Annual Report 2003
The backbone of the State Letter to the Shareholders
The Hon. Michael R Egan, MLC The Hon. John J Della Bosca, MLC Treasurer, Special Minister of State Minister for State Development Minister for Commerce and Vice President Minister for Industrial Relations of the Executive Council and Assistant Treasurer Parliament House Parliament House Macquarie Street Macquarie Street SYDNEY NSW 2000 SYDNEY NSW 2000
30th October 2003
Dear Shareholders
We have pleasure in submitting to you the TransGrid Annual Report 2003 for presentation to Parliament. The Annual Report includes the Statement of Financial Performance for the year ended 30th June 2003 and the Statement of Financial Position as at that date certified by the Auditor-General of New South Wales.
The Annual Report was prepared in accordance with the requirements of Section 24A of the State Owned Corporations Act 1989 and the Annual Reports (Statutory Bodies) Act 1984 and reporting regulations issued by the New South Wales Treasury.
Yours sincerely
P R Higginson D G Croft, AM Chairman Chief Executive
Contents Chairman and Chief Executive’s Report 2 Unregulated Business 40 Year at a Glance 6 Innovation and Excellence 42 Corporate Governance 8 Environment 44 MetroGrid 16 Community 48 Our Network 24 People 50 Capital Works 30 Financial Report 53 Corporate 35 Index 103 TransGrid 2003 01
Australia’s largest transmission company serving the National and International Electricity Supply Industry
Our Objectives Our Values To provide accessible, efficient, In pursuing its goals, TransGrid seeks to safe and reliable facilities for the satisfy its customers’ needs and requirements transmission of electricity by drawing on our values of: To be commercially successful Integrity To be environmentally and Open Communication socially responsible Trust and Respect To identify optimum solutions to Recognition of Contribution provide reliable electricity supply Commitment to Health and Safety Competence
TransGrid Annual Report 2003 02 Chairman and Chief Executive’s Report
TransGrid’s commitment to technological excellence coupled with its environmental credentials underpins the organisation’s long term responsibility to ensure New South Wales has a secure and reliable high voltage network across the State
TransGrid Annual Report 2003 03
This year has been one of excellent Other major projects commenced during financial results as well as a period of the reporting period include a community consolidation. A number of the consultation process for the proposed organisation’s major infrastructure projects Wollar-Wellington 330kV Transmission Line. are nearing completion. This infrastructure, once in service, will reinforce supply to the State’s west and MetroGrid will be commissioned during the central west. next financial year reporting period, thus strengthening Sydney’s energy supply The organisation has now competed 90% capabilities. of the construction of the Molong-Manildra 132kV Transmission Line. This line is being TransGrid’s commitment to technological constructed to meet the growing needs of excellence coupled with its environmental the region west of Orange. credentials underpin the organisation’s long term responsibility to ensure New South A considerable amount of work is being Wales has a secure and reliable high undertaken to ensure that the key elements voltage network across the State. of electricity supply, our substations, meet the ever increasing load flows of the Meeting Demand system. This includes works at Yass, MetroGrid is one of the largest and most Sydney South and Sydney West with a ambitious electricity transmission projects fourth transformer being installed at undertaken in New South Wales in more Canberra in July 2002. than two decades. Network Performance MetroGrid involves the reinforcement of TransGrid is responsible for the largest high transmission from an existing substation in voltage network in Australia, over Sydney’s south to a new state of the art 12,400 kilometres (km) of transmission lines substation in Haymarket. At the time of and 81 substations and switching stations reporting MetroGrid is more than two thirds make up the network. complete and well on target to meet the proposed commissioning dates. This year has seen a major program of construction and extensive refurbishment This project, which will ensure reliability of undertaken by the organisation to ensure it supply for Sydney, will service more than meets its own high standards as well as one million residents and business users international benchmarks of reliability. across Sydney. MetroGrid has been planned in meticulous detail and built with a It is very pleasing to note that TransGrid minimum of disruption to the community. has exceeded its network target of between 99.0% and 99.2% availability, achieving an It is an achievement of which TransGrid can overall outcome of 99.64%. be justifiably proud. To meet the growing demand in electricity usage on the Central Coast, construction of the Tuggerah-Sterland Line commenced during 2003. To minimise environmental impact, TransGrid has made use of existing easements, an approach supported by environmental and community interests.
TransGrid Annual Report 2003 04 Chairman and Chief Executive’s Report
Environment External Business
To ensure that TransGrid meets its TransGrid has expanded its horizons commitment to best environmental practice, nationally through its telecommunication an organisation wide Environmental Working facilities and assets it now owns in other Group structure was established. This states. This demonstrates the capacity the initiative builds on existing structures and organisation has to not only manage its will further enhance our capabilities in this own network in New South Wales but to vital area. support transmission systems across the nation. TransGrid is very proud to have maintained certification to AS/NZS ISO 14001 for the Internationally our relations in China have environmental management systems as well been strengthened with completion of stage as having successfully undergone an two of a Regional Market Study with stage Electricity Supply Association of Australia three to commence in late 2003. (ESAA) Code of Environmental Practice TransGrid was invited to facilitate a audit. transmission business systems national Our commitment to the environment is a core seminar in Shenzhen with a Regional tenet of the organisation, demonstrated we Electricity Market seminar scheduled in the believe not only by the way we conduct our second half of the year in Kunming. business but also in our ongoing support of A number of training programs have been key environmental groups. undertaken for staff from Sichuan Electricity. TransGrid continued its long term support These programs complement the many of Greening Australia in its environmental other programs facilitated by TransGrid in rehabilitation work in the areas of Australia for electricity delegates from China. biodiversity, salinity and erosion. With our support, an area of 380 hectares has been Customers rehabilitated. TransGrid is committed to providing a safe TransGrid again was the principal sponsor and reliable service for its customers. Many of the Western Sydney Environment Week, Connection Agreements were facilitated as well as sponsoring a schools grants during the reporting period. program that encourages the involvement TransGrid continued to offer guidance and of schools in local bush revegetation and assistance to the Market on connection educational activities. processes.
TransGrid is well placed to meet current and future challenges. The extensive capital works program is well under way. The MetroGrid project is on target to meet Sydney’s expanding energy needs and the commitment to system reliability has been realised
TransGrid Annual Report 2003 05
People are the key to the organisation and as such the organisation’s energies are focused on the health and well-being of its staff
People Challenges
People are the key to the organisation and TransGrid is well placed to meet current as such the organisation’s energies are and future challenges. The extensive capital focused on the health and well-being of works program is well under way, the its staff. MetroGrid project will meet Sydney’s expanding energy needs and the The words ‘safety is our first priority’ are commitment to system reliability has been not merely platitudes but reflect a core realised. value of the organisation. Our core responsibilities to our customers, We are delighted to report that TransGrid stakeholders and the environment will achieved the best health and safety result continue to drive our effort. since the organisation’s inception. To ensure the organisation is well equipped to meet the challenges and responsibilities of managing Australia’s largest high voltage transmission network, a number of initiatives have been implemented; these include:
■ Succession planning program
■ 11 new apprentices employed
■ Growth of Graduate, Cadet and Scholarship programs
■ Customised program in Business Management developed in conjunction with the University of New England.
P R Higginson D G Croft, AM Chairman Chief Executive
TransGrid Annual Report 2003 06 Year at a glance
■ TransGrid’s largest single project in 20 years, MetroGrid, a new 28km underground transmission line into central Sydney, 68% complete and is scheduled for operation in the 2003/2004 summer
■ Comprehensive community and environmental management programs successfully implemented as an integral part of MetroGrid
■ Establishment of an organisation wide Environmental Working Group
■ The worst bushfire crisis on record managed successfully through outstanding efforts across the organisation – more than 600km of transmission lines were exposed to the fires (previous record was 200km) with no major interruptions to supply and only one supply loss – in the Cooma/Bega area
■ State System Operations Control successfully transferred from Carlingford to Wallgrove, Central Regional Control, and a new state of the art Supervisory Control and Data Acquisition (SCADA) system introduced
■ Construction of the Tuggerah-Sterland 330kV Double Circuit Line commenced and will be completed in the first quarter 2004
■ Upgrades to substations throughout the network commenced, including at Sydney South, Sydney West, Yass and Canberra
■ The National Electricity Tribunal found South Australia/New South Wales Interconnection (SNI) justified. Murraylink Transmission Company launched an appeal, with a decision likely before the end of 2003.
Key Performance Indicators (Including Significant Item*)
Earnings Before Interest and Tax ($ million) 169.7 Operating Profit Before Tax ($ million) 82.3 Gearing Ratio 55.3% Interest Cover (times) 1.9 Asset Base ($ million) 2,807.4 Revenue ($ million) 412.0
* Significant Item comprises Net Movement in Employer’s Superannuation Reserve
TransGrid Annual Report 2003 07
Return on Equity (%) Return on Assets (%) 7.44 4.90 7.38 8.20 9.83 5.19 6.19 -7.09 -0.42 11.78
99 00 01 02 03 99 00 01 02 03
Network Reliability (System Minutes Lost) Network Availability (%) 0.96 4.23 0.67 0.44 4.40 99.37 99.42 99.62 99.69 99.64
99 00 01 02 03 99 00 01 02 03
Capital Expenditure ($ million) Lost Time Injury Frequency Rate (LTIFR) 4.9 8.3 6.3 4.7 2.1 81.5 196.4 168.1 248.8 260.9
99 00 01 02 03 99 00 01 02 03
TransGrid Annual Report 2003 08 Corporate Governance
The Board is responsible for the overall corporate governance of TransGrid, including setting the organisation’s strategic direction, and setting goals for management
Minister ii two persons nominated by the Labor Council of New South Wales, each TransGrid is subject to the control and being a person selected by the direction of its Portfolio Minister. committee from a panel of three From 1st July 2002 to 1st April 2003, persons nominated by the Labor TransGrid formed part of the portfolio of Council; and The Hon. Kim Yeadon, MP, Minister for c. at least two and not more than five other Information Technology, Minister for Energy, directors to be appointed by the voting Minister for Forestry and Minister for shareholders at their discretion. Western Sydney. One of the directors is to be appointed From 2nd April 2003 to 30th June 2003, Chairperson of the Board and another is to be TransGrid formed part of the portfolio of appointed Deputy Chairperson of the Board. The Hon. Frank Sartor, MP, Minister for Energy and Utilities, Minister for Science The part-time directors of the Board of and Medical Research, Minister Assisting TransGrid are appointed to the Board for a the Minister for Health (Cancer) and period determined by the shareholders. Minister Assisting the Premier on the Arts. Responsibilities of the Board Shareholders The Board is responsible for the overall TransGrid’s Board of Directors is corporate governance of TransGrid, responsible and accountable to the voting including setting the organisation’s strategic shareholders, being the New South Wales direction, and setting goals for Treasurer and the Special Minister of State, management. who each hold one share for and on behalf of the New South Wales Government in Board Committees accordance with the State Owned To assist the Board in fulfiling its corporate Corporations Act 1989. governance responsibilities, the Board utilises the Board Audit Committee and the Structure of the Board Board Committee – Remuneration and The Energy Services Corporations Act 1995 Structure. A charter governs these provides for the Board of TransGrid to committees and the Board delegates their consist of: powers and procedures. a. the Chief Executive The Board committees meet on a quarterly basis and at such other times as b. one director to be appointed by the considered appropriate. voting shareholders on the recommendation of a selection Non-executive directors chair the Board committee comprising: committees. The Chief Executive is also a member of the Board committees. Senior i two persons nominated by the portfolio executives and management may be invited Minister, to attend committee meetings.
TransGrid Annual Report 2003 09
Board Audit Committee Commitment to Corporate Governance
The Board Audit Committee reviews and In August 2002, the ASX Corporate assesses internal processes for Governance Council was established with determining, monitoring and assessing key a mission to develop an industry wide risk areas. It ensures that the organisation supportable and supported framework for has an effective risk management system in corporate governance. place, clear policies and procedures for The ASX Corporate Governance Council reporting, actioning and documenting developed 10 essential principles of breaches of laws including fraud and theft. corporate governance, supported by 28 It meets regularly with internal auditors to recommendations, which were published discuss the control environment including on 31st March 2003. the processes in place for improvement. This framework primarily relates to listed This committee sets the scope of the companies; however, in the interests of internal audit function, reviewing the good corporate governance it was Internal Audit Mission Statement and considered appropriate to examine the Charter, the Risk Management Charter and recommendations and consider TransGrid’s the Code of Ethics. The committee reviews current corporate governance practices in the adequacy of resources and the output relation to these recommendations. of the internal audit functions. In addition, the committee reviews the adequacy and This review of TransGrid’s corporate effectiveness of management’s control of governance practices was undertaken in risk in relation to operational activities, April 2003. It was confirmed that TransGrid financial reporting and compliance. already had a high degree of alignment with the recommendations. The minor gaps in Membership of the committee is Bruce alignment that were noted have been Vaughan, AO (Chairman), Philip Higginson, addressed leading to an effective system of The Hon. Brian Langton and David Croft, AM. corporate governance within TransGrid. Board Committee – Meetings of the Board Remuneration and Structure The Board meets once per month and The Board Committee – Remuneration Board committees meet on a quarterly or and Structure reviews remuneration policies as required basis. and procedures to ensure that practices adopted for the determination of The names and details of Board members remuneration for TransGrid’s senior are included on pages 10, 11 and 12 with executives are applied in line with New the various committees and members South Wales Government policy. included in the Statutory Information section of this Annual Report. Membership of the committee is Philip Higginson (Chairman), Bruce Vaughan, AO, Marlyn Robertson and David Croft, AM.
Terms of Office and Remuneration
The remuneration of each Non-executive director is paid out of TransGrid funds, and is determined by the shareholders. The total income received, or due receivable, by all directors of TransGrid is listed in the Notes to the Financial Statements (item 23). The Chief Executive is not entitled to any additional remuneration for being an Executive Director.
TransGrid Annual Report 2003 10 Corporate Governance
Meetings of the Board Meetings Leave of Meetings Entitled Attended Absence Granted to Attend Mr P R Higginson 11 -11 Mr R B Vaughan 9 211 Mr D G Croft 11 -11 Mr N Betts 8 311 The Hon. B J Langton 11 -11 Ms M C Robertson 5 -5
The Board Philip has had extensive experience in senior management positions in the industrial Mr Philip Higginson manufacturing sector and was employed for Chairman 30 years with the global chemical giant ICI Mr Philip Higginson has served as Chairman Australia Limited, the last 10 years of which since 1st February 1995. Philip’s relationship was as Manager for New South Wales. with TransGrid extends back to 1994 when An experienced company director having he was appointed Chairman of Pacific Grid served for lengthy periods as Chairman of Pty Ltd, a wholly owned subsidiary of the Royal Botanic Gardens and Domain Pacific Power. Trust, a director of the Home Purchase Philip is also Chairman of Employment Assistance Authority, a member of the board National Limited, Chairman of Allen Capital of Focus Publishing Pty Ltd, a Vice-President Funds Management Pty Ltd and a director of of the New South Wales Chamber of the publicly listed hire goods company Manufactures, a director of the Employers National Hire Group Limited and his current Federation Limited, a Vice-President of the executive role is as Managing Director of Conservatorium of Music Foundation, and PRO:NED Australia Pty Ltd, a company over 15 years with the Salvation Army, in specialising in non-executive director search which he served both on the Advisory Board and selection and board governance advice. and two terms as Chairman of the Sydney Red Shield Appeal. He also served two terms
The Board
Mr Philip Higginson Mr Bruce Vaughan, AO Mr David Croft, AM Chairman Deputy Chairman Executive Director and Chief Executive 11
as the Federal President of the Australian Limited; Chairman of the Global Alliance for British Chamber of Commerce, and was a Sugar Trade Liberalisation and Reform (10 member of the board of advice of the global countries); and President and Chairman of insurance broking giant, Aon Ltd. A one time the Research Institute of Asia and the Visiting Fellow of the Faculty of Engineering Pacific (the University of Sydney). at the University of New South Wales and a Formerly, Bruce was Chairman of MIM member of the board of the the University of Holdings Ltd, Chairman of Dalgety Farmers New South Wales Foundation, his Ltd, Chairman of ICI Australia Ltd, Deputy qualifications are in marketing and general Chairman of CGU, director of PacificGrid Pty management and he is a current member of Ltd and director of Tubemakers of Australia. the Australian Institute of Management and Bruce was also a founding member of the the Australian Institute of Company Directors, Business Council of Australia. currently serving on a sub committee of the latter reviewing director education syllabi. An He brings varied experience and a broad inaugural member of the board of the Bell base of knowledge and contacts to the Shakespeare Theatre Company, a member of TransGrid Board. the Australia Day Council, a member of Sydney Rotary and a member of the Royal Mr Neville Betts Botanic Gardens and Domain Trust Director Foundation round off his prior practical Mr Neville Betts was appointed to the community service commitments, TransGrid Board on 30th June 1998. obligations, interests and duties. Neville is currently an Organiser of the Mr Bruce Vaughan, AO Electrical Trades Union of Australia, a Deputy Chairman position that he has held since 1984. He is also a Member of the Divisional Council Mr Bruce Vaughan has served as the Power Industry Committee, Deputy Deputy Chairman on the TransGrid Board Chairman of the Utilities and Light since 1st February 1995. Manufacturer Industry Training Advisory Bruce is the Chairman of Queensland Sugar Board (ITAB) and a former Member of the
Mr Neville Betts The Hon. Brian Langton Ms Marlyn Robertson Mr John Byrne Director Director Director General Manager/Commercial and Board Secretary 12 Corporate Governance
ACT Labor Council Executive and Industrial Marlyn brings to the TransGrid Board a wealth Relations Committee. of experience gained in a global manufacturing organisation. In addition, Neville is a Member of the Australian Institute of Company Directors Mr David Croft, AM and a Graduate of the Mount Eliza Executive Director and Chief Executive Business School. Mr David Croft has served as an Executive He brings to the TransGrid Board an Director on the TransGrid Board since in-depth understanding of the electricity 30th June 1995. industry and its associated union activities. As Chief Executive of TransGrid, David is The Hon. Brian Langton responsible for the development, operation Director and maintenance of the New South Wales bulk electricity transmission network. The Hon. Brian Langton was appointed to the TransGrid Board on 15th December 1999. David was closely involved with the formation of the National Grid Management Brian has extensive experience in Council and the development of the National government, having been the State Member Electricity Market (NEM). for Kogarah for 16 years and, prior to this, an Alderman on Kogarah Council for 12 In September 2000, David was appointed years. During his time as the State Member, President of the International Council of Brian held the portfolios for Transport and CIGRÉ, an international forum between Tourism from 1995 to1997 and Emergency utilities, engineers and consultants, operating Services and Fair Trading from 1997 to1998. in over 80 countries. David is a Director of the Energy Industries Superannuation Scheme In addition, Brian is a Member of the and a Governor of the University of Sydney Advisory Board of Calvary Hospital and a Electrical and Information Engineering former Member of the Local Government Foundation. He is also a Fellow of the Association Executive and a former Director Australian Institute of Company Directors. of St George Hospital. David brings more than 40 years Currently operating as a Government experience in the management of Relations Consultant, Brian brings to the interconnected power systems to the Board more than 30 years experience in the TransGrid Board. public sector. Mr John Byrne Ms Marlyn Robertson General Manager/Commercial Director and Board Secretary Ms Marlyn Robertson was appointed to the Mr John Byrne was appointed as General TransGrid Board on 13th December 2002. Manager/Commercial in February 1995 and Marlyn was formerly the Director of Global became Board Secretary in February 2000. Operations in the Service Enterprise Unit of John has more than 39 years experience in Dow Corning Corporation. Marlyn has been the electricity supply industry with a varied with Dow Corning in various roles, since career in all aspects of financial 1982 when she moved to Australia, after management. John was involved in the working in the United Kingdom and living in development of the electricity market and Africa and Egypt. served on the Electricity Task Force, which Marlyn is a member of the Australian led to the current industry structure in New Institute of Company Directors and holds a South Wales. He is also a Fellow of the Bachelor of Economics degree from the Australian Institute of Company Directors. University of Edinburgh.
TransGrid Annual Report 2003 13
The Executive Team Chris FitzGerald General Manager/Engineering David Croft, AM Executive Director and Chief Executive Appointed General Manager/Engineering in May 1999. Appointed Chief Executive in February 1995. Chris has extensive experience in the As Chief Executive, David is responsible for electricity supply industry, from the development, operation and maintenance telecommunications, protection systems of the New South Wales bulk electricity and SCADA through to high voltage transmission network. David is the President transmission line and substation design and of the International Council of CIGRÉ, a major project management. Chris has also Fellow of the Institution of Engineers played a significant role in the development Australia, a Fellow of the Australian Institute of TransGrid’s community consultation of Company Directors and a Fellow of the policy with respect to project development Australian Institute of Management. David is and environmental impact assessment. also a director of the Energy Industries Chris currently chairs the Executive Superannuation Scheme and a Governor of Research and Development Committee in the University of Sydney Electrical and TransGrid. He is a Fellow of the Institution Information Engineering Foundation. of Engineers Australia. Qualifications: BSc, BE (Elec), FIE Aust, The Engineering Business Unit is FAICD, FAIM responsible for the engineering design and specification of the high voltage network, Kevin Murray plant specification and procurement, and General Manager/Network the project management of TransGrid’s Appointed General Manager/Network in major capital works. It provides specialist February 1995. services to other TransGrid business units and undertakes high voltage engineering As General Manager/Network, Kevin is consultancies in Australia and responsible for managing the transmission internationally. assets to achieve a reliable, available and safe electricity supply in an environmentally sound Qualifications : BSc, BE (Hons), ME, manner. The Network Business Unit is also Grad Dip (Bus Admin), FIE Aust, CP Eng responsible for the field management and commissioning of major capital works Don Hutt programs and for the management of General Manager/Corporate property and easements associated with Development the network. Appointed General Manager/Corporate Kevin has more than 30 years experience in Development in April 2000. the management of high voltage Don has more than 10 years experience on transmission systems and is responsible for policy development in the electricity managing nearly two thirds of TransGrid’s industry. He has been closely involved in work force. Kevin is the Chairman of the structural reform processes of the New TransGrid’s Executive Occupational Health South Wales electricity industry and and Safety Committee, Convenor of the particularly, in the policy, legislative and National Electricity Network Safety Steering regulatory development of the NEM and Committee and a director of the New South its institutions. Wales Energy Industry Ombudsman Board. Qualifications: BE (Elec), Dip Bus Studies, FAICD
TransGrid Annual Report 2003 14 Corporate Governance
The Corporate Development Business commercial activities. John is a Fellow of Unit provides a range of strategic and CPA Australia. administrative services including The Commercial Business Unit provides transmission planning, development and services such as finance, treasury, legal, pricing, project development, regulatory logistics, transport, quality, records, audit, affairs, NEM compliance, and management executive services, risk management and of major customer accounts. Additionally, unregulated business projects. In addition, the Corporate Development Business Unit John performs the role of TransGrid’s Board manages government, media and Secretary. community relations. Qualifications: Comm (Acctg Proc) Cert, Qualifications: BA (Politics and Sociology), Cost Acctg Post Cert, Comm Prog Cert, Public Admin Cert FCPA, FAICD John Byrne Lionel Smyth General Manager/Commercial General Manager/Business Resources and Board Secretary Appointed General Manager/Business Appointed General Manager/Commercial in Resources in December 1998. February 1995. Lionel has over 20 years experience in the John has more than 39 years experience in electricity supply industry in a variety of the electricity supply industry with a varied engineering and managerial roles including career in all aspects of financial all aspects of transmission asset management. John joined TransGrid as the management and maintenance. Lionel was Financial Controller on its formation in involved in the development and February 1995 and had the responsibility establishment of the Energy and Water for developing TransGrid’s financial policies, Ombudsman Scheme in New South Wales, procedures and organisational structure. and is closely involved with the New South Since that time, his responsibilities have Wales Industry Safety Steering Committee. expanded to include most of TransGrid’s
The Executive Team
Mr David Croft, AM Kevin Murray Chris FitzGerald Executive Director and General Manager General Manager Chief Executive Network Engineering 15
The Business Resources Business Unit Peter McIntyre provides Health and Safety, Environmental, General Manager/System Operations Property, Human Resource and Information Appointed General Manager/System Technology services to all TransGrid’s Operations in March 2003. business units. Peter has more than 20 years experience in Qualifications: BE (Elec), Grad Mgt Qual, the electricity supply industry in a variety of GAICD roles, with particular expertise in high Dave Manning voltage asset management. He was General Manager/System Operations previously the Manager/Asset Performance responsible for the development of Appointed General Manager/System maintenance policies and asset Operations in July 1999. Retired from management strategies. TransGrid in February 2003. The System Operations Business Unit is Dave has more than 30 years experience in responsible for ensuring the security and the electricity supply industry, particularly in reliability of the electricity transmission high voltage operations and asset network throughout New South Wales in maintenance. He was previously the Area accordance with the National Electricity Manager responsible for the asset Code. It determines operating policy and management and system operations in implementation requirements for system TransGrid’s Orange region. operations, including facilities required to Qualifications: Grad Dip (Elec Eng), monitor and control the high voltage Post Grad Dip (Bus Studies), AMIEE network. Operations staff liaise with NEMMCO and distributors to ensure close coordination of operating activities.
