ongoing operate in. Aboriginal people form a large Carnarvon, the Malgana People in Denham, communication, setting appropriate and integral part of our customer base and the Bunuba People in Fitzroy Crossing timeframes for consultation and many communities are directly impacted by and the Yinjibarndi People for works near demonstrating cultural awareness. power supply projects that benefit all. Roebourne. Cultural heritage surveys were completed with representatives of the We operated in accordance with our Esperance Nyungar People for a proposed Heritage Management System and no new power site in Esperance, and with potential or actual breaches of the Aboriginal representatives of the Ngarluma People for Heritage Act 1972 were recorded for this the proposed upgrade of the Karratha to period. Assessment of both low and high Dampier transmission line. impact projects ensured we continue to manage native title and heritage risks.
Building strong, respectful partnerships with Aboriginal people and communities is fundamental to achieving our goals 42 18/19 ANNUAL REPORT 03
DIRECTORS’ REPORT 18/19 ANNUAL REPORT 43
Corporate governance Our Risk Management Framework is Board of directors Corporate governance is the system by designed to encourage and support the In accordance with the Electricity which we are directed and managed. It development of an appropriately risk- Corporations Act 2005 (WA), we must be influences how: aware culture within the organisation and governed by a Board of between four and assist us to realise the benefits that accrue eight directors appointed by the Governor on • business objectives are set and achieved from a conscious, structured and dynamic the nomination of the Minister for Energy. • risk is assessed and managed approach to the management of risk. This The Board is responsible to the Minister for means that employees are able to perform Energy for the performance of the business. • corporate fairness, transparency and their activities in a responsible, thoughtful, accountability are promoted, and knowledgeable and consistently professional The primary role of the Board is to set our strategic direction, approve major • performance of the business is optimised. manner, contributing to our overall direction and success. expenditure and provide advice to the To best reflect the expectations of our Minister for Energy on regional power issues. people, stakeholders and customers, we have Managing business risk The Board formally delegates the day- sought to adopt recognised best practice Our Corporate Risk Management Framework to-day management of Horizon Power to for corporate governance by implementing is aligned to the ISO 31000:2009 standard the Chief Executive Officer and executive a Corporate Governance Framework. In and includes processes to identify, assess, management team. practical terms, the Framework: monitor, report and escalate risk exposures During the year, our Board consisted of the • provides structure and consistency to the to management. following people: way we do business with our customers The Framework: and stakeholders • Mr Stephen Edwell • applies to everyone including the Board of Chairman • allows employees to respond to situations directors, the executive team and all other (term concluded 22 May 2019) as they arise with confidence understanding employees and contractors the requirements of the business • Ms Rosemary Wheatley • is applied at all levels of the business Deputy Chair • promotes our performance drivers (including, but not limited to, corporate, (term concluded 20 November 2018) and corporate governance principles, divisional and group functions as well as systems and practices, including the roles, programs and projects) • Mr Peter Oates responsibilities and authorities of the Director Board and executive • is applied to all operational risk (appointed Deputy Chair management processes and practices, and 20 November 2018) • is aligned with our strategic and business plans • is integrated with other corporate • Professor Ray Wills frameworks, in particular the strategic Director • provides accountability and control planning and corporate budgeting systems commensurate with the risks processes. This assists with prioritising • Mr Neil Thompson involved, and important projects and promotes a risk- Director (term concluded 20 November 2018) • is an essential component to our based approach to investment decisions. overall success. The corporate risk profile is reviewed and • Ms Kylie Chamberlain updated on an annual basis by the executive Director team. The corporate risk profile is an • Ms Gail Reynolds-Adamson aggregation of risks identified by the various Director divisions and reported annually to the Audit (term commenced 20 November 2018) and Risk Management Committee. • Ms Sandra Di Bartolomeo We have adopted Director (term commenced 20 November 2018) best practice for corporate governance by implementing a Corporate Governance Framework 44 18/19 ANNUAL REPORT
MR STEPHEN EDWELL CHAIRMAN
Stephen is an economist specialising in He has undertaken various energy-related energy-market regulation, design and projects for the (former) Western Australian utility reform. Department of State Development, Public Utilities Office, Department of Finance and His experience in the Australian energy WA Treasury. sector is wide-ranging. Stephen led the team that project-managed Queensland’s Stephen holds a Bachelor of Commerce entry to the National Electricity Market. (Economics) and a Master of Business He also project-managed the design and Administration. implementation of the Wholesale Electricity Stephen joined Horizon Power on 30 April Market in Western Australia. 2018. He resigned from his position as Stephen has been a senior member of Chairman on 22 May 2019 to take up the Term concluded on 22 May 2019 energy regulatory boards since 2005. He role of Independent Chair of the Energy Appointed in April 2018 was appointed by the Federal Government Transformation Taskforce. as inaugural full-time Chair of the Australian Energy Regulator and Associate Commissioner of the Australian Competition and Consumer Commission (2005-2010). Most recently, Stephen completed an 11- year term as a part-time Governing Body Member of the Western Australian Economic Regulation Authority.
