ANNUAL REPORT 19 9 7 Delta* electricity Introduction 1996/97 Highlights Profile 5 vm Introducing Delta Electricity 6 The Board 8 Hon M Eyn MLC Chairman's Report 10 The Treasurer. Minister lor Energy. Minister lor Police Minister for State and Regional Developmen Level 20. Averv Building Chief Executive's Report 12 and Minister Assisting the Premier 14-24 College Street Key Performance Indicators 14 Darlinghurst NSW 2010 l Farrcr Place Sydney NSW 2000 Review of Operations 17 Marketing 18 Generation 20 Maintenance Services 24 17th October. 1997 Environment 26 Dear Shareholders. Our People 30 It is our pleasure to submit to you the Annual Report ol Strategic Development 34 Delta Electricity for the year ending 30 June. 1997. The Annual Report covers the activities of Delta Electricity in The Future 38 the \ ear and contains the Statement of Accounts for the period from 1 Julv. 1996 to 30 June. 1997 Financial Statements 41 The Annual Report was prepared in accordance with section 24A ol the state Owned Corporations Act 1989 and the Annual Reports Statutory Bodies I Act 1984. and is being sub- Statutory Information 53 muted for presentation to Parliament. Yours sincerely B MURPHY J HEXNESS CHAIRMAN CHIEF EXECUTIVE ^m tm ^^M fresh and INTRODUCTION The financial year 1996/97 was one of the and a new approach to the business of most significant ever for the electricity industry generating electricity. in south-east Australia. As one of the largest electricity generators A State Electricity Market followed by the in Australia, Delta Electricity has met the integration of the New South Wales and challenges of the market head-on. Victorian energy markets meant that electricity generators and distributors faced dramatic new This 1996/97 Annual Report plots the strong circumstances in 1996/97. progress made in securing a pre-eminent position for Delta Electricity in the Australian A competitive market requires fresh and energy sector. innovative thinking — outside the square — 1996/97 highlights Profit: $306 million Environment An excellent result given intense Entry in the Greenhouse Challenge. competition and low spot prices in the wholesale electricity market. Workplace safety Record milestones for days without a lost- Dividend: $180 million time injury achieved at Delta power stations. Met shareholder expectations and represents a return on equity of 11.8%. Training, adult traineeships Formal skills development training and Coal supply contracts enhanced maintenance capability. New coal supply contracts will ensure Delta's competitiveness for years to come. Information technology Streamlined technology and solutions Employee survey introduced to satisfy business requirements. Providing Delta with a better understanding of attitudes to communication, leadership, quality and job satisfaction. Quality Quality Plan and benchmarking established, and an application for a Quality Award Delta Electricity Award submitted. A Delta-specific Award recognising the flexibility required in the competitive electricity market and the need to Corporate relations adequately reward staff. Programs developed to position Delta with its key audiences. Corporate identity A new name and corporate image. Shareholder Value Added A framework introduced to better measure the value contribution of Delta's business. Ethics Guidelines for Corporate Governance established, and a Code of Conduct Communication introduced for all staff. Internal communications improved with regular team briefings, presentations by the Chief Executive, and consultative committees. Staff reward and recognition More flexibility in recognising employee achievements. CORPORATE ORGANISATION STRUCTURE Corporate Secretary Peter Mcllveen Manager/ Internal Audit Barry Green General Manager/ 3enera! Manager/ Strategy Development Greg Everett Mai Park David Hogg ACCESS Corporate Office Munmorah Power Station Wallerawang Power Station Level 15, 201-217 Elizabeth St Scenic Drive 1 Main Street Sydney NSW 2000 Doyalson NSW 2262 Wallerawang NSW 2845 Telephone: (02) 9285 2700 Telephone: (02)4390 1611 Telephone: (02) 6352 8611 Facsimile: (02) 9285 2777 Facsimile: (02)4390 1642 Facsimile: (02) 6352 8847 Office Hours: 8.30 a.m. - 5.00 p.m. Office Hours: 7.45 a.m. - 4.00 p.m. Office Hours: 7.45 a.m. - 4.00 p.m Mt Piper Power Station Vales Point Power Station Maintenance Services 350 Boulder Road Vales Road Munmorah Power Station Portland NSW 2847 Mannering Park NSW 2259 Scenic Drive Telephone: (02) 6354 8111 Telephone: (02)4352 6111 Doyalson NSW 2262 Facsimile: (02) 6354 8112 Facsimile: (02) 4352 6007 Telephone: (02)4390 1606 Office Hours: 7.45 a.m. - 4.00 p.m. Office Hours: 7.45 a.m. - 4.00 p.m. Facsimile: (02)4390 1642 Office Hours: 7.45 a.m. - 4.00 p.m http://www.de.com.au company profile 7 