Qualifications: BSc, BE (Hons), MBA (Technology Management)
Don Hutt John Byrne Lionel Smyth Peter McIntyre General Manager General Manager General Manager General Manager Corporate Development Commercial Business Resources System Operations and Board Secretary TransGrid Annual Report 2003 MetroGrid A case study in engineering excellence, community consultation and best practice environmental management
TransGrid Annual Report 2003 18 MetroGrid: Overview
MetroGrid is one of the longest cable projects of its ABOVE LEFT Installation of 132kV Gas Insulated Switchgear. type in the world TOP Tunnelling was carried out 24 hours a day, seven days a week.
MetroGrid involves the reinforcement of MetroGrid will service the more than BOTTOM Road Header breakthrough at Haymarket Substation, January transmission from an existing substation at one million residents, businesses and other 2003. Picnic Point in Sydney’s south to the electricity consumers in the city and Haymarket Substation in the southern CBD. suburbs south of the harbour to Botany It is required to cater for the significant Bay, west to Chullora and east to the increase in demand for electricity in Sydney. coastline.
MetroGrid comprises three major It encompasses one of the longest cable components: projects of its type in the world. ■ 28km of 330kV cabling which will be MetroGrid includes a range of completely underground. A total of environmental and technological 24.5km is being laid in trenches, mainly advancements: beneath public roads, and the last 3.5km of the route is via a purpose built deep ■ New integrated optical fibre technology tunnel section under the southern CBD will continuously monitor the cable and approaches. operating temperature ■ A highly compact, state of the art ■ Design features and cable routing to underground substation in the Haymarket, manage magnetic fields central Sydney with technologically ■ Haymarket Substation was the subject of advanced gas insulated transformers and an international design competition the first ever gas management system, to ■ Utilisation of world leading gas insulated achieve minimal environmental impact. technology in the Haymarket Substation ■ Associated works by EnergyAustralia to ■ An extensive recycling program connect the 132kV network to the instigated. For instance, 90% of Haymarket Substation. excavated sandstone is being reused for landscaping, road base and paving and construction fill. TransGrid Annual Report 2003 19
ABOVE RIGHT Cable jointing activities TransGrid’s largest project in two decades on the MetroGrid project MetroGrid was subject to a two year Project Timetable: planning and environmental approval ■ June 2002 – planning and environmental process. approval process completed
The MetroGrid community liaison program ■ June 2002 – construction commenced is arguably the most extensive ever ■ June 2003 – project 68% completed undertaken for any major infrastructure project in New South Wales. The The various components of the MetroGrid community involvement program includes: project are targeted for completion from the fourth quarter 2003 through to the first ■ A full-time community liaison office on quarter 2004. the MetroGrid route ■ Three full-time community liaison officers ■ Regular community publications ■ Regular community information sessions ■ Public surveys and follow up ■ A dedicated community information web site and information line ■ Coordination with site project management.
TransGrid Annual Report 2003 20 MetroGrid: Community
One of the most comprehensive community ABOVE LEFT MetroGrid Community Liaison Manager talking with a consultation programs ever associated with an resident living along the MetroGrid route. infrastructure project in New South Wales
Community Consultation A community liaison office is based in Laying 24.5km of cable in trenches, mainly Kingsgrove, approximately half way along in the middle of suburban roads, and a the cable route. The community liaison further 3.5km of cable in a purpose built program is made up of the following: tunnel under the CBD inevitably impacts on ■ Community information sessions the lives of people living and working in the affected areas. ■ Community Liaison Group (CLG) ■ Three full-time community liaison officers With the aims of minimising this impact, providing all stakeholders with as much ■ Notifications of upcoming works – three useful information as possible, and letters and a door knock of residents and importantly, facilitating input into the local businesses process, TransGrid has implemented one of ■ Daily visits to site to talk with residents the most comprehensive community affected by construction activities consultation programs ever associated with ■ On site meetings with residents to an infrastructure project in New South Wales. discuss issues ■ 24 hour 1800 freecall number ■ Signage to advise stakeholders of the project ■ A community profile on each cable section to identify liaison issues.
TransGrid Annual Report 2003 21
ABOVE RIGHT TransGrid continually 85% of those surveyed believed the MetroGrid worked with the community throughout the project. project’s performance was either ‘good’ or ‘very good’
The MetroGrid Community Liaison Group Community Surveys meets every month and each of the Once a section of construction is members continues to be briefed on a completed, residents and stakeholders in range of issues such as construction the area are surveyed to ascertain: how progress and the many plans such as the information was provided; impacts and Construction Environment Management perceptions of construction activity, and Plan (CEMP) that are used to protect the any outstanding issues. environment and community. Preliminary results from sections of surveys Local Government representatives from during the reporting period indicated 85% South Sydney, Canterbury, Hurstville, City of those surveyed believed that TransGrid’s of Sydney, Marrickville, Bankstown and performance on the MetroGrid project was Rockdale have joined other experienced either good or very good. The areas members to make sure that the project surveyed during the year have given meets expectations. The Community positive and constructive results. Lessons Liaison Group has travelled along the cable learnt from these surveys are being route and conducted many site visits to implemented in the future sections. experience construction impacts first hand. As part of the extensive information dissemination program, an expert from the Australian Radiation Protection and Nuclear Safety Agency (ARPANSA) was invited to speak to the CLG and answer any questions on electric and magnetic fields (EMFs).
TransGrid Annual Report 2003 22 MetroGrid: Environment
Lasting improvements to the disrupted areas ABOVE LEFT During the installation of the MetroGrid 330kV cable, particular Environmental Awareness at MetroGrid existing substation at Picnic Point. care is being taken to return the easement back to its original In keeping with TransGrid’s commitment to A firebreak was formed behind houses condition after cable laying. Natural minimise the impacts of construction rock formations are carefully lifted or adjacent to the park. This asset protection activities on the environment, all public cut and then replaced in their former zone will assist in providing bushfire positions. This photograph shows a roadways and parklands disturbed by the protection for houses and importantly, an restored area adjacent to the laying of underground cable will be fully Georges River National Park. The access track with a turning circle for bush restored. MetroGrid is committed to caring yellow markers show the alignment fire brigade vehicles has been constructed. of the cable. for the environment by: A significant number of weeds and exotic ■ Complying with all relevant environmental plants were removed from the Park statutes, regulations and standards providing the opportunity for future ■ Putting in place environmental rehabilitation works. management plans that control the way works are carried out As part of the project, an additional 3.5 hectares of the Georges River National ■ Ensuring that environmental factors are Park will undergo extensive bush taken into account for each activity. regeneration. The trees, shrubs and Local Area Improvements grasses to be planted will include hakeas, Part of the philosophy of the community and banksias, acacia, callistemon, angophora, environmental programs has been to provide casuarina and eucalypts native to the park lasting improvements to the areas disrupted as well as appropriate fire resistant native as part of the restoration process. Some plants. examples of work of this nature commenced In preparation for this, over 26,500 native or completed along the 28km routed during seeds from over 29 species have been the year include: collected to plant as the regeneration Georges River National Park project progresses. MetroGrid involved the installation of the This area is seriously degraded by weed electricity cable through parts of the Georges infestation and a weed management River National Park and the upgrade of the program has been prepared.
TransGrid Annual Report 2003 23
MetroGrid Cable Route
CBD Haymarket Substation
Alexandria St Peters Marrickville
Tempe
Kingsgrove
Hurstville Peakhurst Sydney South Substation Picnic Point
Botany Bay
330kV Cable Trench 330kV Cable Tunnel 330kV Substation
Excavated material is reused wherever possible
The program will run for approximately Reusing and Recycling three years, commencing with weed TransGrid ensures good environmental clearing and site preparation in the spring practice by recycling and reusing material of 2003. excavated from the trenches.
Virginius Reserve At the reporting date, 32,000 tonnes of A contribution to the improved amenity of the material including rock, concrete, clean soil Bankstown area is the installation of a new and bitumen had been removed from the bike track in Virginius Reserve. This bike cable trenches of which 5,200 cubic metres track replaces an old path that runs through had been recycled by TransGrid for reuse at the reserve and over Little Salt Pan Creek. the Sydney South Substation. Concrete and asphalt from road pavements continue Extra Security at Australian to be fully recycled. Technology Park TransGrid responded to the changing Over 110,000 tonnes of excavated material, amenity of the area at the Vice-Chancellor’s mainly Sydney sandstone, have been Oval at the Australian Technology Park in removed from the tunnel section, with over Everleigh through the provision of additional 3,000 tonnes being recycled to provide fill CCTV. The cameras are focused on the area required for the Sydney South Substation. A surrounding the construction site and the substantial amount of the remainder has been vent shaft, with safety and security benefits utilised by other building sites around Sydney to both the community and the site. due to its good qualities as fill.
Marrickville Golf Course Underboring of the Cooks River during 2002 required removal of the Golf Club’s practice facilities. These were replaced with a superior facility on completion of works.
TransGrid Annual Report 2003 24 Our Network
TransGrid continues to optimise its asset management policies and strategies to meet the reliability and quality expectations of its customers
Network Profile ■ TransGrid has established a reliability target of 1.3 system minutes rolling TransGrid’s high voltage transmission average over three years network is the largest in Australia. The network comprises over 12,400km of ■ For the year 2002/2003, TransGrid’s three transmission lines with voltages from 132kV year rolling average at the end of the year to 500kV and 81 substations and was 1.8 system minutes. When converted switching stations. to a percentage of energy delivered, this equates to a reliability exceeding It extends across the eastern half of New 99.998%. South Wales from Queensland to Victoria, and the southern part of New South Wales In 2002/2003, there were two extraordinary from the Snowy system and ACT in the east events that impacted upon the three year to Broken Hill in the west. rolling reliability average. Maintenance of network assets, as well as Without these two incidents, the reliability major refurbishments and capital works, is figure for 2002/2003 would have been 1.02 undertaken by three network regions system minutes. (southern, central and northern) and a Availability Technical Services Group, while network Availability, expressed as a percentage of the management and other specialist services total year, is a measure of the preparedness are located in the business office in Sydney. that a network has to transmit energy Reliability between its generating and consuming TransGrid continues to optimise its asset customers across its circuits. An effective management policies and strategies to meet network must have a high level of such the reliability and quality expectations of its preparedness and TransGrid continues to customers. Throughout the reporting period, achieve an availability performance TransGrid continued to deliver reliability consistent with leading international matching world’s best practice levels while transmission organisations. undertaking extensive maintenance, This measure relates to the total duration of commissioning and construction programs. transmission circuit outages compared to Reliability relates to the amount of energy the total possible hours available for all not supplied due to a breakdown in the circuits. It indicates the effectiveness of network. Described in terms of ‘System strategies to minimise the number and Minutes Lost’, it is a measure of the service duration of planned maintenance outages level of the transmission network as seen by by the optimisation of maintenance the customer. It is the equivalent of how frequencies and the coordination of routine, many minutes the total network, while defect and capital works outages. It also delivering the annual maximum MW reflects the success of maintenance demand, would have to be out of service to policies and practices in reducing equate to the amount of energy not unplanned circuit outages. supplied during the year. The same measure can also be applied to the energy not supplied in an individual incident.
TransGrid Annual Report 2003 25
Variation of Daily State Demand (MW) While availability is measured as a percentage of the ideal ‘no outages’ situation, clearly no responsible Maximum Winter Demand Maximum Summer Demand Minimum System Demand transmission network could attain an 2nd July 2002 30th January 2003 26th December 2002 availability of 100%. To do so would require 14000 absolutely no scheduled maintenance or 12000 capital work to be performed. 10000 TransGrid has a target of between 99.0% 8000 and 99.2% at the end of year. For the year
6000 2002/2003, TransGrid achieved an availability of 99.64%. 4000 System Operations 2000 The TransGrid network is now monitored and operated around the clock from three control 0000 0200 0400 0600 0800 1000 1200 1400 1600 1800 2000 2200 rooms. There are two regional sites, at Yass (Southern Regional Control) and Newcastle (Northern Regional Control), and one in C Variation of Daily Temperature* (0 ) Western Sydney comprising both Central Regional Control and State System Operations.
Maximum Winter Demand Maximum Summer Demand Minimum System Demand System Operations has responsibility for 2nd July 2002 30th January 2003 26th December 2002 ensuring the network continues to operate 50 in an electrically secure way and that there is safe access to the system for 40 maintenance and project work.
30 As the name suggests, State System Operations oversees the entire New South 20 Wales transmission network. After 18 years housed at a purpose built facility in north 10 western Sydney at Carlingford, the State System Operations moved to a new control 00
2 room at Wallgrove, in Sydney’s west. 0000 0 0400 0600 0800 1000 1200 1400 1600 1800 2000 2200 This highly complex move was completed successfully, with operations commencing System Weekly Maximum Demand (MW) at the new site within the planned time and budget constraints. 1992-1993 1997-1998 2002-2003 The new facility incorporates a modern and 14000 powerful Supervisory Control and Data 12000 Acquisition (SCADA) system which provides
10000 enhanced monitoring over the Data Acquisition Control (DAC) system it replaces. 8000
6000
4000
2000
July Aug Sept Oct Nov Dec Jan Feb Mar Apr May June
* Observatory Hill, Sydney.
TransGrid Annual Report 2003 26 Our Network
This newly installed technology allows TransGrid employs the following processes ABOVE LEFT TransGrid problems in the network to be located more in its asset management: telecommunication system has been extensively upgraded to include a quickly and more accurately. SCADA also ■ Specialist working groups for substations, fibre optic network. enables the staging of virtual replays of lines, protection and metering identify ABOVE The new State System events to assist post event analysis and specific performance related issues Operations Control Room, Wallgrove. includes a range of other capabilities that requiring detailed investigation, reporting greatly enhance the ability to monitor and and corrective action across the whole control the network. network. Policies and strategies are Asset Management reviewed to balance issues of plant TransGrid continues to review its asset performance, element criticality and management techniques in order to risk exposures. produce best practice performance from its ■ Quarterly Asset Performance Reviews assets. This is reflected by the high examine in detail the trends, causes and standards of reliability and availability consequences of all forced and emergency regularly achieved. outages of all network plant. Investigations Asset management involves processes that: are instigated, and recommendations implemented, based on factors that have ■ Establish maintenance policies and potential to impact on reliability, availability, refurbishment and replacement strategies the environment or safety ■ Assess actual compliance with policies ■ Technical Performance Assessments are ■ Review the performance trends of plant conducted at all three regions as part of a yearly process. Each region’s processes, ■ Compare practices with other best technical documentation and condition of practice transmission organisations. plant are reviewed for compliance with policies and standards. Such assessments provide the local, regional and network management with feedback on the state of the assets and processes, as well as identifying any issues that need to be addressed
TransGrid Annual Report 2003 27
TransGrid Network System
Bulli Creek
Lismore Dumaresq Tenterfield
Moree Koolkhan
Inverell Glen Innes
Narrabri Coffs Harbour
Armidale Dorrigo Nambucca Gunnedah Tamworth 132 Tamworth 330 Kempsey
Port Macquarie Broken Hill Muswellbrook Taree Beryl Wellington Liddell Bayswater Stroud Wellington Town Mudgee Clarence Burrendong Dam Town Karuah Tea Gardens
Parkes Ilford Mt Piper 132 Molong Mt Piper 330 Forbes Orange Panorama Wallerawang Buronga Cowra
Griffith Avon Redcliffs Balranald Darlington Point Murrumburrah Yanco Marulan Dapto Yass Kangaroo Valley Coleambally Wagga 132 Burrinjuck Murrumbateman Wagga 330 Tumut Canberra Gadara Queanbeyan Blowering Deniliquin Dam Finley Lower Tumut Jindera ANM Upper Tumut Albury Hume Murray Cooma Snowy Adit
Wodonga Guthega Dederang Munyang
Liddell Bayswater Tomago
Newcastle BHP Waratah Transmission System Voltages Eraring
Vales Point 500kV Transmission Line Munmorah 330kV Transmission Line Tuggerah 220kV Transmission Line 132kV Transmission Line 66kV Transmission Line 330kV Underground Cable
500kV Substation 330kV Substation Vineyard Mt Colah 220kV Substation Sydney North 132kV Substation Sydney East Mt Druitt Supply Authority Exchange Point Regentville Sydney West Interstate Exchange Point
Kemps Creek Beaconsfield West Liverpool Wallerawang Sydney South Ingleburn Yass Avon Dapto
TransGrid Annual Report 2003 28 Our Network
TransGrid’s approach to performance is all encompassing
■ TransGrid’s corporate objectives for The 2002/2003 fires, in terms of their electricity supply, safety, quality and the potential impact on electricity supply environment continue to be met through were the worst in the history of the the implementation of the Network State. Management Plan 2001/2006. The Plan For a second consecutive season, major provides a focus for ongoing analysis within bushfires throughout much of New South TransGrid and for continual improvement of Wales posed threats to life, property and the transmission system’s management electricity supply. Flames and carbonised airborne debris and smoke act as ■ TransGrid continued its participation in conductors, which can cause a line to trip. the International Transmission Operations and Maintenance Study (ITOMS) program The 2002/2003 fires, in terms of their for the fifth time. The program involves potential impact on electricity supply were over 20 transmission organisations the worst in the history of the State. They worldwide, including all seven from commenced in October 2002 in the north at Australasia, with the balance from Armidale and near the Hunter power Europe, Scandinavia and America. This stations, moved down to the Central Coast study will utilise data from the and Sydney in December, surrounding the 2002/2003 financial year city’s outer suburbs with a pall of smoke and ash. Then came the terrible ■ TransGrid’s internal benchmarking conflagrations in January 2003, process, TransGrid Inter-Regional with the tragic loss of four lives and the Transmission Operations and destruction of over 500 houses and the Maintenance Study (TIRTOMS), historic Mt Stromlo Observatory in benchmarks its three regions utilising a Canberra, as well as one million hectares of format similar to ITOMS. Through the Kosciuszko National Park. TIRTOMS, TransGrid is able to identify those locations that impact on TransGrid’s Estimated network bushfire exposure combined performance in specific during this period was more than 600km of maintenance activities, providing a driver transmission lines, compared to the 200km to improve the local performance. for the 2001 Christmas New Year fires. The fires caused 201 outages of 330kV and 500kV transmission lines from 5th October 2002 to 2nd February 2003, including 103 trips with auto reclose and two at the request of the Bushfire Service for emergency operations.
TransGrid Annual Report 2003 29
ABOVE More than 600km of Seventeen TransGrid 132kV transmission routing decisions to ensure continuity of transmission lines were exposed to line trips occurred due to bushfire faults supply, and network maintenance teams, the ravages of bushfires in January 2003. over the period, mainly on southern lines in whose task was to quickly repair fire the Canberra/Kosciuszko area. damaged equipment. ABOVE RIGHT Aerial view of Upper Tumut Switching Station after the In one day, 4th December 2002, the The entire traumatic episode was also bushfires. network experienced more main grid testament to the diligent application of transmission trips than would normally be maintenance policies and training incurred in five years! procedures. It also reaffirmed the robustness of network switchgear and protection All high voltage transmission equipment and systems and the appropriateness of fire associated systems performed extremely hazard vegetation control. TransGrid is reliably. Despite the fact the fires were the continuing to work with rural fire services, worst on record, TransGrid had only one building upon the experience gained from loss of supply, namely from 132kV lines in these bushfires, in right of way and access the Cooma, Bega and Jindabyne areas. track management. The system remained in a stable condition throughout the period and NEMMCO responded affirmatively to requests to reclassify multiple contingencies as credible when double circuit lines were under threat. The performance of the transmission lines with regard to design and maintenance was highly effective, with only 14 poles having to be replaced from fire damage. Such an outstanding result in the most extreme of circumstances reflects a high level of skill and preparedness of all TransGrid staff. At the front line were system control operators, who constantly had to make critical, and often split second,
TransGrid Annual Report 2003 30 Capital Works
TransGrid completed an annual capital works program of over $260 million
To ensure the ongoing reliability of the New MetroGrid South Wales transmission network, and to The MetroGrid project augments the meet the requirements of an increasing electricity supply to the CBD and Inner customer demand for electricity, TransGrid is Suburbs. The project includes installation of a continuously involved in augmentation of the 330kV cable from Sydney South 330/132kV network and in replacement or refurbishment Substation to a new 330/132kV component of aging assets. substation currently under construction in the In addition, the network may occasionally Haymarket, an associated 3.5km cable need to be reinforced to meet the new tunnel into Haymarket and cable bay works requirements of additional generating plant at Sydney South Substation. The project also or of large industrial customers. involves substantial associated works by the local distributor, EnergyAustralia, including a As a consequence, TransGrid’s annual new 132/11kV zone substation at Surry Hills capital works program is the culmination of and 132kV cable works to connect both an extensive planning and investment TransGrid’s and EnergyAustralia’s new process designed to deliver the most substations to the existing 132kV network. efficient service outcome for our network users. The long lead times involved in At 30th June 2003, approximately 68% of delivering transmission developments make the major elements of the project, namely the project planning and construction basic tunnelling construction, cable laying process a vital component in achieving an and construction of the Haymarket sub- effective transmission service delivery system. station, had been completed. At any one time up to 345 project personnel have been Developing transmission networks is quite working on the construction project, with challenging and complex, requiring nearly 2,000 individuals involved on site perserverance to steer the projects through since construction commenced. regulatory and environmental approval processes. Both these processes involve Independent Assessment of MetroGrid extensive stakeholder consultation and are Construction Impact essential to ensure the best result for both An outline of the comprehensive community the electricity customer and the wider and environmental management programs is community. contained in the MetroGrid feature on page 20. As stated elsewhere in this report, Such capital works are carried out by TransGrid places great store on not only TransGrid using a competitive contract implementing best practice in these areas of based project management process. public interest but also regularly commissions The following summaries describe the major independent reviews to assess its own capital works projects undertaken by performance. Given the size and nature of TransGrid during this year, in a total annual MetroGrid, an independent report on the program of over $260 million. project’s environmental performance over the past year was conducted by the project’s environmental management representative.
