Endeavour Energy Annual Performance Report - Parliament of New ...

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02 Our Performance StRAtegic Objectives STRATEGIC OBJECTIVE 3 – IMPROVE CUSTOMER VALUE 2010–11 Objective 2010–11 Target 2010–11 Result • Set a course for a sub-70-minute SAIDI. • Implement rapid response teams for our network. • Limit unplanned supply interruptions for our average customer to less than 87 minutes. • By April 2011. • Unplanned supply interruptions for our average customer was 72 minutes. • Completed: half of the rapid response crews have been established and are working well, with the remaining positions expected to be filled in the near future. Reliability performance – a record result Reliability of supply is an important measure by which we demonstrate our network performance and ensure we can deliver value for customers. We measure the reliability of our network with the System Average Interruption Duration Index (SAIDI). This is a measure of the number of unplanned minutes that customers, on average, are without electricity each year. This excludes the impact of significant storms. We achieved our bestever performance in network reliability and are one of the most reliable distributors in Australia with an unplanned SAIDI of 72 minutes. Our SAIDI target for the year ending June 2011 was 87 minutes, but our actual result for the year – excluding significant storm interruptions permitted under our licence conditions – was 72 minutes. Our ongoing reliability improvement programs combined with mild weather patterns throughout the year contributed to this positive result for customers. Events that had a significant impact on the overall reliability result include: • 16 interruptions to zone and sub-transmission substations contributed to approximately 1.3 minutes of SAIDI. • 29 sub-transmission electricity line interruptions contributed to 2.5 minutes of SAIDI. • 734 distribution electricity line interruptions contributed to 50 minutes of SAIDI. Endeavour Energy is well-positioned to establish a sub-70-minute SAIDI as a normal part of doing business. To support this effort, our reliability improvement projects will focus particularly on distribution electricity lines that contribute more than 0.3 minutes to Endeavour Energy’s overall SAIDI performance. Implementing rapid response teams for our network Endeavour Energy has established rostered rapid response teams to attend network incidents that occur outside normal Monday to Friday working hours. Historically these incidents required employees to be called out, at overtime rates, to restore power or ‘make safe’ the network. Our rapid response crews provide valuable support in our efforts to respond to customer outages. This has helped us to: Performance indicator: Supply reliability – normalised unplanned SAIDI (minutes) 94 98 89 79 72 • Manage employee fatigue. • Reduce the need to disrupt planned construction and maintenance activities. • Ensure our employees can be on site as soon as possible. • Reduce our cost to serve for customers. 2006–07 2007–08 2008–09 2009–10 2010–11 Good 12
Efficiency reviews to reduce costs and improve productivity Energy pricing and affordability is a major issue in the community. Electricity prices increased by 15% for Endeavour Energy customers on 1 July 2011, bringing the total increase over four years to 62%. Prices are likely to be impacted further by the Federal Government’s plan to introduce a carbon tax from 1 July 2012. Endeavour Energy recognises that productivity improvements are necessary to keep electricity prices as low as possible. In line with our objective to improve customer value, we: • Continued our focus on improved productivity and efficiency throughout the business, which delivered one-off savings of $10.1 million and ongoing productivity savings of $6.6 million since it began in 2009–10. • Made a voluntary commitment as part of the AER determination to reduce costs by 2% per year in the 2009–2014 period, to help control upward pressure on electricity prices for customers. • Continued our focus on strategic procurement, which has already delivered $7 million in savings over the last two financial years. Endeavour Energy’s customers enjoy the benefits of one of the most reliable electricity networks in Australia. In addition to these initiatives, two further cost reduction programs will commence during the year, with the following objectives: • Reducing and/or eliminating $22 million in corporate and network support overhead costs following the retail sale. • Delivering reductions in network costs of $26 million per year through improvements in fieldforce productivity and through the use of market testing of key functions such as maintenance and selected capital projects. Our efficiency program throughout the business has delivered one-off savings of $10.1 million and ongoing productivity savings of $6.6 million since it began in 2009–10. THE YEAR AHEAD 2011–12 Objective 2011–12 Target 2011–12 Reason • Set a course for a sub-70-minute SAIDI. • Develop strategy to control future network tariff increases. • By June 2012. • By June 2012. • Improve customer value through cost effective reliability. • Improve customer value through effective management of operating costs. Endeavour Energy Annual Performance Report 2010–11 13
Page 1 and 2: ANNUAL PERFORMANCE REPORT 2010-11 I
Page 3 and 4: Contents LETTER TO SHAREHOLDING MIN
Page 5 and 6: YeAR at a Glance Items 2009-10 2010
Page 7 and 8: To that end, we pursued our second
Page 9 and 10: Endeavour Energy’s six strategic
Page 11 and 12: Performance indicator: lost time in
Page 13: Performance indicator: Capital expe
Page 17 and 18: Each year we investigate bushfire r
Page 19 and 20: STRATEGIC OBJECTIVE 6 - DELIVER PER
Page 21 and 22: Network Strategy Network business o
Page 23 and 24: Major works in progress 2010-11 con
Page 25 and 26: Major works in progress 2010-11 con
Page 27 and 28: The NSW Code of Practice - Demand M
Page 29 and 30: Network-related calls increased fro
Page 31 and 32: New apprentices vital to our workfo
Page 33 and 34: Equal employment opportunity As par
Page 35 and 36: Multicultural policies and services
Page 37 and 38: 06 8 % reduction in greenhouse emis
Page 39 and 40: Environmental management system Our
Page 41 and 42: ENDEAvoUR ENERGY’S GoveRNANCE AND
Page 43 and 44: EXECUTIve LEADERshIP TEAM Vince Gra
Page 45 and 46: 08 $ 245 m operating profit after t
Page 47 and 48: Debt Balance sheet debt increased b
Page 49 and 50: Directors’ Report For the yEAR en
Page 51 and 52: Statement of Comprehensive Income F
Page 53 and 54: Statement of Changes in Equity For
Page 55 and 56: Statement of Cash Flows For the yEA
Page 57 and 58: 2 Statement of Significant Accounti
Page 65 and 66:
4 Expenses 2011 $’000 2010 $’00
Page 67 and 68:
5 Gain/(loss) on sale of Retail bus
Page 69 and 70:
7 Deferred Tax (Assets)/Liabilities
Page 71 and 72:
8 Cash Flow Information continued (
Page 73 and 74:
9 Trade and Other Receivables conti
Page 75 and 76:
12 property Plant and Equipment con
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13 Intangible Assets Software $’0
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14 Employee Benefits - Superannuati
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16 Other Current Liabilities 2011 $
Page 83 and 84:
21 Financial Instruments continued
Page 85 and 86:
Page 87 and 88:
Page 89 and 90:
Page 91 and 92:
23 Expenditure Commitments continue
Page 93 and 94:
27 prudential Requirements An unsec
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Appendices Contents Five-year stati
Page 97 and 98:
Australian Financial Services Licen
Page 99 and 100:
Executive Remuneration General prin
Page 101 and 102:
Table A: Number of applications by
Page 103 and 104:
Implementation of Price Determinati
Page 105 and 106:
GLossARY The Australian Consumer La
Page 107:
Ausgrid LOCATIONS and contacts Kand
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