MR PETER OATES DEPUTY CHAIR
Peter has more than 39 years’ experience in disaggregation of SECWA. Peter was the Western Australian electricity industry. Chairman of the Merger Implementation Most of this was in the financial area, Group which provided the oversight into the including periods where he was the General merger of Verve and Synergy in 2013. Manager Finance and Administration Peter holds a Bachelor of Economics, followed by a period where he was the Master of Business Administration from General Manager Emerging Business, which the University of Western Australia, and included the development of renewable is a Fellow of the Certified Practicing projects for Western Power prior to its Accountants. disaggregation in 2006. Peter was appointed Chair of the Audit and He was a Director of Eneabba Gas Ltd from Risk Management Committee upon his Appointed in November 2014 2006 to 2010. Peter has been involved in a appointment to the Horizon Power Board in Appointed Deputy Chair on number of reviews into the structure of the November 2014. 20 November 2018. electricity industry in Western Australia, commencing with his appointment as Executive Officer to the Energy Board of Review in 1992, which resulted in the 18/19 ANNUAL REPORT 45
MS ROSEMARY WHEATLEY DEPUTY CHAIR
Rosemary has been a commercial lawyer for Rosemary is the Government-appointed more than 35 years. During her legal career, independent director of Guumbarr Limited, she acted for many years on behalf of a major a trustee company set up under the Browse bank, a major insurance company, several LNG Precinct Project Agreement. She was a of the larger charities in Australia, and Metropolitan Cemeteries Board member for numerous smaller businesses and individual seven years. clients all over Western Australia. Rosemary holds a Bachelor of Laws She developed specialist expertise in the (Honours) and a Master of Laws. areas of company law, banking securities, property law, trusts, estate planning and superannuation law. Term concluded on 20 November 2018 Appointed in November 2012 Appointed Deputy Chair in October 2016
PROFESSOR RAY WILLS DIRECTOR
Professor Ray Wills has more than 35 years’ Professor Wills is Managing Director of experience in a wide-ranging career as a advisory firm Future Smart Strategies, Chair researcher, academic, planner, consultant, of the solar farm developer, Sun Brilliance, and adviser, manager, executive, business owner executive or non-executive director of several and futurist. other enterprises, including Horizon Power. He is also Adjunct Professor at The University Professor Wills is an authoritative and of Western Australia (UWA), contributing respected commentator on sustainability, to the academic program, and commenting technology and futurism across all sectors on behalf of UWA on climate change and including the built environment, cleantech, sustainability. In August 2018, he was named energy infrastructure, industrials, as Inaugural Expert in Residence with CORE manufacturing, resources, transport, Innovation Hub in Perth. Appointed in November 2014 and water. His research interests include adoption rates of technology and disruptive He has been independently recognised by technology in all forms. a number of international groups as one of the Top 100 Global Leaders in Sustainability, Climate Change and Energy. 46 18/19 ANNUAL REPORT
MR NEIL THOMPSON DIRECTOR
Neil has extensive experience in customer Neil is a Fellow of the Australian Institute and corporate strategy as well as business of Company Directors, an advisory board development. He has held numerous member of the Australian National commercial roles in the aviation, travel and University’s (ANU) Australian Centre on tourism sector in Australia, Asia, Europe China in the World, and a director of Smiling and North America over the last 25 years. Mind Inc. He is also advisor to a number of Neil also led two of Australia’s largest, most Australian start-up ventures, and is fluent profitable customer loyalty businesses, in Mandarin. Qantas Frequent Flyer and Virgin Australia’s Velocity program.