TransGrid Annual Report 2003 31
ABOVE MetroGrid tunellers standing It found that given the scale of the project The route transverses the Ourimbah State in front of the tunnel boring machine and the linear nature of the works, the Forest, semi rural properties, the F3 that worked its way underground from Sydney Park to to TransGrid’s impacts have been effectively predicted, well Freeway, a residential estate, the main new Haymarket Substation. managed and within acceptable limits. The northern railway, Pacific Highway and report concluded that TransGrid and its wetland areas. Scheduled completion date contractors are exercising best management is first quarter 2004. practices, the adopted construction practices are environmentally friendly and Wollar-Wellington Transmission Line effective, proper environmental safeguards Community consultation commenced in are in place and TransGrid is complying with May 2003 for the planned construction of a relevant environmental legislation and new 330kV switching station at Wollar approvals granted for the project. (north-east of Mudgee), and a new single circuit 330kV transmission line between the Tuggerah-Sterland new Wollar switching station and Wellington 330kV Transmission Line 330/132kV Substation. The new The construction of the Tuggerah-Sterland infrastructure will reinforce the supply to the 330kV Double Circuit Transmission Line will west and central west of the State and commence in the second half of 2003 and ensure reliable power supply is available to into 2004 to meet the increasing demand the residents of the region. Stage one of for electricity in the rapidly growing Central the environmental impact statement also Coast area. The double circuit line will commenced during the reporting period. replace the existing 330kV single circuit The project also includes the establishment transmission line that connects the of a microwave radio link between Wollar Tuggerah Substation and the switching station and TransGrid’s Munmorah-North Sydney Line at Sterland communication network, to provide better in the Ourimbah State Forest. communications to Wellington Substation; and the installation of 50MVAr 330kV shunt In order to minimise the environmental reactors at Wellington Substation. impact, a strategy of utilising the existing easement was proposed by TransGrid The construction of the project is planned and supported by environmental and to commence by 2005, and is anticipated community interests following extensive to be completed in 2007. consultation with councils and the local community.
TransGrid Annual Report 2003 32 Capital Works
Molong-Manildra Transmission Line The need for a further source of controlled ABOVE LEFT Molong-Manildra Line reactive power arises from continuing load utilises compact 132kV design to During 2003, TransGrid completed 90% of minimise impact on the environment. growth throughout New South Wales and construction of the Molong-Manildra 132kV from the expected power flows under the ABOVE Sydney South Substation Transmission Lne. The new line and the required extensive earthworks for NEM. Traditionally, power flows have been associated Manildra 132kV Substation and three new 330kV bays. from power station to load centre but under its distribution lines to be constructed by the NEM large power flows into and from Country Energy, will provide for the needs neighbouring states can now occur. These for the region west of Orange which is power flows can fully utilise transmission line experiencing substantial growth through the capacities and create additional VAr losses. success of a range of agriculture based The SVC, through the provision of additional industries including flour milling and a reactive power, will improve the utilisation of booming wine sector. the existing transmission network and will Sydney West Static VAr add to the reliability and quality of supply. Compensator Sydney South 330/132kV Substation – TransGrid has placed a contract with ABB for Replacement of Transformers and the installation of a Static VAr Compensator Augmentation at the Sydney West 330 kV Substation. The Sydney South 330/132kV Substation is a key Static VAr Compensator (SVC) is needed to point of supply for the Sydney metropolitan balance the overall reactive power area and the CBD and requires increased requirement of the New South Wales system transformer capacity. A program of replacing and to provide a dynamic source of reactive the aging units, which are approaching the power to support the system during end of their economic life, commenced in disturbances. The project is scheduled to be March 2003 and is scheduled to be completed by mid 2004. When completed before December 2003. commissioned, it will provide a fast acting reactive power source able to control the Augmentation of the substation is also substation 330kV voltage and to rapidly required to facilitate the termination of respond to network disturbances. the new MetroGrid cable and to provide three new 330kV bays for additional reactive plant to be installed at Sydney South. Work commenced in October 2002 and is scheduled for completion by the end of 2003.
TransGrid Annual Report 2003 33
ABOVE Additional 330/132kV Yass 330/132kV Substation – Canberra Substation Augmentation – transformer installed at Wallgrove. Reconstruction Installation of Transformer ABOVE RIGHT Capacitor banks installed at Wallgrove. A contract for the construction of the new The Canberra 330/132kV Substation is a point substation at Yass, the first 330kV of supply for both ACTEW Corporation and substation developed on the TransGrid Country Energy. It is used to supply the load system in 1959, was awarded in April 2003 to the Australian Capital Territory and with work expected to be completed on the Canberra City, Queanbeyan and parts of the existing site by September 2004. South Coast region. The load on this substation is increasing and the installation of Sydney West 330/132kV Substation – the fourth transformer will ensure that both Installation of Transformer local distributors continue to have a reliable The Sydney West Substation provides point of supply. supply to a major part of Western Sydney. Installation and commissioning were The increasing load in this region, completed in July 2002. particularly during summer peaks, has necessitated the installation of an additional 330/132kV transformer. This project, which increased the number of transformers to five, was successfully completed in December 2002 in time for the summer peak loads.
TransGrid Annual Report 2003 34 Capital Works
Other Capital Projects Work Completed or in Progress
Project Purpose Progress Albury to ANM (Australian Relocation of 12km 132 kV Commissioned July 2002 Newsprint Mills) Transmission transmission line for the Line Albury Wodonga Development Corporation Canberra 330/132kV Installation of fourth transformer Commissioned July 2002 Substation to meet growing load in Canberra area Coleambally 132kV New 132kV line bays installed to Completion scheduled for Substation improve the reliability and security September 2003 of supply to the South West area Deniliquin 132kV Substation Installation of capacitor bank Completed July 2002 Finley 132kV Substation Installation of capacitor bank Completed September 2002 Molong to Manildra 132kV Reinforcement of supply to Completion scheduled for Transmission Line Manildra Flour Mill August 2003 Queanbeyan 132kV Installation of second transformer To be commissioned in Substation July 2003 SNOVIC Project Transmission line uprating and Completed December 2002 control system implementation are required in New South Wales as part of overall project to increase Snowy/New South Wales export capability to Victoria Sydney West 330/132kV Installation of transformer to meet Installation of the new Substation growing load in the Western transformer completed by Sydney area December 2002 and is now in service Sydney West 330/132kV Installation of a 200MVAr 330kV Completed December 2002 Substation tuned capacitor bank is required to provide system reactive support Sydney West SVC Installation of Static VAr Completion scheduled for Compensator (SVC) mid 2004 Tuggerah 330kV Substation Installation of 132kV Scheduled for completion capacitor bank July 2003 Wollar-Wellington 330kV Reinforce supply to Central Completion scheduled for Transmission Line Western New South Wales 2007 Yass 330/132kV Substation Reconstruction of existing Completion scheduled substation for September 2004
TransGrid Annual Report 2003 Corporate 35
The network that is critical to the efficient operation of the National Elecricity Market (NEM) interconnects Brisbane to Sydney and then onto Melbourne. Most of this network is embodied in New South Wales.
Role of New South Wales Over the past 20 years, there have been Transmission Network in the NEM only two major transmission links built in New South Wales: the Eraring to Kemps The New South Wales transmission network Creek 500kV link (which was commissioned plays a pivotal role in facilitating the NEM. in the early 1980s to match the start up of The network is critical to the efficient Eraring Power Station), and the operation of the NEM and principally Bayswater/Mt Piper-Marulan 500kV link interconnects Brisbane to Sydney, and then (presently operating at 330kV) which was to Melbourne. Most of this network is constructed in the late 1980s and early embodied in New South Wales. 1990s, in conjunction with the start up of In this regard, the major event in recent Bayswater and Mt Piper Power Stations. years was the commissioning of the During this 20 year period, the customer Queensland New South Wales demand for electricity in New South Wales Interconnection (QNI), the high voltage has virtually doubled. Consequently, as a interconnector between Queensland to New result of the ongoing demand growth, major South Wales. The benefits of QNI in development of the transmission network in normalising spot prices in the NEM have New South Wales is now being planned, to been significant. In addition, QNI has continue to provide the expected level of resulted in increased power flows on the reliability to electricity customers in this State. New South Wales transmission network which will need to be taken into account Energy Growth and Electricity Demand while planning the development of the New Energy growth in New South Wales has South Wales network. continued at approximately 1,600GWh per annum over the past 20 years. New South Wales Network Development Consistent with the development of In that same period, winter electricity networks in each state of Australia, the demand has, on average, increased by New South Wales network was planned to about 270MW per annum, and summer provide reliable cost effective connections demand at about 350MW per annum. between the major power stations in New South Wales and the major New South Customers Wales load centres, and to provide reliable TransGrid provides a transmission network supply to the more remote parts of the State. service that forms part of the linkage between the producers and consumers of electricity. TransGrid is committed to providing the best value service to all its customers and to continually build on this level of service through regular customer contact and feedback.
TransGrid Annual Report 2003 36 Corporate
During the year, TransGrid processed a Local Generation and Demand number of connection enquiries and Management (DM) applications from prospective load and TransGrid considers local generation and generator customers, particularly from wind demand management as equal options in generation proponents. The level of interest meeting the growing demand in New South from prospective industrial load customers in Wales. the Newcastle area continues to be strong. TransGrid, EnergyAustralia and the TransGrid contributed to a number of Department of Urban and Transport initiatives that provided guidance and Planning have initiated a high priority assistance to the market on the grid project to implement a demand connection processes outlined in the Code. management strategy to provide robust, These initiatives included a TransGrid Wind practical and accurate information on the Grid Connection Workshop, participation in electricity Demand Reduction (DR) a Sustainable Energy Development opportunities in the study area that may Authority (SEDA) Wind Roundtable and defer or avoid future network expansion in conference presentations. the greater Sydney area. TransGrid and Transmission Pricing Review EnergyAustralia are sponsoring the project by committing a total of $10 million. An TransGrid’s transmission prices for independent project manager was 2002/2003 were calculated for the first time appointed in May 2003 to complete the using the cost reflective network pricing project within five years. methodology specified in Chapter 6 of the National Electricity Code (NEC). A major Historical New South Wales Energy Use feature of the Code based prices is that separate prices are set for each 100,000 transmission connection point throughout 90,000 the State. These prices show significant 80,000 variations between locations, providing a 70,000 locational price signal to transmission 60,000 50,000 customers. 40,000 A series of meetings and presentations on 30,000 the price changes was undertaken to 20,000 present and prospective customers. 10,000 There was continued strong interest from businesses considering large industrial 1950/51 1955/56 1960/61 1965/66 1970/71 1975/76 1980/81 1985/86 1990/01 1995/96 2000/01 2005/06 2010/11 projects in New South Wales and indicative transmission prices were provided, together Historical New South Wales Winter and Summer Demand with an explanation of the prices and the Winter Demand Summer Demand guidelines relating to transmission discounts. 18,000 TransGrid again acted as the Coordinating 16,000 Network Service Provider for New South 14,000 Wales and undertook the pricing allocation 12,000 process for both EnergyAustralia’s and 10,000 TransGrid’s transmission services. Prices 8,000 for 2003/2004 were published in May 2003, 6,000 after notification to TransGrid’s customers. 4,000 2,000 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
TransGrid Annual Report 2003 37
A Changing Regulatory Environment South Australia/New South Wales Interconnection (SNI) The past year has been one of challenge and activity in the regulatory arena. Following the National Electricity Market Management Company’s (NEMMCO) The most significant event was the release determination of 6th December 2001 that in December 2002 of the major review of SNI is justified as a regulated the Australian NEM conducted for the interconnector, Murraylink Transmission Council of Australian Governments (COAG). Company (MTC), lodged an appeal to the This report, known as the Parer Market National Electricity Tribunal against the Review, has now formed the foundation for determination. On 31st October 2002, the the ongoing debate on the next phase of Tribunal announced that SNI was justified, reform of the NEM. rejecting all of the MTC’s grounds for The importance of energy reform was appeal. reflected by the establishment of an On 28th November 2002, MTC filed a Australian Government Committee, chaired Notice of Appeal in the Supreme Court of by the Prime Minister, to determine the Victoria in Melbourne against the Tribunal’s ultimate Commonwealth position on energy decision. policy. In June 2003, the Ministerial Council on Energy announced a proposal to In the Appeal, NEMMCO and TransGrid establish a new body responsible for energy were identified as Respondents to the market rules, the Australian Energy Market Appeal. At the Directions Hearing in the Commission, to replace the existing Victorian Supreme Court on 25th February National Electricity Code Administrator. 2003, the Minister for Energy (New South These developments have implications for Wales) and the Minister for Energy (SA) TransGrid’s business outcomes and the were joined as respondents to the ability of TransGrid to deliver improved proceedings at their respective requests. network services in the future. The substantive hearing on the Appeal was Revenue Reset Preparations held in the Supreme Court of Victoria, Under the National Electricity Code, Melbourne from 23rd to 26th June 2003. TransGrid’s revenues are subject to periodic A judgement was handed down by the determination by the Australian Competition Supreme Court on 24th July 2003, and Consumer Commission (ACCC). upholding the Appeal by Murraylink. Currently, the ACCC conducts this review TransGrid has since lodged a Notice of every five years in line with the incentive Appeal with the Court of Appeal of the based regulatory framework contained in Supreme Court of Victoria on the Code. TransGrid is scheduled to have a 7th August 2003. new revenue cap determination during the next financial year, covering the period from 1st July 2004 to 30th June 2009. TransGrid’s ability to meet its service obligations, including adequate levels of network reliability, environmental and safety responsibilities and its responsibilities to electricity end users and Market Participants in the NEM, is impacted by the ACCC’s determination. Substantial resources were committed to preparing the submission to be made in October 2003.
TransGrid Annual Report 2003 38 Corporate
New South Wales Annual 2003 Annual Planning Review and Planning Review Report for New South Wales The Annual Planning Review for 2003 TransGrid’s Obligations commenced in October 2002 with a review TransGrid is responsible for the planning of the customer demand forecast for New and development of transmission networks South Wales, considering the regional load in New South Wales. forecasts by Distributors. These forecasts In its role as the Jurisdictional Planning took into account the actual demand levels Body (JPB) for New South Wales, it experienced during winter 2002. TransGrid represents the New South Wales provided the revised New South Wales load Jurisdiction on NEMMCO’s Inter-Regional forecast to NEMMCO for inclusion in its Planning Committee (IRPC), provides 2003 Statement of Opportunities published jurisdictional information to the IRPC to on 31st July 2003. enable it to assist NEMMCO in producing Based on these revised load forecasts, its annual Statement of Opportunities, and TransGrid has updated its short term (one, carries out an Annual Planning Review and three and five years) and longer term (five- prepares an Annual Planning Report for 10 years) analysis of current and emerging New South Wales. network augmentation requirements. The TransGrid is registered with NEMMCO as a demand forecasts and the results of Transmission Network Service Provider network planning review are summarised in (TNSP) in the New South Wales region of the Annual Planning Report 2003. the NEM. As a TNSP, it analyses the future The level of information included in the APR operation of the transmission network to is intended to encourage market determine the extent of any future network participants and interested parties to constraints, conducts annual planning formulate and propose options to relieve reviews with Distributors to determine the the identified constraints, including those extent of any emerging constraints at points that may include components of local of connection and manages the regulatory generation and Demand Management (DM) approval process for transmission network or other options that may provide augmentations in accordance with the economically efficient outcomes. Code and the ACCC’s Regulatory Test. The Annual Planning Report 2003 forms a Figure 1 illustrates the main planning and basis for reporting to the New South Wales process interrelationship of TransGrid’s Minister for Energy on the outcome of the planning roles and Figure 2 shows the main Annual Planning Review 2003 for the New tasks carried out during the APR. South Wales transmission system.
TransGrid Annual Report 2003 39
Figure 1. TransGrid’s Planning Process
NSW Code TransGrid Participants and IRPC/NEMMCO As Jurisdictional As TNSP Interested Parties Planning Body
Prepare DNSP Prepare TG Load Supply Point Load Forecast Forecast
Prepare and Annual Planning Publish Annual Reviews Planning Report
Present Annual Planning Review Hold Public Participation as Forum to Present Required APR Comments at Forum
Publish Statement Submissions of Opportunities Consider SOO and Conduct Public including Annual Annual Planning Consultation Interconnector Review Issues Review
Publish Final Report
Report to the Minister Resolve Disputes
Build Project
Figure 2. Annual Planning Process
Distributors’ Load Information to SOO Forecasts
State Load Annual Planning Planning Analysis Forecast Report
Public Participants’ Report to Forum Comments Minister
Issues from SOO
TransGrid Annual Report 2003 40 Unregulated Business
During 2002/2003 TransGrid continued to strengthen its relationship within the electricity industry including China where it continues to enjoy a well deserved reputation for excellence
Telecommunication Assets seminar in Shenzhen. Following the success of this CEC engaged TransGrid to conduct a TransGrid owns and manages a network of regional electricity market national seminar more than 80 radio communication sites in Kumming in August 2003. across New South Wales. These assets are strategically located and highly regarded by During 2001/2002, TransGrid conducted a telecommunication companies and third transmission network technical training party network owners for their competitive program for staff from Sichuan Electricity rental charges and wide coverage of which has led to a request for TransGrid to metropolitan, regional and rural areas. conduct a further training program for its commercial/financial staff in late 2003. In addition to the obvious economic benefit to TransGrid, providing third party access to During the year, TransGrid hosted and TransGrid’s infrastructure also assists the provided training for 18 separate electricity environment and local communities by industry delegations from China. The recent maximising the use of existing infrastructure restructuring of the electricity industry in and preventing the proliferation of China and the separation of generation from a communication towers across the State. vertically integrated power industry provide an Furthermore, TransGrid is working with immediate opportunity for TransGrid to assist licensed carriers to utilise existing high in both the modernisation of the newly formed voltage towers for the installation of mobile transmission companies and the introduction telecommunication equipment so as to of competitive electricity markets. reduce the need for new mobile phone towers. Four such installations are currently Delivering Broadband to Regional New being implemented. South Wales TransGrid has established a new web site In August 2002, TransGrid, Country Energy (http://www.transgrid.com.au/services/telec and AARNet signed a Memorandum of omms.html) to facilitate and streamline third Understanding for a new, high speed party access to network infrastructure. telecommunication link between Armidale and Sydney. The agreement, which was TransGrid in China signed at a function held in the University of New England (UNE), Armidale, will result in During 2002/2003, TransGrid continued to faster and cheaper information technology strengthen its relationships with the to regional centres. electricity industry across China where it continues to enjoy a well deserved The New South Wales Minister for Energy reputation for excellence. attended the signing ceremony and said the initial agreement will serve the immediate The beginning of the financial year saw the needs of UNE, but also has the potential to completion of stage two of the East China bring significant benefits to the whole New Regional Market Study by TransGrid with England/north-west region. The new link will work on stage three expected to provide 15 times the present bandwidth commence in late 2003. while reducing costs by about one third. In September 2002, the China Electricity Armidale is an important location for Council (CEC) invited TransGrid to conduct TransGrid. It is a major electricity supply a transmission business systems national centre in New South Wales and is the
TransGrid Annual Report 2003 41
ABOVE TransGrid operators interconnection point for electricity transfers Because of the 24 hour nature of the monitoring a new, high speed with Queensland. mining operations, outages of the electricity telecommunication link between supply are difficult to obtain and cost Armidale and Sydney. This project illustrates TransGrid’s commitment hundreds of thousands of dollars per hour. RIGHT TransGrid’s live line techniques to seeking to extract maximum community exported to Western Australia. value from its infrastructure assets. Hamersley Iron’s asset management strategies for the Dampier Substation UNE and TransGrid have agreed to identified the need to replace all the 220kV cooperate in facilitating a pilot project to bus insulators without interruption to share the usage of the link with the local supply, a task the specialist TransGrid team community for a period of up to three undertook in June 2003. The project years, when separate capacity can then be involved replacing 21 strings of 24mm provided on the TransGrid network. tension insulators (378 discs) and nine This initiative will form a model that can be underslung post insulators. replicated at other regional centres along A massive 160 tonne crane was required to TransGrid’s optical fibre network that extends access the substation environment without from the Queensland border to Albury. infringing safe approach distance. Live Substation Work in Dampier
TransGrid’s reputation for barehand live line techniques led to an unusual contract during the year with Hamersley Iron which called for these skills to be adapted to a substation environment. Hamersley Iron has a large iron ore mining operation in the Pilbara region in Western Australia. It relies on a secure electricity supply for its operations and is a power supply authority in their own right. Its system supplies Dampier and other surrounding towns and is connected to the North-West Grid system up to Port Hedland.
TransGrid Annual Report 2003 42 Innovation & Excellence
ABOVE LEFT A Reinhausen Trial of a new surge arrester monitoring device Tapchanger monitor, installed on a critical network.
Condition Monitoring and the presence of accumulated moisture ABOVE TransGrid is a world leader in its approach to the management of over time can affect a transformer’s suitability On line condition monitoring has been a key on line monitoring data. for service. On line moisture monitoring can area of research for TransGrid in recent years. assist in assessing the moisture content in A focus for the past year was the trial and transformers, and enable this to be tracked evaluation of new monitoring devices, and over time. During the year, a number of automated analysis and decision making moisture monitors were trialled in several using data from a range of on line important power transformers with ongoing monitoring devices. tests planned. TransGrid has had experience with a wide In 2003, TransGrid agreed to trial a new range of on line monitoring devices over surge arrester monitoring device marketed several years, including some new devices in Australia by ABB, with a two year in the 2002/2003 year. evaluation period scheduled. For the first time in Australia a Reinhausen As well as new devices, further work was tapchanger monitor was installed in a undertaken to evaluate and refine the use network, in this case on one of the most of existing devices, including Alstom’s critical transformers in TransGrid’s network CB-Watch two circuit breaker monitors. for maintaining supply to Sydney’s CBD. TransGrid is one of a few utilities worldwide The tapchanger monitor is able to quickly that has had extensive experience with on line detect a wide range of adverse conditions circuit breaker monitoring. An on site and generate alarms with varying levels of evaluation by a leading Alstrom representative urgency. The experience gained may lead from France during the reporting period will to further installations on other major result in greater understanding of the use and network assets. applications of circuit breaker monitoring for the industry world wide. The generation of moisture in transformer insulation is a key factor in its rate of aging, As well as extensive experience with various devices themselves, TransGrid has undertaken research into the automated analysis of on line monitoring data. One of
TransGrid Annual Report 2003 43
ABOVE RIGHT Partnership Agreement the main advantages of on line monitoring is Fibre spans of up to 182km, which signing: Mr David Croft, Chief the ability to have an indication of key incorporate technology developed for Executive, TransGrid and Mr Nori Karasuda, Chief Executive, equipment condition parameters submarine network applications, have been Fujitsu Australia. continuously in real time. With this used to avoid the high cost of adding new information at hand, it is possible to perform repeater sites. analyses and checks of several monitoring To achieve low transmission delays and devices in combination to achieve an high reliability in all circumstances, an improved determination of the actual innovative ‘ladder’ network architecture condition of the equipment. The research was developed enabling diverted traffic to undertaken in TransGrid has focused on take the fastest route in the event of failure. automating this process, where possible, so This represents a merging of power system that the condition monitoring system and telecommunication design practices. provides advice to users as well as raw data. This design can also accommodate the Optical Fibre different network traffic priorities demanded Telecommunication Network by power system services.
