Application for Retail Licence

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Application for Retail Licence Application for Retail Licence by Powershop Australia Pty Ltd (ACN 154 914 075) trading as Powershop Friday the 13th of January 2012 Contents Introduction 5 1. Information on the applicant 5 1.1 Registered address 5 1.2 Contact person 5 1.3 Corporate structure 5 1.4 Organisation structure 6 Retail Licence Application – POWERSHOP Page 1 of 29 1.5 Experience of key people 7 1.6 Outsourcing 12 1.7 Details of incorporation 12 1.8 Shareholders 12 1.9 Licence conditions 12 1.10 Current activities within the electricity industry 12 1.11 Proposed activity following grant of licence 12 2. The Commission’s objectives 13 2.1 General 13 2.2 Promoting the long term interests of Victorian consumers 13 2.3 The price of essential services 13 2.4 The quality of essential services 13 2.5 The reliability of essential services 13 2.6 A consistent regulatory approach to electricity and gas 13 2.7 Promoting the development of full retail competition 13 3. Information on financial viability 14 3.1 Powershop can meet the financial viability requirement 14 3.2 Australian Financial Services Licence 14 Retail Licence Application – POWERSHOP Page 2 of 29 3.3 Credit rating 14 3.4 Distribution arrangements 14 3.5 AEMO credit support requirements 14 3.6 Business plan 14 4. Information on technical capacity 15 4.1 General 15 4.2 Internal controls, policies and procedures 15 4.3 Demonstration of billing and management systems 15 4.4 Complaints register and procedures 15 4.5 Privacy statements 15 4.6 Document Retention policies 16 4.7 Industry submissions and results of any research supporting the application 16 5. Information in support of retail licence application 17 5.1 General 17 5.2 Customers to be served 17 5.3 Energy supply arrangements 17 5.4 Registration as a customer in the National Electricity Market 17 5.5 Capacity to operate a business 17 Retail Licence Application – POWERSHOP Page 3 of 29 5.6 Capacity to comply with regulatory requirements 18 Schedule 1 – Powershop New Zealand organisation structure chart (COMMERCIAL IN CONFIDENCE) 19 Schedule 2 – Certificate of Registration 20 Schedule 3 – Constitution 21 Schedule 4 – Annual Results Announcement 22 Schedule 5 – S&P credit rating report (COMMERCIAL IN CONFIDENCE) 23 Schedule 6 – Distribution Agreement (COMMERCIAL IN CONFIDENCE) 24 Schedule 7 – Business plan (COMMERCIAL IN CONFIDENCE) 25 Schedule 8 – Policy and procedure documents (COMMERCIAL IN CONFIDENCE) 26 Schedule 9 – The Powershop platform (COMMERCIAL IN CONFIDENCE) 27 Schedule 10 – Energy supply arrangements (COMMERCIAL IN CONFIDENCE) 28 Schedule 11 – Demonstrated Significant Customer Acceptance and Support (COMMERCIAL IN CONFIDENCE) 29 Retail Licence Application – POWERSHOP Page 4 of 29 Introduction Meridian Energy Powershop Australia Pty Ltd, ACN 154 914 075 (Powershop) is proposing to establish an electricity retailing business in Victoria. Powershop provides Limited the following application details in accordance with the “Guidance Notes NZ Company 938552 for Applications for Electricity Licences and the Transfer of Existing Electricity Licences” issued by the Essential Services Commission of Victoria 100% (the Commission) in November 2006. Powershop seeks a licence effective any date prior to 1 February 2012. Three River 1. Information on the applicant Holdings No.1 Ltd NZ Company 1920517 1.1 Registered address As at the date of this application Powershop’s registered address is: 100% Powershop Australia Pty Ltd Level 29, 530 Collins Street Three River Melbourne VIC 3000 Holdings No.2 Ltd 1.2 Contact person NZ Company 1920515 James Gerraty Corporate Counsel & Company Secretary 100% Meridian Energy Australia Pty Ltd 9 Queen Street Powershop Melbourne VIC 3000 Phone: 03 8370 2132 Australia Pty Ltd 1.3 Corporate structure ACN 154 914 075 See diagram to right. Retail Licence Application – POWERSHOP Page 5 of 29 1.4 Organisation structure (a) Meridian Energy Limited As a Meridian Energy Group company, Powershop will operate Meridian Energy under the Meridian Energy Limited Board and management. Limited (b) Powershop Australia Board Powershop’s Directors are Peter Scott Lowe, Andrew Dixon Robertson and Paul Thomas Chambers. Peter Lowe is currently a Meridian Energy Director of: retailer Aurora Energy Pty Ltd; Snowy Hydro Limited (parent company of retailer Red Energy Pty Ltd); United Energy Australia / Distribution Holdings Pty Ltd; Multinet Group Holdings Pty Ltd; and Powershop Board eleven companies within the Meridian Energy Group. Peter has previously been a Director of retailer Pulse Energy Pty Ltd. (c) Powershop Leadership Group Powershop Powershop is managed by the Powershop Leadership Group – consisting of Ben Burge, Ari Sargent, Chris Murphy, Peter Van Loon, Leadership Group Michael