Appointed in October 2016 Term concluded 20 November 2018
MS KYLIE CHAMBERLAIN DIRECTOR
Kylie has significant banking and finance Kylie holds a Bachelor of Commerce from industry experience having worked in the the University of Western Australia and industry for over 20 years, holding senior postgraduate qualifications from both the management and executive roles with Securities Institute of Australia and the Australian banking and financial institutions Governance Institute of Australia. including ANZ, Macquarie Bank, St George Kylie is currently a non-executive director of and Bankwest. West Coast Fever Netball Club Ltd. Her range of expertise includes the key areas of finance, management, business development, strategy, culture, governance and risk. Appointed in April 2018 Appointed Acting Chair of the Audit and Risk Committee on 17 June 2019 18/19 ANNUAL REPORT 47
SANDRA DI BARTOLOMEO DIRECTOR
Sandra has over 23 years' experience as a Sandra has previously held positions on the banking and finance lawyer, specialising in Art Gallery of Western Australia Foundation corporate, construction, resources, energy Council, Italian Chamber of Commerce and and property financing. She was formerly Industry Committee and the Law Society a partner of a top tier national law firm, Commercial Law Committee. She holds leading the finance division in Perth. Sandra a Bachelor of Laws from the University has held various senior leadership positions of Western Australia, and postgraduate with National Australia Bank Limited, most qualifications from both the Securities recently heading up the Corporate and Institute of Australia and the Australian Institutional Bank Legal team in Western Institute of Management. Australia and Queensland. Appointed in November 2018
GAIL REYNOLDS-ADAMSON DIRECTOR
Gail Reynolds-Adamson is a descendant from Gail is Chairperson of the Esperance the Noongar, Mirrnning and Nudju peoples Tjaltjraak Native Title Aboriginal Corporation and has extensive experience working RNTBC (ETNTAC), Chairperson of Goldfields with Aboriginal communities and agencies Esperance Development Commission, across Australia. She has a vast knowledge Chairperson of South East Aboriginal Health of Aboriginal cultures and understands Service and Board Member of Australian the need to operate in different ways to Golden Outback. respect different cultural sensitivities. Gail has forged long term relationships with Aboriginal people, communities and stakeholders across various industries and private sector groups, to create and foster Appointed in November 2018 harmonious and productive relationships. She also has considerable experience in the private sector, particularly mining, and has worked for State and Commonwealth Government departments. 48 18/19 ANNUAL REPORT
Attendance at Board meetings The Board meets bi-monthly, but during the year there were a number of circular resolutions, which are recognised as duly constituted board meetings.
Table 10: Board of directors’ meetings and attendance 2018/19
Director Number Number of meetings eligible to of meetings attend during the time the director attended held office during the year Stephen Edwell 13 13 Rosemary Wheatley 6 6 Peter Oates 14 14 Professor Ray Wills 14 14 Neil Thompson 6 6 Kylie Chamberlain 14 14 Gail Reynolds-Adamson 5 6 Sandra Di Bartolomeo 6 6
Table 11: Board of directors’ terms of appointment
Director Appointed Expires Stephen Edwell 30 April 2018 Term concluded 22 May 2019 Rosemary Wheatley 13 November 2012 30 July 2015 Second term 26 October 2016 25 October 2018 Term concluded 20 November 2018 Peter Oates 11 November 2014 10 November 2017 Second term 26 October 2016 25 October 2019 Professor Ray Wills 11 November 2014 10 November 2016 Second term 26 October 2016 25 October 2019 Neil Thompson 26 October 2016 25 October 2018 Term concluded 20 November 2018 Kylie Chamberlain 30 April 2018 29 April 2020 Gail Reynolds-Adamson 20 November 2018 20 November 2020 Sandra Di Bartolomeo 20 November 2018 20 November 2020 18/19 ANNUAL REPORT 49
Audit and Risk Management Financial reporting Compliance with laws and regulations Committee The ARMC performs an overview in relation The ARMC seeks assurance from The Audit and Risk Management Committee to financial reporting by: management that a framework has been (ARMC) is a sub-committee of our Board established for compliance with laws, • considering whether our accounting of directors. Its role is to help the Board regulations and standards. policies and principles are appropriate discharge its responsibility to provide oversight of, and corporate governance for, • assessing significant estimates and Relations with external auditors the business. The ARMC is accountable to, judgements in the financial reports The ARMC meets with the external auditors and reports, to the Board. to discuss the scope and results of their • reviewing management’s process audits and resolve any disagreements about A key role of the ARMC is to provide for ensuring compliance with laws, matters raised with management. assurance to the Board that our core regulations and other requirements business goals and objectives are being relating to our external reporting Composition of the ARMC achieved in an efficient and cost-effective obligations The ARMC comprises: manner within an appropriate framework of • assessing information from the internal internal control and risk management. • Peter Oates and external auditors regarding the Chair quality of financial reports, and • Rosemary Wheatley • reviewing the management of Director finance operations. (term concluded 20 November 2018) Internal control and risk management • Kylie Chamberlain The ARMC provides oversight of the Director identification of risks and threats to Horizon (appointed Acting Chair in June 2019) Power, as well as the processes by which • Sandra Di Bartolomeo those risks and threats are managed. The Director ARMC also assesses and adds value to our (term commenced 20 November 2018) corporate governance, internal control and internal audit functions.