TransGrid’s new optical telecommunication The telecommunication network has network features 27 nodes interconnecting full remote network management that over 1,500km of fibre optic cable running allows switching, performance monitoring, from the Queensland to the Victorian border. diagnostics and synchronisation from It is critical to the operation of the power the main TransGrid maintenance supply for New South Wales and the management centres. management of the NEM. During the December 2002 and January 2003 To minimise the environmental impact and bushfires, the power network experienced take full advantage of existing frequent faults. The signalling needed to infrastructure, the fibre optic network was correctly isolate these and maintain supply run in the overhead earthwire using OPGW was carried over the new optical network that (optical ground wire). transverses the fire affected area without any malfunctions, ensuring the reliability of the main power network.
TransGrid Annual Report 2003 44 Environment
The past year has been both active and productive on the environmental front, with many achievements and milestones realised through the efforts of dedicated staff throughout the organisation
A commitment to best practice training, and system documentation. The environmental management is a core structure is illustrated in the diagram below. commitment of TransGrid and is achieved Highlights through the preparation and implementation Other environmental highlights of the of TransGrid’s Environmental Function Plan reporting period included: and Environmental Management System. These specify the environmental ■ Redefined the business’s Environmental management function across the business Management System which sets the in line with corporate objectives and values. framework for the progressive implementation of the various The past year has been both active and management elements productive on the environmental front, with many achievements and milestones realised ■ Maintained certification to AS/NZS through the efforts of dedicated staff ISO 14001 for the Environmental throughout the organisation. Management System
Environmental Working Groups ■ Further enhanced ‘environmental A significant initiative in the reporting period networking’ both within and outside the was the establishment of a TransGrid organisation. This includes through the Environmental Working Group structure to TransGrid Environmental Working Group, ensure adequate representation and the New South Wales Electricity Network ownership in the development and rollout of Environment Group, and membership of the various environmental management the Electricity Supply Association of elements of the business. This includes Australia (ESAA) Environmental business and employee responsibilities, Committee.
TransGrid Environmental Working Group Structure
Executive Environment
Environmental Waste Environmental Authorisation/ PCB Working Greenhouse Gas Management Working Group Training Group Working Group Working Group Working Group New South ESAA EMS Documentation Environment PCB Management Greenhouse WRAPP Wales Network Environmental Authorisation Challenge Policy PCB Disposal Initiatives Environment Committee Procedures System PCB Licensing Waste Monitoring Committee EMS Reviews Assessment Training Procurement Legislative/Regulation Recycling National Forum for Environmental Review Disposal Electricity Industry Forum for New Environmental South Wales Initiatives Electricity Network Organisations
TransGrid Annual Report 2003 45
ABOVE A tree planting day was held ■ Enhanced and further developed Landscape Restoration Workshop at Fairfield City Farm on 5th June, TransGrid’s environmental auditing ■ In conjunction with the New South Wales World Environment Day as part of TransGrid’s involvement in the Office program National Parks and Wildlife Service and the of Western Sydney’s Environment Australian Network for Plant Conservation, ■ Successfully underwent an ESAA Code of Week. Approximately 60 primary TransGrid (Southern Region), ran a three school children from Western Sydney Environmental Practice audit as part of day workshop on ‘Landscape planted 400 tubestock of being a signatory to ESAA’s Code of Cumberland Plains Woodland Rehabilitation’ attended by more than 70 Environmental Practice species in a prepared area adjacent delegates from around Australia. to a TransGrid easement access ■ Participated in the New South Wales track. Materials Management, Recycling, and Government Energy Management Policy RIGHT TransGrid’s Chairman, Mr Waste Management and the Australian Government Philip Higginson and the Hon. Diane ■ Participated in the New South Wales Beamer, MP, Minister for Western Greenhouse Challenge Sydney, at the launch of Western Government Waste Reduction and Sydney Environment Week. ■ Was Principal Sponsor of Western Sydney Purchasing Policy Environment Week as part of TransGrid’s ■ Developed a new Waste Management ongoing commitment to the environment process for use across the business with where the organisation is active the underlying emphasis on materials ■ Sponsored the Keep Australia Beautiful management improvement. ‘School Grants Campaign’. Greening Australia Environmental Authorisation – A Major TransGrid Commitment and Training Since 2000, TransGrid has supported ■ Developed an environmental awareness Greening Australia’s coordinated training package and delivered the environmental action, including its program to all regional staff GreenSweep program, with funding of over $300,000 plus 120,000 native trees and ■ Performed environmental skills assessment shrubs. GreenSweep has so far involved as part of the Environmental Authorisation more than 120 landholders and 750 system across all the regions volunteers in tackling loss of biodiversity ■ Determined the individual training and increasing salinity and erosion, through requirements for staff performing activities a mosaic of remnant vegetation and native within transmission line corridors. revegetation sites.
TransGrid Annual Report 2003 46 Environment
The total area ‘greened’ under GreenSweep adjacent to TransGrid’s Dapto Substation, LEFT Two thousand native trees and to date is 380 hectares, the equivalent of and Red Crowned Toadlet with NPWS and shrubs were planted at the headwaters of the Boorowa River as more than 760 football fields. Surveys of the University of Technology, Sydney, and part of the TransGrid sponsored bird activity indicate GreenSweep is the effects of slashing on Persoonia GreenSweep environmental program. currently protecting habitat and establishing bargoensis near Cordeaux. ABOVE TransGrid working in an new vegetation for more than 8,800 native environmental partnership with Impact Verification of birds including many threatened woodland Greening Australia and the local Coffs Harbour-Kempsey 132kV farming community to control salinity species. Transmission Line and promote biodiversity in Yass and Gunning Shires. On Sunday 18th May this year, TransGrid The 110km Coffs Harbour-Kempsey 132kV staff, families and friends from around New Transmission Line was constructed in South Wales planted almost 2,000 native 2001/2002, mainly on the route of the pre- trees and shrubs at the headwaters of the existing Country Energy 66kV power line, Boorowa River in a GreenSweep project which was dismantled and removed. The designed to control salinity and promote new power line carries the previous 66kV biodiversity in Yass and Gunning Shires. circuit and the new 132kV circuit on modern, aesthetically designed, double In the central west of New South Wales, circuit 132kV concrete pole structures. Greening Australia planted 6,000 trees at the TransGrid substation at Molong, with seeds During the year, the work was reviewed taken from the adjoining remnant Whitebox with an independent environmental impact woodland, an endangered ecological verification report and an independent community. stakeholder satisfaction survey commissioned. Joint Environmental Programs TransGrid continues to be involved with The verification report involved site universities, the National Parks and Wildlife assessment of actual impacts and the Service (NPWS) and local community effectiveness of the environmental control groups in the research and monitoring of measures adopted by TransGrid. threatened species and assisting in their The verification report confirmed that the recovery. Notable examples include selection of the rebuild option was TransGrid’s continued support for the successful in reducing the impacts of the monitoring of the Illawarra Greenhood establishment of the new transmission line. Orchid with the Wollongong University, Using the route of the existing line minimised the need to construct new
TransGrid Annual Report 2003 47
TransGrid continues to be involved with universities, the National Parks and Wildlife Service and local community groups in the research and monitoring of threatened species and assisting in their recovery access. Development and land uses by the lines now span over the area of landslip owners and occupiers were already working with high ground clearance and no access around the existing line. The removal of old is required to structure sites midway up the chemically treated wood poles and affected escarpment. This is allowing the area to be soil addressed a potential contamination revegetated and past problems in this area problem in the manner recommended by will be significantly alleviated. the local authorities. The post construction review also confirms TransGrid had sought approval for that electric field levels are consistent with construction of the line within a narrow the Environmental Impact Statement (EIS) defined ‘corridor’ rather than on a defined predictions and that magnetic fields have alignment. This was successful in providing been reduced compared with those existing opportunities to reduce impacts in the previously due to the 66kV single circuit detailed design through ongoing transmission line. consultation with affected property owners. Magnetic Field Mitigation Research The independent report confirms that deviations adopted in the course of detailed In conjunction with our cable supplier for design and landowner consultations the MetroGrid project, J Power Systems, resulted in improved environmental we have undertaken some original research outcomes for property owners and also relating to technologies available to reduce reducing impacts on archeological sites and the magnitude of magnetic fields in the flora and fauna. vicinity of high current capacity cables. Close liaison with residents resulted in This work was undertaken at a specially minimal overall noise impact. Actual constructed cable test site where lengths of impacts on threatened species were not 330kV cable were placed in subterranean significant and the procedures for soil and positions to simulate actual installation erosion management outlined in the conditions. Tests were then carried out Construction Environmental Management under controlled conditions to determine the Plan were consistently applied. influence of various treatments on the magnitude of magnetic fields. Substantial areas of acid sulphate soils (ASS) were encountered in flood plain areas This research is being usefully applied and the disturbed soils were treated with during the construction phase of the lime. The report notes a lack of evidence of MetroGrid project and has added to the significant environmental harm due to the body of engineering knowledge in this area. small areas affected by the works. The crossing of the Boambee State Forest escarpment has a history of landslip problems affecting the previous group of three Country Energy 66kV lines. Under the project, all circuits were deviated so that
TransGrid Annual Report 2003 48 Community
Community consultation is an integral element of every proposed TransGrid development project. This is a reflection of the organisation’s commitment to involving the people whose lives may be affected by a particular project, from the planning stages to final delivery
TransGrid has a record of community mutual respect. Depending on the scale of interaction that continues to produce a project, a dedicated community liaison benefits for both individual communities officer, whose job it is to interact and and TransGrid itself. consult with the community throughout the work, is attached to a particular activity. One of the demands on TransGrid is that it Community liaison officers are responsible has to balance its responsibility to maintain for arranging local information sessions and and continually plan for a safe and secure personally visiting residents, homes and electricity supply network throughout New landowners. TransGrid’s community South Wales with the interests of local consultation process may also encompass communities. liaising with a variety of nongovernment and TransGrid is a leader in embracing the government organisations and agencies community by listening to and responding including the National Parks and Wildlife to comment, counsel and input. A critical Service, Aboriginal Land Councils, local element in this process is ensuring accurate councils and the Department of and timely information is made available to Infrastructure, Planning and Natural local interests as a foundation for the input Resources. process. Issues of concern to local Every TransGrid project requires a unique communities can cover a very wide and personal community consultation spectrum including the routing of overhead process. Community concerns vary and underground lines and cables, noise according to both demographics and and dust issues, hours of work, access to geography – every situation from inner land and homes, safety and health issues urban locations to remote rural settings can and the positioning of substations. be encountered and are treated with the Resources same level of full-time care and concern.
The process of community consultation is TransGrid’s current MetroGrid project, approached with the same level of rigour which has three full-time community liaison that is applied to TransGrid’s engineering officers and an extensive list of endeavours. Significant value is placed on communication and consultation initiatives, direct and personal communications. A is featured on page 20. number of community liaison officers are employed by TransGrid. Their job is to build a rapport with the community so that both parties can have a constructive and ongoing relationship based on trust and
TransGrid Annual Report 2003 49
ABOVE Community information session Other major projects that were the subject west of New South Wales. Construction is held to discuss possible corridors for of community consultation programs during planned to begin in 2005. the Wollar-Wellington Transmission Line. the year include: Community consultation commenced in Tuggerah-Sterland Transmission Line May 2003, with the distribution of a project newsletter and the holding of information This project comprised the construction of sessions at Wellington and Gulgong. a 330kV double circuit transmission line Further newsletter releases and information along the route of an existing easement, sessions will be held as the implementation which minimised the environmental impacts of the project progresses. A two stage EIS of the project. Given the sensitivity and will be conducted, one relating to the route constraints of the areas traversed by the selection and one covering construction transmission line, TransGrid decided that along the selected route. the environmental assessment for the project should be similar to that of an EIS, Molong-Manildra Transmission Line even though planning laws decreed a much During 2003, TransGrid completed 90% of less rigorous process could be adopted the construction of the Molong-Manildra because of the existing easement. The 132kV Transmission Line. Community community consultation process was consultations were conducted in central to the project’s success and this 2001/2002 to identify areas of constraints gesture contributed to a positive outcome. and issues of importance to the local The consultation process comprised two community with the aim of refining the series of face to face meetings with preliminary corridors and selecting a residents along the transmission line ‘Preferred Corridor’ for detailed easement, the distribution of three project environmental assessment. While the newsletters to residents in the project straight route from Molong to Manildra is areas, and the holding of a public 20km, as a result of these processes a information session. 27km line with 32 deviations was selected to maintain good separation from the Wollar-Wellington Transmission Line township of Molong, Aboriginal heritage A new 330kV switching station at Wollar sites and environmentally sensitive areas. (near Mudgee) and a new single circuit 330kV transmission line between Wellington and Wollar form part of a project that will reinforce the supply to the west and central
TransGrid Annual Report 2003 50 People
TransGrid’s health and safety policies and practices implemented throughout the past year achieved the best result since TransGrid’s inception and reflects an organisation wide commitment to health and safety
Organisational Development Apprenticeships TransGrid currently employs 35 apprentices A range of organisational development in the professions of System Electricians activities and programs were implemented and Communications. There has been during the year to ensure the ongoing further review and refinement of the success and growth of TransGrid. competency based training program with Succession Planning formal assessment of on the job activities Succession planning is essential in now being undertaken for all apprentices. identifying and nurturing future leaders and Leadership Development Programs in ensuring ongoing organisational TransGrid, in partnership with the University capability. A progressive succession of New England, has continued to develop planning program helps retain key people and deliver a customised program in within the organisation and makes TransGrid business management (Frontline attractive to prospective employees. Management). The program offers formal A program was implemented at the CEO, qualifications up to Diploma level. During General Manager, Regional/Group Manager 2002/2003, 34 candidates participated in and Branch Manager levels. Following this the program. initial implementation, a comprehensive To support the succession planning review of the process was undertaken process and complement the Frontline during the year and improvements Management programs, a leadership identified. An annual review of succession program is being developed targeted at plans commenced in July 2003. the upper levels of management. Training and Development Graduate, Cadet and Scholarship TransGrid maintained its commitment to Programs lifelong learning by continuing to provide The graduate, cadet and scholarship quality training opportunities to its programs are an integral component of employees throughout year. TransGrid’s resourcing strategy. During This year saw the implementation of 2002/2003, TransGrid continued its TransGrid’s Mandatory Training Passport commitment to scholars by offering System and the continued implementation scholarships to engineering students at of employee development programs based the University of Technology, Sydney, as on competency standards. These programs well as Newcastle and Wollongong will be available throughout the organisation Universities. The graduate program was as position descriptions are reviewed and reviewed in 2002/2003 to include supporting training programs are sourced. development and assessment based upon national competencies relevant to each profession.
Work Force Diversity TransGrid has an established Work Force Diversity Plan that is reviewed annually and, where appropriate, revised in order to ensure relevancy and compliance with legislation. Training was provided for all new employees as part of the induction program. TransGrid Annual Report 2003 51
ABOVE Succession planning is The Referral Officers network was further Three key objectives were a major focus for essential in identifying and nurturing improved during 2002/2003 with the year: future leaders and ensuring ongoing information sessions provided to all Referral organisational capability. ■ Develop and implement effective risk Officers concerning their role. This role RIGHT TransGrid’s safety procedures management in all work places and work includes the provision of information, are put into practice in the Annual activities Safety Day Competition at Wagga support and advice for employees who feel Regional Centre. that they may be the victim of harassment, ■ Improve and maintain health and safety discrimination or work place bullying. communications through effective consultative mechanisms Registered Training Organisation TransGrid achieved two year reaccreditation ■ Eliminate identified ‘at risk’ behaviour. of its Registered Training Organisation status in August 2001 following compliance OH&S Statistical Information 2002/2003 assessment by the New South Wales Vocational Education and Training Frequency Rate 2.1 Accreditation Board (VETAB). TransGrid has Average Lost Time Rate in Days 7.3 recently resubmitted for reaccreditation for Total Lost Time Injuries 4 a further five years. Total Days Lost 29
Health and Safety No injuries were incurred as a result of electrical accidents. The health and safety of TransGrid’s people, contractors, visitors and the public are the organisation’s highest priority. Policies and Lost Time Injuries Sustained practices implemented throughout the past Part of Body Number Type of Days year achieved the best result since Injured Injury Lost TransGrid’s inception and reflect an Back 1 Strain 2 organisation wide commitment to health Foot 1 Crush 3 and safety. The benchmark statistic that Leg 1 Fractures 15 records this fact, the Lost Time Injury Groin 1 Strain 9 Frequency Rate, was 2.1. There were four Total 4 29 Lost Time Injuries at an Average Lost Time Rate of 7.3 days.
TransGrid Annual Report 2003 52 People
Each Business Unit developed strategies TransGrid also participated in the Electricity LEFT TransGrid maintained its which addressed these objectives. Of Supply Industry Field Days and was awarded commitment to lifelong learning by continuing to provide quality particular note was the random auditing of third place in the First Aid Competition. training opportunities to staff work teams (including contractors) and throughout the year. The Chairman’s Safety Award recognises an work sites to ensure safety compliance. individual or team who has made a significant ABOVE TransGrid’s Children’s Safety Calendar takes its safety The Safety Communications Steering contribution to safety in TransGrid. message home. Committee provides a forum for the sharing Nominations were received from all of health and safety information between TransGrid locations with the award being locations and ensures communication is presented to Mr Reg Harris, an Engineering maintained with all staff via their OHS Officer from Orange. He is a long standing representatives. This committee was also secretary and member of the Orange OHS active in implementing initiatives for the Committee and an enthusiastic member of Quarterly Health and Safety Themes the Orange First Aid Team. The judges throughout the year. These included commended his actions in taking ownership ‘Cancer Awareness’ (Health) and ‘Risk of specific OHS issues to ensure a safer Assessment’ (Safety), among others. work place, including the removal and Specific theme initiatives included disposal of unwanted chemicals from all employee health assessments, Orange area work places. presentations from guest speakers (physiotherapists, nutritionists, exercise Taking Safety Home physiologists, etc) and increases in first aid The children’s drawing competition classes to achieve a goal of 50% of all staff continues to be a popular event in qualified in first aid. encouraging safety consciousness at home as well as work. The number of entries Safety Day and Chairman’s Award increases each year and the level of TransGrid’s eighth Annual Safety Day was awareness of safety issues among children held at Wagga in September 2002. The is extremely encouraging. The drawings are participation rate was high and competition judged by a panel with the best selected for intense. Tamworth, Newcastle and Yass inclusion in a calendar. These calendars are were divisional winners with Newcastle posted to employees’ homes with taking out overall honours and the Safety information relating to TransGrid’s Day Shield. Employee Assistance Program and Welfare Fund that are services available to both employees and their families.
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 53
Financial Report 53
Statement of Financial Performance ...... 54
Statement of Financial Position...... 55
Statement of Cash Flows ...... 56
Notes to and forming part ...... 57 of the Financial Statements
Statement by Members of the Board . . . . . 75
Independent Audit Report ...... 76
Beginning of Audited Financial Report
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 54
54 Statement of Financial Performance For the year ended 30th June 2003
Note 2003 2002 $'000 $'000 Revenue from Ordinary Activities 2 & 3 411,969 385,906 Expenses from Ordinary Activities, Excluding Borrowing Costs 2 & 4 (242,287) (250,252) Borrowing Costs 2 & 4 (87,388) (82,562) Profit/(Loss) from Ordinary Activities Before Income Tax Equivalent Expense 2 82,294 53,092 Income Tax Equivalent Expense Relating to Ordinary Activities 5 (34,892) (27,774) Profit/(Loss) from Ordinary Activities After Related Income Tax Equivalent Expense 47,402 25,318 Increase/(Decrease) in Asset Revaluation Reserve 17 23,531 22,363 Increase/(Decrease) in Retained Earnings on Adoption of New Accounting Standard: AASB 1044 "Provisions, Contingent Liabilities and Contingent Assets” 18 3,585 - Increase/(Decrease) in Retained Earnings on Adoption of Revised Accounting Standard: AASB 1028 “Employee Benefits” 18 (362) - Total Revenues, Expenses and Valuation Adjustments Attributable to Members of TransGrid and Recognised Directly in Equity 26,754 22,363 Total Changes in Equity Other Than Those Resulting from Transactions with Owners as Owners 74,156 47,681
The accompanying notes form an integral part of these financial statements.
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 55
Statement of Financial Position 55 As at 30 June 2003
Note 2003 2002 $'000 $'000 Current Assets Cash 6 282 16,669 Receivables 7 53,465 64,383 Inventories 8 20,619 21,680 Other 9 10,236 19,498 Total Current Assets 84,602 122,230 Non-Current Assets Property, Plant and Equipment 10(a) & (b) 2,705,403 2,534,324 Future Income Tax Benefit 17,253 16,460 Receivable 134 268 Total Non-Current Assets 2,722,790 2,551,052 Total Assets 2,807,392 2,673,282 Current Liabilities Payables 12 91,422 71,830 Interest Bearing Liabilities 16 158,516 147,985 Provisions 13 55,450 9,724 Tax Liabilities 14 535 (1,022) Other 15 19,152 11,103 Total Current Liabilities 325,075 239,620 Non-Current Liabilities Interest Bearing Liabilities 16 1,230,217 1,176,686 Provisions 13 47,596 49,089 Deferred Tax Liabilities 81,111 100,592 Total Non-Current Liabilities 1,358,924 1,326,367 Total Liabilities 1,683,999 1,565,987 Net Assets 1,123,393 1,107,295 Capital and Retained Earnings Capital 19 584,871 644,871 Reserves 17 490,148 466,709 Retained Profits/(Accumulated Losses) 18 48,374 (4,285) 1,123,393 1,107,295
The accompanying notes form an integral part of these financial statements.
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 56
56 Statement of Cash Flows For the year ended 30th June 2003
Note 2003 2002 $'000 $'000 Cash Flows from Operating Activities Cash Received in the Course of Operations 457,050 421,128 Cash Paid in the Course of Operations (151,426) (137,571) Interest Received 1,568 2,104 Interest Paid (87,128) (84,651) Income Tax Paid 29 (b) (6,848) (12,581) Net Cash Flows from Operating Activities 29 (e) 213,216 188,429 Cash Flows from Investing Activities Purchase of Property, Plant and Equipment (240,355) (239,474) Proceeds from the Sale of Property, Plant and Equipment 6,254 4,551 Net Cash Flows from Investing Activities (234,101) (234,923) Cash Flows from Financing Activities Proceeds from Borrowings 224,998 237,993 Repayments of Borrowings (160,500) (197,072) Distribution to Government 19 (60,000) - Dividends Paid 29 (b) - - Net Cash Flows from Financing Activities 4,498 40,921 Net Increase/(Decrease) in Cash Held (16,387) (5,573) Cash at Beginning of the Financial Year 16,669 22,242 Cash at the End of the Financial Year 29 (a) 282 16,669
The accompanying notes form an integral part of these financial statements.