Benveniste, Hamish Wilkie, Jim Barrett and James Waldren. (d) Ari Sargent & Powershop New Zealand Ari Sargent provides marketing knowledge, and the benefit of his experience running Powershop New Zealand. The Powershop New Michael Peter Van Chris Ari Sargent Zealand team provides capability and resource as necessary, and Benveniste Loon Murphy the Powershop New Zealand organisation structure chart is Marketing etc Finance Operations Legal / Regulatory contained at Schedule 1. (e) Team members Powershop [Settlements [Pricing Corporate Powershop’s management and support team combines strong / Billing NZ leadership with solid industry experience and will have access to the Analyst] Counsel Officer] See Schedule 3 Retail Energy Market experience of Meridian Energy Limited and the Powershop New Zealand team. Retail Licence Application – POWERSHOP Page 6 of 29 1.5 Experience of key people Secure Energy Pty Ltd from 2007 until 2011 when he joined Meridian Energy. From 1997 to 2004 Chris was General The summaries below set out the relevant experience of key Powershop Manager – Strategy & Planning, and General Manager – personnel, including those members of the Meridian Energy Australia Pty Network Commercial at United Energy Limited. In these Ltd, Meridian Energy Limited, and Powershop New Zealand Limited teams roles he was responsible for distribution revenue, system‐ who will dedicate time and effort to supporting Powershop. wide load forecasting, tariff development, regulatory affairs, (a) Benjamin Burge corporate strategy and the establishment & eventual sale of Chief Executive Officer, Meridian Energy Australia Pty Ltd UEComm Limited (a telecommunications subsidiary of United Energy), Pulse Energy Pty Ltd (an electricity retail Before becoming CEO of Meridian Energy Australia, Ben business) and EdgeCap Pty Ltd (energy trading). held various roles in the electricity industry. Ben was the Executive Chairman of Secure Energy Pty Ltd (a distributed From 1993 to 1996, Chris was an Executive Director of JT energy generation business with generation assets within Campbell & Co Pty Ltd. From 1994 to 1996, Chris was a Australia). Ben was formerly the Chief Executive and director of Moldflow International Pty Ltd and from 1997 to partner of Melbourne‐based boutique investment bank JT 1998 a director of The Preston Group Ltd, both international Campbell & Co Pty Ltd. In 2005, JT Campbell & Co Pty Ltd software development companies, and has additionally was awarded “Principal Deal of the Year” by the Australia formally been a non‐executive Director of a number of ASX‐ Venture Capital Association. listed companies. In 1987, Chris was the Communications Officer for Elders IXL, where he was responsible for all Ben is a solicitor and has worked in commercial law, venture corporate data communications activities. capital and corporate finance for more than 17 years, with exposure to financial services, media and resources. Ben (c) Peter Van Loon was the founding CEO of ASX‐listed digital media company Manager Operations, Meridian Energy Australia Pty Ltd emitch Limited from 1999 to 2001. He is a former Director Peter has an extensive background in electrical and of PWC and a former Partner of IBM Business Consulting, electronics engineering, as well as IT systems and local and and has direct experience with the risk departments of wide area networking. He has had over ten years’ Australia’s leading retail banks. experience with the State Electricity Commission of Victoria (b) Christopher Murphy in a field capacity involving power station/terminal and Manager Regulatory & Commercial, Meridian Energy substation testing and commissioning and over ten years’ Australia Pty Ltd experience in project managing major IT infrastructure projects. Chris Murphy has extensive experience in electricity and financial markets. Chris was the Chief Executive Officer of Retail Licence Application – POWERSHOP Page 7 of 29 For the 10 years preceding his joining the Meridian Energy working there for eight years until the company was sold by team, Peter was Managing Director of VLE Consulting, Meridian Energy to AGL. He then joined investment bank where he delivered project and change management Goldman Sachs to develop an electricity trading business solutions relating to specialised areas of the National and provide expert advice on the sale of Snowy Hydro. Electricity Market Full Retail Competition rules and James subsequently joined Commonwealth Bank of processes and procedures for retail and distribution clients Australia as the Head of Electricity Trading and developed its operating in the National Electricity Market, as well as energy trading business. In addition to electricity trading AEMO. experience James also has experience in trading renewable energy certificates and carbon
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