Table 12: ARMC meetings and attendance 2018/19
Director Number Number of meetings eligible to of meetings attend during the time the director attended held office during the year Peter Oates 6 6 Rosemary Wheatley 2 2 Kylie Chamberlain 6 6 Sandra Di Bartolomeo 4 4 50 18/19 ANNUAL REPORT
Corporate Affairs and Composition of the Governance and corporate Communications Committee CAC Committee compliance disclosures The Corporate Affairs and Communications The CAC Committee comprises: In compliance with the accountability Committee (the CAC Committee) is a provisions of the Electricity Corporations • John Le Cras, Chair sub-committee of our Board of directors. Act 2005 (the Act), we provided the The CAC Committee’s role is to assist the • Professor Ray Wills, Director Minister for Energy with a quarterly report Board in discharging their responsibility for the first three quarters of the 2018/19 • Neil Thompson, Director (term concluded of oversight of the corporate affairs, financial year and this annual report for the 20 November 2018) customer and stakeholder communications entire financial year. functions as well as oversight of marketing • Gail Reynolds-Adamson, Director (term Each of the quarterly performance reports and customer engagement activity and commenced 20 November 2018) were submitted to the Minister for Energy change-management. In doing so, the CAC • Bob Cronin, Advisor (term concluded 20 one month after the end of the quarter. Each Committee is accountable to the Board. November 2018) report included an overview of performance A key role of the CAC Committee is to and highlights of important achievements. provide reasonable assurance to the Board This annual report will be provided to the that our communications and corporate Minister for Energy within the time specified affairs objectives are being discharged in by the Act and includes: an efficient and effective manner, within • consolidated financial statements and appropriate frameworks. other statutory information required under the Act Table 13: CAC Committee meetings and attendance 2018/19 • a comparison of performance with Statement of Corporate Intent targets, and Director Number Number of meetings eligible to of meetings attend during the time the member • other information required by the Act to attended held office during the year be included. John Le Cras (Chair) 7 7 In addition to quarterly and annual reports, Professor Ray Wills 7 7 the Act requires the Minister for Energy be provided with: Neil Thompson 3 3 • a five-year Strategic Development Plan and Bob Cronin AM 3 3 a one-year Statement of Corporate Intent Gail Reynolds-Adamson 4 4 • a separate report on employee compliance with any issued codes of conduct, and • any specific information in our possession requested by the Minister for Energy. A copy of the Annual Report will also be provided to the Public Sector Commissioner, as required by the Act. 18/19 ANNUAL REPORT 51
Significant issues impacting On 2 February 2018, the Minster for Energy Shares in statutory authorities Horizon Power released his final coverage decision to cover N/A Current and emerging issues and trends Horizon Power under the Electricity Networks Access Code 2004, effective from 1 January Shares in subsidiary bodies The widespread adoption of distributed 2020. On 9 February 2018, the Public Utilities energy resources including solar panels and N/A Office (PUO) issued a Design Consultation battery storage systems, and introduction of Paper detailing its proposed reforms for Declarations of interest retail competition from third parties in the the electricity industry in the Pilbara. These NWIS has the potential to lead to a decline in Our Code of Conduct and Conflicts of reforms have two key components: our revenue. Interest Policy are endorsed by the Board 1. Introduction of network open access to and Executive and provide all employees Economic and social trends the Horizon Power and Alinta networks with information on what constitutes a There is an expectation by our customers through the implementation of a light- conflict of interest and how such should be that services and products delivered will be handed regulatory regime (LHR). managed. A conflict of interest may arise in enhanced to enable a greater amount a number of situations involving a disparity 2. The establishment of an Independent of renewable energy devices connected to between the interests of Horizon Power and System Operator (ISO) to ensure our network. the interests of the relevant individual. the security of operation of the Members of the Board are required to Changes in written law interconnected system in the Pilbara. declare any interests at all Board meetings. There have been no significant changes to On 15 March 2019, two detailed design any primary legislation governing Horizon papers were published to describe the Stephen Edwell Power during the 2018/19 financial year. expected Light Handed Regulation, • None declared and System Operations Arrangements. Rosemary Wheatley Likely developments in operations in These papers note that the Bill which will future years enable the implementation of the above • Director, Guumbarr Ltd (Ms Wheatley Market reform components is expected to be passed in also disclosed that Guumbarr Ltd has applied for funding for six houses as part We are facing a changing business 2019, following which the Pilbara Networks of Horizon Power’s Broome North Project environment in the Pilbara. Following the Access Code 2019 will be established. with LandCorp), and State Government’s decision to proceed AEMO are expected to be assigned an with open access and implement a light- administrative ISO role. • Chairperson, Karratha Central Serviced handed regulatory regime in the Pilbara, The decision to cover our NWIS network Apartments. we have been supporting the Government raises a number of important policy Peter Oates by ensuring we are positioned to drive the implications for Government and us, • None declared most economically beneficial outcomes for principally in respect of the introduction Government and our customers. of competition into a currently existing Professor Ray Wills In 2018, the Department of Treasury monopoly market. • Owner and Managing Director, FDRW Pty commenced the GTE Reform Project with the Future power supplies Ltd trading as Future Smart Strategies intent of improving governance