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 57
Notes to and forming part of the Financial Statements 57 For the year ended 30th June 2003
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Basis of Preparation Underground circuits are valued on the basis of replacement cost estimates per kilometre to construct circuits of different TransGrid is a statutory State owned corporation under the voltage types and various construction characteristics. State Owned Corporations Act 1989 and was corporatised under the Energy Services Corporations Amendment Transformers are valued on the basis of estimates of the cost (TransGrid Corporatisation) Act 1998. of replacement transformers. The financial statements are a general-purpose financial Substations are valued on the basis of estimates of the cost of report, and have been prepared in accordance with Australian replacement of component parts. Accounting Standards, Urgent Issues Group Consensus Views Capitalised work in progress is brought to account at cost. and other authoritative pronouncements of the Australian Accounting Standards Board. Land is valued at market value, except for land under infra- structure assets, reserved for transmission facilities, which is at The financial statements have been prepared to comply with the net realisable value. Due regard is given to the level of the requirements of the Public Finance and Audit Act 1983, the expenditure required to transform land into saleable condition. Public Finance and Audit Regulation 2000, the State Owned Buildings are valued at cost to TransGrid at establishment. Corporations Act 1989 and relevant Treasury Circulars. Valuations have not been adjusted in respect of the potential The statements have been prepared on the basis of historical effect of any Capital Gains Tax. costs and, except where stated, do not take into account A revaluation of infrastructure assets, non-infrastructure land changing monetary values. and staff cottages was undertaken as at 30th June 2003 Where necessary, comparative information has been reclassified based on price index movements. TransGrid’s valuation policy to achieve consistency in disclosure with amounts for the provides for a full and detailed valuation of these assets to be current financial year. undertaken at five-year intervals, in conjunction with Treasury Policy and as part of the transmission network revenue setting (b) Basis of Accounting process. In the intervening years, a revaluation based on price (i) Valuation index movements is undertaken. Regulated Assets Unregulated Assets Regulated Assets comprise property, plant and equipment Unregulated Assets comprise property, plant and equipment used by TransGrid to provide electricity transmission services used by TransGrid to provide services other than regulated that are regulated by the Australian Competition and electricity transmission services. The classes of unregulated Consumer Commission (ACCC). The classes of regulated assets as disclosed in Notes 10(a) and (b) are: assets as disclosed in Notes 10(a) and (b) are: ■ System Plant and Equipment ■ Buildings and Staff Cottages ■ Communication Equipment ■ Land The assets in this class are valued at their costs of acquisition, ■ Easements less associated accumulated depreciation. The carrying ■ System Plant and Equipment amount of these assets are reviewed annually to determine ■ Communication Equipment whether they are in excess of their recoverable amount at balance date. If the carrying amount of an asset exceeds ■ Other Assets the recoverable amount, the asset is written down to the Transmission Grid Infrastructure Assets are valued using an lower value. optimised depreciated replacement cost (ODRC) methodology. In assessing the recoverable amounts, the relevant cash flows Valuations are determined by TransGrid staff and carried out in have been discounted to their present value. accordance with the NSW Treasury Policy Guidelines for the Valuation of Physical Non-Current Assets at Fair Value. Overhead transmission lines are valued on the basis of replacement cost estimates per kilometre to construct the different voltage type transmission lines categorised according to various construction characteristics applicable to each transmission line.
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 58
58 Notes to and forming part of the Financial Statements For the year ended 30th June 2003
(ii) Capitalisation (d) Depreciation Capital expenditure is defined as expenditure in relation to: Items of property, plant and equipment, including buildings but ■ acquisition of a new unit of plant; excluding freehold land and easements are depreciated over their estimated useful lives. The straight-line method is used. ■ installation of a new unit of plant; Assets are depreciated from the month of acquisition or in ■ work performed on a unit of plant, where the need for the respect of constructed assets, from the time the asset reaches work existed at the time the unit was acquired and the work practical completion and is ready for use. Asset lives are was carried out prior to it being put into operation; reviewed annually in accordance with Australian Accounting ■ replacement of a unit of plant, or of a substantial part of a unit Standard AAS 4, "Depreciation of Non-Current Assets". of plant; The useful lives presently assigned to TransGrid's major assets ■ an addition or alteration to a unit of plant, which results in a are shown in the table below: significant improvement to its overall design. Expenditure is not capitalised below a minimum threshold of $1,000. Buildings 30 years System Plant and Equipment – Regulated 40-50 years (c) Changes in Accounting Policies System Plant and Equipment – Unregulated 20-40 years Accounting policies are consistent with those applied in the Communication Equipment – Regulated 10-35 years previous year except for changes arising from the application Communication Equipment – Unregulated 35 years of the new AASB 1044 "Provisions, Contingent Liabilities and Contingent Assets", revised AASB 1012 "Foreign Currency Other Assets 2-10 years Translation" and revised AASB 1028 “Employee Benefits”. (e) Borrowings The accounts have been impacted in the following areas: Loans are carried at their principal amounts, which represent ■ AASB 1044 resulted in the restatement of the opening the present value of future cash flows associated with servicing balance of the insurance provision. Further details on the the debt. impact are provided in Notes 1(i), 13, and 18. Borrowing costs include interest and costs incurred in connec- ■ AASB 1012 resulted in the inclusion of net assets or liabilities tion with arrangement of borrowings. Discount/Premium on arising from a forward exchange contract, which are classified loans is in the nature of a cost/cost reduction of borrowing. as a hedge being recognised on the Statement of Financial Discount/Premiums are amortised over the term of the loans Position. Also the gains or losses on contracts intended to unless the amounts are insignificant where they are written off hedge specific purchases or sales are deferred on the at the time of the loan. The amount applicable to each year is Statement of Financial Position until the hedged purchase included in the Statement of Financial Performance as part of or sale is recognised. Further details including prior year TransGrid's borrowing costs for the year. comparative information are provided in Notes 1(q), 9, 15, and 31. Interest on borrowings is recognised as expense in the period in which it is incurred unless it relates to qualifying assets. ■ The revised AASB 1028 resulted in the restatement of the Qualifying assets are assets which take more than 12 months opening balance of the provision for employee entitlements to get ready for their intended use. Where funds are borrowed to annual leave. Further details on the impact are provided in generally, interest on the borrowings is capitalised to qualifying Notes 1(g) and 18. assets in accordance with AAS 34 "Borrowing Costs". The amount of interest attributed to qualifying assets during the year was $6,918,000 ($8,183,000) at a weighted average rate of 6.48% (6.57%).
(f) Dividends Provision is made for the amount of dividend payable in relation to the current financial year, in accordance with the dividend recognition policy set out in Treasury Circular NSW TC 03/02 "Accounting for Dividends". Accordingly, a dividend in relation to the financial year is taken to be determined before balance date, consistent with the requirements of AASB 1044.
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 59
59
(g) Employees' Leave Entitlements (i) Insurance A calculation in accordance with AASB 1028 "Employee TransGrid maintains a mix of external insurance policies and Benefits" is made each year in respect of TransGrid's liability at internal provisioning in accordance with AASB 1044. The balance date for employees' entitlements to long service leave treatment of risks and associated liabilities are determined in and annual leave, and an annual contribution is made to adjust conjunction with independent insurance advisers and loss the provision to an amount which is considered adequate to adjusters. meet that liability. The application of AASB 1044 effective from 1st July 2002 Annual Leave resulted in the restatement of the insurance provision by The provision for employee entitlements to annual leave $5,121,000, an associated decrease of Future Income Tax represent the amount which TransGrid has a present obligation Benefit by $1,536,000, with a corresponding resultant net to pay resulting from employees' services provided up to increase in Retained Earnings. balance date. TransGrid is a self-insurer for Workers’ Compensation. The Prior to the application of the revised AASB 1028, the provi- liability for claims made, or to be made, against the Insurance sion was calculated at nominal amounts based on salary rates Provision is determined by reference to the Workers' current at balance date. In accordance with the requirements Compensation Act, 1987 and the WorkCover Authority's of the revised Standard, the provision has been calculated at guidelines to self-insurers. nominal amounts based on the remuneration rates that are expected to be paid when the leave is taken. This resulted in a (j) Inventory Valuation net decrease to Retained Earnings of $362,000, an increase in Inventories of Stores and Materials are valued at the average the provision of $517,000 and an associated increase in Future cost of items in store automatically adjusted at time of delivery Tax Benefit by $155,000 at the beginning of the year. of new items, separately determined for each location. Long Service Leave (k) Income Tax The liability for employee entitlements to long service leave has, in accordance with the guidelines of Treasury Circular NSW TC TransGrid is subject to the National Tax Equivalent Regime 03/06 "Accounting Standards Update" been calculated on the (NTER) administered by the Australian Taxation Office. The basis of current salary rates to be paid by TransGrid resulting NTER is based on application of federal income tax laws under from employees' services provided up to balance date and which TransGrid pays income tax equivalents to NSW includes related on-costs. Treasury.
(h) Superannuation TransGrid adopts the liability method of tax effect accounting. Income tax expense is calculated on the operating profit Contributions to employee superannuation plans are charged adjusted for permanent differences between taxable income as an expense as the contributions are paid or become and accounting profit. The effect of timing differences, which payable. The difference between the liability determined at occur when items are brought to account in different periods 30th June each year and the reserve held by the Energy for income tax equivalent and accounting purposes, are shown Industries Superannuation Scheme is brought to account as at the rate deemed applicable when the timing difference an account payable or a prepayment. reverses in the provision for deferred income tax and future At balance date, TransGrid has funds held by the income tax benefit where applicable. Superannuation Scheme in excess of its liability. Accordingly, a prepayment of superannuation contributions is reflected in the financial statements (refer to Note 9).
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 60
60 Notes to and forming part of the Financial Statements For the year ended 30th June 2003
(l) Goods and Services Tax (p) Revenue
Revenues, expenses and assets are recognised net of the Revenue relating to TransGrid’s core operations is classified as amount of Goods and Services Tax (GST), except where the revenue from operating activities for the purposes of Note 3. amount of GST incurred is not recoverable from the Australian Revenue arising from other than core operations is classified Taxation Office (ATO). In these circumstances, the GST is as revenue outside operating activities for the purposes of recognised as part of the cost of acquisition of the asset or as Note 3. part of an item of the expense. Revenue from electricity transmission services is subject to the Receivables and payables are stated with the amount of GST application of an ACCC-determined revenue cap for the finan- included. cial year. The revenue caps are determined by the ACCC at The net amount of GST recoverable from, or payable to, the five-year intervals. The transmission services prices are set at ATO is included as a current asset or current liability in the the beginning of the financial year to achieve the revenue cap Statement of Financial Position. applicable for that year.
Cash flows are included in the Statement of Cash Flows on a Revenue from the sale of goods or services is recognised upon gross basis. The GST component of cash flows arising from delivery of goods or services to the customer. Interest revenue investing and financing activities which are recoverable from, is recognised as it is earned, taking into account the interest or payable to, the ATO are classified as operating cash flows. rates applicable to the financial assets.
(m) Segment Reporting (q) Foreign Currency Translation TransGrid operates in one industry being the transmission of Specific Commitments electricity in New South Wales. As such, TransGrid has only Hedging is undertaken to avoid or minimise possible adverse one business segment as well as one geographical segment in financial effects of movements in exchange rates. Gains or accordance with AASB 1005 "Segment Reporting", and this is costs arising upon entry into hedging transactions, together reported in the financial statements. with subsequent exchange gains or losses resulting from those transactions are deferred in the Statement of Financial Position (n) Receivables from the inception of the hedge transaction up to the date of Receivables are recognised at amounts due less a provision the purchase or sale and included in the measurement of the for doubtful debts. Collectibility of debts is reviewed on an purchase or sale. The net amounts receivable or payable under ongoing basis. A provision for doubtful debt is raised when the hedging transaction are also included in the Statement of some doubt as to collection exists. Debts which are known to Financial Position. be uncollectible are written off. Any gains or losses after the recognition of the hedged Trade debtors are normally settled within 20 working days from purchase or sale are included in the Statement of Financial date of issue of invoice. The payment terms for other debtors Performance, unless they relate to qualifying assets. All gains are generally within 30 working days. or losses arising from hedging transactions associated with qualifying assets are capitalised consistent with AASB 1012. (o) Payables Accounts payables, including accruals not yet billed, are recognised when TransGrid has an obligation to pay as a result of the completion of a work or service. Trade accounts are usually settled within 60 days.
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 61
61
2. PROFIT/(LOSS) FROM ORDINARY ACTIVITIES 2003 2002 $'000 $'000 Profit/(Loss) from ordinary activities before income tax equivalent expense comprises: Revenue from Ongoing Activities 411,969 385,906 Expenses from Ongoing Activities excluding Borrowing Costs (228,687) (210,939) Borrowing Costs (87,388) (82,562) Earnings from Ongoing Activities 95,894 92,405 Net Movement in Employer’s Superannuation Reserve (13,600) (39,313) Profit/(Loss) from Ordinary Activities Before Income Tax Equivalent Expense 82,294 53,092
Earnings from Ongoing Activities Earnings from Ongoing Activities represent TransGrid’s financial performance on its day to day business operations, the activities of which TransGrid is able to exercise some degree of control over the outcomes. Net Movement in Employer’s Superannuation Reserve (also refer to Note 1(h)) The Energy Industries Superannuation Scheme advises the level of liability in respect of TransGrid’s superannuation commitments to its employees who are members of the various divisions of the Scheme. The calculation of the superannuation position is based upon an actuarial review independent of TransGrid’s ongoing activities and involvement. The main drivers of the actuarial calculation are the level of investment return, salary inflation and CPI increases. Details of these assumptions are presented below. The negative movement during the financial year is mainly attributable to the nature of the liability assessment by Actuary and lower than expected investment returns. Energy Industries Superannuation Schemes Assumptions Applicable to Liability Operative Date as at 30th June 2003 Investment Return 2001/2002 -7.0% p.a. 2002/2003 -0.8% p.a. 2003/2004 7.0% p.a. Thereafter 7.5% p.a. Salary Inflation 2001/2002 5.5% p.a. 2002/2003 4.0% p.a. Thereafter 4.0% p.a. Increase in CPI 2001/2002 2.5% p.a. 2002/2003 2.5% p.a. Thereafter 2.5% p.a.
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 62
62 Notes to and forming part of the Financial Statements For the year ended 30th June 2003
3. REVENUE 2003 2002 $'000 $'000 Revenue from Operating Activities Transmission of Electricity 389,850 363,392 Proceeds from Sales of Non-Current Assets 6,254 4,551 Conveyancing Inquiries 2,405 2,942 398,509 370,885 Revenue from Other Than Operating Activities Interest 1,273 1,414 Unregulated Work 9,972 11,382 Sundry 2,215 2,225 13,460 15,021 Total Revenue 411,969 385,906
Net gain/(loss) on sales of property, plant and equipment amounted to $1,123,000 (2002, Loss $503,000).
4. EXPENSES 2003 2002 $'000 $'000 Transmission of Electricity 221,154 204,601 Other Services 7,533 6,338 228,687 210,939 Other Expenses Borrowing Costs 87,388 82,562 Net Movement in Employer’s Superannuation Reserve 13,600 39,313 100,988 121,875 Total Expenses 329,675 332,814
Total Expenses above include depreciation of non-current assets of $108,459,000 ($101,451,000) and doubtful debts of $202,000 (Nil).
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 63
63
5. INCOME TAX EQUIVALENT EXPENSE The income tax equivalent expense for the financial year differs from the amount calculated on the profit/(loss). The differences are reconciled as follows: 2003 2002 $'000 $'000 Profit/(Loss) from Ordinary Activities Before Income Tax Equivalent Expense 82,294 53,092 Income Tax Equivalent Expense/(Benefit) Calculated @ 30% 24,688 15,928 Add/less tax effect of Permanent Differences Accelerated Research and Development Allowance (7) (12) Net (Gain)/Loss on Debt Prepayments - (44) Movement in Employer’s Superannuation Reserve 4,080 13,182 Revaluation of Assets 1,353 1,056 Capital Expenditure 31 278 Other 9 (15) Income Tax Equivalent Expense Adjusted for Permanent Differences 30,154 30,373 Reassessment of prior period’s timing and permanent differences 4,833 (3,103) Net adjustment to deferred income tax liabilities and assets to reflect the decrease in company tax rate - 502 (Over)/Under Provision in Prior Year (95) 2 Income Tax Equivalent Expense 34,892 27,774
6. CASH 2003 2002 $'000 $'000 Cash on Hand 13 13 Deposits at Call 269 16,656 282 16,669 Deposits at call bear average floating interest rates of 4.60% (4.58%).
7. RECEIVABLES 2003 2002 $'000 $'000 Current Debtors Trade Debtors 50,858 56,645 Debtors Other Than Trade 2,809 2,162 53,667 58,807 Provision For Doubtful Debts (202) - 53,465 58,807 Other - 5,576 Total 53,465 64,383
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 64
64 Notes to and forming part of the Financial Statements For the year ended 30th June 2003
8. INVENTORIES 2003 2002 $'000 $'000 Transmission Plant Spares 20,454 21,381 Other 165 299 20,619 21,680
9. OTHER ASSETS 2003 2002 $'000 $'000 Current Prepaid Superannuation 5,569 19,236 Other Prepayments 340 262 Deferred Exchange Losses and Costs on Forward Foreign Exchange Contracts 4,327 - Total 10,236 19,498
Prior year’s Deferred exchange losses and costs on forward foreign exchange contracts not required to be recognised on the Statement of Financial Position amounted to $901,000.
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 65
65
10. PROPERTY, PLANT AND EQUIPMENT 2003 2002 $'000 $'000
(a) Valuation and accumulated depreciation for each class of property, plant and equipment Regulated Assets Land 52,650 51,595
Easements 461,322 446,082
Buildings 17,384 17,347 Accumulated Depreciation (2,525) (1,861) 14,859 15,486
System Plant and Equipment 2,038,138 1,891,079 Accumulated Depreciation (439) - 2,037,699 1,891,079
Communication Equipment 72,028 70,633 Accumulated Depreciation (560) (1,096) 71,468 69,537
Other Assets 101,768 95,662 Accumulated Depreciation (47,269) (38,001)
54,499 57,661 Total Depreciated Value of Regulated Property, Plant and Equipment 2,692,497 2,531,440
Unregulated Assets System Plant and Equipment 13,127 2,884 Accumulated Depreciation (368) - 12,759 2,884 Communication Equipment 157 - Accumulated Depreciation (10) - 147 -
Total Depreciated Value of Unregulated Property, Plant and Equipment 12,906 2,884 Total Depreciated Value of Property, Plant and Equipment 2,705,403 2,534,324
TransGrid has within its books fully depreciated assets, comprising Air Conditioners, Office Machines and Miscellaneous Equipment. These items are considered immaterial in the context of the Financial Statements.
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 66
66 Notes to and forming part of the Financial Statements For the year ended 30th June 2003
(b) Reconciliations of the carrying amounts of each class of property, plant and equipment at the beginning and end of the current financial year
Carrying Transfers Carrying Amount at Revaluation from Amount beginning increments/ work in at end of year Additions Disposals Depreciation (decrements) progress of year $’000 $’000 $’000 $’000 $’000 $’000 $’000 Regulated Assets Buildings and Staff Cottages 14,370 - - (766) 3 661 14,268 Land 49,661 - (126) - 189 774 50,498 Easements 444,705 - 19 - 4,633 9,554 458,911 System Plant and Equipment 1,803,443 - - (85,874) 18,000 50,148 1,785,717 Communication Equipment 53,561 - - (5,681) 661 17,732 66,273 Other Assets 45,133 - (5,130) (15,760) 45 27,137 51,425 Unregulated Assets System Plant and Equipment 2,539 - - (368) - 10,588 12,759 Communication Equipment - - - (10) - 157 147 Work In Progress 120,912 261,244 - - - (116,751) 265,405 Total 2,534,324 261,244 (5,237) (108,459) 23,531 - 2,705,403
11. CAPITAL EXPENDITURE COMMITMENTS Commitments arising from contracts for expenditure in respect of property, plant and equipment to the extent not provided for in the accounts: 2003 2002 $'000 $'000 Payable Within One Year 159,086 212,737 Payable One to Five Years 3,726 56,199 Payable Later than Five Years - - Total (including GST) 162,812 268,936
Total Expenditure Commitments above include input tax credits of $14,801,000 ($25,995,000) that are expected to be recoverable from the Australian Taxation Office.
12. PAYABLES 2003 2002 $'000 $'000 Current Creditors 56,095 38,106 Accrued Interest 34,812 33,724 Other 515 - Total 91,422 71,830
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 67
67
13. PROVISIONS 2003 2002 $'000 $'000 Current Dividend 46,199 - Employees' Accrued Entitlements 8,332 8,143 Insurance 919 1,581 55,450 9,724 Non-Current Employees' Accrued Entitlements 43,272 39,113 Insurance 4,324 9,976 47,596 49,089 Total 103,046 58,813
(i) Employees' Accrued Entitlements The following table shows a breakdown of the Employees' Accrued Entitlements Provision at balance date: Annual Leave 11,467 10,354 Long Service Leave 40,137 36,902 51,604 47,256 All of the above liabilities have been fully provided. During the financial year, $11,426,000 ($10,860,000) was contributed to the above provisions.
(ii) Insurance In accordance with Condition 6(a)(iii) of the license granted under Section 211 of the Workers’ Compensation Act, 1987, the provision for total outstanding workers' compensation claims liability including incurred but not reported claims and administration is $4,639,000 ($5,990,456). During the financial year, $1,504,233 ($726,352) was contributed to the provision for Workers’ Compensation. The following table details the movements in the insurance provision during the year. The carrying amounts are determined on the basis of best estimates and actuary assessment. Adjustments Opening as per Closing Balance AASB 1044 Contributions Payments Balance Class $’000 $’000 $’000 $’000 $’000 General 5,567 (3,171) 244 (2,036) 604 Workers’ Compensation 5,990 (1,950) 1,504 (905) 4,639 Total 11,557 (5,121) 1,748 (2,941) 5,243
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 68
68 Notes to and forming part of the Financial Statements For the year ended 30th June 2003
14. CURRENT TAX LIABILITIES 2003 2002 $'000 $'000 Provision for Income Tax 535 (1,022) Income Tax payable by TransGrid is determined in accordance with the National Tax Equivalent Regime. Income Tax payments for the financial year are expected to amount to $8,478,430 ($10,022,708).
15. OTHER CURRENT LIABILITIES 2003 2002 $'000 $'000 Electricity Creditors 14,700 11,103 Net Payable on Hedges 4,327 - Other 125 - Total 19,152 11,103
Electricity Creditors relates to monies received for electricity transmission services that are above the revenue cap as determined by the ACCC. These monies belong to TransGrid’s customers who are market participants and will be taken into account when setting the next period’s transmission service prices resulting in those prices being lower than they would have otherwise been. Prior year’s Net payable on hedges not required to be recognised on the Statement of Financial Position amounted to $901,000.