T troducing Delt Delta Electricity was formed on 1 March, 1996, DELTA'S VISION. MISSION AND VALUES To be the supplier as part of the New South Wales Governments A vision, mission and set of corporate values restructure of the State's electricity industry. The were developed in a series of staff and business of first choice in the restructure was in response to the large-scale planning workshops held in May, 1996. changes in generation, transmission and supply of electricity market. electricity in eastern Australia following the Federal Delta's vision is: Government's program of competition reform. "To be the supplier of first choice in the Delta Electricity operates under the Energy electricity market." Services Corporations Act (1995) and the State PRINCIPAL FUNCTIONS AND This vision has given impetus to Delta's strategic Owned Corporations Act (1989). OBJECTIVES business plans and has focussed attention on Delta's total generating capacity is 4,240 MW, with core operational issues. Delta Electricity's principal functions are: four power stations in New South Wales: a) to establish, maintain and operate facilities Mt Piper and Wallerawang near Lithgow, and Delta's values represent those qualities that for the generation of electricity and other forms Vales Point and Munmorah on the Central Coast. are intrinsic to the success of its business. of energy; and The corporate office is located in Sydney. The values have already had a practical impact on the organisation by forming the basis for b) to supply electricity and other forms of energy a set of specific standards, including a Code of to other persons and bodies. Station Unit Size Total Capacity Conduct and ethics. (MW) Units (MW) Guiding Delta in carrying out these functions are Mt Piper 660 2 1320 Delta values: the following principal objectives: Vales Point 660 2 1320 • productive relationships with 1. To be a successful business, and to this end: Wallerawang 500 2 1000 colleagues, customers and suppliers; Munmorah 300 2 600 (i) operate at least as efficiently as any • provision of opportunity to participate, comparable businesses, Total 4240 contribute and improve; (ii) maximise the State's investment in Delta, • flexibility in responding to competitive (iii) exhibit a sense of social responsibility by Since it was formed, Delta has operated mainly markets, technological change and considering the interests of the community in the wholesale electricity market, selling to stakeholder requirements; and in which it operates; energy retailers and in some cases to very large • performance through pride in business industrial customers. 2. To protect the environment by conducting success, environmental commitment and operations in compliance with the principles of Careful attention to the structure of Delta's technical excellence. ecologically sustainable development contained business operations over the last 12 months Delta believes it will succeed in the electricity in section 6 (2) of the Protection of the has paid off. market by conducting its business in a safe, Environment Administration Act 1991; Delta has emerged as one of the lowest-cost coal- efficient and environmentally responsible manner. 3. To exhibit a sense of responsibility towards fired generators of electricity in the highly Delta's mission encapsulates the formula for regional development and de-centralisation in competitive National Electricity Market (NEM), achieving success: its operations; which integrates the energy markets of New South • marketing customised products; Wales, Victoria, the Australian Capital Territory 4. To operate efficient, safe and reliable energy and South Australia. Delta is recognised nationally • a co-operative and open work environment; generation facilities; as supplying electricity safely, efficiently and at a • honesty, integrity and tolerance; and 5. To be an efficient and responsible electricity competitive price, and its environment supplier; and management procedures are in line with • support of learning and innovation. environmental best practice. 6. To participate successfully in the wholesale electricity market. Mr B K Murphy Chairman and Director BScApp (Hons), BE(Chem), MBA, DipEnvironStud Appointed 1st March, 1996, re-appointed 1st March 1997 for period ending 29th February, 2000. Ms B K Ward Director BEc(Qld), MPolEcon(Qld) Appointed 1st March, 1996, re-appointed 1st March 1997 for period ending 28th February, 1998. Mr D J Asimus, AO Director BEc, HonDSc(NSW), Hon D.AGEc (Syd) Appointed 1st March, 1996, re-appointed 1st March, 1997 for period ending 28th February, 1999. The Honourable B J Unsworth Director Appointed 1st March, 1996, re-appointed 1st March, 1997 for period ending 29th February, 2000. Mr W Wider Director BA (Hon) (Syd), M Comm (NSW)