processes We are currently undertaking a program • Chair and Partner, Sun Brilliance Power amongst a number of government trading of work to secure a future power solution Pty Ltd and non-executive director of enterprises, including Horizon Power. supply for our customers in the towns of Indian subsidiary, Sun Brilliance Energy Horizon Power engaged with the Esperance and Denham that delivers the (India) Pte Ltd Department of Treasury throughout the best service to our customers and value for • Owner and Managing Director, Sun remainder of 2018 in regards to the areas money for the State Government. Brilliance Solar One Pty Ltd of reform proposed and expects these The power solutions are likely to include reforms to culminate in amendments to renewable energy technologies such as solar, • Owner and Managing Director, Blue the Electricity Corporations Act 2005 (WA), battery storage and/or wind generation. by Design Pte Ltd (Singapore), and its being Horizon Power’s enabling legislation. In Denham, this work is taking place due to Australian subsidiary Eno Store Pty Ltd the current ageing infrastructure needing • Non-executive director, PowerMinder; replacement, where it is anticipated that the and Non-executive director, BioTek Fuels new power station will be commissioned in March 2021. • Adjunct Professor at The University of Western Australia contributing to the The existing contractual agreement with the academic program and one of UWA’s private company which owns the existing spokespersons on climate change, Esperance power station remains in place. sustainability and new technology, and In preparation for the expiration of the current agreement, a procurement process • Inaugural Expert in Residence, CORE is underway. Innovation Hub in Perth. 52 18/19 ANNUAL REPORT
Kylie Chamberlain Indemnification of Directors Remuneration settings have been • Director, West Coast Fever Netball Club The Directors’ and Officers’ Liability changed to align with State Government Ltd, and Insurance Policy insures (amongst others) policy, specifically by implementing a Horizon Power’s directors and officers, remuneration freeze for all comparable • Director and shareholder, Herman shadow directors, and employees, and it positions to those covered by the Salaries Property Pty Ltd. covers all loss resulting from a claim made and Allowances Tribunal, which includes Gail Reynolds-Adamson against an insured person during the policy our senior executives. period, subject to any exclusions set out in • Chairperson, Esperance Tjaltjraak Native Principles used to determine the the policy. At the date of this report no claims Title Aboriginal Corporation (ETNTAC) nature and amount of compensation have been made against the directors’ and • Chairperson, Goldfields Esperance officers’ component of the policy. Compensation approval protocols are as Development Commission (GEDC) follows: Additionally, we have entered into deeds of • Director, Australian Golden Outback (AGO) indemnity, insurance and access with our • provide market-competitive remuneration to employees, having • Director, Kaata Tidje Pty Ltd directors. Under these deeds, we agree to indemnify directors in respect of certain regard to both the level of work assigned • Director, Good Fire Pty Ltd liabilities incurred while acting as a director and the effectiveness of performance • Chairperson, South East Aboriginal Health of Horizon Power. The indemnity includes • allocate remuneration to employees on Service liabilities of a civil nature owed to persons the basis of merit and performance, and (other than Horizon Power) incurred by the • Director, Blue Waters Tourism Pty Ltd, and director unless the liability arises out of • adopt performance measures that align the interests of employees with the • Appointed to the South-west Marine conduct involving a lack of good faith. interests of key stakeholders. Parks Advisory Committee. Horizon Power has entered into deeds Sandra Di Bartolomeo of indemnity, insurance and access with Non-executive directors Peter Oates, Ray Wills, Kylie Chamberlain, • Currently employed by Minter Ellison Payment to Non-executive directors consists Gail Reynolds-Adamson and Sandra Di of base remuneration and superannuation. Lawyers, and Bartolomeo, in addition to former director • Shareholder and director, Bartan Limited and chairman, Stephen Edwell. Chief Executive Officer and executives (private company registered in Ireland). The Chief Executive Officer and executives’ Emoluments paid to Board of directors compensation framework is based on a Neil Thompson and senior executives total package that includes total fixed • Non-executive director, Smiling Mind Board members are appointed by the remuneration structures with: State Government under the Electricity • Advisory Board Member, the Australian Corporations Act 2005 following State • cash Centre on China in the World Government approval processes that • selection of prescribed non-financial • Advisor to Sendle also outline the compensation payable benefits for their services. • Industry Advisory Panel Member, TFE • superannuation, and Hotels Ltd The Chief Executive Officer’s remuneration is determined by the Salaries and Allowances • cost of fringe-benefit tax. • Member, Opal Aged Care Advisory Panel, Tribunal, and performance is assessed by and the Board annually against Key Performance Total fixed remuneration • Advisory Council Member, OnPointLoyalty Indicators listed in our Strategic The compensation framework is market- LLC. Development Plan. competitive and performance-based, with flexibility for the package to be Senior executive salaries have previously structured at the Executive's discretion been reviewed annually, determined, and upon a combination of cash, a selection paid in accordance with market evaluations of prescribed non-financial benefits, and our human resource policies. superannuation and cost of fringe-benefits tax. External remuneration consultants provide analysis and advice to ensure remuneration is set to reflect the market for a comparable role. Remuneration for executives is reviewed annually to ensure the level is market-competitive. There are no guaranteed remuneration increases included in any executive contracts. 18/19 ANNUAL REPORT 53
Non-financial benefits Selection available: cost of novation of selected motor vehicle and the cost of fringe- benefits tax.