16. MATURITY ANALYSIS OF BORROWINGS 2003 2002 $'000 $'000 Summary of Maturity Pattern Up to one year 158,516 147,985 Over One and Up to Two Years 160,500 146,035 Over Two and up to Five Years 441,792 442,985 Over Five Years 627,925 587,666 Total 1,388,733 1,324,671 Premium on Domestic loans issued by NSW Treasury Corporation amounted to $3,983,000 (2002, Premium $4,421,000). The effective interest rate applicable for the debt portfolio is 6.48% (6.57%). Borrowings shown as current liability is nominally due for repayment within twelve months. However due to the availability of rollover facilities and the liquidity of the underlying debt instruments, TransGrid may not necessarily need to repay these loans within twelve months.
17. RESERVES 2003 2002 $'000 $'000 Asset Revaluation Reserve Opening Balance 466,709 445,030 Increment on Revaluation of Infrastructure Assets, Staff Cottages and Non-Infrastructure Land During the Year 23,531 22,363 Transfer to Retained Earnings (92) (684) Closing Balance 490,148 466,709
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 69
69
18. RETAINED EARNINGS/(ACCUMULATED LOSSES) 2003 2002 $'000 $'000 Opening Balance (4,285) (30,287) Net Profit/(Loss) Before Dividends 47,402 25,318 Dividends (46,199) - Transfer from Reserves 92 684 Adjustment for Overstatement of Deferred Tax Balance on TransGrid’s Corporatisation 48,141 - Net Adjustment Resulting from Adoption of AASB 1044 3,585 - Net Adjustment Resulting from Adoption of Revised AASB 1028 (362) - Closing Balance 48,374 (4,285)
19. CAPITAL TransGrid commenced operations on 1st February 1995 on separation from Pacific Power under the Electricity Transmission Authority Act, 1994 at which time a series of assets and liabilities were transferred. TransGrid was corporatised as a statutory State owned corporation on 14th December 1998, with share capital of two $1 shares. These shares are issued to the Treasurer and the Special Minister of State. The $2 is reported as part of Capital. 2003 2002 $'000 $'000 Opening Balance 644,871 645,893 Contribution to Shareholder (60,000) - Other Adjustments - (1,022) Closing Balance 584,871 644,871
20. DIVIDEND AND CONTRIBUTIONS TO SHAREHOLDER A dividend of $46,199,000 (2001/02, Nil) has been recognised for distribution to the shareholder. The dividend will be paid during the course of the 2003/04 financial year and is represented by the dividend provision. A $60 million capital distribution to the shareholder was made during the year.
21. SECURED LIABILITIES At balance date, there was no loan liability of TransGrid secured by a charge over TransGrid's assets.
22. AUDIT FEES 2003 2002 $'000 $'000 Amounts received, or due and receivable, by the auditors for: Auditing the Financial Statements 147 140
23. FEES PAID TO DIRECTORS Fees, including superannuation benefits paid to Directors, other than salaries paid to full-time Directors, were $286,251 ($305,885).
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 70
70 Notes to and forming part of the Financial Statements For the year ended 30th June 2003
24. CONTINGENT LIABILITIES 2003 2002 $'000 $'000 Contingent Liabilities at balance date were: Contract Liability 6,169 2,238 Easement-related Activities 1,500 750
Easement-related Activities The contingent liabilities for easement-related activities relate to easement compensation matters that remain unresolved as at balance date.
25. EVENTS OCCURRING AFTER BALANCE DATE There are no post balance date events that affect TransGrid’s financial statements.
26. CONSULTANCY COSTS The costs of consultancy services during the financial year were $492,598 ($1,266,556).
27. LEASES TransGrid has no finance lease commitments. The following lease commitments disclosed are in the nature of operating leases. Lessor A non-cancellable operating lease for a building with a lease period of 10 years, an option to renew for a further 10 years, and the minimum lease receivable being $275,045 per annum GST inclusive is in existence. The gross amount of the leased asset is $3,117,109 with accumulated depreciation of $378,604 and depreciation expense for the year of $112,157. Revenue received from the lease for the financial period was $311,996 ($219,885). Commitments in relation to the lease contracted for at the reporting date but not recognised as asset, receivable GST inclusive: 2003 2002 $'000 $'000 Within One Year 279 253 Later Than One Year but Not Later Than 5 Years 1,198 1,087 Later Than 5 Years 3,859 3,898
Lessee A non-cancellable operating lease for a building with lease duration of eight years, and minimum lease payments of $2,351,000 per annum GST inclusive. There is a re-new option but no purchase option under the current lease arrangement. The lease expense for the financial year was $2,161,000 ($2,069,000). Commitments in relation to the lease contracted for at the reporting date but not recognised as liability, payable GST inclusive: 2003 2002 $'000 $'000 Within One Year 2,362 2,393 Later Than One Year but Not Later Than 5 Years 6,866 9,535 Later Than 5 years Nil Nil The contingent rentals have been escalated by estimated CPI and market rate.
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 71
71
28. NATIONAL ELECTRICITY MARKET SETTLEMENT RESIDUES The National Electricity Market (NEM) includes inter-regional trading between the Queensland, New South Wales, Snowy, South Australian and Victorian market regions using the existing transmission interconnectors. Given the technical characteristics of the interconnectors, energy transfer between the NEM regions incurs losses and is constrained from time to time. This results in different pool prices being set in the various regions. These pricing differences cause surplus settlement funds to accrue from the power flows between respective regions. NEMMCO auctions these inter-regional settlement residues. Under the National Electricity Code (NEC) and methodology autho- rised by NECA, the proceeds of the auction are paid to the Transmission Network Service Provider (TNSP) in the importing region. NEMMCO pays to TransGrid the auction proceeds for interconnectors that import power into the NSW and Snowy NEM Regions. In addition, the settlement process within each market region results in the accumulation of intra-regional settlement residues. These residues are not auctioned and are paid directly to the relevant TNSP. TransGrid receives intra-regional settlement residues for the NSW and Snowy NEM Regions. The NEM settlement residues are treated as income to TransGrid. In the event that these residues cause the total revenue received during the year to exceed TransGrid’s revenue cap, the excess is taken into account when setting the next period’s transmission service prices, resulting in those prices being lower than they would have otherwise been.
29. NOTES TO STATEMENT OF CASH FLOWS
(a) Reconciliation of Cash For the purpose of the Statement of Cash Flows, cash includes deposits at call with financial institutions. Cash as at the end of the financial year as shown in the Statement of Cash Flows is reconciled to the related items in the Statement of Financial Position as follows: 2003 2002 $'000 $'000 Cash/Deposits 282 16,669
(b) Dividends and Taxes No dividends were received. Dividends and tax equivalents paid during the year amounted to $6,848,000 ($12,581,000).
(c) Acquisitions and Disposals of Entities No entities were acquired or disposed of during the year.
(d) Financing Arrangements TransGrid is required to borrow all new money through NSW Treasury Corporation. TransGrid has an overdraft facility of $6,000,000 with the ANZ Bank and this facility was undrawn at balance date. TransGrid also has an indemnity guarantee facility for $10,000,000 of which $6,723,800 has been drawn.
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 72
72 Notes to and forming part of the Financial Statements For the year ended 30th June 2003
(e) Reconciliation of Net Cash Provided by Operating Activities to Operating Profit 2003 2002 $'000 $'000 Profit/(Loss) from Ordinary Activities after Income Tax 47,402 25,318 Add/(Less): Items Classified as Financing/Investing Activities Loss/(Gain) on Repayments of Borrowings - (147) Loss/(Gain) on Sale of Property, Plant and Equipment (1,123) 503 Add/(Less) Non-Cash Items Depreciation 108,459 101,451 Asset Write-off 106 139 Amortisation of (Premium)/Discount on Loans (436) (152) Provision for Doubtful Debts 202 - Net Cash Provided By Operating Activities Before Change in Assets and Liabilities 154,610 127,112 Net Changes in Assets and Liabilities During the Financial Period (Increase)/Decrease in Trade Debtors 5,787 (132) (Increase)/Decrease in Other Receivables 4,930 (5,486) (Increase)/Decrease in Inventories 1,060 (730) (Increase)/Decrease in Other Assets 9,397 43,676 Increase/(Decrease) in Payables (1,299) 5,009 Increase/(Decrease) in Provisions 2,638 1,301 Increase/(Decrease) in Income Tax & Deferred Taxes 28,044 15,193 Increase/(Decrease) in Other Liabilities 8,049 2,486 Net Cash Provided by Operating Activities 213,216 188,429
30. INTEREST IN EXTERNAL ENTITIES TransGrid holds one "B" Employer Class Share in Energy Industries Superannuation Scheme Pty Limited. The Share has a Par Value of $1.00. TransGrid also holds 250,000 fully paid ordinary shares in Geodynamics Limited. This does not represent a material interest in the entity. The investment in Geodynamics Limited was undertaken as part of TransGrid’s research and development activities to sponsor investigation of the generation of electricity from hot dry rocks geothermal energy.
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 73
73
31. FINANCIAL INSTRUMENTS DISCLOSURE (a) Interest Rate Risk TransGrid’s exposure to interest rate risk and the effective weighted average interest rate for each class of financial asset and liability is set out in the following table. Exposure to interest rate risk arises from assets and liabilities bearing variable interest rates. TransGrid’s exposure is limited due to the majority of its financial assets and liabilities being either non-interest bearing or held in fixed rates.
Note Weighted Average Effective Floating Non-interest interest rate interest rate Fixed interest rate bearing Total % $’000 $’000 $’000 $’000 2003 2002 2003 2002 2003 2002 2003 2002 2003 2002 Assets Cash 6 4.604.60 4.584.58 269 16,656 - - 13 13 282 16,669 Receivables 7 - - - - 53,465 64,383 53,465 64,383
Total Financial 269 16,656 - - 53,478 64,396 53,747 81,052 Assests
Liabilities Accounts Payable 12 & 15 4.754.75 6.225 14,700 - - 11,103 91,422 71,830 106,122 82,933 Borrowings 16 6.486.48 6.576.57 - - 1,388,733 1,324,671 - - 1,388,733 1,324,671 Total Financial 14,700 - 1,388,733 1,335,774 91,422 71,830 1,494,855 1,407,604 Liabilities
(b) Credit Risk Credit risk represents the loss that would occur if counterparties failed to perform as contracted. TransGrid does not have any significant exposure to any individual customer or counterparty.
(c) Foreign Exchange Risk TransGrid enters into forward foreign exchange contracts to hedge certain anticipated purchase and sales commitments denominated in foreign currencies (16% European Euro, 30% Swedish Krona and 54% Japanese Yen). The terms of these commitments are for not more than one year. The following gains, losses and costs in relation to forward foreign exchange contracts have been deferred on the Statement of Financial Position at balance date: 2003 2002 $'000 $'000 Unrealised Gains - 271 Total Unrealised Gains - 271 Unrealised Losses 3,317 - Costs of Hedge Contracts 1,010 1,172 Total Costs and Unrealised Losses 4,327 1,172 Net Costs and Unrealised Gains/(Losses) (4,327) (901)
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 74
74 Notes to and forming part of the Financial Statements For the year ended 30th June 2003
(d) Net Fair Value of Financial Assets and Liabilities The net fair value of financial assets and liabilities, with the exception of borrowings and forward exchange contracts, is reflected by their carrying amounts in the Statement of Financial Position. The net fair value of borrowings is based on market value derived by NSW Treasury Corporation using market interest rates current at balance date. The net fair value for forward exchange contracts is taken to be the unrealised gain or loss at balance date calculated by refer- ence to the current forward rates for contracts with similar maturity profiles. The carrying amounts and net fair values of financial assets and liabilities at balance date are: 2003 2003 2002 2002 Carrying Net Fair Carrying Net Fair Amount Value Amount Value $'000 $'000 $'000 $'000 Financial Assets Cash 282 282 16,669 16,669 Receivables 53,465 53,465 64,383 64,383 Forward Exchange Contracts --882 Total Financial Assets 53,747 53,747 81,060 81,134 Financial Liabilities Accounts Payable 106,122 106,122 82,933 82,933 Borrowings 1,388,733 1,489,900 1,324,671 1,374,700 Forward Exchange Contracts 4,327 3,161 909 - Total Financial Liabilities 1,499,182 1,599,183 1,408,513 1,457,633
End of Audited Financial Report
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 75
75
Statement by Members of the Board For the year ended 30th June 2003
Pursuant to Section 41B (1) of the Public Finance and Audit Act 1983, and in accordance with a resolution of the Board of TransGrid we declare on behalf of TransGrid that in our opinion: 1. the Financial Statements consisting of the Statement of Financial Position, the accompanying Statement of Financial Performance, the Statement of Cash Flows and the Notes to and forming part of the Financial Statements of TransGrid for the financial period ended 30 June 2003 exhibit a true and fair view of the position and transactions of TransGrid; 2. the Financial Statements have been prepared in accordance with the provisions of the Public Finance and Audit Act 1983, the Public Finance and Audit Regulation 2000, and relevant Treasury Circulars, except where a Treasurer’s exemption has been granted; and 3. the Financial Statements have been drawn up in accordance with disclosure requirements of the relevant Australian Accounting Standards. Further, we are not aware at this time of any circumstances which would render any particulars in the Financial Statements to be misleading or inaccurate.
P R Higginson D G Croft Chairman Chief Executive
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 76
76
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 77
Statutory Information 77
ABORIGINAL EMPLOYMENT & DEVELOPMENT STATEMENT TransGrid has implemented an Aboriginal Employment and Development Strategy. This strategy recognises TransGrid’s intention to identify, support and promote the employment and development opportunities of Aboriginal employees throughout the organisation. The Aboriginal Employment and Development Strategy plays an integral part in TransGrid’s Workforce Diversity Strategy which ensures that a diverse work environment is established and maintained and that all employees’ needs, differences and expectations are recognised and acknowledged.
BOARD OF DIRECTORS REMUNERATION Remuneration paid to TransGrid’s Directors during 2002/2003 is disclosed below in the respective bandwidths. Bandwidth Directors $80,000-$99,999 1 $60,000-$79,999 0 $40,000-$59,999 3 $20,000-$39,999 1 Up to $19,999 0
CHARTER TransGrid was established as a State-owned corporation on 14th December 1998, by and under the Energy Services Corporations Amendment (TransGrid Corporatisation) Act 1998, which effected various amendments to the Energy Services Corporations Act 1995. Section 6C of the Energy Services Corporations Act gives TransGrid, as an energy transmission operator, two principal functions, viz. a) to establish, maintain and operate facilities for the transmission of electricity and other forms of energy, and b) to provide services for the transmission of electricity and other forms of energy in accordance with the relevant regulatory regime. The Section also empowers TransGrid to utilise and develop its electricity transmission facilities to carry out telecommunications services. The principal legislation under which TransGrid operates is the Energy Services Corporations Act 1995, the Electricity Supply Act 1995 and the State Owned Corporations Act 1989.
CODE OF ETHICS & CONDUCT Throughout 2002/2003, TransGrid has continued to develop and maintain a strong ethics culture. Following the Chief Executive’s authorisation in June 2002, an updated Code of Ethics and Conduct (“the Code”) was promulgated to all staff. Compulsory attendance at awareness sessions, held throughout the year, have facilitated staff awareness of the revisions to the Code as well as to new segments such as the Gifts, Benefits and Hospitality Register. Staff have received the updated Code in a positive manner. In May 2003, the TransGrid Board approved a Code of Conduct for Directors. The conduct guidelines are another element supporting TransGrid’s self-regulatory approach to the conduct of its business. During the year, the “Contractors Guide to the TransGrid Code of Ethics and Conduct” was revised and reissued as “TransGrid Business Ethics – A Guide to Contractors, Clients and Agencies”. The Guide is available through the TransGrid website, the internal TransNet site and for inclusion as a reference in all TransGrid external contracts. The introduction of the Ethics Helpline has provided a channel for staff to seek independent advice on ethical dilemmas or to report suspected instances of unethical behaviour, in a confidential manner.
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 78
78 Statutory Information
COMPARISON OF STAFF NUMBERS As at 30 June 2003
Total Staff No. P/T Staff Equiv. F/T of P/T Equiv. F/T Staff Senior Contract Officers 111 0 0 111.00 Professional Officers 167 4 2.24 165.24 Engineering Officers 221 1 0.84 220.84 Administrative Officers 169 11 6.71 164.71 Tradespersons 70 0 0 70.00 Power Workers 65 0 0 65.00 Team Leader – Network 26 0 0 26.00 Operator 31 0 0 31.00 Lineworker 69 0 0 69.00 Apprentice 35 0 0 35.00 Total 964 13 9.79 957.79
COMPLIANCE 2003 During 2002-2003 TransGrid has conducted a thorough review of the requirements of the National Electricity Market and has clarified roles and responsibilities under its compliance process to support all of those of its activities associated with meeting its Code obligations to the participants of the National Electricity Market. TransGrid continues to monitor and review all areas that are affected by changes in legislation to ensure that compliance is integrated into the culture of TransGrid operations and processes.
CONSULTANTS FEES During the year $492,598 was spent on consulting services mainly in relation to environmental impact assessments for the South Australia/New South Wales Interconnection and Molong-Manildra 132kV Transmission Line projects, as well as for specific technical and management advice in the normal course of business.
CONSUMER RESPONSE TransGrid receives Property Information Inquiries from solicitors, conveyancers and the general public regarding TransGrid’s rights and interests that may affect title to land. For the year ending 30 June 2003, TransGrid responded to 114,316 such inquiries. Response times were within designated time frames. More than 80% of these inquiries were processed using online access facilities provided by the Central Register of Restrictions administered by Land and Property Information NSW.
COST OF ANNUAL REPORT TransGrid’s Annual Report was produced under the guidance of an internal steering committee in conjunction with an external graphic designer. The total external costs incurred in the production of the Annual Report was $73,230. The Annual Report is available on the Internet (www.transgrid.com.au) and on CD ROM.
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 79
79
CREDIT CARD USAGE Credit Card usage in TransGrid is in accordance with its detailed documented procedures. TransGrid continues to promote the correct usage of its Corporate Credit Cards and there is a continuous review of usage characteristics and authorisations.
DISABILITY PLAN TransGrid has a documented Disability Action Plan 2000-2003 based on the New South Wales Disability Framework 1989. The plan has strategies which have been implemented by management and staff to respond to the needs of people with disabilities within New South Wales.
EEO DISCLOSURES
Commentary on EEO Achievements Outcomes July 2002-June 2003 ■ Interactive workshops were provided to staff on the application of the Code of Ethics. ■ Information on harassment and discrimination prevention was kept updated and made available on the intranet. ■ Referral Officer’s Network was continued and refresher training provided. ■ All new employees attended an Induction Program which includes Occupational Health and Safety; Code of Ethics and Conduct; General Conditions of Employment including Leave Entitlements; Grievance and Dispute Procedures; Harassment Prevention; and Workforce Diversity. ■ All HR procedures reviewed to reflect changes in Workforce Diversity issues. Major Planned Outcomes July 2003-June 2004 ■ Include Workforce Diversity Data Collection Survey in the Induction Program for all new employees. ■ Continue support for the Women’s Contact Officer Network. ■ Establish an Aboriginal and Torres Strait Islander network support system within TransGrid. ■ Liaise with Aboriginal and Torres Strait Islander employees, managers and team leaders to identify and promote skills development which enhances career opportunities. ■ Conduct Strategic Indigenous Awareness Programs across the organisation. ■ Develop a broader advertising strategy for vacant positions to encourage applications from female, disabled and indigenous applicants.
Trends in the Representation of EEO Groups % of Total Staff (Refer Note 2) EEO Group 2000 2001 2002 2003 Women 12 12 12 13 Aboriginal and TSI 0.72 0.53 0.73 0.73 People whose first language was not English 8 8 10 10 People with a disability 7 7 2* 6 People with a disability requiring work-related adjustment - - - 1
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 80
80 Statutory Information
Trends in the Distribution of EEO Groups Distribution Index (Refer Note 3) EEO Group 2000 2001 2002 2003 Women 113 115 116 124 Aboriginal and TSI 7 5 7 7 People whose first language was not English 79 79 96 98 People with a disability 66 65 18* 53 People with a disability requiring work-related adjustment - - - 13
Notes 1. Current staff numbers are as at 30 June 2003 2. Excludes casual staff 3. A distribution index of 100 indicates that the centre of the distribution of the EEO group across salary levels is equivalent to that of other staff. * Error in reporting
ETHNIC AFFAIRS PRIORITY STATEMENT TransGrid’s Ethnic Affairs Priority Statement (EAPS) aims to ensure that people from all cultural backgrounds have access to participate in and contribute to TransGrid’s planning processes, facilities and services. The EAPS is an initiative of the Community Relations Commission (CAC) to facilitate development and support multiculturalism in the workforce. TransGrid is committed to ensuring that the needs of a culturally diverse society are reflected across all aspects of the business and that cultural diversity is recognised and utilised as a valuable resource. TransGrid’s Ethnic Affairs Priority Statement will assist the organisation to recognise the NSW Governments Ethnic Affairs Action Plan. Ethnic affairs priorities and initiatives shall reflect the culturally diverse needs of TransGrid employees and the community.
FRAUD PREVENTION In conjunction with the promotion of the Code of Ethics and Conduct, TransGrid has implemented new security measures at specific sites to reduce the opportunity for theft and fraudulent activity. Improved lighting and security systems have been installed incorporating a new issue of locks and keys for entry into all the electricity substation high voltage switchyard sites. A range of new anti-corruption and fraud prevention awareness colour posters have been distributed and displayed in all areas as part of the fraud strategy program.
FREEDOM OF INFORMATION TransGrid did not receive any Freedom of Information (FOI) applications under the Freedom of Information Act 1989 in 2002/2003. There were five FOI applications received in 2001/2002. During the 2002/2003 year: ■ The impact of the requirements of the Act on TransGrid’s activities was minor. ■ No major issues have arisen in connection with TransGrid’s compliance with the requirements of the Act. ■ No inquiries were made under the Act by the Ombudsman, nor were there any appeals under the Act to the District Court or the Supreme Court.
