Endeavour Energy Annual Performance Report - Parliament of New ...
Endeavour Energy Annual Performance Report - Parliament of New ...
Endeavour Energy Annual Performance Report - Parliament of New ...
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01<br />
Our<br />
organisation<br />
The yeAR in review<br />
<strong>Report</strong> by the Chairman and Chief Executive Officer<br />
The 2010–11 financial year was a<br />
period <strong>of</strong> significant change and<br />
strong corporate performance<br />
by <strong>Endeavour</strong> <strong>Energy</strong>.<br />
Our retail business and brand<br />
was sold to Origin in March 2011;<br />
we delivered a record capital<br />
investment <strong>of</strong> $496 million in<br />
our electricity network; we<br />
reduced our operating costs<br />
by $26 million compared to<br />
budget and we achieved a<br />
best-ever performance for<br />
network reliability.<br />
The year also saw<br />
unprecedented public scrutiny<br />
placed on the efficiency and<br />
costs <strong>of</strong> the industry due to<br />
continued price increases<br />
against a background <strong>of</strong> concern<br />
for the impact <strong>of</strong> a future carbon<br />
tax on electricity prices.<br />
Delivery against<br />
our plan<br />
We are pleased to report<br />
<strong>Endeavour</strong> <strong>Energy</strong>’s strategic<br />
planning process enabled<br />
the organisation to respond<br />
positively to the year’s<br />
challenges. Our plan centred on<br />
objectives designed to:<br />
• Improve safety performance<br />
• Deliver our network plan<br />
to improve reliability and<br />
cater for growth<br />
• Respond to electricity<br />
affordability by driving<br />
efficiency and productivity<br />
improvements to control<br />
future increases in<br />
electricity prices<br />
• Leverage new technology<br />
• Manage major business risks,<br />
particularly related to the<br />
retail sale and the risk <strong>of</strong> the<br />
network starting bushfires<br />
• Deliver performance through<br />
our people.<br />
Improving safety<br />
Despite our substantial focus on<br />
strengthening safety systems, we<br />
fell short <strong>of</strong> our target <strong>of</strong> zero harm<br />
to employees. Our lost-time injuries<br />
(LTI) performance <strong>of</strong> 24 incidents for<br />
2010–11 represented a disappointing<br />
increase over the previous year’s<br />
18 incidents.<br />
We did, however, advance our<br />
Lifeguard program, aimed at<br />
reducing foreseeable risks <strong>of</strong> an<br />
employee not being fit for work due<br />
to fatigue, alcohol or other drugs and<br />
will continue this focus in 2011–12.<br />
We also progressed our public<br />
safety program – a highlight <strong>of</strong><br />
which was our $2 million per year<br />
black spot pole replacement<br />
program – designed to improve<br />
community safety through power<br />
pole relocations.<br />
Investing in the network<br />
2010–11 was the second year <strong>of</strong> our<br />
five-year network investment plan<br />
approved by the Australian <strong>Energy</strong><br />
Regulator. We delivered an overall<br />
record $496 million <strong>of</strong> the total<br />
annual budget <strong>of</strong> $518 million.<br />
This investment aims to secure a safe<br />
and reliable electricity network for<br />
some <strong>of</strong> Australia’s fastest growing<br />
regional economies, including<br />
NSW’s two largest growth centres.<br />
The increase in program delivery<br />
was the result <strong>of</strong> a peak resourcing<br />
model we established to provide us<br />
with the capability to efficiently and<br />
effectively deliver peak workloads<br />
without the need to increase<br />
employee numbers above what is<br />
sustainable in the long term. We also<br />
continued our intake <strong>of</strong> apprentices,<br />
with a further 60 new starters<br />
in 2010–11.<br />
Record reliability results<br />
<strong>Endeavour</strong> <strong>Energy</strong> continues to make<br />
excellent progress in improving<br />
reliability and is now one <strong>of</strong> the<br />
nation’s top performers in overall<br />
reliability performance measured<br />
by the System Average Interruption<br />
Duration Index (SAIDI).<br />
Whereas our target for unplanned<br />
SAIDI this year was 87 minutes, the<br />
actual normalised result – excluding<br />
interruptions allowed under our<br />
licence conditions – was 72 minutes.<br />
This is our best-ever performance.<br />
Major network events<br />
After a year relatively free <strong>of</strong> major<br />
storms, Mother Nature unleashed<br />
a violent windstorm on Fathers’<br />
Day 2010, which saw about 100,000<br />
customers affected by 120 kilometre<br />
per hour winds. Hardest hit was<br />
the Shoalhaven area, later declared<br />
a natural disaster area by the<br />
NSW Government.<br />
Power was safely restored to<br />
all customers four days later,<br />
a significant effort given the<br />
continuing havoc the gale force<br />
winds unleashed. This occurred<br />
without injury to any employees or<br />
the public. The effort reflects the<br />
pride and dedication <strong>of</strong> our people<br />
in protecting the health and safety<br />
<strong>of</strong> our customers and communities.<br />
Rising prices<br />
and affordability<br />
Customers connected to <strong>Endeavour</strong><br />
<strong>Energy</strong>’s network are under<br />
pressure from the rising cost <strong>of</strong><br />
living, including their electricity bills<br />
which have risen 62% since 2008.<br />
While rising prices are a product <strong>of</strong><br />
both retail and network factors, our<br />
customers clearly expect us to do<br />
everything we can to control future<br />
increases in network tariffs.<br />
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