Superannuation Paid in accordance with the amount required under the Superannuation Guarantee (Administration) Act 1992 (Cth) on the executive's behalf to a superannuation fund that is a complying superannuation fund within the meaning of that Act.
Remuneration Cash salary Super Other Total 2018/19 and fees $ annuation $ remuneration $ $
Non-executive directors S Edwell (Chairman) 1 86,961 8,261 - 95,222 R Wheatley (Director) 2 24,692 2,346 - 27,038 R Wills (Director) 45,000 4,275 - 49,275 P Oates (Deputy Chair) 53,885 5,097 - 58,982 N Thompson (Director) 3 18,519 1,759 - 20,278 K Chamberlain (Director) 45,000 4,275 - 49,275 G Reynolds-Adamson (Director) 26,654 2,532 - 29,186 S Di Bartolomeo (Director) 26,654 2,532 - 29,186
Disclosure for the five employees with the highest emoluments T Mohn (General Manager Advanced Microgrid) 4 304,078 26,037 303,001 633,116 B Bourke 5 287,114 27,276 232,067 546,457 M Houlahan (General Manager Commercial Services and Finance) 6 432,737 41,110 - 473,847 M Paterson (General Manager Consumer Energy) 383,562 36,438 35,000 455,000 F Tudor 7 46,914 4,457 400,220 451,591
Notes to Table 14 1 Ceased as Chairman on 22 May 2018. 2 Ceased as director on 20 November 2018. 3 Ceased as director on 20 November 2018. 4 Ceased as General Manager on 1 March 2019. Other remuneration includes payment in lieu of notice $255,000, leave payout $22,405, separation $5,000 and travel allowance $20,596. 5 B Bourke is not part of the Executive. Other remuneration includes leave payout $159,900, travel allowance $45,224 and non-monetary benefits $26,943. 6 M Houlahan was Acting Chief Executive Officer from 28 August 2018 to 17 March 2019. 7 F Tudor ceased as Chief Executive Officer on 27 August 2018. Other remuneration includes leave pay out on termination $293,003, payment in lieu of notice $72,434, ex gratia payment $19,239, non-monetary benefits $10,928 and travel allowance $4,616. 54 18/19 ANNUAL REPORT
Legislation Observance of the Code of Conduct Regular reviews of record-keeping systems The Electricity Corporations Act 2005 (WA) Section 33 of the Electricity Corporations and practices are conducted as required establishes Horizon Power as a corporation Act 2005 (WA) (the Act) requires the Board to ensure efficiency and effectiveness. with responsibility of the provision of Horizon Power to provide to the Minister Training programs for core systems, of electricity outside the South West for Energy, at the same time as delivering supplemented by the provision of relevant Interconnected System and sets out the its annual report, a separate report on the information on the business’ intranet, powers and duties of the corporation. observance of its Code of Conduct are provided and reviewed to ensure they by employees. reflect new business requirements. Electricity licences The Board confirms that our Code of Conduct Our online employee induction includes The Electricity Industry Act 2004 (WA) was updated and adopted by the Board at the business’s Code of Conduct, which requires participants who generate, its meeting in June 2019. The updated Code explains an employee’s responsibilities transmit, distribute or retail electricity in of Conduct will be circulated to all Horizon with respect to information and knowledge Western Australia to obtain a licence to Power employees and made available on its management. We regularly review our operate. Licences are issued by the Economic intranet. The Board and the Chief Executive induction process to ensure it includes all Regulation Authority (ERA or the Authority). Officer, under delegated authority, assign relevant information for employees and will We were issued with an Integrated Regional accountability to managers in the organisation continue to refine this process. Additional Licence on 30 March 2006. to ensure observance of the standards of information about this is easily accessible The Integrated Regional Licence requires us conduct and integrity by employees. to all employees on our intranet. to comply with a number of codes, including: During the year there was one suspected Western Australian Electoral Act 1907 • Code of Conduct for the Supply of minor misconduct matter that has been In accordance with the requirements of Electricity to Small Use Customers 2018 reported to the Public Sector Commission. Section 175ZE of the Western Australian The investigation concluded that the • Electricity Industry (Network Reliability Electoral Act 1907, the following information allegations amounted to serious misconduct. and Quality of Supply) Code 2005, and is presented in respect of expenditures (excluding GST) incurred during 2018/19. Shared responsibility with other • Electricity Industry (Metering) Code 2005. This expenditure includes costs associated agencies with public safety advertising campaigns, Compliance with other legislation We did not share any responsibilities with other planned outage notifications, self-read We have a number of controls and systems in agencies during the 2018/19 financial year. meter mail outs, research and recruitment. place that support the business in complying with all legislation and regulations affecting State Records Act 2000 • Advertising agencies: $245,776.32: its activities. This includes an online We maintain and support high quality Rare Creative, Equilibrium, Capture compliance register, as well as compliance- record-keeping practices in our day-to- Branding and Multiplier mapping and monitoring software. day business activities. The function of • Market research organisations: managing records resides within individual $59,802.3: Metrix Consulting Restriction on the area within which business divisions. we may operate • Polling organisations: n/a All records are managed according to the Within Western Australia, the performance requirements of the State Records Act 2000 • Direct mail organisations: $5,441.71: of our functions is limited to those parts of and our approved record-keeping plan. Our Rare Creative and Campaign monitor the State that are not serviced by the South record-keeping plan is reviewed annually to West Interconnected System. • Media advertising organisations: ensure currency and updates are submitted $184,078.82: Adcorp, Carat, Fairfax Media to the Minister for Energy for approval. Publications, Initiative Media Australia and Market Creations. Total expenditure: $495,099.15 18/19 ANNUAL REPORT 55