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 81
81
SECTION A Number of new FOI requests PERSONAL OTHER TOTAL FOI REQUESTS 2001-02 2002-03 2001-02 2002-03 2001-02 2002-03 A1 New (Including transferred in) 1 0 4 0 5 0 A2 Brought forward 0 0 0 0 0 0 A3 Total to be processed 1 0 4 0 5 0 A4 Completed 1 0 3 0 4 0 A5 Transferred out 0 0 0 0 0 0 A6 Withdrawn 0 0 1 0 1 0 A7 Total processed 1 0 3 0 4 0 A8 Unfinished (Carried forward) 0 0 0 0 0 0
SECTION B Result of FOI requests PERSONAL OTHER RESULT OF FOI REQUEST 2001-02 2002-03 2001-02 2002-03 B1 Granted in full 0 0 0 0 B2 Granted in part 0 0 0 0 B3 Refused 1 0 3 0 B4 Deferred 0 0 0 0 B5 Completed 1 0 3 0
SECTION C Ministerial Certificates 2001-02 2002-03 C1 Ministerial Certificates issued 0 0
SECTION D Formal Consultations - number of requests requiring consultations (issued) and total number of formal consultation(s) for the period ISSUED TOTAL 2001-02 2002-03 2001-02 2002-03 D1 Number of requests requiring formal consultation(s) 1 0 1 0
SECTION E Requests for amendment of personal records TOTAL Result of Amendment Request 2001-02 2002-03 E1 Result of amendment - agreed 0 0 E1 Result of amendment - refused 0 0 E3 Total 0 0
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 82
82 Statutory Information
SECTION F Requests for notation of personal records 2001-02 2002-03 F3 Number of requests for notation 0 0
SECTION G FOI requests granted in part or refused Personal Other Basis of disallowing or restricting access 2001-02 2002-03 2001-02 2002-03 G1 Section 19 {applic. incomplete, wrongly directed} 0 0 0 0 G2 Section 22 {deposit not paid} 0 0 0 0 G3 Section 25 (1)(a1) {diversion of resources} 0 0 3 0 G4 Section 25(1)(a){Exempt} 1 0 0 0 G5 Section 25(1)(b), (c), (d) {Otherwise available} 0 0 0 0 G6 Section 28(1)(b) {documents not held} 0 0 0 0 G7 Section 24(2) - deemed refused, over 21 days 0 0 0 0 G8 Section 31(4) {released to Medical Practitioner} 0 0 0 0 G9 Totals 1 0 3 0
SECTION H Costs and fees of requests processed Assessed Costs FOI Fees Received 2001-02 2002-03 2001-02 2002-03 H1 All completed requests $0 $0 $90 $0
SECTION I Discounts allowed Personal Other Type of Discount Allowed 2001-02 2002-03 2001-02 2002-03 I1 Public interest 0 0 0 0 I2 Financial hardship - Pensioner/Child 0 0 0 0 I3 Financial hardship - Non profit organisation 0 0 0 0 I4 Totals 0 0 0 0 I5 Significant correction of personal records 0 0 0 0
SECTION J Days to process Personal Other Elapsed Time 2001-02 2002-03 2001-02 2002-03 J1 0 - 21 days 1 0 2 0 J2 22 - 35 days 0 0 1 0 J3 Over 35 days 0000 J4 Totals 1 0 3 0
SECTION K Processing time Personal Other Processing Hours 2001-02 2002-03 2001-02 2002-03 K1 0 - 10 hours 1 0 0 0 K2 11 - 20 hrs 0 0 0 0 K3 21 - 40 hrs 0 0 3 0 K4 Over 40 hrs 0 0 0 0 K5 Totals 1 0 3 0
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 83
83
SECTION L Reviews and Appeals 2001-02 2002-03 L1 Number of internal reviews finalised 0 0 L2 Number of Ombudsman reviews finalised 0 0 L3 Number of District Court appeals finalised 0 0
Details of Internal Review Results Bases of Internal Review – Personal Other Grounds on which Upheld Varied Upheld Varied Internal Review Requested 2001-02 2002-03 2001-02 2002-03 2001-02 2002-03 2002-02 2002-03 L4 Access refused 0 0 0 0 0 0 0 0 L5 Deferred 0 0 0 0 0 0 0 0 L6 Exempt matter 0 0 0 0 0 0 0 0 L7 Unreasonable charges 0 0 0 0 0 0 0 0 L8 Charge unreasonably incurred 0 0 0 0 0 0 0 0 L9 Amendment refused 0 0 0 0 0 0 0 0 L10 Totals 0 0 0 0 0 0 0 0
FOI – STATEMENT OF AFFAIRS Information required under Section 14(2) of the Act, is located as follows: ■ The agency’s structure and functions: Corporate Governance ■ The way its functions affect the public: Environment, Community, Our Network ■ How the public may participate in agency policy development: Environment, Community ■ The kinds of documents the agency holds: Promotion ■ How members of the public may access and amend agency documents: Promotion, Environment, Community, FOI
FUNDS GRANTED TO NON-GOVERNMENT COMMUNITY ORGANISATIONS $ Greening Australia 100,000 Yass River Festival 2,500 Fairfield City Farm 2,500 Western Sydney Environment Week 11,000 Keep Australia Beautiful: School Grants Program 12,250 Donations to Regional Schools 3,200 Orange Adventure Playground 500 Fred Hollows Foundation 500
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 84
84 Statutory Information
GRADUATES, CADETS, SCHOLARSHIP PROGRAM The graduate, cadet and scholarship programs support TransGrid’s resource planning program by providing holistic, on the job learning for developing professions in the disciplines of Engineering, Environment and Accountancy. This is achieved by rotating graduates to various teams in TransGrid. Each placement affords a unique opportunity for development in the relevant national competencies. External professional bodies have been engaged to provide competency assessment for each graduate. This ensures that the development is recognised at a high standard within the profession internally and externally. TransGrid currently has six (6) Accountancy graduates, four (4) Environmental Engineering graduates and eighteen (18) Electrical Engineering graduates. In 2002 and 2003, four (4) scholars met the criteria to be converted to cadets. During 2002/2003, TransGrid increased its commitment to scholarship programs for graduates and cadets by offering Scholarships to Engineering students at the University of Technology as well as Newcastle and Wollongong Universities. This brings the total scholarships to six, spanning each academic year during 2002/03.
GUARANTEE OF SERVICE TransGrid service levels are determined by the Australian Competition and Consumer Commission as part of the revenue determination process. In addition, the NSW Ministry of Utilities and Energy monitors service levels. TransGrid also has defined service commitments with its customers through its Connection Agreements.
INDUSTRIAL RELATIONS POLICIES AND PROCEDURES TransGrid continues to consult with Unions and employees on a range of industrial matters. This consultative approach has resulted in no time lost due to industrial disputes during the reporting period.
INTERNET CONTACT DETAILS The TransGrid web site can be located at www.transgrid.com.au
KEY PERFORMANCE INDICATORS (EXCLUDING SIGNIFICANT ITEM) Actual Target Earnings Before Interest and Tax ($ million) 183.3 184.9 Operating Profit Before Tax ($ million) 95.9 93.5 Gearing Ratio 55.3% 56.3% Interest Cover (times) 2.1 2.0 Asset Base ($ million) 2,807.4 2,891.3 Revenue ($ million) 412.0 408.6
TransGrid’s performance during the year was in accordance with the targets agreed with its shareholder in its 2002/03 Statement of Corporate Intent (SCI). Operating Profit Before Tax exceeded the SCI target whilst Earnings Before Interest and Tax was marginally below target. Network assets are performing satisfactorily and this has contributed to TransGrid providing a network that was reliable with availability level above target of 99.2% during 2002/03. Capital expenditure targets were met with the South Australia/New South Wales Interconnection Project being the only significant project to be delayed awaiting planning/environmental approvals, and the outcome of the regulatory processes.
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 85
85
LAND DISPOSAL During the year TransGrid disposed of the following surplus properties: Easement affected rural land at Tarana, via Oberon – value $104,000 Easement affected rural land at Forbes – value $37,500 Depot site at Bowenfels – value $33,000 No associations between purchaser and approver Access to documents relating to these disposals may be sought under the Freedom of Information Act, 1989 LEGAL CHANGE
Legislation The Electricity Supply (Safety and Network Management) Regulation 2002 replaced the Electricity Supply (Safety Plans) Regulation 1997, imposing more extensive planning and reporting requirements on network operators. Amendments to the National Electricity Code (the code of conduct approved under the National Electricity Law) impose revised information requirements concerning network outages and their market impact, and revised technical standards for network connection (to commence in November 2003).
Judicial Decisions There have been no significant judicial decisions affecting TransGrid or the users of its services. It should, however, be noted that TransGrid was the defendant in two sets of proceedings arising out of environmental incidents in the south of the State in early 2001. The Environment Protection Authority prosecuted TransGrid in the Land and Environment Court on four counts under Section 120 of the Protection of the Environment Operations Act 1997 of causing waters to be pol- luted, and the National Parks and Wildlife Service prosecuted TransGrid in the Downing Centre Local Court on two counts under Clause 15 of the National Parks and Wildlife (Land Management) Regulation 1995 of damaging vegetation in a park and two counts under Section 57 of the National Parks and Wildlife Act 1974 of picking vegetation in a nature reserve. TransGrid plead- ed guilty to all counts and was convicted on all counts. The Land and Environment Court imposed penalties totalling $80,000 and an order for $50,000 prosecution costs. The Local Court imposed fines totalling $3,500 and an order for $236 court costs. TransGrid duly paid all penalties, fines and costs.
MEETINGS OF THE BOARD Meetings Leave of Meetings Entitled Attended Absence Granted to Attend Mr P R Higginson 11 - 11 Mr R B Vaughan 9 2 11 Mr D G Croft 11 - 11 Mr N Betts 8 3 11 The Hon B J Langton 11 - 11 Ms M C Robertson 5 - 5
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 86
86 Statutory Information
MINISTER TransGrid is subject to the control and direction of its Portfolio Minister. From 1st July 2002 to 1st April 2003, TransGrid formed part of the portfolio of The Hon. Kim Yeadon MP, Minister for Information Technology, Minister for Energy, Minister for Forestry, and Minister for Western Sydney. From 2nd April 2003 to 30th June 2003, TransGrid formed part of the portfolio of The Hon. Frank Sartor MP, Minister for Energy and Utilities, Minister for Science and Medical Research, Minister Assisting the Minister for Health (Cancer), and Minister Assisting the Premier on the Arts
NUMBERS OF EXECUTIVE OFFICERS Executive Officers As at 30th June 2003 As at 30th June 2002 No. of Executive Officers at SES Level 1 or above 72 66 No. of Female Executive Officers at SES level 1 or above 2 1
OCCUPATIONAL HEALTH & SAFETY Occupational Health and Safety statistical information for 2002/2003 is shown below: Frequency Rate 2.1 Average Lost Time Rate 7.3 Total Lost Time Injuries 4 Total Days Lost 29 No injuries were incurred as a result of electrical accidents.
A table of the Lost Time Injuries sustained is shown below: Part of Body Injured Number Type of Injury Days Lost Back 1 Strain 2 Foot 1 Crush 3 Leg 1 Fractures 15 Groin 1 Strain 9 Total 4 29 Days
ORGANISATION CHART
Board of Directors
Chief Executive
General Manager General Manager General Manager General Manager General Manager General Manager Business Resorces Commercial Corporate Engineering Network System Operations Development
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 87
87
PERFORMANCE STATEMENTS Mr D Croft, Chief Executive, was assessed by the Board as having achieved all the key performance criteria set in the Corporate Plan and the Statement of Corporate Intent with the NSW Government including network reliability and availability targets and financial performance targets. Mr Croft has continued to make a significant contribution to the ongoing evolution of the National Electricity Market, has expanded the asset base through completion of unregulated projects, implemented a number of envi- ronmental management initiatives, introduced workforce and succession planning for executive and senior management roles and maintained TransGrid’s good safety record. Mr K Murray, General Manager/Network, was assessed by the Chief Executive as having achieved all key performance criteria including network reliability of 99.99%, circuit availability of 99.64%, achievement of TransGrid Network maintenance and refurbishment programs, improved safety performance and convened a national committee developing a set of national network safety standards. Mr J Byrne, General Manager/Commercial, was assessed by the Chief Executive as having achieved all performance criteria, including the effective management of all TransGrid financial functions, significant increase in Unregulated Income including com- pletion of the SNOVIC Capacitor Banks, maintenance of TransGrid quality certifications, and introduction of the TRIM records management system. Mr C FitzGerald, General Manager/Engineering, was assessed by the Chief Executive as having achieved all performance criteria including the achievement of the major capital works budget for 2002/3, the management of major capital projects on schedule and to specification, strong progression of the MetroGrid project to achieve the summer 2003 commissioning targets, formalisation of the pre-planning, design and project management framework for major projects and the management of new technology in TransGrid. Mr D Hutt, General Manager/Corporate Development, was assessed by the Chief Executive as having achieved all performance criteria including enhancing the NEM compliance and dispute resolution processes, and assisting in the development of policy relating to the role of transmission in the National Electricity Market. Mr L Smyth, General Manager/Business Resources, was assessed by the Chief Executive as having achieved all performance criteria including implementation of succession planning and leadership development, leading TransGrid Safety Commitment and achievement of TransGrid’s lowest ever Lost Time Injury rate, achieving reliability of better than 99% for the corporate comput- er systems and development and implementation of an environmental authorisation system. Mr K Tothill, Executive Manager/Regulation and Revenue, was assessed by the General Manager/Corporate Development as having achieved all performance criteria including the development of the process for the ACCC revenue reset application, imple- mentation of updated transmission pricing and discount arrangements, and contributing to the development of the strategies for the approach to the potential changes of the NEM arrangements applying to the transmission business. Mr M Park, Executive Manager/Strategic Network Planning, was assessed by the General Manager/Corporate Development as having achieved all performance criteria including the preparation of Strategic Network plans for the NSW system, the implementation of effective Joint Planning processes, preparation of 5 and 10 year capital works programs, publication of TransGrid’s Annual Planning Report, implementation of Demand Side initiatives and effectively representing NSW on the Inter Regional Planning Committee.
PRIVACY MANAGEMENT PLAN Obligations for the use, protection and release of personal information in New South Wales are governed by the Privacy and Personal Information Protection Act 1998. TransGrid is committed to adherence with the principles of sound privacy practice to ensure management of personal information is consistent with legislative requirements. In light of this, TransGrid prepared and implemented a Privacy Management Plan during 2002/03 to facilitate adherence to the principles of the Act and to communicate how privacy is managed within the organisation. TransGrid’s Privacy Management Plan is available on-line to all staff via TransNet. No complaints were received and TransGrid conducted no internal reviews during the requisite reporting period.
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 88
88 Statutory Information
PROMOTION TransGrid is committed to providing a variety of communication vehicles to inform the public, customers and suppliers throughout the reporting year as follows: ■ Annual Report ■ Code of Ethics and Conduct ■ Corporate Plan ■ NSW Annual Planning Statement ■ Network Asset Management Plan ■ TransGrid Business Ethics – A Guide to Contractors, Clients and Agencies ■ TransTalk: In-House Newsletter ■ Variety of Brochures and Advertisements promoting TransGrid’s business and services ■ Internet Site
REMUNERATION OF SENIOR OFFICERS Remuneration packages for the year ending 30th June 2003 for TransGrid’s Chief Executive and Senior Executives are disclosed below in accordance with Treasury Circular TC 03/07. Position Incumbent Total Remuneration Package Chief Executive D. Croft $471,250 General Manager/Network K. Murray $249,750 General Manager/Commercial J. Byrne $240,500 General Manager/Engineering C. FitzGerald $208,000 General Manager/Corporate Development D. Hutt $206,500 General Manager/Business Resources L. Smyth $182,000 Executive Manager/ Revenue & Regulation K. Tothill $182,000 Executive Manager/Strategic Network Planning M. Park $181,000
REPORTING EXEMPTIONS The following reporting exemptions have been granted by NSW Treasury to enable financial reporting requirements that apply, to be broadly consistent with Corporations Act reporting requirements, given that the entity operates in the competitive National Electricity Market:
Financial Reporting Exemptions Statutory Requirements Act/Regulation References Comments Financial Statements s.41B (c) PF&AA Exemption from preparing manufacturing, trading and profit and loss statements. Required to prepare a summarised Operating Statement (ie summarising major categories of revenues and expenses). Income and Expenditure Information Schedule 1, Part 1: PF&A Reg Amounts set aside for renewal or Item 2 replacement of fixed assets Amounts set aside to any provision Item 4 for known commitments Amount appropriated for repayment Item 6 of loan/advances/debentures/deposits
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 89
89
Statutory Requirements Act/Regulation References Comments Material items of income and Item 13 Required to summarise the material items of expenditure on a program or revenues and expenses on a program or activity basis activity basis. Additional Information Schedule 1, Part 3: PF&A Reg Excess of non-current asset value Item 13 over replacement cost
Annual Reporting Exemptions Statutory Requirements Act/Regulation References Comments Budgets ■ detailed budget for the year s.7(1)(a)(iii)ARSBA reported on ■ outline budget for next year s.7(1)(a)(iii)ARSBA ■ particulars of material adjustments to cl 6 ARSBR detailed budget for the year reported on Report of Operations s.7(1)(a)(iv)ARSBA Exemption subject to the condition that information relating to the “Summary review of operations” is to be disclosed in a summarised form. Management and Activities Schedule 1 ARSBR Exemption subject to the condition that relevant information is to be disclosed in a summarised form. Consultants Schedule 1 ARSBR Exemption subject to the condition that the total amount spent on consultants is to be disclosed along with a summary of the main purposes of the engagements. Land Disposal Schedule 1 ARSBR Payment of Accounts Schedule 1 ARSBR Time for Payment of Accounts Schedule 1 ARSBR Report on Risk Management and Schedule 1 ARSBR Exemption subject to the condition that relevant Insurance Activities information is to be disclosed in a summarised form. Abbreviations: PF&AA Public Finance and Audit Act 1983 PF&A Reg Public Finance and Audit Regulation 2000 ARSBA Annual Reports (Statutory Bodies) Act 1984 ARSBR Annual Reports (Statutory Bodies) Regulation 2000
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 90
90 Statutory Information
RESEARCH & DEVELOPMENT Research and development has become an important strategy for TransGrid to provide innovative solutions to achieve core objectives. A dynamic research and development program within TransGrid also assists personnel in developing their skills. TransGrid also promotes research relationships with external organisations and educational institutions. This exposes TransGrid to the very latest technology and expertise available. TransGrid has a number of research projects or has some involvement in projects in the following areas. ■ Fibre Optic Current and Voltage transducers that use light to measure these quantities on high voltage networks. These devices are being developed in consultation with the Australian Photonics Cooperative Research Centre, the University of Sydney and ABB Australia. ■ Corporate condition monitoring system that will allow easy viewing, trending and analysis of data from online monitoring devices on the power network. ■ Insulation monitor for transformers through collaboration with the University of Technology, Sydney and Siemens. ■ Travelling Wave Fault Location to quickly determine the location of network faults. ■ The generation of electricity from hot dry rocks. ■ Transient stability of electrical networks ■ Mitigation of electrical fields from power cables
RISK MANAGEMENT & INSURANCE The Executive Risk Management Committee is responsible for ensuring TransGrid’s risks are identified and effectively managed. Implementation of risk management strategies are the responsibility of all levels of Management within TransGrid and a framework exists to ensure that all risks are proactively and explicitly managed on an ongoing basis. The Corporate Risk and Audit Group assist Management in the achievement of risk management objectives by providing advice and assistance in development of risk management plans, training staff in risk assessment method, ongoing verification and review of risk mitigation actions and actively monitoring the effectiveness of the risk management process. The Corporate Risk and Audit Manager is responsible to the Chief Executive Officer for the provision of risk management services including Internal Audit. A quarterly report is provided to the Executive Risk Management Committee and the Board Audit Committee on the effectiveness of the risk management process and the results of internal audits completed. Risk management programs include: health and safety, environmental, fire, legislation and National Electricity Code compliance, fraud risk awareness and training in risk management. In health and safety and environment matters and issues, separate Executive Committees exist in recognition of the importance of these risk areas. TransGrid is a licensed workers compensation self-insurer. Other insurable risk is covered by a program of self-retained risk and external insurance.
SENIOR OFFICERS Position Name Qualifications
Executive Director and Chief Executive Mr David Croft, AM BSc, BE (Elec), FIE Aust, FAICD, FAIM General Manager Mr Kevin Murray BE (Elec), Dip Bus Studies, FAICD Network General Manager Mr Chris FitzGerald BSc, BE (Hons), ME, Grad Dip ( Bus Admin), Engineering FIE Aust, CP Eng General Manager Mr Don Hutt BA (Politics and Sociology), Public Admin Cert. Corporate Development
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 91
91
General Manager Commercial Mr John Byrne Comm (Acctg Proc) Cert, Cost Acctg and Board Secretary Post Cert, Comm Prog Cert, FCPA, FAICD General Manager Mr Lionel Smyth BE (Elec), Grad Mgt Qual, GAICD Business Resources General Manager Mr Dave Manning Grad Dip (Elec Eng) Post Grad Dip (Bus Studies), AMIEE. System Operations Retired Feb 2003 General Manager Mr Peter McIntyre BSc, BE (Hons), MBA (Technology Management) System Operations
SIGNIFICANT COMMITTEES
Management Activities – TransGrid Committees TransGrid Board Mr P R Higginson Chairman Mr R B Vaughan Deputy Chairman Mr D G Croft Executive Director Mr N Betts Director – Labor Council Representative The Hon. B J Langton Director Ms M C Robertson Director Board Audit Committee Mr R B Vaughan Chairman of Committee Mr P R Higginson Chairman Mr D G Croft Executive Director The Hon. B J Langton Director Executive Board Committee Mr P R Higginson Chairman Mr D G Croft Executive Director Board Committee – Remuneration and Structure Mr P R Higginson Chairman of Committee Mr R B Vaughan Deputy Chairman Mr D G Croft Executive Director Ms M C Robertson Director
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 92
92 Statutory Information
Executive Team Mr D Croft Chief Executive Mr J Byrne General Manager/Commercial Mr C FitzGerald General Manager/Engineering Mr D Hutt General Manager/Corporate Development Mr P McIntyre General Manager/System Operations Mr K Murray General Manager/Network Mr L Smyth General Manager/Business Resources
Executive Risk Management Committee The Executive Risk Management Committee ensures that the effectiveness of management control is maintained. It oversees the setting of policies, co-ordination and communication of fraud control strategies and ensures that TransGrid’s overall fraud control measures operate effectively. Mr D Croft Chief Executive (Convenor) Mr J Byrne General Manager/Commercial Mr C FitzGerald General Manager/Engineering Mr D Hutt General Manager/Corporate Development Mr P McIntyre General Manager/System Operations Mr K Murray General Manager/Network Mr L Smyth General Manager/Business Resources Mr P Keating Corporate Risk and Audit Manager (Meeting Secretary)
Chief Executive Business Review Committee The Chief Executive Business Review Committee closely monitors business performance and outcomes. Mr D Croft Chief Executive (Convenor) Mr J Byrne General Manager/Commercial Mr C FitzGerald General Manager/Engineering Mr D Hutt General Manager/Corporate Development Mr P McIntyre General Manager/System Operations Mr K Murray General Manager/Network Mr L Smyth General Manager/Business Resources Mrs J Christie Executive Assistant (Meeting Secretary) Executive Human Resources Steering Committee (HRSC) The Executive Human Resources Steering Committee determines human resource policy and directs strategic human resource management. Mr L Smyth General Manager/Business Resources (Convenor) Mr P McIntyre General Manager/System Operations Mr K Murray General Manager/Network Mr M Park Executive Manager/Strategic Network Development Mr J Howland Network Business Development and Training Manager Mr S Jones Manager/Engineering Design Mr E Valageorgiou Manager/Executive Services Mr B Rigg Manager/Human Resources Ms F McCulloch Human Resources Generalist (Meeting Secretary)
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 93
93
Executive Occupational Health and Safety Committee The Executive Occupational Health and Safety Committee provides direction on policies and procedures relating to occupational health and safety matters, and provides executive support to location managers and Occupational Health and Safety Committees. Mr K Murray General Manager/Network (Convenor) Mr C FitzGerald General Manager/Engineering Mr P McIntyre General Manager/System Operations Mr L Smyth General Manager/Business Resources Mrs L Cooper Health and Safety Manager Mr V Galea Manager/Central Region Mr G Smith Manager/Southern Region Mr K Stephenson Manager/Northern Region Mr J Zahra Manager/Corporate Mr J Robinson Safety and Fire Consultant (Meeting Secretary) Executive Business Development Committee The Executive Business Development Committee determines business development policy and strategy and monitors performance against targets. Mr J Byrne General Manager/Commercial (Convenor) Mr C FitzGerald General Manager/Engineering Mr D Hutt General Manager/Corporate Development Mr K Murray General Manager/Network Mr J Howland Network Business Development and Training Manager Mr R Sonter Engineering/Business Development Manager Mr P Trimmer Business Development Manager/Project Development Mr A Pittlik Executive Manager/Business Development (Meeting Secretary)
Executive Planning Committee The Executive Planning Committee determines, sets and monitors network development activities and facilitates internal communication on these matters. Mr D Hutt General Manager/Corporate Development (Convenor) Mr J Byrne General Manager/Commercial Mr C FitzGerald General Manager/Engineering Mr P McIntyre General Manager/System Operations Mr K Murray General Manager/Network Mr L Smyth General Manager/Business Resources Mr G Chubb Manager/Customer Services Mr M Park Executive Manager/Strategic Network Development Mr C Parker Manager/Transmission Development (Meeting Secretary)
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 94
94 Statutory Information
Executive Environment Committee The Executive Environment Committee sets corporate environmental policy and monitors the effectiveness of environmental management within TransGrid. Mr D Croft Chief Executive (Convenor) Mr J Byrne General Manager/Commercial Mr C FitzGerald General Manager/Engineering Mr K Murray General Manager/Network Mr L Smyth General Manager/Business Resources Mr A Gilbert Executive Environmental Manager Mr P Phillips Manager/Asset Performance Mr G Smith Manager/Southern Region Ms M Calvert Professional Officer (Meeting Secretary)
Executive Research and Development Committee The Executive Research and Development Committee determines, sets and monitors the overall direction of research and technology development. Mr C FitzGerald General Manager/Engineering (Convenor) Mr P McIntyre General Manager/System Operations Mr W Glanville Manager/Technical Services Mr G Holden Financial Controller Mr S Jones Manager/Technology Development Dr A Manglick Manager/Project Development Mr P Phillips Manager/Asset Performance Mr A Pittlik Executive Manager/Business Development Mr K Hinkley Professional Officer (Meeting Secretary)
Executive Information Systems Strategy Committee (ISSC) The Executive Information Systems Strategy Committee (ISSC) sets and monitors overall direction of information systems strategies. Mr L Smyth General Manager/Business Resources (Convenor) Mr N Aroney Manager/Operations Control Mr C Baker Manager/Transmission Pricing Mr J Diesendorf Manager/Environment and Business Systems Mr G Holden Financial Controller Mr P Keating Corporate Risk and Audit Manager Mr P Phillips Manager/Asset Performance Mr T Meehan Manager/Information Systems Mr D Smith Assets Manager/Southern Region Mr W Twemlow IT Projects Manager (Meeting Secretary) Executive Revenue Reset Committee The Executive Revenue Reset Committee will provide an overall management strategy to help maximise TransGrid’s regulated revenue to be negotiated for the next ACCC determination (that will come into effect from the 1 July 2004). Mr D Hutt General Manager/Corporate Development (Convenor) Mr J Byrne General Manager/Commercial Mr C FitzGerald General Manager/Engineering Mr P McIntyre General Manager/System Operations Mr K Murray General Manager/Network Mr L Smyth General Manager/Business Resources Mr K Tothill Executive Manager/Regulation and Pricing Mr M Park Executive Manager/Strategic Network Development Mr P Gall Manager/Regulatory Affairs Mr D Gittani Professional Officer (Meeting Secretary)
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 95
95
STAFF BY CATEGORY Category Description Number of Employees Administrative Officer 169 Apprentice 35 Engineering Officer 221 Lineworker 69 Operator 31 Professional Officer 167 Power Worker 65 Senior Contract Officer 111 Team Leader - Network 26 Tradesperson 70 Total 964
STAFF BY SALARY LEVEL Level Total Staff (Number) Men Women <$23,339 5 5 0 $23,339 - $30,654 23 22 1 $30,655 - $34,269 8 7 1 $34,270 - $43,366 38 24 14 $43,367 - $56,080 328 268 60 $56,081 - $70,101 211 181 30 >$70,101 351 333 18 Total 964 840 124
STAFF OVERSEAS VISITS 1st July 2002-30th June 2003 Name Position Countries Visited Purpose of Visit G. Bucea Professional Officer Japan Inspection of Cable and Accessories for CBD Project A. Pittlik Executive Manager China, Hong Kong SPEC feasibility report presentation & Vietnam S. Jones Manager Japan Final Testing of CBD Cable Accessories C. FitzGerald General Manager Japan Final Testing of CBD Cable Accessories B. Mills Engineering Officer USA Attend Training Course on Dissolved Gas Analysis M. Hackett Engineering Officer Germany Inspection and Testing of GIS for CBD Project M. Grierson Engineering Officer Germany Inspection and Testing of GIS for CBD Project B. Mills Engineering Officer USA Stage 2 Training on Dissolved Gas Analysis P. Trimmer Manager China Business Development Meetings A. Meehan Manager Denmark, Sweden SCADA and EMS Implementation & UK W. Glanville Manager Denmark, Sweden SCADA and EMS Implementation & UK K. Dodds Manager Singapore Participate in the APUG Steering Committee Meeting
A. Pittlik Executive Manager China Attend Cross Border Power Grid Interconnection Workshop
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 96
96 Statutory Information
Name Position Countries Visited Purpose of Visit P. Phillips Manager Sweden, Germany Tapchanger Course & Meetings with ABB & VA Tech & Austria K. Wyper Manager Germany Attend Tapchanger Training Course S. Adams Engineering Officer Germany Attend Tapchanger Training Course R. Ubrihien Engineering Officer Germany Attend Tapchanger Training Course S. Cameron Engineering Officer Germany Attend Tapchanger Training Course G. Ebb Manager Japan Inspection and Testing of Haymarket Shunt Reactor A. Pittlik Executive Manager Vietnam, Business Development Meetings and CEPSI Conference Hong Kong & Japan R. Sonter Manager Japan Attend the 14th CEPSI Conference A. Kingsmill Professional Officer Japan Attend the 14th CEPSI Conference A. Manglick Manager Japan Attend the 14th CEPSI Conference G. Ebb Manager Japan Witness Testing of GIS for Haymarket Substation D. Croft Chief Executive India Attend International Electric Power Transmission Conference G. Spence Professional Officer Japan Witness Testing of GIS for Haymarket Substation G. Bucea Professional Officer Japan Cable Tests associated with MetroGrid Project A. Pittlik Executive Manager Singapore Attend 6th Annual Asia Power Conference P. Trimmer Manager China Negotiations associated with unregulated contract work F. Li Professional Officer China Negotiations associated with unregulated contract work N. Frappell Professional Officer USA Attend ESMO International Live Line Conference G. Walker Professional Officer Austria Design Review of 375 and 200MVA Transformers J. Byrne General Manager UK Risk Management Presentations to insurance underwriters P. Higginson Chairman UK Risk Management Presentations to insurance underwriters J. Mouatt Professional Officer Sweden Design Review of Sydney West SVC Transformer A. McAlpine Project Engineer Japan Factory Acceptance Tests for Cable Monitoring System A. Kingsmill Professional Officer Japan Factory Acceptance Tests for Cable Monitoring System G. Bucea Professional Officer France Present TransGrid Paper at Jicable Conference
A further 17 trips, of which the majority of costs were funded by other Organisations, were undertaken by TransGrid Officers.
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 97
97
WASTE REDUCTION AND PURCHASING POLICY TransGrid is a participant in the NSW Government’s Waste Reduction and Purchasing Policy (WRAPP) as part of its commitment to reducing the quantity of waste going to disposal. Waste reduction is designed to promote ecologically sustainable development by requiring more efficient use of natural resources and minimisation of environmental impacts. TransGrid is actively seeking improved methods for waste disposal wherever possible. These strategies include ■ Further reduction in paper usage ■ Increased recycling of paper, toner cartridges and construction materials ■ Introduction of a WRAPP database for centralised collection of information ■ WRAPP to be part of the environmental awareness training throughout the organisation
WORK FORCE DIVERSITY ACHIEVEMENTS
Referral Officer Network The Referral Officers Network has continued to facilitate the provision of information to all staff in relation to harassment, dis- crimination and workplace bullying. A conference attended by Referral Officers took place in March 2003 to discuss relevant changes in legislation and their responsibility within the organisation. A Referral Officer is readily available to assist employees that feel they have been a victim of harassment and/or discriminatory behaviour. The Referral Officer is to provide information and support for employees seeking resolution. Employees are able to express how they feel regarding someone else’s behaviour, without being judged.
Vacation Care Subsidy The continuation of the Vacation Care Program has ensured that subsidised childcare has been made available to all staff throughout TransGrid for all school vacation periods. During 2002/2003, 29 subsidies have been allocated.
Provision of Programs for Women TransGrid’s major initiative in relation to women is the on-going development of the TransGrid Spokeswomen’s Network. This Network forms part of the New South Wales Government’s “Spokeswomen’s Program” administered by the Premier’s Department. The Program exists to promote efficiency and effectiveness in the NSW public sector by assisting women to develop their skills so that they can fully participate in the work environment. The Spokeswomen’s Network supports TransGrid’s operations and business activities through the provision of relevant support to its women, thereby assisting them to realise their full potential. The Network is comprised of a Women’s Liaison Officer, a Spokeswomen’s Co-ordinator and 10 Spokeswomen positions. Spokeswomen consolidate and complement the activities of TransGrid management by bringing to their attention issues relating to women. The main focus of Spokeswomen is identifying the needs of women in the organisation, in particular with respect to Equal Employment Opportunity. This includes: ■ Information needs relating to women and work; ■ Career, training and development needs; ■ Anti-discrimination issues; ■ providing access to a wide contact and referral network; ■ workplace conditions; and ■ Identifying varying issues and priorities of women in different stages of their lifecycle or career paths. During 2002/03, TransGrid encouraged female employees to participate in various activities specifically geared towards the development of women, such as:
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 98
98 Statutory Information
■ Attendance of TransGrid’s Spokeswomen at relevant training sessions, Network Days and the Annual Spokeswomen’s Conference; ■ the continued publication of the TransGrid Spokeswomen’s quarterly newsletter, Women of Today; ■ attendance of female employees at the Women’s Information Days facilitated by the Spokeswomen’s Program. These are held throughout the State and cover a wide variety of topics relating to women; ■ participation of TransGrid women in the Women in Leadership Program conducted by Dattner Grant; and ■ the continued participation in the Springboard Women’s Development Program. TransGrid continues to value the diversity of its workforce and remains committed to the principles of equity, access, opportunity and participation.
WORK FORCE DIVERSITY STRATEGY
Workforce Diversity Training TransGrid has a documented Workforce Diversity Strategy developed in line with the requirements of Part 9A of the Anti-Discrimination Act 1977. TransGrid is committed to Equal Employment Opportunity, Cultural Diversity and Ethical Practices. All employees are expected to demonstrate an understanding of and commitment to these areas. During 2002/03, mandatory on-line Workforce Diversity Training for all new employees has continued, as part of the employee induction program.
End of the Statutory Information
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 99
Statistical Information 99
TABLE 1 – SYSTEM ENERGY AND MAXIMUM DEMANDS Yearly Energy Yearly Maximum (GWh) (MW) 1990/91 52119 9374 1991/92 52828 9519 1992/93 54551 9792 1993/94 56531 9888 1994/95 58091 10613 1995/96 59885 10228 1996/97* 61254 10554 1997/98* 62952 10996 1998/99* 64279 11097 1999/2000* 66244 11673 2000/2001*# 68066 11360 2001/2002* 70101 12068 2002/2003 71574 12332 Notes: The Yearly Energy and Yearly Maximum have been calculated as generated, including net import from Snowy, Victoria and South Australia less pumping load for financial years up to and including 1995/96. * Market energy and market maximum demand is included the table from 1996/97 onwards as more appropriate to TransGrid's role in the State Electricity Market and then the National Electricity Market. # As at 18:00hrs on 3rd May 2001, Sithe and Redbank Generators have been included in the demand and energy as recorded by TransGrid.
TABLE 2 – TRANSMISSION LINES AND UNDERGROUND CABLES AS AT 30TH JUNE 2003 Transmission Lines Underground Cables Route Circuit Route Circuit Operating Voltage (km) (km) (km) (km) 500kV in service at 500kV 143 286 500kV in service at 330kV 386 771 Total 500kV 529 1,057 330kV in service at 330kV 4,389 5,171 20 20 330kV in service at 132kV 76 144 Total 330kV 4,465 5,315 20 20 220kV in service at 220kV 681 681 Total 220kV 681 681 132kV in service at 132kV 5,196 5,281 132kV in service at 66kV 4 4 Total 132kV 5,200 5,285 66kV in service at 66kV 62 62 TOTAL 66kV 62 62 Totals 10,937 12,400 20 20
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 100
100 Statistical Information
TABLE 3 – SCHEDULE OF SUBSTATIONS AND SWITCHING STATIONS IN SERVICE AS AT 30TH JUNE 2003 Transformers Comm. Year System Voltage kV No. Note Unit Rating MVA Total Rating MVA Voltage 500kV - Site Eraring 1984 500/330 3 (a) 400 1200 Kemps Creek 1984 500/330 6 (a) 400 2400 1989 330/16 2 (b) 150 - Total sites at 500 kV = 2 Voltage 330kV – Site Armidale 1972 330/132 2 150 300 330/132 1 200 200 1969 132/66 2 30 60 2001 330/13.6 1 (b) 305 - Avon 1974 330 - - - Bayswater 1984 330 - - - Beaconsfield West 1979 330/132 2 375 750 Canberra 1967 330/132 6 (a) 133 800 2375750 Dapto 1962 330/132 3 375 1125 330/132 1 160 160 Darlington Point 1988 330/220 2 200 400 330/132 2 280 560 Dumaresq 2000 330 - - - Ingleburn 1984 330/66 2 250 500 Jindera 1979 330/132 2 375 750 Kangaroo Valley 1976 330 - - - Liddell 1970 330 - - - Lismore 1992 330/132 2 375 750 2000 132/26 1 (b) 180 - Liverpool 1985 330/132 2 375 750 Lower Tumut 1972 330 - (e) - - Marulan 1992 330/132 1 160 160 Mt Piper 1986 330/132 1 375 375 Munmorah 1967 330/132 1 (e) 375 375 Murray 1967 330/132 2 40 80 Muswellbrook 1983 330/132 2 375 750 Newcastle 1969 330/132 12 (a) 133 1600 Regentville 1998 330/132 2 375 750 Sydney East 1976 330/132 9 (a) 133 1200 Sydney North 1963 330/132 4 375 1500 Sydney South 1961 330/132 18 (a) 100 1800 Sydney West 1965 330/132 12 (a) 145 1740 2003 330/132 1 375 375 Tamworth 1968 330/132 2 150 300 330/132 1 200 200 Tomago 1983 330 - - - Tuggerah 1986 330/132 1 375 375 Upper Tumut 1969 330 - (e) - - Vales Point 1962 330/132 2 160 320 Vineyard 1994 330/132 2 200 400 Wagga 1973 300/132 6 (a) 133 800 Wallerawang 1975 330/132 2 215 430
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 101
101
Transformers Comm. Year System Voltage kV No. Note Unit Rating MVA Total Rating MVA Wellington 1984 330/132 1 190 190 1200200 Yass 1959 330/132 6 (a) 50 300 1965 132/66 1 30 30 Total Sites at 330kV = 36 Voltage 220kV – Site Broken Hill 1979 220/22 2 100 200 Buronga 1988 220 - - - Balranald 2000 220/22 1 30 30 Total Sites at 220kV = 3 Voltage 132kV – Site Albury 1958 132 - (c) - - ANM 1981 132 - - - Beryl 1976 132/66 2 120 240 Burrinjuck 1950 132 - - - Coffs Harbour 1979 132/66 2 60 120 Coleambally 1993 132 - - - Cooma 1954 132/66/11 1 (d) 60 60 2 27.5 55 Cowra 1960 132/66 2 30 60 Deniliquin 1971 132/66 2 60 120 Finley 1991 132/66 1 30 30 Forbes 1969 132/66 2 60 120 Gadara 2000 132/11 1 35 35 Glen Innes 1970 132/66 2 30 60 Griffith 1964 132/33 3 45 135 Gunnedah 1985 132/66 2 60 120 Guthega 1970 132 - (e) - - Hume 1957 132 - - - Inverell 1984 132/66 2 120 240 Kempsey 1967 132/33 2 30 60 66/33 2 15 30 Koolkhan 1963 132/66 1 30 30 132/66 1 60 60 Molong 2001 132/66 1 30 30 Moree 1984 132/66 2 60 120 Mt. Piper 1988 132/66 2 120 240 Munyang 1989 132/33 2 30 60 Murrumburrah 1985 132/66 2 60 120 Narrabri 1965 132/66 3 30 90 Nambucca 2001 132/66 1 60 60 Orange 1954 132/66 3 30 90 Panorama 1979 132/66 2 120 240 Parkes 1993 132/66 1 60 60 Port Macquarie 1979 132/33 3 30 90 Queanbeyan 1957 132/66 3 30 90 Tamworth 1961 132/66 3 60 180 Taree 1958 132/66 2 60 120 132/33 2 30 60
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 102
102
Transformers Comm. Year System Voltage kV No. Note Unit Rating MVA Total Rating MVA Tenterfield 1970 132/22 2 15 30 Tumut 1967 132/66 2 60 120 Wagga 1955 132/66 3 60 180 Wallerawang 1953 132/66 2 60 120 Waratah West 1992 132 - - - Yanco 1969 132/33 2 45 90 Total Sites at 132kV = 40 Total Sites at all Voltages = 81
Total Transformers at rating Total Number Total Rating MVA 500kV 9 3,600 330kV 121 22,015 220kV 3 230 132kV 75 3,825 66kV 2 30 Total Transformers at all ratings 210 29,700
(a) Single phase transformers (b) Static VAR compensator transformers – Not counted in ‘Transformers Total Rating’ (c) Transformer assets transferred to Great Southern Energy on 1st July, 1991 (d) Substation 11kV assets transferred to Great Southern Energy on 1st July 1991 (e) Substation and Switching Stations transferred from SHL to TransGrid on 28th June 2002
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 103
Index 103
Aboriginal Employment and Development Statement 77 Innovation and Excellence 42 Action Plan for Women 97 Internet Contact Details 84 Aims and Objectives 1 Key Performance Indicators (Excluding Significant Item) 84 Board of Directors Remuneration 77 Key Performance Indicators (Including Significant Item) 6 Capital Expenditure ($M) 7 Land Disposal 85 Capital Projects Work Completed or in Progress 34 Legal Change 85
Capital Works 30 Letter to the Shareholders INSIDE FRONT COVER Chairman and Chief Executive’s Report 2 Lost Time Injury Frequency Rate (LTIFR) 7 Charter 77 Meetings of The Board 10, 85 Code of Ethics and Conduct 77 MetroGrid 16 Community 48 MetroGrid Cable Route 23 Comparison of Staff Numbers 78 Minister 8, 86 Compliance 2003 78 Network Availability (%) 7 Consultants Fees 78 Network Reliability (System Minutes Lost) 7 Consumer Response 78 Network System Map 27
Contents INSIDE FRONT COVER Notes To and Forming Part of the Financial Statements 57 Corporate 35 Numbers of Executive Officers 86 Corporate Governance 8 Occupational Health and Safety 86 Cost of Annual Report 78 Statistical Information 2002/2003 Credit Card Usage 79 Organisation Chart 86 Disability Plan 79 Our Network 24 EEO Disclosures 79 People 50 Environment 44 Performance Statements 87 Ethnic Affairs Priority Statement 80 Privacy Management Plan 87 Executive Team 13 Promotion 88 Financial Report 53 Remuneration of Senior Officers 88 FOI – Statement of Affairs 83 Reporting Exemptions 88 Fraud Prevention 80 Research and Development 90 Freedom Of Information 80 Return on Assets (%) Graph 7 Funds Granted to Non-Government Return on Equity (%) Graph 7 Community Organisations 83 Risk Management and Insurance 90 Graduates, Cadets, Sponsorship Program 84 Schedule of Substations and Switching Stations Guarantee of Service 84 in Service as at 30th June 2003 100 Historical NSW Energy Use 36 Senior Officers 90 Historical NSW Winter and Summer Demand 36 Significant Committees 91 Independent Audit Report 76 Staff by Category 95 Industrial Relations Policies and Procedures 84
TransGrid Annual Report 2003 TransGrid Annual Report Fin 23/10/03 10:57 AM Page 104
104 Index
Staff by Salary level 95 Staff Overseas Visits 95 Statement by Members of The Board 75 Statement of Cash Flows 56 Statement of Financial Performance 54 Statement of Financial Position 55 Statistical Information 99 Statutory Information 77 Structure of The Board 8 System Energy and Maximum Demands (MW) 99 System Weekly Maximum Demand (MW) 25 The Board 10 The Executive Team 13
TransGrid Contact Details INSIDE BACK COVER TransGrid’s Environmental Working Group Structure 44 TransGrid Network System Map 27 TransGrid’s Planning Process 39 Transmission Lines and Underground Cables as at 30th June 2003 99 Unregulated Business 40 Variation of Daily State Demand (MW) 25 Variation of Daily Temperature (0˚) 25 Waste Reduction and Purchasing Policy (WRAPP) 97 Work Force Diversity Achievements 97 Work Force Diversity Strategy 98 Year at a Glance 6
TransGrid Annual Report 2003 TransGrid Contact Details
Sydney Central Region Southern Region 201 Elizabeth Street Metroplitan Wagga PO Box A1000 200 Old Wallgrove Road 14 Copeland Street Sydney South NSW 1235 Horsley Park NSW 2164 Wagga Wagga NSW 2650 Telephone 02 9284 3000 PO Box 87 PO Box 8516 Telephone 61 2 9284 3000 Horsley Park NSW 2164 Kooringal NSW 2650 Fascimile 02 9284 3456 Telephone 02 9620 0777 Telephone 02 6922 0222 Facsimile 61 2 9284 3456 Office Hours 7:30am-4:30pm Office Hours 7:30am-4:30pm Office Hours: 8:00am-6:00pm Orange Yass 217 -235 McLachlan Street Perry Street Orange NSW 2800 Yass NSW 2582 PO Box 906 PO Box 139 Orange NSW 2800 Yass NSW 2582 Telephone 02 6360 8711 Telephone 02 6226 9666 Office Hours 7:30am-4:00pm Office Hours 8:00am-4:30pm
Northern Region www.transgrid.com.au Newcastle Wirra Crescent This report is also available off University Drive on CD. Waratah West NSW 2298 PO Box 93 Waratah NSW 2298 Telephone 02 4967 8678 Office Hours 7:30am-4:30pm Tamworth Goonoo Goonoo Road Tamworth NSW 2340 PO Box 526 Tamworth NSW 2340 Telephone 02 6765 1666 Office Hours 7:30am-4:30pm
PRODUCED BY INTERNAL TRANSGRID COMMITTEE DESIGN: DAVID HELSHAM DESIGN PHOTOGRAPHY: JOHN MARMARAS, RON SONTER HELSHAM DESIGN PHOTOGRAPHY: DESIGN: DAVID