Environmental regulations We operate in accordance with other Electricity and fuel purchases were higher The primary environmental legislation in WA relevant environmental obligations, which than the last year by ~4.4 % ($232.2 million is the Environmental Protection Act 1986, include, but are not limited to: v 222.4 million) but within expected levels. Operating expenses were also slightly less which gives rise to many regulations. The • Environmental Protection and than in 2017/18 despite higher maintenance main regulations relevant to us include, but Biodiversity Conservation Act 1999 activities and costs associated with Cyclone are not limited to: (Commonwealth) Veronica. Similarly, depreciation and • Environmental Protection Regulations • Contaminated Sites Act 2003 amortisation and finance costs were slightly 1987 provide generally for the prevention below the previous year. and control of pollution and ensure that • Dangerous Goods Safety Act 2004 appropriate processes are established • National Greenhouse and Energy Balance sheet to manage pollution, noise and other Reporting Act 2007 Our net assets amounted to $572.4 million environmental impacts generated by recording a slight reduction of $4.6 million • National Environment Protection (National construction and operations. compared to last year. The reduction is partly Pollutant Inventory) Measure 1998 • Environmental Protection (Controlled due to a repayment of capital to the State Waste) Regulations 2004 provide for • Biodiversity Conservation Act 2016, and Treasury in respect of unutilised funding on the Pilbara Underground Power Project the licensing of carriers, drivers and • Wildlife Conservation Act 1950. vehicles involved in the transportation of completed below budget at the end of the controlled waste on public roads. Our performance in relation to environmental previous year. obligations is discussed further in the Total asset base amounts to $1,776 million, • Environmental Protection (Native Environment and Heritage section. Vegetation Clearing) Regulations 2004 mainly made up of property, plant and protect all native vegetation in Western Operations during the 2018/19 equipment at $1,566 million. Major projects Australia. Clearing native vegetation is financial year undertaken during the year are listed in the capital expenditure program below. prohibited, unless a clearing permit is The Electricity Corporations Act 2005 granted by the Department of Water and stipulates the specific and general As at 30 June 2019, cash at bank was Environmental Regulation or the clearing information that is to be reported within the $78.2 million, mainly through short-term is for an exempt purpose. Directors’ report for the current financial year. liquidity debt. • Environmental Protection (Unauthorised To avoid duplication of content, please refer Capital expenditure Discharges) Regulations 2004 provide for to the Operational Performance Report We delivered an $84.2 million capital the prevention of unauthorised discharge section for a review of our operations during expenditure program in 2018/19. of potentially environmentally harmful the financial year and the results of Expenditures for the year were $41.9 million materials, and those operations. on the Asset Management Plan; $25.2 million • Environmental Protection (Noise) Financial performance on the Onslow Distributed Energy Resources Regulations 1997 provide for noise project and $2.1 million on the Roy Hill Power We ended the year with a net profit after tax emitted on a premises or public place and Supply, final payments of $5.2 million on the of $35.9 million (2017/18: $111.9 million). received on another premises. Pilbara Underground Power Project and $9.8 Total income for the year recorded an million on customer funded works. overall decrease of 15% compared to last year ($560.0 million v $660.0 million). This Dividends reduction was mainly attributable to the During the year we paid dividends of previous year’s one-off capital revenues $36.6 million to the State Government, associated to Onslow DER and South Hedland representing a final dividend on profits for power stations. This year energy sales were 2017/18 of $22.7 million and an interim higher by 2.6% due to higher supply to dividend of $13.9 million for 2018/19. major customers. Government subsidies were up due to higher Tariff Equalisation Contributions +$31 million, offset by lower contributions from Community Service Obligations (-$7.6 million). 56 18/19 ANNUAL REPORT
GLOSSARY OF TERMS
Advanced meter - or smart meter, is Demand management - an automated Feed-in-management (FIM) - a type a device that measures the amount of process that enables customer loads to of generation management in which electricity used in real time and sends rapidly decrease or increase their electricity participating customers allow Horizon this information back to Horizon Power. use in response to changes in the condition Power to manage the output of their solar Advanced meters collect large amounts of the grid and/or changes in energy price or generation to better match supply with of data that can be interpreted to provide other information. Demand management demand and help prevent system instability. customers with tailored energy efficiency is most suitable for significant customer Fringe of grid (FoG) - network advice and alternative ways of paying for loads such as air conditioning, electric water infrastructure at the remote edge of the grid. electricity, enable energy trading, and heating, water pumping, and the charging improve network security and safety. of energy storage or electric vehicles. In a Government trading enterprise (GTE) Advanced meters can be read remotely high-DER environment it can be used to both - a government body that derives its prime and allow electricity supply to be remotely reduce the intensity of peak demand periods source of revenue from the sale of goods and switched on or off. and better match appliance runtimes services in a commercial environment. with times where there is an oversupply of Advanced microgrids - are powered by Generation management (GM) - used renewable energy. integrating centralised power generation to monitor, control, and optimise the with very significant levels of distributed Distributed energy resource (DER) performance of generation, particularly energy resources (DER) located on customer - dispersed power generation, energy rooftop solar. Generation management sites and connected to the distribution storage, and demand management located controls the output of rooftop solar, and network. They enable customers’ DER to at customer premises or connected directly allows more renewable energy to be hosted provide services to the network in exchange to the distribution network. While DER is across Horizon Power’s electricity systems. for a financial benefit and support the often used to refer to renewable generation Grid / off-grid - the electrical grid is trading of power between customers. sources, it also includes dispersed non- the interconnected network delivering Advanced microgrids will be a key building renewable generation sources. electricity from producers to consumers, block of high-DER electricity systems as Distributed energy resources consisting of generation, transmission, and they maximise reliance on intermittent management system (DERMS) - a distribution assets. Off-grid power systems renewable generation, better balance software platform to manage all distributed are not connected to the main electricity supply and demand, reduce extreme peak energy resource assets connected to the network and can be stand-alone power demand, and increase energy efficiency and energy network. systems that provide a smaller community service reliability. with electricity. Energy storage - a means of storing energy Centralised / traditional generation - within an electricity system, either directly or large-scale electricity generation produced indirectly. Storage may be either centralised at centralised facilities and typically fuelled or distributed throughout a network. by gas or diesel. Examples include batteries, power capacitors, flywheels, and pumped hydro systems. 18/19 ANNUAL REPORT 57
Lost time injury frequency rate (LTIFR) - Stand-alone power system (SPS) - Industry measurements a formula to provide the number of lost most commonly used to describe privately GWh gigawatt hour: one GWh equals time injuries to be sustained, per one million owned off-grid power systems that provide 1,000 megawatt hours or one million hours worked, over a given 12 month period. electricity to a single customer through a kilowatt hours. combination of energy storage and both Master meter - the main meter which renewable and fossil-fuel generation. kVA kilovolt ampere: one kVA equals 1,000VA. measures the total electricity supplied to a building or a remote community. System Average Interruption Duration kW kilowatt: one kW equals 1,000 Index (SAIDI) – average total length of watts MW megawatt: one MW equals Microgrid - a geographically confined outages in minutes over 12 months. 1,000 kilowatts. collection of electrical resources that act together, with centralised generation System Average Interruption kWh kilowatt hour: the standard ‘unit’ typically playing a key role. Microgrids can Frequency Index (SAIFI) – average of electricity which represents the be remote, embedded, or interconnected number of interruptions over 12 months. consumption of electrical energy at the rate and may begin their life either detached or of one kilowatt over a period of one hour System blueprints - the system Horizon attached to a larger grid. MWh megawatt hour: one MWh equals Power uses to determine the optimal supply 1,000 kilowatt hours. Micro power system (MPS) - a new utility models for each of its microgrids over the asset class designed to provide remote long term. MVA megavolt ampere: one MVA equals customers with a full electric utility service, 1,000kVA W watt: a measure of the power Unassisted pole failure - an unassisted without requiring a traditional poles and present when a current of one ampere flows failure of a pole, as defined by Regulation wires network connection. Distinct from under a pressure of one volt. 28 of the Electricity (Network Safety) privately-owned stand-alone power systems Regulations 2015, is summarised as a V volt: the unit of potential or (SPS), they are fully integrated across all network pole breaking or collapsing due to a electrical pressure . utility back-office systems, designed for force greater than its design specification. multi-decade life cycle efficiencies and VA volt ampere: volt amperes are the capable of being fleet-managed in Uniform tariff policy - all retail electricity ‘apparent power’ and are the product the thousands. customers in Western Australia are charged of the voltage applied to the equipment the same rate, even though the true cost to times the current drawn by the equipment. Notifiable public safety incidents - supply differs by system and region. The VA rating is limited by the maximum an incident or event that is caused, permissible current, and the watt rating by or significantly contributed to, by electricity the power-handling capacity of the device. and that results in serious injury; or serious damage. Photovoltaic (PV) - the conversion of light into electricity using solar panels. Pre-payment meter - billing system where customers pay for electricity before it can be consumed.